<TABLE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
PERINI CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
<S> <C>
MASSACHUSETTS 04-1717070
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
73 MT. WAYTE AVENUE, FRAMINGHAM, MASSACHUSETTS 01701 (508) 628-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DAVID B. PERINI
PERINI CORPORATION
73 Mt. Wayte Avenue, Framingham, Massachusetts 01701 (508) 628-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
Copies to:
THOMAS W. JACKSON GERALD S. TANENBAUM
JACOBS PERSINGER & PARKER CAHILL GORDON & REINDEL
77 Water Street, New York, New York 10005 80 Pine Street, New York, New York 10005
(212) 607-6231 (212) 701-3224
--------------
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the Registration Statement is declared effective.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. []
If the Registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)
(1) of this Form, check the following box. []
<TABLE>
CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
TITLE OF EACH CLASS OF AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED(1) UNIT(2) PRICE(1)(2) FEE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Depositary Shares, each
representing 1/10th
share of $
Convertible
Exchangeable Junior
Preferred Stock ...... 1,150,000 shares $25 $28,750,000 $9,914
$ Convertible
Exchangeable
Junior Preferred
Stock, par value
$1 per share (3) ..... 115,000 shares
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
(1) Includes 150,000 Depositary Shares which may be purchased by the
Underwriter to cover over-allotments, if any, representing an aggregate of
15,000 shares of $ Convertible Exchangeable Junior Preferred Stock.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) This Registration Statement also covers such indeterminate principal
amount of % Convertible Subordinated Debentures due 2019 as may be
exchanged by the Company for the $ Convertible Exchangeable Junior
Preferred Stock and such indeterminate number of shares of Common Stock of
the Company as may be issuable upon conversion of such shares of $
Convertible Exchangeable Junior Preferred Stock or such Debentures, as
well as such additional shares of Common Stock as may become issuable
pursuant to any anti-dilution provisions governing such $ Convertible
Exchangeable Junior Preferred Stock or such Debentures.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement will thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
PERINI CORPORATION
CROSS REFERENCE SHEET PURSUANT TO ITEM 501 OF REGULATION S-K
<CAPTION>
REGISTRATION STATEMENT ITEM NUMBER AND CAPTION CAPTION IN PROSPECTUS
- ---------------------------------------------- ---------------------
<S> <C>
1. Forepart of Registration Statement and Outside Front
Cover Page of Prospectus ............................ Facing Page; Cross Reference Sheet; Outside
Front Cover Page.
2. Inside Front Page and Outside Back Cover Pages of
Prospectus .......................................... Inside Front Page and Outside Back Cover
Page.
3. Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges ........................... Prospectus Summary; The Company.
4. Use of Proceeds ...................................... Use of Proceeds.
5. Determination of Offering Price ...................... *<F1>
6. Dilution ............................................. *<F1>
7. Selling Security Holders ............................. *<F1>
8. Plan of Distribution ................................. Underwriting.
9. Description of Securities to be Registered ........... Description of Convertible Preferred Stock;
Description of Depositary Shares;
Description of Debentures; Description of
Outstanding Capital Stock -- Common Stock.
10. Interests of Named Experts and Counsel ............... Experts; Legal Matters.
11. Information with Respect to the Registrant ........... Prospectus Summary; The Company; Price Range
of Common Stock; Dividends; Selected
Financial Data; Management's Discussion and
Analysis of Financial Condition and Results
of Operations; Business.
12. Incorporation of Certain Information by Reference .... Incorporation of Certain Documents by
Reference.
13. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities ...... *<F1>
<FN>
- ---------
<F1><*Not Applicable.
</TABLE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PROSPECTUS
Subject to Completion
Dated May 27, 1994
1,000,000 Shares
PERINI CORPORATION
Depositary Convertible Exchangeable Junior Preferred Shares Each Representing
1/10th Share of $ Cumulative Convertible Exchangeable Junior Preferred
Stock
Each of the Depositary Convertible Exchangeable Junior Preferred Shares (the
"Depositary Shares") represents ownership of 1/10th of a share of the $
Cumulative Convertible Exchangeable Junior Preferred Stock, par value $1.00
per share (the "Convertible Preferred Stock") of Perini Corporation, a
Massachusetts corporation (the "Company" or "Perini"), and entitles the holder
to all proportional rights and preferences of the underlying Convertible
Preferred Stock. The proportionate dividend rate per annum and liquidation
value of the Depositary Shares are $ and $25, respectively, per share. See
"Description of Convertible Preferred Stock" and "Description of Depositary
Shares."
The Depositary Shares are convertible at the option of the holder at any time,
unless previously redeemed, into shares of common stock, par value $1.00 per
share, of the Company (the "Common Stock") at a conversion price of $ per
share of Common Stock (equivalent to a conversion rate of shares of Common
Stock for each Depositary Share), subject to adjustment under certain
circumstances. The Common Stock is listed on the American Stock Exchange under
the symbol "PCR." On May 26, 1994, the reported last sale price of the Common
Stock on the American Stock Exchange was $12 1/4 per share.
The Depositary Shares are exchangeable at the option of the Company, in whole
but not in part, on any dividend payment date commencing September 15, 1996
for the Company's % Convertible Subordinated Debentures Due 2019 (the
"Debentures") at the rate of $25 principal amount of Debentures for each
Depositary Share. See "Description of Convertible Preferred Stock,"
"Description of Depositary Shares" and "Description of Debentures."
The Depositary Shares are redeemable on or after September 15, 1997, in whole
or in part, at the option of the Company, at the redemption prices set forth
herein, plus accrued and unpaid dividends to the date of redemption. Dividends
on the Convertible Preferred Stock at an annual rate of $ per share
(equivalent to $ per Depositary Share) will be cumulative and payable
quarterly beginning September 15, 1994. See "Description of Convertible
Preferred Stock." The Convertible Preferred Stock is junior in right of
payment of dividends and in liquidation to the Company's outstanding $21.25
Convertible Exchangeable Preferred Stock.
THE DEPOSITARY SHARES AND THE CONVERTIBLE PREFERRED STOCK, AND THE DEBENTURES
AND COMMON STOCK ISSUABLE UPON THE EXCHANGE OR CONVERSION THEREOF, HAVE NOT
BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(3)
- ------------------------------------------------------------------------------
Per Depositary Share $ $ $
- ------------------------------------------------------------------------------
Total(4) $ $ $
- ------------------------------------------------------------------------------
(1) Plus accrued dividends, if any, from July , 1994.
(2) The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act. See
"Underwriting."
(3) Before deducting expenses estimated at $ , which are payable by the
Company.
(4) The Company has granted the Underwriter a 30-day option to purchase up to
an additional 150,000 Depositary Shares on the same terms as set forth
above, solely to cover over-allotments, if any. If such over-allotment
option is exercised in full, the total Price to Public, Underwriting
Discounts and Commissions and Proceeds to Company will be $ , $
and $ , respectively. See "Underwriting."
The Depositary Shares offered by this Prospectus are being offered by the
Underwriter, subject to prior sale, when, as and if delivered to and accepted
by the Underwriter, and subject to approval of certain legal matters by Cahill
Gordon & Reindel, counsel for the Underwriter. It is expected that delivery of
the Depositary Shares will be made against payment therefor on or about July
, 1994 at the offices of J.P. Morgan Securities Inc., 60 Wall Street, New
York, New York.
J.P. MORGAN SECURITIES INC.
July , 1994
<PAGE>
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED UPON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
IN CONNECTION WITH THE OFFERING OF THE DEPOSITARY SHARES, THE UNDERWRITER MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE
OF THE DEPOSITARY SHARES OFFERED HEREBY OR THE COMPANY'S COMMON STOCK OR THE
COMPANY'S $21.25 CONVERTIBLE EXCHANGEABLE PREFERRED STOCK OR THE DEPOSITARY
CONVERTIBLE EXCHANGEABLE PREFERRED SHARES REPRESENTING SUCH PREFERRED STOCK AT
LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE AMERICAN STOCK EXCHANGE (IN THE CASE OF
THE COMMON STOCK), IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
No person has been authorized to give any information or to make any
representation other than those contained in this Prospectus and, if given or
made, such information or representation must not be relied upon as having
been authorized by the Company or by the Underwriter. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, the
securities being offered hereby in any jurisdiction to any person to whom it
is unlawful to make such offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implications that there has been no change in the affairs of the Company
since the date hereof or that the information contained herein is correct as
of any time subsequent to its date.
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page Page
<S> <C> <S> <C>
Available Information ................................. 3 Business .......................................... 16
Incorporation of Certain Documents by Reference ....... 3 Description of Convertible Preferred Stock ........ 25
Prospectus Summary .................................... 4 Description of Depositary Shares .................. 28
The Company ........................................... 7 Description of Debentures ......................... 31
Price Range of Common Stock ........................... 8 Description of Outstanding Capital Stock .......... 34
Dividends ............................................. 8 Certain Federal Income Tax Consequences ........... 36
Use of Proceeds ....................................... 8 Underwriting ...................................... 41
Capitalization ........................................ 9 Experts ........................................... 42
Selected Financial Data ............................... 10 Legal Matters ..................................... 42
Management's Discussion and Analysis of Financial Statements .............................. F-1
Financial Condition and Result of Operations ........ 12
</TABLE>
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information filed by the Company with the Commission, can be inspected
and copied at prescribed rates, at the public reference facilities maintained
by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the following Regional Offices of the Commission: New York
Regional Office, 7 World Trade Center, 13th floor, New York, New York 10048;
and Chicago Regional Office, Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Such reports and other
information concerning the Company can also be inspected at the offices of the
American Stock Exchange, 86 Trinity Place, New York, New York 10006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, heretofore filed by the Company with the Commission
pursuant to Section 13 of the 1934 Act, are hereby incorporated by reference:
1. The Company's Annual Report on Form 10-K (File No. 1-6314) for the fiscal
year ended December 31, 1993.
2. The Company's Quarterly Report on Form 10-Q for the three months ended
March 31, 1994, as amended by Form 10-Q/A filed May 16, 1994.
3. The Company's Proxy Statement dated April 13, 1994 and Supplement to the
Proxy Statement dated April 29, 1994 used in connection with the Annual
Meeting of Stockholders held on May 19, 1994.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15
(d) of the 1934 Act subsequent to the date of this Prospectus and prior to the
termination of the Offering shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing of such documents. Any
statement contained in this Prospectus or in any document incorporated herein
by reference shall be deemed modified or superseded for purposes of this
Prospectus to the extent that any statement contained herein or in any
subsequently filed document that also is or is deemed to be incorporated by
reference modifies or supercedes such statement.
The Company will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon the written or oral request of such person, a
copy of any of the documents described above (other than exhibits unless such
exhibits are expressly incorporated by reference in such documents). Requests
for such copies should be directed to Robert E. Higgins, Esq., Secretary,
Perini Corporation, 73 Mt. Wayte Avenue, Framingham, Massachusetts 01701,
telephone number
(508) 628-2000.
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and Consolidated Financial Statements appearing elsewhere in this
Prospectus. Unless otherwise indicated, the information in this Prospectus
assumes that the Underwriter's over-allotment option is not exercised.
THE COMPANY
The Company provides diversified construction services for public and private
clients in North America and selected overseas locations. The Company believes
it is one of the largest general contractors in the United States. During
1993, the Company's construction segment had revenues of $1.03 billion and at
March 31, 1994, the Company had a backlog of uncompleted construction work of
$1.31 billion. This backlog is broadly diversified by geographic section of
the country and project category. The Company also has significant investments
in real estate, but has not commenced the development of any new real estate
projects since 1990.
The Company was incorporated in 1918 as the successor of businesses which have
been engaged since 1894 in providing construction services.
CONSTRUCTION
The general contracting services provided by the Company consist of planning
for, providing and managing the manpower, equipment, materials and
subcontractors required for the timely completion of a project in accordance
with the terms and specifications contained in a construction contract. The
Company operates through two distinct business groups: Civil and Environmental
Construction and Building Construction.
The Civil and Environmental ("heavy") operation undertakes large civil
construction projects throughout the United States, with current emphasis on
major metropolitan areas, such as Boston, New York, Chicago and Los Angeles.
Based on its 100 year history in heavy operations, the Company believes that
it has particular expertise in large and complex projects.
The Building Construction ("building") operation pursues the construction of a
broad range of buildings and facilities through eight regional offices located
in major metropolitan areas.
The Company undertakes a wide range of heavy and building construction
projects including:
<TABLE>
<S> <C> <C>
Highways Mass Transportation Hotels & Casinos
Correctional Facilities Tunnels Dams
Bridges Educational Facilities Health Care Facilities
Sports Complexes Office & Retail Buildings Airports
Waste Water Treatment Plants Civic & Cultural Facilities Environmental Remediation Projects
</TABLE>
REAL ESTATE
The Company's real estate development operations are conducted by Perini Land
and Development Company ("PL&D"), a wholly-owned subsidiary, which began
operations in the 1950's. As a result of the prolonged recession and reduced
liquidity existing in the real estate industry over the past few years, PL&D
embarked on a strategy in 1991 designed to substantially reduce its real
estate holdings, pay down related debt and reduce overhead associated with
those operations. The Company also suspended all investment in new projects
and limited development expenditures to only those necessary to bring
properties to market or to preserve permits or other entitlements.
<PAGE>
<TABLE>
THE OFFERING
<S> <C>
SECURITIES OFFERED ................................... 1,000,000 Depositary Convertible Exchangeable Junior
Preferred Shares (each representing 1/10th of a share of
$ Cumulative Convertible Exchangeable Junior
Preferred Stock). See "Description of Convertible
Preferred Stock" and "Description of Depositary Shares."
DIVIDENDS ............................................ Annual cumulative dividends of $ per Depositary
Share, payable quarterly commencing September 15, 1994.
See "Description of Convertible Preferred Stock--
Dividends" and "Description of Depositary Shares--
Dividends and Other Distributions."
CONVERSION RIGHTS .................................... Convertible at any time into Common Stock at a conversion
price of $ per share of Common Stock, subject to
adjustment under certain circumstances. See "Description
of Convertible Preferred Stock--Conversion," "Description
of Depositary Shares--Conversion" and "Description of
Debentures--Conversion Rights."
OPTIONAL REDEMPTION BY THE COMPANY ................... Redeemable at any time on or after September 15, 1997 at
the option of the Company, in whole or in part, at an
initial redemption price of $ per Depositary Share,
declining annually to $25 per Depositary Share on or
after September 15, 2004. See "Description of Convertible
Preferred Stock--Optional Redemption," "Description of
Depositary Shares--Redemption of Depositary Shares" and
"Description of Debentures--Optional Redemption."
EXCHANGE PROVISION ................................... Exchangeable at the option of the Company, in whole but
not in part, on any dividend payment date commencing
September 15, 1996, for the Company's % Convertible
Subordinated Debentures Due 2019, at a rate equivalent to
$25 principal amount of Debentures for each Depositary
Share. See "Description of Convertible Preferred Stock--
Exchange," "Description of Depositary Shares--Exchange"
and "Description of Debentures."
RANKING .............................................. The Convertible Preferred Stock represented by the
Depositary Shares is junior in rank to the presently
issued and outstanding shares of $21.25 Convertible
Exchangeable Preferred Stock, par value $1.00 per share,
of the Company. See "Description of Outstanding Capital
Stock -- $21.25 Preferred Stock."
LIQUIDATION PREFERENCE ............................... $25 per Depositary Share. See "Description of Convertible
Preferred Stock--Liquidation."
AMERICAN STOCK EXCHANGE SYMBOL FOR
THE COMMON STOCK ................................... PCR
USE OF PROCEEDS ...................................... For general corporate purposes, including temporary
reduction of outstanding balances under the Company's
long term revolving credit facility and short term lines
of credit and repayment of any amounts outstanding under
the Company's short-term revolving credit facility. The
proceeds will serve to increase the Company's available
working capital to support its construction operations.
See "Use of Proceeds."
</TABLE>
<PAGE>
<TABLE>
SUMMARY FINANCIAL INFORMATION
------------------------------------------------------------------------------------------------------
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
Dollars in thousands, ------------------------- ---------------------------------------------------------------------------
except share and ratio
data 1994 1993 1993 1992 1991 1990 1989
---------- ----------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA
Revenues:
Construction $ 154,191 $ 244,487 $1,030,341 $1,023,274 $ 919,641 $ 983,689 $ 830,553
Real estate development 20,200 13,556 69,775 47,578 72,267 31,331 70,216
Net income (loss) 792 745 3,165 (16,984)\1/<F1> 3,178\1/<F1> (2,575) 13,152
Earnings (loss) per
common share $ .06 $ .05 $ .24 $ (4.69) $ .27 $ (1.20) $ 3.11
Weighted average number of
shares outstanding 4,331 4,150 4,265 4,079 3,918 3,916 3,545
Ratio of earnings to
combined fixed charges
and preferred stock
dividend requirements\2/<F2> 1.19x 1.05x .10x .80x .20x 2.57x
OTHER DATA
Ratio of Adjusted EBIT to
interest and preferred
stock dividend
requirements\3/<F3> 1.19x 1.46x 1.12x 1.11x --\4/<F4> 2.64x
</TABLE>
<TABLE>
----------------------------------------------------------------------------------------------------
<CAPTION>
AT MARCH 31, AT DECEMBER 31,
------------------------- ----------------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---------- ---------- ---------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Working capital $ 26,175 $ 30,848 $ 36,877 $ 31,028 $ 30,724 $ 33,756 $ 40,203
Long-term debt, less
current maturities 76,169 82,012 82,366 85,755 96,294 100,912 82,848
Stockholders' equity 131,404 126,675 131,143 121,765 138,644 136,682 142,970
Total assets 429,547 469,331 476,378 470,696 498,574 509,707 456,000
BACKLOG $1,315,218 $1,071,160 $1,238,141 $1,169,553 $1,233,958 $1,091,077 $1,018,912
<FN>
- ----------
<F1>\1/ Net income (loss) in 1992 and 1991 includes pretax writedowns of $31.4
million and $2.8 million, respectively, to reduce the carrying value of
certain real estate to net realizable value.
<F2>\2/ For purposes of computing the ratio of earnings from continuing operations
to combined fixed charges and preferred stock dividend requirements,
"earnings" consists of earnings from continuing operations before income
taxes, as adjusted for (1) fixed charges, (2) differences between
distributions from and share of earnings or losses of less-than-50%-owned
affiliates, (3) minority interest in earnings of greater-than-50%-owned
affiliates with fixed charges and (4) minority share of losses in greater-
than-50%-owned affiliates. "Fixed charges" consists of interest, whether
capitalized or expensed, that portion of rental expenses estimated to be
representative of the interest factor and amortization of deferred debt
expenses and finance fees. "Preferred stock dividend requirements" consist
of dividends declared on outstanding preferred stock as adjusted to the
pre-tax equivalent required to cover such dividends. The Company has
guaranteed debt of certain less-than-50%-owned affiliates. The amount of
fixed charges related to these debt guarantees was approximately $314,000
for the three months ended March 31, 1994 and $1,275,000, $1,448,000 and
$1,925,000 for the years ended December 31, 1993, 1992 and 1991,
respectively. These amounts are included in the computation of the above
ratios. For the years ended December 31, 1992, 1991 and 1990 the Company's
earnings before fixed charges was insufficient to cover fixed charges and
preferred dividends by approximately $12,869,000, $3,746,000 and
$11,049,000, respectively.
<F3>\3/ The ratio is calculated by dividing (a) income before income taxes plus
interest expense and the writedowns referred to in footnote (1) above by
(b) interest expense (including capitalized interest) plus dividends
declared on outstanding preferred stock as adjusted to the pre-tax
equivalent required to cover such dividends.
<F4>\4/ The ratio was not meaningful in 1990 since Adjusted EBIT was negative.
</TABLE>
<PAGE>
THE COMPANY
The Company provides diversified construction services for public and private
clients in North America and selected overseas locations. The Company believes
it is one of the largest general contractors in the United States. During
1993, the Company's construction segment had revenues of $1.03 billion and at
March 31, 1994, the Company had a backlog of uncompleted construction work of
$1.31 billion. This backlog is broadly diversified by geographic section of
the country and project category. The Company also has significant investments
in real estate, but has not commenced the development of any new real estate
projects since 1990.
The Company was incorporated in 1918 as the successor of businesses which have
been engaged since 1894 in providing construction services.
CONSTRUCTION
The general contracting services provided by the Company consist of planning
for, providing and managing the manpower, equipment, materials and
subcontractors required for the timely completion of a project in accordance
with the terms and specifications contained in a construction contract. The
Company operates through two distinct business groups: Civil and Environmental
Construction and Building Construction.
The Civil and Environmental ("heavy") operation undertakes large civil
construction projects throughout the United States, with current emphasis on
major metropolitan areas, such as Boston, New York, Chicago and Los Angeles.
Based on its 100 year history in heavy operations, the Company believes that
it has particular expertise in large and complex projects.
The Building Construction ("building") operation pursues the construction of a
broad range of buildings and facilities through eight regional offices located
in major metropolitan areas.
The Company undertakes a wide range of heavy and building construction
projects including:
<TABLE>
<CAPTION>
<S> <C> <C>
Highways Mass Transportation Hotels & Casinos
Correctional Facilities Tunnels Dams
Bridges Educational Facilities Health Care Facilities
Sports Complexes Office & Retail Buildings Airports
Waste Water Treatment Plants Civic & Cultural Facilities Environmental Remediation Projects
</TABLE>
The Company plans to continue to increase the amount of heavy construction
work it performs because of the opportunities to realize relatively higher
margins on such work. The Company believes the best opportunities for growth
in the coming years are in the urban infrastructure market. The growth in this
market is expected to be positively influenced by the Federal government's
$155 billion Intermodal Surface Transportation Efficiency Act which is
expected over time to stimulate demand for heavy construction in highways and
mass transit projects. The Company's strategy in building construction is to
increase profit margins by improving productivity and quality through efforts
now underway, to take advantage of certain market niches and to expand into
new markets compatible with its expertise.
REAL ESTATE
The Company's real estate development operations are conducted by Perini Land
and Development Company ("PL&D"), a wholly-owned subsidiary, which began
operations in the 1950's. As a result of the prolonged recession and reduced
liquidity existing in the real estate industry over the past few years, PL&D
embarked on a strategy in 1991 designed to substantially reduce its real
estate holdings, pay down related debt and reduce overhead associated with
those operations. The Company also suspended all investment in new projects
and limited development expenditures to only those necessary to bring
properties to market or to preserve permits or other entitlements.
<PAGE>
PRICE RANGE OF COMMON STOCK
The Common Stock is listed on the American Stock Exchange. The following table
sets forth the high and low sales prices per share of the Common Stock as
reported on the American Stock Exchange Composite Tape for the periods
indicated.
<TABLE>
<CAPTION>
------------------------
High Low
---- ---
<S> <C> <C>
1992
----
First Quarter $14 3/8 $11 3/4
Second Quarter 14 3/4 11 5/8
Third Quarter 13 1/8 10 7/8
Fourth Quarter 18 3/4 10 1/4
1993
----
First Quarter $18 5/8 $14 1/8
Second Quarter 14 7/8 13
Third Quarter 13 1/2 9 7/8
Fourth Quarter 12 3/4 10 1/8
1994
----
First Quarter $13 7/8 $11 1/4
Second Quarter (through May 25) 13 3/8 11 5/8
</TABLE>
The reported last sale price of the Common Stock on the American Stock
Exchange Composite Tape on May 26, 1994 was $12 1/4 per share.
On April 29, 1994, there were approximately 1,519 holders of record of Common
Stock.
DIVIDENDS
There were no cash dividends paid on the Common Stock in 1993, 1992 or 1991.
The Company periodically reviews reinstating the Common Stock cash dividend
but it has no present intention to do so. The Company has paid dividends on
its $21.25 Convertible Exchangeable Preferred Stock, par value $1.00 per share
(the "$21.25 Preferred Stock") since its issuance in 1987.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 1,000,000 Depositary
Shares offered hereby are estimated to be $23,680,000 (approximately
$27,280,000 if the Underwriter's over-allotment option is exercised in full).
The Company intends to use such proceeds for general corporate purposes,
including temporary reduction of outstanding balances under the Company's
long-term revolving credit facility and short-term lines of credit and
repayment of any amounts outstanding under the Company's short-term revolving
credit facility. The proceeds will serve to increase the Company's available
working capital to support its construction operations.
In March 1994, the Company entered into a credit agreement with a group of
banks to provide for a $15 million short-term revolving credit facility
through December 31, 1994. The short-term credit facility is secured by, among
other things, two parcels of real property in Arizona. This short-term
revolving credit facility will be reduced dollar-for-dollar by the amount of
net proceeds from the sale of the Depositary Shares offered hereby. As a
consequence, upon completion of the Offering, such credit facility will
terminate and, if any amounts are outstanding thereunder, a portion of the
proceeds from the Offering will be used to repay such amounts. At May 26,
1994, no amount was outstanding under such credit facility.
CAPITALIZATION
The following table sets forth the consolidated short-term debt and
capitalization of the Company at March 31, 1994, and as adjusted to reflect
the issuance of the 100,000 shares of Convertible Preferred Stock represented
by the 1,000,000 Depositary Shares offered hereby, and as adjusted to reflect
the use of a portion of the net proceeds therefrom to repay current
indebtedness:
<TABLE>
<CAPTION>
-------------------------
ACTUAL AS ADJUSTED
------ -----------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt:
Notes payable to banks $ 4,000 $ --
Current maturities of long-term debt 5,194 5,194
-------- --------
Total short-term debt $ 9,194 $ 5,194
-------- --------
Long-term debt:
Real estate development $ 7,696 $ 7,696
Other 68,473 68,473
-------- --------
Total long-term debt $ 76,169 $ 76,169
-------- --------
Preferred stock, $1.00 par value
Authorized - 1,000,000 shares
Issued
100,000 shares of $21.25 Convertible Exchangeable
Preferred Stock,
liquidation value of $25,000,000 $ 100 $ 100
100,000 shares of $ Cumulative Convertible
Exchangeable Junior Preferred Stock,
liquidation value of $25,000,000 0 100
Common Stock, $1.00 par value
Authorized - 15,000,000 shares\1/<F1>
Issued - 4,985,160 shares 4,985 4,985
Paid-in surplus 59,875 83,455
Retained earnings 83,855 83,855
ESOT related obligations (6,982) (6,982)
Less - Common Stock in treasury, at cost - 654,353 shares (10,429) (10,429)
-------- --------
Total stockholders' equity 131,404 155,084
-------- --------
Total capitalization $207,573 $231,253
-------- --------
<FN>
- ----------
<F1>\1/ Reflects an increase of 7,500,000 shares approved by the stockholders of
the Company at the Annual Meeting of
Stockholders held May 19, 1994.
</TABLE>
SELECTED FINANCIAL DATA
The selected financial data of the Company shown below for the five year
period ended December 31, 1993, other than backlog data which is unaudited,
has been derived from Consolidated Financial Statements audited by Arthur
Andersen & Co., independent public accountants. The information as of and for
the three months ended March 31, 1994 and 1993 has been derived from unaudited
financial statements and, in the opinion of the Company, includes all
adjustments (consisting only of normal recurring adjustments) necessary to
present fairly such financial information in accordance with generally
accepted accounting principles applied on a consistent basis. The Company's
results reflect a limited number of large transactions in both construction
and real estate. Consequently, quarterly results can vary depending on the
timing of transactions and the profitability of the projects being reported.
For the foregoing and other reasons, results for the three months ended March
31, 1994 may not necessarily be indicative of results to be expected for the
full year. The selected financial data should be read in conjunction with the
Consolidated Financial Statements and related notes and Management's
Discussion and Analysis of Financial Condition and Results of Operations,
which are included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
THREE MONTHS
Dollars in thousands, ENDED MARCH 31, YEAR ENDED DECEMBER 31,
except ---------------------------- -------------------------------------------------------------------------
share and ratio data 1994 1993 1993 1992 1991 1990 1989
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA
Revenues:
Construction $ 154,191 $ 244,487 $1,030,341 $1,023,274 $ 919,641 $ 983,689 $ 830,553
Real estate development 20,200 13,556 69,775 47,578 72,267 31,331 70,216
--------- --------- --------- --------- --------- --------- ---------
Total revenues $ 174,391 $ 258,043 $1,100,116 $1,070,852 $ 991,908 $1,015,020 $ 900,769
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Costs and expenses:
Cost of operations $ 161,615 $ 247,038 $1,047,330 $1,048,663 $ 931,054 $ 971,632 $ 826,392
General, administrative
and selling expenses 9,810 9,027 44,212 41,328 48,530 46,841 50,615
--------- --------- --------- --------- --------- --------- ---------
Total costs and expenses $ 171,425 $ 256,065 $1,091,542 $1,089,991 $ 979,584 $1,018,473 $ 877,007
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Income (loss) from
operations $ 2,966 $ 1,978 $ 8,574 $ (19,139) $ 12,324 $ (3,453) $ 23,762
Other income (expense),
net (420) 5,055 5,207 436 1,136 3,431 2,777
Interest expense, net of
capitalized amounts (1,247) (1,188) (5,655) (7,651) (9,022) (6,238) (3,987)
--------- --------- --------- --------- --------- --------- ---------
Income (loss) before
income taxes $ 1,299 $ 5,845 $ 8,126 $ (26,354) $ 4,438 $ (6,260) $ 22,552
(Provision) credit for
income taxes (507) (5,100) (4,961) 9,370 (1,260) 3,685 (9,400)
--------- --------- --------- --------- --------- --------- ---------
Net income (loss)
$ 792 $ 745 $ 3,165 $ (16,984)\1/<F1> $ 3,178\1/<F1> $ (2,575) $ 13,152
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Per common share:
Earnings (loss)
$ .06 $ .05 $ .24 $ (4.69) $ .27 $ (1.20) $ 3.11
Cash dividends
declared $ -- $ -- $ -- $ -- $ -- $ .60 $ .80
Ratio of earnings to
combined fixed charges
and preferred stock
dividend
requirements\2/<F2> 1.19x 1.05x .10x .80x .20x 2.57x
Weighted average number of
shares outstanding 4,331 4,150 4,265 4,079 3,918 3,916 3,545
OTHER DATA
Ratio of Adjusted EBIT to
interest and preferred
stock dividend
requirements\3/<F3> 1.19x 1.46x 1.12x 1.11x --\4/<F4> 2.64x
-------------------------------------------------------------------------------------------------------
AT MARCH 31, AT DECEMBER 31,
---------------------------- -------------------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
--------- --------- --------- --------- --------- --------- ---------
BALANCE SHEET DATA
Working capital $ 26,175 $ 30,848 $ 36,877 $ 31,028 $ 30,724 $ 33,756 $ 40,203
Long-term debt, less
current maturities 76,169 82,012 82,366 85,755 96,294 100,912 82,848
Stockholders' equity 131,404 126,675 131,143 121,765 138,644 136,682 142,970
Total assets 429,54 469,331 476,378 470,696 498,574 509,707 456,000
BACKLOG $1,315,218 $1,071,160 $1,238,141 $1,169,553 $1,233,958 $1,091,077 $1,018,912
<FN>
- ---------
<F1>\1/ Net income (loss) in 1992 and 1991 includes pretax writedowns of $31.4
million and $2.8 million, respectively, to reduce the carrying value of
certain real estate to net realizable value.
<F2>\2/ For purposes of computing the ratio of earnings from continuing operations
to combined fixed charges and preferred stock dividend requirements,
"earnings" consists of earnings from continuing operations before income
taxes, as adjusted for (1) fixed charges, (2) differences between
distributions from and share of earnings or losses of less-than-50%-owned
affiliates, (3) minority interest in earnings of greater-than-50%-owned
affiliates with fixed charges and (4) minority share of losses in greater-
than-50%-owned affiliates. "Fixed charges" consists of interest, whether
capitalized or expensed, that portion of rental expenses estimated to be
representative of the interest factor and amortization of deferred debt
expenses and finance fees. "Preferred stock dividend requirements" consist
of dividends declared on outstanding preferred stock as adjusted to the
pre-tax equivalent required to cover such dividends. The Company has
guaranteed debt of certain less-than-50%-owned affiliates. The amount of
fixed charges related to these debt guarantees was approximately $314,000
for the three months ended March 31, 1994 and $1,275,000, $1,448,000 and
$1,925,000 for the years ended December 31, 1993, 1992 and 1991,
respectively. These amounts are included in the computation of the above
ratios. For the years ended December 31, 1992, 1991 and 1990 the Company's
earnings before fixed charges was insufficient to cover fixed charges and
preferred dividends by approximately $12,869,000, $3,746,000 and
$11,049,000, respectively.
<F3>\3/ The ratio is calculated by dividing (a) income before income taxes plus
interest expense and the writedowns referred to in footnote (1) above by
(b) interest expense (including capitalized interest) plus dividends
declared on outstanding preferred stock as adjusted to the pre-tax
equivalent required to cover such dividends.
<F4>\4/ The ratio was not meaningful in 1990 since Adjusted EBIT was negative.
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATION
First Quarter 1994 Compared to First Quarter 1993
Revenues decreased $83.7 million (or 32.4%), from $258.1 million in 1993 to
$174.4 million in 1994. This decrease resulted from decreased construction
revenues of $90.3 million (or 37%), from $244.5 million in 1993 to $154.2
million in 1994, due primarily to a decrease in revenues from building
operations of $105 million (or 53%), from $199 million in 1993 to $94 million
in 1994. This decrease in revenue was due to the timing in the start-up of
certain hotel/casino projects obtained late in 1993 compared to a few similar
projects that were well underway during the first quarter of 1993. This
decrease was partially offset by an increase in revenues from the heavy
construction operations of $14 million (or 30%), from $46 million in 1993 to
$60 million in 1994, due to the acquisition of assets of Gust K. Newberg
Construction Co. ("Newberg") in mid-1993 and an increased heavy backlog going
into 1994. This decrease was also partially offset by an increase in revenues
from real estate operations of $7 million, from $13 million in 1993 to $20
million in 1994, caused primarily by the sale of two investment properties in
1994.
The gross profit in 1994 increased by $1.8 million, from $11 million in 1993
to $12.8 million in 1994, due primarily to a $2.6 million increase from
construction operations, from $9.7 million in 1993 to $12.3 million in 1994.
This improvement from construction operations was due to the mix of the work
performed, relatively more of the higher margin heavy construction work, from
19% of total construction volume in 1993 to 39% in 1994. This increase in
gross profit was partially offset by a decrease in gross profit from real
estate of $.8 million, from $1.3 million in 1993 to $.5 million in 1994, due
primarily to a decrease in high margin land sales in Florida.
The increase in general, administrative and selling expenses of $.8 million
(or 9%), from $9 million in 1993 to $9.8 million in 1994, resulted primarily
from the Newberg/Perini Division which was formed in mid-1993.
The $5.4 million decrease in other income from income of $5 million in 1993 to
a loss of $.4 million in 1994 was due primarily to the non-recurring gain
($4.6 million) on the sale by the Company of its 74%-owned interest in
Majestic Contractors Limited ("Majestic"), its Canadian pipeline subsidiary,
in January, 1993.
The higher-than-normal tax rate in 1993 was due to tax provided at an
additional 66% rate on the gain on the sale of Majestic, which represented a
combination of an additional tax provision for the difference between book and
tax basis of the Company's investment in this subsidiary and a valuation
reserve in the first quarter of 1993 related to the gain based upon the
Company's estimate of its utilization of the related foreign tax credits.
1993 Compared to 1992
The improved operating results in 1993 resulted in net income of $3.2 million
(or $.24 per common share) compared to a net loss in 1992 of $17 million (or
$4.69 per common share). The primary reason for this improvement was the
nominal profit generated by real estate operations in 1993 compared to a $47
million operating loss in 1992 which included a $31.4 million pretax net
realizable value writedown on certain real estate assets management decided to
liquidate in the near-term. However, profits from construction operations
decreased due primarily to the mix of work performed in 1993, relatively more
of the lower margin building construction work and relatively less of the
higher margin heavy and pipeline construction work, the latter being due to
the sale by the Company of Majestic in January, 1993.
Revenues reached a new record for the second consecutive year and amounted to
$1.100 billion in 1993 compared to $1.071 billion in 1992, an increase of $29
million (or 3%). This increase resulted primarily from a net increase in
construction revenues of $7 million from $1.023 billion in 1992 to $1.030
billion in 1993 due primarily to an increase in volume from building
operations of $113 million (or 19%), from $604 million in 1992 to $717 million
in 1993 due to an increased backlog going into 1993 and certain hotel/casino
projects included in the backlog, and to a lesser degree, a small increase in
heavy construction revenues. These increases more than offset the $101 million
decrease in revenues from pipeline construction due to the sale of Majestic
referred to above and a $14 million decrease from engineering services due to
the sale of Monenco Group Ltd. ("Monenco"), a Canadian-based consulting,
engineering and project management company, in the first quarter of 1992. In
addition, revenues from real estate operations increased by $22.2 million,
from $47.6 million in 1992 to $69.8 million in 1993 due primarily to the sale
of a partnership interest in certain commercial rental properties in San
Francisco and, to a lesser degree, an increase in land sales in Florida.
Gross profit in 1993 increased by $30.6 million, from $22.2 million in 1992 to
$52.8 million in 1993 due primarily to a $47.2 million improvement in the
Company's real estate operations, from a $43.5 million loss in 1992 to a $3.7
million profit in 1993. This improvement in the Company's real estate
operations is due primarily to the non-recurring $31.4 million pretax net
realizable value writedown in 1992 referred to previously, the sale of certain
commercial rental properties in San Francisco, profitable land sales in
Florida and an improvement in results from a major ongoing operating property,
The Resort at Squaw Creek. This increase in gross profit was offset by a
decrease in gross profit from construction operations of $16.6 million from
$65.7 million in 1992 to $49.1 million in 1993 due primarily to the sales of
Majestic and Monenco referred to above, a combined $18 million decrease.
Total general, administrative and selling expenses increased by $2.9 million
(or 7%) in 1993, from $41.3 million in 1992 to $44.2 million in 1993 due to
several factors, including $2.2 million related to the acquisition of Newberg
(see Note 1 to Notes to the Consolidated Financial Statements), a $2.1 million
expense for severance incurred in connection with re-engineering some of the
business units and additional personnel for the Company's ongoing heavy
construction operations. These increases were partially offset by the $5.1
million decrease resulting from the sale of Majestic referred to above.
The increase in other income of $4.8 million, from $.4 million in 1992 to $5.2
million in 1993 is due to the gain of $4.6 million on the sale of Majestic and
a decrease in the deduction for minority interest, both of which were
partially offset by the nonrecurring gain of $2 million from the sale of
Monenco in 1992.
The decrease in interest expense of $2 million (or 26%), from $7.7 million in
1992 to $5.7 million in 1993 primarily results from lower interest rates
during 1993 and lower average borrowings due to the continued pay down of real
estate and other debt, and, to a lesser degree, less interest expense related
to Majestic due to the sale.
The higher-than-normal tax rate in 1993 is due to additional tax provided on
the gain on the sale of Majestic for the difference between the book and tax
bases of the Company's investment in this subsidiary.
1992 Compared to 1991
Operations in 1992 resulted in a net loss of $17 million (or $4.69 per common
share) compared to 1991 net income of $3.2 million (or $.27 per common share).
The primary reason for this decline in earnings was a substantial loss
recorded by the Company's real estate operations, due to a combination of
significant operating losses and a $31.4 million pre-tax net realizable value
writedown in 1992 on certain real estate assets management decided to
liquidate in the near-term. These losses and writedown resulted from a
weakening in property values caused by the continuing adverse impact of the
national real estate recession, the surplus of real estate product for sale in
most markets, and severely restricted financing sources (both domestic and
foreign) for potential buyers due to the well-publicized problems in the
commercial banking industry. Overall construction operations, on the other
hand, reached an all-time record level of profitability in 1992 due to the
fourth consecutive year of record earnings from domestic construction
operations, as well as a significant increase in earnings from Canadian
pipeline operations. In January, 1993, the Company sold its investment in the
Canadian pipeline operations (see Note 1 to Notes to the Consolidated
Financial Statements).
Revenues reached a record of $1,071 billion in 1992 compared to $992 million
in 1991, an increase of $79 million (or 8%). This increase reflected an
overall increase in construction revenues of $103 million (or 11%), from $920
million in 1991 to $1.023 billion in 1992, which was partially offset by a
decline in real estate revenues of $24 million (or 33%), from $72 million in
1991 to $48 million in 1992. The increase in construction revenues was due
primarily to increased volume from building construction operations which
increased $97 million (or 19%), from $507 million in 1991 to $604 million in
1992, resulting from a high level of activity in the hotel/casino market as
well as a higher overall backlog of work going into 1992 compared to 1991. In
addition, revenues from Canadian pipeline operations increased $32 million (or
46%), from $69 million in 1991 to $101 million in 1992, due primarily to
higher margins on projects obtained in the resurgent Canadian natural gas
pipeline construction market. Revenues from international construction
operations increased $32 million, more than tripling the 1991 level of $15
million, due primarily to a higher backlog of work entering 1992 compared to
1991. These increases in construction revenues were partially offset by a
decrease in volume from engineering services of $41 million, from $54 million
in 1991 to $13 million in 1992 due to the sale in the first quarter of 1992 of
the Company's investment in Monenco and, to a lesser degree, a decrease in
volume from heavy operations of $10 million (or 4%) from $263 million in 1991
to $253 million in 1992 due to the timing in start-up of new projects. The
decrease in real estate revenues was due to a decrease in real estate
closings, primarily in the California and Florida market areas where sales
activity remained constrained due to the factors noted above.
Gross profit in 1992 decreased $38.7 million (or 64%), from $60.9 million in
1991 to $22.2 million in 1992 due primarily to a $43.1 million decrease from
real estate operations, from a $.4 million loss in 1991 to a $43.5 million
loss in 1992, caused by the reasons mentioned above. Gross profit from
construction operations increased $4.4 million (or 7%), from $61.3 million in
1991 to $65.7 million in 1992 due primarily to the higher revenues discussed
above as well as strong operating results achieved in Canada where certain
pipeline projects were successfully completed.
Total general, administrative and selling expenses decreased $7.2 million (or
15%) from $48.5 million in 1991 to $41.3 million in 1992 due primarily to the
impact of cost reduction programs implemented in recent years throughout the
Company's corporate, construction and real estate operations and, to a lesser
degree, a reduction in sales commissions resulting from the decrease in real
estate land sales.
Other income decreased $.7 million, from $1.1 million in 1991 to $.4 million
in 1992. A $2 million gain relating to the Company's sale of its 45%-interest
in Monenco in 1992 was more than offset by the increase in the deduction for
minority interest in the 1992 earnings of Majestic.
Interest expense decreased $1.4 million from $9 million in 1991 to $7.6
million in 1992, due primarily to lower average interest rates on borrowings
under the Company's credit facilities and repayment of loans in early 1992
relating to the sale of Monenco.
The tax credit for 1992 reflects an effective tax rate of 36% compared to the
Federal statutory rate of 34%, because of the impact of foreign and state tax
credits.
FINANCIAL CONDITION
Cash and Working Capital
During the first three months of 1994, the Company used $20.3 million of cash
for operations, primarily to fund a decrease in payables; $9.1 million of cash
for investing activities, primarily in construction joint ventures; and $5.2
million of cash for financial activities, primarily to pay down debt. The
source of cash was a $34.6 million reduction in cash on hand.
In addition to internally generated funds, the Company has access to
additional funds under its $18 million short-term lines of credit, its $70
million long-term revolving credit facility and, effective March 31, 1994, a
$15 million short-term, collateralized revolving credit facility. At March 31,
1994, there was $14 million available under the short-term lines of credit,
$.2 million available under the long-term credit facility and $15 million
available under the new short-term credit facility. The full amount available
under these facilities may be borrowed during any fiscal quarter. However,
financial covenants limiting the debt to equity ratio contained in the
agreements governing these facilities limit the amount of borrowings which may
be outstanding at the end of any fiscal quarter. Based on these covenants,
$4.5 million of additional borrowing capacity was available at March 31, 1994.
The $15 million short-term revolving credit facility will terminate upon the
completion of this Offering.
Following this Offering, management believes that cash generated from
operations, unused credit lines and various real estate borrowings will be
adequate to meet the Company's funding requirements, although the withdrawal
of many commercial lending sources from both the real estate and construction
markets has significantly slowed the Company's real estate sales and/or put
restrictions on new borrowings and extensions on maturing loans by these very
same sources, causing uncertainties in predicting liquidity.
During 1993, the Company used $39.1 million of cash for investment activities,
primarily to fund construction joint ventures and to repay indebtedness of
real estate joint ventures; $3 million for financing activities, primarily to
pay down company debt; and $1.6 million to fund operating activities,
primarily changes in working capital. The source of cash was a $43.7 reduction
in cash on hand.
During 1992, the Company provided $55.4 million of cash from operations and
$14.2 million of cash from the sale of its investment in Monenco. Of this
amount $29.9 million was used for investing activities, primarily in two real
estate joint ventures and, to a lesser degree, real estate properties used in
operations; $7.1 million was used for financing activities, primarily to pay
down company debt; and the remaining amount ($31.7 million, net) increased
cash on hand.
During 1991, the Company used $50.9 million of cash for investing activities,
primarily in two real estate joint ventures and, to a lesser degree, in land
held for sale or development and construction equipment, and a net of $24.2
million of cash primarily to pay down company debt. These uses of cash were
funded by cash provided by operations ($70.9 million) and an overall reduction
in cash of $4.2 million.
As mentioned previously, the softening of the national real estate market
coupled with problems in the commercial banking industry have significantly
reduced credit availability for both new real estate development projects and
the sale of completed product, sources historically relied upon by the Company
and its customers to meet liquidity needs for its real estate development
business. The Company has addressed this problem by relying on corporate
borrowings, extending certain maturing real estate loans (with such extensions
usually requiring pay downs and increased annual amortization of the remaining
loan balance), suspending the acquisition of new real estate inventory,
significantly reducing development expenses on certain projects, utilizing
treasury stock in partial payment of amounts due under certain of its
incentive compensation plans, utilizing cash internally generated from
operations and, during the first quarter of 1992, selling its interest in
Monenco. In addition, in January 1993, the Company sold its majority interest
in Majestic for approximately $31.7 million in cash. Since Majestic had been
fully consolidated, the net result to the Company was to increase working
capital by $8 million and cash by $4 million. In addition, the Company
implemented a company-wide cost reduction program in 1990, and again in 1991
and 1993 to improve long-term financial results and suspended the dividend on
its common stock during the fourth quarter of 1990. Also, the Company
increased the aggregate amount available under its revolving credit agreement
from $53 million to $70 million in May 1993.
Working capital decreased $10.7 million, from $36.9 million at the end of 1993
to $26.2 million at March 31, 1994 and the current ratio decreased from 1.17:1
to 1.14:1. At the end of 1993, the working capital current ratio improved to
1.17:1 compared to 1.14:1 at the end of 1992 and 1.16:1 at the end of 1991.
Long-term Debt
Long-term debt at March 31, 1994 was $76.2, representing a decrease of $6.2
million from year end. This was primarily the result of the repayment of
certain mortgaged indebtedness relating to real estate properties sold during
the quarter. At March 31, 1994, the long-term debt to equity ratio was .58:1.
Long-term debt was $82.4 million at the end of 1993 which represented a
decrease of $3.4 million compared with $85.8 million at the end of 1992, which
was a decrease of $10.5 million from the $96.3 million at the end of 1991. Of
the total decrease in 1992, $5.5 million was due to repayment of loans
relating to the purchase of Monenco in 1987 and, to a lesser degree, equipment
financings. The ratio of long-term debt to equity stood at .63:1 at the end of
1993 compared to .70:1 at the end of 1992 and .69:1 at the end of 1991.
Stockholders' Equity
The Company's book value per common share at March 31, 1994 was $24.55. The
Company's book value per common share stood at $24.49 at December 31, 1993,
compared to $23.29 per common share and $28.96 per common share at the end of
1992 and 1991, respectively. The major factors impacting stockholders' equity
during the three-year period under review were results of operations,
preferred dividends and, in 1992 and 1993, treasury stock issued in partial
payment of incentive compensation.
Dividends
There were no cash dividends paid during 1993, 1992 or 1991 on the Company's
outstanding common stock. The Company periodically reviews reinstating the
Common Stock cash dividend but it has no present intention to do so. In 1987,
the Company issued 1,000,000 depositary convertible exchangeable preferred
shares, each depositary share representing ownership of 1/10 of a share of
the $21.25 Preferred Stock. During the three-year period ended December 31,
1993, the Board of Directors declared regular quarterly cash dividends of
$5.3125 per share for the annual total of $21.25 per share (equivalent to
quarterly dividends of $.53125 per depositary share for an annual total of
$2.125 per depositary share). Dividends on preferred shares are cumulative and
are payable quarterly before any dividends may be declared or paid on the
common stock of the Company (see Note 7 to Notes to the Consolidated Financial
Statements). Dividends on the $21.25 Preferred Stock are cumulative and no
dividend may be paid on the Convertible Preferred Stock if there is a dividend
arrearage on the $21.25 Preferred Stock.
BUSINESS
The Company provides diversified construction services for public and private
clients in North America and selected overseas locations. The Company believes
it is one of the largest general contractors in the United States. The Company
also has significant investments in real estate but has not commenced the
development of any new real estate projects since 1990.
CONSTRUCTION
The general contracting services provided by the Company consist of planning
for, providing and managing the manpower, equipment, materials and
subcontractors required for the timely completion of a project in accordance
with the terms and specifications contained in a construction contract. The
Company is currently engaged in over 100 construction projects in the United
States and overseas. The Company operates through two distinct business
groups: Civil and Environmental ("heavy") Construction and Building
("building") Construction.
The heavy operation undertakes large civil construction projects throughout
the United States, with current emphasis on major metropolitan areas, such as
Boston, New York City, Chicago and Los Angeles. The heavy operation performs
construction and rehabilitation of highways, subways, tunnels, dams, bridges,
airports, waste water and water treatment facilities and marine projects.
Based on its 100 year history in heavy operations, the Company believes that
it has particular expertise in large and complex projects. As part of the
Company's strategy to increase the amount of heavy construction work it
performs, effective July 1, 1993, the Company acquired the interest of
Newberg, a Chicago-based construction company, in certain construction
projects and related equipment. The Newberg acquisition gave the Company,
among other things, a local presence in the Chicago metropolitan area and
Newberg's power plant construction and maintenance experience.
The building operation pursues the construction of a broad range of buildings
and facilities through eight regional offices located in major metropolitan
areas. In 1992, the Company combined its building operations, which previously
had been conducted under three separate names, into a wholly-owned subsidiary,
Perini Building Company, Inc. This subsidiary combines substantial resources
and expertise to better serve clients within the building construction market
and enhances Perini's name recognition in this market. The building operation
undertakes a broad range of projects including health care facilities,
correctional facilities, sports complexes, hotels, casinos and residential,
commercial, civic and cultural and educational facilities.
The international operation also engages in both heavy and building
construction services, funded primarily in U.S. dollars by agencies of the
United States government. In selected situations, it pursues private work
internationally.
The Company owns 90% of Perland Environmental Technologies, Inc. ("Perland").
Perland provides consulting, engineering and construction services primarily
on a turn-key basis for hazardous material management and clean-up to both
private clients and public agencies nationwide.
As part of its effort to focus on its core construction operations, in March
1992, Majestic, the Company's 74%-owned Canadian pipeline operation, sold its
41% interest in Monenco, a Canadian-based consulting, engineering and project
management company, and in January 1993, the Company sold its 74% interest in
Majestic. The sale of these companies served to generate liquid assets which
improved the Company's financial condition without affecting its core
construction business.
Construction Strategy
The Company plans to continue to increase the amount of heavy construction
work it performs because of the opportunities to realize relatively higher
margins on such work. The Company believes the best opportunities for growth
in the coming years are in the urban infrastructure market. The growth in this
market is expected to be positively influenced by the Federal government's
$155 billion Intermodal Surface Transportation Efficiency Act which is
expected over time to stimulate demand for heavy construction in highways and
mass transit projects. The Company's strategy in building construction is to
increase profit margins by improving productivity and quality through efforts
now underway, to take advantage of certain market niches and to expand into
new markets compatible with its expertise.
Internally, the Company plans to continue both to strengthen its management
through management development and job rotation programs and to improve
efficiency through strict attention to the control of overhead expenses and
implementation of improved project management systems.
Backlog
At March 31, 1994, the Company's construction backlog was $1.31 billion. As of
December 31, 1993, backlog was $1.24 billion compared to backlogs of $1.17
billion and $1.23 billion as of December 31, 1992 and 1991, respectively. The
following is a table of backlog by geographic region as of December 31, 1993,
1992 and 1991:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
BACKLOG AS OF DECEMBER 31,
(DOLLARS IN THOUSANDS) 1993 1992 1991
------------------- ----------------------------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Northeast .......................... $ 552,035 45% $ 451,746 39% $ 460,482 37%
Mid-Atlantic ....................... 34,695 3 34,840 3 92,130 8
Southeast .......................... 34,980 3 53,971 5 8,847 1
Midwest ............................ 143,961 12 211,649 18 129,103 11
Southwest .......................... 314,058 25 256,973 22 91,897 7
West ............................... 143,251 11 123,384 10 274,657 22
Canada ............................. -- -- 711 -- 90,152 7
Other Foreign ...................... 15,161 1 36,279 3 86,690 7
--------- --- --------- --- --------- ---
Total ............................ $1,238,141 100% $1,169,553 100% $1,233,958 100%
--------- --- --------- --- --------- ---
--------- --- --------- --- --------- ---
</TABLE>
The Company includes a construction project in its backlog at such time as a
contract is awarded or a firm letter of commitment obtained. As a result, the
backlog figures are firm, subject only to the cancellation provisions
contained in the various contracts. The Company anticipates that approximately
$475 million of its backlog at December 31, 1993 will not be completed in
1994.
The Company's backlog in the Northeast region of the United States remains
strong in part because of the Company's particular knowledge of costs and
subcontractor capabilities in the metropolitan Boston and New York areas,
which allows the Company to bid more competitively in that region. The
increases in the Southwest region generally reflect certain hotel/casino
projects. The decreases in the Other Foreign region reflect a decline in U.S.
Government-sponsored foreign construction. Other fluctuations in backlog are
viewed by management as transitory.
Clients
During 1993, the Company performed work for over 100 federal, state and local
governmental agencies or authorities and private customers. No material part
of the Company's business is dependent upon a single or limited number of
customers, the loss of which would have a material adverse effect on the
Company. The following table illustrates the portion of construction revenues
derived from contracts with various types of customers.
<TABLE>
REVENUES BY CLIENT SOURCES
<CAPTION>
----------------------------------------
YEAR ENDED DECEMBER 31,
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Private owners ............................................. 46% 43% 44%
Federal governmental agencies .............................. 12 6 2
State, local and foreign governments ....................... 42 51 54
--- --- ---
100% 100% 100%
--- --- ---
</TABLE>
Construction Contracts
The five general types of contracts in current use in the construction
industry, and in the table which follows, are:
* Fixed price contracts ("FP") which usually transfer more risk to the
contractor but offer the opportunity, under favorable circumstances, for
greater profits. Since current market opportunities are concentrated in
heavy and publicly-bid building construction, fixed price contracts
represent the major portion of the Company's backlog.
* Unit price contracts ("UP") which provide that the owner pay the
contractor a specified amount for each unit of work completed under the
contract. For contracts where precise quantities cannot be determined in
advance, it is less risky than a fixed price contract.
* Guaranteed maximum price contracts ("GMP") which provide for a cost-
plus-fee arrangement up to a maximum agreed price. These contracts place
risks on the contractor but may permit an opportunity for greater profits
than cost-plus-fixed-fee contracts through sharing agreements with the
client on any cost savings. GMP contracts are typically used in building
construction projects for private owners.
* Construction management contracts ("CM") under which a contractor
agrees to manage a project for the owner for an agreed-upon fee which may
be fixed or may vary based upon negotiated factors. The contractor
generally provides services to supervise and coordinate the construction
work on a project, but does not directly purchase contract materials,
provide construction labor and equipment or enter into subcontracts.
Construction management contracts remain a relatively small percentage of
the Company's contracts.
* Cost-plus-fixed-fee contracts ("CPFF") under which the contractor
performs the contract for a negotiated fee above the cost incurred provide
less risk for the contractor from a financial standpoint but limit
profits.
Since construction contracts often extend over long periods of time,
significant changes may occur in the availability of labor and materials,
prevailing wage scales and the general economy. Difficulty in estimating the
extent of these changes results in greater risks with long-term contracts,
especially fixed-price contracts. The Company attempts to reduce the effect of
certain risks inherent in long-term contracts through the following policies
and procedures:
* The Company usually requires performance and payment bonds or other
adequate assurances of operational and financial capability from
subcontractors and major vendors in order to reduce the potential for
losses caused by subcontractors' and suppliers' defaults.
* When operating under fixed-price contracts, the Company generally
has sought to award principal subcontracts on a fixed-price basis at the
same time that it enters the general contract.
* The Company seeks to reduce the risks inherent in bid-based projects
by pursuing negotiated contracts, including teaming up with developers and
designers on projects that provide for a fixed fee, budgeted contingencies
and pre-qualified, reputable subcontractors.
* The Company will endeavor, as it has from time to time in the past,
to participate in construction joint ventures, both in a majority and in a
minority position, for the purpose of bidding on projects. Although joint
ventures tend to spread the risk of loss, the Company's initial
obligations to the venture may increase if one of the other participants
is financially unable to bear its portion of costs and expenses. For
further information regarding certain joint ventures, see Note 2 of Notes
to Consolidated Financial Statements.
Consistent with practices in the construction industry, nearly all of the
Company's contracts are subject to termination provisions. If terminated, the
Company is generally entitled to be paid for work completed or in process and
related profit to the date of termination.
Selected Construction Projects
The Company's two largest recently completed and on-going building
construction projects are the Luxor Hotel/Casino in Las Vegas, Nevada,
completed in October 1993, and an as yet to be named Hotel/Casino in Reno,
Nevada, scheduled for completion in June 1995. The overall project value of
each of these projects is in the $300 million range, although the Company's
portion thereof has not been separately disclosed. The following is a summary
of other selected on-going and recently completed construction projects of the
Company:
<TABLE>
<CAPTION>
COMPLETION
APPROXIMATE OR ESTIMATED
TYPE OF PERINI CONTRACT COMPLETION
PROJECT LOCATION CONTRACT --------------- ----------
------- -------- -------- AMOUNT DATE
(IN 000'S)
<S> <C> <C> <C> <C>
HEAVY
Residuals Waste Water Treatment Boston, MA FP $173,176\1/<F1> March 1995
Facility
Combined Sewage Overflow Tunnel Chicago, IL FP 100,857\1/<F1> May 1997
Routes I-93/1 Interchange Charlestown, MA FP 98,668\1/<F1> October 1994
Wilshire/Western Station Los Angeles, CA FP 84,924\1/<F1> March 1995
to Wilshire/Alvarado Subway
Lock and Dam No. 5 Caddo Parish, LA FP 78,259\1/<F1> January 1995
Route I-95 Baldwin Bridge Old Saybrook, CT FP 54,802\1/<F1> June 1993
Route I-295 Bordentown, NJ FP 51,659 August 1993
Coney Island-Water New York, NY FP 51,512 December 1994
Pollution Control Plant
Coney Island-West Water Treatment New York, NY FP 40,985 September 1996
Plant
Pulaski Bridge Rehab New York, NY UP 38,875 December 1994
Hunts Point Water New York, NY FP 38,826 June 1993
Pollution Control Plant
San Francisco Muni-Metro Railway San Francisco, CA FP/UP 34,576\1/<F1> September 1996
Rehab
South Boston Approach- Central Boston, MA FP 33,286\1/<F1> May 1995
Artery
NJ Route 3 Union, NJ FP 31,516 September 1996
Logan Airport Ramps Boston, MA UP 27,300 July 1995
Minidoka Power Plant Minidoka, ID FP 23,127 April 1997
39th Street Bridge New York, NY FP 22,552 June 1997
Stillwell Avenue New York, NY FP 21,383 February 1997
Stevenson Expressway Chicago, IL UP 18,165 October 1994
Vermont/Sunset Station Los Angeles, CA FP/UP 17,987\1/<F1> January 1997
Vermont/Beverly Station Los Angeles, CA FP/UP 16,383\1/<F1> October 1994
Spectacle Island Material Site- Boston, MA UP 15,596 December 1996
Central Artery
NJ Route 78 Union, NJ FP 13,737 December 1995
BUILDING
San Jose Multi-Purpose Arena San Jose, CA FP 96,456 August 1993
Bus Terminal and Parking Deck Boston, MA FP 85,084 August 1995
Veterans Administration Medical Detroit, MI FP 80,724\1/<F1> July 1995
Center
Police Building Santa Ana, CA FP 78,300 December 1995
Research Center-Dana Boston, MA GMP 75,000 October 1996
Farber Cancer Institute
Research Facility at MIT, Lincoln Bedford, MA GMP 73,736 February 1995
Laboratories
Grand Slam Canyon Theme Park Las Vegas, NV GMP 73,600 July 1993
Prudential Center Retail Phase I Boston, MA GMP 67,357 June 1994
University of California-Berkeley Berkeley, CA CPFF 65,068 August 1994
Life Sciences Building
Federal Correction Institution and Greenville, IL FP 58,431 May 1994
Prison
Ramada Express Hotel Casino Laughlin, NV GMP 57,244 September 1993
Expansion
Integrated Project Controls- Boston, MA FP 50,870 July 1998
Central Artery
Clark County Government Building Las Vegas, NV FP 48,398 August 1995
Riverside Resort Laughlin, NV GMP 41,373 December 1994
Veterinary Hospital and Research Ithaca, NY FP 39,480\1/<F1> March 1995
Facility at
Cornell University
Boston College- Chestnut Hill, MA FP 38,030 December 1993
Residence Halls
Federal Triangle Complex Washington, D.C. CM 35,581\2/<F2> July 1996
Northeast Prison Philadelphia, PA FP 33,053\1/<F1> June 1995
Beaumont Hospital Troy, MI CM 29,908 July 1994
Hard Rock Cafe Las Vegas, NV GMP 26,704 December 1994
Argonne Laboratory Chicago, IL FP 23,447 July 1995
Primus Auto-Office Nashville, TN GMP 22,000 October 1995
Forensic Center Trenton, NJ FP 19,143 July 1995
INTERNATIONAL
SAMIR Oil Tank Farm Morocco FP $ 43,582 February 1994
U.S. Embassy-Caracas Venezuela FP 36,632 July 1994
Peace Vector II Egypt CP 24,474 March 1994
Embassy Housing Turkmenistan/Moldova FP 6,108 December 1994
HAZARDOUS WASTE
New Bedford Harbor Remediation New Bedford, MA FP $ 20,433 November 1994
Tybouts Center New Castle, DE FP 12,304 October 1994
Remediation
<FN>
- ---------
<F1>\1/Joint venture participation--represents the Company's share of the final or
estimated final contract price.
<F2>\2/Total Company-managed project value of approximately $550 million.
</TABLE>
Competition
The construction business is highly competitive. Competition is based
primarily on price, reputation for quality, reliability and financial strength
of the contractor. While the Company experiences a great deal of competition
from other large general contractors, some of which may be larger with greater
financial resources than the Company, as well as from a number of smaller
local contractors, it believes it has sufficient technical, managerial and
financial resources to be competitive in each of its major market areas.
REAL ESTATE
The Company's real estate development operations are conducted by Perini Land
and Development Company ("PL&D"), a wholly-owned subsidiary, which began
operations in the 1950's. As a result of the prolonged recession and reduced
liquidity existing in the real estate industry over the past few years, PL&D
in 1991 embarked on a strategy to substantially reduce its real estate
holdings, pay down related debt and reduce overhead associated with those
operations. The Company also suspended all investment in new projects and
limited development expenditures to only those necessary to bring properties
to market or to preserve permits or other entitlements.
Between 1991 and the end of the first quarter of 1994, property sales have
reduced PL&D's inventory from 31 properties to 16. In many cases, the
Company's investment in the remaining properties has been reduced due to sales
of portions of the properties. Of the remaining inventory, two properties,
plus several tracts or units of larger multi-unit properties, are currently
under contract for sale in 1994. Since 1990, PL&D revenues from sales have
totalled approximately $107 million and the Company has reduced its real
estate related debt plus contingent liabilities associated with real estate by
approximately $46 million. In addition, the Company refinanced all of its
major properties during the 1992 through 1994 period.
Historically, PL&D has maintained offices in five states - Arizona,
California, Florida, Georgia and Massachusetts. The Company continues to hold
properties in each of those markets, but in late 1993, PL&D significantly
reduced its staff in California and currently plans to administer its existing
California assets from other offices. Over the past three and one-half years,
PL&D has reduced administrative personnel throughout its organization from
over 60 people to fewer than 20 people.
Although PL&D has no current plans to acquire new properties, it will continue
to make investments that are necessary to bring existing properties to market.
It will also explore opportunities in which existing personnel could be used
to generate fee income in situations where no associated capital commitment is
required or, in association with construction units, to help generate building
opportunities for Perini units.
Of PL&D's current holdings, two northern California projects, The Resort at
Squaw Creek, a deluxe resort-conference center hotel near Lake Tahoe, and
Rincon Center, a mixed-use commercial and residential building located in San
Francisco's business district, make up more than 50% of the Company's real
estate development investments. In 1992 and 1991, the Company took writedowns
of $31.4 million and $2.8 million, respectively, to reduce the carrying value
of certain real estate assets to net realizable value. Such writedowns did not
include Rincon Center and The Resort at Squaw Creek. See "Investments in and
Refinancing of Rincon Center and The Resort at Squaw Creek." Rincon Center,
which was refinanced in 1993, is currently generating sufficient cash to cover
its operating expenses plus interest expense and is expected in 1994 to
contribute toward its required annual principal amortization. The Resort at
Squaw Creek covered its operating expenses and contributed toward debt service
for the first time in 1993. The $48 million financing on The Resort at Squaw
Creek matures in May 1995 and conversations with the project's lead bank
suggests there is interest on its part to extend the loan on the property with
no significant cash paydown based on the expected appraisal value.
Negotiations are expected to begin this year.
Real Estate Properties
The following is a description of the Company's real estate development
investments:
<TABLE>
<CAPTION>
APPROXIMATE STATUS AS OF
PROJECT LOCATION SITE DESCRIPTION PERINI INTEREST MARCH 31, 1994
------- -------- ---- ----------- --------------- --------------
<S> <C> <C> <C> <C> <C>
ARIZONA
Sabino Springs Tucson 33 residential Estate lots adjoining a 100% Further development
Country Club lots planned residential golf awaiting completion of
course community infrastructure on
adjacent golf course
community
I-10 West Phoenix 160 acres Industrially zoned land 80% 13 acres remain to be
sold
Airport Commerce Center Tucson 166 acres Industrially zoned land 80% 123 acres remain to be
sold
Perini Central Phoenix 4.4 acres Zoned for office, retail and 75% On hold pending
Limited Partnership residential use improvement in market
Grove at Black Phoenix 30 acres Office park complex 50% 150,000 sq. ft. office
Canyon building fully leased;
further development on
hold
Capitol Plaza Phoenix 1.75 acres Commercially zoned land 100% On hold pending
improvement in market
CALIFORNIA
Rincon Center San Francisco 320 apartment Mixed-use office, retail and 46% Almost 100% of the
units, 63,000 residential complex office space, 94% of the
sq. ft. retail retail space and all but
space, 416,000 10 of the residential
sq. ft. units were leased
commercial space
The Resort at Squaw Squaw 405 units Ski resort/conference hotel 18% Opened December 1990;
Creek Valley golf course completed
1992
FLORIDA
The Villages of Palm West Palm 1,428 acres Planned community of 6,750 100% Ongoing development; 14
Beach Beach residential units with acres remain to be sold
commercial development and
two golf courses
Metrocentre West Palm 17 lots Commercial/office 100% 5 lots remain to be sold
Beach park development
GEORGIA
The Oaks at Buckhead Atlanta 217 condominium 201 high-rise units plus 16 50% 76 units closed; 15
units town homes under contract
The Villages at Lake Clayton 348 acres Planned Community 49% Large portion of
Ridge County infrastructure and all
recreational amenities
complete; 18.5 acres
sold for apartment
development; 16 acres
sold to local school
board; 148 single family
lots delivered to
builders
MASSACHUSETTS
Raynham Woods Commerce Raynham 409 acres Office park and retail 100% 206 salable acres remain
Center development after accounting for
wetlands, public use,
and previously sold
acreage, also two fully
leased commercial
buildings owned on site
Robin Hill Marlboro 53 acres Office park development 100% Final 53 acres currently
under contract for sale
in 1994
Easton Business Center Easton 40 acres Commercially zoned land 100% Remains to be sold
Commercial/Retail Wareham 19 acres Commercially zoned land 100% Remains to be sold
</TABLE>
Investments in and Refinancing of Rincon Center and The Resort at Squaw Creek
Rincon Center. Rincon Center is a large mixed-use project in the financial
district of San Francisco. The project is located on the site of the U.S.
Postal Service's historic Rincon Annex. The land is in the ninth year of a 65-
year leasehold from the U.S. Postal Service.
Rincon Center is controlled by Rincon Center Associates, a California limited
partnership of which PL&D and Pacific Gateway Properties, Inc. ("PGP") are the
general partners. PL&D is the managing general partner and owns 46% of the
equity interest of the partnership.
The commercial portion of the project known as Rincon One, which includes
approximately 223,000 square feet of office space and 42,000 square feet of
retail space, was sold and leased back by the developing partnership in 1988.
The commercial portion of the project known as Rincon Two, which includes
approximately 200,000 square feet of office space, 21,000 square feet of
retail space and a 14,000 square foot U.S. postal facility, is financed by a
$28 million bank loan which matures in 1998. The residential portion of Rincon
Two contains 320 apartment units which were financed by $34 million of tax-
free bonds which mature in 2006.
The Company has advanced approximately $70 million to the partnership since
its formation in 1984 through December 31, 1993. Approximately $8 million of
this amount was advanced during 1993, primarily to pay down some of the
principal portion of project debt which was renegotiated during 1993. Although
the project is close to fully occupied, commercial rent concessions during
1993 prevented operations from exceeding breakeven on a cash flow basis. Those
concessions have ended, and in 1994 operations are expected to generate
positive cash flow before any required principal paydowns on loans. Two major
loans on this property in the aggregate totaling over $75 million were
scheduled to mature in 1993. During 1993, both loans were extended for five
additional years. To extend these loans, PL&D provided approximately $7
million in new funds which were used to reduce the principal balance of the
loans. Additional amortization of these loans will be required. To the extent
operating cash flow is insufficient to cover required principal payments, PL&D
will be responsible for 80% of the shortfall. In addition, during 1993, PL&D
agreed, if necessary, to lend PGP funds to meet its 20% share of cash calls,
in which case, PL&D will receive a priority return from the partnership on
those funds and penalty fees in the form of rights to certain distributions
due PGP by the partnership controlling Rincon. During 1993, PL&D advanced $1.7
million under this agreement, primarily to meet the principal payment
obligations of the loan extensions described above.
The various financings are secured by a pledge of the project, two letters of
credit aggregating $9 million ($4.5 million from the Company and $4.5 million
from PGP) and PL&D's corporate guaranty of $3.5 million. PL&D has guaranteed
the payment of any operating deficits and the payment of interest on both the
bonds and the bank loan. Perini has guaranteed PL&D's share of the operating
deficits on Rincon One over the next five years and $5 million of the
principal amortization payable on Rincon Two over the next five years.
The Resort at Squaw Creek. The Resort at Squaw Creek is a resort-conference
hotel which was completed and put into operation in December of 1990.
Ownership of the project is held by Squaw Creek Associates, a California
general partnership ("SCA"). PL&D as a partner in Glenco-Perini-HCV ("GPHCV"),
a California limited partnership and a general partner in SCA, owns 18% of the
project. PL&D, however, has full responsibility for GPHCV's 40% share of all
operating deficits of the project and 100% of any portion of a $2 million
annual preferred return to the majority partner which is not funded from
operating cash flow. The financing on the project is an approximately $48
million bank loan which matures May 1, 1995. Under the terms of that loan,
PL&D has guaranteed $10 million of principal and all interest payments and
provides a $1.0 million letter of credit as its share of an overall $2.5
million commitment. See Note 11 to the Notes to Consolidated Financial
Statements.
At December 31, 1993, PL&D had advanced $68 million, of which $2.8 million was
advanced during 1993, to the partnership to cover construction overruns,
operating deficits or preferred return commitments. Approximately $15 million
of these advances, and accrued interest thereon, currently have a priority
position, second only to the bank loan. At March 31, 1994, such interest
accrual amounted to approximately $5 million.
INSURANCE AND BONDING
All of the Company's properties and equipment, both directly owned or owned
through partnerships or joint ventures with others, are covered by insurance
and management believes that such insurance is adequate. However, due to
conditions in the insurance market, the Company's California properties, owned
in partnership with others, are not fully covered by earthquake insurance. In
conjunction with its construction business, the Company is often required to
provide various types of surety bonds. The Company has dealt with the same
surety for approximately 75 years and it has never been refused a bond.
Although from time-to-time the surety industry encounters limitations
affecting the bondability of very large projects, the Company has not
encountered any limit on its bonding ability that has adversely impacted its
operations.
LEGAL PROCEEDINGS
On July 30, 1993, the U.S. District Court for the District of Columbia upheld
the Contracting Officer's termination for default, both dated May 11, 1990, on
two adjacent contracts for subway construction between Mergentime-Perini (two
joint ventures) and the Washington Metropolitan Area Transit Authority
("WMATA") and found the Mergentime Corporation, Perini Corporation and the
Insurance Company of North America, the surety, jointly and severally liable
to WMATA for damages in the amount of $16.5 million, consisting primarily of
excess reprocurement costs. The court deferred ruling on the net value of the
joint ventures' major claims against WMATA. Any such amounts awarded to the
joint ventures could serve to offset the above damages award. Originally
Mergentime Corporation was the sponsor and manager of both joint ventures with
a 60% interest in each. Perini held the remaining 40%. The contracts were
awarded in 1985 and 1986 but in 1987, Perini and Mergentime entered into an
agreement whereby Perini withdrew from the joint ventures, but remained
obligated to WMATA under the contracts and related bonds. At that point,
Mergentime assumed full control over the performance of both projects. After
the termination of the joint ventures' contracts in May 1990, Perini, acting
independently, was awarded a separate contract by WMATA to finish these
projects, both of which were successfully completed on schedule.
Mergentime may be unable to meet its financial obligations under the award. In
such event the Company, as a joint venture partner, could be liable for the
entire amount. Currently both parties have filed post-trial motions with the
District Court attacking the decision and award. For the purposes of these
motions, the successor judge (who was recently named) is treating the judgment
as one that is not a final judgment and thus not one from which an appeal lies
pending rulings on the motions. Although no date has been set for a review of
the post-trial motions, the Court has indicated that such consideration will
require substantial effort and that it intends to give this case the
consideration it deserves.
The ultimate financial impact, if any, of this judgment is not yet
determinable, and therefore, no impact is reflected in the Consolidated
Financial Statements.
In the ordinary course of its construction business, the Company is engaged in
other lawsuits. The Company believes that such lawsuits are usually
unavoidable in major construction operations and that their resolution will
not materially affect its business.
EMPLOYEES
The total number of personnel employed by the Company is subject to seasonal
fluctuations, the volume of construction in progress and the relative amount
of work performed by subcontractors. During 1993, the maximum number of
employees involved in operations was approximately 2,600 and the minimum was
approximately 1,900. Included in these figures are 1,000 core salaried
employees.
The Company operates as a union contractor. As such, it is a signatory to
numerous local and regional collective bargaining agreements, both directly
and through trade associations, throughout the country. These agreements cover
all necessary union crafts and are subject to various renewal dates. Estimated
amounts for wage escalation related to the expiration of union contracts are
included in the Company's bids on various projects, and as a result, the
expiration of any union contract in the current fiscal year is not expected to
have any material impact on the Company.
DESCRIPTION OF CONVERTIBLE PREFERRED STOCK
Each of the Depositary Shares offered hereby represents 1/10th of a share of
the Convertible Preferred Stock. See "Description of Depositary Shares."
The Restated Articles of Organization, as amended, of the Company (the
"Restated Articles") authorize the issuance of one million shares of preferred
stock, par value $1.00 per share. Currently, there are 100,000 shares of
$21.25 Convertible Exchangeable Preferred Stock outstanding. See "Description
of Outstanding Capital Stock--$21.25 Preferred Stock." The summary of terms of
the Company's preferred stock (including the Convertible Preferred Stock)
contained in this Prospectus does not purport to be complete and is subject
to, and qualified in its entirety by, the provisions of the Company's Restated
Articles and the Certificate of Vote of Directors Establishing a Series of a
Class of Stock fixing the relative rights and preferences of the Convertible
Preferred Stock (the "Certificate") which is an exhibit to the Registration
Statement of which this Prospectus is a part.
GENERAL
The Company's preferred stock may be issued from time to time in one or more
series, without stockholders' approval. Subject to limitations prescribed by
law and by the Restated Articles, the Board of Directors is authorized to
determine the relative rights and preferences for each series of preferred
stock that may be issued, and to fix the number of shares of each such series.
Without obtaining the favorable vote of the holders of two-thirds of the
outstanding Convertible Preferred Stock, the Company is prohibited by the
terms of the Convertible Preferred Stock from issuing additional preferred
stock that is senior to the Convertible Preferred Stock as to dividends and
liquidation. The Company may issue additional series of preferred stock
ranking on a parity with the Convertible Preferred Stock as to dividends and
liquidation without the vote of the outstanding Convertible Preferred Stock.
See "Voting Rights" below. Notwithstanding the fixing of the number of shares
constituting a particular series, the Board of Directors may at any time
authorize the issuance of additional shares of the same series. The
Convertible Preferred Stock offered hereby will be a single series consisting
of up to 100,000 shares, plus up to 15,000 shares issuable pursuant to the
Initial Purchaser's over-allotment option. Any Convertible Preferred Stock
converted, redeemed, exchanged or otherwise acquired by the Company will, upon
cancellation, have the status of authorized but unissued preferred stock
undesignated as to series subject to reissuance by the Board of Directors.
DIVIDENDS
Holders of the shares of Convertible Preferred Stock are entitled to receive,
when and as declared by the Board of Directors of the Company out of funds of
the Company legally available for payment, an annual cash dividend of $
per share, payable quarterly in arrears on September 15, December 15, March 15
and June 15 of each year (beginning September 15, 1994), unless any such date
is a non-business day, in which event the dividend will be payable on the next
business day. Dividends on the Convertible Preferred Stock will be cumulative
from the date of original issue and shall be payable to the holder of record
on the record date fixed for such payment. Accumulated but undeclared
dividends will not bear interest. When dividends are not paid in full upon any
series of preferred stock ranking senior as to dividends to the Convertible
Preferred Stock, then no dividend shall be paid or declared and set apart for
payment on the Convertible Preferred Stock unless and until all accrued and
unpaid dividends with respect to such other stock shall have been paid or
declared and funds therefor set apart for payment. When dividends are not paid
in full upon the Convertible Preferred Stock and upon any other stock ranking
on a parity as to dividends with the Convertible Preferred Stock, all
dividends declared upon shares of Convertible Preferred Stock and any other
stock ranking on a parity as to dividends with the Convertible Preferred Stock
shall be declared pro rata based on the ratio that accrued and unpaid
dividends on each series of stock bears to each other. Except as provided in
the preceding sentence, unless full cumulative dividends on the Convertible
Preferred Stock have been paid or declared and funds therefor set apart for
such payment, the Company shall not declare, pay or set apart for payment, any
cash dividends or make any other cash distribution upon the Common Stock of
the Company or any other stock of the Company ranking junior to or on a parity
with the Convertible Preferred Stock as to dividends.
CONVERSION
Holders of the Convertible Preferred Stock will be entitled at any time to
convert shares of Convertible Preferred Stock into Common Stock of the Company
at the conversion rate set forth on the cover page of this Prospectus, except
that, with respect to shares of Convertible Preferred Stock called for
redemption or exchange, conversion rights will expire at the close of business
on the redemption date or exchange date, so long as there has been no default
in the payment of the redemption price or exchange price. Except as provided
below, no payment or adjustment on account of dividends accumulated and unpaid
upon Convertible Preferred Stock or in respect of dividends on Common Stock
will be issued upon conversion, but if such conversion would otherwise result
in a fractional share being issued, an amount will be paid in cash by the
Company equal to the market value of the fractional interest. Convertible
Preferred Stock surrendered for conversion during the period between the
record date for payment of dividends and the dividend payment date (except for
Convertible Preferred Stock called for redemption or exchange with a
redemption date or exchange date during such period) must be accompanied by
payment of an amount equal to the dividend thereon which the holder is to
receive on the dividend payment date.
The conversion price is subject to adjustment upon the occurrence of certain
events, including the issuance of Common Stock of the Company as a dividend or
distribution on the Common Stock, subdivisions and combinations of the Common
Stock, certain reclassifications of the Common Stock, the issuance to the
holders of Common Stock of certain rights or warrants entitling them to
subscribe for Common Stock at less than the then current market price (as
defined) and the distribution to the holders of Common Stock of shares of
capital stock other than Common Stock, debt securities of the Company or
assets or rights or warrants to purchase securities of the Company (excluding
cash dividends or distributions paid out of earnings or surplus as shown on
the books of the Company). No adjustment in the conversion price will be
required in respect of a change in the par value of the Common Stock or
issuances of rights to purchase Common Stock pursuant to a Company plan for
reinvestment of dividends or interest. No adjustment in the conversion price
will be required unless such an adjustment would require a change of at least
1% in the price then in effect, but any adjustment that would otherwise be
required to be made shall be carried forward and taken into account in any
subsequent adjustment. No adjustment need be made if the holders of
Convertible Preferred Stock participate in the transaction that would have
resulted in an adjustment absent such participation. The Company may at any
time reduce the conversion price by any amount for a minimum period of 20 days
upon notice to the holders of the Convertible Preferred Stock 15 days prior to
the date the decreased conversion price takes effect.
In the event of certain mergers, consolidations or any sale, lease or transfer
of all or substantially all of the assets of the Company, the right of a
holder of Convertible Preferred Stock to convert such stock into Common Stock
of the Company will be converted into the right to receive whatever securities
or other property, including cash, the holders of such number of shares of
Common Stock into which the Convertible Preferred Stock might have been
converted prior to such merger, consolidation, sale, lease or transfer.
A conversion rate adjustment made according to the provisions of the
Convertible Preferred Stock (or the absence of provision for such an
adjustment) might result in a constructive distribution to the holders of
Convertible Preferred Stock or holders of Common Stock that would be subject
to taxation as a dividend.
EXCHANGE
The Convertible Preferred Stock is exchangeable, in whole but not in part, at
the option of the Company on any dividend payment date on or after September
15, 1996, for the Company's % Convertible Subordinated Debentures Due 2019
(the "Debentures"). See "Description of Debentures." Holders of the
Convertible Preferred Stock will be entitled to receive $250 principal amount
of the Debentures in exchange for each share of Convertible Preferred Stock
held by them at the time of exchange. At such time, the rights of the holders
of the Convertible Preferred Stock as stockholders of the Company shall cease
(except the right to receive Debentures and accrued and unpaid dividends to
the date of exchange), and the person or persons entitled to receive the
Debentures issuable upon such exchange shall be treated for all purposes as
the registered holder or holders of such Debentures. The Company will mail
notice of its intention to exchange to each holder of record of the
Convertible Preferred Stock no less than 30 nor more than 60 days prior to the
date of exchange. The Convertible Preferred Stock will be convertible into
Common Stock up to the close of business on the date of exchange.
OPTIONAL REDEMPTION
The Convertible Preferred Stock will not be redeemable by the Company prior to
September 15, 1997. Thereafter, the Convertible Preferred Stock is redeemable
at the option of the Company, in whole or in part, at the following redemption
prices per share, if redeemed during the 12-month period beginning September
15 in each of the years indicated:
<TABLE>
<CAPTION>
YEAR PRICE YEAR PRICE
---- ----- ---- -----
<S> <C> <S> <C>
1997 ....................... $ 2001 ..................... $
1998 ....................... 2002 .....................
1999 ....................... 2003 .....................
2000 .......................
</TABLE>
and on or after September 15, 2004, at $250 per share, plus, in each case,
accumulated and unpaid dividends to the date of redemption. If full cumulative
dividends on the Convertible Preferred Stock have not been paid, no shares of
Convertible Preferred Stock may be redeemed and the Company may not acquire
any shares of the Convertible Preferred Stock other than pursuant to a
purchase or exchange offer made on the same terms to all holders of
Convertible Preferred Stock unless the holders of two-thirds of the
Convertible Preferred Stock shall have consented thereto.
The Company will mail notice of redemption to each holder of record of
Convertible Preferred Stock to be redeemed not less than 30 nor more than 60
days prior to the redemption date. On and after the date of redemption,
dividends shall cease to accumulate on the Convertible Preferred Stock so
called for redemption, such shares shall no longer be deemed to be outstanding
and all rights of the holders of such shares as stockholders of the Company
shall cease, except the right to receive the amounts payable upon such
redemption, without interest, upon surrender of the certificates evidencing
such shares.
If less than all of the outstanding shares of Convertible Preferred Stock are
to be redeemed, the Company will select those to be redeemed pro-rata or by
lot or in such manner as the Company shall deem appropriate or fair.
There is no mandatory redemption or sinking fund obligation with respect to
the Convertible Preferred Stock.
LIQUIDATION
In the event of involuntary liquidation, dissolution or winding up of the
Company, the holders of the shares of Convertible Preferred Stock are entitled
to receive out of the assets of the Company available for distribution to
stockholders, before any distribution of assets is made to holders of Common
Stock or any other stock ranking junior to the Convertible Preferred Stock as
to liquidation, liquidating distributions in the amount of $25 per share plus
accumulated and unpaid dividends. In the event of voluntary liquidation,
dissolution or winding up of the Company, the holders of shares of Convertible
Preferred Stock are entitled to receive out of the assets of the Company
available for distribution to stockholders, subject to the rights of any
series of preferred stock ranking senior to the Convertible Preferred Stock as
to liquidation, but before any distribution of assets is made to holders of
Common Stock or any other stock ranking junior to the Convertible Preferred
Stock as to liquidation, liquidating distributions in the amounts set forth
under "Optional Redemption" above, plus accumulated and unpaid dividends.
If upon any liquidation of the Company, or any other distribution of its
assets, the amounts payable with respect to the Convertible Preferred Stock or
any other outstanding shares of preferred stock of the Company ranking as to
any such distribution on a parity with the Convertible Preferred Stock are not
paid in full, the holders of the Convertible Preferred Stock and of such other
shares of stock will share ratably in any such distribution of assets of the
Company in proportion to the full respective preferential amounts to which
they are entitled. After payment of the full amount of the liquidating
distribution to which they are entitled, the holders of shares of Convertible
Preferred Stock will not be entitled to any participation in any distribution
of assets by the Company.
VOTING RIGHTS
The Convertible Preferred Stock is not entitled to vote, except as provided
below and in accordance with Massachusetts law and, in such case, the holders
of the Convertible Preferred Stock shall have one vote per share. The Company
may not amend, alter or repeal any of the preferences or rights (including
voting rights) of the holders of the Convertible Preferred Stock or authorize,
create or increase the amount of any class or series of stock ranking prior to
the Convertible Preferred Stock as to dividends or liquidation without the
favorable vote of the holders of at least two-thirds of the then outstanding
shares of Convertible Preferred Stock, voting together as a class with the
holders of any other outstanding shares of preferred stock which rank on
parity with the Convertible Preferred Stock as to dividends and liquidation.
The number of authorized shares of the Company's preferred stock may be
increased by the affirmative vote of the holders of at least a majority of the
voting stock of the Company, voting together. Any amendments to the Restated
Articles which adversely affect the preferences or rights of the holders of
the Convertible Preferred Stock require a two-thirds vote of the Convertible
Preferred Stock voting separately as a class. The Company may issue additional
series of preferred stock ranking on a parity with the Convertible Preferred
Stock as to dividends and liquidation without the vote of the outstanding
Convertible Preferred Stock.
If an amount equal to six quarterly dividends on the Convertible Preferred
Stock shall have accumulated and be unpaid, the number of directors of the
Company will be increased by two and the holders of the Convertible Preferred
Stock, voting together as a class with any other series of preferred stock on
parity with the Convertible Preferred Stock as to dividends or liquidation
rights and which is similarly affected, will be entitled to elect such
additional two directors until all dividends in default have been paid or
declared and funds therefor set apart for payment, at which time such two
directors will resign from the board and the number of directors of the
Company will be reduced by two. When such voting rights have vested in the
holders of the Convertible Preferred Stock, a special meeting to elect such
directors may be called by the Chief Executive Officer or Chairman of the
Company or by the holders of 25% or more of the shares of preferred stock of
all series affected.
OTHER PROVISIONS
The holders of the Convertible Preferred Stock have no preemptive rights with
respect to any shares of capital stock of the Company or any other securities
of the Company convertible into or carrying rights or options to purchase any
such shares. The Convertible Preferred Stock, upon issuance against full
payment of the purchase price therefor, will be fully paid and nonassessable.
The transfer agent, conversion agent and registrar for the Convertible
Preferred Stock will be State Street Bank & Trust Co.
DESCRIPTION OF DEPOSITARY SHARES
Each Depositary Share represents one-tenth of a share of Convertible Preferred
Stock deposited under the Deposit Agreement (the "Deposit Agreement") among
the Company, State Street Bank & Trust Co., as depositary (the "Depositary"),
and the holders from time to time of the depositary receipts (the "Depositary
Receipts") issued thereunder. Subject to the term of the Deposit Agreement,
each owner of a Depositary Share is entitled, proportionately, to all of the
rights and preferences of the Convertible Preferred Stock represented thereby
(including dividend, conversion, redemption, exchange, liquidation and voting
rights) contained in the Company's Restated Articles and in the Certificate
and summarized above under "Description of Convertible Preferred Stock." The
Depositary Shares are evidenced by Depositary Receipts issued pursuant to the
Deposit Agreement. The Company does not expect that there will be any trading
market for the Convertible Preferred stock except as may be represented by the
Depositary Shares.
The following summary does not purport to be complete and is subject in all
respects to the Deposit Agreement and form of Depositary Receipt, copies of
which are attached as an exhibit to the Registration Statement of which this
Prospectus is a part.
ISSUANCE OF DEPOSITARY RECEIPTS
Immediately following the issuance and delivery of the Convertible Preferred
Stock by the Company to the Initial Purchaser at the closing as contemplated
herein, the Initial Purchaser will deposit the Convertible Preferred Stock
with the Depositary which will then issue the Depositary Receipts representing
Depositary Shares to the Initial Purchaser.
WITHDRAWAL OF CONVERTIBLE PREFERRED STOCK
Upon surrender of the Depositary Receipts at the shareholder services office
of the Depositary (unless the underlying Depositary Shares have previously
been called for redemption or exchange), the owner of the Depositary Shares
evidenced thereby is entitled to delivery at such office, to or upon his
order, of the number of whole shares of Convertible Preferred Stock and any
money or other property represented by such Depositary Shares. Owners of
Depositary Shares will be entitled to receive whole shares of Convertible
Preferred Stock on the basis of one share of Convertible Preferred Stock for
every ten Depositary Shares surrendered. In no event will fractional shares of
Convertible Preferred Stock (or cash in lieu thereof) be distributed by the
Depositary. If any Depositary Receipt delivered by any holder evidences a
number of Depositary Shares in excess of the number of Depositary Shares
representing the number of whole shares of Convertible Preferred Stock to be
withdrawn, the Depositary will deliver to the holder at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
Whenever the Company redeems shares of Convertible Preferred Stock from the
Depositary, the Depositary will redeem as of the same redemption date the
Depositary Shares representing the shares of Convertible Preferred Stock so
redeemed upon no less than 30 nor more than 60 days' notice, from the proceeds
received by the Depositary in respect of the redemption of such shares of
Convertible Preferred Stock held by the Depositary. The redemption price per
Depositary Share will be equal to one-tenth of the redemption price per share
payable with respect to a share of Convertible Preferred Stock. See
"Description of Convertible Preferred Stock -- Optional Redemption."
If less than all of the Depositary Shares are to be redeemed, the Depositary
Shares to be redeemed shall be selected pro rata or by lot or in such manner
as the Company shall deem appropriate and fair.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
amounts payable on such redemption and any money or other property to which
the holder of such Depositary Shares was entitled upon such redemption, upon
surrender to the Depositary of the Depositary Receipt evidencing such
Depositary Shares.
CONVERSION
Each record holder of Depositary Shares will have the right, at any time, to
surrender Depositary Receipts representing one or more whole shares of
Convertible Preferred Stock to the Depositary with written instructions to
convert a number of underlying whole shares of Convertible Preferred Stock to
which such holder would be entitled into shares of the Company's Common Stock
at the then effective conversion price (subject to the same terms and
conditions set forth in "Description of Convertible Preferred Stock --
Conversion"). If only a portion of the Depositary Shares evidenced by a
Depositary Receipt is to be converted, a new Depositary Receipt or Receipts
will be issued for any Depositary Shares not to be converted. No fractional
shares of Common Stock will be issued upon conversion of Depositary Shares,
and if such conversion would otherwise result in a fractional share of Common
Stock being issued, an amount will be paid in cash by the Company equal to the
market value of the fractional interest.
EXCHANGE
On or after September 15, 1996, upon election by the Company to exchange the
Convertible Preferred Stock for the Debentures, the Depositary Shares will be
exchanged, upon no less than 30 nor more than 60 days' notice, by the
Depositary for the Debentures at the rate of $25 principal amount of
Debentures for each Depositary Share then outstanding. See "Description of
Convertible Preferred Stock -- Exchange." Upon such exchange, the Depositary
Shares will no longer be deemed outstanding and all rights of the holders of
the Depositary Shares will cease, except the right to receive the Debentures
and any other money or other property to which the holders of Depositary
Shares were entitled upon such exchange, upon surrender to the Depositary of
the Depositary Receipts evidencing such Depositary Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash distributions
received in respect of the Convertible Preferred Stock to the record holders
of Depositary Shares in proportion, insofar as practicable, to the number of
Depositary Shares owned by such holders.
In the event of a distribution other than in cash, including a distribution of
the Debentures in the event of the exchange of the Convertible Preferred
Stock, the Depositary will distribute property received by it to the record
holders of Depositary Shares entitled thereto, unless the Depositary
determines that it is not feasible to make such distribution, in which case
the Depositary may, with the approval of the Company, adopt such method as it
deems equitable and practical for the purpose of effecting such distribution,
including the sale of such property and distribution of the net proceeds from
such sale to such holders.
The amount distributed in all of the foregoing cases will be reduced by any
amounts required to be withheld by the Company or the Depositary on account of
any taxes.
VOTING THE CONVERTIBLE PREFERRED STOCK
Upon receipt of notice of any meeting at which the owners of the Convertible
Preferred Stock are entitled to vote, the Depositary will mail the information
contained in such notice of meeting to the record holders of Depositary
Shares. Each record holder of Depositary Shares on the record date (which will
be the same date as the record date for the Convertible Preferred Stock) will
be entitled to instruct the Depositary as to the exercise of the voting rights
pertaining to the number of shares of Convertible Preferred Stock represented
by such holder's Depositary Shares. The Depositary will endeavor, insofar as
practicable, to vote the number of shares of Convertible Preferred Stock
represented by such Depositary Shares in accordance with such instructions,
and the Company has agreed to take all action which may be deemed necessary by
the Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of Convertible Preferred Stock to the extent it
does not receive specific instructions from the holders of Depositary Shares
representing such Convertible Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipts evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment which imposes
or increases any fees, taxes or charges upon owners of Depositary Shares
(other than taxes and other governmental charges, fees and telegram, telex,
delivery or other expenses payable by such owners as stated below under
"Charges of Depositary"), or which otherwise prejudices any substantial rights
of holders of Depositary Shares or materially prejudices the rights of holders
of Convertible Preferred stock, will not take effect as to outstanding
Depositary Shares until the expiration of 90 days after notice of such
amendment has been mailed to the record holders of outstanding Depositary
Shares. In no event may any amendment impair the right of any owner of any
Depositary Share, subject to the conditions specified in the Deposit
Agreement, to surrender Depositary Receipts evidencing Depositary Shares to
the Depositary with written instructions to convert such Depositary Shares
into Common Stock or to deliver to such holder the Convertible Preferred Stock
underlying such Depositary Shares and any money or other property, including
the Debentures, represented thereby, except in order to comply with mandatory
provisions of applicable law.
Whenever directed by the Company, the Depositary will terminate the Deposit
Agreement by mailing notice of such termination to the record holders of all
outstanding Depositary Shares at least 30 days prior to the date of
termination. The Depositary may likewise terminate the Deposit Agreement at
any time 60 days after the Depositary shall have delivered to the Company a
written notice of its election to resign if a successor depositary shall not
theretofore have been appointed and accepted its appointment. If any
Depositary Shares remain outstanding after the date of termination, the
Depositary thereafter will discontinue the transfer of Depositary Receipts,
will suspend the distribution of dividends to the owners thereof, and will not
give any further notices (other than notice of such termination) or perform
any further acts under the Deposit Agreement except as provided below and
except that the Depositary will continue (a) to collect dividends on the
Convertible Preferred Stock and any other distributions with respect thereto
or, if applicable, principal of, and premium, if any, and interest on the
Debentures, and (b) to deliver Convertible Preferred Stock or, if applicable,
the Debentures, together with such dividends and distributions, or the
principal, premium, if any, and interest, and the net proceeds of any sales of
rights, preferences, privileges or other property, without liability for
interest, in exchange for Depositary Receipts surrendered. At any time after
the expiration of two years from the date of termination, the Depositary may
sell the Convertible Preferred Stock or, if applicable, the Debentures then
held by it, at public or private sales, at such place or places and upon such
terms as it deems proper and may thereafter hold the net proceeds of any such
sale, together with any money and other property then held by it, without
liability for interest, for the pro rata benefit of the holders of Depositary
Receipts which shall not theretofore have been surrendered. The Company does
not intend to terminate the Deposit Agreement or to permit the resignation of
the Depositary without appointing a successor depositary.
CHARGES OF DEPOSITARY
All charges in connection with the initial deposit of the Convertible
Preferred Stock and the initial issuance of the Depositary Shares will be
borne by the Company, as will all charges of the Depositary in connection with
initial withdrawals of Convertible Preferred Stock by the owners of Depositary
Shares following the initial deposit by the Initial Purchaser or conversions
of Convertible Preferred Stock or the exchange of Convertible Preferred Stock
for Debentures. The Depositary will charge the party to whom Depositary
Receipts are delivered against subsequent deposits of Convertible Preferred
Stock $ for each 100 Depositary Shares evidenced by Depositary Receipts so
delivered. The Company will pay all other charges of the Depositary except for
taxes (including transfer taxes, if any) and other governmental charges, and
such telegram, telex, delivery or other charges as are expressly provided in
the Deposit Agreement to be at the expense of holders of Depositary Shares or
persons depositing Convertible Preferred Stock.
RIGHTS AND DUTIES OF DEPOSITARY
The Depositary will make available to holders of Depositary Shares, upon
request of such holders, all reports and communications from the Company which
are delivered to the Depositary and made generally available to the holders of
Convertible Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and
the Depositary under the Deposit Agreement are limited to performance in good
faith of the duties undertaken by each of them thereunder and neither is
obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares, Convertible Preferred Stock or other securities described
herein unless satisfactory indemnity is furnished. They may rely upon advice
of or information from counsel, accountants, persons presenting Convertible
Preferred Stock for deposit, holders of Depositary Receipts or other persons
believed to be competent and on documents believed to be genuine.
The Depositary and the Depositary's agents may own and deal in any class of
securities of the Company and its affiliates and in Depositary Receipts. The
Depositary may also act as transfer agent or registrar of any of the
securities of the Company and its affiliates, may loan money to the Company
and its affiliates and may engage in any other business with or for the
Company and its affiliates.
DESCRIPTION OF DEBENTURES
The Company will issue the Debentures under an indenture (the "Indenture")
between the Company and State Street Bank & Trust Co. (the "Trustee"). The
terms of the Debentures will include those stated in the Indenture, a form of
which is attached as an exhibit to the Registration Statement of which this
Prospectus is a part. The Debentures will be unsecured subordinated
obligations of the Company limited to $25,000,000 principal amount.
GENERAL
The Debentures are in registered form without coupons in denominations of $25
and any whole multiple of $25. The Company will pay interest on the Debentures
semiannually on September 15 and March 15 of each year at the rate of %
per annum. It will pay interest on the Debentures to the persons who are
registered holders at the close of business on the last day of the month
before the interest payment date. Interest will be computed on the basis of a
360-day year of twelve 30-day months. The Company may pay principal and
interest by its check and may mail an interest check to a holder's registered
address. The Debentures mature on September 15, 2019.
CONVERSION RIGHTS
The holders of Debentures will be entitled at any time on or before September
15, 2019, to convert the Debentures into Common Stock of the Company initially
at the conversion rate for the Depositary Shares set forth on the cover of
this Prospectus, except that, with respect to Debentures called for
redemption, conversion rights will terminate at the close of business on the
redemption date. Notice of redemption must be given not less than 30 nor more
than 60 days before the redemption date. Except as provided below, no payment
or adjustment is to be made on conversion for interest accrued on the
Debentures or for dividends on the Common Stock issued on conversion of any
Debenture. Debentures surrendered for conversion between the record date for
payment of interest and the interest payment date (except Debentures called
for redemption during such period) must be accompanied by payment of the
interest on the Debentures, if any, that the holder is to receive on the
interest payment date. No fractional shares of Common Stock will be issued
upon conversion of the Debentures, and if such conversion would otherwise
result in a fractional share of Common Stock being issued, an amount will be
paid in cash by the Company equal to the market value of the fractional
interest.
The conversion price is subject to adjustment on the occurrence of certain
events, including the issuance of Common Stock of the Company as a dividend or
distribution on the Common Stock, subdivisions and combinations of the Common
Stock, certain reclassifications of the Common Stock, the issuance to the
holders of Common Stock of certain rights or warrants entitling them to
subscribe for Common Stock at less than the then current market price (as
defined) and the distribution to the holders of Common Stock of shares of
capital stock other than Common Stock, debt securities of the Company or
assets or any rights or warrants to purchase securities of the Company
(excluding cash dividends or distributions paid out of earnings or surplus as
shown on the books of the Company). No adjustment in the conversion price will
be required in respect of a change in the par value of the Common Stock or
issuance of rights to purchase Common Stock pursuant to a Company plan for
reinvestment of dividends or interest. No adjustment in the conversion price
will be required unless cumulative adjustments would require a change of at
least 1% in the price then in effect, but any adjustment that would otherwise
be required to be made shall be carried forward and taken into account in any
subsequent adjustment. No adjustment need be made if Debentureholders
participate in the transaction that would have resulted in an adjustment
absent such participation. The Company may at any time reduce the conversion
price by any amount for a minimum period of 20 days upon notice to holders of
the Debentures 15 days prior to the date the described conversion price
adjustment is to take effect.
In the event of certain mergers, consolidations or any sale, lease or transfer
of all or substantially all of the assets of the Company, the right of a
holder of Debentures to convert such Debentures into Common Stock of the
Company will be converted into the right to receive whatever securities or
other property, including cash, the holders of such number of shares of Common
Stock into which the Debentures might have been converted prior to such
merger, consolidation, sale, lease or transfer.
SUBORDINATION
The payment of the principal, premium, if any, and interest on the Debentures
and sinking fund amounts is subordinated in right of payment, as set forth in
the Indenture, to the payment of all Senior Debt of the Company, whether
outstanding on the date of the Indenture or incurred after that date. Senior
Debt is defined as (a) the principal of, premium, if any, and accrued and
unpaid interests on (1) indebtedness of the Company for money borrowed, (2)
guaranties by the Company of indebtedness for money borrowed by any other
person, (3) indebtedness evidenced by notes, debentures, bonds or other
instruments of indebtedness for the payment of which the Company is
responsible or liable, by guaranty, or otherwise (other than debentures issued
in exchange for the $21.25 Preferred Stock, which shall be pari passu with the
Debentures) and (4) obligations of the Company under any agreement to lease,
or lease of any real or personal property, (b) any other indebtedness,
liability or obligation, contingent or otherwise, of the Company and any
guaranty, endorsement or other contingent obligation in respect thereof, and
(c) modifications, renewals, extensions, and refundings of any such
indebtedness, liabilities or obligations, unless, in the instrument creating
or evidencing the same or pursuant to which the same is outstanding, it is
provided that such indebtedness, liabilities or obligations, or such
modification, renewal, extension or refunding, or the obligations of the
Company pursuant to such guaranty, are not superior in right of payment to the
Debentures. Senior Debt will not include any obligation of the Company to any
subsidiary of the Company. The Debentures will be pari passu with any
debentures issued in exchange for shares of the $21.25 Preferred Stock.
There are no restrictions in the Indenture on the amount of Senior Debt the
Company may have outstanding.
No payment on account of principal, premium, if any, and interest on the
Debentures and sinking fund requirements may be made if at the time of such
payment there exists a default with respect to any Senior Debt and the default
is the subject of judicial proceedings or the Company receives notice from
certain authorized persons that payments may not be made. On any distribution
of the assets of the Company on any dissolution, liquidation or reorganization
of or similar proceeding relating to the Company, the holders of Senior Debt
will be entitled to receive payment in full before the Debentureholders are
entitled to receive any payment.
By reason of such subordination, in the event of insolvency, creditors of the
Company who are holders of Senior Debt, as well as general creditors of the
Company, may recover more, ratably, than the holders of the Debentures.
SINKING FUND
The Indenture requires the Company to redeem through a mandatory sinking fund
commencing on September 15, 2005, or on the first September 15, following the
date of initial issuance of the Debentures, whichever is later, and on each
succeeding September 15, to and including September 15, 2018, 5% of the
original principal amount of the Debentures, at a redemption price equal to
their principal amount plus interest accrued to the redemption date.
Debentures converted into Common Stock or acquired or redeemed by the Company
and delivered to the Trustee for cancellation, otherwise than through the
mandatory sinking fund, may be used, at their principal amount (excluding any
premium), to reduce the amount of any mandatory sinking fund payment. The
right to convert Debentures called for redemption through the sinking fund
terminates at the close of business on the date of redemption.
OPTIONAL REDEMPTION
The Debentures will not be redeemable by the Company prior to September 15,
1997. Thereafter, the Debentures are redeemable at the option of the Company,
on at least 30 and not more than 60 days' notice, in whole or in part, at the
following redemption prices (expressed as percentage of principal), if
redeemed during the 12-month period beginning on September 15 in each of the
years indicated:
<TABLE>
<CAPTION>
YEAR PERCENTAGE YEAR PERCENTAGE
---- ---------- ---- ----------
<S> <C> <S> <C>
1997 ............................. 2001 .........................
1998 ............................. 2002 .........................
1999 ............................. 2003 .........................
2000 .............................
</TABLE>
and on or after September 15, 2004, at the principal amount plus, in each
case, any accrued interest to the date of redemption.
On and after the redemption date, interest ceases to accrue on Debentures or
portions of them called for redemption.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of any holders of Debentures, may consolidate
with or merge into, or sell, lease or transfer all or substantially all its
assets to, another entity, provided (1) the resulting, surviving or transferee
entity assumes all the Company's obligations on the Debentures and under the
Indenture, except as to conversion in certain circumstances, (2) that after
giving effect to such transaction no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default, has
happened and is continuing and (3) certain other requirements are met. In the
case of a sale, lease or transfer of assets, the predecessor entity will be
relieved of its obligations under the Indenture.
MODIFICATION AND WAIVER
Subject to certain exceptions, the Indenture may be amended or supplemented
with the consent of the holders of at least
66-2/3% in principal amount of the Debentures then outstanding, and any past
default or compliance with any provisions may be waived with the consent of
the holders of a majority in principal amount of the Debentures then
outstanding. Without the consent of any Debentureholder, the Company may amend
or supplement the Indenture or the Debentures to cure any ambiguity, omission,
defect or inconsistency or to provide for uncertificated Debentures in
addition to or in place of certificated Debentures or to make any change that
does not materially adversely affect the right of any Debentureholder. Without
the consent of any Debentureholder, the Trustee may waive compliance with any
provision of the Indenture or the Debentures if the waiver does not materially
adversely affect the rights of any Debentureholder.
When a successor corporation, trustee, paying agent or registrar assumes all
the obligations of its predecessor under the Debentures and the Indenture, the
predecessor will released from those obligations.
DEFAULTS AND REMEDIES
An Event of Default under the Indenture includes default for 30 days in
payment of interest on the Debentures, default in payment of principal on the
Debentures at maturity or pursuant to a mandatory redemption, failure by the
Company for 60 days after notice to it to comply with any of the other
provisions of the Indenture or Debentures, and certain events of bankruptcy or
insolvency. If an Event of Default occurs and is continuing, the Trustee or
the holders of at least 25% in principal amount of the Debentures outstanding
may declare the Debentures to be due and payable immediately, subject to the
subordination provisions contained in the Indenture, but under certain
conditions such acceleration may be rescinded by the holders of a majority in
principal amount of the Debentures then outstanding. The Indenture will
require the Company to file with the Trustee annually a certificate of two
Company officers stating whether the signers know of any default under the
Indenture that occurred during the previous fiscal year.
Debentureholders may not enforce the Indenture or the Debentures except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Debentures unless it receives indemnity satisfactory to it. Subject to
certain limitations, holders of a majority in principal amount of the
Debentures may direct the Trustee in its exercise of any trust or power under
the Indenture. The Trustee may withhold from Debentureholders notice of any
continuing default (except a default in payment of principal or interest) if
it determines that withholding notice is in their interest.
A director, officer, employee or stockholder, as such, of the Company will not
have any liability for any obligations of the Company under the Debentures or
the Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Debentureholder by accepting a Debenture
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Debentures.
TRANSFER AND EXCHANGE
A holder may transfer or exchange Debentures in accordance with the Indenture.
The Registrar may require a holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Debentures selected for redemption. However, if public notice has been
given that a Debenture is to be redeemed in part, the portion of the Debenture
not to be redeemed may be transferred.
REGISTRAR, PAYING AGENT AND CONVERSION AGENT
The Trustee will maintain an office or agency where the Debentures may be
presented for registration of transfer or for exchange, an office or agency
where the Debentures may be presented for payment and an office where the
Debentures may be presented for conversion.
SATISFACTION AND DISCHARGE OF THE INDENTURE
The Indenture will be discharged and cancelled upon payment or redemption of
all the Debentures or on the 91st day following the deposit with the Trustee
of funds or U.S. Government Obligations sufficient to pay principal and
interest on the Debentures to maturity or redemption.
DESCRIPTION OF OUTSTANDING CAPITAL STOCK
COMMON STOCK
The Restated Articles of the Company authorize the issuance of 15,000,000
shares of Common Stock, par value $1.00 per share, including an increase of
7,500,000 shares approved by the stockholders of the Company at the Annual
Meeting of Stockholders held May 19, 1994. At the close of business on April
29, 1994, there were 4,363,143 shares of Common Stock outstanding, 662,252
shares of Common Stock reserved for issuance upon conversion of the $21.25
Convertible Exchangeable Preferred Stock, 202,664 shares of Common Stock
reserved for payment of 1993 incentive compensation awards to employees
payable in stock and 481,610 shares of Common Stock reserved for issuance upon
exercise of outstanding employee stock options. Subject to the rights of the
holders of preferred stock then outstanding, holders of Common Stock are
entitled to one vote per share on matters to be voted on by stockholders and
are entitled to receive such dividends, if any, as may be declared from time
to time by the Board of Directors of the Company in its discretion out of
funds legally available therefor. Upon any liquidation or dissolution of the
Company, the holders of Common Stock are entitled to receive pro rata all
assets remaining available for distribution to stockholders after payment of
all liabilities and provision for the liquidation of any shares of preferred
stock at the time outstanding. The Common Stock has no preemptive or other
subscription rights, and there are no conversion rights or redemption or
sinking fund provisions with respect to such stock.
The payment of dividends on the Common Stock is subject to the prior payment
of dividends on the outstanding preferred stock and the Convertible Preferred
Stock offered hereby. Further, the Company's revolving credit agreement, as
well as certain other agreements, provides for, among other things,
maintaining specified working capital and tangible net worth levels and
limitations on indebtedness, all of which could impact the ability of the
Company to pay dividends. In addition to the above, payment of dividends on
Common Stock will be at the discretion of the Board of Directors.
The foregoing summary of the Common Stock does not purport to be complete and
is subject to and qualified in its entirety by the Restated Articles and the
laws of the Commonwealth of Massachusetts.
PREFERRED STOCK
The Restated Articles authorize the issuance of one million shares of
preferred stock, par value $1.00 per share. The
Company's authorized but unissued preferred stock may be issued from time to
time in one or more series, without stockholders' approval. Subject to
limitations prescribed by law and by the Restated Articles, the Board of
Directors is authorized to determine the relative rights and preferences for
each series of preferred stock that may be issued, and to fix the number of
shares of such series. Thus, the Board of Directors, without stockholder
approval, could authorize the issuance of additional preferred stock with
voting, conversion and other rights that could adversely affect the voting
power and other rights of holders of Common Stock or that could make it more
difficult for another company to effect certain business combinations with the
Company.
Notwithstanding the fixing of the number of shares constituting a particular
series, the Board of Directors may at any time authorize the issuance of
additional shares of the same series. Any preferred stock converted, redeemed,
exchanged or otherwise acquired by the Company will, upon cancellation, have
the status of authorized but unissued preferred stock undesignated as to
series subject to reissuance by the Board of Directors.
$21.25 PREFERRED STOCK
The Company currently has issued and outstanding 100,000 shares of $21.25
Convertible Exchangeable Preferred Stock, par value $1.00 per share (the
"$21.25 Preferred Stock"), represented by 1,000,000 depositary shares. On
April 29, 1994, there were 182 record holders of the $21.25 Convertible
Exchangeable Preferred Stock. Each depositary share represents 1/10th of a
share of the $21.25 Preferred Stock and each owner of a depositary share is
entitled, proportionately, to all of the rights and preferences of the $21.25
Preferred Stock described below.
The $21.25 Preferred Stock ranks senior to the Convertible Preferred Stock
with respect to dividends and liquidation. Holders of the shares of $21.25
Preferred Stock are entitled to receive an annual cash dividend of $21.25 per
share ($2.125 per depositary share). Unless full cumulative dividends have
been paid or declared, no cash dividends may be declared or paid or other
distribution made on the Common Stock or the Convertible Preferred Stock.
Holders of the $21.25 Preferred Stock will be entitled at any time to convert
shares of $21.25 Preferred Stock into Common Stock of the Company at the
conversion price of $377.50 ($37.75 per depositary share), subject to
adjustment in certain circumstances. Each share of the $21.25 Preferred Stock
is exchangeable, in whole but not in part, at the option of the Company, for
$250 principal amount of the Company's 8-1/2% Convertible Subordinated
Debentures Due 2012 ($25 per depositary share). Holders of such debentures
will be entitled at any time to convert such debentures into Common Stock at
the conversion price of $37.75, subject to adjustment in certain
circumstances.
The $21.25 Preferred Stock is redeemable at the option of the Company, in
whole or in part, at specified redemption prices per share. The $21.25
Preferred Stock is not entitled to vote, except as to certain matters in
regard to creation of additional series of preferred stock or in the event of
an arrearage on dividends. If six quarterly dividends on the $21.25 Preferred
Stock shall have accumulated and been unpaid, the number of directors of the
Company will be increased by two and the holders of the $21.25 Preferred
Stock, voting together as a class with any other series of preferred stock
with the same rank similarly affected, will be entitled to elect such
additional two directors until all dividends in default have been paid or
declared and funds have been set apart for payment therefor, at which time
such two directors will resign from the board and the number of directors of
the Company will be reduced by two. Holders of the $21.25 Preferred Stock are
entitled to receive a liquidating distribution of $250 per share in the event
of an involuntary liquidation, or an amount equal to the then applicable
optional redemption price in the event of a voluntary liquidation.
SHAREHOLDERS' RIGHTS PLAN
The Company has adopted a Shareholder Rights Plan pursuant to which it issued
one Preferred Stock Purchase Right (each, a "Right") for each outstanding
share of Common Stock. Each Right entitles the registered holder to purchase
from the Company a unit consisting of one one-hundredth of a share (a "Unit")
of Series A Junior Participating Cumulative Preferred Stock, par value $1.00
per share (the "Series A Preferred Stock"), at a cash Exercise Price of $100
per Unit, subject to adjustment. As set forth below, the Shareholder Rights
Plan may have the effect of delaying, deferring or preventing a change in
control of the Company. State Street Bank & Trust Co. is the agent for the
Rights.
Currently, the Rights are not exercisable and are attached to all outstanding
shares of Common Stock. No separate Right Certificates will be distributed
until the Distribution Date. The "Distribution Date" will occur (and the
Rights will separate from the Common Stock) upon the earlier of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons (other than the Company and certain of its affiliates and
other exempted persons) (an "Acquiring Person") has acquired beneficial
ownership of 20% or more of the outstanding shares of Common Stock (the date
of said announcement being referred to as the "Stock Acquisition Date"), or
(ii) 10 business days following the commencement of a tender offer or exchange
offer that would result in a person or group becoming an Acquiring Person, or
(iii) the declaration by the Board of Directors that any person is an "Adverse
Person".
Until the Distribution Date (or earlier redemption or expiration of the
Rights), (i) the Rights will be evidenced by the Common Stock certificates and
will be transferred with such Common Stock certificates, (ii) new Common Stock
certificates will contain a notation incorporating the Shareholder Rights
Agreement by reference, and (iii) the surrender for transfer of any
certificates for Common Stock will also constitute the transfer of the Rights
associated with the Common Stock represented by such
certificate.
The Rights are not exercisable until the Distribution Date and will expire at
the close of business on September 23, 1998, unless previously redeemed by the
Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates will
be mailed to holders of record of Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate Rights Certificates alone
will represent the Rights. Except as otherwise determined by the Board of
Directors, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.
In the event that a Stock Acquisition Date occurs or the Board of Directors
determines that a person is an Adverse Person, proper provision will be made
so that after the Distribution Date each holder of a Right will thereafter
have the right to receive upon exercise that number of Units of Series A
Preferred Stock of the Company having a market value of two times the exercise
price of the Right (such right being referred to as the "Subscription Right").
Additionally, 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 or (ii) 50% or more of the Company's assets or earning power is
sold, after the Distribution Date each holder of a Right shall thereafter have
the right to receive, upon exercise, common stock of the acquiring company
having a market value equal to two times the exercise price of the Right (such
right being referred to as the "Merger Right"). The holder of a Right will
continue to have the Merger Right whether or not such holder has exercised the
Subscription Right. Rights that are or were beneficially owned by an Acquiring
Person or an Adverse Person may (under certain circumstances specified in the
Shareholder Rights Agreement) become null and void. At any time after a Stock
Acquisition Date occurs or the Board of Directors determines that a person is
an Adverse Person, the Board of Directors may, at its option, exchange all or
any part of the then outstanding and exercisable Rights for shares of Common
Stock or Units of Series A Preferred Stock at an exchange ratio of one share
of Common stock or one Unit of Series A Preferred Stock per Right.
The Exercise Price payable, and the number of units of Series A Preferred
Stock or other securities or property issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution. With certain
exceptions, no adjustment in the Exercise Price will be required until
cumulative adjustments amount to at least 1% of the Exercise Price.
Any of the provisions of the Shareholder Rights Agreement may be amended by
the Board of Directors of the Company at any time prior to the Distribution
Date. From and after the Distribution Date, the Board of Directors of the
Company may subject to certain limitations specified in the Rights Agreement,
amend the Rights Agreement to cure any ambiguity, defect or inconsistency, to
shorten or lengthen any time period under the Rights Agreement, or to make
other changes that do not adversely affect the interests of the Rights holders
(excluding the interests of Acquiring Persons, Adverse Persons or their
Affiliates or Associates).
The Rights may be redeemed in whole, but not in part, at a price of $0.02 per
Right (payable in cash, Common Stock or other consideration deemed appropriate
by the Board of Directors) by the Board of Directors at any time prior to the
date on which a person is declared to be an Adverse Person, the tenth day
after the Stock Acquisition Date or the occurrence of an event giving rise to
the Merger Right. Immediately upon the action of the Board of Directors
ordering redemption of the Rights, the Rights will terminate and thereafter
the only right of the holders of Rights will be to receive the redemption
price.
Until a Right is exercised, the holder will have no rights as a stockholder of
the Company (beyond those as an existing common stockholder), including the
right to vote or to receive dividends. While the distribution of the Rights in
1988 was not taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Series A Preferred Stock (or other
consideration) of the Company or for common stock of an acquiring company as
set forth above.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a brief description of certain Federal income tax aspects of
this offering that should be considered by most investors. It is a summary
only and is not intended as a substitute for careful tax planning. The
discussion of the Federal income tax consequences set forth below is based
upon currently existing provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), judicial decisions, and administrative interpretations
including, but not limited to, Treasury Regulations relating to original issue
discount (the "OID Regulations"), all of which are subject to change, which
change could apply retroactively and adversely affect a holder of Depositary
Shares, Convertible Preferred Stock or Debentures. No information is provided
herein with respect to foreign, state and local or estate and gift tax
considerations. This information is directed herein to investors who will hold
the Convertible Preferred Stock, and Debentures and the Common Stock as
"capital assets" within the meaning of the Code Section 1221. In addition, the
discussion does not address the tax consequences to certain holders subject to
special rules, including life insurance companies, tax-exempt organizations,
banks and dealers in securities. PURCHASERS OF THE DEPOSITARY SHARES OFFERED
HEREBY SHOULD CONSULT THEIR OWN TAX ADVISERS AS TO THE TAX CONSEQUENCES TO
THEM OF AN INVESTMENT THEREIN, INCLUDING THE APPLICATION OF STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS.
Holders of the Depositary Shares will be treated for Federal income tax
purposes as if they were holders of the Convertible Preferred Stock
represented by the Depositary Shares. Accordingly, (i) no gain or loss will be
recognized for Federal income tax purposes upon the withdrawal of Convertible
Preferred Stock in exchange for Depositary Shares as provided in the Deposit
Agreement, (ii) the tax basis of each share of Convertible Preferred Stock to
an exchanging holder of Depositary Shares will be the same as the aggregate
tax basis of the Depositary Shares exchanged therefor and (iii) the holding
period of the Convertible Preferred Stock received in exchange for the
Depositary Shares will include the period during which the Depositary Shares
were held.
DIVIDENDS ON CONVERTIBLE PREFERRED STOCK
The tax treatment of convertible exchangeable preferred stock with terms
closely comparable to those of the Convertible Preferred Stock has not been
the subject of any regulations, published rulings or judicial decisions
currently in effect. However, under applicable authorities the Convertible
Preferred Stock should be treated as equity for Federal income tax purposes
and the remainder of this discussion of Federal income tax consequences
assumes that they will be so treated.
Dividends paid on the Convertible Preferred Stock will be taxable as ordinary
income to the extent of the Company's current or accumulated earnings and
profits, if any. To the extent a dividend exceeds a holder's allocable share
of the Company's current or accumulated earnings and profits, the dividend
will first be treated as a reduction of the holder's tax basis in the
Convertible Preferred Stock, and then as capital gain (provided the
Convertible Preferred Stock is held as a capital asset) to the extent in
excess of such tax basis. To the extent that dividends paid on the Convertible
Preferred Stock are treated as ordinary income, such dividends will be taxable
as ordinary income but may qualify for the 70 percent dividends-received
deduction under Section 243 of the Code, although the benefit of such
deduction may be reduced or eliminated by the corporate alternative minimum
tax. Under Section 246A of the Code, to the extent that a corporation incurs
indebtedness "directly attributable" to a portfolio stock investment in
another company (which would include the Convertible Preferred Stock), the 70
percent deduction for dividends received on such stock is generally
disallowed. In addition, under Section 246(c) of the Code the 70 percent
dividends-received deduction will not be available with respect to stock which
is held for 45 days or less (90 days in the case of a dividend attributable to
a period or periods aggregating more than 366 days). The length of time that a
taxpayer is deemed to have held stock for these purposes is reduced for
periods during which the taxpayer's risk of loss with respect to the stock is
diminished by reason of the existence of certain options, contracts to sell or
other similar transactions. Moreover, Section 1059 of the Code would require a
corporate shareholder to reduce its basis (but not below zero) in the
Convertible Preferred Stock by the nontaxed portion of any "extraordinary
dividend" if the Convertible Preferred Stock has not been held for at least
two years before the date of announcement or agreement with respect to such
dividend. In addition, a holder disposing of Convertible Preferred Stock would
have to recognize additional gain, if any, in an amount equal to nontaxed
portions of any extraordinary dividends that would have reduced the holder's
basis but for the limitation on reducing basis below zero. An "extraordinary
dividend" on the Convertible Preferred Stock would generally be a dividend
that (a) equals or exceeds five percent of the holder's basis in such stock,
treating all dividends having ex-dividend dates within an 85-day period as one
dividend, or (b) exceeds 20 percent of the holder's basis in such stock,
treating all dividends having ex-dividend dates within a 365-day period as one
dividend; provided that market value, if it can be established by the holder,
may be substituted for stock basis for purposes of these tests. In addition,
an amount treated as a dividend in the case of a redemption of the Convertible
Preferred Stock that is either non-pro rata as to all stockholders or in
partial liquidation would also constitute an "extraordinary dividend" without
regard to the length of time the Convertible Preferred Stock has been held.
The length of time that a taxpayer is deemed to have held stock for purposes
of Section 1059 is determined under principles similar to those contained in
Section 246(c) of the Code as discussed above. Corporate shareholders are
urged to consult their tax advisors with respect to the possible application
of this rule to a redemption or exchange for Debentures (see discussion below
regarding redemption and exchange for Debentures).
REDEMPTION PREMIUM
Under Section 305 of the Code and the applicable Treasury Regulations, if the
redemption price of redeemable preferred stock exceeds its issue price, a
portion of such excess may constitute an unreasonable redemption premium
taxable as a distribution in amounts determined under the economic accrual
principles of Section 1272 of the Code over the period during which the
preferred stock cannot be redeemed. Such constructive distribution is taxed as
a dividend to the extent of the issuing corporation's current or accumulated
earnings and profits. Under existing Treasury Regulations which are
anticipated to apply in the case of redeemable preferred stock, such as the
Convertible Preferred Stock, that the issuer is not required to redeem at a
specified time (and which is not puttable by a shareholder), a premium is
considered to be reasonable if it is in the nature of a penalty for a
premature redemption and if such premium does not exceed the amount which the
issuer would be required to pay for such redemption right under market
conditions existing at the time of issuance of the preferred stock. The
Revenue Reconciliation Act of 1990, however, authorized the Treasury to
promulgate new regulations regarding the federal income tax treatment of
redemption premiums with respect to preferred stock, which regulations are
generally expected to be prospective with respect to the Convertible Preferred
Stock, but which could be retroactive. Thus, no assurance can be given as to
the treatment of the redemption premium with respect to the Convertible
Preferred Stock under any such
regulations.
The redemption premium for the Convertible Preferred Stock is believed to be a
reasonable penalty for premature redemption of the Convertible Preferred Stock
based on existing market conditions; however, because of the factual nature of
the determination, there is no certainty as to the reasonableness of the
redemption premium and tax counsel is unable to provide any opinion thereon.
The Company will not report any portion of the redemption premium as a
constructive distribution which may be treated as a dividend.
REDEMPTION AND EXCHANGE FOR DEBENTURES
A redemption of Convertible Preferred Stock for cash or in exchange for
Debentures will be a taxable event. A redemption of Convertible Preferred
Stock for cash will be treated under Section 302 of the Code as a distribution
that is taxable as a dividend to the extent of the Company's allocable current
or accumulated earnings and profits unless the redemption (a) results in a
"complete termination" of the shareholder's stock interest in the Company
under Section 302(b)(3) of the Code; (b) is "substantially disproportionate"
with respect to the shareholder under Section 302(b)(2) of the Code; or (c) is
"not essentially equivalent to a dividend" with respect to the shareholder
under Section 302(b)(1) of the Code. In determining whether any of these tests
has been met, shares considered to be owned by the shareholder by reason of
certain constructive ownership rules set forth in Section 318 of the Code, as
well as shares actually owned, must generally be taken into account. A
distribution to a shareholder will be "not essentially equivalent to a
dividend" if it results in a "meaningful reduction" in the shareholder's stock
interest in the Company. The Internal Revenue Service has issued a published
ruling indicating that a redemption which results in a reduction in the
proportionate interest in the Company (taking into account the Section 318
constructive ownership rules) of a shareholder whose relative stock interest
is minimal (an interest of less than one percent should satisfy this
requirement) and who exercises no control over Company affairs should be
treated as being "not essentially equivalent to a dividend." If any of these
three tests is met, the redemption of the Convertible Preferred Stock for cash
would result in taxable gain or loss equal to the difference between the
amount of cash received (less any portion thereof attributable to accumulated
and declared unpaid dividends, which will be taxable as a dividend to the
extent of the Company's current or accumulated earnings and profits) and the
shareholder's adjusted tax basis in the Convertible Preferred Stock redeemed.
Such gain or loss would be capital gain or loss if the Convertible Preferred
Stock were held as a capital asset, and would be long-term capital gain or
loss if the holding period for the Convertible Preferred Stock were to exceed
one year.
For purposes of this discussion, the "issue price" of the Debentures would,
pursuant to the OID Regulations, be determined in the manner described below
for purposes of computing original issue discount (if any) on the Debentures.
See the discussion below under "Original Issue Discount". The issue price of
the Debentures should generally be taken into account as the payment received
for the stock for purposes of computing the amount of gain or loss realized by
a holder upon the exchange of Convertible Preferred Stock for Debentures (and
such holder's tax basis in the Debentures). A redemption of Convertible
Preferred Stock by exchange for Debentures will be subject to the same rules
as a redemption for cash, but because of their conversion feature, the receipt
of Debentures in exchange for the Convertible Preferred Stock cannot qualify
under the "complete termination" or "substantially disproportionate" tests
described above unless, as a result of other transactions (such as
contemporaneous sales of Debentures), the interest in the Company of the
holder of Convertible Preferred Stock is sufficiently reduced. The redemption
would, therefore, be treated as a distribution to the extent of the issue
price of the Debentures and taxable as a dividend to the extent of the
Company's allocable current or accumulated earnings and profits unless it
satisfied the "not essentially equivalent to a dividend" test. Because a
holder of convertible debentures is considered to own the underlying stock for
purposes of the Section 318 constructive ownership rules, and because a
redemption which does not result in any reduction in the interest of a
shareholder holding less than a one percent interest does not satisfy the
"meaningful reduction" standard, the exchange of Debentures for Convertible
Preferred Stock may not result in a "meaningful reduction" of the holder's
constructive interest in the Common Stock. Accordingly, no assurance can be
given that the "not essentially equivalent to a dividend" test can be
satisfied. If such a test were met such dividend treatment would not apply and
the holder would instead recognize gain or loss equal to the difference
between the issue price of the Debentures (less any portion thereof
attributable to accumulated and declared unpaid dividends, which will be
taxable as a dividend to the extent of the Company's current or accumulated
earnings and profits) and the shareholder's adjusted tax basis in the
Convertible Preferred Stock. Such gain or loss would be capital gain or loss
and would be long-term capital gain or loss if the holding period for the
Convertible Preferred Stock were to exceed one year. It is not anticipated
that the conditions for the use of the installment method will be available
for reporting such gain.
If a redemption of the Convertible Preferred Stock is treated as a
distribution that is taxable as a dividend, the amount of the distribution
will be measured by the amount of cash or the issue price of the Debentures,
as the case may be, received by the stockholder. The stockholder's basis in
the redeemed Convertible Preferred Stock will be transferred to any remaining
stockholdings in the Company. If the stockholder does not retain any stock
ownership in the Company, he might be permitted to transfer such basis to any
Debentures received in the redemption or he might lose such basis entirely.
Any redemption of the Convertible Preferred Stock that is treated as a
dividend and that is non-pro rata as to all shareholders may be subject to the
"extraordinary dividend" provisions of section 1059 of the Code applicable to
certain corporate shareholders, discussed above. See "Dividends on Convertible
Preferred Stock" above.
ORIGINAL ISSUE DISCOUNT
If the Convertible Preferred Stock is exchanged for Debentures at a time when
the stated redemption price at maturity of such Debentures exceeds their issue
price (including the value of the conversion feature) by an amount equal to or
greater than one-fourth of 1% of the stated redemption price at maturity times
the number of complete years to maturity, the Debentures will be treated as
having original issue discount ("OID") equal to the entire amount of such
excess. If the Debentures and the Convertible Preferred Stock are traded on an
established securities market within the meaning of section 1273(b)(3) of the
Code, the issue price of the Debentures will be their fair market value
(including the value of the conversion feature) as of the issue date.
Moreover, if the Convertible Preferred Stock (but not the Debentures issued
and exchanged therefor) is traded on an established securities market at the
time of the exchange, then the issue price of the Debentures should be equal
to the fair market value of the Convertible Preferred Stock at the time of the
exchange. It is not possible to predict whether the Convertible Preferred
Stock or the Debentures will be traded on an established securities market at
the time of exchange. If neither the Preferred Stock nor the Debentures are
traded on an established securities market, and absent any "potentially
abusive situation," the issue price of the Debentures will be their stated
principal amount, or, in the event the Debentures do not bear "adequate stated
interest" within the meaning of section 1274 of the Code, their "imputed
principal amount" as determined under section 1274 of the Code.
A holder of a Debenture would generally be required under section 1272 of the
Code to include in gross income (irrespective of its method of accounting) a
portion of such OID for each year during which it holds such a Debenture, even
though the cash to which such income is attributable would not be received
until maturity or redemption of the Debenture. The amount of any OID included
in income for each year would be calculated under a constant yield to maturity
formula that would result in the allocation of less OID to the early years of
the term of the Debenture and more OID for later years.
If the Debentures are issued with OID and the Company were found to have had
an intention to call the Debentures before maturity, any gain realized on a
sale, exchange or redemption of Debentures prior to maturity would be
considered ordinary income to the extent of any unamortized OID for the period
remaining to the stated maturity of the Debentures. The Company cannot predict
whether it would have an intention to call the Debentures before their
maturity at the time, if ever, it issues the Debentures. Moreover, the
Internal Revenue Service may take the position that the Company's right to
redeem the Debentures manifests an intention on the part of the Company to
call the Debentures prior to their maturity. Under the OID Regulations,
however, debt instruments that are publicly offered such as the Debentures
would be exempt from these "intention-to-call" rules. In addition, under the
OID Regulations it is possible, although unlikely, that the Internal Revenue
Service would take the position that because of the existence of a sinking
fund the Debentures are to be treated as installment obligations. That
position would affect the calculation of original issue discount as well as
the application of the de minimis 1/4 percent exception described above.
If issued with OID, the Debentures may be subject to the provisions of the
Code dealing with high yield discount obligations in which case the Company
may not be entitled to claim a deduction with respect to a certain portion of
the OID (the "Disqualified Portion") and the remainder of the OID may not be
claimed as a deduction until paid. In such case, the Disqualified Portion of
the OID may be treated as a dividend with respect to the stock of the Company
and the rules applicable to distributions with respect to the Convertible
Preferred Stock may apply.
BOND PREMIUM ON DEBENTURES
If the Convertible Preferred Stock is exchanged for Debentures at a time when
the issue price of such Debentures (excluding the amount thereof attributable
to the conversion feature as determined under Treasury Regulations section
1.171-2(c)(2)) exceeds the amount payable at the maturity date (or earlier
redemption date, if appropriate) of the Debentures, such excess will be
deductible, subject to certain limitations with respect to individuals, by the
holder of such Debentures as amortizable bond premium over the term of the
Debentures (taking into account earlier call dates, as appropriate), under a
yield to maturity formula but only if an election by the taxpayer under
section 171 of the Code is in effect or is made. An election under section 171
of the Code is available only if the Debentures are held as capital assets.
Such election is binding once made and applies to all debt obligations owned
or subsequently acquired by the taxpayer. Under the Code, the amortizable bond
premium will be treated as an offset to interest income on the Debentures
rather than as a separate deduction item unless otherwise provided in future
Treasury Regulations.
MARKET DISCOUNT ON RESALE OF DEBENTURES
The market discount provisions of sections 1276 through 1278 of the Code may
adversely affect a disposition (including a redemption or retirement) of the
Debentures. If a holder acquires a Debenture at a market discount which equals
or exceeds one-fourth of 1% of the stated redemption price at maturity times
the number of remaining complete years to maturity and thereafter recognizes
gain upon a disposition of the Debentures, the lesser of (i) such gain, or
(ii) the portion of the market discount which accrued while the Debenture was
held by such holder, will be treated as ordinary income (and not as capital
gain) at the time of the disposition. For these purposes, market discount
equals the excess of the stated redemption price at maturity (or, if the
Debenture is issued with OID, its revised issue price as defined in the Code)
over the adjusted tax basis of the debenture in the hands of a holder
immediately after its acquisition. Market discount would generally accrue on a
straight line basis over the term of the Debenture, except that, at the
election of the holder, it will accrue on an economic accrual basis. A holder
of a Debenture may elect to include any market discount in income currently
rather than upon disposition of the Debenture. This election is revocable only
with the consent of the Internal Revenue Service and applies to all market
discount bonds acquired by the holder on or after the first day of the taxable
year in which the holder makes the election.
A holder of any Debenture acquired at a market discount may be required to
defer the deduction of all or a portion of any interest paid or accrued on any
indebtedness incurred or continued to purchase or carry the Debenture until
the market discount is recognizable upon a subsequent disposition of the
Debenture. Such deferral is not required, however, if the holder elects to
include accrued market discount in income currently.
REDEMPTION OR SALE OF DEBENTURES
Generally any redemption or sale of the Debentures by a holder would result in
taxable gain or loss equal to the difference between the amount of cash
received (except to the extent the cash received is attributable to accrued
stated interest) and the holder's adjusted tax basis in the Debentures. The
adjusted tax basis of a holder who received the Debentures in exchange for the
Convertible Preferred Stock will generally be equal to the issue price of such
Debentures at that time plus any OID previously included in income and less
any bond premium previously amortized by such holder. Except as described
above, such gain or loss would be capital gain or loss if the Debentures were
held as a capital asset and would be taxed as described under "Redemption and
Exchange for Debentures" above. However, if the Company were found to have an
intention at the time the Debentures were issued to call them before maturity,
the gain would be ordinary income to the extent of any unamortized OID, unless
the exception for "publicly offered" debt instruments as set forth in the OID
Regulations would be available. See "Original Issue Discount" above."
BACKUP WITHHOLDING
Under backup withholding rules, a holder of Convertible Preferred Stock or a
Debenture may be subject to backup withholding at the rate of 31 percent with
respect to dividends or interest paid, OID accrued with respect to, or the
proceeds of a sale, exchange or redemption of, Convertible Preferred Stock,
Debentures or Common Stock, as the case may be, unless (a) such holder is a
corporation or comes within certain other exempt categories and, when
required, demonstrates this fact or (b) provides a taxpayer identification
number, certifies as to no loss of exemption from backup withholding, and
otherwise complies with applicable requirements of the backup withholding
rules. Amounts paid as backup withholding do not constitute an additional tax
and will be credited against the holder's federal income tax liabilities, so
long as the required information is provided to the Internal Revenue Service.
The Company will report to the holders of Convertible Preferred Stock,
Debentures or Common Stock and to the Internal Revenue Service the amount of
any "reportable payments" for each calendar year and the amount of tax
withheld, if any, with respect to payment on the securities.
CONVERSION OF CONVERTIBLE PREFERRED STOCK OR DEBENTURES INTO COMMON STOCK
In general, no gain or loss will be recognized for Federal income tax purposes
on conversion of the Convertible Preferred Stock or the Debentures solely into
shares of Common Stock. If dividends on the Convertible Preferred Stock were
in arrears at the time of conversion, however, a portion of the Common Stock
received in exchange for Convertible Preferred Stock would be viewed under
Code Section 305(c) as a distribution with respect to the Convertible
Preferred Stock, taxable as if it were a dividend distribution. The tax basis
for the shares of Common Stock received upon conversion (other than shares
attributable to dividend arrearages) will be equal to the tax basis of the
Convertible Preferred Stock or Debentures converted and, provided that the
Convertible Preferred Stock or the Debentures were held as capital assets, the
holding period of the shares of Common Stock will include the holding period
of the Convertible Preferred Stock or the Debentures converted. Gain realized
upon the receipt of cash paid in lieu of fractional shares of Common Stock
will be taxed immediately. Any accrued market discount not previously included
in income as of the date of the conversion of Debentures will carry over to
the Common Stock received on conversion and will be treated as ordinary income
upon subsequent disposition of the Common Stock.
ADJUSTMENT OF CONVERSION PRICE
Section 305 of the Code treats as a taxable dividend certain actual or
constructive distributions of stock with respect to stock and convertible
securities. Treasury Regulations treat holders of convertible preferred stock
or convertible debentures as having received such a constructive distribution
where the conversion price of such preferred stock or debentures is adjusted
to reflect certain taxable distributions with respect to the stock into which
such preferred stock or debentures are convertible. Thus, an adjustment in the
conversion price of the Convertible Preferred Stock or the Debentures may be
taxable to the holders thereof as a dividend.
UNDERWRITING
Under the terms and conditions contained in the Underwriting Agreement dated
July , 1994 (the "Underwriting Agreement"), J.P. Morgan Securities Inc. (the
"Underwriter"), has agreed to purchase from the Company, and the Company has
agreed to sell it, all of the Convertible Preferred Stock represented by
Depositary Shares offered hereby. Under the terms and conditions of the
Underwriting Agreement, the Underwriter is obligated to take and pay for all
of the Convertible Preferred Stock represented by the Depositary Shares
offered hereby if any are purchased.
The Underwriter proposes to offer the Depositary Shares in part directly to
the public at the public offering price set forth on the cover page of this
Prospectus and in part to certain securities dealers at such price less a
concession not in excess of $. per Depositary Share. The Underwriter may
allow, and such dealers may reallow, a concession not in excess of $. per
Depositary Share to certain other brokers and dealers. After the Depositary
Shares are released for sale to the public, the offering price and such
concessions thereon may from time to time be changed.
The Company has granted to the Underwriter an option to purchase up to an
additional 15,000 shares of Convertible Preferred Stock represented by 150,000
Depositary Shares at the initial offering price, less the discount, provided
that any closing of such option will take place no later than , 1994.
The Underwriter may exercise such option solely for the purpose of covering
over-allotments, if any, made in connection with the sale of the Depositary
Shares offered hereby.
Without the prior written consent of the Underwriter, the Company has agreed,
with certain limited exceptions, not to, for a period of 90 days after the
date of this Prospectus, directly or indirectly, sell, offer to sell, grant
any option for the sale of, or otherwise dispose of, any shares of Convertible
Preferred Stock, Common Stock or any securities convertible into or
exchangeable or exercisable for any such shares (other than upon conversion of
the $21.25 Preferred Stock or pursuant to existing employee benefit plans).
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act or to contribute
to payments which the Underwriter may be required to make in respect thereof.
There is currently no trading market for the Depositary Shares or the
Convertible Preferred Stock represented thereby and no assurance can be given
as to the development or liquidity of any trading market for the Depositary
Shares or the Convertible Preferred Stock, although the Common Stock into
which such securities are convertible is quoted on the American Stock
Exchange. The Depositary Shares and the Convertible Preferred Stock
represented by the Depositary Shares will not be listed on any exchange and
the Company does not expect that there will be any trading market for the
Convertible Preferred Stock except as represented by the Depositary Shares.
In the ordinary course of its business, the Underwriter or any of its
affiliates may engage in ordinary commercial banking and investment banking
transactions with the Company in the future. In addition, Morgan Guaranty
Trust Company of New York, a wholly-owned subsidiary of J.P. Morgan & Co.
Incorporated and an affiliate of the Underwriter is the agent bank under
credit agreements with the Company dated as of May 10, 1993 and March 9, 1994,
under which the Company owed as of March 31, 1994 approximately $14,956,000 to
Morgan Guaranty Trust Company of New York. Morgan Guaranty Trust Company of
New York is also issuer of a letter of credit in the amount of $7,196,598 as
of March 31, 1994, which supports debt of the Company's Employee Stock
Ownership Trust.
EXPERTS
The audited Consolidated Financial Statements of the Company and the statement
of construction revenues and costs of Newberg/Perini for the year ended
December 31, 1992 included in this Prospectus and incorporated by reference in
the Registration Statement of which this Prospectus is a part have been
audited by Arthur Andersen & Co., independent public accountants, to the
extent and for the periods indicated in their report thereon, which appears
elsewhere herein and in the Registration Statement, and have been so included
in reliance upon the report of Arthur Andersen & Co. given upon their
authority as experts in accounting and auditing.
The related statements of construction revenues and costs of Newberg/Perini
for the years ended December 31, 1991 and 1990 have been audited by Alexander
X. Kuhn & Co., independent public accountants, as indicated in their report
with respect thereto and are included herein in reliance upon the authority of
said firm as experts in accounting and auditing.
The financial statements of Ebasco/Newberg, a Joint Venture, as of December
31, 1992 and 1991, and for each of the two years in the period ended December
31, 1992, not presented separately herein, have been audited by Deloitte &
Touche, independent auditors, as indicated in their report with respect
thereto and is included herein in reliance upon their authority as experts in
accounting and auditing.
LEGAL MATTERS
Certain legal matters with respect to the Convertible Preferred Stock, the
Debentures exchangeable therefor and the Common Stock issuable upon conversion
of the Convertible Preferred Stock or the Debentures will be passed on for the
Company by Jacobs Persinger & Parker, New York, New York. Certain legal
matters with respect to the Depositary Receipts will be passed on for the
Depositary by Peabody & Arnold, counsel to the Depositary. Marshall A. Jacobs,
a director of the Company, is of counsel to the firm of Jacobs Persinger &
Parker and owns 1,401 shares of the Common Stock of the Company. Certain legal
matters with respect to the Convertible Preferred Stock, the Debentures
exchangeable therefor and the Common Stock issuable upon conversion of the
Convertible Preferred Stock or the Debentures will be passed on for the
Underwriter by Cahill Gordon & Reindel (a partnership including a professional
corporation), New York, New York.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Perini Corporation:
We have audited the accompanying consolidated balance sheets of PERINI
CORPORATION (a Massachusetts corporation) and subsidiaries as of December 31,
1993 and 1992, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1993. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Perini
Corporation and subsidiaries as of December 31, 1993 and 1992, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1993, in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN & CO.
Boston, Massachusetts
February 11, 1994
<PAGE>
<TABLE>
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<CAPTION>
---------------------------------------------
MARCH 31, DECEMBER 31,
In thousands except per share data 1994 1993 1992
------- ------- -------
(UNAUDITED)
<S> <C> <C> <C>
CURRENT ASSETS:
Cash, including cash equivalents of $55, $20,354
and $52,749 (Note 1) ............................ $ 1,282 $ 35,871 $ 79,563
Accounts and notes receivable, including retainage
of $45,365, $45,084 and $48,748 ................. 109,579 123,009 123,189
Unbilled work ..................................... 14,952 14,924 8,878
Construction joint ventures (Notes 1 and 2) ....... 61,697 61,156 29,654
Real estate inventory ............................. 8,300 11,666 7,225
Deferred income taxes (Notes 1 and 5) ............. 7,702 7,702 --
Other current assets .............................. 6,024 3,274 3,505
------- ------- -------
Total current assets ............................ $209,536 $257,602 $252,014
------- ------- -------
REAL ESTATE DEVELOPMENT INVESTMENTS:
Land held for sale or development (including land
development costs) at the lower of cost or market
(Note 1) ........................................ $ 47,736 $ 48,011 $ 46,943
Investments in and advances to real estate joint
ventures
(Notes 1, 2 and 11) ............................. 142,357 138,095 127,104
Real estate properties used in operations, less
accumulated depreciation of $3,440, $3,638 and
$3,181 .......................................... 9,890 12,678 16,235
Other ............................................. -- -- 636
------- ------- -------
Total real estate development investments ....... $199,983 $198,784 $190,918
------- ------- -------
PROPERTY AND EQUIPMENT, at cost:
Land .............................................. $ 1,451 $ 1,451 $ 1,307
Buildings and improvements ........................ 15,690 15,566 15,455
Construction equipment ............................ 16,680 16,440 40,388
Other equipment ................................... 11,733 11,625 11,624
------- ------- -------
$ 45,554 $ 45,082 $ 68,774
Less -- Accumulated depreciation (Note 1) ......... 29,274 28,986 44,233
------- ------- -------
Total property and equipment, net ............... $ 16,280 $ 16,096 $ 24,541
------- ------- -------
OTHER ASSETS:
Other investments ................................. $ 2,056 $ 2,188 $ 1,473
Goodwill (Note 1) ................................. 1,692 1,708 1,750
------- ------- -------
Total other assets .............................. $ 3,748 $ 3,896 $ 3,223
------- ------- -------
$429,547 $476,378 $470,696
------- ------- -------
------- ------- -------
The accompanying notes are an integral part of these financial statements.
<PAGE>
</TABLE>
<TABLE>
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS -- CONTINUED
LIABILITIES AND STOCKHOLDERS' EQUITY
<CAPTION>
---------------------------------------------
MARCH 31, DECEMBER 31,
In thousands except per share data 1994 1993 1992
------- ------- -------
(UNAUDITED)
<S> <C> <C> <C>
CURRENT LIABILITIES:
Notes Payable -- Bank ............................. $ 4,000 $ -- $ --
Current maturities of long-term debt (Note 4) ..... 5,194 7,617 10,776
Accounts payable, including retainage of $39,347,
$45,508 and $34,168 ............................. 107,012 136,231 134,750
Deferred contract revenue ......................... 27,092 25,867 25,768
Accrued expenses .................................. 39,628 47,827 49,170
Accrued income taxes (Notes 1 and 5) .............. 435 3,183 522
------- ------- -------
Total current liabilities ......................... $183,361 $220,725 $220,986
------- ------- -------
DEFERRED INCOME TAXES AND OTHER LIABILITIES (Notes 1
and 5) ................................................ $ 35,246 $ 38,794 $ 30,830
------- ------- -------
LONG-TERM DEBT, less current maturities included above (Note 4):
Real estate development ........................... $ 7,696 $ 11,382 $ 17,661
Other ............................................. 68,473 70,984 68,094
------- ------- -------
Total long-term debt ............................ $ 76,169 $ 82,366 $ 85,755
------- ------- -------
MINORITY INTEREST (Note 1) ............................ $ 3,367 $ 3,350 $ 11,360
------- ------- -------
CONTINGENCIES AND COMMITMENTS (Note 11)
STOCKHOLDERS' EQUITY (Notes 1, 7, 8, 9 and 10):
Preferred stock, $1 par value --
Authorized -- 1,000,000 shares
Issued and outstanding -- 100,000 shares
($25,000 aggregate liquidation preference) .... $ 100 $ 100 $ 100
Common stock, $1 par value --
Authorized -- 7,500,000 shares
Issued -- 4,985,160 shares ...................... 4,985 4,985 4,985
Paid-in surplus ................................... 59,875 59,875 60,019
Retained earnings ................................. 83,855 83,594 82,554
Cumulative translation adjustment ................. -- (4,696)
ESOT related obligations .......................... (6,982) (6,982) (7,888)
------- ------- -------
$141,833 $141,572 $135,074
Less -- Common stock in treasury, at cost --
654,353, 654,353 and 835,036 shares ............. 10,429 10,429 13,309
------- ------- -------
Total stockholders' equity ...................... $131,404 $131,143 $121,765
------- ------- -------
$429,547 $476,378 $470,696
------- ------- -------
------- ------- -------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
---------------------------------------------------------------------------
THREE MONTHS
In thousands, except per ENDED MARCH 31, YEAR ENDED DECEMBER 31,
share data 1994 1993 1993 1992 1991
--------- --------- --------- --------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUES (Notes 2 and 14) .. $ 174,391 $ 258,043 $1,100,116 $1,070,852 $991,908
--------- --------- --------- --------- -------
COSTS AND EXPENSES (Notes 2 and 10):
Cost of operations ....... $ 161,615 $ 247,038 $1,047,330 $1,048,663 $931,054
General, administrative
and selling expenses ... 9,810 9,027 44,212 41,328 48,530
--------- --------- --------- --------- -------
$ 171,425 $ 256,065 $1,091,542 $1,089,991 $979,584
--------- --------- --------- --------- -------
INCOME (LOSS) FROM
OPERATIONS (Note 14) ....... $ 2,966 $ 1,978 $ 8,574 $ (19,139) $ 12,324
Other income (expense),
net (Note 6) ............... (420) 5,055 5,207 436 1,136
Interest expense, net of
capitalized amounts
(Notes 1, 3 and 4) ..... (1,247) (1,188) (5,655) (7,651) (9,022)
--------- --------- --------- --------- -------
INCOME (LOSS) BEFORE INCOME
TAXES ...................... $ 1,299 $ 5,845 $ 8,126 $ (26,354) $ 4,438
(Provision) credit for
income taxes
(Notes 1 and 5) ........ (507) (5,100) (4,961) 9,370 (1,260)
--------- --------- --------- --------- -------
NET INCOME (LOSS) .......... $ 792 $ 745 $ 3,165 $ (16,984) $ 3,178
--------- --------- --------- --------- -------
--------- --------- --------- --------- -------
EARNINGS (LOSS) PER COMMON
SHARES
(Note 1) ............... $ .06 $ .05 $ .24 $ (4.69) $ .27
--------- --------- --------- --------- -------
--------- --------- --------- --------- -------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<CAPTION>
----------------------------------------------------------------------------------------------------
CUMULATIVE ESOT
PREFERRED COMMON PAID-IN RETAINED TRANSLATION RELATED TREASURY
In thousands, except STOCK STOCK SURPLUS EARNINGS ADJUSTMENT OBLIGATION STOCK
per share data --------- ------ ------- -------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance -- December
31, 1990 ......... $100 $4,985 $60,635 $100,610 $(3,080) $ (9,528) $ (17,040)
Net Income ......... -- -- -- 3,178 -- -- --
Preferred stock-cash
dividends declared
($21.25 per
share*) <F1>...... -- -- -- (2,125) -- -- --
Restricted stock
awarded .......... -- -- (8) -- -- -- 80
Translation
adjustment ....... -- -- -- -- 45 -- --
Payments related to
ESOT notes ....... -- -- -- -- -- 792 --
------------------------------------------------------------------------------------------------------
Balance -- December
31, 1991 ......... $100 $4,985 $60,627 $101,663 $(3,035) $ (8,736) $(16,960)
Net Income (Loss) .. -- -- -- (16,984) -- -- --
Preferred stock --
cash dividends
declared ($21.25
per share*) <F1>.. -- -- -- (2,125) -- -- --
Treasury stock
issued in partial
payment of
incentive
compensation ..... -- -- (606) -- -- -- 3,642
Restricted stock
awarded .......... -- -- (2) -- -- -- 9
Translation
adjustment ....... -- -- -- -- (1,661) -- --
Payments related to
ESOT notes ....... -- -- -- -- -- 848 --
------------------------------------------------------------------------------------------------------
Balance -- December
31, 1992 ......... $100 $4,985 $60,019 $ 82,554 $(4,696) $ (7,888) $(13,309)
Net Income ........ -- -- -- 3,165 -- -- --
Preferred stock --
cash dividends
declared ($21.25
per share*) <F1>.. -- -- -- (2,125) -- -- --
Treasury stock
issued in partial
payment of
incentive
compensation ..... -- -- (143) -- -- -- 2,872
Restricted stock
awarded .......... -- -- (1) -- -- -- 8
Related to sale of
Majestic ......... -- -- -- -- 4,696 -- --
Payments related to
ESOT notes ....... -- -- -- -- -- 906 --
------------------------------------------------------------------------------------------------------
Balance -- December
31, 1993 ......... $100 $4,985 $59,875 $ 83,594 $-- $(6,982) $(10,429)
Net Income ......... -- -- -- 792 -- -- --
Preferred stock --
cash dividends
declared ($5.31
per share**) <F2>. -- -- -- (531) -- -- --
------------------------------------------------------------------------------------------------------
Balance -- March 31,
1994 (Unaudited) . $100 $4,985 $59,875 $ 83,855 $-- $ (6,982) $(10,429)
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
<FN>
- ---------
<F1> *Equivalent to $2.125 per depositary share (see Note 7).
<F2>**Equivalent to $.53125 per depositary share (see Note 7).
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
-------------------------------------------------------------------------
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
In thousands 1994 1993 1993 1992 1991
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ................ $ 792 $ 745 $ 3,165 $(16,984) $ 3,178
Adjustments to reconcile net
income (loss) to net cash from
operating activities --
Depreciation and amortization .. 663 656 3,515 6,297 7,190
Non-current deferred taxes and
other liabilities ................ (3,548) 14,495 11,239 (13,236) 3,406
Distributions greater (less)
than earnings of joint
ventures and affiliates ...... 4,443 (2,719) (2,821) 9,412 (2,291)
Writedown of certain real estate
properties ....................... -- -- -- 31,368 2,800
(Gain) on sale of Monenco ...... -- -- -- (1,976) --
(Gain) on sale of Majestic
(Notes 1 and 6) .................. -- (4,600) (4,631) -- --
(Gain) loss on sale of fixed
assets ........................... -- -- (299) (570) (94)
Minority interest, net ......... 17 (16) (78) 2,001 1,292
Cash provided from (used by)
changes in components of
working capital other than
cash, notes payable and
current maturities of long-
term debt .................... (28,428) (27,994) (19,653) 35,819 29,549
Real estate development
investments other than joint
ventures ......................... 6,749 1,761 10,908 6,253 18,322
Other non-cash items, net ...... (1,028) (2,101) (2,922) (2,972) 7,501
-------- -------- -------- -------- --------
NET CASH FROM OPERATING
ACTIVITIES ....................... $(20,340) $(19,773) $ (1,577) $ 55,412 $ 70,853
-------- -------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property
and equipment .................... $ 42 $ 153 $ 1,344 $ 1,890 $ 1,815
Cash distributions of capital
from unconsolidated joint ventures 698 1,155 4,977 3,413 4,469
Acquisition of property and
equipment ........................ (772) (2,106) (4,387) (4,044) (6,614)
Improvements to land held for
sale or development .............. (130) (2,190) (4,227) (4,341) (8,307)
Improvements to and acquisitions
of real estate properties used
in operations ................ (24) -- (614) (6,310) (894)
Capital contributions to
unconsolidated joint ventures .... (6,333) (6,359) (24,579) (8,425) (8,503)
Advances to real estate joint
ventures, net .................... (2,579) (2,830) (16,031) (12,091) (33,991)
Proceeds from sale of Monenco
shares ........................... -- -- -- 14,180 --
Proceeds from sale of Majestic,
net of subsidiary's cash ......... -- 4,432 4,377 -- --
Investments in other activities -- -- -- (3) 1,127
-------- -------- -------- -------- --------
NET CASH USED BY INVESTING
ACTIVITIES ....................... $ (9,098) $ (7,745) $(39,140) $(15,731) $(50,898)
-------- -------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt ... $ 1,362 $ 507 $ 8,014 $ 9,571 $ 4,563
Repayment of long-term debt .... (9,982) (3,015) (11,600) (17,590) (18,661)
Cash dividends paid ............ (531) (531) (2,125) (2,125) (2,125)
Treasury stock issued .......... -- -- 2,736 3,043 72
Borrowings (repayment) of notes
payable to banks ................. 4,000 -- -- -- (8,000)
-------- -------- -------- -------- --------
NET CASH USED BY FINANCING
ACTIVITIES ....................... $ (5,151) $ (3,039) $ (2,975) $ (7,101) $(24,151)
-------- -------- -------- -------- --------
EFFECT OF EXCHANGE RATE CHANGES ON
CASH ............................. $ -- $ -- $ -- $ (831) $ 18
-------- -------- -------- -------- --------
NET INCREASE (DECREASE) IN CASH .. $(34,589) $(30,557) $(43,692) $ 31,749 $ (4,178)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR ................ 35,871 79,563 79,563 47,814 51,992
-------- -------- -------- -------- --------
CASH AND CASH EQUIVALENTS AT END
OF YEAR (PERIOD) ................. $ 1,282 $ 49,006 $ 35,871 $ 79,563 $ 47,814
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
SUPPLEMENTAL DISCLOSURES OF CASH
PAID FOR:
Interest, net of amounts
capitalized ...................... $ 1,563 $ 1,652 $ 5,947 $ 10,995 $ 7,953
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Income tax payments (refunds) .. $ 2,626 $ 404 $ 843 $ (2,603) $(10,446)
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
(INCLUDING DATA APPLICABLE TO UNAUDITED PERIODS)
PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INCLUDING DATA APPLICABLE TO UNAUDITED PERIODS)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Perini
Corporation, its subsidiaries and certain majority-owned real estate joint
ventures (the "Company"). All subsidiaries are wholly-owned except Majestic
Contractors Limited ("Majestic"), which was approximately 74%-owned and
Perland Environmental Technologies, Inc., which is approximately 90%-owned.
All significant intercompany transactions and balances have been eliminated in
consolidation. Non-consolidated joint venture interests are accounted for on
the equity method with the Company's share of revenues and costs in these
interests included in "Revenues" and "Cost of Operations," respectively, in
the accompanying consolidated statements of operations.
In January, 1993, the Company sold its 74%-ownership in Majestic, its Canadian
pipeline construction subsidiary, for $31.7 million which resulted in an after
tax gain of approximately $1.0 million.
Effective July 1, 1993, the Company acquired Gust K. Newberg Construction
Co.'s ("Newberg") interest in certain construction projects and related
equipment. The purchase price for the acquisition was (i) approximately $3
million in cash for the equipment paid by a third party leasing company, which
in turn simultaneously entered into an operating lease agreement with the
Company for the use of said equipment, (ii) the greater of $1 million or 25%
of the aggregate pretax earnings during the period from April 1, 1993 through
December 31, 1994, net of payments accruing to Newberg as described in (iii)
below, and (iii) 50% of the aggregate of net profits earned from each project
from April 1, 1993 through December 31, 1994 and, with regard to one project
through December 31, 1995. This acquisition is being accounted for as a
purchase. If this acquisition had been consummated as of January 1, 1992, the
1992 and 1993 pro forma results would have been, respectively, Revenues of
$1,164,444,000 and $1,134,264,000 and Net Income (Loss) of $(14,935,000) ($
(4.18) per common share) and $3,724,000 ($.37 per common share).
(B) TRANSLATION OF FOREIGN CURRENCIES
The accounts of the Canadian subsidiary were translated in accordance with
Statement of Financial Accounting Standards (SFAS) No. 52, under which
translation adjustments are accumulated directly as a separate component of
stockholders' equity. Gains and losses on foreign currency transactions are
included in results of operations during the period in which they arise.
(C) METHOD OF ACCOUNTING FOR CONTRACTS
Profits from construction contracts and construction joint ventures are
generally recognized by applying percentages of completion for each year to
the total estimated profits for the respective contracts. The percentages of
completion are determined by relating the actual cost of the work performed to
date to the current estimated total cost of the respective contracts. When the
estimate on a contract indicates a loss, the Company's policy is to record the
entire loss. The cumulative effect of revisions in estimates of total cost or
revenue during the course of the work is reflected in the accounting period in
which the facts which caused the revision became known. An amount equal to the
costs attributable to unapproved change orders and claims is included in the
total estimated revenue when realization is probable. Profit from claims is
recorded in the year such claims are resolved.
In accordance with normal practice in the construction industry, the Company
includes in current assets and current liabilities amounts related to
construction contracts realizable and payable over a period in excess of one
year. Unbilled work represents the excess of contract costs and profits
recognized to date on the percentage of completion accounting method over
billings to date on certain contracts. Deferred contract revenue represents
the excess of billings to date over the amount of contract costs and profits
recognized to date on the percentage of completion accounting method on the
remaining contracts.
(D) METHODS OF ACCOUNTING FOR REAL ESTATE OPERATIONS
All real estate sales are recorded in accordance with SFAS. No. 66. Gross
profit is not recognized in full unless the collection of the sale price is
reasonably assured and the Company is not obliged to perform significant
activities after the sale. Unless both conditions exist, recognition of all or
a part of gross profit is deferred.
The gross profit recognized on sales of real estate is determined by relating
the estimated total land, land development and construction costs of each
development area to the estimated total sales value of the property in the
development. If the estimated total costs exceed the estimated total sales
value, a provision is made to reduce the carrying value of the development by
the amount of this excess. These provisions (or writedowns to net realizable
value) amounted to $31.4 million in 1992 and $2.8 million in 1991.
Certain interest expense incurred by the Company is capitalized as part of the
costs of property being developed or constructed. Interest capitalized was $.2
million in 1993 and 1992, and $2.2 million in 1991.
Real estate taxes applicable to property being developed or constructed are
generally capitalized as part of "Real Estate Properties Under Construction"
or "Land Development Costs."
(E) DEPRECIABLE PROPERTY AND EQUIPMENT
Land, buildings and improvements, construction and computer-related equipment
and other equipment are recorded at cost. Depreciation is provided primarily
using accelerated methods for construction and computer-related equipment and
the straight-line method for the remaining depreciable property.
(F) GOODWILL
Goodwill represents the excess of the costs of subsidiaries acquired over the
fair value of their net assets as of the dates of acquisition. These amounts
are being amortized on a straight-line basis over 40 years.
(G) INCOME TAXES
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes," the
adoption of which did not result in a material impact on the accompanying
financial statements (see Note 5).
It is the policy of the Company to accrue appropriate U.S. and foreign income
taxes on earnings of foreign subsidiaries which are intended to be remitted to
the Company.
(H) EARNINGS PER COMMON SHARE
Computations of earnings per common share amounts are based on the weighted
average number of common shares outstanding during the respective periods.
During the three-year period ended December 31, 1993 and the three-month
periods ended March 31, 1994 and 1993, earnings per common share reflect the
effect of preferred dividends accrued during the year. Common stock
equivalents related to additional shares of common stock issuable upon
exercise of stock options (see Note 9) have not been included since their
effect would be immaterial or antidilutive. Earnings per common share on a
fully diluted basis are not presented because the effect of conversion of the
Company's depositary convertible exchangeable preferred shares into common
stock is antidilutive.
(I) CASH AND CASH EQUIVALENTS
Cash equivalents include short-term, highly liquid investments with original
maturities of three months or less.
(J) RECLASSIFICATIONS
Certain prior year amounts have been reclassified to be consistent with the
current year classifications.
(K) INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The consolidated balance sheet as of March 31, 1994, the consolidated
statements of operations and cash flows for the three months ended March 31,
1994 and 1993, and the consolidated statement of stockholders' equity for the
three months ended March 31, 1994 are unaudited but, in the opinion of
management, include all adjustments (consisting of normal, recurring
adjustments) necessary to present fairly the results for these interim
periods.
(2) JOINT VENTURES
The Company, in the normal conduct of its business, has entered into certain
partnership arrangements, referred to as "joint ventures," for construction
and real estate development projects. Each of the joint venture participants
is usually committed to supply a predetermined percentage of capital, as
required, and to share in a predetermined percentage of the income or loss of
the project. Summary financial information (in thousands) for construction and
real estate joint ventures accounted for on the equity method for the three
years ended December 31, 1993 follows:
<TABLE>
CONSTRUCTION JOINT VENTURES
<CAPTION>
-----------------------------------------
Financial position at December 31, 1993 1992 1991
------- ------- -------
<S> <C> <C> <C>
Current assets .................................. $241,905 $216,568 $177,388
Property and equipment, net ..................... 17,228 18,203 10,434
Current liabilities ............................. (151,181) (155,026) (103,785)
------- ------- -------
Net assets ...................................... $107,952 $ 79,745 $ 84,037
------- ------- -------
------- ------- -------
Operations for the year ended December 31, 1993 1992 1991
------- ------- -------
Revenue ......................................... $626,327 $487,758 $419,772
Cost of operations .............................. 574,383 445,494 381,508
------- ------- -------
Pretax income ................................... $ 51,944 $ 42,264 $ 38,264
------- ------- -------
------- ------- -------
Company's share of joint ventures 1993 1992 1991
------- ------- -------
Revenue ......................................... $293,547 $254,265 $207,458
Cost of operations .............................. 272,137 231,564 184,996
------- ------- -------
Pretax income ................................... $ 21,410 $ 22,701 $ 22,462
------- ------- -------
------- ------- -------
Investment ...................................... $ 61,156 $ 29,654 $ 29,958
------- ------- -------
------- ------- -------
REAL ESTATE JOINT VENTURES
-----------------------------------------
Financial position at December 31, 1993 1992 1991
------- ------- -------
Property held for sale or development ........... $ 35,855 $ 17,902 $ 50,822
Investment properties, net ...................... 191,606 243,477 239,089
Other assets .................................... 61,060 59,688 51,664
Long-term debt .................................. (103,090) (151,538) (168,937)
Other liabilities ............................... (256,999) (229,865) (205,326)
------- ------- -------
Net assets (liabilities) ........................ $(71,568) $ (60,336) $ (32,688)
------- ------- -------
------- ------- -------
Operations for the year ended December 31, 1993 1992 1991
------- ------- -------
Revenue ......................................... $ 83,710 $ 64,776 $ 59,501
Cost of operations .............................. 101,623 95,823 89,938
------- ------- -------
Pretax income (loss) ............................ $ (17,913) $ (31,047) $ (30,437)
------- ------- -------
Company's share of joint ventures
Revenue ......................................... $ 43,590 $ 27,118 $ 38,223
Cost of operations .............................. 50,339 46,423 42,523
------- ------- -------
Pre-tax income (loss) ........................... $ (6,749) $ (19,305) $ (4,300)
------- ------- -------
------- ------- -------
Investment ...................................... $ (27,768) $ (23,542) $ (4,889)
------- ------- -------
------- ------- -------
</TABLE>
(3) NOTES PAYABLE TO BANKS
The Company maintains unsecured short-term lines of credit totaling $18
million at December 31, 1993 and March 31, 1994. In support of these credit
lines, the Company generally has agreed to pay fees which approximate 1/4 of
1% of the amount of the lines. Information relative to the Company's short-
term debt activity under such lines in 1993 and 1992 follows (in thousands):
--------------------
MARCH 31, DECEMBER 31,
1994 1993 1992
------ ------ ------
Borrowings during the period:
Average ...................... $ 7,941 $ 8,451 $ 3,980
Maximum ...................... $15,000 $18,000 $17,000
At end of period .............
$ 4,000 $ -- $--
Weighted average interest rates:
During the period ............ 6.1% 6.2% 6.4%
At end of period ............. 6.3% -- --
In addition, effective March 31, 1994, the Company obtained a $15 million
collateralized short-term credit facility available for the balance of 1994.
At March 31, 1994, no amounts were borrowed under this facility. This facility
will terminate upon the completion of the offering covered by this Prospectus.
(4) LONG-TERM DEBT
Long-term debt of the Company consisted of the following (in thousands):
<TABLE>
<CAPTION>
-----------------------------------
MARCH 31, DECEMBER 31,
1994 1993 1992
------ ------ ------
<S> <C> <C> <C>
REAL ESTATE DEVELOPMENT:
Industrial revenue bonds, primarily at 65% of prime,
payable in semi-annual installments .............. $ 1,683 $ 1,683 $ 5,340
Mortgages on real estate, at rates ranging from
4 7/8% to 10.82%, payable in installments ......... 8,570 16,027 19,732
Other indebtedness ................................. -- -- 687
------ ------ ------
Total .............................................. $10,253 $17,710 $25,759
Less -- current maturities ......................... 2,557 6,328 8,098
------ ------ ------
Net real estate development long-term debt ..... $ 7,696 $11,382 $17,661
------ ------ ------
------ ------ ------
OTHER:
Revolving credit loans at an average rate of 5.8% in
1993 and 5% in 1992 .............................. $58,000 $60,000 $53,125
ESOT Notes at 8.24%, payable in semi-annual
installments (Note 7) ............................ 5,825 6,238 7,014
Industrial revenue bonds at various rates, payable
in installments to 2005 ............................ 4,000 4,000 5,254
Other indebtedness ................................. 3,285 2,035 5,379
------ ------ ------
Total .............................................. $71,110 $72,273 $70,772
Less -- current maturities ......................... 2,637 1,289 2,678
------ ------ ------
Net other long-term debt ....................... $68,473 $70,984 $68,094
------ ------ ------
------ ------ ------
</TABLE>
Payments required under these obligations amount to approximately $7,617 in
1994, $5,359 in 1995, $62,666 in 1996, $2,656 in 1997, $3,601 in 1998 and
$8,084 for the years 1999 and beyond.
The Company's revolving credit agreement, as amended, with a group of major
banks provides for, among other things, the Company to borrow up to an
aggregate of $70 million, with a $15 million maximum of such amount also being
available for letters of credit. The Company may choose from three interest
rate alternatives including a prime-based rate, as well as other interest rate
options based on LIBOR (London inter-bank offered rate) or participating bank
certificate of deposit rates. Borrowings and repayments may be made at any
time through April 30, 1996, at which time all outstanding loans under the
agreement must be paid or otherwise refinanced. The Company must pay a
commitment fee of 1/2 of 1% annually on the unused portion of the commitment.
The revolving credit agreement, as well as certain other loan agreements,
provides for, among other things, maintaining specified working capital and
tangible net worth levels and, additionally, imposes limitations on
indebtedness and future investment in real estate development projects.
<PAGE>
PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
(INCLUDING DATA APPLICABLE TO UNAUDITED PERIODS)
(5) INCOME TAXES
Effective January 1, 1993, the Company adopted SFAS No. 109 on accounting for
income taxes. This standard determines deferred income taxes based on the
estimated future tax effects of differences between the financial statement
and tax basis of assets and liabilities, given the provisions of enacted tax
laws. Prior to the implementation of this statement, the Company accounted for
income taxes under Accounting Principles Board Opinion No. 11. The impact of
adopting SFAS No. 109 was not material, and accordingly, there is no
cumulative effect of a change in accounting method presented in the statement
of operations for the year ended December 31, 1993. Prior year financial
statements have not been restated to apply the provisions of SFAS No. 109.
The (provision) credit for income taxes is comprised of the following (in
thousands):
<TABLE>
<CAPTION>
--------------------------------------------------
FEDERAL FOREIGN STATE TOTAL
--------- --------- -------- --------
<S> <C> <C> <C> <C>
1993
Current ...........................................
$ (2,824) $ -- $ (430) $ (3,254)
Deferred .......................................... (1,808) -- 101 (1,707)
----------- ----------- ---------- -----------
$ (4,632) $ -- $ (329) $ (4,961)
----------- ----------- ---------- -----------
----------- ----------- ---------- -----------
1992
Current ...........................................
$ -- $ (5,486) $ (325) $ (5,811)
Deferred .......................................... 13,236 814 1,131 15,181
----------- ----------- ---------- -----------
$13,236 $ (4,672) $ 806 $ 9,370
----------- ----------- ---------- -----------
----------- ----------- ---------- -----------
1991
Current ........................................... $ 5,964 $ (2,497) $ (200) $ 3,267
Deferred .......................................... (5,325) 742 56 (4,527)
----------- ----------- ---------- -----------
$ 639 $ (1,755) $ (144) $ (1,260)
----------- ----------- ---------- -----------
----------- ----------- ---------- -----------
</TABLE>
The domestic and foreign components of income (loss) before income taxes are
as follows (in thousands):
<TABLE>
<CAPTION>
-------------------------------------
U.S. FOREIGN TOTAL
--------- -------- --------
<S> <C> <C> <C>
1993 ....................................................
$ 8,126 $ -- $ 8,126
1992 .................................................... $ (42,238) $15,884 $(26,354)
1991 .................................................... $ 328 $ 4,110 $ 4,438
</TABLE>
<PAGE>
The table below reconciles the difference between the statutory federal income
tax rate and the effective rate provided in the statements of operations.
<TABLE>
<CAPTION>
---------------------------------------------------
MARCH 31, DECEMBER 31,
1994 1993 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Statutory federal income tax rate ...................... 34% 34% 34% (34)% 34%
Foreign taxes .......................................... -- -- -- (1) 3
State income taxes, net of federal tax benefit ......... 5 1 2 (1) --
Reversal of tax valuation reserves no longer required .. -- -- -- -- (10)
Sale of Canadian subsidiary ............................ -- 52 24 -- --
Other .................................................. -- -- 1 -- 1
------- ------- ------- -------- -------
39% 87% 61% (36)% 28%
------- ------- ------- -------- -------
------- ------- ------- -------- -------
</TABLE>
The following is a summary of the significant components of the Company's
deferred tax assets and liabilities as of December 31, 1993 (in thousands):
<TABLE>
<S>
----------------------------------
DEFERRED DEFERRED
TAX ASSETS TAX LIABILITIES
------------- -----------------
<C> <S> <S>
Provision for estimated losses ..........................
$ 9,684 $ --
Contract losses ......................................... 2,841 --
Joint ventures -- construction .......................... -- 6,996
Joint ventures -- real estate ........................... -- 18,078
Timing of expense recognition ........................... 5,012 --
Capitalized carrying charges ............................ -- 2,301
Net operating loss carryforwards ........................ 916 --
Alternative minimum tax credit carryforwards ............ 3,567 --
General business tax credit carryforwards ............... 4,038 --
Foreign tax credit carryforwards ........................ 1,352 --
Other, net .............................................. 422 --
------- -------
$27,832 $27,375
Valuation allowance for deferred tax assets ............. (2,251) --
------- -------
Total ................................................... $25,581 $27,375
------- -------
------- -------
</TABLE>
The valuation allowance for deferred tax assets is principally attributable to
the net operating loss carryforwards of Perland Environmental Technologies,
Inc. and foreign tax credit carryforwards resulting from the 1993 sale of the
Company's Canadian subsidiary. Any portion of the valuation allowance
attributable to these deferred tax assets for which benefits are subsequently
recognized will be applied to reduce income tax expense.
At December 31, 1993, the Company has unused tax credits and net operating
loss carryforwards for income tax reporting purposes which expire as follows
(in thousands):
<TABLE>
<CAPTION>
--------------------------------------------------------------
UNUSED INVESTMENT FOREIGN NET OPERATING LOSS
TAX CREDITS TAX CREDITS CARRYFORWARDS
-------------------- -------------- ---------------------
<S> <C> <C> <C>
1994-1998 ...........................
$ 32 $1,352 $ --
1999-2002 ........................... 935 -- --
2003-2006 ........................... 3,071 -- 2,700
------ ------ ------
$4,038 $1,352 $2,700
------ ------ ------
------ ------ ------
</TABLE>
Approximately $2.7 million of the net operating loss carryforwards can only be
used against the taxable income of the corporation in which the loss was
recorded for tax and financial reporting purposes.
(6) OTHER INCOME (EXPENSE), NET
Other income (expense) items are as follows (in thousands):
<TABLE>
<CAPTION>
----------------------------------------------------------------
MARCH 31, DECEMBER 31,
1994 1993 1993 1992 1991
------- -------- ------- ------------ -------
<S> <C> <C> <C> <C> <C>
Interest and dividend income ...........
$-- $ -- $ 624 $ 1,783 $1,016
Minority interest (Note 1) ............. 32 71 167 (3,039) (76)
Gain on sale of Majestic (Note 1) ...... -- 4,600 4,631 -- --
Gain on sale of investment in Monenco .. -- -- -- 1,976 --
Miscellaneous income (expense), net .... (452) 384 (215) (284) 196
------- -------- ------- -------- -------
$(420) $5,055 $5,207 $ 436 $1,136
------- -------- ------- -------- -------
------- -------- ------- -------- -------
</TABLE>
(7) CAPITALIZATION
In July 1989, the Company sold 262,774 shares of its $1 par value common
stock, previously held in treasury, to its Employee Stock Ownership Trust
("ESOT") for $9,000,000. The ESOT borrowed the funds via a placement of 8.24%
Senior Unsecured Notes ("Notes") guaranteed by the Company. The Notes are
payable in 20 equal semi-annual installments of principal and interest
commencing in January 1990. The Company's annual contribution to the ESOT,
plus any dividends accumulated on the Company's common stock held by the ESOT,
will be used to repay the Notes. Since the Notes are guaranteed by the
Company, they are included in "Long-Term Debt" with an offsetting reduction in
"Stockholders" Equity'' in the accompanying consolidated balance sheets. The
amount included in "Long-Term Debt" will be reduced and "Stockholders"
Equity'' reinstated as the Notes are paid by the ESOT.
In June 1987, net proceeds of approximately $23,631,000 were received from the
sale of 1,000,000 depositary convertible exchangeable preferred shares (each
depositary share representing ownership of 1/10 of a share of $21.25
convertible exchangeable preferred stock, $1 par value) at a price of $25 per
depositary share. Annual dividends are $2.125 per depositary share and are
cumulative. Generally, the liquidation preference value is $25 per depositary
share plus any accumulated and unpaid dividends. The $21.25 Preferred Stock is
convertible at the option of the holder, at any time, into common stock of the
Company at a conversion price of $37.75 per share of common stock. The $21.25
Preferred Stock is redeemable at the option of the Company at any time after
June 15, 1990, in whole or in part, at declining premiums until June 1997 and
thereafter at $25 per share plus any unpaid dividends. The $21.25 Preferred
Stock is also exchangeable at the option of the Company, in whole but not in
part, on any dividend payment date into 8 1/2% convertible subordinated
debentures due in 2012 at a rate equivalent to $25 principal amount of
debentures for each depositary share.
(8) SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
Under the terms of the Company's Shareholder Rights Plan, as amended, the
Board of Directors of the Company declared a distribution on September 23,
1988 of one preferred stock purchase right (a "Right") for each outstanding
share of common stock. Under certain circumstances, each Right will entitle
the holder thereof to purchase from the Company one one-hundredth of a share
(a "Unit") of Series A Junior Participating Cumulative Preferred Stock, $1 par
value (the "Preferred Stock"), at an exercise price of $100 per Unit, subject
to adjustment. The Rights will not be exercisable or transferable apart from
the common stock until the occurrence of certain events viewed to be an
attempt by a person or group to gain control of the Company (a "triggering
event"). The Rights will not have any voting rights or be entitled to
dividends.
Upon the occurrence of a triggering event, each Right will be entitled to that
number of Units of Preferred Stock of the Company having a market value of two
times the exercise price of the Right. If the Company is acquired in a merger
or 50% or more of its assets or earning power is sold, each Right will be
entitled to receive common stock of the acquiring company having a market
value of two times the exercise price of the Right. Rights held by such a
person or group causing a triggering event may be null and void.
The Rights are redeemable at $.02 per Right by the Board of Directors at any
time prior to the occurrence of a triggering event and will expire on
September 23, 1998.
(9) STOCK OPTIONS
At March 31, 1994, December 31, 1993 and 1992, 481,610 shares of the Company's
authorized but unissued common stock were reserved for issuance to employees
under its 1982 Stock Option Plan. Options are granted at fair market value on
the date of grant and generally become exercisable in two equal annual
installments on the second and third anniversary of the date of grant and
expire eight years from the date of grant. The options granted in 1992 become
exercisable on March 31, 2001 if the Company achieves a certain profit target
in the year 2000, may become exercisable earlier if certain interim profit
targets are achieved, and, to the extent not exercised, expire 10 years from
the date of grant. A summary of stock option activity related to the Company's
stock option plan is as follows:
--------------------------------------
NUMBER OF
NUMBER OF OPTION PRICE SHARES
SHARES PER SHARE EXERCISABLE
--------- ------------- -----------
Outstanding at December 31, 1991 ... 216,925 $11.06-$33.06 71,025
Granted .......................... 252,000 $16.44
Canceled ......................... (30,100) $11.06-$33.06
Outstanding at December 31, 1992 ... 438,825 $11.06-$33.06 91,075
Granted .......................... -- --
Canceled ......................... (4,400) $11.06-$33.06
Outstanding at December 31, 1993 ... 434,425 $11.06-$33.06 143,000
Granted .......................... 20,000 $13.00
Canceled ......................... (12,700) $11.06-$33.06
Outstanding at March 31, 1994 ...... 441,725 $11.06-$33.06 132,950
When options are exercised, the proceeds are credited to stockholders' equity.
In addition, the income tax savings attributable to nonqualified options
exercised is credited to paid-in surplus.
(10) EMPLOYEE BENEFIT PLANS
The Company and its U.S. subsidiaries have a defined benefit plan which covers
its executive, professional, administrative and clerical employees, subject to
certain specified service requirements. The plan is noncontributory and
benefits are based on an employee's years of service and "final average
earnings", as defined. The plan provides reduced benefits for early retirement
and takes into account offsets for social security benefits. All employees are
vested after 5 years of service. Net pension cost for 1993, 1992 and 1991
follows (in thousands):
<TABLE>
<CAPTION>
----------------------------------------
1993 1992 1991
---------- ----------- -----------
<S> <C> <C> <C>
Service cost -- benefits earned during the period ......... $1,000 $ 896 $ 949
Interest cost on projected benefit obligation ............. 2,862 2,314 2,456
Return on plan assets:
Actual .................................................. (4,002) (1,220) (5,143)
Deferred ................................................ 1,309 (1,043) 2,895
Other ..................................................... 19 19 18
---------- ----------- -----------
Net pension cost .......................................... $1,188 $ 966 $1,175
---------- ----------- -----------
---------- ----------- -----------
Actuarial assumptions used:
Discount rate ........................................... 7 1/2%*<F1> 8 1/2% 8 1/2%
Rate of increase in compensation ........................ 5 1/2%*<F1> 6 1/2% 6 1/2%
Long-term rate of return on assets ...................... 8%*<F1> 9% 9%
<FN>
- --------------
<F1>*Rates were changed effective December 31, 1993 and resulted in a net increase
of $3.1 million in the projected benefit obligation referred to below.
</TABLE>
The Company's plan has assets in excess of accumulated benefit obligation.
Plan assets generally include equity and fixed income funds. The status of the
Company's employee pension benefit plan is summarized below (in thousands):
<TABLE>
<CAPTION>
------------------------
DECEMBER 31,
1993 1992
----------- -----------
<S> <C> <C>
Assets available for benefits:
Funded plan assets at fair value ................................... $32,795 $30,305
Accrued pension expense ............................................ 3,780 2,592
----------- -----------
Total assets ......................................................... $36,575 $32,897
----------- -----------
Actuarial present value of benefit obligations:
Accumulated benefit obligations, including vested
benefits of $31,837 and $26,790 .................................. $32,463 $27,243
Effect of future salary increases .................................. 6,468 6,229
----------- -----------
Projected benefit obligations ........................................ $38,931 $33,472
----------- -----------
Assets available less than projected benefits ........................ $ 2,356 $ 575
----------- -----------
----------- -----------
Consisting of:
Unamortized net liability existing at date of adopting
SFAS No. 87 ..................................................... $ 41 $ 47
Unrecognized net loss .............................................. 2,260 460
Unrecognized prior service cost .................................... 55 68
----------- -----------
$ 2,356 $ 575
----------- -----------
----------- -----------
</TABLE>
The Company's policy is generally to fund currently the costs accrued under
the pension plan and the Section 401(k) plan described below.
The Company also has noncontributory Section 401(k) and employee stock
ownership plans (ESOP) which cover its executive, professional, administrative
and clerical employees, subject to certain specified service requirements.
Under the terms of the Section 401(k) plan, the provision is based on a
specified percentage of profits, subject to certain limitations. Contributions
to the related employee stock ownership trust (ESOT) are determined by the
Board of Directors and may be paid in cash or shares of company common stock.
In addition, the Company has an incentive compensation plan for key employees
which is generally based on achieving certain levels of profit within their
respective business units.
The aggregate amounts provided under these employee benefit plans were $9.1
million in 1993, $10.8 million in 1992 and $12.7 million in 1991.
The Company also contributes to various multiemployer union retirement plans
under collective bargaining agreements, which provide retirement benefits for
substantially all of its union employees. The aggregate amounts provided in
accordance with the requirements of these plans were $5.2 million in 1993,
$11.2 million in 1992 and $8.5 million in 1991. The Multiemployer Pension Plan
Amendments Act of 1980 defines certain employer obligations under
multiemployer plans. Information regarding union retirement plans is not
available from plan administrators to enable the Company to determine its
share of unfunded vested liabilities.
(11) CONTINGENCIES AND COMMITMENTS
At December 31, 1993, the Company has guaranteed approximately $1.7 million of
debt incurred by various joint ventures in addition to the guarantees referred
to below.
In connection with a real estate development joint venture, the Company's
wholly-owned real estate subsidiary has guaranteed the payment of interest on
both mortgage and bond financing covering a project with loans totaling $62
million; has issued a secured letter of credit to collateralize $4.5 million
of these borrowings; has guaranteed amortization payments up to $10.4 million
on these borrowings; and has guaranteed a master lease under a sale operating
lease-back transaction under which management believes the subsidiary's
additional funding obligation on a 10% present value basis will not exceed
$2.6 million. The Company has also guaranteed $5.0 million of the subsidiary's
$10.4 million amortization guaranty and any obligation under the master lease
during the next five years. As part of the sale operating lease-back
transaction, the joint venture, in which the Company's real estate subsidiary
is a 46% general partner, agreed to obtain a financial commitment on behalf of
the lessor to replace at least $43 million of long-term financing by July 1,
1993. To satisfy this obligation, the partnership successfully extended
existing financing to July 1, 1998. To complete the extension, the partnership
had to advance funds sufficient to reduce the financing from $46.5 million to
$40.5 million. In addition, as part of the obligations of the extension, the
partnership will have to further amortize the debt from its current $40.5
million to $33 million over the next five years. If by January 1, 1998, the
joint venture has not received a further extension or new commitment for
financing on the property for at least $33 million, the lessor will have the
right under the lease to require the joint venture to purchase the property
for a stipulated amount significantly in excess of the debt.
In 1993, the joint venture also extended $29 million of the $62 million
financing mentioned above through October 1, 1998. This extension required a
$.6 million up front paydown and also requires the joint venture to amortize
up to $13 million of the principal over the next five years. Under certain
conditions, the amortization could be as low as $9 million. It is expected
that some but not all of the amortization requirements will be generated by
the project's operations.
In a separate agreement related to this same property, the 20% co-general
partner has indicated it does not have nor does it expect to have the
financial resources to fund its share of capital calls. Therefore, the
Company's wholly-owned real estate subsidiary agreed to lend this 20% co-
general partner on an as-needed basis, its share of any capital calls which
the partner cannot meet. In return, the Company's subsidiary receives a
priority return from the partnership on those funds it advances for its
partner and penalty fees in the form of rights to certain other distributions
due the borrowing partner from the partnership. The severity of the penalty
fees increases in each succeeding year for the next several years. During
1993, the subsidiary advanced $1.7 million under this agreement, primarily to
meet the principal payment obligations of the loan extensions described above.
In connection with a second real estate development joint venture, the
Company's wholly-owned real estate subsidiary has guaranteed the payment of
interest on mortgage financing with a total bank loan value currently
estimated at $48 million; has guaranteed $10 million of loan principal; has
posted a letter of credit for $1.6 million as its part of credit support
required to extend the maturity of the $48 million loan to May, 1995, which
letter of credit is guaranteed by both the Company and its subsidiary; and has
guaranteed leases which aggregate $2 million on a present value basis as
discounted at 10%.
In connection with a third real estate development joint venture, the
Company's wholly-owned real estate subsidiary has guaranteed 50% of the
outstanding loan, up to a maximum of $12.5 million of principal of the loan,
of which $5.6 million represents the subsidiary's share of the amount
outstanding at December 31, 1993.
Included in the loan agreements related to the above joint ventures, among
other things, are provisions that, under certain circumstances, could limit
the subsidiary's ability to transfer funds to the Company. In the opinion of
management, these provisions should not affect the operations of the Company
or the subsidiary.
On July 30, 1993, the U.S. District Court (D.C.), in a preliminary opinion,
upheld terminations for default on two adjacent contracts for subway
construction between Mergentime-Perini, under two joint ventures, and the
Washington Metropolitan Area Transit Authority ("WMATA") and found the
Mergentime Corporation, Perini Corporation and the Insurance Company of North
America, the surety, jointly and severally liable to WMATA for damages in the
amount of $16.5 million, consisting primarily of excess reprocurement costs to
complete the projects. Many issues were left partially or completely
unresolved by the opinion, including substantial joint venture claims against
WMATA. Any such amounts awarded to the joint ventures could serve to offset
the above damages awarded. The ultimate financial impact, if any, of this
judgement is not yet determinable, and therefore, no impact is reflected in
the 1993 financial statements.
Contingent liabilities also include liability of contractors for performance
and completion of both company and joint venture construction contracts. In
addition, the Company is a defendant in various lawsuits (see "Business --
Legal Proceedings" included elsewhere in this Prospectus). In the opinion of
management, the resolution of these matters will not have a material effect on
the accompanying financial statements.
<PAGE>
PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
(INCLUDING DATA APPLICABLE TO UNAUDITED PERIODS)
(12) RELATED PARTY TRANSACTIONS
During 1984, the Company transferred certain of its income producing real
estate properties and real estate joint venture interests to a new company,
Perini Investment Properties, Inc. (PIP) and distributed the common stock of
PIP to the company's shareholders on a share-for-share basis. In 1992 PIP
changed its name to Pacific Gateway Properties, Inc. (PGP), reflecting that
company's new West Coast focus and minimal ongoing interdependence with Perini
Corporation. Hereafter, PIP will be referred to as PGP. Initially, a majority
of PGP's directors were also directors of the Company and, the two companies
also had the same initial controlling stockholder group. Currently, the two
companies have only one common director.
Pursuant to a Service Agreement with PGP, which was terminated effective June
30, 1991, the Company provided certain management, operational, accounting,
tax and other administrative services to PGP for a fee based on a formula that
included an annual base fee and property acquisition fees plus reimbursement
for certain expenses. Fees and expenses under this agreement amounted to
$182,000 in 1991.
PGP is a partner in certain of the real estate joint ventures discussed in
Note 2 and in the first real estate development joint venture referred to in
Note 11.
(13) UNAUDITED QUARTERLY FINANCIAL DATA
The following table sets forth unaudited quarterly financial data for the
years ended December 31, 1993 and 1992 (in thousands except per share
amounts):
<TABLE>
<CAPTION>
--------------------------------------------------
1993 BY QUARTER
1ST 2ND 3RD 4TH
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues ........................................ $258,043 $348,004 $274,795 $219,274
Net income ...................................... $ 745 $ 965 $ 679 $ 776
Earnings per common share ....................... $ .05 $ .10 $ .04 $ .05
--------------------------------------------------
1992 BY QUARTER
1ST 2ND 3RD 4TH
-------- -------- -------- ----------
Revenues ........................................ $246,126 $238,059 $289,602 $ 297,065
Net income (loss) ............................... $ 1,510 $ 960 $ 2,701 $ (22,155)
Earnings (loss) per common share ................ $ .25 $ .10 $ .53 $ (5.47)
</TABLE>
(14) BUSINESS SEGMENTS AND FOREIGN OPERATIONS
The Company is currently engaged in the construction and real estate
development businesses. The following tables set forth certain business and
geographic segment information relating to the Company's operations for the
three years ended December 31, 1993 (in thousands):
<TABLE>
BUSINESS SEGMENTS
<CAPTION>
------------------------------------------
REVENUES
1993 1992 1991
---------- -------------- ------------
<S> <C> <C> <C>
Construction ....................................... $1,030,341 $1,023,274 $919,641
Real Estate ........................................ 69,775 47,578 72,267
---------- -------------- ------------
$1,100,116 $1,070,852 $991,908
---------- -------------- ------------
---------- -------------- ------------
------------------------------------------
INCOME (LOSS) FROM OPERATIONS
1993 1992 1991
---------- -------------- ------------
Construction ....................................... $ 15,164 $ 34,387 $ 24,938
Real Estate ........................................ 240 (47,206) (7,239)
Corporate .......................................... (6,830) (6,320) (5,375)
---------- -------------- ------------
$ 8,574 $ (19,139) $ 12,324
---------- -------------- ------------
---------- -------------- ------------
------------------------------------------
ASSETS
1993 1992 1991
---------- -------------- ------------
Construction ....................................... $ 219,604 $ 214,089 $198,971
Real Estate ........................................ 218,715 204,713 252,870
---------- -------------- ------------
$ 476,378 $ 470,696 $498,574
---------- -------------- ------------
---------- -------------- ------------
------------------------------------------
CAPITAL EXPENDITURES
1993 1992 1991
---------- -------------- ------------
Construction ....................................... $ 4,387 $ 4,042 $ 6,599
Real Estate ........................................ 23,590 29,131 44,207
---------- -------------- ------------
$ 27,977 $ 33,173 $ 50,806
---------- -------------- ------------
---------- -------------- ------------
------------------------------------------
DEPRECIATION
1993 1992 1991
---------- -------------- ------------
Construction ....................................... $ 2,552 $ 5,489 $ 6,342
Real Estate ........................................ 963 808 848
---------- -------------- ------------
$ 3,515 $ 6,297 $ 7,190
---------- -------------- ------------
---------- -------------- ------------
GEOGRAPHIC SEGMENTS
------------------------------------------
REVENUES
1993 1992 1991
---------- -------------- ------------
United States ...................................... $1,064,380 $ 909,358 $859,398
Canada ............................................. -- 107,709 109,764
Other Foreign ...................................... 35,736 53,785 22,746
---------- -------------- ------------
$1,100,116 $1,070,852 $991,908
---------- -------------- ------------
---------- -------------- ------------
------------------------------------------
INCOME (LOSS) FROM OPERATIONS
1993 1992 1991
---------- -------------- ------------
United States ...................................... $ 17,249 $ (28,994) $ 13,478
Canada ............................................. -- 12,812 4,218
Other Foreign ...................................... (1,845) 3,363 3
Corporate .......................................... (6,830) (6,320) (5,375)
---------- -------------- ------------
$ 8,574 $ (19,139) $ 12,324
---------- -------------- ------------
---------- -------------- ------------
------------------------------------------
ASSETS
1993 1992 1991
---------- -------------- ------------
United States ...................................... $ 433,488 $ 365,997 $408,797
Canada ............................................. -- 46,089 40,895
Other Foreign ...................................... 4,831 6,716 2,149
Corporate* <F1>..................................... 38,059 51,894 46,733
---------- -------------- ------------
$ 476,378 $ 470,696 $498,574
---------- -------------- ------------
---------- -------------- ------------
<FN>
- ------------
<F1>*In all years, corporate assets consist principally of cash, cash equivalents,
marketable securities and other investments available for general corporate
purposes.
Contracts with various federal, state, local and foreign governmental agencies
represented approximately 54% of construction revenues in 1993, 57% in 1992
and 56% in 1991.
</TABLE>
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Perini Corporation:
We have audited the accompanying statement of construction revenues and costs
of Newberg/Perini (a division of Perini Corporation and a former component of
Gust K. Newberg Construction Co.) for the year ended December 31, 1992. This
statement is the responsibility of the Company's management. Our
responsibility is to express an opinion on this statement based on our audit.
We did not audit the financial statements of EBASCO/Newberg, a joint venture,
for which Newberg/Perini's share of construction revenues constitutes 15% of
total revenues. Those statements were audited by other auditors whose report
has been furnished to us and our opinion, insofar as it relates to the amounts
included for that entity, is based solely on the report of the other auditors.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement is free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall statement presentation.
We believe that our audit and the report of other auditors provide a
reasonable basis for our opinion.
The accompanying statement was prepared for the purpose of complying with the
rules and regulations of the Securities and Exchange Commission as described
in Note 1 and is not intended to be a complete presentation of the results of
operations of Newberg/Perini.
In our opinion, based on our audit and the report of other auditors, the
statement referred to above presents fairly, in all material respects, the
construction revenues and costs of Newberg/Perini for the year ended December
31, 1992, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN & CO.
August 16, 1993
Boston, Massachusetts
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Perini Corporation:
We have audited the accompanying statements of construction revenues and costs
of Newberg/Perini (a division of Perini Corporation and a former component of
Gust K. Newberg Construction Co.) for the years ended December 31, 1991 and
1990. These statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these statements based on our
audit. We did not audit the financial statements of EBASCO/Newberg, a joint
venture, for the year ended December 31, 1991 for which Newberg/Perini's share
of construction revenues constitutes 31% of the total revenues in 1991. Those
statements were audited by other auditors whose report has been furnished to
us and our opinion, insofar as it relates to the amounts included for that
entity, is based solely on the report of the other auditors.
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 statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statements. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall statement presentation.
We believe that our audits and the report of other auditors provide a
reasonable basis for our opinion.
The accompanying statements were prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission as
described in Note 1 and are not intended to be a complete presentation of the
results of operations of Newberg/Perini.
In our opinion, based on our audits and the report of other auditors, the
statements referred to above present fairly, in all material respects, the
construction revenues and costs of Newberg/Perini for the years ended December
31, 1991 and 1990, in conformity with generally accepted accounting
principles.
ALEXANDER X. KUHN & CO.
August 16, 1993
Oakbrook Terrace, IL
<PAGE>
INDEPENDENT AUDITORS' REPORT
MEMBERS OF THE JOINT VENTURE
Ebasco/Newberg, A Joint Venture
Tullahoma, Tennessee
We have audited the balance sheets of Ebasco/Newberg, a Joint Venture, as of
December 31, 1992 and 1991, and the related statements of operations,
venturers' equity (deficit) and cash flows for the years then ended (not
presented separately herein). These financial statements are the
responsibility of the Joint Venture's management. Our responsibility is to
express an opinion on these financial statements 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, such financial statements, referred to above, present fairly,
in all material respects, the financial position of Ebasco/Newberg, a Joint
Venture, at December 31, 1992 and 1991, and the results of its operations and
cash flows for the years then ended, in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE
January 21, 1993
Nashville, Tennessee
<PAGE>
NEWBERG/PERINI
STATEMENTS OF CONSTRUCTION REVENUES AND COSTS
FOR THE YEARS ENDED DECEMBER 31, 1992, 1991 AND 1990
<TABLE>
<CAPTION>
-----------------------------------------------
1992 1991 1990
------------ ------------ -----------
<S> <C> <C> <C>
CONSTRUCTION REVENUES .......................... $187,183,556 $109,981,708 $10,025,483
CONSTRUCTION COSTS ............................. 174,066,719 103,316,505 9,301,700
------------ ------------ -----------
GROSS PROFIT ................................... $ 13,116,837 $ 6,665,203 $ 723,783
------------ ------------ -----------
------------ ------------ -----------
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
NEWBERG/PERINI
NOTES TO STATEMENTS OF REVENUES AND COSTS
FOR THE YEARS ENDED DECEMBER 31, 1992, 1991 AND 1990
(1) ORGANIZATION AND STATEMENT PRESENTATION
As described further in Note 2, on July 1, 1993, Gust K. Newberg Construction
Co. (Newberg) sold its interest related to certain construction contracts and
certain construction equipment to Perini Corporation (Perini) and a third
party leasing company. Perini formed a new division, Newberg/Perini, to
complete the construction projects acquired, to enter into an operating lease
agreement for the use of the equipment and to pursue new work in the areas of
heavy construction in the Midwest and power plant construction and maintenance
nationwide. Pursuant to the acquisition, these statements have been prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission. These statements represent the construction revenues
and costs of the acquired construction projects as reported as a component of
Newberg prior to the acquisition.
(2) ACQUISITION
Effective July 1, 1993, Perini acquired Newberg's interest in eleven joint
ventures (the "Joint Ventures") and one contract (the "Contract") relating to
certain construction projects and certain construction equipment. The purchase
price for the acquisition was (i) approximately $3 million in cash for the
equipment paid by a third party leasing company, which in turn simultaneously
entered into an operating lease agreement with the Registrant for the use of
said equipment, (ii) the greater of $1 million or 25% of the aggregate pretax
earnings during the period from April 1, 1993 through December 31, 1994, net
of payments accruing to Newberg as described in (iii) below and (iii) 50% of
the aggregate of net profits earned by each Joint Venture interest and under
the Contract from April 1, 1993 through December 31, 1994 and, with regard to
one Joint Venture interest, through December 31, 1995.
(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Joint venture interests are accounted for on the equity method. The company's
share of revenues and costs in these interests is included in "Construction
Revenues and Costs", respectively, in the accompanying Statements of
Construction Revenues and Costs.
Profits from construction contracts and construction joint ventures are
generally recognized by applying percentages of completion for each year to
the total estimated profits for the respective contracts. The percentages of
completion are determined by relating the actual cost of the work performed to
date to the current estimated total cost of the respective contracts. When the
estimate on a contract indicates a loss, the company's policy is to record the
entire loss. Income from claims is recorded in the year such claims are
resolved.
<PAGE>
PERINI CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
YEAR ENDED ENDED DECEMBER 31, YEAR ENDED
DECEMBER 31, JUNE 30, 1993 DECEMBER 31,
1993 1993 PRO FORMA 1993
PERINI NEWBERG ADJUSTMENTS PRO FORMA
------ ------- ----------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues from Operations
Construction ........... $1,030,341 $69,275 $(35,127) $1,064,489
Real Estate ............ 69,775 -- -- 69,775
--------- ------ ------- ---------
$1,100,116 $69,275 $(35,127) $1,134,264
--------- ------ ------- ---------
Costs and Expenses
Cost of Operations ..... $1,047,330 $63,464 $(31,732) $1,079,062
General, Administrative
and Selling Expenses . 44,212 -- 1,500 45,712
--------- ------ ------- ---------
$1,091,542 $63,464 $(30,232) $1,124,774
--------- ------ ------- ---------
Income from Operations ... $ 8,574 $ 5,811 $ (4,895) $ 9,490
Other Income, Net ...... 5,207 -- -- 5,207
Interest Expense ....... (5,655) -- -- (5,655)
--------- ------ ------- ---------
Income (Loss) Before
Income Taxes ............. $ 8,126 $ 5,811 $ (4,895) $ 9,042
Provision for Income Taxes
.......................... (4,961) -- (357) (5,318)
--------- ------ ------- ---------
Net Income ............... $ 3,165 $ 5,811 $ (5,252) $ 3,724
--------- ------ ------- ---------
--------- ------ ------- ---------
Earnings Per Common Share $ .24 $ .37
--------- ---------
--------- ---------
</TABLE>
See notes to pro forma condensed consolidated statement of operations.
<PAGE>
PERINI CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Effective July 1, 1993, the Registrant acquired Newberg's interest in eleven
joint ventures (the "Joint Ventures") and one contract (the "Contract")
relating to certain construction projects and certain construction equipment.
The purchase price for the acquisition was (i) approximately $3 million in
cash for the equipment paid by a third party leasing company, which in turn
simultaneously entered into an operating lease agreement with the Registrant
for the use of said equipment, (ii) the greater of $1 million or 25% of the
aggregate pretax earnings of Perini/Newberg, a new division of the Registrant
primarily responsible for completing the projects, during the period from
April 1, 1993 through December 31, 1994, net of payments accruing to Newberg
as described in (iii) below and (iii) 50% of the aggregate of net profits
earned by each Joint Venture and under the Contract from April 1, 1993 through
December 31, 1994 and, with regard to one Joint Venture, through December 31,
1995.
NOTE A: PRO FORMA ADJUSTMENTS TO CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS
The pro forma statement of operations combines the revenues and costs of
Newberg/Perini for the six months ended June 30, 1993 (preacquisition) with
the consolidated results of operations of Perini Corporation and subsidiaries
for the year ended December 31, 1993.
The pro forma adjustment to revenues and costs from construction operations
represents Newberg's approximate 50% share in accordance with the terms of the
Asset Purchase Agreement.
The pro forma adjustments to general, administrative and selling expenses
represent management's estimate of a normalized annual level of such expense
($2.8 million) and amortization of the $1 million assigned to the non-
competition agreement which is being amortized over its five-year term on a
straight-line basis.
The pro forma adjustment to the provision for income taxes was calculated by
applying the Registrant's 1993 statutory federal and state income tax rate of
39% to income before income taxes to the pro forma adjusted Newberg results.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Except for the Registration Fee and the NASD Filing Fee, the following table
sets forth estimates of expenses of issuance other than underwriting discounts
and commissions:
Registration Fee.......................................... $ 9,914
NASD Filing Fee........................................... 3,375
Listing Fee............................................... 17,500
Accounting Fees..........................................
Depositary's Fees and Expenses...........................
Transfer Agent's Fees and Expenses.......................
Trustee's Fees and Expenses..............................
Printing Costs...........................................
Engraving Costs..........................................
Legal Fees and Expenses..................................
Blue Sky Fees and Expenses...............................
Miscellaneous............................................
------
Total.................................................. $
------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Restated Articles of Organization, as amended, of Perini Corporation (the
"Registrant") provide for the elimination of liability of directors to the
Registrant or its stockholders for monetary damages for negligent acts or
omissions to the extent permitted by Section 13 of the Business Corporation
Law of the Commonwealth of Massachusetts.
Section 67 of the Business Corporation Law of the Commonwealth of
Massachusetts gives corporations the power to indemnify directors, officers,
employees and other agents and persons under certain circumstances.
The By-laws of the Registrant provide for indemnification of officers,
directors and certain other corporate representatives for all expenses
incurred by them in defense of any proceeding or lawsuit in which they are
successful on the merits. In such a situation, the right to receive
indemnification is mandatory and does not require an affirmative determination
by the Board of Directors.
The By-laws also authorize indemnification of officers, directors and certain
other corporate representatives for expenses and liabilities in cases other
than those in which they are successful on the merits, subject to specified
conditions. No indemnification shall be provided with respect to any matter as
to which an officer, director or corporate representative shall have been
adjudicated not to have acted in good faith and in the reasonable belief that
his action was in the best interest of the Registrant, or, with respect to a
criminal matter, that he had reasonable cause to believe that his conduct was
unlawful. No indemnification shall be provided for any director or officer or
corporate representative with respect to a proceeding by or in the right of
the Registrant in which he is adjudicated to be liable to the Registrant.
The By-laws provide that if a proceeding is compromised or settled in a manner
which imposes a liability or obligation upon a director or officer or
corporate representative, no indemnification shall be provided to him with
respect to (i) a proceeding by or in the right of the Registrant unless the
Board of Directors determines in its discretion that indemnification is
appropriate under the circumstances, and (ii) any other type of proceeding if
it is determined by the Board of Directors that said director or officer or
corporate representative in ineligible to be indemnified under the By-laws of
the Registrant.
The By-laws provide that any indemnification other than mandatory
indemnification shall be authorized in each case as determined by the Board of
Directors, which may act on the indemnification request notwithstanding that
one or more of its members are parties to the proceeding or otherwise have an
interest in such indemnification.
The By-laws also authorize the Registrant to purchase and maintain insurance
on behalf of officers and directors against liabilities incurred by them in
their capacities as such, whether or not the Registrant would have been able
to indemnify them for such liabilities.
In January 1987, the Registrant established the Perini Corporation Indemnity
Trust to assure that independent fiduciaries will administer the
indemnification obligations of the Registrant to its directors, officers,
employees and agents pursuant to the laws of Massachusetts, its Restated
Articles of Organization, as amended, By-laws, and indemnity contracts or
agreements. State Street Bank & Trust Company is the trustee. The Perini
Corporation Indemnity Trust currently has assets of nominal value but these
could be increased at any time.
The By-laws of the Registrant authorized the Registrant to enter into specific
agreements with its officers and directors to indemnify them to the full
extent permitted by law. In December 1986, the Board of Directors approved and
the Registrant entered into indemnification agreements with each of its
directors and certain of its officers. These indemnification agreements were
ratified by stockholders at the 1987 Annual Meeting.
The Registrant has a one-year insurance policy, effective July 1, 1993, with
National Union Fire Insurance Company insuring directors and officers against
certain liabilities that may incur, including liabilities under the Security
Act of 1933, as amended. This policy contains standard reimbursement
provisions to an aggregate limit of $15 million and a corporate retention of
$200,000 for expenses reimbursable to the directors and/or officers of the
Registrant. The policy contains various reporting requirements and exclusions.
The Registrant also has a one-year insurance policy, effective July 1, 1993,
with the Fidelity and Casualty Company of New York, insuring directors and
officers against certain liabilities in the amount of $5 million excess over
the primary coverage.
ITEM 16. EXHIBITS.
The list of Exhibits appears on page E-1 of this Registration Statement.
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended (the "Act"), may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in t he Act and is, therefore, unenforceable. In the event
that claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
The Company hereby undertakes that (1) for purposes of determining any
liability under the Act, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule 424
(b)(1) or (4) or 497(h) under the Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective and (2) for
purposes of determining any liability under the Act, each post-effective
amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-2 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Framingham, Commonwealth of Massachusetts, on the
27th day of May, 1994.
PERINI CORPORATION
By:
DAVID B. PERINI
---------------------
DAVID B. PERINI
Chairman, President and
Chief Executive Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints David B. Perini, James M. Markert and Robert E.
Higgins, and each of them, acting singly, his true and lawful attorneys-in-
fact and agents, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign any or
all amendments, including any post-effective amendments, to this Registration
Statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or their substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Chairman, President, Chief Executive
Officer and Director (Principal
Executive Officer)
DAVID B. PERINI
- ------------------------------
DAVID B. PERINI May 27, 1994
Senior Vice President -- Finance and
Administration and Director
(Principal Financial Officer)
JAMES M. MARKERT
- ------------------------------
JAMES M. MARKERT May 27, 1994
Vice President and Controller
(Principal Accounting Officer)
BARRY R. BLAKE
- ------------------------------
BARRY R. BLAKE May 27, 1994
Director
RICHARD J. BOUSHKA
- ------------------------------
RICHARD J. BOUSHKA May 27, 1994
Director
MARSHALL M. CRISER
- ------------------------------
MARSHALL M. CRISER May 27, 1994
Director
THOMAS E. DAILEY
- ------------------------------
THOMAS E. DAILEY May 27, 1994
Director
ALBERT A. DORMAN
- ------------------------------
ALBERT A. DORMAN May 27, 1994
Director
ARTHUR J. FOX, JR.
- ------------------------------
ARTHUR J. FOX, JR. May 27, 1994
Director
- ------------------------------
NANCY HAWTHORNE
Director
MARSHALL A. JACOBS
- ------------------------------
MARSHALL A. JACOBS May 27, 1994
Director
ROBERT M. JENNEY
- ------------------------------
ROBERT M. JENNEY May 27, 1994
Director
JOHN J. MCHALE
- ------------------------------
JOHN J. MCHALE May 27, 1994
Director
JANE E. NEWMAN
- ------------------------------
JANE E. NEWMAN May 27, 1994
Director
BART W. PERINI
- ------------------------------
BART W. PERINI May 27, 1994
Director
JOSEPH R. PERINI
- ------------------------------
JOSEPH R. PERINI May 27, 1994
</TABLE>
<PAGE>
<TABLE>
EXHIBIT INDEX
<CAPTION>
<S> <C>
1 Form of Underwriting Agreement
4(a) Certificate of Vote of Directors Establishing a Series of a Class of Stock determining the relative
rights and preferences of the $ Convertible Exchangeable Junior Preferred Stock
4(b) Form of Deposit Agreement, including form of Depositary Receipt
4(c) Form of Indenture with respect to the % Convertible Subordinated Debentures Due , 2019,
including form of Debenture
4(d) Shareholder Rights Agreement, as amended, and Certificate of Vote of Directors adopting a
Shareholders Rights Plan providing for the issuance of a Series A Junior Participating cumulative
Preferred Stock purchase rights as a dividend to all shareholders of record on October 6, 1988
(incorporated by reference to Current Report on Form 8-K (Date of earliest reportable event: May 17,
1990))
5(a) Opinion of Jacobs Persinger & Parker as to legality*<F1>
5(b) Opinion of Peabody & Arnold as to legality*<F1>
5(a) Opinion of Jacobs Persinger & Parker as to legality*<F1>
7 Opinion of Goodwin, Proctor & Hoar as to liquidation preference*<F1>
10(a) Restricted Stock Plan for Outside Directors
10(b) 1982 Stock Option and Long Term Performance Incentive Plan, as amended (incorporated by reference to
Exhibit A to the Registrant's Proxy Statement dated April 15, 1992)
10(c) Perini Corporation Amended and Restated General Incentive Compensation Plan (incorporated by
reference to Exhibit 10.2 to the Registrant's Form 10-K for the year ended December 31, 1991)
10(d) Perini Corporation Amended and Restated construction Business Unit Incentive Compensation Plan
(incorporated by reference to Exhibit 10.3 to the Registrant's Form 10-K for the year ended December
31, 1991)
10(e) $70,000,000 Credit Agreement dated as of May 10, 1993 among Registrant and Morgan Guaranty Trust
Company of New York, Bank of America National Trust & Savings Association, Shawmut Bank, N.A., Fleet
Bank of Massachusetts, N.A. and Baybank Boston, N.A., as amended by Amendment No. 1 dated as of
December 30, 1993, Amendment No. 2 dated as of February 11, 1994, Amendment No. 3 dated as of March
8, 1994 and Amendment No. 4 dated as of May 3, 1994
10(f) $15,000,000 Credit Agreement dated as of March 9, 1994 among Registrant and Morgan Guaranty Trust
Company of New York, Bank of America National Trust & Savings Association, Shawmut Bank, N.A., Fleet
Bank of Massachusetts, N.A. and Baybank Boston, N.A., as amended by Amendment No. 1 dated as of May
3, 1994
12 Statement re Computation of Ratios
23(a) Consent of Jacobs Persinger & Parker (see Exhibit 5(a))*<F1>
23(b) Consent of Peabody & Arnold (see Exhibit 5(b))*<F1>
23(c) Consent of Goodwin, Proctor & Hoar (see Exhibit 7)*<F1>
23(d) Consent of Arthur Andersen & Co.
23(e) Consent of Alexander X. Kuhn & Co.
23(f) Consent of Deloitte & Touche
24 Power of Attorney (see page II-4)
25 Statement of Eligibility and Qualification on Form T-1 of State Street Bank & Trust Co.*<F1>
<FN>
- ---------
<F1>*To be filed by amendment.
</TABLE>
<PAGE>
EXHIBIT 1
UNDERWRITING AGREEMENT
Perini Corporation
100,000 Shares
$ Cumulative Convertible Exchangeable Junior Preferred Stock
(1,000,000 Depositary Shares)
June , 1994
J.P. MORGAN SECURITIES INC.
60 Wall Street
New York, New York 10260
Ladies/Gentlemen:
Perini Corporation, a Delaware corporation (the "Company"), proposes
to issue and sell to J.P. Morgan Securities Inc. (the "Underwriter") 100,000
shares (the "Firm Securities") of its $ Cumulative Convertible
Exchangeable Junior Preferred Stock (the "Convertible Preferred Stock") and,
for the sole purpose of covering over-allotments in connection with the sale of
the Firm Securities, at the option of the Underwriter, up to an additional
15,000 shares (the "Option Securities") of its Convertible Preferred Stock.
The Firm Securities and any Option Securities purchased by the Underwriter are
herein referred to as the "Securities."
Simultaneously with the issuance of the Securities, the Underwriter
will deposit the Securities pursuant to a Deposit Agreement dated as of June
, 1994 (the "Deposit Agreement") among the Company, ________ (the "Depositary")
and the holders from time to time of the depositary receipts evidencing the
Depositary Convertible Exchangeable Preferred Shares (the "Depositary Shares")
issued at such time to represent the Securities so deposited. Each Depositary
Share will represent one-tenth share of Convertible Preferred Stock.
The terms of the Convertible Preferred Stock are contained in the
Certificate of Vote of Directors Establishing a Series of a Class of Stock (the
"Certificate"), a form of which is attached as an exhibit to the Registration
Statement (as defined below). The Convertible Preferred Stock will be
convertible from and after the date of issuance at the holder's option into
shares of the Company's common stock, par value $1.00 per share (the "Common
Stock"), at an initial conversion rate of shares of Common Stock per
share of Convertible Preferred Stock (or shares per Depositary Share),
subject to adjustment in certain circumstances. On or after June 15, 1996 the
Convertible Preferred Stock is exchangeable at the option of the Company into
the Company's % Convertible Subordinated Debentures due 2019 (the "Exchange
Debentures").
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement on Form S-2 (File No. 33- ), including a prospectus, relating to
the Securities and the Depositary Shares. The registration statement as
amended at the time when it shall become effective, or, if post-effective
amendments are filed with respect thereto, as amended by such post-effective
amendments at the time of their effectiveness, including in each case
information incorporated by reference therein (the "Incorporated Documents")
and information (if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Securities Act, is
hereinafter referred to as the "Registration Statement"; the prospectus
constituting a part of the Registration Statement in the form first used to
confirm sales of Securities is hereinafter referred to as the "Prospectus,"
except that if any revised prospectus shall be provided to the Underwriter by
the Company which differs from the Prospectus (whether or not any such revised
prospectus is required to be filed by the Company pursuant to Rule 424(b) under
the Securities Act), the term "Prospectus" shall refer to each such revised
prospectus from and after the time it is first provided to the Underwriter for
such use.
1. The Company hereby agrees to issue and sell the Firm Securities
to the Underwriter as hereinafter provided, and the Underwriter, upon the basis
of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase from the Company all of the
Firm Securities at a price equal to $ per share, plus accrued dividends,
if any, from June , 1994 to the date of payment and delivery (the "Purchase
Price").
In addition, the Company agrees to issue and sell the Option
Securities to the Underwriter as hereinafter provided, and the Underwriter,
upon the basis of the representations and warranties herein contained, but
subject to the conditions hereinafter stated, shall have the option to purchase
from the Company up to 15,000 Option Securities at the Purchase Price, for the
sole purpose of covering over-allotments (if any) in the sale of Firm
Securities by the Underwriter.
The Underwriter may exercise the option to purchase the Option
Securities at any time (but not more than once) by written notice to the
Company, provided that the closing of the sale of the Option Securities shall
take place no later than July , 1994. Such notice shall set forth the
aggregate principal amount of Option Securities as to which the option is being
exercised and the date and time when the Option Securities are to be delivered
and paid for, which may be the same date and time as the Closing Date (as
hereinafter defined) but shall not be earlier than the Closing Date or later
than the tenth full Business Day (as hereinafter defined) after the date of
such notice. Any such notice shall be given at least two Business Days prior
to the date and time of delivery specified therein.
2. The Company understands that the Underwriter intends (i) to make
a public offering of the Depositary Shares as soon after the Registration
Statement and this Agreement have become effective as in the judgment of the
Underwriter is advisable and (ii) initially to offer the Depositary Shares upon
the terms set forth in the Prospectus. The Company confirms that the
Underwriter and any dealer were authorized to distribute any preliminary
prospectus and are authorized to distribute the Prospectus and any amendments
or supplements to it.
3. Payment for the Securities shall be made to the Company or to its
order by certified or official bank check or checks payable in New York
Clearing House or other next day funds at the office of Cahill Gordon &
Reindel, 80 Pine Street, New York, New York at 10:00 A.M., New York City time,
in the case of the Firm Securities, on June , 1994, or at such other time on
the same or such other date, not later than the fifth Business Day thereafter,
as the Underwriter and the Company may agree upon in writing or, in the case of
the Option Securities on the date and time specified by the Underwriter in the
written notice of its election to purchase such Option Securities. The time
and date of such payment for the Firm Securities are referred to herein as the
"Closing Date" and the time and date for such payment for the Option
Securities, if other than the Closing Date, are herein referred to as the
"Additional Closing Date." As used herein, the term "Business Day" means any
day other than a day on which banks are permitted or required to be closed in
New York City.
Payment for the Securities to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Underwriter of Securities registered in the name of the Underwriter (or its
designee), the delivery by the Underwriter to the Depositary of certificates
representing such registered Securities and the delivery by the Depositary to
the Underwriter of depositary receipts evidencing the Depositary Shares
representing the Securities. The Depositary Shares shall be registered in such
names and in such amounts as the Underwriter shall request in writing not later
than two full Business Days prior to the Closing Date or the Additional Closing
Date, as the case may be and will be made available for inspection and
packaging by the Underwriter in New York, New York not later than 10:00 A.M.,
New York City time, on the Business Day prior to the Closing Date or the
Additional Closing Date, as the case may be.
4. The Company represents and warrants to the Underwriter that:
(a) no order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and each preliminary prospectus
filed as part of the Registration Statement, as originally filed or as part of
any amendment thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act, and
did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information relating to the Underwriter furnished to the Company in writing by
the Underwriter expressly for use therein;
(b) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of the Company, threatened by the Commission;
and the Registration Statement and the Prospectus (as amended or supplemented
if the Company shall have furnished any amendments or supplements thereto)
comply, or will comply, as the case may be, in all material respects with the
Securities Act and do not, and will not, as of the applicable effective date of
the Registration Statement and any amendment thereto and as of the date of the
Prospectus and any amendment or supplement thereto, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, and the Prospectus, as
amended or supplemented at the Closing Date and the Additional Closing Date, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact necessary or required to be stated therein or to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; except that the foregoing representations and warranties
shall not apply to statements or omissions in the Registration Statement or the
Prospectus made (i) in reliance upon and in conformity with information
relating to the Underwriter furnished to the Company in writing by the
Underwriter expressly for use therein or (ii) in the Statement of Eligibility
and Qualification of the Trustee under the Trust Indenture Act of 1939 ("TIA")
on Form T-1 (the "Form T-1");
(c) the Company meets all conditions and requirements for the use of
a Form S-2 Registration Statement ("Form S-2") under the Securities Act;
(d) the Incorporated Documents, when they were filed with the
Commission, conformed in all material respects to the requirements of the
Exchange Act, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and any further documents so filed
and incorporated by reference in the Registration Statement, when such
documents are filed by the Company with the Commission, will conform in all
material respects to the requirements of the Exchange Act, and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(e) Arthur Andersen & Co. who are reporting upon the audited
consolidated financial statements of the Company and its subsidiaries (the
"Subsidiaries") and the related schedules included in the Registration
Statement for the years ended December 31, 1991, 1992 and 1993, are independent
public accountants as required by the Securities Act, Alexander K. Kuhn & Co.
who are reporting on the audited statements of construction revenues and costs
of Newberg/Perini, a division of the Company, incorporated by reference into
the Registration Statement for the year ended December 31, 1991 are independent
public accountants as required by the Securities Act and Deloitte & Touche who
are reporting on the audited balance sheets and related statements of
operations, ventures' equity (deficit) and cash flows for Ebasco/Newberg, a
joint venture, incorporated by reference into the Registration Statement for
the years ended December 31, 1992 and 1991 are independent public accountants
as required by the Securities Act;
(f) the financial statements referred to in (e) above, as well as the
unaudited interim financial information relating to the Company included or
incorporated by reference in the Registration Statement, present fairly the
consolidated financial position of the Company and its Subsidiaries taken as a
whole as of the dates and periods indicated and the consolidated results of
operations and consolidated cash flows of the Company and its Subsidiaries
taken as a whole for the periods specified in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved, except as disclosed in the Registration Statement (subject in
the case of interim statements to normal year-end adjustments);
(g) the Company and its Subsidiaries are conducting and intend to
conduct their businesses so as to comply in all material respects with
applicable federal, state and local government statutes and regulations, except
where such failure to comply would not have a material adverse effect on the
business, prospects, operations or condition, financial or otherwise, of the
Company and its Subsidiaries taken as a whole (a "Material Adverse Effect");
and except as set forth in the Registration Statement, neither the Company nor
any of its Subsidiaries is charged with, or to the Company's knowledge, is
under investigation with respect to, any material violation of any of such
statutes or regulations or is the subject of any pending or, to its knowledge,
threatened proceeding by any regulatory authority relating to any such
violation, except where such violation or proceeding would not have a Material
Adverse Effect;
(h) except as set forth in the Registration Statement and except for
transfer restrictions imposed by operation of local law the compliance with
which, singly or in the aggregate, would not have a Material Adverse Effect,
the Company owns, beneficially and of record, free and clear of any mortgage,
pledge, security interest, lien, claim or other encumbrance or restriction on
transferability or voting, directly or indirectly through a Subsidiary, all of
the outstanding equity securities listed on Annex A hereto of each of the
Subsidiaries listed thereon, which constitute all of the subsidiaries of the
Company; except as set forth in the Registration Statement or in Annex A, all
of the outstanding capital stock of the Subsidiaries has been duly and validly
authorized and issued and is fully paid and non-assessable; and except as set
forth in the Registration Statement or in Annex A, there are no outstanding (a)
securities or obligations of the Company convertible into or exchangeable for
any shares of capital stock of the Company or any Subsidiary, (b) rights,
warrants or options to acquire or purchase from the Company any shares of
capital stock of the Company or any Subsidiary or any such convertible or
exchangeable securities or obligations, or (c) obligations or understandings of
the Company to issue or sell any shares of capital stock of the Company or any
Subsidiary, any such convertible or exchangeable securities or obligations, or
any such warrants, rights or obligations;
(i) the statistical and market-related data included in the
Registration Statement are based on or derived from sources which the Company
believes to be reliable and accurate;
(j) except as stated in the Registration Statement, the Company knows
of no outstanding claims for services, either in the nature of a finder's fee
or origination fee, with respect to the transactions contemplated hereby;
(k) since the date of the latest consolidated financial statements
included or incorporated by reference in the Registration Statement, except as
disclosed or contemplated in the Registration Statement, there has not been
(A) any change in the Company's issued capital stock, warrants or options
except pursuant to the terms of the instruments governing the same or pursuant
to the exercise of such options or warrants, or the issuance of certain
options, or (B) any material adverse change in the management, business,
prospects, operations or condition, financial or otherwise, of the Company and
the Subsidiaries taken as a whole (a "Material Adverse Change," and any event
or state of facts which could result in a Material Adverse Change is herein
referred to as a "Prospective Material Adverse Change");
(l) since the respective dates as of which information is given in
the Registration Statement, except as disclosed or contemplated therein, (i)
there have been no transactions entered into by the Company or any of its
Subsidiaries, other than those in the ordinary course of business, which are
material to the Company and its Subsidiaries taken as a whole, and (ii) there
has been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock;
(m) each of the Company and the Subsidiaries has been duly organized
under the laws of its jurisdiction of incorporation; each of the Company and
the Subsidiaries is a validly existing corporation in good standing under the
laws of its jurisdiction of organization and has full corporate power and
authority to own its properties and conduct its business as described in the
Registration Statement and is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions where the ownership of
its property or the conduct of its business requires such qualification, except
where the failure so to qualify or be in good standing would not have a
Material Adverse Effect;
(n) each of this Agreement and the Deposit Agreement has been duly
authorized, executed and delivered by the Company and, assuming the due
authorization, execution and delivery by the other parties thereto, constitutes
the valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except as the enforceability thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar
laws now or hereafter in effect relating to creditors' rights generally and
(ii) equitable principles of general applicability whether applied by a court
of law or equity;
(o) the sale and issuance of the Securities have been duly authorized
by the Company and, issued by the Company and delivered to and paid for by the
Underwriter in accordance with the terms of this Agreement and the Deposit
Agreement, the Securities and Depositary Shares will be validly issued, the
Securities will be fully paid and non-assessable and the Securities and
Depositary Shares will not be subject to any preemptive rights or other similar
rights to purchase the Securities pursuant to (i) the Company's Restated
Articles of Organization, (ii) the Certificate, (iii) Massachusetts Business
Corporation Law or (iv) contracts to which the Company is a party;
(p) the indenture governing the Exchange Debentures (the "Indenture")
has been duly authorized by the Company and qualified under the TIA, and, when
executed and delivered by the Company and the trustee thereunder (the
"Trustee"), the Indenture will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
as the enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors' rights generally and (ii) equitable principles of general
applicability whether applied by a court of law or equity; and the Exchange
Debentures and the Indenture conform in all material respects to the
descriptions thereof in the Registration Statement;
(q) the shares of Common Stock issuable upon conversion of the
Securities (or the Exchange Debentures, as the case may be) have been duly
authorized for issuance upon such conversion and duly reserved for such
issuance and, when issued upon such conversion in accordance with the terms of
the Certificate (or Indenture, as the case may be), will be validly issued and
will be fully paid and non-assessable, and the issuance of such shares of
Common Stock is not subject to any preemptive or similar rights;
(r) the Exchange Debentures have been duly authorized by the Company
and, when duly executed, authenticated and issued in accordance with the terms
of the Certificate and the Indenture, will be validly issued and represent
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except (i) bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) equitable principles of general applicability whether
applied by a court of law or equity;
(s) the execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement and the Deposit
Agreement, including without limitation the issuance and delivery of shares of
Common Stock upon conversion of the Securities (or the Exchange Debentures, as
the case may be), and the consummation by the Company of the transactions
contemplated hereby and thereby (i) have been duly authorized by all necessary
corporate action on the part of the Company, (ii) do not and will not result in
any violation of the Restated Articles of Organization or the Amended and
Restated By-laws of the Company and (iii) do not and will not conflict with, or
result in a breach or violation of any of the terms or provisions of, or
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or give rise to any right to accelerate the
maturity or require the prepayment of any indebtedness or the purchase of any
capital stock under, or result in the creation or imposition of any lien,
charge or encumbrance upon any material property or assets of the Company or
any Subsidiary of the Company under, (A) any indenture, mortgage, loan
agreement, note, lease, partnership agreement or other agreement or instrument
to which the Company or any such Subsidiary is a party or by which any of them
may be bound or to which any of their properties may be subject (except for
such conflicts, breaches, violations, defaults, accelerations, prepayments,
liens, charges or encumbrances that would not have a Material Adverse Effect),
(B) any existing applicable law, rule or regulation (other than the securities
or Blue Sky laws of the various states of the United States of America and
except for such laws, rules or regulations that would not have a Material
Adverse Effect) or (C) any judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any such Subsidiary or any of their respective properties
(except for such judgments, orders or decrees that would not have a Material
Adverse Effect);
(t) no authorization, approval, consent or license of, or filing
with, any government, governmental instrumentality or court, domestic or
foreign (other than as may be required under the Securities Act or the
securities or Blue Sky laws of the various states of the United States of
America), is required for the valid authorization, issuance, sale and delivery
of the Securities or the Depositary Shares, or the issuance and delivery of
shares of Common Stock upon conversion of Securities (or Exchange Debentures,
as the case may be), or the performance by the Company of its obligations under
this Agreement or the Deposit Agreement;
(u) the Company (i) is not in violation of its Restated Articles of
Organization or Amended and Restated By-Laws and (ii) is not and with the
giving of notice or lapse of time or both would not be in violation of, or in
default under, any obligation, agreement, covenant or condition contained in
any indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which it is a party or by which it may be bound or to which any
of its properties may be subject, except for such violations or defaults that
would not have a Material Adverse Effect;
(v) except as described in the Registration Statement, there is no
action, suit or proceeding before or by any government, governmental
instrumentality or court, now pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its Subsidiaries that is
reasonably likely to have a Material Adverse Effect or that is reasonably
likely to have a material adverse effect on the consummation of the
transactions contemplated in this Agreement or the Deposit Agreement. The
aggregate of all pending legal or governmental proceedings known to the Company
to which the Company or any of its Subsidiaries is a party or that affect any
of their properties that are not described in the Registration Statement,
including ordinary routine litigation incidental to their respective
businesses, is not reasonably likely to have a Material Adverse Effect;
(w) there are no contracts or documents that are required to be
described or referred to in the Registration Statement, or to be filed as
exhibits to the Registration Statement, that are not described, filed or
referred to as required;
(x) the Company and each of its Subsidiaries have good and marketable
title to all properties and assets described in the Registration Statement as
owned by them, free and clear of all liens, charges, encumbrances or
restrictions, except (i) as described or reflected in the Registration
Statement or (ii) for such liens, charges, encumbrances or restrictions which
would not have a Material Adverse Effect. All of the leases and subleases
material to the business of the Company and its Subsidiaries taken as a whole
are, assuming the due authorization, execution and delivery by the parties
thereto other than the Company, in full force and effect with respect to the
Company, with such exceptions as would not have a Material Adverse Effect, and
neither the Company nor any of its Subsidiaries has received any notice of any
material claim that has been asserted by anyone adverse to the rights of the
Company or any of its Subsidiaries under any of the leases or subleases
mentioned above, or affecting or questioning the rights of such entity to the
continued possession of the leased or subleased premises under any such lease
or sublease, which claim would have a Material Adverse Effect;
(y) each of the Company and its Subsidiaries owns, possesses or has
obtained all material licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all material declarations
and filings with, all federal, state, local and other governmental authorities
(including foreign regulatory agencies), all self-regulatory organizations and
all courts and other tribunals, domestic or foreign, necessary to own or lease,
as the case may be, and to operate its properties and to carry on its business
as conducted as of the date hereof, except in each case where the failure to
obtain licenses, permits, certificates, consents, orders, approvals and other
authorizations, or to make all declarations and filings, would not have a
Material Adverse Effect, and none of the Company or any of its Subsidiaries has
received any notice of any proceeding relating to revocation or modification of
any such license, permit, certificate, consent, order, approval or other
authorization, except as described in the Registration Statement and except, in
each case, where such revocation or modification would not have a Material
Adverse Effect; and the Company and each of its Subsidiaries are in material
compliance with all laws and regulations relating to the conduct of their
respective businesses as conducted as of the date hereof, except where
noncompliance with such laws or regulations would not have a Material Adverse
Effect;
(z) there are no labor disputes with the employees of the Company or
any of its Subsidiaries which are likely to have a Material Adverse Effect;
(aa) the Company and its Subsidiaries are in material compliance with
all applicable existing federal, state, local and foreign laws and regulations
relating to protection of human health or the environment or imposing liability
or standards of conduct concerning any Hazardous Material (as hereinafter
defined) ("Environmental Laws"), except, in each case, where noncompliance,
singly or in the aggregate, would not have a Material Adverse Effect. The term
"Hazardous Material" means (i) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, (ii) any "hazardous waste" as defined by the Resource Conservation
and Recovery Act, as amended, (iii) any petroleum or petroleum product, (iv)
any polychlorinated biphenyl, and (v) any pollutant or contaminant or
hazardous, dangerous, or toxic chemical, material, waste or substance regulated
under or within the meaning of any other Environmental Law;
(bb) there are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its Subsidiaries under any Environmental Law that, singly or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect;
(cc) the Company has not taken and has agreed not to take, directly or
indirectly, any action designed to, or that might be reasonably expected to,
cause or result in stabilization or manipulation of the price of the
Securities, the Depositary Shares or the Common Stock, and the Company has not
distributed and has agreed not to distribute any offering material in
connection with the offering and sale of the Securities and the Depositary
Shares other than the preliminary prospectus filed with the Commission, or the
Prospectus or other material permitted by the Securities Act;
(dd) the Depositary Shares and the authorized capital stock of the
Company, including the Securities, conform in all material respects to the
descriptions thereof contained in the Registration Statement;
(ee) all of the outstanding shares of capital stock of the Company
have been duly authorized and are validly issued, fully paid and non-assessable
and are not subject to any preemptive or similar rights; and
(ff) the Common Stock is listed on the American Stock Exchange and no
proceedings to suspend, terminate or withdraw such listing are pending, or, to
the knowledge of the Company, threatened.
5. The Company covenants and agrees with the Underwriter as follows:
(a) to use its best efforts to cause the Registration Statement to
become effective (if the Registration Statement shall not have been declared
effective prior to the execution hereof) at the earliest possible time and, if
applicable, to file the Prospectus with the Commission with the time periods
specified by Rule 424(b) and Rule 430A under the Securities Act;
(b) to deliver, at the expense of the Company, to the Underwriter
four signed copies of the Registration Statement (as originally filed) and each
amendment thereto, in each case including exhibits, and, during the period
mentioned in paragraph (e) below, to the Underwriter and dealers as many copies
of the Prospectus (including all amendments and supplements thereto) as the
Underwriter may reasonably request;
(c) a reasonable time before filing any amendment or supplement to
the Registration Statement or the Prospectus, to furnish to the Underwriter a
copy of the proposed amendment or supplement for review and not to file any
such proposed amendment or supplement to which the Underwriter reasonably
objects within a reasonable time after receiving the copy;
(d) to advise the Underwriter promptly, and to confirm such advice in
writing, (i) when the Registration Statement shall become effective, (ii) when
any amendment to the Registration Statement shall have become effective, (iii)
of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for any
additional information, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statements or the
initiation or threatening of any proceeding for that purpose and (v) of the
receipt by the Company of any notification with respect to any suspension of
the qualification of the Securities for offer and sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose; and to use
its reasonable best efforts to prevent the issuance of any such stop order or
notification and, if issued, to obtain as soon as possible the withdrawal
thereof;
(e) if, during such period of time after the first date of the public
offering of the Securities as a prospectus relating to the Securities is
required by law to be delivered in connection with sales by the Underwriter or
any dealer, any event shall occur as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with law, forthwith to prepare and furnish, at the expense of the
Company, to the Underwriter and dealers (whose names and addresses the
Underwriter will furnish to the Company), such amendments or supplements to the
Prospectus as may be necessary so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus
will comply with law;
(f) (i) to use its best efforts to qualify the Securities, the
Depositary Shares (and the Common Stock) for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Underwriter shall
reasonably request and to continue such qualification in effect so long as
reasonably required for distribution of the Securities and (ii) to pay all fees
and expenses (including fees and disbursements of counsel for the Underwriter)
reasonably incurred in connection with such qualification under the laws of
such jurisdictions as the Underwriter may designate; provided that the Company
shall not be required to qualify the Securities in any jurisdiction where, as a
result of such qualification, the Company would be required to qualify as a
foreign corporation or to file a general consent to service of process in any
jurisdiction;
(g) to make generally available to its security holders and to the
Underwriter as soon as practicable an earnings statement covering a period of
at least twelve months beginning after the effective date of the Registration
Statement, which shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 of the Commission promulgated thereunder; provided,
that in no event shall the Company be required to provide such statement prior
to ninety days following the end of such twelve month period;
(h) so long as the Securities are outstanding, until five years after
the Closing Date, to furnish to the Underwriter copies of all reports or other
communications (financial or other) furnished to holders of the Securities, and
copies of any reports and financial statements furnished to or filed with
Commission or any national securities exchange;
(i) for a period of 90 days following the date of the Prospectus,
without the prior written consent of the Underwriter, not to offer, sell, offer
to sell or grant any option for the sale of or otherwise dispose of any shares
of Convertible Preferred Stock or Common Stock or any securities which are
convertible into or exchangeable or exercisable for any such shares (other than
pursuant to this Agreement); provided, that, without such prior written
consent, the Company may (i) issue and sell shares of Common Stock upon
conversion of the Convertible Preferred Stock or the Company's outstanding
$21.25 Convertible Exchangeable Preferred Stock; and (ii) issue stock or grant
options under the Company's existing employee benefit plans;
(j) to pay all costs and expenses incident to the performance of its
obligations hereunder, including without limiting the generality of the
foregoing, all costs and expenses (i) incident to the preparation, issuance,
execution and delivery of the Securities and the Depositary Shares (including
any expenses of the Depositary), (ii) incident to the preparation, printing and
filing of the Registration Statement, the Prospectus and any preliminary
prospectus (including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or qualification
and determination of eligibility for investment of the Securities and the
Depositary Shares under the laws of such jurisdictions as the Underwriter may
reasonably designate (including reasonable fees of counsel for the Underwriter
and their disbursements related to such registration or qualification), (iv) in
connection with the listing of the shares of Common Stock issuable upon
conversion of the Securities on the American Stock Exchange, (v) related to any
filing with, and review by, the National Association of Securities Dealers,
Inc., (vi) in connection with the printing (including word processing and
duplication costs) and delivery of this Agreement, the Deposit Agreement, all
other agreements relating to underwriting and syndication arrangements, the
Blue Sky Survey, any legal investment survey and the furnishing to the
Underwriter and dealers of copies of the Registration Statement and the
Prospectus, including mailing and shipping, as herein provided, and (vii)
payable to rating agencies in connection with the rating of the Securities and
the Depositary Shares;
(k) to use its best efforts to maintain the listing of the Common
Stock on the American Stock Exchange or other national securities exchange
registered under the Securities Exchange Act of 1934, as amended, and advise
the Underwriter promptly if such listing is suspended, terminated or withdrawn
by such exchange; and
(l) to use the net proceeds of the offering of Securities as set
forth in the Registration Statement under the caption "Use of Proceeds."
6. The obligation of the Underwriter hereunder to purchase the Firm
Securities is subject to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective (or if a
post-effective amendment is required to be filed under the Securities Act, such
post-effective amendment shall have become effective) not later than 5:00 P.M.,
New York City time, on the date hereof; and no stop order suspending the
effectiveness of the Registration Statement shall be in effect, and no
proceedings for such purpose shall be pending before or threatened by the
Commission; and any requests for additional information by the Commission
shall have been complied with to the reasonable satisfaction of the Underwriter.
(b) The representations and warranties of the Company contained
herein shall be true and correct on and as of the Closing Date as if made on
and as of the Closing Date, and the Company shall have complied with all
agreements and all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date.
(c) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any downgrading, nor
shall any notice have been given of (i) any intended or potential downgrading
or (ii) any review or possible change that does not indicate an improvement, in
the rating accorded any securities of the Company by any "nationally recognized
statistical rating organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act.
(d) Since the respective dates as of which information is given in
the Registration Statement there shall not have been any Material Adverse
Change or any development involving a Prospective Material Adverse Change,
otherwise than as set forth or contemplated in the Registration Statement, the
effect of which in the judgment of the Underwriter makes it impracticable or
inadvisable to proceed with the offering or the delivery of the Securities and
the Depositary Shares on the terms and in the manner contemplated in the
Registration Statement.
(e) The Underwriter shall have received on and as of the Closing Date
a certificate of an executive officer of the Company reasonably satisfactory to
the Underwriter to the effect set forth in subsections (a) through (c) of this
Section 6 and to the further effect that since the respective dates as of which
information is given in the Registration Statement there has not occurred any
Material Adverse Change or any development involving a Prospective Material
Adverse Change, otherwise than as set forth in the Registration Statement.
(f) The Underwriter shall have received on the Closing Date a signed
opinion of Jacobs Persinger & Parker, special counsel for the Company, dated
the Closing Date, substantially to the effect that:
(i) each of the Company and the Subsidiaries has been duly
organized and is a validly existing corporation in good standing under the laws
of its jurisdiction of incorporation and has full corporate power and authority
to own its properties and to conduct its business as described in the
Registration Statement and is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions where the ownership of
its property or the conduct of its business requires such qualification, except
where the failure so to qualify or be in good standing would not have a
Material Adverse Effect;
(ii) the sale and issuance of the Securities and the Depositary
Shares have been duly authorized by the Company, and the Securities, when
issued by the Company and delivered to and paid for by the Underwriter in
accordance with the terms of this Agreement and the Deposit Agreement, will be
fully paid and nonassessable and are not subject to any preemptive rights or
other similar rights to purchase the Securities pursuant to (A) the Company's
Restated Articles of Organization, (B) the Certificate, (C) Delaware General
Corporation Law, or (D) contracts to which the Company is a party;
(iii) the issuance of the shares of Common Stock issuable
upon conversion of the Securities (or the Exchange Debentures as the case may
be) has been duly authorized by requisite corporate action on the part of the
Company and such shares have been duly reserved for such issuance, and such
shares, when issued and delivered upon such conversion in accordance with the
terms of the Certificate (or the Indenture, as the case may be), will be
validly issued, fully paid and non-assessable and will be free of preemptive
rights or other similar rights;
(iv) the Indenture has been duly authorized by the Company and
qualified under the TIA and, upon execution and delivery by the Trustee
(assuming due authorization, execution and delivery thereof by the Trustee),
will be a valid and binding agreement of the Company, enforceable against it in
accordance with its terms, except that enforcement thereof may be limited by
(1) bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally and (2) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity);
(v) the Exchange Debentures have been duly authorized by the
Company and, when duly executed, authenticated and issued in accordance with
the terms of the Certificate and the Indenture, will be validly issued and
represent binding obligations of the Company enforceable against the Company in
accordance with their terms, except (i) bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) equitable principles of general applicability whether
applied by a court of law or equity;
(vi) each of this Agreement and the Deposit Agreement has been
duly authorized, executed and delivered by the Company and, assuming the due
authorization, execution and delivery by the other parties thereto, constitutes
the valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except as the enforceability thereof may be
limited by (A) bankruptcy, insolvency, reorganization, moratorium or similar
laws now or hereafter in effect relating to creditors' rights generally and (B)
equitable principles of general applicability whether applied by a court of law
or equity;
(vii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement and the
Deposit Agreement, including without limitation the issuance and delivery of
shares of Common Stock upon conversion of the Securities (or the Exchange
Debentures, as the case may be), and the consummation by the Company of the
transactions contemplated hereby and thereby, (A) have been duly authorized by
all necessary corporate action on the part of the Company, (B) do not and will
not result in any violation of the Restated Articles of Organization or the
Amended and Restated By-laws of the Company and (C) do not and will not
conflict with, or result in a breach or violation of any of the terms or
provisions of, or constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, or give rise to any right
to accelerate the maturity or require the prepayment of any indebtedness or the
purchase of any capital stock under, or result in the creation or imposition of
any lien, charge or encumbrance upon any material property or assets of the
Company or any Subsidiary of the Company under, (1) to the knowledge of such
counsel after due inquiry and investigation, any indenture, mortgage, loan
agreement, note, lease, partnership agreement or other agreement or instrument
to which the Company or any such Subsidiary is a party or by which any of them
may be bound or to which any of their properties may be subject (except for
such conflicts, breaches, violations, defaults, accelerations, prepayments,
liens, charges or encumbrances that would not have a Material Adverse Effect),
(2) any existing applicable law, rule or regulation (other than the securities
or Blue Sky laws of the various states of the United States of America and
except for such laws, rules or regulations that would not have a Material
Adverse Effect) or (3) to the knowledge of such counsel after due inquiry and
investigation, any judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any such Subsidiary or any of their respective properties (except
for such judgments, orders or decrees that would not have a Material Adverse
Effect);
(viii) such counsel does not know of any action, suit or
proceeding before or by any government, governmental instrumentality or court
now pending or threatened against or affecting the Company, the Subsidiaries or
any of their respective properties that is required to be described in the
Registration Statement or the Prospectus and is not so described or of any
contract or other document that is required to be described in the Registration
Statement or the Prospectus, or to be filed as an exhibit to the Registration
Statement, that is not described or filed, as required;
(ix) the Depositary Shares and the authorized capital stock of
the Company, including the Securities, conform as to legal matters in all
material respects to the descriptions thereof contained in the Registration
Statement; and
(x) the Registration Statement and the Prospectus (except for
the financial statements, schedules and other financial and statistical data
included in the Registration Statement and the Prospectus, as to which counsel
need not opine) comply as to form in all material respects with the
requirements of the Securities Act.
Such counsel shall also state that it has been advised by the
Commission that the Registration Statement became effective under the
Securities Act; that any required filings of the Prospectus pursuant to Rule
424(b) have been made in the manner and within the time period required by Rule
424(b); and that no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted, are pending or, to such counsel's knowledge, are contemplated under
the Securities Act.
Such counsel shall also state that no facts have come to such
counsel's attention which would lead such counsel to believe that the
Registration Statement, at the time it became effective, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; or
that the Prospectus, as of its date and as of the Closing Date, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading (such
counsel need not express an opinion with respect to the financial statements,
schedules and other financial and statistical data included in or excluded from
the Registration Statement and the Prospectus).
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers or representatives of the Company and its Subsidiaries and public
officials and such counsel may rely on the opinion of Robert E. Higgins,
General Counsel to the Company, with respect to the interpretation and
application of the laws of the state of Massachusetts.
(g) On the effective date of the Registration Statement (and the
effective date of any post-effective amendment thereto) and also on the Closing
Date, Arthur Andersen & Co. shall have furnished to the Underwriter letters,
dated the respective dates of delivery thereof, in form and substance
reasonably satisfactory to the Underwriter, containing statements and
information of the type customarily included in accountants' "comfort letters"
with respect to certain financial information relating to the Company contained
or incorporated by reference in the Registration Statement.
(h) The Underwriter shall have received on the Closing Date an
opinion of Cahill Gordon & Reindel, counsel for the Underwriter, with respect
to the validity of the Securities and the Depositary Shares, the Registration
Statement and other related matters as the Underwriter may reasonably request,
and such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters.
(i) The Underwriter shall have received on and as of the Closing Date
a certificate of the chief financial officer of the Company to the effect that
neither the Company nor any of its Subsidiaries is in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument to which it is a party or by which it
may be bound or to which any of its properties may be subject and which default
may have a Material Adverse Effect.
(j) The Underwriter shall have received on or prior to the Closing
Date a fully executed copy of the Deposit Agreement, in form and substance
satisfactory to the Underwriter and an opinion of counsel to the Depositary to
the effect that: the Deposit Agreement has been duly authorized, executed and
delivered by the Depositary and constitutes a legal, valid and binding
obligation of the Depositary enforceable against the Depositary in accordance
with its terms except as the same may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors' rights generally and (B) equitable principles of general
applicability whether applied by a court of law or equity. The Depositary
Shares, when issued under the Deposit Agreement in accordance with its
provisions, will be legally issued and entitle the holders thereof to the
rights specified in the receipts representing such Depositary Shares and in the
Deposit Agreement.
(k) On or prior to the Closing Date the Company shall have furnished
to the Underwriter such further certificates and documents as the Underwriter
shall reasonably request.
The obligation of the Underwriter to purchase Option Securities hereunder is
subject to satisfaction of the conditions set forth in paragraphs (a) through
(k) above on and as of the Additional Closing Date, except that the
certificates, opinions and other documents called for above shall be dated the
Additional Closing Date.
7. The Company agrees to indemnify and hold harmless the
Underwriter, its officers and directors, and each person, if any, who controls
the Underwriter within the meaning of either Section 15 of the Securities Act
or Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, the reasonable legal fees and other expenses
actually incurred in connection with any suit, action or proceeding or any
claim asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and
in conformity with information relating to the Underwriter furnished to the
Company in writing by the Underwriter expressly for use therein; provided that
the foregoing indemnity with respect to any preliminary prospectus shall not
inure to the benefit of the Underwriter (or to the benefit of any person
controlling the Underwriter) from whom the person asserting any such losses,
claims, damages or liabilities purchased Securities if such untrue statement
or omission or alleged untrue statement or omission made in such preliminary
prospectus is eliminated or remedied in the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) and, if required by law, a copy of the Prospectus (as so amended or
supplemented) shall not have been furnished to such person at or prior to the
written confirmation of the sale of such Securities to such person.
The Underwriter agrees to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement and each person who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to the Underwriter, but only with reference to information
relating to the Underwriter furnished to the Company in writing by the
Underwriter expressly for use in the Registration Statement, the Prospectus,
any amendment or supplement thereto, or any preliminary prospectus. For
purposes of this Section 7, the only written information furnished by the
Underwriter to the Company expressly for use in the Registration Statement or
the Prospectus is the information in the last paragraph on the cover page of
the Prospectus and, under the caption "Underwriting" in the Prospectus, the
following: the second paragraph and the seventh paragraph.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of
the two preceding paragraphs, such person (the "Indemnified Person") shall
promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Person") in writing, and the Indemnifying Person, upon request of
the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the
reasonable fees and expenses actually incurred by such counsel related to such
proceeding. In any such proceeding, any Indemnified Person shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person unless (i) the Indemnifying
Person and the Indemnified Person shall have mutually agreed to the contrary,
(ii) the Indemnifying Person has failed within a reasonable time to retain
counsel reasonably satisfactory to the Indemnified Person or (iii) the named
parties in any such proceeding (including any impleaded parties) include both
the Indemnifying Person and the Indemnified Person and representations of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying
Person shall not, in connection with any proceeding or related proceeding in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all Indemnified Persons,
and that all such fees and expenses shall be reimbursed as they are incurred.
Any such separate firm for the Underwriter and such control persons of the
Underwriter shall be designated in writing by J.P. Morgan Securities Inc. and
any such separate firm for the Company, its directors, its officers and such
control persons of the Company shall be designated in writing by the Company.
The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
an Indemnifying Person to reimburse the Indemnified Person for reasonable fees
and expenses actually incurred by counsel as contemplated by the third sentence
of this paragraph, the Indemnifying Person agrees that it shall be liable for
any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 30 days after receipt by such
Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such
request prior to the date of such settlement; provided, however, that the
Indemnifying Person shall not be liable for any settlement effected without its
consent pursuant to this sentence if the Indemnifying Party is contesting, in
good faith, the request for reimbursement. No Indemnifying Person shall,
without the prior written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs
of this Section 7 is unavailable to an Indemnified Person in respect of any
losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable
by such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriter on the
other hand from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Underwriter on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriter on the other shall be deemed
to be in the same respective proportions as the net proceeds from the offering
(before deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriter, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate public
offering price of the Securities. The relative fault of the Company on the one
hand and the Underwriter on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriter and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, in no event
shall the Underwriter be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that the Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section 7
are in addition to any liability which the Indemnifying Persons may otherwise
have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Company as set forth in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of the Underwriter or any person controlling the Underwriter or by or on behalf
of the Company, its officers or directors or any other person controlling the
Company and (iii) acceptance of and payment for any of the Securities and the
Depositary Shares.
8. Notwithstanding anything herein contained, this Agreement (or the
obligation of the Underwriter with respect to the Option Securities) may be
terminated in the absolute discretion of the Underwriter, by notice given to
the Company, if after the execution and delivery of this Agreement and prior to
the Closing Date (or, in the case of the Option Securities, prior to the
Additional Closing Date) (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board Option Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of the
Company shall have been suspended or materially limited on any exchange or in
any over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred an outbreak of hostilities
or an escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Underwriter, is material and
adverse and which, in the judgment of the Underwriter, makes it impracticable
or inadvisable to market the Securities and the Depositary Shares on the terms
and in the manner contemplated in the Prospectus.
9. If this Agreement shall be terminated by the Underwriter because
of any failure or refusal on the part of the Company to comply with the terms
or to fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement, the
Company agrees to reimburse the Underwriter for all out-of-pocket expenses
(including the fees and expenses of their counsel) reasonably incurred by the
Underwriter in connection with this Agreement or the offering contemplated
hereunder.
10. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriter shall be
given to J.P. Morgan Securities Inc., 60 Wall Street, New York, New York 10260
(facsimile number (212) 648-5705); Attention: Syndicate Department. Notices
to the Company shall be given to it at 73 Mt. Wayte Avenue, Framingham,
Massachusetts 01701; Attention: James M. Markert (facsimile (508) 628-2960).
11. This Agreement shall each inure to the benefit of and be binding
upon the Underwriter and the Company and any controlling person referred to
herein and their respective successors, heirs and legal representatives.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriter
and the Company and their respective successors, heirs and legal
representatives and the controlling persons and officers and directors referred
to in Section 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Securities from the Underwriter
shall be deemed to be a successor by reason merely of such purchase.
12. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS
OF LAWS PROVISIONS THEREOF.
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
PERINI CORPORATION
By:________________________
Name:
Title:
Accepted: June , 1994
J.P. MORGAN SECURITIES INC.
By:_____________________________
Name:
Title:
<PAGE>
ANNEX A
Subsidiaries
Percentage
Subsidiary Name Owned
EXHIBIT 4(a)
CERTIFICATE OF VOTE OF DIRECTORS ESTABLISHING
A SERIES OF A CLASS OF STOCK
General Laws Chapter 156B, Section 26
We, James M. Markert, Vice President, and Robert E. Higgins, Clerk, of
Perini Corporation (the "Corporation"), located at 73 Mt. Wayte Avenue,
Framingham, Massachusetts 01701, do hereby certify that at a meeting of the
directors of the Corporation held on May 19, 1994 the following vote
establishing and designating a series of a class of stock and determining
the relative rights and preferences thereof was duly adopted.
VOTED, pursuant to the authority expressly granted to and vested in the
Board of Directors of the Corporation by the provisions of the Restated
Articles of Organization, as amended (the "Restated Articles"), this Board of
Directors hereby authorizes the issuance of a series of preferred stock, par
value $1.00 per share, of the Corporation which shall consist of up to 115,000
shares, and this Board of Directors hereby fixes the relative rights and
preferences of the shares of such series (in addition to the powers,
designations, preferences and relative, participating, optional or other
special rights, and the qualifications, limitations or restrictions thereof,
set forth in the Restated Articles which are applicable to such preferred
stock), all as provided in Exhibit A annexed hereto and made a part hereof.
IN WITNESS WHEREOF, each of the undersigned have hereunto set their hand as
of the day of 1994.
_______________________
James M. Markert
_______________________
Robert E. Higgins
<PAGE>
EXHIBIT A TO CERTIFICATE OF VOTE OF DIRECTORS
(1) Designation. The series of the Preferred Stock created herein shall
consist of One Hundred Fifteen Thousand (115,000) shares and shall be
designated the "$ Convertible Exchangeable Junior Preferred Stock."
Said series is hereinafter called the "Convertible Preferred Stock."
The term "Preferred Stock" or "preferred stock" as used herein shall mean
the Preferred Stock authorized by the Restated Articles of Organization, as
amended, of the Corporation and shall include the Convertible Preferred Stock
and the $21.25 Convertible Exchangeable Preferred Stock.
(2) Dividends. The holders of the Convertible Preferred Stock shall be
entitled to receive cash dividends when and as declared by the Board of
Directors out of funds legally available for such purposes, at the annual rate
of per share, and no more, payable quarterly in arrears on the 15th day
of September, December, March and June of each year (unless any such day is a
non-business day, in which event the next business day shall be the payment
date), commencing on September 15, 1994. Dividends on the Convertible
Preferred Stock shall begin to accrue and shall be cumulative from the date of
original issue of such shares (the "Issue Date") and shall be payable to the
holders of record on the record date fixed with respect to such payment. The
date on which the Corporation initially issues any share of Convertible
Preferred Stock shall be its date of issue regardless of the number of times
transfer of such shares is made on the stock records of the Corporation and
regardless of the number of certificates which may be issued to evidence such
share. Accumulated but undeclared dividends will not bear interest. When
dividends are not paid in full upon any series of preferred stock ranking senior
as to dividends to the Convertible Preferred Stock, then no dividend shall be
paid or declared and set apart for payment on the Convertible Preferred Stock
unless and until all accrued and unpaid dividends with respect to such other
stock shall have been paid or declared and funds therefor set apart for payment.
When dividends are not paid in full upon the Convertible Preferred Stock and
upon any other stock ranking on a parity as to dividends with the Convertible
Preferred Stock, all dividends declared upon shares of Convertible Preferred
Stock and any other stock ranking on a parity as to dividends with the
Convertible Preferred Stock shall be declared pro rata based on the ratio that
accrued and unpaid dividends on each series of stock bears to each other.
Dividends payable on September 15, 1994 and on the date of any redemption
of the Convertible Preferred Stock not occurring on a regular dividend payment
date shall be calculated on the basis of the actual number of days elapsed
(including the date of redemption) over a 360-day year.
Except as set forth above, in no event (so long as any Convertible
Preferred Stock shall remain outstanding) shall any cash dividends whatsoever
be declared or paid upon, nor shall any cash distribution be made upon, the
Common Stock, or any other stock of the Corporation ranking junior to or on a
parity with the Convertible Preferred Stock as to dividends, unless full
cumulative dividends on all outstanding shares of Convertible Preferred Stock
for all dividend payment periods terminating on or prior to the date of the
payment of such dividends shall have been paid or declared and funds therefor
set apart for such payment.
(3) Voting Rights. The holders of Convertible Preferred Stock shall not,
by virtue of their ownership thereof, be entitled to vote upon any matter
except as provided by this Clause (3) or as required by law. Whenever the
holders of the Convertible Preferred Stock shall be entitled to exercise voting
rights, each holder of record thereof shall have one vote for each share so
held.
If an amount equal to six (6) quarterly dividends payable on the
Convertible Preferred Stock shall have accumulated and be unpaid, the number of
directors of the Corporation will be increased by two (2) and the holders of
outstanding Convertible Preferred Stock together with the holders of any
outstanding series of Preferred Stock ranking on a parity with the Convertible
Preferred Stock as to dividends or liquidation rights and as to which the
equivalent of six (6) quarterly dividends is in arrears (but only if the
holders of the shares of such other series would otherwise have a right to
elect directors as a result of a dividend arrearage), voting as a single
class without regard to series, will be entitled to elect such
additional two (2) directors at a special meeting called for that purpose as
hereinafter provided, or at any annual meeting of stockholders. When such
voting rights shall have vested in the holders of the Convertible Preferred
Stock, a special meeting to elect such directors may be called by the Chief
Executive Officer or Chairman of the Corporation or by the holders of 25% or
more of the shares of Preferred Stock of all series affected, in the manner
provided in the Corporation's By-laws, or by law if no such provision is in
effect. Whenever all dividends in default have been paid or declared and funds
therefor set apart for payment, the number of directors of the Corporation
shall be reduced by two (2) and such additional directors elected pursuant to
this Clause (3) shall forthwith cease to be directors and the contingent voting
rights provided herein for the election of two (2) directors shall cease,
subject always to the same provisions for the vesting of such contingent voting
rights of the holders of the Convertible Preferred Stock to elect two (2)
directors in the case of future dividend defaults.
In addition, without the vote of the holders of at least two-thirds (2/3)
of the number of shares of Convertible Preferred Stock then outstanding, (i)
voting together as a class with the holders of any other outstanding shares of
preferred stock ranking on parity with the Convertible Preferred Stock as to
dividends and liquidation, the Corporation shall not create any class of stock
ranking prior to the Convertible Preferred Stock with respect to dividends or
to the distribution of assets in liquidation, or (ii) voting separately as a
class, amend, alter or repeal any of the preferences or rights of the holders
of the Convertible Preferred Stock so as to adversely affect such preferences
and rights. The Corporation may create any class of stock ranking on a parity
with the Convertible Preferred Stock with respect to dividends or to the
distribution of assets in liquidation without the vote of the Convertible
Preferred Stock.
(4) (A) Optional Redemption. The shares of Convertible Preferred Stock
will not be redeemable by the Corporation prior to , 1997.
Thereafter, the Convertible Preferred Stock is redeemable at the option of the
Corporation, in whole or in part, at the following redemption prices per share,
if redeemed during the 12-month period beginning , in each of the
years indicated:
Redemption Redemption
Year Price per Share Year Price per Share
1997 2001
1998 2002
1999 2003
2000
and on or after , 2004 at the redemption price of Two Hundred
Fifty Dollars ($250) per share, plus, in each case, accumulated and unpaid
dividends to the date of redemption. If full cumulative dividends on the
Convertible Preferred Stock have not been paid, no shares of Convertible
Preferred Stock may be redeemed and the Corporation may not acquire any shares
of the Convertible Preferred Stock unless (i) the holders of two-thirds (2/3)
of the shares of the Convertible Preferred stock shall have consented thereto,
or (ii) the Corporation acquires any shares of the Convertible Preferred Stock
pursuant to a purchase or exchange offer made on the same terms to all holders
of the Convertible Preferred Stock.
There is no mandatory redemption or sinking fund obligation with respect to
the Convertible Preferred stock.
(B) Selection for Redemption. If less than all of the outstanding
shares of the Convertible Preferred Stock are to be redeemed, the Corporation
will select the shares to be redeemed pro rata or by lot or in such manner as
the Corporation shall deem appropriate or fair, provided that only whole
shares shall be selected for redemption.
(C) Redemption Procedure. Notices of any redemption shall be mailed
(i) not less than thirty (30) nor more than sixty (60) days prior to the date
fixed for redemption to the holders of shares of the Convertible Preferred
Stock to be redeemed at their respective addresses as the same appear upon the
books of the Corporation; provided, however, that no defect in the mailing of
such notice to a holder shall affect its sufficiency with respect to other
holders. Payment of the redemption price of the shares redeemed shall be made
at such place or places of redemption as shall be determined by the Board of
Directors of the Corporation and shall be specified in the notice of redemption
and shall be made against the surrender for cancellation of the certificates
for the shares redeemed. Any shares of Convertible Preferred Stock so noticed
for redemption may be converted into shares of Common Stock, as hereinafter
provided, at any time prior to the close of business on the date of redemption.
If notice of redemption shall have been mailed as hereinbefore provided and
if on or before the redemption date specified in such notice all funds
necessary for such redemption shall have been set aside by the Corporation so as
to be available for the benefit of the holders of the shares so called for
redemption, then from and after the date fixed for redemption the shares of
Convertible Preferred Stock so called for redemption, notwithstanding that any
certificate therefor shall not have been surrendered or cancelled, shall no
longer be deemed outstanding, dividends thereon shall cease to accrue and all
rights of the holders with respect to such shares shall forthwith on the date
of redemption cease and terminate (at the close of business on the redemption
date with respect to the conversion rights provided for in Clause (6)), except
only the right of the holders thereof to receive upon surrender of certificates
therefor the amount payable upon redemption thereof, but without interest.
(5) (A) Optional Exchange. In addition to the optional redemption rights
of the Corporation as set forth in Clause (4) above, at the option of the
Corporation the Convertible Preferred Stock shall be exchangeable in whole but
not in part on any dividend payment date beginning , 1996 for the
Corporation's % Convertible Subordinated Debentures Due 2019 (the
"Debentures") to be issued substantially in the form set forth in the form of
Indenture governing such Debentures. No such exchange shall be made unless all
dividends accrued and payable on the Convertible Preferred Stock to the date of
the exchange have been paid or declared and sufficient funds set aside for
their payment.
Upon election by the Corporation to exchange the Convertible Preferred
Stock, each share of Convertible Preferred Stock will be entitled to receive
$250 principal amount of Debentures for each share of Convertible Preferred
Stock held by them at the time of exchange.
At such time, the rights of the holders of the Convertible Preferred Stock
as stockholders of the Corporation shall cease (except the right to receive
Debentures and accrued and unpaid dividends to the date of exchange), and the
person or persons entitled to receive the Debentures issuable upon such
exchange shall be treated for all purposes as the registered holder or holders
of such Debentures. The Convertible Preferred Stock will be convertible into
Common Stock up to the close of business on the date of exchange.
(B) Notice of Exchange. Notice of any exchange of the Convertible
Preferred Stock shall be mailed not less than thirty (30) and not more than
sixty (60) days prior to the date of exchange to each holder of Convertible
Preferred Stock, at such holder's address as it appears on the books of the
Corporation, specifying the effective date of the exchange and the place where
certificates for shares of the Convertible Preferred Stock are to be
surrendered for Debentures and stating that dividends on shares of the
Convertible Preferred Stock will cease to accrue on and after the date of
exchange; provided, however, that no defect in the mailing of such notice shall
affect the validity of the proceedings for the exchange of any shares of the
Convertible Preferred Stock.
(C) Indenture; Opinion of Counsel. Prior to giving notice of
intention to exchange pursuant to Clause (5)(B) above, the Corporation and a
bank or trust company selected by the Corporation shall execute and deliver the
Indenture substantially in the form approved by the Board of Directors at the
time of original issuance of the Convertible Preferred Stock with such changes
as may be required by law, stock exchange rule or usage or that do not
adversely affect the interests of the holders of the Debentures. A copy of
the Indenture may be inspected by the holders of any shares of Convertible
Preferred Stock at the offices of the Corporation during normal business hours.
The Corporation will not give notice of its intention to exchange pursuant to
Clause (5)(B) above unless it shall file at the office or agency of the
Corporation maintained for the exchange of Convertible Preferred Stock an
opinion of counsel (who may be an employee of the Corporation) that the
Indenture has been duly authorized, executed and delivered by the Corporation,
has been duly qualified under the Trust Indenture Act of 1939 (or that such
qualification is not necessary) and constitutes a valid and binding instrument
enforceable against the Corporation in accordance with its terms (subject to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles, and
subject to such other qualifications as are then contained in opinions of
counsel experienced in such matters); and to the effect that the Debentures have
been duly authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered in exchange for the shares of
Convertible Preferred Stock, will constitute valid and binding obligations of
the Corporation entitled to the benefits of the Indenture (subject as
aforesaid); and that the exchange of Debentures for the Convertible Preferred
Stock will not violate the laws of the state of incorporation of the
Corporation; and that neither the execution and delivery of the Indenture or
the Debentures nor compliance with the terms, conditions or provisions of such
instruments will result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust or other agreement or instrument, known to such counsel, to which the
Corporation or any of its subsidiaries is a party or by which it or any of them
is bound, or any decree, judgment, order, rule or regulation, known to counsel,
of any court or governmental agency or body having jurisdiction over the
Corporation and such subsidiaries or any of their properties; and that the
Debentures have been duly registered for such exchange with the Securities and
Exchange Commission under a registration statement that has become effective
under the Securities Act of 1933 (the "Act") or that the exchange of the
Debentures for the shares of Convertible Preferred Stock is exempt from
registration under the Act and the Debentures, when issued, will be as freely
tradeable as the Convertible Preferred Stock.
(D) Exchange Procedure. If on the date fixed for exchange, the
Corporation has taken all action required to authorize the issuance of the
Debentures in exchange for the Convertible Preferred Stock, then,
notwithstanding that the certificates for such shares have not been surrendered
for cancellation, from and after the date fixed for exchange the shares of
Convertible Preferred Stock shall no longer be deemed outstanding, dividends
thereon shall cease to accrue and all rights of the holders with respect to
such shares shall terminate (as of the close of business on the date fixed for
exchange with respect to the conversion rights provided for in Clause (6)),
except only the right to receive dividends accrued and unpaid as of the date of
exchange and, upon surrender of certificates therefor, the right to receive the
Debentures, and the person or persons entitled to receive the Debentures
issuable upon exchange shall be treated for all purposes as the registered
holder or holders of such Debentures. Upon due surrender of a certificate
representing shares of Convertible Preferred Stock, the holder thereof shall
receive the principal amount of Debentures to which such holder is thereby
entitled. Any shares of Convertible Preferred Stock so noticed for exchange may
be converted into shares of Common Stock, as hereinafter provided, at any time
prior to the close of business on the date fixed for exchange.
(6) Conversion Rights.
(A) Conversion Provisions. At any time subsequent to the Issue Date,
the holders of any one or more shares of the Convertible Preferred Stock may,
at their option, convert such share or shares, on the terms and conditions set
forth in this Clause (6), into fully paid and non-assessable shares of Common
Stock except that, with respect to any shares of Convertible Preferred Stock
called for redemption or exchange, the conversion right shall terminate at the
close of business on the date of redemption or exchange, unless default is made
in the payment of the redemption or exchange price. Each share of the
Convertible Preferred Stock shall be convertible into shares of
Common Stock (equivalent to a conversion price of $ per share);
provided, however, that the number of shares of Common Stock issuable on
conversion of each share of the Convertible Preferred Stock (the "conversion
rate") shall be subject to adjustment in accordance with the provisions
hereinafter set forth in this Clause (6).
(B) Adjustment for Change in Capital Stock. If the Corporation
(i) pays a dividend or makes a distribution on its Common Stock in shares
of its Common Stock;
(ii) subdivides its outstanding shares of Common Stock into a greater
number of shares;
(iii) combines its outstanding shares of Common Stock into a smaller
number of shares;
(iv) makes a distribution on its Common Stock in shares of its capital
stock other than Common Stock; or
(v) issues by reclassification of its Common Stock any shares of its
capital stock;
then the conversion privilege and the conversion price in effect immediately
before such action shall be adjusted so that the holder of the Convertible
Preferred Stock thereafter converted may receive the number of shares of
capital stock of the Corporation which he would have owned immediately following
such action if he had converted the Convertible Preferred Stock immediately
before the record date (or, if no record date, the effective date) for such
action.
The adjustment shall become effective immediately after the record date in
the case of a dividend or distribution and immediately after the effective date
in the case of a subdivision, combination or reclassification.
If after an adjustment a holder of the Convertible Preferred Stock upon
conversion of it may receive shares of two or more classes of capital stock of
the Corporation, the Corporation shall determine the allocation of the adjusted
conversion price between the classes of capital stock. After such allocation,
the conversion privilege and conversion price of each class of capital stock
shall thereafter be subject to adjustment on terms comparable to those
applicable to Common Stock contained in this Clause (6).
(C) Adjustment for Rights Issue. If the Corporation distributes any
rights or warrants to the holders of its Common Stock entitling them for a
period expiring within sixty (60) days after the record date mentioned below to
purchase shares of Common Stock at a price per share less than the current
market price per share on that record date, the conversion price shall be
adjusted in accordance with the formula:
0 + N x P
-----
C1 = C x M
---------
0 + N
where
C1 = the adjusted conversion price.
C = the current conversion price.
0 = the number of shares of Common Stock outstanding on the
record date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
M = the current market price per share of Common Stock on the
record date.
The adjustment shall become effective immediately after the record date for
the determination of stockholders entitled to receive the rights or warrants.
Such adjustment shall be made successively whenever such a record date is
fixed; and in the event that such rights or warrants are not so issued or to
the extent that such rights and warrants are not so exercised prior to the
expiration thereof, the conversion price shall again be adjusted to be the
conversion price which would then be in effect if such record date had not been
fixed.
(D) Adjustment For Other Distributions. If the Corporation
distributes to the holders of its Common Stock any of its assets or debt
securities or any rights or warrants to purchase securities of the Corporation,
the conversion price shall be adjusted in accordance with the formula:
C1 = C x M - F
-----
M
where
C1 = the adjusted conversion price.
C = the current conversion price.
M = the current market price per share of Common Stock on the
record date mentioned below.
F = the fair market value on the record date of the assets,
securities, rights or warrants applicable to one share of
Common Stock. The Corporation shall determine the fair
market value.
The adjustment shall become effective immediately after the record date for
the determination of stockholders entitled to receive the distribution. Such
adjustment shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the conversion price shall
again be adjusted to the conversion price which would then be in effect if such
record date had not been fixed.
This Subclause (D) does not apply to cash dividends or cash distributions
paid out of earnings or surplus as shown on the books of the Corporation. Also,
this Subclause (D) does not apply to rights or warrants referred to in
Subclause (C) above.
(E) Adjustment for Reorganization. In case of any consolidation or
merger of the Corporation into another corporation, or in the case of any merger
of another corporation into the Corporation (other than a merger with a
corporation in which merger the Corporation is the continuing corporation and
which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock), or in case of any sale,
lease or transfer to another corporation of all or substantially all of the
assets of the Corporation, the holder of each share of the Convertible
Preferred Stock then outstanding shall have the right thereafter, subject to
the terms and conditions of this Clause (6), to convert such share only into the
kind and amount of shares of stock and other securities and property receivable
upon such consolidation, merger, sale, lease or transfer by a holder of the
number of shares of Common Stock into which such share of Convertible Preferred
Stock might have been converted immediately prior to such consolidation, merger,
sale, lease or transfer; and effective provision shall be made in the Articles
of Organization or Charter of the resulting or surviving corporation or
otherwise so that the provisions set forth in this Clause (6) shall thereafter
be applicable, as nearly as practicable, to any such other shares of stock and
other securities and property deliverable upon conversion of the Convertible
Preferred Stock remaining outstanding or other convertible exchangeable
preferred stock received by the holders in place thereof; and any such
resulting or surviving corporation shall expressly assume the obligation to
deliver, upon the exercise of the conversion privilege, such shares, securities
or property as the holders of the Convertible Preferred Stock remaining
outstanding, or other convertible preferred stock received by the holders in
place thereof, may be entitled to, and to make provisions for the protection of
the conversion right as herein provided. In case securities or property other
than shares of Common Stock shall be issuable or deliverable upon conversion as
aforesaid, then all reference in this Subclause (E) shall be deemed to apply,
so far as appropriate and as nearly as practicable, to such other securities or
property. The provisions of this Subclause (E) shall similarly apply to
successive reorganizations, consolidations, mergers, leases, sales or transfers.
(F) Current Market Price. For the purpose of any computation under
this Clause (6), the current market price per share of Common Stock at any date
shall be deemed to be the average of the daily closing prices for any thirty
(30) consecutive business days selected by the Corporation commencing not more
than forty-five (45) business days before the date in question. The closing
price for each day shall be the last reported sale price for Common Stock on the
principal national securities exchange on which the Common Stock may be listed
or, if such stock is not then so listed, the closing price of the Common Stock
as shown by the National Association of Securities Dealers, Inc. National
Market or, if no such closing price is available, at the average of the
representative last bid and asked prices of such Common Stock in the
over-the-counter market, as shown by the National Association of Securities
Dealers, Inc. Automated Quotation System Level I (or comparable system) or in
the absence of any of the foregoing, the fair market value as determined by the
Board of Directors (whose determination shall be conclusive).
(G) Fractional Shares. No fractional shares of Common Stock shall be
issued on any conversion, but in lieu thereof the Corporation shall pay in cash
an amount equal to the current market value of such fractional interest computed
on the basis of the closing price as determined in accordance with the
provisions of Subclause (F) above, on the last trading day prior to the date
upon which conversion is deemed to have been effected. Any determination that
the Corporation or the Board of Directors makes regarding fractional shares is
conclusive.
(H) When No Adjustment Required. No adjustment need be made for any
transaction referred to in Subclause (B), (C) or (D) above if the holders of
the Convertible Preferred Stock are to participate in the transaction on a
basis and with notice that the Board of Directors determines to be fair and
appropriate in light of the basis and notice on which holders of Common Stock
participate in the transaction.
Notwithstanding the provisions of Subclauses (B), (C), (D) and (E) above,
no adjustment of the conversion price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the conversion price,
but in such case any adjustment that would otherwise be required then to be
made shall be carried forward and shall be made at the time of and together
with the next subsequent adjustment. All calculations under this Clause (6)
shall be made and rounded to the nearest one-hundredth of a share or the
nearest cent, as the case may be.
No payment or adjustment on account of dividends accumulated or in arrears
upon shares of the Convertible Preferred Stock, any other series of Preferred
Stock, or Common Stock, shall be made in connection with any conversion, except
as may otherwise be provided at the discretion of the Board of Directors and
except as provided hereinafter. Shares of Convertible Preferred Stock
surrendered for conversion during the period between the date fixed as the
record date for the payment of a dividend and the date fixed as the dividend
payment date must be accompanied by payment to the Corporation of an amount
equal to the dividend payable on such shares on the dividend payment date,
provided, however, that if the Corporation fixes a date for redemption or for
exchange of such shares of Convertible Preferred Stock which is after such
record date for the payment of dividends and before such dividend payment date,
then shares of Convertible Preferred Stock surrendered for conversion after
such record date and before such dividend payment date need not be accompanied
by payment to the Corporation of an amount equal to the dividend on such shares
payable on such dividend payment date.
No adjustment need be made for sales of Common Stock pursuant to a plan for
reinvestment of dividends or interest and no adjustment need be made for a
change in the par value of the Common Stock.
No adjustment need be made in connection with the issuance of shares of
Common Stock upon conversion of the Convertible Preferred Stock or the
Corporation's $21.25 Convertible Exchangeable Preferred Stock, $1.00 par value,
or the issuance of (including issuance of awards, rights and options to
purchase) shares of Common Stock to employees or other eligible persons of the
Corporation under plans duly adopted by the stockholders of the Corporation.
The Board of Directors shall have the power to resolve any ambiguity or
correct any error in this Clause (6) and its action in so doing, as evidenced
by a Board resolution, shall be final and conclusive.
The certificate of any independent firm of public accountants of recognized
standing selected by the Board of Directors shall be satisfactory evidence of
the correctness of any computation made in this Clause (6).
(I) Notice of Adjustment. Whenever there is an adjustment requiring
a change in the conversion rate, the Corporation shall file with the transfer
agent, or transfer agents, for the Convertible Preferred Stock a statement
signed by the Secretary of the Corporation, describing specifically the event
giving rise to such adjustment and stating the adjustment which shall be made
to the conversion rate. The statement so filed shall be open to inspection by
any holder of record of shares of the Convertible Preferred Stock. The
Corporation shall at the time of filing any such statement mail notice to the
same effect to holders of shares of the Convertible Preferred Stock at their
addresses appearing on the books of the Corporation or supplied by them to the
Corporation for the purpose of notice. In addition, the Corporation shall
include a notice of the conversion rate with each dividend payment on the
Convertible Preferred Stock or otherwise give notice thereof promptly after
the due date for each such dividend, whenever there has been a change in the
conversion rate since the last previous dividend due date.
(J) Conversion Procedure. Upon surrender to the Corporation at the
office of the transfer agent, or transfer agents, for the Convertible Preferred
Stock, or at such other place or places, if any, as the Board of Directors of
the Corporation may determine, of certificates, duly endorsed to the Corporation
or in blank, for shares of Convertible Preferred Stock to be converted, together
with appropriate evidence of the payment of any transfer or similar tax, if
required, and instructions in writing to the Corporation to convert such shares
and specifying the name and address of the person, corporation, firm or other
entity to whom such shares are to be issued, the Corporation will issue (i) the
number of full shares of Common Stock issuable on conversion thereof as of the
time of such surrender and as promptly as practicable thereafter will deliver
certificates for such shares of Common Stock, and (ii) cash for any remaining
fraction of a share, as provided in Subclause (G) above. The Corporation shall
pay any documentary, stamp or similar issue or transfer tax due on the issue of
shares of Common Stock upon conversion; provided, however, that the holder
shall pay any such tax which is due because such shares are to be issued in a
name other than that of such holder.
The Corporation shall at all times after the Issue Date reserve for issuance
upon conversion of the Convertible Preferred Stock a sufficient number of full
shares of Common Stock for the conversion of each outstanding share of
Convertible Preferred Stock at the current conversion rate.
(K) Notice of Certain Transactions. If
(i) the Corporation takes any action that would require an adjustment in
the conversion rate pursuant to Subclauses (B), (C), (D) and (E) of
this Clause (6); or
(ii) there is a voluntary or involuntary liquidation, dissolution or
winding up of the Corporation;
the Corporation shall provide notice in the manner set forth in Subclause (I) of
this Clause (6) of such action, stating therein the proposed record date for a
distribution or the effective date of a reclassification, consolidation,
merger, lease, transfer, liquidation, dissolution or winding up, at least
fifteen (15) days in advance of such date. Failure to mail the notice or any
defect therein shall not affect the validity of the transaction.
(L) Reduction of Conversion Price Below Par Value of Common Stock.
Before taking any action which would cause an adjustment reducing the
conversion price below the then par value (if any) of the Common Stock
deliverable upon conversion of the Convertible Preferred Stock, the Corporation
will take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Corporation may validly and legally issue fully paid
and non-assessable shares of Common Stock at such adjusted conversion price.
(M) Decrease in Conversion Price. The Corporation may at any time
decrease the conversion price by any amount for any period of time if the
period is at least 20 days and if the decrease is irrevocable during the
period. Whenever the conversion price is decreased, the Corporation shall give
the holders of the Convertible Preferred Stock notice of the decrease at least
15 days prior to the date the decreased conversion price takes effect, in the
manner set forth in Subclause (I) above, which notice shall state the decreased
conversion price and the period it will be in effect. A decrease in the
conversion price pursuant to this Subclause (M) shall not otherwise change or
adjust the conversion price otherwise in effect for purposes of this Clause (6).
(7) Liquidation Rights. In the event of an involuntary liquidation,
dissolution or winding up of the Corporation, the holders of the shares of the
Convertible Preferred Stock are entitled to receive out of the assets of the
Corporation available for distribution to stockholders, before any distribution
of assets is made to holders of Common Stock or any other stock ranking junior
to the Convertible Preferred Stock as to liquidation, liquidating distributions
in the amount of $25 per share plus accumulated and unpaid dividends. In the
event of a voluntary liquidation, dissolution or winding up of the Corporation,
the holders of shares of the Convertible Preferred Stock are entitled to
receive out of the assets of the Corporation available for distribution to the
stockholders, subject to the rights of any series of Preferred Stock ranking
senior to the Convertible Preferred Stock as to liquidation, but before any
distribution of assets is made to holders of Common Stock or any other stock
ranking junior to the Convertible Preferred Stock as to liquidation,
liquidation distributions in the amount set forth in Clause 4(A) above as per
the then applicable redemption price, plus accumulated and unpaid dividends.
If upon voluntary or involuntary liquidation, dissolution or winding up of
the Corporation, amounts payable with respect to the Convertible Preferred Stock
or any other outstanding shares of preferred stock of the Corporation ranking as
to any such distribution on a parity with the Convertible Preferred Stock are
not paid in full, the holders of the Convertible Preferred Stock and of such
other shares of stock shall share ratably in any such distribution of assets of
the Corporation in proportion to the full respective preferential amounts to
which they are entitled. After payment of the full amount of liquidating
distributions to which they are entitled, the holders of shares of Convertible
Preferred Stock shall not be entitled to any further participation in any
distribution of assets by the Corporation.
Neither the consolidation of nor merging of the Corporation with or into any
other corporation or corporations, nor the lease or transfer of all or
substantially all of the assets of the Corporation, shall be deemed to be a
liquidation, dissolution or a winding up of the Corporation within the meaning
of any of the provisions of this Clause (7).
(8) Status of Shares Redeemed, Exchanged or Converted. All shares of
Convertible Preferred Stock redeemed, exchanged or converted pursuant to Clause
(4), (5) or (6) hereof and all shares of the Convertible Preferred Stock
otherwise reacquired by the Corporation and subsequently cancelled shall be
restored to the status of authorized and unissued preferred stock undesignated
as to series subject to reissuance by the Board of Directors.
(9) Subdivision of Shares. The Board of Directors may at any time
subdivide the shares of Convertible Preferred Stock as of an effective date
fixed by the Board of Directors. Except as otherwise provided by law, notice
of the proposed subdivision and the effective date shall be mailed to each
holder of record of Convertible Preferred Stock not less than fifteen (15) days
before the effective date. The dividend rate, conversion rate and liquidation
rights in effect immediately prior to the close of business on the effective
date of such subdivision shall be proportionately reduced as of the close of
business on the effective date of such division.
(10) "Common Stock" Defined. Whenever reference is herein made to "Common
Stock," "Common Stock" shall mean any stock of any class of the Corporation
which has no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up
of the Corporation and which is not subject to redemption by the Corporation.
However, Common Stock issuable upon conversion of the Convertible Preferred
Stock shall include only shares of the class designated as Common Stock as of
the original date of issuance of shares of the Convertible Preferred Stock, or
shares of the Corporation of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation
and which are not subject to redemption by the Corporation; provided that if at
any time there shall be more than one such resulting class, the shares of each
such class then so issuable shall be substantially in the proportion which the
total number of shares of such class resulting from such reclassification bears
to the total number of shares of all classes resulting from all such
reclassifications.
(11) No Preemptive Rights. The holders of the Convertible Preferred Stock
shall not have any preemptive rights.
EXHIBIT 4(b)
PERINI CORPORATION,
STATE STREET BANK & TRUST COMPANY
As Depositary
and
ALL HOLDERS OF DEPOSITARY RECEIPTS
DEPOSIT AGREEMENT
Dated as of July , 1994
<PAGE>
TABLE OF CONTENTS
Page
Parties
Recitals
DEPOSIT AGREEMENT
ARTICLE I
Definitions
SECTION 1.01 "Articles of Organization"
SECTION 1.02 "Authorizing Resolutions"
SECTION 1.03 "Common Stock"
SECTION 1.04 "Company"
SECTION 1.05 "Convertible Subordinated Debentures"
SECTION 1.06 "Deposit Agreement"
SECTION 1.07 "Depositary"
SECTION 1.08 "Depositary's Agent"
SECTION 1.09 "Depositary Shares"
SECTION 1.10 "Receipt"
SECTION 1.11 "Record holder"
SECTION 1.12 "Registrar"
SECTION 1.13 "Securities Act of 1933"
SECTION 1.14 "Shareholder Services Office"
SECTION 1.15 "Stock"
ARTICLE II
Form of Receipts; Deposit of Stock; Execution and Delivery; Transfer,
Surrender, Redemption, Conversion and Exchange of Receipts
SECTION 2.01 Form and Transferability of Receipts
SECTION 2.02 Deposit of Stock; Execution and Delivery of
Receipts in Respect Thereof
SECTION 2.03 Redemption of Stock
SECTION 2.04 Transfer of Receipts
SECTION 2.05 Combinations and Split-Ups of Receipts
SECTION 2.06 Surrender of Receipts and Withdrawal of Stock
SECTION 2.07 Conversion of Stock into Common stock
SECTION 2.08 Exchange of Stock for Convertible Subordinated Debentures
at the Company's Option
SECTION 2.09 Limitations on Execution and Delivery; Transfer, Surrender
and Exchange of Receipts
SECTION 2.10 Lost Receipts, etc.
SECTION 2.11 Cancellation and Destruction of Surrendered Receipts
ARTICLE III
Certain Obligations of Holders of Receipts and the Company
SECTION 3.01 Filing Proofs, Certificates and Other Information
SECTION 3.02 Payment of Taxes or Other Governmental Charges
SECTION 3.03 Representations and Warranties as to Stock
SECTION 3.04 Representations and warranties as to Debentures
SECTION 3.05 Covenants and Warranties as to Common Stock
TABLE OF CONTENTS - continued
Page
ARTICLE IV
The Deposited Securities; Notices
SECTION 4.01 Cash Distributions
SECTION 4.02 Distributions other than Cash
SECTION 4.03 Subscription Rights, Preferences or Privileges
SECTION 4.04 Notice of Dividends; Fixing of Record Date for Receipt Holders
SECTION 4.05 Voting Rights
SECTION 4.06 Changes Affecting Deposited Securities and Reclassifications,
Recapitalizations, etc.
SECTION 4.07 Reports
SECTION 4.08 List of Receipt Holders
ARTICLE V
The Depositary and The Company
SECTION 5.01 Maintenance of Offices, Agencies, Transfer Books by the
Depositary; Registrar
SECTION 5.02 Prevention or Delay in Performance by the Depositary, the
Depositary's Agent or the Company
SECTION 5.03 Obligations of the Depositary, the Depositary's Agents and
the Company
SECTION 5.04 Resignation and Removal of the Depositary; Appointment of
Successor Depositary
SECTION 5.05 Corporate Notices and Reports
SECTION 5.06 Deposit of Stock by the Company
SECTION 5.07 Indemnification by the Company
SECTION 5.08 Charges and Expenses
ARTICLE VI
Amendment and Termination
SECTION 6.01 Amendment
SECTION 6.02 Termination
ARTICLE VII
Miscellaneous
SECTION 7.01 Counterparts
SECTION 7.02 Exclusive Benefit of Parties
SECTION 7.03 Invalidity of Provisions
SECTION 7.04 Notices
SECTION 7.05 Depositary's Agents
SECTION 7.06 Holders of Receipts are Parties
SECTION 7.07 Governing Law
SECTION 7.08 Headings
Testimonium
Signatures
Exhibit A
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of July , 1994, among Perini
Corporation, a corporation duly organized and existing under the laws of the
Commonwealth of Massachusetts, State Street Bank & Trust Company, a national
banking association duly organized and existing under the laws of the United
States of America, as Depositary, with its principal shareholder services
office at , and all holders from time to
time of Depositary Receipts issued hereunder.
W I T N E S S E T H:
WHEREAS, it is desired to provide, as hereinafter set forth in this
Deposit Agreement, for the deposit of shares of $ Convertible
Exchangeable Junior Preferred Stock, par value $1.00 per share, of Perini
Corporation, with the Depositary for the purposes set forth in this Deposit
Agreement and for the issuance hereunder of Depositary Receipts evidencing $
Depositary Convertible Exchangeable Junior Preferred Shares, in respect
of the $ Convertible Exchangeable Junior Preferred Stock so
deposited; and
WHEREAS, such Depositary Receipts are to be substantially in the form
of Exhibit A annexed hereto, with appropriate insertions, modifications and
omissions, as hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the above premises, it is agreed
by and among the parties hereto as follows:
ARTICLE I
Definitions
The following definitions shall for all purposes, unless otherwise
clearly indicated, apply to the respective terms used in this Deposit Agreement
and the Depositary Receipts:
SECTION 1.01. The term "Articles of Organization" shall mean the
Restated Articles of Organization, as amended from time to time, of the Company.
SECTION 1.02. The term "Authorizing Resolutions" shall mean the
resolutions adopted by the Board of Directors of the Company establishing and
setting forth the rights, preferences and privileges of the Stock.
SECTION 1.03. The term "Common Stock" shall mean any stock of any
class of the Company which has no preference in respect of dividends or of
amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which is not subject to redemption
by the Company. However, subject to the provisions of the Authorizing
Resolutions, shares issuable on conversion of the Stock shall include only
shares of the class designated as Common Stock of the Company at the date of
this Deposit Agreement or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and which are
not subject to redemption by the Company; provided that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
SECTION 1.04. The term "Company" shall mean Perini Corporation, a
corporation organized and existing under the laws of the Commonwealth of
Massachusetts and having its principal office at 73 Mt. Wayte Avenue,
Framingham, Massachusetts 01701, and its successors.
SECTION 1.05. The term "Convertible Subordinated Debentures" shall
mean the Company's % Convertible Subordinated Debentures Due 2019
which may be issued pursuant to an Indenture between the Company and a trustee,
in exchange for the Stock pursuant to the terms of the Stock.
SECTION 1.06. The term "Deposit Agreement" shall mean this agreement,
as the same may be amended or supplemented from time to time.
SECTION 1.07. The term "Depositary" shall mean State Street Bank &
Trust Company, a national banking association organized and existing under the
laws of the United States of America, with its principal shareholder services
office at , and any successor as
depositary hereunder.
SECTION 1.08. The term "Depositary's Agent" shall mean an agent
appointed by the Depositary as provided, and for the purposes specified in
Section 7.05.
SECTION 1.09. The term "Depositary Shares" shall mean the $
Depositary Convertible Exchangeable Junior Preferred Shares, evidenced by the
Depositary Receipts issued hereunder and representing the interests in the
Stock deposited with the Depositary hereunder. Each Depositary Share shall
present one-tenth (1/10th) of a share of Stock and the same proportionate
interest in any and all other property received by the Depositary in respect of
such shares of Stock and at the time held under this Deposit Agreement.
SECTION 1.10. The term "Receipt" shall mean one or more of the
Depositary Receipts issued hereunder and evidencing the Depositary Shares.
SECTION 1.11. The term "record holder" as applied to a Receipt shall
mean the person in whose name a Receipt is registered on the books of the
Depositary maintained for such purposes.
SECTION 1.12. The term "Registrar" shall mean any bank or trust
company which shall be appointed to register Depositary Receipts as herein
provided.
SECTION 1.13. The term "Securities Act of 1933" shall mean the Act of
May 27, 1933 (15 U.S. Code Secs. 77a-77aa), as from time to time amended.
SECTION 1.14. The term "shareholder services office" when used with
respect to the Depositary, shall mean the principal office of the Depositary in
Dorchester, Massachusetts, at which at any particular time its shareholder
services business shall be administered.
SECTION 1.15. The term "Stock" shall mean shares of the Company's $
Convertible Exchangeable Junior Preferred Stock, par value $1.00 per
share, issued concurrently herewith.
ARTICLE II
Form of Receipts; Deposit of Stock; Execution and
Delivery; Transfer, Surrender, Redemption,
Conversion and Exchange of Receipts
SECTION 2.01. Form and Transferability of Receipts. Receipts shall
be engraved or printed or lithographed on steel-engraved borders and shall be
substantially in the form set forth in Exhibit A annexed to this Deposit
Agreement, with appropriate insertions, modifications and omissions, as
hereinafter provided. Receipts shall be executed by the Depositary by the
manual signature of a duly authorized officer of the
Depositary, provided that such signature may be a facsimile if a Registrar for
the Receipts (other than the Depositary) shall have been appointed and such
Receipts are countersigned by manual signature of a duly authorized officer of
the Registrar. No Receipt shall be entitled to any benefits under this Deposit
Agreement or be valid or obligatory for any purpose, unless it shall have been
executed manually by the Depositary, or if a Registrar for the Receipts (other
than the Depositary) shall have been appointed, by facsimile by the Depositary,
by the signature of a duly authorized officer and, if executed by facsimile
signature of the Depositary, shall have been countersigned manually by such
Registrar by the signature of a duly authorized officer. Receipts executed as
provided in this Section may be issued notwithstanding that any authorized
officer of the Depositary signing such Receipts shall have ceased to hold
office at the time of issuance of such Receipts. The Depositary shall record
on its books each Receipt so signed and delivered as hereinafter provided.
Receipts shall be in denominations of any number of Depositary Shares.
All Receipts shall be dated the date of their execution.
Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of
this Deposit Agreement as may be required by the Depositary or required to
comply with any applicable law or any regulation thereunder or with the rules
and regulations of any securities exchange upon which the Stock, the Receipts
or the Depositary Shares may be listed or to conform with any usage with
respect thereto, or to indicate any special limitations or restrictions to
which any particular Receipts are subject by reason of the date of issuance of
the Stock or otherwise.
Title to a Receipt (and to the Depositary Shares evidenced thereby)
which is properly endorsed or accompanied by a properly executed instrument of
transfer shall be transferable by delivery with the same effect as in the case
of a negotiable instrument; provided, however, that until a Receipt shall be
transferred on the books of the Depositary as provided in Section 2.04, the
Depositary may, notwithstanding any notice to the contrary, treat the record
holder thereof at such time as the absolute owner thereof for the purpose of
determining the person entitled to distribution of dividends or other
distributions or to any notice provided for in this Deposit Agreement and for
all other purposes.
SECTION 2.02. Deposit of Stock; Execution and Delivery of Receipts in
Respect Thereof. Subject to the terms and conditions of this Deposit
Agreement, any holder of Stock may deposit such Stock under this Deposit
Agreement by delivery to the Depositary of a certificate or certificates for
the Stock to be deposited, properly endorsed or accompanied, if required by
law, by a duly executed instrument of transfer or endorsement, in form
satisfactory to the Depositary, together with all such certifications as may be
required by the Depositary in accordance with the provisions of this Deposit
Agreement, and together with a written order directing the Depositary to
execute and deliver to, or upon the written order of, the person or persons
stated in such order a Receipt or Receipts for the number of Depositary Shares
representing such deposited Stock.
If required by the Depositary, Stock presented for deposit at any
time, whether or not the register of stockholders of the Company is closed,
shall also be accompanied by an agreement or assignment, or other instrument
satisfactory to the Depositary, which will provide for the prompt transfer to
the Depositary or its nominee of any dividend or right to subscribe for
additional Stock or to receive other property which any person in whose name
the Stock is or has been recorded may thereafter receive upon or in respect of
such deposited Stock, or in lieu thereof such agreement of indemnity or other
agreement as shall be satisfactory to the Depositary.
Subject to the terms and conditions of this Deposit Agreement, Stock
may also be deposited hereunder in connection with the delivery of Receipts to
represent distributions under Section 4.02 and upon exercise of the rights to
subscribe referred to in Section 4.03.
Upon each delivery to the Depositary of a certificate or certificates
for Stock to be deposited hereunder, together with the other documents above
specified, the Depositary shall, as soon as transfer and recordation can be
accomplished, present such certificate or certificates to the Company for
transfer and recordation in the name of the Depositary or its nominees of the
Stock being deposited. Deposited Stock shall be held by the Depositary, at its
shareholder services office, or at such other place or places as the Depositary
shall determine.
Upon receipt by the Depositary of a certificate or certificates for
Stock deposited in accordance with the provisions of this Section, together
with the other documents required as above specified, the Depositary, subject
to the terms and conditions of this Deposit Agreement, shall execute and
deliver to or upon the order of the person or persons named in the written
order referred to in the first paragraph of this Section, delivered to the
Depositary or to the Depositary's Agent, a Receipt or Receipts for the number
of Depositary Shares representing the Stock so deposited and registered in such
name or names as may be requested by such person or persons. The Depositary
shall execute and deliver such Receipts at its shareholder services office and
at such other offices, if any, as it may designate. Delivery at any other
offices shall be at the risk and expense of the person requesting such
delivery. However, in each case, such delivery will be made only upon payment
to the Depositary of the fee of the Depositary for the execution and delivery
of such Receipt or Receipts, as provided in Section 5.08, and of all taxes and
governmental charges and fees payable in connection with such deposit and the
transfer of the deposited Stock.
SECTION 2.03. Redemption of Stock. Whenever the Company shall elect
to redeem shares of the Stock, it shall give the Depositary not less than 30
nor more than 60 days' notice of the date of such proposed redemption of Stock
and of the number of shares held by the Depositary to be so redeemed and the
redemption price for the Stock to be redeemed (which shall include full
cumulative dividends thereon to the redemption date). On the date of such
redemption, provided that the Company shall then have paid in full to the
Depositary the redemption price of the Stock to be redeemed, the Depositary
shall redeem the number of Depositary Shares representing such Stock. The
Depositary shall mail notice of such redemption and the proposed simultaneous
redemption of the number of Depositary Shares representing the Stock to be
redeemed, first class mail postage prepaid, not less than 30 nor more than 60
days prior to the date fixed for redemption of such Stock and Depositary Shares
("redemption date"), to the holders of record on the record date for such
redemption (determined pursuant to Section 4.4) of the Receipts evidencing the
Depositary Shares to be so redeemed, at the addresses of such holders as the
same appear on the records of the Depositary; but neither failure to mail any
such notice to one or more such holders nor any defect in any notice shall
affect the sufficiency of the proceedings for redemption as to other holders.
Each such notice shall state the record date for the purposes of such
redemption; the redemption date; the number of Depositary Shares to be
redeemed; if less than all the Depositary Shares held by such holder are to be
redeemed, the number of such Depositary Shares held by such holder to be so
redeemed; the redemption price; the place or places where Receipts evidencing
Depositary Shares are to be surrendered for payment of the redemption price;
and that dividends in respect of the Stock represented by the Depositary Shares
so to be redeemed will cease to accrue and that conversion rights in respect
thereof will terminate at the close of business on such redemption date. In
case less than all the outstanding Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed shall be selected pro rata of by lot or in
such manner as the Company shall deem appropriate and fair.
Notice having been mailed by the Depositary as aforesaid, from and
after the redemption date (unless the Company shall have failed to redeem the
shares of Stock to be redeemed by it as set forth in the Company's notice
provided for in the preceding paragraph), all dividends in respect of the
shares of Stock so called for redemption shall cease to accrue, the conversion
rights in respect thereof will terminate, the Depositary Shares being redeemed
from such proceeds shall be deemed no longer to be outstanding, all rights of
the holders of Receipts evidencing such Depositary Shares (except the right to
receive the redemption price)
shall, to the extent of such Depositary Shares, cease and terminate and, upon
surrender in accordance with said notice of the Receipts evidencing any such
Depositary Shares (properly endorsed or assigned for transfer, if the
Depositary shall so require), such Depositary Shares shall be redeemed by the
Depositary at the redemption price per Depositary Share equal to one-tenth
(1/10) (as such fraction may from time to time be adjusted, in certain events,
so as to equal at all times the fraction of an interest represented by one
Depositary Share in one share of Stock) of the redemption price per share paid
in respect of the shares of Stock plus all money and other property, if any,
represented by such Depositary Shares, including all amounts paid by the
Company in respect of dividends which on the redemption date have accrued on
the shares of Stock to be so redeemed and have not theretofore been paid. The
foregoing shall further be subject to the terms and conditions of the
Authorizing Resolutions.
If less than all of the Depositary Shares evidenced by a Receipt are
called for redemption, the Depositary will deliver to the holder of such
Receipt upon its surrender to the Depositary, together with the redemption
payment, a new Receipt evidencing the Depositary Shares evidenced by such prior
Receipt and not called for redemption.
SECTION 2.04. Transfer of Receipts. Subject to the terms and
conditions of this Deposit Agreement, the Depositary shall make transfer on its
books from time to time of Receipts upon any surrender thereof by the holder in
person or by duly authorized attorney, properly endorsed or accompanied by a
properly executed instrument of transfer, and duly stamped as may be required
by law. Thereupon the Depositary shall execute a new Receipt or Receipts and
deliver the same to or upon the order of the person entitled thereto
representing the same aggregate number of Depositary Shares as those evidenced
by the Receipt or Receipts surrendered.
SECTION 2.05. Combination and Split-ups of Receipts. Upon surrender
of a Receipt or Receipts at the Depositary's shareholder services office or at
such other office as it may designate for the purpose of effecting a split-up
or combination of such Receipt or Receipts, and subject to the terms and
conditions of this Deposit Agreement, the Depositary shall execute and deliver
a new Receipt or Receipts in authorized denominations requested, evidencing the
same aggregate number of Depositary Shares evidenced by the Receipt or Receipts
surrendered.
SECTION 2.06. Surrender of Receipts and Withdrawal of Stock. Any
holder of a Receipt or Receipts representing any number of whole shares of
Stock may withdraw the Stock and all money and other property, if any,
represented thereby by surrendering such Receipt or Receipts at the
Depositary's shareholder services office or at such other office as the
Depositary may designate for such withdrawals (unless the Depositary Shares
represented thereby shall have been theretofore called for redemption or
exchange). Thereafter, without unreasonable delay, the Depositary shall
deliver to such holder, or to the person or persons designated by such holder
as hereinafter provided, the number of whole shares of Stock and all money and
other property, if any, represented by the Receipt or Receipts so surrendered
for withdrawal. If the Receipt or Receipts delivered by the holder to the
Depositary in connection with such withdrawal shall evidence a number of
Depositary Shares in excess of the number of Depositary Shares representing the
number of whole shares of Stock to be so withdrawn, the Depositary shall at the
same time, in addition to such number of whole shares of Stock and such money
and other property, if any, to be so withdrawn, deliver to such holder, or
(subject to Section 2.04) upon his order, a new Receipt evidencing such excess
number of Depositary Shares. Delivery of the Stock and money and other
property being withdrawn may be made by the delivery of such certificates,
documents of title and other instruments as the Depositary may deem
appropriate, which, if required by law, shall be properly endorsed or
accompanied by proper instruments of transfer.
If the Stock and the money and other property being withdrawn are to
be delivered to a person or persons other than the record holder of the Receipt
or Receipts being surrendered for withdrawal of Stock,
such holder shall execute and deliver to the Depositary a written order
(accompanied by a signature guarantee) so directing the Depositary and the
Depositary may require that the Receipt or Receipts surrendered by such holder
for withdrawal of such shares of Stock be properly endorsed in blank or
accompanied by a properly executed instrument of transfer in blank.
Delivery of the Stock and the money and other property, if any,
represented by Receipts surrendered for withdrawal shall be made by the
Depositary at its shareholder services office, except that, at the request,
risk and expense of the holder surrendering such Receipt or Receipts and for
the account of the holder thereof, such delivery may be made at such other
place as may be designated by such holder.
SECTION 2.07. Conversion of Stock into Common Stock.
(a) Receipts may be surrendered with instructions to the Depositary
as conversion agent to convert such number of whole shares of underlying Stock
represented thereby (subject to the provisions of subparagraph (g) below) as
the holder wishes to convert into Common Stock of the Company at the conversion
rate specified in the Authorizing Resolutions with respect to each share of
Stock, as such conversion rate may be adjusted from time to time as provided in
the Authorizing Resolutions. Subject to the terms and conditions of this
Deposit Agreement and the Authorizing Resolutions, a holder of a Receipt or
Receipts representing at least one whole share of Stock may surrender such
Receipt or Receipts at the Depositary's shareholder services office or at such
office as it may designate for such purpose, together with a completed and
executed notice of conversion in the form included in the Receipt, thereby
instructing the Depositary, as conversion agent, to convert the number of whole
shares of underlying Stock specified in such notice into shares of Common
Stock. Each holder surrendering Receipts for conversion during the period
between a record date for payment of dividends and a dividend payment date
(except for Receipts representing Stock called for redemption or exchange with
a redemption or exchange date during such period) must accompany such Receipts
with a check made payable to the Company in an amount equal to the dividend
thereon which such holder is to receive on the dividend payment date.
(b) Upon receipt of such Receipt or Receipts and the notice of
conversion instructing the Depositary as conversion agent to convert, the
Depositary shall (x) give written notice to the Company, or its authorized
agent, of the number of whole shares of Common Stock and the amount of cash, if
any, as provided in subparagraph (g) below, relating to such holder's
conversion, and (y) deliver to the Company or its authorized agent the notice
of conversion, together with certificates for the Stock represented by the
Receipts surrendered with the notice of conversion and any accompanying check
as provided above. As promptly as is practicable after the receipt of such
conversion notice, certificates and any such accompanying check from the
Depositary, the Company shall furnish or cause to be furnished to the
Depositary a certificate or certificates representing such number of whole
shares of Common Stock, and such cash, if any, as is referred to above and the
Depositary shall deliver to such holder (i) a certificate or certificates
representing whole shares of Common Stock into which the Stock represented by
Receipts has been converted, (ii) a Receipt evidencing the number of Depositary
Shares, if any, to which the holder is entitled and (iii) any money or other
property to which the holder is entitled.
(c) Upon any such conversion of the Stock underlying the Depositary
Shares, no allowance, adjustment or payment shall be made with respect to
dividends upon such Stock or shares of Common Stock issued upon the conversion
thereof, except as the Company may otherwise determine in accordance with the
Authorizing Resolutions.
(d) Stock converted into Common Stock shall be cancelled.
(e) If any Depositary Shares shall be called for redemption or
exchange, the Stock underlying such shares may be converted into Common Stock
as provided in this Section until and including, but not after (unless the
Company shall default in payment due upon the redemption or exchange of the
underlying Stock), the close of business on the redemption or exchange date.
(f) Delivery of Common Stock and other property may be made by the
delivery of certificates and other proper documents of title, which, if
required by law, shall be properly endorsed or accompanied by proper
instruments of transfer. Such delivery shall be made as hereinafter provided,
without unreasonable delay, at the risk and expense of any holder surrendering
Receipts, and for the account of such holder, to such place designated by such
holder.
(g) No fractional shares of Common Stock shall be issuable upon
conversion of Stock underlying the Depositary Shares. If, except for the
provisions of this paragraph, any holder of Receipts surrendered to the
Depositary with instructions for conversion of the underlying Stock would be
entitled to a fractional share of Common Stock, the Company shall deliver to
the Depositary for delivery to such holder, in accordance with paragraph (b)
above, an equivalent amount in cash for such fractional share based upon the
current market value of the Common Stock computed as set forth in the
Authorizing Resolutions. In addition, no fractional shares of Stock may be
converted and, in the event Receipts are surrendered together with a conversion
notice requesting the conversion of other than a whole number of shares of
underlying Stock, the holder shall receive a Receipt evidencing the number of
Depositary Shares not converted.
SECTION 2.08. Exchange of Stock for Convertible Subordinated
Debentures at the Company's Option. The Stock is exchangeable in whole at the
option of the Company for Convertible Subordinated Debentures in accordance
with the terms of the Stock. Whenever the Company shall elect to exchange the
shares of Stock for Convertible Subordinated Debentures it shall give the
Depositary not less than 30 nor more than 60 days notice of the date of such
proposed exchange of Stock (which shall be a dividend payment date for the
Stock). On the date of such exchange, provided that the Company shall then
have issued the Convertible Subordinated Debentures for the Stock to be
exchanged and shall have paid in full the final dividend on the Stock in
immediately available funds to the Depositary, the Depositary shall exchange
the Receipts for the Convertible Subordinated Debentures issued in such
exchange, the final dividend paid on the Stock and such other money or
property, if any, to which the holders of Receipts are then entitled. The
Depositary shall mail notice of such exchange and the proposed simultaneous
exchange of the Depositary Shares representing the Stock to be exchanged, first
class mail postage prepaid, not less than 30 and not more than 60 days prior to
the date fixed for exchange of such Stock and Depositary Shares (the "exchange
date"), to the holders of record on the record date for such exchange
(determined pursuant to Section 4.04) of the Receipts evidencing the Depositary
Shares to be so exchanged, at the addresses of such holders as the same appear
on the records of the Depositary; but neither failure to mail any such notice
to one or more such holders nor any defect in any notice shall affect the
sufficiency of the proceedings for exchange. Each such notice shall state the
record date for the purposes of such exchange; the exchange date; the principal
amount of the Convertible Subordinated Debentures to be exchanged for each
Depositary Share; the place or places where Receipts evidencing Depositary
Shares are to be surrendered for exchange; and that dividends in respect of the
Stock represented by the Depositary Shares to be exchanged will cease to accrue
and that the conversion rights in respect thereof will terminate at the close
of business on such exchange date.
Notice having been mailed by the Depositary as aforesaid, from and
after the exchange date (unless the Company shall have failed to issue the
Convertible Subordinated Debentures in exchange for the Stock as set forth in
the Company's notice provided for in the preceding paragraph), all dividends in
respect of the shares of Stock so called for exchange shall cease to accrue,
the conversion rights in respect thereof will
terminate, the Depositary Shares being exchanged shall be deemed no longer to
be outstanding, all rights of the holders of Receipts evidencing such
Depositary Shares (except the right to receive the Convertible Subordinated
Debentures and the payment of the final dividend on the Stock in immediately
available funds and to receive any other money or property to which such holder
was entitled upon such exchange) shall, to the extent of such Depositary
Shares, cease and terminate and, upon surrender in accordance with said notice
of the Receipts evidencing any such Depositary Shares (properly endorsed or
assigned for transfer, if the Depositary shall so require), such Depositary
Shares shall be exchanged for such Convertible Subordinated Debentures at an
exchange rate per Depositary Share equal to one-tenth (1/10) (as such fraction
may from time to time be adjusted, in certain events, so as to equal at all
times the fraction of an interest represented by one Depositary Share in one
share of Stock) of the exchange rate per share in respect of the shares of
Stock plus all money and other property, if any, represented by such Depositary
Shares, including all amounts paid by the Company in respect of dividends which
on the exchange date have accrued on the shares of Stock to be so exchanged and
have not theretofore been paid. The foregoing shall further be subject to the
terms and conditions of the Authorizing Resolutions.
SECTION 2.09. Limitations on Execution and Delivery; Transfer,
Surrender and Exchange of Receipts. As a condition precedent to the execution
and delivery, transfer, split-up, combination, surrender or exchange of any
Receipt or the conversion or exchange of the Stock for Common Stock or
Convertible Subordinated Debentures, respectively, the Depositary, or any of
the Depositary's Agents, or the Company may require payment of a sum sufficient
for reimbursement of any tax or other governmental charge with respect thereto
(including any such tax or charge with respect to Stock being deposited or
withdrawn or with respect to the Common Stock upon conversion or the
Convertible Subordinated Debentures upon exchange), may require the production
of proof satisfactory to it as to the identity and genuineness of any signature
and may also require compliance with such regulations, if any, as the
Depositary may establish consistent with the provisions of this Deposit
Agreement.
The deposit of Stock may be refused, the delivery of Receipts against
Stock may be suspended or the transfer of Receipts may be refused, or the
transfer, surrender or exchange of outstanding Receipts or the conversion or
exchange of the Stock for Common Stock or Convertible Subordinated Debentures,
respectively, may be suspended during any period when the register of
stockholders of the Company is closed, or if any such action is deemed
necessary or advisable by the Depositary, any of the Depositary's Agents or the
Company at any time or from time to time because of any requirement of law or
of any government or governmental body or commission, or under any provision of
this Deposit Agreement. Without limitation of the foregoing, the Depositary
shall not knowingly accept for deposit under this Deposit Agreement, or for
distribution to holders of Receipts, any Stock or other securities required to
be registered under the Securities Act of 1933, unless a registration statement
under such Act is in effect as to such securities.
SECTION 2.10. Lost Receipts, etc. In case any Receipt shall be
mutilated or be destroyed or lost or stolen, the Depositary in its discretion
may execute and deliver a Receipt of like form and tenor in exchange and
substitution for such mutilated Receipt, or in lieu of and in substitution for
such destroyed, lost or stolen Receipt, upon the holder thereof filing with the
Depositary evidence satisfactory to the Depositary of such destruction or loss
or theft of such Receipt and the authenticity thereof and of his ownership
thereof and furnishing the Depositary with reasonable indemnification
satisfactory to it.
SECTION 2.11. Cancellation and Destruction of Surrendered Receipts.
All Receipts surrendered to the Depositary or any Depositary's Agent shall be
cancelled by the Depositary. Except as prohibited by applicable law or
regulations, the Depositary is authorized to destroy Receipts so cancelled.
ARTICLE III
Certain Obligations of Holders of Receipts and the Company
SECTION 3.01. Filing Proofs, Certificates and Other Information. Any
person presenting Stock for deposit or any holder of a Receipt may be required
from time to time to file such proof of residence or other matters or other
information, to execute such certificates and to make such representations and
warranties as the Depositary or the Company may reasonably deem necessary or
proper. The Depositary or the Company may withhold the delivery or delay the
transfer, redemption or exchange of any Receipt or the withdrawal of the Stock
represented by the Depositary Shares evidenced by any Receipt or the
Convertible Subordinated Debentures exchanged for such Stock pursuant to
Section 2.08 or the distribution of any dividend or other distribution or the
sale of any rights or of the proceeds thereof or the exercise of any conversion
right as specified in Section 2.07 until such proof or other information is
filed or such certificates are executed or such representations and warranties
are made.
SECTION 3.02. Payment of Taxes or Other Governmental Charges. If any
tax or other governmental charge shall become payable by or on behalf of the
Depositary with respect to any Receipt evidencing Depositary Shares or with
respect to the Depositary Shares evidenced by such Receipt or with respect to
the Stock (or any fractional interest therein) represented by such Depositary
Shares or the Convertible Subordinated Debentures exchanged for such Stock
pursuant to Section 2.08 or with respect to the exercise of any conversion
right as referred to in Section 2.07, such tax (including transfer taxes, if
any) or governmental charge shall be payable by the holder of such Receipt,
except as provided in Section 5.08. Transfer of any Receipt or any withdrawal
of Stock or exchange of Stock for Convertible Subordinated Debentures and all
money or other property, if any, represented by Depositary Shares evidenced by
such Receipt may be refused until such payment is made, and any dividends,
interest payments or other distributions may be withheld, and such conversion
right may be refused, or any part or all of the Stock or such Convertible
Subordinated Debentures or other property represented by the Depositary Shares
evidenced by such Receipt and not theretofore sold may be sold for the account
of the holder thereof (after attempting by reasonable means to notify such
holder prior to such sale), and such dividends or other distributions or the
proceeds of any such sale may be applied to payment of any such tax or other
governmental charge, the holder of such Receipt remaining liable for any
deficiency.
SECTION 3.03 Representations and Warranties as to Stock. Every
person depositing Stock under this Deposit Agreement shall be deemed thereby to
represent and warrant that such Stock and each certificate therefor are valid
and that the person making such deposit is duly authorized to do so and has, or
the person on whose behalf such deposit is made has, good and marketable title
to such Stock, free and clear of any liens, claims or encumbrances. The
Company hereby further represents and warrants that the Stock, when issued,
will be duly and validly issued, fully paid and non-assessable. Such
representations and warranties shall survive the deposit of the Stock and the
issuance of Receipts.
SECTION 3.04. Representations and Warranties as to Debentures. The
Company represents and warrants that if it shall elect to exchange in whole the
Stock for its Convertible Subordinated Debentures, (i) such Convertible
Subordinated Debentures, when issued, will be valid and binding obligations of
the Company entitled to the benefits of the Indenture related to such
Convertible Subordinated Debentures, and (ii) such Indenture will constitute a
valid and binding instrument in accordance with its terms except as the same
may be limited by bankruptcy, insolvency, reorganization or other laws relating
to or affecting the enforcement of creditors' rights and by general equitable
principles.
SECTION 3.05. Covenant and Warranties as to Common Stock. The
Company covenants that it will keep a sufficient number of authorized and
unissued shares of Common Stock to meet conversion requirements in respect of
the Stock and Convertible Subordinated Debentures and that it will give written
notice to the Depositary of any adjustments in the conversion rate of Stock
into Common Stock as set forth in
the Authorizing Resolutions. The Company represents and warrants that upon
such conversion the Common Stock will be validly issued, fully paid and
nonassessable. Such covenant, representations and warranties shall survive the
deposit of the Stock and the issuance of Receipts and the issuance of the
Common Stock upon conversion.
ARTICLE IV
The Deposited Securities; Notices
SECTION 4.01. Cash Distributions. Whenever the Depositary shall
receive any cash dividend or other cash distribution on the Stock, the
Depositary shall, subject to Section 3.02, distribute to record holders of
Receipts on the record date fixed pursuant to Section 4.04 such amounts of such
sums as are, as nearly as possible, in proportion to the respective number of
Depositary Shares held by such holders; provided, however, that in case the
Company or the Depositary shall be required to withhold and does withhold from
any cash dividend or other cash distribution in respect of the Stock an amount
on account of any taxes, the amount made available for distribution or
distributed in respect of Depositary Shares shall be reduced accordingly. The
Depositary shall distribute or make available for distribution, as the case may
be, only such amount, however, as can be distributed without attributing to any
owner of Depositary Shares a fraction of one cent and any balance not so
distributable shall be held by the Depositary (without liability for interest
thereon) and shall be added to and treated as part of the next sum received by
the Depositary for distribution to record holders of Receipts then outstanding.
SECTION 4.02. Distributions other than Cash. Whenever the Depositary
shall receive any distribution other than cash upon the Stock, including
without limitation any distribution of Convertible Subordinated Debentures in
exchange for Stock pursuant to Section 2.08, the Depositary shall, subject to
Section 3.02, distribute on the record date fixed pursuant to Section 4.04 such
amounts of the Convertible Subordinated Debentures, other securities or
property received by it as are, as nearly as practicable, in proportion to the
number of Depositary Shares evidenced by the Receipts held by such holders, in
any manner that the Depositary may deem equitable and practicable for
accomplishing such distribution. If in the opinion of the Depositary such
distribution cannot be made proportionately among the record holders of
Receipts entitled thereto, or if for any other reason (including any
requirement that the Company or the Depositary withhold an amount on account of
any taxes) the Depositary deems, after consultation with the Company, such
distribution not to be feasible, the Depositary may, with the approval of the
Company, adopt such method as it deems equitable and practicable for the
purpose of effecting such distribution, including the sale (at public or
private sale) of the Convertible Subordinated Debentures, other securities or
property thus received, or any part thereof, at such place or places and upon
such terms as it may deem proper. The net proceeds of any such sale shall,
subject to Section 3.02, be distributed or made available for distribution, as
the case may be, by the Depositary to the holders of Receipts entitled thereto
as provided by Section 4.01 in the case of a distribution received in cash.
SECTION 4.03. Subscription Rights, Preferences or Privileges.
Whenever the Company shall offer or cause to be offered to the holders of the
Stock in whose names such securities are recorded on the books of the Company
any rights, preferences or privileges to subscribe for or to purchase any
securities or any rights, preferences or privileges of any other nature, such
rights, preferences or privileges shall in each instance be made available by
the Depositary to the record holders of Receipts in such manner as the
Depositary may determine, either by the issue to the record holders of Receipts
entitled thereto of warrants representing such rights, preferences or
privileges or by such other method as may be approved by the Depositary in its
discretion with the approval of the Company; provided, however, that (a) if at
the time of issue or offer of any such rights, preferences or privileges the
Depositary determines that it is not lawful or (after consultation with the
Company) not feasible to make such rights, preferences or privileges available
to the holders of Receipts by the issue of warrants or otherwise, or (b) if and
to the extent so instructed by holders of Receipts who do not desire
to exercise such rights, preferences or privileges, then the Depositary, in its
discretion (with the approval of the Company, in any case where the Depositary
has determined that it is not feasible to make such rights, preferences or
privileges available), may, if applicable laws or the terms of such rights,
preferences or privileges permit such transfer, sell such rights, preferences
or privileges at public or private sale, at such place or places and upon such
terms as it may deem proper. The net proceeds of any such sale shall be
distributed by the Depositary to the record holders of Receipts entitled
thereto as provided by Section 4.01 in the case of a distribution received in
cash.
If registration under the Securities Act of 1933 of the securities to
which any rights, preferences or privileges relate is required in order for
holders of Receipts to be offered or sold the securities to which such rights,
preferences or privileges relate, the Company agrees with the Depositary that
it will promptly file a registration statement pursuant to such Act with
respect to such rights, preferences or privileges and securities and use its
best efforts and take all steps available to it to cause such registration
statement to become effective sufficiently in advance of the expiration of such
rights, preferences or privileges to enable such holders to exercise such
rights, preferences or privileges. In no event shall the Depositary make
available to the holders of Receipts any right, preference or privilege to
subscribe for or to purchase any securities unless and until such a
registration statement shall have become effective, or unless the offering and
sale of such securities to the holders of such Receipts are exempt from
registration under the provisions of such Act.
If any other action under the laws of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to
holders of Receipts, the Company agrees with the Depositary that the Company
will use its best efforts to take such action or obtain such authorization,
consent or permit sufficiently in advance of the expiration of such rights,
preferences or privileges to enable such holders of Receipts to exercise such
rights, preferences or privileges.
SECTION 4.04. Notice of Dividends, Fixing of Record Date for Receipt
Holders. Whenever any cash dividend or other cash distribution shall become
payable or any distribution other than cash shall be made, or if rights,
preferences or privileges shall at any time be offered, with respect to the
Stock, or whenever the Depositary shall receive notice of (a) any meeting at
which holders of Stock are entitled to vote or of which holders of Stock are
entitled to notice, or (b) any election on the part of the Company to redeem
any shares of Stock or to exchange shares of Stock for Convertible Subordinated
Debentures, the Depositary shall, in each such instance, fix a record date
(which shall be the record date fixed by the Company with respect to the Stock)
for the determination of the holders of Receipts who shall be entitled to
receive such dividend, distribution, rights, preferences or privileges or the
net proceeds of the sale thereof, or to give instructions for the exercise of
voting rights at any such meeting or who shall be entitled to notice of such
meeting, or whose Depositary Shares are to be redeemed or exchanged.
SECTION 4.05. Voting Rights. Upon receipt of notice of any meeting
at which the holders of Stock are entitled to vote, the Depositary shall, as
soon as practicable thereafter, mail to the record holders of Receipts a notice
which shall contain (a) such information as is contained in such notice of
meeting, and (b) a statement that the holders of Receipts at the close of
business on a specified record date determined pursuant to Section 4.04 will be
entitled, subject to any applicable provisions of law and of the Articles of
Organization of the Company or the Authorizing Resolutions relating to the
Stock, to instruct the Depositary as to the exercise of the voting rights
pertaining to the amount of Stock represented by their respective Depositary
Shares, and a brief statement as to the manner in which such instructions may
be given. Upon the written request of a holder of a Receipt on such record
date, the Depositary shall endeavor insofar as practicable to vote or cause to
be
voted the amount of Stock represented by Depositary Shares evidenced by such
Receipt in accordance with the instructions set forth in such request. The
Company hereby agrees to take all action which may be deemed necessary by the
Depositary in order to enable the Depositary to vote such Stock or cause such
Stock to be voted. In the absence of specific instructions from the holder of
a Receipt, the Depositary will abstain from voting to the extent of the Stock
represented by the Depositary Shares evidenced by such Receipt.
<PAGE>
SECTION 4.06. Changes Affecting Deposited Securities and
Reclassifications, Recapitalizations, etc. Upon any change in par or stated
value, split-up, consolidation or any other reclassification of the Stock, or
upon any recapitalization, reorganization, merger, amalgamation or
consolidation or lease or transfer of all or substantially all of the Company's
assets, the Depositary may in its discretion with the approval of, and shall
upon the instructions of, the Company, in such manner as the Depositary may
deem equitable (a) make such adjustments in (i) the fraction of an interest
represented by one Depositary Share in one share of Stock, (ii) the ratio of
the redemption price per Depositary Share to the redemption price of a share of
Stock, and (iii) the exchange ratio for the exchange of Depositary Shares for
Convertible Subordinated Debentures upon the exchange of shares of Stock for
such Convertible Subordinated Debentures, in each case as may be necessary to
fully reflect the effects of such change in par or stated value, split-up,
consolidation or other reorganization, merger, amalgamation or such
consolidation or lease or transfer, and (b) treat any securities which shall be
received by the Depositary in exchange for or upon conversion of or in respect
of the Stock as new deposited securities under this Deposit Agreement, and
Receipts then outstanding shall thenceforth represent the new deposited
securities so received in exchange for or upon conversion or in respect of such
Stock. In any such case the Depositary may in its discretion, with the
approval of the Company execute and deliver additional Receipts, or may call
for the surrender of all outstanding Receipts to be exchanged for new Receipts
specifically describing such new deposited securities. Anything to the
contrary herein notwithstanding, holders of Receipts shall have the right from
and after the effective date of any such change of par or stated value,
split-up, consolidation or other reclassification of the Stock or any such
recapitalization, reorganization, merger, amalgamation or consolidation or
lease or transfer of substantially all of the assets of the Company to
surrender such Receipts to the Depositary with instructions to convert,
exchange or surrender the Stock represented thereby only into or for, as the
case may be, the kind and amount of shares of stock or other securities or
property or cash into which the Stock represented by such Receipts might have
been converted or for which such Stock might have been exchanged or surrendered
immediately prior to the effective date or record date of such transaction.
The Company shall cause any such surviving corporation (if other than the
Company) expressly to assume the obligations of the Company hereunder.
SECTION 4.07. Reports. The Depositary shall make available to
holders of Receipts, upon request of such holders, reports and communications
received from the Company which are both (a) received by the Depositary as the
holder of the Stock and (b) made generally available to the holders of such
Stock by the Company.
SECTION 4.08. List of Receipt Holders. Promptly upon request from
time to time by the Company, the Depositary shall furnish to it a list, as of a
recent date, of the names, addresses and holdings of Depositary Shares by all
persons in whose names Receipts are registered on the books of the Depositary.
ARTICLE V
The Depositary and The Company
SECTION 5.01. Maintenance of Offices, Agencies, Transfer Books by the
Depositary; Registrar. Until termination of this Deposit Agreement in
accordance with its terms, the Depositary shall maintain at its shareholder
services office and such other place as may be required by law, regulation or
stock
exchange rule, facilities for the execution and delivery, transfer, surrender
and exchange of Receipts, and at the offices of the Depositary's Agents, if
any, facilities for the delivery, transfer, surrender and exchange of Receipts,
all in accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books at its shareholder services office for
the transfer of Receipts which books at all reasonable times shall be open for
inspection by the record holders of Receipts, provided that such inspection
shall be for a proper purpose reasonably related to such person's interest as
an owner of Depositary Shares evidenced by the Receipts. The Depositary may
close the books, at any time or from time to time, when deemed expedient by it
in connection with the performance of its duties hereunder.
If the Receipts or the Depositary Shares evidenced thereby or the
Stock represented by such Depositary Shares shall be listed on the American
Stock Exchange or any other national securities exchange, the Depositary may,
with the approval of the Company, appoint a Registrar for registry of such
Receipts or Depositary Shares in accordance with any requirements of such
exchange. Such Registrar (which may be the Depositary if so permitted by the
requirements of such exchange) may be removed and a substitute Registrar
appointed by the Depositary upon the request or with the approval of the
Company. If the Receipts or such Depositary Shares or such Stock are listed on
one or more other stock exchanges, the Depositary will, at the request of the
Company, arrange such facilities for the delivery, transfer, surrender and
exchange of such Receipts, such Depositary Shares, or such Stock as may be
required by law or applicable stock exchange regulation.
SECTION 5.02 Prevention or Delay in Performance by the Depositary,
the Depositary's Agent or the Company. Neither the Depositary nor any
Depositary's Agent nor the Company shall incur any liability to any holder of
any Receipt if, by reason of any provision of any present or future law, or
regulation thereunder, of the United States of America or of any other
governmental authority, or, in the case of the Depositary or the Depositary's
Agent, by reason of any provision, present or future, of the Articles of
Organization of the Company or the Authorizing Resolutions relating to the
Stock or by reason of any act of God or war or other circumstances beyond
control of the relevant party, the Depositary, any Depositary's Agent or the
Company shall be prevented or forbidden from doing or performing any act or
thing which by the terms of this Deposit Agreement provide shall be done or
performed; nor shall the Depositary, any Depositary's Agent or the Company
incur any liability to any holder of a Receipt by reason of any non-performance
or delay caused as aforesaid, in performance of any act or thing which by the
terms of this Deposit Agreement provide shall or may be done or performed, or
by reason of any exercise of, or failure to exercise, any discretion provided
for in this Deposit Agreement.
SECTION 5.03. Obligations of the Depositary, the Depositary's Agents
and the Company. Neither the Depositary nor any Depositary's Agent nor the
Company assumes any obligation or shall be subject to any liability under this
Deposit Agreement to holders of Receipts other than that each of them agrees to
use its best judgment and good faith in the performance of such duties as are
specifically set forth in this Deposit Agreement.
Neither the Depositary nor any Depositary's Agent nor the Company
shall be under any obligation to appear in, prosecute or defend any action,
suit or other proceeding in respect of the Stock, Depositary Shares or the
Receipts, which in its opinion may involve it in expense or liability, unless
indemnity satisfactory to it against all expense and liability be furnished as
often as may be required.
Neither the Depositary nor any Depositary's Agent nor the Company
shall be liable for any action or failure to act by it in reliance upon the
advice of or information from legal counsel, accountants, any person presenting
Stock for deposit, any holder of a Receipt or any other person believed by it
in good faith to
be competent to give such advice or information. The Depositary, any
Depositary's Agent and the Company may each rely and shall each be protected in
acting upon any written notice, request, direction or other document believed
by it to be genuine and to have been signed or presented by the proper party or
parties.
The Depositary shall not be responsible for any failure to carry out
any instructions to vote any of the shares of Stock or for the manner or effect
of any such vote made, so long as any such action or failure to act is in good
faith.
The Depositary will indemnify the Company against any liability which
may arise out of acts performed or omitted by the Depositary or its agents due
to its or their negligence or bad faith. The Depositary and the Depositary's
Agents may own and deal in any class of securities of the Company and its
affiliates and Receipts. The Depositary may also be a depositary of the
Company for any purpose, may loan money to the Company and its affiliates, may
act as trustee, transfer agent or registrar of any of the securities of the
Company and its affiliates and may engage in any other business with or for the
Company and its affiliates.
The Company agrees with the Depositary to register the Stock and
Depositary Shares evidenced by Receipts to be initially issued upon the deposit
of the Stock under the Securities Act of 1933 and, if required by applicable
law, to register promptly and maintain the registration of Depositary Shares
evidenced by Receipts under the Securities Exchange Act of 1934.
SECTION 5.04. Resignation and Removal of the Depositary; Appointment
of Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by written notice of its election to do so delivered to the Company,
such resignation to take effect upon the appointment of a successor depositary
and its acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by written
notice of such removal delivered to the Depositary, such removal becoming
effective upon the appointment of a successor depositary and its acceptance of
such appointment as hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall within 60 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor depositary,
which shall be a bank or trust company having its principal office in the
United States of America and having a combined capital and surplus of at least
$50,000,000. Every successor depositary shall execute and deliver to its
predecessor and to the Company an instrument in writing accepting its
appointment hereunder, and thereupon such successor depositary, without any
further act or deed, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor and for all purposes shall be the
Depositary under this Deposit Agreement, and such predecessor, upon payment of
all sums due it and on the written request of the Company, shall execute and
deliver an instrument transferring to such successor all rights and powers of
such predecessor hereunder, shall duly assign, transfer and deliver all right,
title and interest in the Stock and the money or property held hereunder by it
as Depositary to such successor, and shall deliver to such successor a list of
the record holders of all outstanding Receipts. Any successor depositary shall
promptly mail notice of its appointment to the record holders of Receipts.
Any corporation into or with which the Depositary may be merged or
consolidated shall be the successor of such Depositary without the execution or
filing of any document or any further act. Such successor depositary may
authenticate the Receipts in the name of the predecessor depositary or in the
name of the successor depositary.
SECTION 5.05. Corporate Notices and Reports. The Company agrees that
it will deliver to the Depositary, and the Depositary will, promptly after
receipt thereof, transmit to the record holders of
Receipts, in each case at the addresses recorded in the Depositary's books,
copies of all notices and reports (including, without limitation, financial
statements) required by law, by the rules of any national securities exchange
upon which the Stock, the Depositary Shares or the Receipts are listed or by
the Company's Articles of Organization and the Authorizing Resolutions to be
furnished by the Company to holders of the Stock. Such transmission will be at
the Company's expense and the Company will provide the Depositary with such
number of copies of such documents as the Depositary may reasonably request.
In addition, the Depositary will transmit to the holders of Receipts (at the
Company's expense) such other documents as may be requested by the Company.
SECTION 5.06. Deposit of Stock by the Company. The Company agrees
with the Depositary that neither the Company nor any company controlled by the
Company will at any time deposit any Stock, if such Stock is required to be
registered under the provisions of the Securities Act of 1933 and no
registration statement is in effect as to such Stock.
SECTION 5.07. Indemnification by the Company. The Company agrees to
indemnify the Depositary, any Depositary's Agent and any Registrar against any
liability arising out of acts performed or omitted in accordance with the
provisions of this Deposit Agreement, as the same may be amended, modified or
supplemented from time to time, and the Receipts (a) by the Depositary, any
Registrar or any of their respective agents (including any Depositary's Agent),
except for liability arising out of negligence or bad faith on the part of any
such person or persons, or (b) by the Company or any of its agents.
SECTION 5.08. Charges and Expenses. No charges and expenses of the
Depositary or any Depositary's Agent hereunder, or those of any Registrar,
shall be payable by any person other than the Company, except for fees for the
deposit of Stock subsequent to the initial deposit hereunder, or any surrender
of Receipts for withdrawal of shares of Stock represented by the Depositary
Shares evidenced thereby (other than the initial withdrawal of any shares of
Stock following the initial deposit of such shares hereunder), for which the
person making such a deposit will be charged $ per 100 Depositary
Shares or portion thereof delivered to or upon his order or surrendered for
such withdrawal, any taxes and other governmental charges and as set forth in
the next succeeding sentence, provided that the Company shall pay any charges
or expenses of the Depositary in connection with any withdrawal of Stock upon
its conversion or exchange, as provided in the Authorizing Resolutions. If, at
the election of a holder of Stock or Receipts, any delivery or communication
from the Depositary to such holder is by telegram or telex or if the Depositary
incurs charges or expenses for which it is not otherwise liable hereunder at
the election of such holder, such holder will be liable for such charges and
expenses. All other charges and expenses of the Depositary and any
Depositary's Agent hereunder and of any Registrar (including, in each case,
fees and expenses of counsel) incident to the performance of their respective
obligations hereunder will be paid upon consultation and agreement between the
Depositary and the Company as to the amount and nature of such charges and
expenses. The Depositary shall present its statement for charges and expenses
to the Company once every month or at such other intervals as the Company and
the Depositary may agree.
ARTICLE VI
Amendment and Termination
SECTION 6.01. Amendment. The form of the Receipts and any provisions
of this Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect which they may
deem necessary or desirable. Any amendment which shall impose any fees, taxes
or charges (other than fees and charges provided for herein), or which shall
otherwise prejudice any substantial existing rights of holders of Receipts,
shall not become effective as to outstanding Receipts until the expiration of
90 days after notice of such amendment shall have been given to the record
holders of outstanding Receipts. Every holder of an outstanding Receipt at the
time any such amendment so becomes
effective shall be deemed, by continuing to hold such Receipt, to consent and
agree to such amendment and to be bound by the Deposit Agreement as amended
thereby. In no event shall any amendment impair the right of the holder of any
Receipt to surrender the Receipt evidencing such Depositary Shares with
instructions to the Depositary to convert such shares into Common Stock or to
deliver to the holder the Stock and all money and other property, if any,
represented thereby, including any Convertible Subordinated Debentures, and
receive therefor the Stock and other property represented thereby or to convert
the number of whole shares of underlying Stock into Common Stock, except in
order to comply with mandatory provisions of applicable law.
SECTION 6.02. Termination. Whenever so directed by the Company, the
Depositary will terminate this Deposit Agreement by mailing notice of such
termination to the record holders of all Receipts then outstanding at least 30
days prior to the date fixed in such notices for such termination. The
Depositary may likewise terminate this Deposit Agreement if at any time 60 days
shall have expired after the Depositary shall have delivered to the Company a
written notice of its election to resign and a successor depositary shall have
not been appointed and accepted its appointment as provided in Section 5.04.
If any Receipts shall remain outstanding after the date of termination
of this Deposit Agreement, the Depositary thereafter shall discontinue the
transfer of Receipts, shall suspend the distribution of dividends to the
holders thereof, and shall not give any further notices (other than notice of
such termination) or perform any further acts under this Deposit Agreement,
except that the Depositary shall continue to collect dividends and other
distributions pertaining to the Stock, shall sell rights, preferences or
privileges as provided in this Deposit Agreement and shall continue to deliver
Stock and any money and other property represented by Receipts upon surrender
thereof by the holders. At any time after the expiration of two years from the
date of termination, the Depositary may sell the Stock or Convertible
Subordinated Debentures then held hereunder at public or private sale, at such
place or places and upon such terms as it deems proper and may thereafter hold
the net proceeds of any such sale, together with any money and other property
held by it hereunder, without liability for interest, for the benefit, pro rata
in accordance with their holdings, of the holders of Receipts which have not
theretofore been surrendered. After making such sale, the Depositary shall be
discharged from all obligations under this Deposit Agreement, except to account
for such net proceeds and money, cash and other property. Within 60 days after
the first anniversary date of such sale, the Depositary shall pay to the
Company any such net proceeds which shall not have been claimed by holders of
Receipts surrendering their Receipts therefor. After making such payment to
the Company, the Depositary shall be discharged from all obligations under this
Deposit Agreement and the remaining Receipt holders shall look to the Company
for such proceeds relating to such Receipts. Upon the termination of this
Deposit Agreement, the Company shall be discharged from all obligations under
this Deposit Agreement except for its obligations to the Depositary, any
Depositary's Agent and any Registrar under Sections 5.07 and 5.08 hereof.
ARTICLE VII
Miscellaneous
SECTION 7.01. Counterparts. This Deposit Agreement may be executed
in any number of counterparts and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed an original, but all such counterparts taken together shall
constitute one and the same instrument. Copies of this Deposit Agreement shall
be filed with the Depositary and the Depositary's Agents and shall be open to
inspection during business hours at the Depositary's shareholder services
office and the respective offices of the Depositary's Agents, if any, by any
holder of a Receipt.
SECTION 7.02. Exclusive Benefit of Parties. This Deposit Agreement
is for the exclusive benefit of the parties hereto, and their respective
successors hereunder, and shall not be deemed to give any legal or equitable
right, remedy or claim to any other person whatsoever.
SECTION 7.03. Invalidity of Provisions. In case any one or more of
the provisions contained in this Deposit Agreement or in the Receipts should be
or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein or
therein shall in no way be affected, prejudiced or disturbed thereby.
SECTION 7.04. Notices. Any and all notices to be given to the
Company hereunder or under the Depositary Receipts shall be in writing and
shall be deemed to have been duly given if personally delivered or sent by mail
or by telegram or telex confirmed by letter, addressed to the Company at 73 Mt.
Wayte Avenue, Framingham, Massachusetts 01701, Attention: Secretary, or any
other place to which the Company may have transferred its principal executive
office.
Any and all notices to be given to the Depositary hereunder or under
the Depositary Receipts, shall be in writing and shall be deemed to have been
duly given if personally delivered or sent by mail or by telegram or telex
confirmed by letter, addressed to the Depositary at its shareholder services
office.
Any and all notices to be given to any record holder of a Receipt
hereunder or under the Depositary Receipts shall be deemed to have been duly
given if personally delivered or sent by mail or by telegram or telex confirmed
by letter, addressed to such record holder at the address of such record holder
as it appears on the books of the Depositary, or, if such holder shall have
filed with the Depositary a written request that notices intended for such
holder be mailed to some other address, at the address designated in such
request.
Delivery of a notice sent by mail or by telegram or telex shall be
deemed to be effected at the time when a duly addressed letter containing the
same (or a confirmation thereof in the case of a telegram or telex message) is
deposited, postage prepaid, in a post-office letter box. The Depositary or the
Company may, however, act upon any telegram or telex message received by it
from the other or from any holder of a Receipt, notwithstanding that such
telegram or telex message shall not subsequently be confirmed by letter as
aforesaid.
SECTION 7.05. Depositary's Agents. The Depositary may from time to
time appoint Depositary's Agents to act in any respect for the Depositary for
the purposes of this Deposit Agreement and may at any time appoint additional
Depositary's Agents and vary or terminate the appointment of such Depositary's
Agents. The Depositary will notify the Company of any such action.
<PAGE>
SECTION 7.06. Holders of Receipts are Parties. The holders of
Receipts from time to time shall be deemed to be parties to this Deposit
Agreement and shall be bound by all of the terms and conditions hereof and of
the Receipts by acceptance thereof.
SECTION 7.07. Governing Law. This Deposit Agreement and the Receipts
and all rights hereunder and thereunder and provisions hereof and thereof shall
be governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts.
SECTION 7.08. Headings. The headings of articles and sections in
this Deposit Agreement and in the form of the Receipt set forth in Exhibit A
hereto have been inserted for convenience only and are not to be regarded as
part of this Agreement or to have any bearing upon the meaning or
interpretation of any provision contained herein or in the Receipts.
IN WITNESS WHEREOF, Perini Corporation and State Street Bank & Trust
Company of Boston have duly executed this Agreement as of the day and year first
above set forth and all holders of Receipts shall be
acceptance by them of Receipts issued in accordance with the terms hereof.
PERINI CORPORATION
By: __________________________
Attest:
____________________________ Name: ___________________
Secretary
Title: ___________________
STATE STREET BANK & TRUST COMPANY
By: _____________________
Attest:
____________________________ Name: ___________________
Secretary
Title: ___________________
<PAGE>
EXHIBIT A
DEPOSITARY RECEIPT
FOR
$ DEPOSITARY CONVERTIBLE EXCHANGEABLE JUNIOR PREFERRED SHARES
REPRESENTING $ CONVERTIBLE EXCHANGEABLE JUNIOR PREFERRED STOCK
(par value $1.00 per share)
OF
PERINI CORPORATION
(Incorporated under the Laws of Massachusetts)
No. FBU
CUSIP
$ Depositary Convertible Exchangeable Junior Preferred Shares
(Each such share representing one-tenth of one share of $
Convertible Exchangeable Junior Preferred Stock, par value $1.00 per share)
1. State Street Bank & Trust Co., a national banking association
duly organized and existing under the laws of the United States of America, as
depositary (the "Depositary"), hereby certifies that
is the registered owner of $ Depositary Convertible Exchangeable
Junior Preferred Shares ("Depositary Shares"), each Depositary Share
representing one-tenth (1/10) of one share of $ Convertible
Exchangeable Junior Preferred Stock ("Stock") of Perini Corporation,
incorporated under the laws of the Commonwealth of Massachusetts (the
"Company"). Each such Depositary Share represents one-tenth (1/10) share of
Stock at the date hereof deposited at the shareholder services office of the
Depositary. The rights, preferences and limitations of the Stock are set forth
in the Company's Restated Articles of Organization, as amended, and the
resolutions adopted by the Board of Directors of the Company establishing the
Stock (the "Authorizing Resolutions"), copies of which are on file at the
Depositary's shareholder services office.
2. The Deposit Agreement. The Depositary Receipts ("Receipts"), of
which this Receipt is one, are made available upon the terms and conditions set
forth in the Deposit Agreement dated as of July , 1994 (the "Deposit
Agreement"), among the Company, the Depositary and all holders from time to
time of Receipts. The Deposit Agreement (copies of which are on file at the
Depositary's shareholder services office) sets forth the rights of holders of
the Receipts and the rights and duties of the Depositary in respect of the
Stock deposited and any and all property and cash from time to time held
thereunder. The statements made on the face and the reverse of this Receipt
are summaries of certain provisions of the Deposit Agreement and are subject to
the detailed provisions thereof, to which reference is hereby made. Unless
otherwise expressly provided herein, all defined terms used herein shall have
the meanings described thereto in the Deposit Agreement.
3. Redemption at the Company's Option. Whenever the Company shall
elect to redeem shares of the Stock, it shall give the Depositary not less than
30 and not more than 60 days notice of the date of such proposed redemption of
stock and of the number of shares held by the Depositary to be so redeemed and
the redemption price for the Stock to be redeemed (which shall include full
cumulative dividends thereon to the redemption date). The Depositary shall
mail notice of such redemption and the proposed simultaneous
redemption of corresponding numbers of Depositary Shares from the proceeds of
such redemption of Stock not less than 30 and not more than 60 days prior to
the date fixed for redemption of such Stock and Depositary Shares to the
holders of record of Receipts on the record date for such f the Depositary
Shares to be so redeemed. In case less than all the outstanding Depositary
Shares are to be so redeemed, the Depositary Shares to be so redeemed shall be
selected pro rata or by lot or in such manner as the Company shall deem
appropriate and fair. If less than all of the Depositary Shares represented by
this Receipt are called for redemption, the Depositary will deliver to the
holder of this Receipt upon its surrender to the Depositary, together with the
redemption payment, a new Receipt representing the Depositary Shares not called
for redemption. Notice having been mailed as aforesaid, from and after the
date set for redemption (unless the Company shall have failed to redeem the
shares of Stock to be redeemed as set forth in the notice of redemption), all
dividends in respect of the shares of Stock so called for redemption shall
cease to accrue, the conversion rights in respect of the Stock shall terminate,
the Depositary Shares called for redemption shall be deemed no longer to be
outstanding, and all rights of holders of Receipts with respect to such called
Depositary Shares (except the right to receive the redemption price) shall, to
the extent of such Depositary Shares, cease and terminate and, upon surrender
in accordance with said notice of the Receipts evidencing such Depositary
Shares (properly endorsed or assigned for transfer, if the Depositary shall so
require), such Depositary Shares shall be redeemed by the Depositary at the
redemption price therefor specified in said notice, plus all money and other
property, if any, represented by such Depositary Shares, including all amounts
paid by the Company in respect of dividends which on the redemption date have
accrued on the shares of Stock to be so redeemed and have not theretofore been
paid. The foregoing shall be subject to the terms and conditions of the
Authorizing Resolutions.
4. Surrender of Receipts and Withdrawals of Stock. Upon surrender
of this Receipt to the Depositary at its shareholder services office or at such
other offices as it may designate, and subject to the provisions of the Deposit
Agreement (unless the Depositary Shares evidenced hereby have been theretofore
called for redemption or exchange), the holder hereof is entitled to withdraw,
and to obtain delivery, to or upon the order of such holder, of the Stock and
all money and other property, if any, at the time represented hereby; provided,
however, that the holder hereof is not entitled to withdraw less than a whole
share of Stock and therefore, this Receipt alone or in the aggregate with other
Receipts, must evidence at least a whole share of Stock; and provided further,
that in the event this Receipt shall evidence a number of Depositary Shares in
excess of the number of Depositary Shares representing the number of whole
shares of Stock to be so withdrawn, the Depositary shall, in addition to such
number of whole shares of Stock and the money and other property, if any, to be
so withdrawn, deliver, to or upon the order of such holder, a new Receipt
evidencing such excess number of Depositary Shares.
5. Conversion of Stock. Receipts may be surrendered at the place or
places specified in Paragraph 4 hereof with instructions to the Depositary, as
conversion agent, to convert any specified number of whole shares of Stock
represented by Depositary Shares evidenced hereby into Common Stock of the
Company at the conversion rate specified in the Authorizing Resolutions, as
such conversion rate may be adjusted from time to time by the Company as
provided in the Authorizing Resolutions. Upon conversion of such whole shares
of Stock, no allowance, adjustment or payment shall be made with respect to
dividends on such Stock or Common Stock and no fractional share of Common Stock
shall be issued except as the Company may otherwise determine in accordance
with the Authorizing Resolutions; however, a cash payment will be made by the
Company in lieu thereof on the basis of the then current market value of such
fractional share, as provided in the Authorizing Resolutions. Each holder
surrendering Receipts for conversion during the period between a record date
for payment of dividends and a dividend payment date (except for Receipts
representing Stock called for redemption or exchange with a redemption or
exchange date during such period) must accompany such Receipts with a check
made payable to the Company in an amount equal to the dividend thereon which
such holder is to receive on the dividend payment date.
6. Exchange of Stock for Convertible Subordinated Debentures at the
Company's Option. The Stock is exchangeable in whole, but not in part, at the
option of the Company for the % Convertible Subordinated Debentures Due
2019 of the Company (the "Convertible Subordinated
Debentures") in accordance with the terms of the Stock. Whenever the Company
shall elect to exchange the shares of the Stock for Convertible Subordinated
Debentures, it shall give the Depositary not less than 30 nor more than 60 days
notice of the date of such proposed exchange of Stock. On the date of such
exchange, provided that the Company shall then have issued the Convertible
Subordinated Debentures for the Stock to be exchanged, the Depositary shall
exchange the Depositary Shares representing the Stock for the proposed
Convertible Subordinated Debentures issued in such exchange. The Depositary
shall mail notice of such exchange and of the proposed simultaneous exchange of
the Depositary Shares representing the Stock to be exchanged, not less than 30
nor more than 60 days prior to the date fixed for exchange of such Stock and
Depositary Shares, to all holders of record on the record date for such
exchange (determined as provided in Paragraph 17 below) of the Receipts
evidencing the Depositary Shares at the addresses of such holders as the same
appear on the records of the Depositary, but the failure to mail any such
notice to a holder shall not affect the sufficiency of the proceedings for
exchange. Each such notice shall state the record date for the purposes of
such exchange; the exchange date; the principal amount of the Convertible
Subordinated Debentures to be exchanged for each Depositary Share; the place or
places where such Receipts are to be surrendered for exchange; and that
dividends in respect of the Depositary Shares to be exchanged will cease to
accrue and the conversion rights in respect thereof will terminate at the close
of business on such exchange date.
Notice having been mailed by the Depositary as aforesaid, from and
after the exchange date (unless the Company shall have failed to exchange the
shares of Stock to be exchanged by it as set forth in the Company's notice
provided for in the preceding paragraph), all dividends in respect of the
Depositary Shares of Stock shall cease to accrue, the conversion rights in
respect thereof shall terminate, the Depositary Shares being exchanged shall no
longer be deemed to be outstanding, all rights of the holders of Receipts with
respect to such Depositary Shares (except the right to receive Convertible
Subordinated Debentures) shall, to the extent of such Depositary Shares, cease
and terminate, and, upon surrender in accordance with said notice of the
Receipts evidencing any such Depositary Shares (properly endorsed or assigned
for transfer, if the Depositary shall so require), said Depositary Shares shall
be exchanged by the Depositary for the Convertible Subordinated Debentures at
an exchange rate per share equal to one-tenth (1/10) (as such fraction may from
time to time be adjusted, in certain events, so as to equal at all times the
fraction of an interest represented by one Depositary Share in one share of
Stock) of the exchange rate per share in respect of the shares of Stock plus
all money and other property, if any, represented by such Depositary Shares,
including all amounts paid by the Company in respect of dividends which on the
exchange date have accrued on the shares of Stock to be so exchanged and have
not theretofore been paid. The foregoing shall be further subject to the terms
and conditions of the Authorizing Resolutions.
7. Transfers, Split-ups, Combinations. This Receipt is transferable
on the books of the Depositary upon surrender of this Receipt to the
Depositary, properly endorsed or accompanied by a properly executed instrument
of transfer, and upon such transfer the Depositary shall sign and deliver a
Receipt to or upon the order of the person entitled thereto, as provided in the
Deposit Agreement. This Receipt may be split into other Receipts or combined
with other Receipts into one Receipt, representing the same aggregate number of
Depositary Shares as the Receipt or Receipts surrendered.
8. Conditions to Signing and Delivery, Transfer, Exchange, etc. of
Receipts. Prior to the execution and delivery, transfer, split-up,
combination, surrender or exchange of this Receipt or the conversion or
exchange of the Stock for Common Stock or Convertible Subordinated Debentures,
respectively, the Depositary, or any of the Depositary's Agents or the Company,
may require payment of a sum sufficient for payment (or, in the event that the
Depositary or the Company shall have made such payment, the reimbursement to
it) of any tax or other governmental charge with respect thereto (including any
such tax or charge with respect to Stock being deposited or withdrawn), may
require proof satisfactory to it as to the indemnity and genuineness of any
signature and may also require compliance with such regulations, if any, as it
may establish pursuant to the Deposit Agreement. Any person presenting Stock
for deposit, or any holder of this Receipt, may be required to file any
information and to execute such certificates as the Depositary or the Company
may reasonably deem necessary or proper.
9. Suspension of Delivery, Transfer, etc. The deposit of Stock, the
delivery of this Receipt against Stock, the transfer, surrender or exchange of
this Receipt or the exercise of any conversion or exchange right may be
suspended (a) during any period when the register of stockholders of the
Company is closed, or (b) if any such action is deemed necessary or advisable
by the Depositary, any of the Depositary's Agents or the Company at any time or
from time to time because of any requirement of law or of any government or
governmental body or commission, or under any provision of the Deposit
Agreement.
10. Payment of Taxes or Other Governmental Charges. If any tax or
other governmental charge shall become payable by or on behalf of the
Depositary with respect to this Receipt or with respect to the Depositary
Shares evidenced hereby or with respect to the Stock (or any fractional
interest therein (represented by such Depositary Shares or the Convertible
Subordinated Debentures exchanged for such Stock, or with respect to the
exercise of any conversion or exchange of the Stock into Common Stock or
Convertible Subordinated Debentures, respectively, such tax (including transfer
taxes, if any) or governmental charge shall be payable by the holder hereof.
Transfer of this Receipt, any withdrawal of Stock evidenced by this Receipt or
any conversion or exchange of the Stock underlying this Receipt into Common
Stock or Convertible Subordinated Debentures, respectively, may be refused
until such payment is made, and any dividends, interest payments or other
distributions may be withheld, or any part of all of the Stock represented by
the Depositary Shares not evidenced by this Receipt and not theretofore sold
may be sold for the account of the holder hereof, and such dividends, interest
payments or other distributions or the proceeds of any such sale may be applied
to payment of any such tax or other governmental charge, the holder of this
Receipt remaining liable for any deficiency.
11. Warranties by Depositor. Every person depositing Stock under the
Deposit Agreement shall be deemed thereby to represent and warrant that such
Stock and each certificate therefor are valid, that such person making such
deposit, or the person on whose behalf such deposit is made, has good and
marketable title to such Stock, free and clear of any liens, claims or
encumbrances, and that the person making such deposit is duly authorized to do
so.
12. Amendment. The form of the Receipts and any provisions of the
Deposit Agreement may at any time and from time to time be amended by agreement
between the Company and the Depositary in any respect which they may deem
necessary or desirable. Any amendment which imposes any fees, taxes or charges
(other than fees and charges provided for in the Deposit Agreement), or which
shall otherwise prejudice any substantial existing right of holders of
Receipts, shall not become effective as to outstanding Receipts until the
expiration of 90 days after notice of such amendment shall have been given to
the record holders of outstanding Receipts. The holder of this Receipt at the
time any such amendment so becomes effective shall be deemed, by continuing to
hold this Receipt, to consent and agree to such amendment and to be bound by
the Deposit Agreement as amended thereby. In no event shall any amendment
impair the right of the holder of this Receipt to surrender this Receipt to the
Depositary with instructions to convert such shares into Common Stock or to
deliver to the holder the Stock and all money and other property, if any,
represented hereby, including any Convertible Subordinated Debentures, and
receive therefor the Stock and other property represented hereby or to convert
the number of whole shares of underlying Stock into Common Stock, except in
order to comply with mandatory provisions of applicable law.
13. Charges of Depositary. The Depositary will charge the party to
whom Receipts for Depositary Shares are delivered against deposits of Stock $
for each 100 Depositary Shares or fraction thereof so delivered (other
than the initial deposit of such shares by J.P. Morgan Securities Inc. under
the Deposit Agreement) and for withdrawal of shares of Stock represented by
Receipts for Depositary Shares (other than the initial withdrawal of any shares
of Stock following the initial deposit of such shares by J.P. Morgan Securities
Inc). The Company will pay all other charges of the Depositary, except for
taxes and other governmental charges, and such telegram, telex and delivery
charges as are expressly provided in the Deposit Agreement to be at the expense
of persons depositing Stock or holders of Receipts.
14. Title to Receipts. it is a condition of this Receipt, and every
successive holder hereof by accepting or holding the same consents and agrees,
that title to this Receipt (and to the Depositary Shares evidenced hereby),
when properly endorsed or accompanied by a properly executed instrument of
transfer, is transferable by delivery with the same effect as in the case of a
negotiable instrument; provided, however, that until this Receipt shall be
transferred on the books of the Depositary, the Depositary may, notwithstanding
any notice to the contrary, treat the record holder hereof at such time as the
absolute owner hereof for the purpose of determining the person entitled to
distribution of dividends or other distributions or to any notice provided for
in the Deposit Agreement, and for all other purposes.
15. Dividends and Distributions. Whenever the Depositary receives
any cash dividend or other cash distribution on the Stock, the Depositary will,
subject to the provisions of the Deposit Agreement, make such distribution to
the holders of Receipts as nearly as practicable in proportion to the
respective numbers of Depositary Shares evidenced by the Receipts held by such
holders; provided, however, that the amount distributed will be reduced by any
amounts required to be withheld by the Company or the Depositary on account of
any taxes. Other distributions received on the Stock may be distributed to
such holders of Receipts as provided in the Deposit Agreement.
16. Subscription Rights, Preferences or Privileges. If the Company
shall at any time offer to the record holders of the Stock any rights,
preferences or privileges to subscribe for or to purchase any securities or any
rights, preferences or privileges of any other nature, such rights, preferences
or privileges shall in each such instance, subject to the provisions of the
Deposit Agreement, be made available by the Depositary to the record holders of
Receipts in such manner as the Depositary may determine, either by the issue to
the record holders of Receipts entitled thereto of warrants representing such
rights, preferences or privileges or by such other method as may be approved by
the Depositary in its discretion with the approval of the Company provided,
however, that (a) if at the time of issue or offer of any such rights,
preferences or privileges the Depositary determines that it is not lawful or
(after consultation with the Company) not feasible to make such rights,
preferences or privileges available to holders of Receipts by the issue of
warrants or otherwise, or (b) if and to the extent so instructed by holders of
Receipts who do not desire to exercise such rights, preferences or privileges,
then the Depositary, in its discretion (with the approval of the Company, in
any case where the Depositary has determined that it is not feasible to make
such rights, preferences or privileges available) may, if applicable laws or
the terms of such rights, preferences or privileges permit such transfer, sell
such rights, preferences or privileges at public or private sale, at such place
or places and upon such terms as it may deem proper. The net proceeds of any
such sale shall, subject to the provisions of Paragraph 10 hereof, be
distributed by the Depositary to the record holders of Receipts entitled
thereto as in the case of a distribution received in cash.
If any other action (including the registration under the Securities
Act of 1933 of the securities to which any rights, preferences or privileges
relate) under the laws of any jurisdiction or any governmental or
administrative authorization, consent or permit is required in order for such
rights, preferences or privileges to be made available to holders of Receipts,
the Company will use its best efforts to take such action to obtain such
registration, authorization, consent or permit sufficiently in advance of the
expiration of such rights, preferences or privileges, to enable holders of
Receipts to exercise such rights, preferences or privileges. In no event shall
the Depositary make available to the holders of Receipts any right, preference
or privilege to subscribe for or to purchase any securities unless or until the
relevant registration statement shall have become effective, or unless the
offering and sale of such securities to such holders are exempt from
registration under the provisions of such Act.
17. Fixing of Record Date. Whenever any cash dividend or other cash
distribution shall become payable or any distribution other than cash shall be
made, or if rights, preferences or privileges shall at any time be offered,
with respect to the Stock, or whenever the Depositary shall receive notice of
(a) any meeting at which holders of Stock are entitled to vote or of which
holders of Stock are entitled to notice, or (b) any
election on the part of the Company to redeem any shares of Stock or to
exchange shares of Stock for Convertible Subordinated Debentures, the
Depositary shall in each such instance fix a record date (which shall be the
same date as the record date fixed by the Company with respect to the Stock)
for the determination of the holders of Receipts who shall be entitled to
receive such dividend, distribution, rights, preferences or privileges or the
net proceeds of the sale thereof, or to give instructions for the exercise of
voting rights at any such meeting, or who shall be entitled to notice of such
meeting, or whose Depositary Shares are to be redeemed or exchanged.
18. Voting Rights. Upon receipt of notice of any meeting at which
the holders of Stock are entitled to vote, the Depositary shall, as soon as
practicable thereafter, mail to the record holders of Receipts a notice which
shall contain (a) such information as is contained in such notice of meeting,
and (b) a statement that the holders of Receipts at the close of business on a
specified record date will be entitled, subject to any applicable provisions of
law and of the Articles of Organization of the Company or the Authorizing
Resolutions, to instruct the Depositary as to the exercise of the voting rights
pertaining to the amount of Stock represented by the Depositary Shares
evidenced by their respective Receipts, and a brief statement as to the manner
in which such instructions may be given. Upon the written request of a holder
of a Receipt on such record date, the Depositary shall endeavor insofar as
practicable to vote or cause to be voted the amount of Stock represented by
such Receipt in accordance with the instructions set forth in such request. In
the absence of specific instructions from the holder of a Receipt, the
Depositary will abstain from voting to the extent of the Stock represented by
the Depositary Shares evidenced by such Receipt.
19. Changes Affecting Deposited Securities. Upon any change in par
or stated value, split-up, consolidation or any other reclassification of the
Stock, or upon any recapitalization, reorganization, merger, amalgamation or
consolidation or lease or transfer of all or substantially all of the Company's
assets, the Depositary may in its discretion with the approval of, and shall
upon the instructions of, the Company, in such manner as the Depositary may
deem equitable, (a) make such adjustments in (i) the fraction of an interest
represented by one Depositary Share in one share of Stock, (ii) the ratio of
the redemption price per Depositary Share to the redemption price of a share of
Stock, and (iii) the exchange ratio for the exchange of Depositary Shares for
Convertible Subordinated Debentures upon the exchange of shares of Stock for
such Convertible Subordinated Debentures, in each case as may be necessary to
fully reflect the effects of such change in par or stated value, split-up,
consolidation or other reorganization, merger, amalgamation or such
consolidation or lease or transfer, and (b) treat any securities which shall be
received by the Depositary in exchange for or in conversion of or in respect of
the Stock as new deposited securities under the Deposit Agreement, and Receipts
then outstanding shall thenceforth represent the new deposited securities so
received in exchange for or in conversion of or in respect of such Stock. In
any such case the Depositary may in its discretion, with the approval of the
Company, execute and deliver additional Receipts, or may call for the surrender
of outstanding Receipts to be exchanged for new Receipts specifically
describing such new deposited securities. None of the provisions of this
Paragraph 19 shall apply to an exchange pursuant to Paragraph 6 hereof.
20. Reports; Inspection of Transfer Books. The Depositary will make
available to holders of Receipts, upon request of such holders, any reports and
communications received from the Company which are both (a) received by the
Depositary as the holder of the Stock and (b) made generally available to the
holders of such Stock by the Company. The Depositary will also send to record
holders of Receipts copies of such notices, reports and other financial
statements to the extent provided in the Deposit Agreement when furnished by
the Company. The Depositary will keep books for the transfer of Receipts,
which at all reasonable times will be open for inspection by the revord holders
of Receipts; provided, however, that such inspection shall be for a proper
purpose reasonably related to such person's interest as an owner of Depositary
Shares evidenced by the Receipts.
21. Liability of the Depositary, the Depositary's Agents or the
Company. Neither the Depositary nor any Depositary's Agent nor the Company
shall incur any liability to any holder of any Receipt if, by reason of any
provision of any present or future law or regulation of any governmental
authority, or, in the case of the Depositary or the Depositary's Agents, by
reason of any provision, present or future, of the Articles of Organization of
the Company or the Authorizing Resolutions, or by reason of any act of God or
war or other circumstance beyond the control of the relevant party, the
Depositary, any Depositary's Agent or the Company shall be prevented or
forbidden from doing or performing any act or thing which by the terms of the
Deposit Agreement provide shall be done or performed; nor shall the Depositary,
any Depositary's Agent or the Company incur any liability to any holder of a
Receipt by reason of any non-performance or delay, caused as aforesaid, in
performance of any act or thing which by the terms of the Deposit Agreement
provide shall or may be done or performed, or by reason of any exercise of, or
failure to exercise, any discretion provided for in the Deposit Agreement.
22. Obligations of the Depositary, the Depositary's Agents and the
Company. Neither the Depositary nor any Depositary's Agent nor the Company
assumes any obligation or shall be subject to any liability under the Deposit
Agreement to holders of Receipts other than that each of them agrees to use its
best judgment and good faith in the performance of such duties as are
specifically set forth in the Deposit Agreement.
Neither the Depositary nor any Depositary's Agent nor the Company will
be under any obligation to appear in, prosecute or defend any action, suit or
other proceeding in respect of the Stock, Depositary Shares or the Receipts,
which in its opinion may involve it in expense or liability, unless indemnity
satisfactory to it against all expense and liability be furnished as often as
may be required.
Neither the Depositary nor any Depositary's Agent nor the Company will
be liable for any action or failure to act by it in reliance upon the advice of
or information from legal counsel, accountants, any person presenting Stock for
deposit, any holder of a Receipt or any other person believed by it in good
faith to be competent to give such advice or information.
The Depositary will not be responsible for any failure to carry out
any instructions to vote any of the shares of Stock or for the manner or effect
of any such vote made, as long as any such action or failure to act is in good
faith.
The Company will indemnify the Depositary and any Depositary's Agent
against any liability arising out of acts performed or omitted in connection
with the Deposit Agreement or the Receipts, as the same may be amended,
modified or supplemented from time to time (a) by the Depositary or any
Registrar, or any of their respective agents (including Depositary's Agent),
except to the extent that liability results from negligence or bad faith, or
(b) by the Company or any of its agents.
The Depositary will indemnify the Company against any liability which
may arise out of acts performed or omitted by the Depositary or its Agents due
to negligence or bad faith.
The Depositary and the Depositary's Agents may own and deal in any
class of securities of the Company or its affiliates and in Receipts. The
Depositary may also be a depositary of the Company for any purpose, may loan
money to the Company and its affiliates, may act as trustee, transfer agent or
registrar of any of the securities of the Company or its affiliates and may
engage in any other business with or for the Company and its affiliates.
23. Resignation and Removal of Depositary. The Depositary may at any
time (a) resign by written notice of its election to do so delivered to the
Company, such resignation to take effect upon the appointment of a successor
Depositary and its acceptance of such appointment, or (b) be removed by the
Company effective upon the appointment of a successor depositary and its
acceptance of such appointment, all as provided in the Deposit Agreement.
24. Termination of Deposit Agreement. Whenever so directed by the
Company, the Depositary will terminate the Deposit Agreement by mailing notice
of such termination to the record holders of all Receipts outstanding at least
30 days prior to the date fixed in such notice for such termination. The
Depositary may likewise terminate the Deposit Agreement if at any time 60 days
shall have expired after the Depositary shall have delivered to the Company a
written notice of its election to resign and a successor Depositary shall not
have been appointed and accepted its appointment. If any Receipts remain
outstanding after the date of termination, the Depositary thereafter shall
discontinue all functions and be discharged from all obligations as provided in
the Deposit Agreement, except as specifically provided therein. At any time
after the expiration of two years from the date of termination, the Depositary
may sell the Stock or Convertible Subordinated Debentures then held by it at
public or private sale, at such place or places and upon such terms as it deems
proper and may thereafter hold the net proceeds of any such sale, together with
any other cash then held by it, without liability for interest, for the pro
rata benefit of the holders of Receipts which have not theretofore been
surrendered. After making such sale, the Depositary shall be discharged from
all obligations under the Deposit Agreement, except to account for such net
proceeds and other cash. Within 60 days after the first anniversary date of
such sale, the Depositary shall pay to the Company any such net proceeds which
shall not have been claimed by holders of Receipts surrendering their Receipts
therefor. After making such payment to the Company, the Depositary shall be
discharged from all obligations under the Deposit Agreement and the remaining
Receipt holders shall look to the Company for any such proceeds relating to
such Receipts.
Upon the termination of the Deposit Agreement, the Company shall be
discharged from all obligations thereunder except for its obligations to the
Depositary, any Depositary's Agent and any Registrar with respect to
indemnification, charges and expenses.
25. Governing Law. The Deposit Agreement and this Receipt and all
rights thereunder and hereunder and provisions thereof and hereof shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts.
This Receipt shall not be entitled to any benefits under the Deposit
Agreement or be valid or obligatory for any purpose unless this Receipt shall
have been executed manually by the Depositary or, if a Registrar for the
Receipts (other than the Depositary) shall have been appointed, by the
facsimile signature of a duly authorized officer of the Depositary and, if so
executed, shall have been countersigned manually by a duly authorized officer
of the Registrar.
Dated:
STATE STREET BANK & TRUST CO.
By: ___________________________
Authorized Signature
[Form of Notice of Conversion]
The undersigned holder of this Receipt for $ Depositary
Convertible Exchangeable Junior Preferred Shares (the "Depositary Shares")
hereby irrevocably exercises the option to convert whole shares of
the underlying $ Convertible Exchangeable Junior Preferred Stock (the
"Stock") represented by this Receipt into shares of Common Stock (and any other
applicable securities or property) of Perini Corporation in accordance with the
terms and conditions of the Stock including the Authorizing Resolutions in
respect thereof and further as provided in the Deposit Agreement dated as of
July , 1994 among Perini Corporation, State Street Bank & Trust Company, as
Depositary, and the holders from time to time of Receipts, referred to in this
Receipt, and directs that the securities deliverable upon the conversion be
registered in the name of and delivered, together with a check in payment for
any fractional share and any other property, to the undersigned unless a
different name has been indicated below. If securities are to be registered in
the name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto. If the number of shares of Stock
indicated above is less than the number of shares of such Stock on deposit in
respect of this Receipt, the undersigned directs that the Depositary issue to
the undersigned, unless a different name is indicated below, a new Receipt
evidencing the balance of the Depositary Shares not surrendered with
instructions for conversion of the underlying Stock.
Dated _________________________
Name __________________________
(Please Print Name and Address)
Signature _______________________________
Address _______________________________
NOTE: The above signature should correspond exactly with the name on the face
of this Receipt or with the name of assignee appearing in assignment form below.
If shares are to be registered in the name of a person other than the
holder, please print such person's name and address below:
Name ____________________________________
Address _________________________________
[Form of Assignment]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto of the Depositary Convertible
Exchangeable Junior Preferred Shares represented by the within Receipt and all
rights and interests represented thereby, and hereby irrevocably constitutes
and appoints attorney, to transfer the same
on the books of the within named Depositary, with full power of substitution in
the premises.
Dated: _______________________ Signature: __________________________________
NOTE: The above signature should correspond exactly with the name on the face
of this Receipt.
EXHIBIT 4(c)
PERINI CORPORATION
AND
STATE STREET BANK & TRUST CO.,
Trustee,
___________________
INDENTURE
Dated as of
,
___________________
$
% Convertible Subordinated Debentures Due 2019
<PAGE>
CROSS-REFERENCE SHEET
TIA Section Indenture Section
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(b) 7.08; 7.10; 12.02
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.05
(b) 12.03
(c) 12.03
313(a) 7.06
(b)(1) N.A.
(b)(2) 7.06
(c) 12.02
(d) 7.06
314(a) 4.02; 12.02
(b) N.A.
(c)(1) 12.04
(c)(2) 12.04
(c)(3) N.A.
(d) N.A.
(e) 12.05
(f) N.A.
315(a) 7.01(b)
(b) 7.05; 12.02
(c) 7.01(a)
(d) 7.01(c)
(e) 6.11
316(a)(last sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318(a) 12.01
_______________________
N.A. means not applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 Definitions and Incorporation by Reference
SECTION 1.01 Definitions
1.02 Other Definitions
1.03 Incorporation by Reference of Trust
Indenture Act
1.04 Rules of Construction
ARTICLE 2 The Securities
SECTION 2.01 Form and Dating
2.02 Execution and Authentication
2.03 Registrar, Paying Agent and
Conversion Agent
2.04 Paying Agent to Hold Money in Trust
2.05 Securityholder Lists
2.06 Transfer and Exchange
2.07 Replacement Securities
2.08 Outstanding Securities
2.09 Treasury Securities
2.10 Temporary Securities
2.11 Cancellation
2.12 Defaulted Interest
ARTICLE 3 Redemption
SECTION 3.01 Notices to Trustee
3.02 Selection of Securities to Be Redeemed
3.03 Notice of Redemption
3.04 Effect of Notice of Redemption
3.05 Deposit of Redemption Price
3.06 Securities Redeemed in Part
ARTICLE 4 Covenants
SECTION 4.01 Payment of Securities
4.02 SEC Reports
4.03 Certificate as to Defaults
ARTICLE 5 Successors
SECTION 5.01 When Corporation May Merge, etc.
ARTICLE 6 Defaults and Remedies
SECTION 6.01 Events of Default
6.02 Acceleration
6.03 Other Remedies
6.04 Waiver of Past Defaults
6.05 Control by Majority
6.06 Limitation on Suits
6.07 Rights of Holders to Receive Payment
6.08 Collection Suit by Trustee
6.09 Trustee May File Proofs of Claim
6.10 Priorities
6.11 Undertaking for Costs
ARTICLE 7 Trustee
SECTION 7.01 Duties of Trustee
7.02 Rights of Trustee
7.03 Individual Rights of Trustee, etc.
7.04 Trustee's Disclaimer
7.05 Notice of Defaults
7.06 Reports by Trustee to Holders
7.07 Compensation and Indemnity
7.08 Replacement of Trustee
7.09 Successor Trustee by Merger, etc.
7.10 Eligibility; Disqualification
7.11 Preferential Collection of Claims
Against Corporations
ARTICLE 8 Discharge of Indenture
SECTION 8.01 Termination of Company's Obligations
8.02 Application of Trust Money
8.03 Repayment to Corporation
8.04 Reinstatement
ARTICLE 9 Amendments, Supplements and Waivers
SECTION 9.01 Without Consent of Holders
9.02 With Consent of Holders
9.03 Compliance with Trust Indenture Act
9.04 Revocation and Effect of Consents
9.05 Notation on or Exchange of Securities
9.06 Trustee Protected
ARTICLE 10 Conversion
SECTION 10.01 Conversion Privilege
10.02 Conversion Procedure
10.03 Fractional Shares
10.04 Taxes on Conversion
10.05 Corporation to Provide Stock
10.06 Adjustment for Change in Capital Stock
10.07 Adjustment for Rights Issue
10.08 Adjustment for Other Distributions
10.09 Current Market Price
10.10 When Adjustment May Be Deferred
10.11 When No Adjustment Required
10.12 Notice of Adjustment
10.13 Voluntary Reduction
10.14 Notice of Certain Transactions
10.15 Reduction of Conversion Price Below
Par Value of Common Stock
10.16 Reorganization of Corporation
10.17 Corporation Determination Final
10.18 Trustee's Disclaimer
ARTICLE 11 Subordination
SECTION 11.01 Agreement to Subordinate
11.02 Certain Definitions
11.03 Liquidation; Dissolution; Bankruptcy
11.04 Default on Senior Debt
11.05 Acceleration of Securities
11.06 When Distribution Must Be Paid Over
11.07 Notice by Corporation
11.08 Subrogation
11.09 Relative Rights
11.10 Subordination May Not Be Impaired by
Corporation
11.11 Distribution or Notice to Representative
11.12 Rights of Trustee and Paying Agent
11.13 Officers' Certificate
11.14 Trustee Owes No Fiduciary Duty to Holders
of Senior Debt
ARTICLE 12 Miscellaneous
SECTION 12.01 Trust Indenture Act Controls
12.02 Notices
12.03 Communication by Holders with Other
Holders
12.04 Certificate and Opinion as to Conditions
Precedent
12.05 Statements Required in Certificate or
Opinion
12.06 Rules by Trustee, Paying Agent,
Registrar
12.07 Legal Holidays
12.08 No Recourse Against Others
12.09 Duplicate Originals
12.10 Variable Provisions
12.11 Governing Law
Signatures
Exhibit A-Form of Security
<PAGE>
INDENTURE dated as of , , between PERINI CORPORATION, a
Massachusetts corporation (the "Corporation"), and STATE STREET BANK & TRUST
CO., [a national banking association organized and existing under the laws of
the United States of America,] as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Corporation's %
Convertible Subordinated Debentures Due 2019 ("Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.1 Definitions.
"Affiliate" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Corporation.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Board of Directors" means the Board of Directors of the Corporation
or the Executive Committee of the Board.
"Corporation" means the party named as such in this Indenture until a
successor replaces it and after that means the successor.
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Holder" or "Securityholder" means a person in whose name a Security
is registered on the Registrar's books.
"Indenture" means this Indenture as amended from time to time.
"Officers' Certificate" means a certificate signed by two Officers,
one of whom must be the President, the Treasurer or a Vice President of the
Corporation.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to
the Corporation or the Trustee.
["$ Preferred Stock"]
"$21.25 Preferred Stock" means the $21.25 Convertible Exchangeable
Preferred Stock, par value $1.00 per share, of the Corporation.
"principal" of a debt security means the principal of the security
plus the premium, if any, on the security.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Securities described above issued under this
Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
{sections} 77aaa-77bbbb)
as in effect on the date of this Indenture.
"Trustee" means the party named as such above until a successor
replaces it and after that means the successor.
"Trust Officer" means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
SECTION 1.2 Other Definitions.
Defined in
Term Section
"Bankruptcy Law" 6.01
"Common Stock" 10.01
"Conversion Agent" 2.03
"Custodian" 6.01
"Event of Default" 6.01
"Legal Holiday" 12.07
"Officer" 12.10
"Paying Agent" 2.03
"Quoted Price" 12.10
"Registrar" 2.03
"Representative" 11.02
"Senior Debt" 11.02
"U.S. Government Obligations" 8.01
SECTION 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Corporation.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the
TIA have the meanings assigned to them.
SECTION 1.4 Rules of Construction. Unless the context otherwise
requires,
(1) a term has the meaning assigned to it,
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with generally accepted accounting principles,
(3) "or" is not exclusive,
(4) words in the singular include the plural, and in the plural include
the singular, and
(5) provisions apply to successive events and transactions.
ARTICLE 2
The Securities
SECTION 2.1 Form and Dating. The Securities will be substantially in
the form of Exhibit A, which is part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Security will be dated the date of its authentication.
SECTION 2.2 Execution and Authentication. Two Officers will sign the
Securities for the Corporation by manual or facsimile signature. The
Corporation's seal will be impressed, affixed, imprinted or reproduced on the
Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security will
nevertheless be valid.
A Security will not be valid until authenticated by the manual
signature of the Trustee. The signature will be conclusive evidence that the
Security has been authenticated under this Indenture.
The Trustee will authenticate Securities for original issue on a
written order of the Corporation signed by two Officers up to the total
principal amount stated in paragraph 4 of Exhibit A. The total principal
amount of Securities outstanding at any time may not exceed that amount except
as provided in Section 2.07 (Replacement Securities).
The Trustee may appoint an authenticating agent acceptable to the
Corporation to authenticate Securities. An authenticating agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
Agent. An authenticating agent has the same rights as an Agent to deal with
the Corporation or an Affiliate.
SECTION 2.3 Registrar, Paying Agent and Conversion Agent. The
Corporation shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency where Securities may be presented for payment ("Paying Agent") and an
office where Securities may be presented for conversion ("Conversion Agent").
The Registrar shall keep a register of the Securities and of their transfer and
exchange. The Corporation may appoint one or more co-registrars, one or more
additional paying agents and one or more additional conversion agents. The
term "Paying Agent" includes any additional paying agent, and the term
"Conversion Agent" includes any additional conversion agent. If the
Corporation fails to maintain a Registrar, Paying Agent or Conversion Agent,
the Trustee will act as such.
SECTION 2.4 Paying Agent to Hold Money in Trust. The Corporation
will require each Paying Agent other than the Trustee to agree in writing that
the Paying Agent will hold in trust for the benefit of Securityholders or the
Trustee all money held by the Paying Agent for the payment of principal of or
interest on the Securities and will notify the Trustee of any default by the
Corporation in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
If the Corporation acts as Paying Agent, it will segregate and hold as a
separate trust fund all money held by it as Paying Agent. The Corporation at
any time may require a Paying Agent to pay all money held by it to the Trustee.
On payment over to the Trustee, the Paying Agent will have no further
liability for the money.
SECTION 2.5 Securityholder Lists. The Trustee will preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Corporation will furnish to the Trustee on or before each
interest payment date and at such other times as the Trustee may request in
writing a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Securityholders.
SECTION 2.6 Transfer and Exchange. Where Securities are presented to
the Registrar or a co-registrar with a request to register a transfer or to
exchange them for an equal principal amount of Securities of other
denominations, the Registrar will register the transfer or make the exchange as
requested. To permit registrations of transfers and exchanges, the Trustee
will authenticate Securities at the Registrar's request. The Corporation may
charge for its reasonable expenses incurred in connection with any registration
of transfer or exchange but not for any exchange pursuant to Section 2.10
(Temporary Securities), 3.06 (Securities Redeemed in Part), 9.05 (Notation on
or Exchange of Securities) or 10.02 (Conversion Procedure).
SECTION 2.7 Replacement Securities. If the Holder of a Security
claims that the Security has been lost, destroyed or wrongfully taken, the
Corporation will issue and the Trustee will authenticate a replacement
Security. If required by the Trustee or the Corporation, the Holder must
furnish an indemnity bond, sufficient in the judgment of both the Trustee and
the Corporation, to protect the Corporation, the Trustee, any Agent or any
authenticating agent from any loss that any of them may suffer if a Security is
replaced. The Corporation may charge for its reasonable expenses incurred in
replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.8 Outstanding Securities. The Securities outstanding at
any time are all Securities authenticated by the Trustee except for those
cancelled by it, those delivered to it for cancellation and those described in
this Section as not outstanding.
If a Security is replaced pursuant to the foregoing Section, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If Securities are considered paid under Section 4.01 (Payment of
Securities), they cease to be outstanding and Interest on them ceases to accrue.
A Security does not cease to be outstanding because the Corporation or
an Affiliate holds the Security.
SECTION 2.9 Treasury Securities. In determining whether the Holders
of the required principal amount of Securities have concurred in any direction,
waiver or consent, Securities owned by the Company or an Affiliate shall be
disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded.
SECTION 2.10 Temporary Securities. Until definitive Securities are
ready for delivery, the Corporation may prepare and the Trustee will
authenticate temporary Securities. Temporary Securities will be substantially
in the form of definitive Securities but may have variations that the
Corporation considers appropriate for temporary Securities. Without
unreasonable delay, the Corporation will prepare and the Trustee will
authenticate definitive Securities in exchange for temporary Securities.
SECTION 2.11 Cancellation. The Corporation at any time may deliver
Securities to the Trustee for cancellation. The Registrar, Paying Agent and
Conversion Agent will forward to the Trustee any Securities surrendered to them
for registration of transfer, exchange or payment. The Trustee will cancel all
Securities surrendered for registration of transfer, exchange, payment,
conversion or cancellation and will dispose of cancelled Securities as the
Corporation directs. The Corporation may not issue new Securities to replace
Securities it has paid or delivered to the Trustee for cancellation or that any
Securityholder has converted pursuant to this Indenture.
SECTION 2.12 Defaulted Interest. If the Corporation defaults in a
payment of interest on any Securities, it will pay the defaulted interest in
any lawful manner. It may pay the defaulted interest, plus any interest
payable on the defaulted interest, to the persons who are Securityholders on a
subsequent special record date. The Corporation will fix the special record
date and payment date. At least 15 days before the record date, the
Corporation will mail to Securityholders a notice that states the record date,
the payment date, and the amount of defaulted interest to be paid.
ARTICLE 3
Redemption
SECTION 3.1 Notices to Trustee. If the Corporation wants to redeem
Securities pursuant to paragraph 5 (Optional Redemption) of the Securities, it
will notify the Trustee in writing of the redemption date and the principal
amount of Securities to be redeemed.
If the Corporation wants to reduce the principal amount of Securities
to be redeemed pursuant to paragraph 6 (Mandatory Redemption) of the
Securities, it will notify the Trustee in writing of the amount of the
reduction and the basis for it. If the Corporation wants to credit against any
such redemption Securities it has not previously delivered to the Trustee for
cancellation, it must deliver the Securities with the notice.
The Corporation will give the notice provided for in this Section at
least 50 days before the redemption date.
SECTION 3.2 Selection of Securities to Be Redeemed. If less than all
the Securities are to be redeemed, the Trustee will select the Securities to
be redeemed pro rata or by lot or in such manner as it shall deem appropriate
or fair. The Trustee will make the selection from outstanding Securities not
previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities that have a denomination larger than
$25. Securities and portions of them it selects will be in amounts of $25 or
an integral multiple of $25. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called
for redemption.
SECTION 3.3 Notice of Redemption. At least 30 days but not more than
60 days before a redemption date, the Corporation will mail a notice of
redemption to each Holder whose Securities are to be redeemed.
The notice will identify the Securities to be redeemed and will state
(1) the redemption date,
(2) the redemption price,
(3) the then applicable conversion price,
(4) the name and address of the Paying Agent and the Conversion Agent,
(5) that Securities called for redemption may be converted at any time
before the close of business on the redemption date,
(6) that Holders who want to convert the Securities must satisfy the
requirements in paragraph 8 of the Securities,
(7) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price, and
(8) that interest on Securities called for redemption ceases to accrue on
and after the redemption date.
At the Corporation's written request, the Trustee will give the notice
of redemption in the Corporation's name and at its expense.
SECTION 3.4 Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable
on the redemption date and at the redemption price stated in the notice.
SECTION 3.5 Deposit of Redemption Price. At least one business day
before the redemption date, the Corporation will deposit with the Paying Agent
money sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on the redemption date. The Paying Agent will return
to the Corporation any money not required for that purpose because of
conversion of Securities.
SECTION 3.6 Securities Redeemed in Part. On surrender of a Security
that is redeemed in part, the Trustee will authenticate for the Holder a new
Security equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE 4
Covenants
SECTION 4.1 Payment of Securities. The Corporation will pay the
principal of and interest on the Securities on the dates and in the manner
provided in the Securities. Principal and interest will be considered paid on
the date due if the Paying Agent holds on that date money in immediately
available funds sufficient to pay all principal and interest then due.
The Corporation will pay interest on overdue principal at the rate
borne by the Securities, and it will pay interest on overdue installments of
interest at the same rate to the extent lawful.
SECTION 4.2 SEC Reports. The Corporation will file with the Trustee
within 15 days after it files them with the SEC copies of the annual reports
and of the information, documents and other reports (or copies of such portions
of any of the foregoing as the SEC may by rules and regulations prescribe) that
the Corporation is required to file with the SEC pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934. The Corporation also will comply
with the other provisions of TIA {section} 314(a).
SECTION 4.3 Certificate as to Defaults. The Corporation will deliver
to the Trustee within 120 days after the end of each fiscal year of the
Corporation an Officers' Certificate stating whether or not the signers know of
any Default that occurred during the fiscal year. If they do know of such a
default, the certificate will describe the Default and its status. The
certificate need not comply with Section 12.05. See Section 12.10.
<PAGE>
ARTICLE 5
Successors
SECTION 5.1 When Corporation May Merge, etc. The Corporation will
not consolidate with or merge into, or transfer or lease all or substantially
all of its assets to, any other entity unless
(1) the other entity assumes by supplemental indenture all the obligations
of the Corporation under the Securities and this Indenture, except that it need
not assume the obligations of the Corporation as to conversion of Securities if
pursuant to Section 10.15 (Reorganization of Corporation) the Corporation or
another person enters into a supplemental indenture obligating it to deliver
securities, cash or other assets on conversion of Securities,
(2) immediately after the transaction no Default exists, and
(3) the Corporation delivers to the Trustee an Officer's Certificate and
an Opinion of Counsel each stating that such consolidation, merger or transfer
and such supplemental indenture comply with this Indenture.
The surviving transferee or lessee entity will be the successor
Corporation, and the obligations of the predecessor Corporation in the case of
a transfer or lease will be terminated.
ARTICLE 6
Defaults and Remedies
SECTION 6.1 Events of Default. An "Event of Default" occurs if
(1) the Corporation defaults in the payment of interest on any Security
when the interest becomes due and payable and the default continues for 30 days,
(2) the Corporation defaults in the payment of the principal of any
Security when the principal becomes due and payable at maturity, upon
redemption or otherwise,
(3) the Corporation fails to comply with any of its other agreements in
the Securities or this Indenture and the Default continues for the period and
after the notice specified below in this Section,
(4) the Corporation pursuant to or within the meaning of any Bankruptcy
Law,
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property, or
(D) makes a general assignment for the benefit of its creditors or
(5) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that
(A) is for relief against the Corporation in an involuntary case,
(B) appoints a Custodian of the Corporation or for any substantial part of
its property or
(C) orders the winding up or liquidation of the Corporation,
and the order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, United States Code or any
similar Federal or State law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar
official under any Bankruptcy Law.
A Default under clause (3) is not an Event of Default until the
Trustee or the Holders of at least 25% in principal amount of the Securities
notify the Corporation of the default and the Corporation does not cure the
default within 60 days after receipt of the notice. The notice must specify
the Default, demand that it be remedied and state that the notice is a "Notice
of Default."
SECTION 6.2 Acceleration. If an Event of Default occurs and is
continuing, the Trustee by notice to the Corporation or the Holders of at least
25% in principal amount of the Securities by notice to the Corporation and the
Trustee may declare the principal of and accrued interest on all the Securities
to be due and payable. Upon a declaration the principal and interest will be
due and payable immediately. The Holders of a majority in principal amount of
the Securities by notice to the Trustee may rescind an acceleration and its
consequences if all existing Events of Default have been cured or waived
(except nonpayment of principal or interest that has become due solely because
of the acceleration) and if the rescission would not conflict with any judgment
or decree.
SECTION 6.3 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing on an Event of Default will not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All available
remedies are cumulative to the extent permitted by law.
SECTION 6.4 Waiver of Past Defaults. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except a default in the payment of the
principal or interest on any Securities or a Default under Article 10.
SECTION 6.5 Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture, is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability.
SECTION 6.6 Limitation on Suits. A Securityholder may pursue a
remedy with respect to this Indenture or the Securities only if
(1) the Holder gives to the Trustee notice of a continuing Event of
Default,
(2) the Holders of at least 25% in principal amount of the Securities make
a request to the Trustee to pursue the remedy,
(3) such Holder or Holders offer to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expense,
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity, and
(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of the outstanding Securities.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over the other
Securityholder.
SECTION 6.7 Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder of a Security to
receive payment of principal of and interest on the Security on or after the
respective due dates expressed in the Security, or to bring suit for the
enforcement of any such payment on or after such respective dates, will not be
impaired or affected without the consent of the Holder.
Notwithstanding any other provision of this Indenture, the right of
any holder of a Security to bring suit for the enforcement of the right to
convert the Security will not be impaired or affected without the consent of
the Holder.
SECTION 6.8 Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Corporation for the whole amount of principal and interest remaining unpaid.
SECTION 6.9 Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Corporation, its creditors
or its property.
SECTION 6.10 Priorities. If the Trustee collects any money pursuant
to this Article, it will pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07 (Compensation
and Indemnity).
Second: to holders of Senior Debt to the extent required by Article 11.
Third: to Securityholders for amounts due and unpaid on the Securities
for principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Securities for principal
and interest, respectively.
Fourth: to the Corporation.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section.
SECTION 6.11 Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 (Rights of Holders to
Receive Payment) or a suit by Holders of more than 10% in principal amount of
the Securities.
ARTICLE 7
Trustee
SECTION 7.1 Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee will exercise its rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default,
(1) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others, and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, on certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee will examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that
(1) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01,
(2) the Trustee will not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts, and
(3) the Trustee will not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received
by it pursuant to Section 6.05 (Control by Majority).
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee will not be liable for interest on any money received
by it except as the Trustee may agree with the Corporation. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.2 Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee will not be
liable for any action it takes or omits to take in good faith in reliance on an
Officers' Certificate or Opinion.
(c) The Trustee may act through agents and will not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee will not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within its rights or
powers.
SECTION 7.3 Individual Rights of Trustee, etc. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Corporation or an Affiliate with the same
rights it would have if it were not Trustee. Any Agent may do the same with
like rights. However, the Trustee must comply with Sections 7.10 (Eligibility;
Disqualification) and 7.11 (Preferential Collection of Claims Against
Corporations).
SECTION 7.4 Trustee's Disclaimer. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it will not be accountable for the Corporation's use of the
proceeds from the Securities, and it will not be responsible for any statement
in the Securities other than its certificate of authentication.
SECTION 7.5 Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee will mail to
Securityholders a notice of the Default within 90 days after it occurs. Except
in the case of a Default in payment on any Security, the Trustee may withhold
the notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of such
Securityholders. Except for the Events of Default listed in Section 6.01(1)
and (2), the Trustee shall not be deemed to have knowledge of a Default until
it has been notified thereof in writing.
SECTION 7.6 Reports by Trustee to Holders. Within 60 days after the
reporting date stated in Section 12.10, the Trustee will mail to each
Securityholder a brief report dated as of such reporting date that complies
with TIA {section} 313(a). The Trustee also will comply with TIA
{section} 313(b)(2).
A copy of each report at the time of its mailing to Securityholders
will be filed with the SEC and each stock exchange on which the Securities are
listed. The Corporation will notify the Trustee in writing when the Securities
are listed on any stock exchange.
SECTION 7.7 Compensation and Indemnity. The Corporation will pay to
the Trustee from time to time reasonable compensation for its services. The
Corporation will reimburse the Trustee on request for all reasonable
out-of-pocket expenses incurred by it. Such expenses will include the
reasonable compensation and expenses of the Trustee's agents and counsel.
The Corporation will indemnify the Trustee against any loss, liability
or expense (including attorney's fees) incurred by it in connection with the
acceptance or administration of this Indenture and its duties under it. The
Trustee will notify the Corporation promptly of any claim for which it may seek
indemnity. The Corporation will defend the claim and the Trustee will
cooperate in the defense. The Trustee may have separate counsel and the
Corporation will pay the reasonable fees and expenses of such counsel. The
Corporation need not pay for any settlement made without its consent. The
Corporation need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through negligence or bad faith.
To secure the Corporation's payment obligations in this Section, the
Trustee will have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal of and
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.8 Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee will become effective only on
the successor Trustee's acceptance of appointment as provided in this Section.
The Trustee may resign by so notifying the Corporation. The Holders
of a majority in principal amount of the Securities may remove the Trustee by
so notifying the removed Trustee and the Corporation. The Corporation may
remove the Trustee if
(1) the Trustee fails to comply with Section 7.10 (Eligibility;
Disqualification),
(2) the Trustee is adjudged a bankrupt or an insolvent,
(3) a receiver or other public officer takes charge of the Trustee or
its property or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of trustee for any reason, the Corporation shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Corporation.
A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Corporation. Immediately after
that, the retiring Trustee will transfer all property held by it as Trustee,
the resignation or removal of the retiring Trustee will then become effective,
and the successor Trustee will have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee will mail notice of its
succession to each Holder of the Securities.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Corporation
or the Holders of at least 10% in principal amount of the Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10 (Eligibility,
Disqualification), any Securityholder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
SECTION 7.9 Successor Trustee by Merger, etc. If the Trustee
consolidates with, merges or converts into or transfers all or substantially
all its corporate trust assets to another corporation, the successor
corporation without any further act will be the successor Trustee.
SECTION 7.10 Eligibility; Disqualification. This Indenture will
always have a Trustee that satisfies the requirements of
TIA {section} 310(a)(1). Such Trustee must have a combined capital and
surplus of at least $25,000,000 as set forth in its most recent published
annual report of condition. Such Trustee will comply with TIA {section} 310(b),
including the optional provision permitted by the second sentence of
TIA {section} 310(b)(9).
SECTION 7.11 Preferential Collection of Claims Against Corporations.
The Trustee is subject to TIA {section} 311(a), excluding any creditor
relationship listed in TIA {section} 311(b). A Trustee who has resigned or
been removed is subject to TIA {section} 311(a) to the extent indicated.
ARTICLE 8
Discharge of Indenture
SECTION 8.1 Termination of Company's Obligations. The Company may
terminate all its obligations under this Indenture effective on the 91st day
following the Company's irrevocable deposit in trust with the Trustee of money
or U.S. Government Obligations sufficient to pay principal and interest on the
Securities to their maturity or, if arrangements satisfactory to the Trustee
for the giving of notice for redemption have been made, to their redemption
date, if the following conditions are satisfied:
(1) Article 11 permits such deposit and termination.
(2) If the Securities are listed on a stock exchange, the Trustee has
received an Opinion of Counsel that such deposit and termination would not
cause the Securities to be delisted.
(3) The Trustee has received an Opinion of Counsel that
Securityholders will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit and termination, accompanied by a ruling
to that effect of the Internal Revenue Service.
(4) The Trustee has received an Opinion of Counsel that such deposit
will not result in the creating of an investment company under the Investment
Company Act of 1940.
(5) No Default or Event of Default under Section 6.01(4) or 6.01(5)
exists at any time from the date of the deposit until such 91st day.
(6) The Trustee has received an Officers' Certificate and Opinion
complying with Section 12.04 relating to such termination.
However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06,
2.07, 7.07, 7.08 and 8.03, and in Article 10, will survive until the securities
are no longer outstanding. After that, the obligations in Sections 7.07 and
8.03 will survive. After a deposit, the Trustee on request will acknowledge in
writing the discharge of the Company's obligations under this Indenture except
for those surviving obligations specified above.
In order to have money available on a payment date to pay principal or
interest on the Securities, the U.S. Government Obligations must be payable as
to principal or interest on or before such payment date in such amounts as will
provide the necessary money. U.S. Government Obligations may not be callable
at the issuer's option.
"U.S. Government Obligations" means direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged.
SECTION 8.2 Application of Trust Money. The Trustee will hold in
trust money or U.S. Government Obligations deposited with it pursuant to
Section 8.01. It will apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities. Money
and obligations so held in trust are not subject to Article 11 or to the claim
of the Trustee under Section 7.07.
SECTION 8.3 Repayment to Corporation. The Trustee and the Paying
Agent will promptly pay or deliver to the Corporation on request any excess
money or securities held by them at any time. The Trustee and the Paying Agent
will pay to the Corporation on request any money held by them for the payment
of principal or interest that remains unclaimed for two years. Securityholders
entitled to the money must look to the Corporation for payment as general
creditors unless an applicable abandoned property law designates another person.
SECTION 8.4 Reinstatement. If the Trustee is unable to apply any
money or U.S. Government Obligations in accordance with Section 8.01 by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Corporation's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.01 until such time as the Trustee is permitted to apply
all such money or U.S. Government Obligations in accordance with Section 8.01;
provided, however, principal of any Securities because of the reinstatement of
their obligations, the Corporation shall be subrogated to the rights of the
Holders of such Securities to receive such payment from the money or U.S.
Government Obligations held by the Trustee.
ARTICLE 9
Amendments, Supplements and Waivers
SECTION 9.1 Without Consent of Holders. The Corporation and the
Trustee may amend this Indenture or the Securities without the consent of any
Securityholder
(1) to cure any ambiguity, defect or inconsistency,
(2) to comply with Section 5.01 (When Corporation May Merge, etc.),
(3) to provide for uncertificated Securities in addition to
certificated Securities or
(4) to make any change that does not adversely affect the rights of
any Securityholder.
SECTION 9.2 With Consent of Holders. The Corporation and the Trustee
may amend this Indenture or the Securities with the written consent of the
Holders of at least 66-2/3% in principal amount of the Securities. However,
without the consent of each Securityholder affected, an amendment under this
Section may not
(1) reduce the amount of Securities whose Holders must consent to an
amendment,
(2) reduce the rate of or change the time for payment of interest on
any Security,
(3) reduce the principal or extend the maturity of any Security at
final maturity or upon any mandatory redemption,
(4) make any Security payable in money other than that stated in the
Security,
(5) make any change that adversely affects the right to convert any
Security,
(6) make any change in Section 6.04 (Waiver of Past Defaults), 6.07
(Rights of Holders to Receive Payment) or this sentence or
(7) make any change in Article 11 that adversely affects the rights
of any Securityholders.
An amendment under this Section may not make any change that adversely
affects the rights under Article 11 of any holder of an issue of Senior Debt
unless the holders of the issue pursuant to its terms consent to the change.
After an amendment under this Section becomes effective, the Company
will mail to Securityholders a notice briefly describing the amendment.
SECTION 9.3 Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Securities will be set forth in a supplemental indenture
that complies with the TIA as then in effect.
SECTION 9.4 Revocation and Effect of Consents. Until an amendment or
waiver becomes effective, a consent to it by a Holder of a Security is a
continuing consent by the Holder and every subsequent Holder of that Security
or portion of a Security that evidences the same debt as the consenting
Holder's Security, even if notation of the consent is not made on any Security.
However, any such Holder or subsequent Holder may revoke the consent as to his
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. An
amendment or waiver becomes effective in accordance with its terms and
thereafter binds every Securityholder.
SECTION 9.5 Notation on or Exchange of Securities. The Trustee may
place an appropriate notation about an amendment or waiver on any Security
thereafter authenticated. The Corporation in exchange for all Securities may
issue and the Trustee will authenticate new Securities that reflect the
amendment or waiver.
SECTION 9.6 Trustee Protected. The Trustee need not sign any
supplemental indenture that adversely affects its rights.
ARTICLE 10
Conversion
SECTION 10.1 Conversion Privilege. A Holder of a Security may
convert it into Common Stock at any time during the period stated in paragraph
8 of the Securities. The number of shares issuable upon conversion of a
Security is determined as follows: Divide the principal amount to be converted
by the conversion price in effect on the conversion date. Round the result to
the nearest 1/100th of a share.
The initial conversion price is stated in paragraph 8 of the
Securities. The conversion price is subject to adjustment.
A Holder may convert a portion of a Security if the portion is $25 or
a whole multiple of $25. Provisions of this Indenture that apply to conversion
of all of a Security also apply to conversion of a portion of it.
"Common Stock" means Common Stock of the Corporation as it exists on
the date of this Indenture as originally signed.
SECTION 10.2 Conversion Procedure. To convert a Security a Holder
must satisfy the requirements in paragraph 8 of the Securities. The date on
which the Holder satisfies all those requirements is the conversion date. As
soon as practical, the Corporation will deliver through the Conversion Agent a
certificate for the number of full shares of Common Stock issuable upon the
conversion and a check for any fractional share. The person in whose name the
certificate is registered will be treated as a stockholder of record on and
after the conversion date.
No payment or adjustment will be made for accrued interest on a
converted Security.
If a Holder converts more than one Security at the same time, the
number of full shares issuable upon the conversion will be based on the total
principal amount of the Securities converted.
On surrender of a Security that is converted in part, the Trustee will
authenticate for the Holder a new Security equal in principal amount to the
unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a Legal
Holiday in a place where a Conversion Agent is located, the Security may be
surrendered to that Conversion Agent on the next succeeding day that is not a
Legal Holiday.
SECTION 10.3 Fractional Shares. The Corporation will not issue a
fractional share of Common Stock on conversion of a Security. Instead the
Corporation will deliver its check for the current market value of the
fractional share. The current market value of a fraction of a share is
determined as follows: Multiply the current market price of a full share by
the fraction. Round the result to the nearest cent.
The current market price of a share of Common Stock is the Quoted
Price of the Common Stock on the last trading day before the conversion date.
In the absence of such a quotation, the Board of Directors will determine, in
good faith evidenced by a resolution, the current market price on the basis of
such quotations as it considers appropriate.
SECTION 10.4 Taxes on Conversion. If a Holder of a Security converts
it, the Corporation shall pay any documentary, stamp or similar issue or
transfer tax due on the issue of shares of Common Stock on the conversion.
However, the Holder shall pay any such tax which is due because the shares are
issued in a name other than the Holder's name.
SECTION 10.5 Corporation to Provide Stock. The Corporation will
reserve out of its authorized but unissued Common Stock or its Common Stock
held in treasury enough shares of Common Stock to permit the conversion of the
Securities.
All shares of Common Stock which may be issued on conversion of the
Securities will be fully paid and non-assessable.
The Corporation will endeavor to comply with all securities laws
regulating the offer and delivery of shares of Common Stock on conversion of
Securities and will endeavor to list such shares on each national securities
exchange on which the Common Stock is listed.
SECTION 10.6 Adjustment for Change in Capital Stock. If the
Corporation
(1) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock,
<PAGE>
(2) subdivides its outstanding shares of Common Stock into a greater
number of shares,
(3) combines its outstanding shares of Common Stock into a smaller
number of shares,
(4) makes a distribution on its Common Stock in shares of its capital
stock other than Common Stock,or
(5) issues by reclassification of its Common Stock any shares of its
capital stock,
then the conversion privilege and the conversion price in effect immediately
before such action will be adjusted so that the Holder of a Security thereafter
converted may receive the number of shares of capital stock of the Corporation
which the Holder would have owned immediately following such action if the
Holder had converted the Security immediately before the record date (or, if no
record date, the effective date) for such action.
The adjustment will become effective immediately after the record date
in the case of a dividend or distribution and immediately after the effective
date in the case of a subdivision, combination or reclassification.
If after an adjustment a Holder of a Security upon conversion of it
may receive shares of two or more classes of capital stock of the Corporation,
the Corporation shall determine the allocation of the adjusted conversion price
between the classes of capital stock. After such allocation, the conversion
privilege and the conversion price of each class of capital stock shall
thereafter be subject to adjustment on terms comparable to those applicable to
Common Stock contained in this Article.
SECTION 10.7 Adjustment for Rights Issue. If the Corporation
distributes any rights or warrants to all holders of its Common Stock entitling
them for a period expiring within 60 days after the record date mentioned below
to purchase shares of Common Stock at a price per share less than the current
market price per share on that record date, the conversion price shall be
adjusted in accordance with the following formula:
O + N x P
-----
C1 = C x M
---------------
O + N
where
C1 = the adjusted conversion price.
C = the current conversion price.
O = the number of shares of Common Stock outstanding on the record date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
M = the current market price per share of Common Stock on the record date.
The adjustment will become effective immediately after the record date
for the determination of stockholders entitled to receive the rights or
warrants. Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights or warrants are not so issued
or to the extent that such rights and warrants are not so exercised prior to
the expiration thereof, the conversation price shall again be adjusted to be
the conversion price which would then be in effect if such record date had not
been fixed.
SECTION 10.8 Adjustment for Other Distributions. If the Corporation
distributes to the holders of its Common Stock any of its assets or debt
securities or any rights or warrants to purchase securities of the Corporation,
the conversion price will be adjusted in accordance with the formula:
M - F
-----
C1 = C x M
where
C1 = the adjusted conversion price.
C = the current conversion price.
M = the current market price per share of Common Stock on the record date
mentioned below.
F = the fair market value on the record date of the assets, securities,
rights or warrants applicable to one share of Common Stock. The Corporation
will determine the fair market value.
The adjustment will become effective immediately after the record date
for the determination of stockholders entitled to receive the distribution.
Such adjustment shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the conversion
price shall again be adjusted to be the conversion price which would then be in
effect if such record date had not been fixed.
This Section does not apply to cash dividends or cash distributions
paid out of earnings or surplus as shown on the books of the Corporation.
Also, this Section does not apply to rights or warrants referred to in the
foregoing Section.
SECTION 10.9 Current Market Price. In the foregoing two Sections the
current market price per share of Common Stock on any date is the average of
the Quoted Prices of the Common Stock, each day, for 30 consecutive trading
days commencing 45 trading days before the date in question. In the absence of
one or more such quotations, the Board of Directors will determine, in good
faith evidenced by a resolution, the current market price on the basis of such
quotations as it considers appropriate.
SECTION 10.10 When Adjustment May Be Deferred. No adjustment in the
conversion price need be made unless the adjustment would require an increase
or decrease of at least 1% in the conversion price; but in such case any
adjustment that would otherwise be required then to be made shall be carried
forward and shall be made at the time of and together with the next subsequent
adjustment. All calculations under this Article will be made to the nearest
cent or to the nearest 1/100th of a share, as the case may be.
SECTION 10.11 When No Adjustment Required. No adjustment need be
made for a transaction referred to in Section 10.06, 10.07 or 10.08 if
Securityholders are to participate in the transaction on a basis and with
notice that the Board of Directors determines to be fair and appropriate in
light of the basis and notice on which holders of Common Stock participate in
the transaction.
No adjustment on account of dividends accumulated or in arrears upon
shares of Common Stock, shall be made in connection with any conversion, except
as may otherwise be provided at the discretion of the Board of Directors, in
good faith evidenced by a resolution.
No adjustment need be made for rights to purchase Common Stock
pursuant to a Corporation plan for reinvestment of dividends or interest.
No adjustment need be made in connection with the issuance of shares
of Common Stock upon conversion of the Securities.
No adjustment need be made for a change in the par value or no par
value of the Common Stock.
To the extent the Securities become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
The Board of Directors shall have the power to resolve any ambiguity
or correct any error in this Section 10.11 and its action in so doing, in good
faith evidenced by a Board resolution, shall be final and conclusive.
SECTION 10.12 Notice of Adjustment. Whenever the conversion price is
adjusted, the Corporation will promptly mail to Securityholders a notice of the
adjustment. The Corporation will file with the Trustee a certificate from the
Corporation's independent public accountants briefly stating the facts
requiring the adjustment and the manner of computing it. The certificate will
be conclusive evidence that the adjustment is correct.
The certificate so filed shall be open to inspection by any holder of
record of a Security.
SECTION 10.13 Voluntary Reduction. The Corporation may at any time
reduce the conversion price by any amount for any period of time if the period
is at least 20 days and if the reduction is irrevocable during the period.
Whenever the conversion price is reduced, the Corporation will mail to
Securityholders a notice of the reduction. The Corporation will mail the
notice at least 15 days before the date the reduced conversion price takes
effect. The notice will state the reduced conversion price and the period it
will be in effect.
A reduction of the conversion price does not change or adjust the
conversion price otherwise in effect for purposes of Sections 10.06 through
10.08.
SECTION 10.14 Notice of Certain Transactions. If
(1) the Corporation takes any action that would require an adjustment
in the conversion price pursuant to Section 10.06, 10.07 or 10.08 and if the
Corporation does not let Securityholders participate pursuant to Section 10.11,
(2) the Corporation takes any action that would require a
supplemental indenture pursuant to Section 10.15 or
(3) there is a voluntary or involuntary liquidation, dissolution or
winding up of the Corporation,
the Corporation shall mail to Securityholders a notice stating the proposed
record date for a dividend or distribution or the proposed effective date of a
subdivision, combination, reclassification, consolidation, merger, transfer,
lease, liquidation or dissolution. The Corporation shall mail the notice at
least 15 days before such date. Failure to mail the notice or any defect in it
shall not affect the validity of the transaction.
SECTION 10.15 Reduction of Conversion Price Below Par Value of Common
Stock. Before taking any action which would cause an adjustment reducing the
conversion price below the then par value (if any) of the Common Stock
deliverable upon conversion of a Security, the Corporation will take any
corporate action which may, in the opinion of its counsel, be necessary in
order that the Corporation may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted conversion price.
SECTION 10.16 Reorganization of Corporation. If the Corporation is a
party to a transaction subject to Section 5.01 or a merger which reclassifies
or changes its outstanding Common Stock, the person obligated to deliver
securities, cash or other assets on conversion of Securities will enter into a
supplemental indenture. If the issuer of securities deliverable on conversion
of Securities is an affiliate of the surviving, transferee or lessee
corporation, that issuer will join in the supplemental indenture.
The supplemental indenture will provide that the Holder of a Security
may convert it into the kind and amount of securities, cash or other assets
which the Holder would have owned immediately after the consolidation, merger,
transfer or lease if the Holder had converted the Security immediately before
the effective date of the transaction. The supplemental indenture will provide
for adjustments which will be as nearly equivalent as may be practical to the
adjustments provided for in this Article. The successor Corporation will mail
to Securityholders a notice briefly describing the supplemental indenture.
SECTION 10.17 Corporation Determination Final. Any determination
that the Corporation or the Board of Directors must make pursuant to Section
10.03, 10.06, 10.08, 10.09 or 10.11 is conclusive.
SECTION 10.18 Trustee's Disclaimer. The Trustee has no duty to
determine when an adjustment under this Article should be made, how it should
be made or what it should be. The Trustee has no duty to determine whether any
provisions of a supplemental indenture under Section 10.15 are correct. The
Trustee makes no representation as to the validity or value of any securities
or assets issued on conversion of Securities. The Corporation is solely
responsible for performing the duties and responsibilities contained in this
Article, and the Trustee will not be responsible for the Corporation's failure
to comply with this Article. Each Conversion Agent other than the Corporation
will have the same protection under this Section as the Trustee.
ARTICLE 11
Subordination
SECTION 11.1 Agreement to Subordinate. The Corporation agrees, and
each Securityholder by accepting a Security agrees, that the indebtedness
evidenced by the Securities is subordinated in right of payment, to the extent
and in the manner provided in this Article, to the prior payment in full of all
Senior Debt, and that the subordination is for the benefit of the holders of
Senior Debt.
SECTION 11.2 Certain Definitions.
"Representative" means the indenture trustee or other trustee, agent
or representative for an issue or class of Senior Debt.
"Senior Debt" means (a) the principal of, premium, if any, and accrued
and unpaid interest on (1) indebtedness of the Corporation for money borrowed,
whether outstanding on the date of this Indenture or created, incurred or
assumed after that date, (2) guaranties by the Corporation of indebtedness for
money borrowed by any other person, whether outstanding on the date of this
Indenture or created, incurred or assumed after that date, (3) indebtedness
evidenced by notes, debentures, bonds or other instruments of indebtedness for
the payment of which the Corporation is responsible or liable, by guaranty, or
otherwise, whether outstanding on the date of this Indenture or created,
incurred, or assumed after that date (other than any debentures issued in
exchange for shares of the $21.25 Preferred Stock, which debentures shall be
pari passu with these securities), and (4) obligations of the Corporation
under any agreement to lease, or lease of any real or personal property,
whether outstanding on the date of this Indenture or created, incurred or
assumed after that date, (b) any other indebtedness, liability or obligation,
contingent or otherwise, of the Corporation and any guaranty, endorsement or
other contingent obligation in respect thereof, whether outstanding on the date
of this Indenture or created, incurred or assumed after that date, and (c)
modifications, renewals, extensions and refundings of any such indebtedness,
liabilities or obligations, unless, in the instrument creating or evidencing
the same or pursuant to which the same is outstanding, it is provided that such
indebtedness, liabilities or obligations, or such modification, renewal,
extension or refunding, or the obligations of the Corporation pursuant to such
guaranty, are not superior in right of payment to the Securities. Senior Debt
will not include any obligation of the Corporation to any other corporation a
majority of the outstanding voting stock of which is owned by the Corporation.
Senior Debt may be further defined in Section 12.10. These Securities shall be
pari passu with any debentures issued in exchange for the $21.25 Preferred
Stock.
A distribution may consist of cash, securities or other property.
SECTION 11.3 Liquidation; Dissolution; Bankruptcy. On any
distribution to creditors of the Corporation in a liquidation or dissolution of
the Corporation or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Corporation or its property,
(1) holders of Senior Debt will be entitled to receive payment in
full in cash of the principal of and interest (including interest accruing
after the commencement of any such proceeding) to the date of payment on the
Senior Debt before Securityholders will be entitled to receive any payment of
principal of or interest on Securities, and
(2) until the Senior Debt is paid in full in cash, any distribution
to which Securityholders would be entitled but for this Article will be made to
holders of Senior Debt as their interests may appear, except that
Securityholders may receive securities that are subordinated to Senior Debt to
at least the same extent as the Securities.
Upon any distribution of assets of the Corporation referred to in this
Section, the Trustee and the Securityholders shall be entitled to rely upon any
order or decree of a court of competent jurisdiction in which such bankruptcy,
reorganization, insolvency, receivership, assignment for the benefit of
creditors, marshalling of assets or similar proceedings are pending for the
purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Debt, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Section, and the Trustee and the Securityholders
shall be entitled to rely upon a certificate of the liquidating trustee or
agent or other person making any distribution to the Trustee or to the
Securityholders for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior Debt, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Section. If the Trustee
determines, in good faith, that further evidence is required with respect to
the right of any person, as a holder of Senior Debt, to participate in any
payment or distribution pursuant to this Section, the Trustee may request such
person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of such Senior Debt held by such person, as to the extent to which
such person is entitled to participate in such payment or distribution, and as
to other facts pertinent to the rights of such person under this Section, and
if such evidence is not furnished, the Trustee may defer any payment to such
person pending judicial determination as to the right of such person to receive
such payment.
SECTION 11.4 Default on Senior Debt. The Corporation may not pay
principal of or interest on the Securities and may not acquire any Securities
for cash or property other than capital stock of the Corporation if
(1) a default on Senior Debt occurs, and
(2) the default is the subject of judicial proceedings or the
Corporation receives a notice of the default from a person who may give it
pursuant to Section 11.12.
The Corporation may resume payments on the Securities and may acquire
them when
(a) the default is cured or waived or
(b) 120 days pass after the notice is given if the default is not the
subject of judicial proceedings,
if this Article otherwise permits the payment or acquisition at that time.
Nothing in this Section shall apply to claims of, or payments to, the Trustee
pursuant to Section 7.07.
SECTION 11.5 Acceleration of Securities. If payment of the
Securities is accelerated because of an Event of Default, the Corporation will
promptly notify holders of Senior Debt of the acceleration. The Corporation
may pay the Securities when 120 days pass after the acceleration occurs if this
Article permits the payment at that time.
SECTION 11.6 When Distribution Must Be Paid Over. If a distribution
is made to Securityholders that because of this Article should not have been
made to them, the Securityholders who receive the distribution will hold it in
trust for holders of Senior Debt and pay it over to them as their interests may
appear.
SECTION 11.7 Notice by Corporation. The Corporation will promptly
notify the Trustee and the Paying Agent of any facts known to the Corporation
that would cause a payment of principal of or interest on the Securities to
violate this Article.
SECTION 11.8 Subrogation. After all Senior Debt is paid in full and
until the Securities are paid in full, Securityholders will be subrogated to
the rights of holders of Senior Debt to receive distributions applicable to
Senior Debt to the extent that distribution otherwise payable to the
Securityholders have been applied to the payment of Senior Debt. A
distribution made under this Article to holders of Senior Debt which otherwise
would have been made to Securityholders is not, as between the Corporation and
Securityholders, a payment by the Corporation on Senior Debt.
SECTION 11.9 Relative Rights. This Article defines the relative
rights of Securityholders and holders of Senior Debt. Nothing in this
Indenture will
(1) impair, as between the Corporation and Securityholders, the
obligation of the Corporation, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their terms,
(2) affect the relative rights of Securityholders and creditors of
the Corporation other than holders of Senior Debt or
(3) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default, subject to the rights of holders of Senior
Debt to receive distributions otherwise payable to Securityholders.
If the Corporation fails because of this Article to pay principal of
or interest on a Security on the due date, the failure is still a Default.
SECTION 11.10 Subordination May Not Be Impaired by Corporation. No
right of any holder of Senior Debt to enforce the subordination of the
indebtedness evidenced by the Securities will be impaired by any act or failure
to act by the Corporation or by its failure to comply with this Indenture.
SECTION 11.11 Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Debt, the
distribution may be made and the notice given to their Representative.
SECTION 11.12 Rights of Trustee and Paying Agent. The Trustee or
Paying Agent may continue to make payments on the Securities until it receives
written notice of facts that would cause a payment of principal of or interest
on the Securities to violate this Article. Only the Corporation, a
Representative or a holder of an issue of Senior Debt that has no
Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may
do the same with like rights.
SECTION 11.13 Officers' Certificate. If there occurs an event
referred to in Section 11.04, the Corporation shall as soon as practicable give
to the Trustee an Officers' Certificate (on which the Trustee may conclusively
rely) identifying all holders of Senior Debt and the principal amount of Senior
Debt then outstanding held by each such holder and stating the reasons why such
Officers' Certificate is being delivered to the Trustee.
SECTION 11.14 Trustee Owes No Fiduciary Duty to Holders of Senior
Debt. With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt and the Trustee shall not be
liable to any holder of Senior Debt if it shall mistakenly pay over or deliver
to Holders of Securities, the Corporation or any other person monies or assets
to which any holder of Senior Debt shall be entitled by virtue of this Article
11 or otherwise.
ARTICLE 12
Miscellaneous
SECTION 12.1 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision that is
required to be included in this Indenture by the TIA, the required provision
will control.
SECTION 12.2 Notices. Any notice or communication by the Corporation
or the Trustee to the other is duly given if in writing and delivered in person
or mailed by registered first-class mail or next-day air courier or by telecopy
to the other's address or telecopy number in Section 12.10. The Corporation or
the Trustee by notice to the other may designate additional or different
addresses or telecopy numbers for subsequent notices or communications.
Any notice or communication delivered to a Securityholder will be
delivered to the Securityholder at the Securityholder's address as it appears
on the registration books of the Registrar. Failure to deliver a notice or
communication to a Securityholder or any defect in it will not affect its
sufficiency with respect to other Securityholders.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied. If a notice or communication is
delivered in the manner provided above, it is duly given, whether or not the
addressee receives it.
If the Corporation delivers a notice or communication to
Securityholders, it will delivers a copy to the Trustee and each Agent at the
same time.
The Corporation will also comply with TIA {section} 313(c)(2) and (3).
SECTION 12.3 Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA {section} 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Corporation, the Trustee, the Registrar and anyone else will
have the protection of TIA {section} 312(c).
SECTION 12.4 Certificate and Opinion as to Conditions Precedent. On
any request or application by the Corporation to the Trustee to take any action
under this Indenture, the Corporation shall furnish to the Trustee
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with, and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 12.5 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include
(1) a statement that the person making such certificate or opinion
has read such covenant or condition,
(2) a brief statement as to the nature and scope of the examination
or investigation on which the statements or opinions contained in such
certificate or opinion are based,
(3) a statement that, in the opinion of such person, the person has
made such examination or investigation as is necessary to enable the person to
express an informed opinion as to whether such covenant or condition has been
complied with and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
SECTION 12.6 Rules by Trustee, Paying Agent, Registrar. The Trustee
may make reasonable rules for action by or a meeting of Securityholders. The
Paying Agent or Registrar may make reasonable rules and set reasonable
requirements for its functions.
SECTION 12.7 Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday, a legal holiday or a day on which banking institutions are not required
to be open. If a payment date is a Legal Holiday at a place of payment,
payment shall be made at that place on the next succeeding day that is not a
Legal Holiday, and no interest will accrue for the intervening period.
SECTION 12.8 No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Corporation will not have any
liability for any obligation of the Corporation under the Securities or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. All liability described in the Securities of
any director, officer, employee or stockholder, as such, of the Corporation is
waived and released.
SECTION 12.9 Duplicate Originals. The parties may sign any number of
copies of this Indenture. One signed copy is enough to prove this Indenture.
SECTION 12.10 Variable Provisions.
"Officer" means the Chairman, the President, any Vice-President, the
Treasurer, the Secretary, any Assistant Treasurer or any Assistant Secretary of
the Corporation.
"Quoted Price" of the Common Stock means the last reported sales price
of the Common Stock on the principal national securities exchange on which the
Common Stock may be listed or, if such stock is not then so listed, the closing
price of the Common Stock as shown by the National Association of Securities
Dealers, Inc. National Market or, if no such closing price is available, at the
average of the representative last bid and asked prices of such Common Stock in
the over-the-counter market, as shown by the National Association of Securities
Dealers, Inc. Automated Quotation System Level I (or comparable system), or in
the absence of any of the foregoing, the fair market value as determined by the
Board of Directors in good faith, evidenced by a resolution (whose
determination shall be conclusive).
The Corporation initially appoints the Trustee Paying Agent, Registrar
and Conversion Agent.
The first certificate pursuant to Section 4.03 will be for the fiscal
year ending on
The reporting date for Section 7.06 is May 15 of each year.
The first reporting date is May 15,
Senior Debt does not include
(1)
(2)
The Securities are not senior in right of payment to the foregoing
debt securities of the Company.
The Company's address is:
73 Mt. Wayte Avenue
Framingham, Massachusetts 01701-9160
Telecopy Number:
The Trustee's address is:
State Street Bank & Trust Co.
Attn: Corporate Trust Division
Telecopy Number:
SECTION 12.11 Governing Law. The laws of the Commonwealth of
Massachusetts shall govern this Indenture and the Securities.
<PAGE>
SIGNATURES
PERINI CORPORATION
By
------------------------------
STATE STREET BANK & TRUST CO, AS
TRUSTEE
By
------------------------------
<PAGE>
EXHIBIT A
(Face of Security)
No. $
PERINI CORPORATION
promises to pay to , or registered assigns, the principal sum of
Dollars on June 15, 2019.
% Convertible Subordinated Debenture Due June 15, 2019
Interest Payment Dates: March 15, June 15, September 15,
December 15
Record Dates: March 1, June 1, September 1, December 1
Dated:
Authenticated:
State Street Bank & Trust Co.,
as Trustee
By By
-------------------------- --------------------------
Authorized Signatory
OR By
-------------------------- --------------------------
, as Authenticating
Agent
By
--------------------------
Authorized Officer (SEAL)
(Back of Security)
% Convertible Subordinated Debenture Due June 15, 2019
1. Interest. Perini Corporation ("Corporation"), a Massachusetts
corporation, promises to pay interest on the principal amount of this Security
at the rate per annum shown above. The Corporation will pay interest quarterly
on March 15, June 15, September 15 and December 15 of each year. Interest on
the Securities will accrue from the most recent date to which interest has
been paid, or, if no interest has been paid, from . Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Corporation will pay interest on the
Securities (except defaulted interest) to the persons who are registered
holders of Securities at the close of business on the record date immediately
preceding an interest payment date even though Securities are canceled after
the record date and on or before the interest payment date. Holders must
surrender Securities to a Paying Agent to collect principal payments. The
Corporation will pay principal and interest in money of the United States that
at the time of payment is legal tender for payment of public and private debts.
However, the Corporation may pay principal and interest by check payable in
such money. It may mail an interest check to a holder's registered address.
3. Paying Agent, Registrar, Conversion Agent. Initially, The First
National Bank of Boston ("Trustee") will act as Paying Agent, Registrar and
Conversion Agent. The Corporation may change any Paying Agent, Registrar,
Conversion Agent or co-registrar without notice. The Corporation may act in
any such capacity.
4. Indenture. The Corporation issued the Securities under an
Indenture dated as of , ("Indenture"), between the
Corporation and the Trustee. The terms of the Securities include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code {sections} 77aaa-77bbb) as in effect on the
date of the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
such terms. The Securities are unsecured subordinated obligations of the
Corporation limited to $ in total principal amount.
5. Optional Redemption. The Securities will not be redeemable by the
Company prior to June 15, 1997. Thereafter, the Securities are redeemable on
at least 30 and not more than 60 days' notice at the option of the Corporation,
in whole or in part, at any time and from time to time, at the following
redemption prices (expressed in percentages of principal amount), if redeemed
during the 12-month period beginning June 15 in each of the years indicated:
Year Percentage Year Percentage
2000
1997 2001
1998 2002
1999 2003
and on or after June 15, 2004, at 100% of the principal amount, plus, in each
case, interest accrued to the redemption date. On and after the redemption
date, interest ceases to accrue on Debentures or portions of them called for
redemption.
6. Mandatory Sinking Fund Redemption. The Corporation will redeem 5%
of the aggregate principal amount of the Securities outstanding on June 15, 200
, and on each succeeding June 15 thereafter, to and including June 15, 2019, at
a redemption price of 100% of principal amount, plus accrued interest to the
redemption date. The Corporation may reduce the principal amount of Securities
to be redeemed pursuant to this paragraph 6 by subtracting 100% of the
principal amount (excluding premium) of any Securities that the Corporation has
delivered to the Trustee for cancellation or that the Corporation has redeemed
or acquired other than pursuant to this paragraph 6, or that have been
converted into Common Stock. The Corporation may so subtract the same Security
only once.
7. Notice of Redemption. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption rate to each
holder of Securities to be redeemed at his registered address. Securities in
denominations larger than $25 may be redeemed in part but only in whole
multiples of $25. On and after the redemption date interest ceases to accrue
on Securities or portions of them called for redemption.
8. Conversion. A holder of a Security may convert such Security into
Common Stock of the Corporation at any time before the close of business on
June 15, 2019. If a Security is called for redemption, the holder may convert
such Security at any time before the close of business on the redemption date.
The initial conversion price is $ per share, subject to adjustment in
certain events. To determine the number of shares issuable upon conversion of
a Security, divide the principal amount to be converted by the conversion price
in effect on the conversion date. On conversion no payment or adjustment for
interest will be made. Securities surrendered for conversion between a record
date for payment of interest and the interest payment date (except Securities
called for redemption during such period) must be accompanied by payment of the
interest on the Securities, if any, that the holder is to receive on the
interest payment date; provided that if the Corporation defaults on the payment
of the interest, the funds will be returned to the payor thereof. The
Corporation will deliver a check for any fractional share.
To convert a Security a holder must (1) complete and sign the
conversion notice on the back of the Security, (2) surrender the Security to a
Conversion Agent, (3) furnish appropriate endorsements and transfer documents
if required by the Registrar or Conversion Agent, (4) pay any transfer or
similar tax if required, and (5) if applicable, pay the interest described in
the previous paragraph. A holder may convert a portion of a Security if the
portion is $25 or a whole multiple of $25.
The conversion price is subject to adjustment on the occurrence of
certain events, including the issuance of stock of the Corporation as a
dividend or distribution on the Common Stock, subdivisions and combinations of
the Common Stock, certain reclassifications of the Common Stock, the issuance
to holders of Common Stock of certain rights or warrants entitling them to
subscribe for Common Stock at less then the then current market price (as
defined) and the distribution to the holders of Common Stock of shares of
capital stock other than Common Stock, debt securities of the Corporation or
any rights or warrants to purchase securities of the Corporation (excluding
cash dividends or distributions from current or retained earnings and rights to
purchase Common Stock pursuant to a Company plan for reinvestment of dividends
or interest). No adjustment in the conversion price will be required unless
cumulative adjustments would require a change of at least 1% in the price then
in effect, but any adjustment that would otherwise be required to be made shall
be carried forward and taken into account in any subsequent adjustment. No
adjustment need be made if Securityholders may participate in the transaction
that would have resulted in an adjustment absent such participation. The
Corporation from time to time may voluntarily reduce the conversion price by
any amount for a period of time if the period is at least 20 days and if the
decrease is irrevocable during the period.
If the Corporation is a party to a consolidation or merger or a
transfer or lease of all or substantially all of its assets, the right to
convert a Security into Common Stock may be changed into a right to convert it
into securities, cash or other assets of the Corporation or another.
9. Subordination. The Securities are subordinated to Senior Debt,
which is any Debt of the Corporation except subordinated Debt specified in the
Indenture and Debt that by its terms is not senior in right of payment to the
Securities. A Debt is any indebtedness for borrowed money or any guarantee of
such indebtedness. To the extent provided in the Indenture, Senior Debt must
be paid before the Securities may be paid. The Corporation agrees, and each
Securityholder by accepting a Security agrees, to the subordination and
authorizes the Trustee to give it effect.
10. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $25 and whole multiples of
$25. The transfer of Securities may be registered and Securities may be
exchanged as provided in the Indenture. The Registrar may require a holder,
among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture.
The Registrar need not exchange or register the transfer of any Security or
portion of a Security selected for redemption. Also, it need not exchange or
register the transfer of any Securities for a period of 15 days before a
selection of Securities to be redeemed.
11. Persons Deemed Owners. The registered holder of a Security may
be treated as its owner for all purposes.
12. Amendments and Waivers. Subject to certain exceptions, the
Indenture or the Securities may be amended with the consent of the holders of
at least 66-2/3% in principal amount of the Securities, and any existing
default may be waived with the consent of the holders of a majority in
principal amount of the Securities. Without the consent of any Securityholder,
the Indenture or the Securities may be amended to cure any ambiguity, defect or
inconsistency, to provide for assumption of Corporation obligations to
Securityholders or to make any change that does not adversely affect the rights
of any Securityholder.
13. Satisfaction and Discharge of Indenture. The Corporation will be
discharged from the Indenture on the 91st day after it deposits with the
Trustee funds or U.S. Government Obligations sufficient to pay at maturity or
on redemption all Securities not previously delivered to the Trustee for
cancellation, including principal and accrued interest and all other sums then
payable by the Corporation under the Indenture, and complies with certain other
conditions specified in the Indenture.
14. Defaults and Remedies. An Event of Default is default for 30
days in payment of interest on the Securities, default in payment of principal
on them, failure by the Corporation for 60 days after notice to it to comply
with any of its other agreements in the Indenture or the Securities, and
certain events of bankruptcy or insolvency. If an Event of Default occurs and
is continuing, the Trustee or the holders of at least 25% in principal amount
of the Securities may declare all the Securities to be due and payable
immediately. Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities. Subject
to certain limitations, holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing default
(except a default in payment of principal or interest) if it determines that
withholding notice is in their interests. The Corporation must file with the
Trustee annually a certificate of two officers of the Corporation stating
whether the signers know of any default under the Indenture that occurred
during the previous fiscal year.
15. Trustee Dealings with Corporation. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Corporation or its Affiliates, and
may otherwise deal with the Corporation or its Affiliates, as if it were not
Trustee.
16. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Corporation will not have any liability for any
obligations of the Corporation under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
17. Authentication. This Security will not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
18. Abbreviations. Customary abbreviations may be used in the name
of a Securityholder or an assignee, such as: TEN COM (=tenants in common), TEN
ENT (=tenants by the entireties), JT TEN (=joint tenants with right of
survivorship and not as tenants in common), CUST (=Custodian), and UGMA
(=Uniform Gifts to Minors Act).
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
-------------------------------------------------------
agent to transfer this Security on the books of the Corporation. The agent may
substitute another to act for him/her.
Date: Your signature:
------------------- ----------------------------------
----------------------------------
(Sign exactly as your name appears on
the other side of this Security)
<PAGE>
CONVERSION NOTICE
To convert this Security into Common Stock of the Corporation, check the box:
[ ]
To convert only part of this Security, state the amount:
$
------------------
If you want the stock certificate made out in another person's name, fill in
the form below:
-------------------------------------------------
(Insert other person's soc. sec. or tax I.D. no.)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Print or type other person's name, address and zip code)
Date: Your signature:
---------------- ----------------------------------------
(Sign exactly as your name appears on the
other side of this Security)
EXHIBIT 10(a)
1988 PERINI CORPORATION
RESTRICTED STOCK PLAN FOR OUTSIDE DIRECTORS
1. Purpose:
The purpose of the 1988 Perini Corporation Restricted
Stock Plan for Outside Directors is to provide an additional
incentive to attract and retain qualified individuals to serve
as directors of Perini Corporation and to provide a demonstrable
linkage between director and shareholder interests.
2. Definitions:
(a) Award: An award of common stock of Perini
Corporation, par value $1.00 per share, pursuant to Section 6
hereof.
(b) Board: The Board of Directors of Perini
Corporation.
(c) Committee: The committee appointed pursuant to
Section 5 hereof by the Board.
(d) Common Stock: The common stock of Perini
Corporation, par value $1.00 per share.
(e) Corporation: Perini Corporation.
(f) Disability: Any physical or mental condition
which consists of a disability within the meaning of Section
105(d)(4) of the Internal Revenue Code of 1986, as amended.
(g) Outside Director: Any director of the Corporation
who is not also employed by the Corporation in a capacity other
than as a director.
(h) Participant: An Outside Director to whom an Award
is made. An Outside Director shall cease to be a Participant
when all shares of Common Stock under all Awards made to the
Participant have been forfeited and returned to the Corporation
or are no longer subject to the restrictions of Section 9 hereof.
(i) Plan: The 1988 Perini Corporation Restricted
Stock Plan for Outside Directors.
(j) Resignation or Removal: Cessation of service as
an Outside Director other than by reason of death or Disability.
3. Effective Date and Term of Plan:
The Plan shall become effective upon (i) its adoption
by the shareholders of the Corporation; and (ii) receipt of a
"no-action letter" or its equivalent from the Securities and
Exchange Commission to the effect that participation in the Plan
will not disqualify any Outside Director as a "Disinterested
Director" under Rule 16(b)-3. If the Plan is not so adopted by
shareholders of the Corporation or the "no-action letter" is not
received, the Plan and all Awards theretofore made shall be null
and void and all shares of Common Stock theretofore awarded,
together with all dividends, securities and other property
received with respect to such shares of Common Stock (other than
regular cash dividends), shall be returned to the Corporation
without payment by the Corporation of consideration therefor,
whether or not the Participant had theretofore died, incurred a
Disability or ceased to be a director.
The Plan shall remain in effect until the later of the
time when (a) the restrictions on all shares of Common Stock
awarded have lapsed or been released; or (b) no further Awards
may be made. No Awards shall be made after May 19, 1998.
4. Awards:
The date of an Award shall be the date on which an
Outside Director becomes eligible to participate in the Plan.
Each Outside Director on the date of adoption of the Plan by the
shareholders (the "Initial Award Date") shall receive an initial
Award and subsequent Awards on the third, sixth and ninth
anniversary dates of the Initial Award Date. The amount of each
Award shall be for that number of shares of Common Stock of the
Corporation which shall have a market value on the Award date
equal to the annual director's retainer fee paid by the
Corporation to its Outside Directors at such date (exclusive of
any per meeting fees or expense reimbursements).
Directors becoming eligible after the date of adoption
of the Plan shall also receive initial Awards on becoming
eligible and subsequent Awards on the same date as all other
Outside Directors. The number of shares in the Initial Award of
Outside Directors becoming eligible after the Initial Award Date
shall be a product of the number of shares awarded to each
director on the Initial Award Date, multiplied by a fraction
whose numerator is the period of time remaining in the
three-year restricted period applicable to shares awarded on the
most recent Award date to Outside Directors (generally measured
in days) and whose denominator is the three-year restricted
period (1,095 days), eliminating any fraction less
than 1/2 share and rounding to a full share any fraction greater
than or equal to 1/2.
5. Administration:
The Plan shall be administered by a Committee appointed
by the Board of Directors. The Committee shall consist of not
less than three members of the Board.
The Committee shall have full power and authority: (a)
to determine the restrictions and, to the extent provided in
Section 9 hereof, release shares of Common Stock from
restrictions applicable to shares awarded under the Plan; (b) to
determine all questions of fact that may arise under the Plan;
(c) to interpret the provisions of the Plan or any Award or
agreement thereunder; and (d) to promulgate such rules and
regulations, and take such other action, as it deems necessary
and advisable for the proper administration and implementation
of the Plan. Any determination, interpretation, promulgation or
other act of the Committee shall be conclusively binding upon
all persons. Notwithstanding the foregoing, no individual or
committee has discretion with respect to the amount or terms of
Awards to Outside Directors under the Plan.
6. Stock Subject to the Plan:
Subject to Section 13 hereof, the maximum number of
shares of Common Stock that may be awarded under the Plan shall
be 30,000. Shares of Common Stock awarded under the Plan shall
be shares reacquired by the Corporation and held in its
Treasury. Shares of Common Stock awarded under the Plan that
are thereafter forfeited by the Participant and returned to the
Corporation shall again be available for Award.
7. Eligibility:
Awards will be made to persons who are Outside
Directors. Each Outside Director becomes eligible to receive an
Award on the date he first becomes a director of the Corporation
or, if he was serving as such prior to adoption of the Plan, on
the date the Plan is adopted by the shareholders.
8. No Payment for Shares of Common Stock:
The shares of Common Stock awarded under the Plan shall
be issued to the Participant pursuant to Section 11 hereof
without any consideration or payment from the Participant.
9. Restrictions and Releases:
All shares of Common Stock awarded to Participants
hereunder shall be subject to the following:
(a) The Participant may not sell, assign,
transfer, pledge or otherwise encumber the shares of Common
Stock subject to the Award for a period of 3 years from the
date of the Award. No purported transfer of the shares of
Common Stock, whether voluntary or involuntary, by
operation of law or otherwise, shall vest the transferee
with any interest or right in such shares of Common Stock
whatsoever, but immediately upon any attempt to transfer
such shares of Common Stock, such shares of Common Stock,
together with all dividends, securities and other property
received with respect to such shares of Common Stock (other
than regular cash dividends), shall be immediately returned
to the Corporation without payment by the Corporation or
consideration therefor, and the transfer shall be of no
force and effect.
(b) If the Participant ceases to be an Outside
Director by reason of death or Disability during the period
any shares of Common Stock awarded to the Participant are
subject to the restrictions of Section 9(a) hereof, then
such restrictions shall be released upon such cessation.
No transfer, by will or the laws of descent and
distribution, of the shares of Common Stock with respect to
when the restrictions are released by reason of the
Participant's death shall be effective to bind the
Corporation unless the Committee shall have been furnished
with (i) written notice thereof and with a copy of the will
and/or such other evidence as the Committee may deem
necessary to establish the validity of the transfer; and
(ii) an agreement by the transferee to comply with all the
terms and conditions of the Award that were or would have
been applicable to the Participant and to be bound by the
acknowledgment made by the Participant in connection with
the Award Agreement (as hereinafter defined).
(c) (i) The Committee, in its sole discretion,
may release all or part of any shares of Common Stock
awarded hereunder from the restrictions of Section 9(a)
hereof in the event the Corporation merges, consolidates,
combines, liquidates, dissolves or undergoes any similar
corporate change or in the event of a spin-off, split-up or
split-off with respect to the Common Stock of the
Corporation. The effective date of such release shall be
as of the effective date (or, if a record date is fixed,
the record date) of any such merger, consolidation,
combination, liquidation, dissolution or similar corporate
change or spin-off, split-up or split-off.
(ii) In the event that:
(1) any person other than the Corporation
shall after the adoption of the Plan acquire more
than 20% of the Common Stock of the Corporation
through a tender offer, exchange offer or
otherwise; or
(2) a change in the "control" of the
Corporation occurs, as such term is defined in
Rule 405 under the Securities Act of 1933; or
(3) there shall be a sale of all or
substantially all of the assets of the
Corporation; or
(4) the Committee reasonably believes that
an event described in (1), (2) or (3) above may
occur;
then the Committee, in its sole discretion, may release all
or part of any shares of Common Stock awarded hereunder
from the restrictions of Section 9(a) hereof.
(d) If a Participant ceases to be an Outside
Director during the period any shares of Common Stock
awarded to the Participant are subject to the restrictions
of Section 9(a) by reason of Resignation or Removal, the
shares of Common Stock so restricted, together with all
dividends, securities and other property received with
respect to such shares of Common Stock (other than regular
cash dividends), shall be forfeited and returned to the
Corporation, without payment by the Corporation of
consideration therefor, within 30 days after his cessation
as a director, provided that the Committee, in its sole
discretion, may release all or a portion of such shares of
Common Stock from such restrictions.
(e) At the time of an Award, the Committee may
impose such additional restrictions on the shares of Common
Stock awarded as it, in its sole discretion, deems
appropriate.
10. Award Agreement:
Each Award shall be evidenced by a written agreement
(the Award Agreement) executed by the Participant and the
Corporation, which shall contain such restrictions, terms and
conditions as may be required by the Plan and the Committee.
11. Issuance of Certificates:
(a) With respect to the shares of Common Stock
awarded under the Plan, the Corporation shall cause to be
issued stock certificates, registered in the name of the
Participant, evidencing the shares of Common Stock awarded by
the Award Agreement reasonably promptly after the receipt by the
Corporation of (i) the Award Agreement executed by the
Participant as provided in Section 10 hereof; and (ii) a stock
power endorsed by the Participant in blank with respect to the
shares of Common Stock awarded by the Award Agreement.
(b) All certificates evidencing shares of Common
Stock issued under the Plan shall bear the following legends:
(i) "The transferability of this certificate and the
shares of stock represented hereby are subject to
the restrictions, terms and conditions (including
forfeiture and restrictions against transfer)
contained in the 1988 Perini Corporation
Restricted Stock Plan for Outside Directors and an
Award Agreement entered into between the
registered owner of such shares and Perini
Corporation. A copy of the Plan and the Award
Agreement is on file in the office of the
Secretary of Perini Corporation, 73 Mt. Wayte
Avenue, Framingham, Massachusetts 01701."
(ii) "The shares evidenced by this certificate may not
be transferred or disposed of unless (1) a
registration statement under the Securities Act of
1933, as amended, is then in effect with respect
thereto and such sale is made pursuant to such
registration statement; or (2) a written opinion
from counsel to the Corporation is obtained to the
effect that such transfer or disposition will not
violate the Securities Act of 1933, as amended,
and the rules and regulations promulgated
thereunder."
The legend set forth in Section 11(b)(i) shall not be removed
from the certificates evidencing such shares of Common Stock
until the lapse or release of the restrictions imposed pursuant
to Section 9 on such shares of Common Stock.
(c) The Participant shall not be deemed for any
purpose to be, or have any rights as, a shareholder of the
Corporation with respect to any shares of Common Stock awarded,
except to the extent a stock certificate is issued therefor and
then only from the date such certificate is issued. No
adjustment shall be made for dividends or distributions or other
rights for which the record date is prior to the date such stock
certificate is issued.
12. Depositary:
Each certificate issued pursuant to Section 11 with
respect to shares of Common Stock awarded thereunder, together
with the stock powers relating to such shares of Common Stock,
shall be deposited by the Corporation with a depositary agent
designated by the Corporation (which may be the Corporation).
The Corporation shall cause such depositary agent to execute a
depositary agreement evidencing the certificates held by it
which are registered in the name of the Participant. Reasonably
promptly after the lapse or release of the restrictions imposed
pursuant to Section 9 on any such shares of Common Stock, the
Corporation shall cause to be issued certificates evidencing the
shares of Common Stock with respect to which the restrictions
have lapsed or been released, free of the legend provided in
Section 11(b)(i), and shall cause such certificates to be
delivered to the participant (or his legal representative,
beneficiary or heir).
13. Changes in Capitalization and Deposit of Securities and
Property:
In the event of any change in the number of shares of
outstanding Common Stock by reason of any stock dividend or
split, recapitalization, merger, consolidation, combination or
exchange of shares or similar corporate change or in the event
of a spin-off, split-up or split-off, the maximum aggregate
number of shares that may be awarded under the Plan and the
class of shares that may be awarded under the Plan shall be
appropriately adjusted by the Committee. Unless the Committee
otherwise determines, any securities and other property
(excluding regular dividends paid in cash) received by an
Outside Director as a result of any such change or otherwise
with respect to shares of Common Stock still subject to the
restrictions of Section 9 will be subject to such restrictions,
and shall be promptly deposited with the depositary agent
designated by the Corporation to be held in accordance with
Section 11 hereof.
14. Outside Director's Right:
No Outside Director or other person shall have any
claims or right to receive an Award hereunder.
The Plan is not a contract of service, and the terms of
service or other relationship of any Outside Director shall not
be affected in any way by the Plan or related instruments except
as specifically provided in the Plan or such related
instruments. The establishment of the Plan and making of Awards
pursuant thereto shall not be construed as conferring any legal
rights upon any Outside Director for continuation of service or
other relationship or as interfering with or limiting the right
of the Corporation to terminate his service or other
relationship, at any time, for any reason, for or without cause,
and without regard to the effect that such termination might
have upon him as a Participant.
15. Amendment or Termination:
The Board of directors may amend, suspend or terminate
the Plan or any portion thereof at any time, provided that: (a)
no amendment shall be made, without the approval, in accordance
with applicable law, by the shareholders of the Corporation at a
meeting of the Corporation's shareholders, that would materially
modify the eligibility requirements for Participants, increase
the maximum number of shares of Common Stock that may be awarded
under the Plan, or materially increase benefits accruing to
Participants; (b) no amendment, suspension or termination shall
be made or effected that would adversely affect any right of a
Participant with respect to an Award made to him without the
written consent of the Participant, unless such amendment,
suspension or termination is required by applicable law.
16. Expenses:
The expenses of the Plan shall be paid by the
Corporation.
17. Withholding Tax:
The Participant or any other person receiving shares of
Common Stock under the Plan shall be required to pay to the
Corporation, as the case may be, the amount of any taxes the
Corporation is required by law to withhold with respect to any
Award or with respect to the lapse or release of any
restrictions on shares of Common Stock subject to an Award.
Such payment shall be due on the date the Corporation is
required by law to withhold such taxes. On the request of a
Participant, the Corporation may subtract and retain a number of
shares equal in value to such amount prior to issuance of
unrestricted share certificates in lieu of payment of such
amount in cash. In the event that such payment is not made when
due, the Corporation shall have the right (a) to sell with
10 days' notice, or such longer notice as may be required by
applicable law, a sufficient number of shares of Common Stock
issued in connection with any Award to the Participant in order
to cover all or part of the amount required to be withheld; (b)
to deduct, to the extent permitted by law, from any payment of
any kind otherwise due to such person from the Corporation all
or part of the amount required to be withheld; or (c) to pursue
any other remedy at law or in equity.
18. Failure to Comply:
In addition to the remedies of the Corporation
elsewhere provided for herein, failure by the Participant to
comply with any of the terms and conditions of the Plan or the
Award Agreement executed by the Participant pursuant to Section
10, unless such failure is remedied by the Participant within 10
days after having been notified of such failure by the
Committee, shall be grounds for the cancellation of the Award,
in whole or in part, as the Committee, in its sole discretion,
determines. Upon such cancellation, the shares of the Common
Stock relating to that portion of the Award cancelled, together
with all dividends, securities and other property received with
respect to such shares of Common Stock (other than regular cash
dividends), shall be forfeited by the Participant and
immediately returned to the Corporation without payment by the
Corporation of consideration therefor.
19. Other Terms and Conditions:
Notwithstanding anything herein to the contrary, the
Corporation shall not be obligated by Sections 11 or 12 to cause
to be issued or delivered any certificates evidencing shares of
Common Stock awarded unless and until the Corporation is advised
by its counsel that the issuance and delivery of such
certificates is in compliance with all applicable laws,
regulations of governmental authority and the requirements of
the American Stock Exchange and any other exchange upon which
the Common Stock may be traded.
The Company shall in no event be obligated to register
any securities pursuant to the Securities Act of 1933 (as now in
effect or as hereafter amended) or to take any other affirmative
action in order to cause the issuance and delivery of such
certificates to comply with any such law, regulation or
requirement. The Committee may require, as a condition of the
issuance and delivery of such certificates and in order to
ensure compliance with such laws, regulations and requirements,
that the Participant make such covenants, agreements and
representations as the Committee, in its sole discretion, deems
necessary or desirable.
20. Governing Law:
All Awards shall be made and accepted in the
Commonwealth of Massachusetts or in such other states as the
Committee, in its sole discretion, may from time to time
determine. The laws of the Commonwealth of Massachusetts shall
control the interpretation and performance of the terms of the
Plan.
EXHIBIT 10(e)
[CONFORMED COPY]
$70,000,000
CREDIT AGREEMENT
dated as of
May 10, 1993
among
Perini Corporation
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Agent
<PAGE>
TABLE OF CONTENTS 1<F1>
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.......................... 1
1.02 Accounting Terms and Determinations.. 14
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments to Lend.................. 15
2.02 Method of Borrowing.................. 15
2.03 Notes................................ 17
2.04 Maturity of Loans.................... 17
2.05 Interest Rates....................... 17
2.06 Commitment Fees...................... 21
2.07 Participation Fee.................... 21
2.08 Agency Fee........................... 21
2.09 Optional Termination or
Reduction of Commitments........... 21
2.10 Mandatory Termination or
Reduction of Commitments........... 21
2.11 Optional Prepayments................. 23
2.12 General Provisions as
to Payments........................ 24
2.13 Funding Losses....................... 25
2.14 Computation of Interest and Fees..... 25
2.15 Maximum Interest Rate................ 25
2.16 Letters of Credit.................... 26
[FN]
- ---------------------
<F1>The Table of Contents is not a part of this Agreement.
<PAGE>
ARTICLE III
CONDITIONS
SECTION 3.01 Effectiveness........................ 31
3.02 Credit Events........................ 32
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Corporate Existence and Power....... 33
4.02 Corporate and Governmental
Authorization; No Contravention... 33
4.03 Binding Effect...................... 34
4.04 Financial Information............... 34
4.05 Litigation.......................... 34
4.06 Compliance with ERISA............... 34
4.07 Environmental Matters............... 35
4.08 Taxes............................... 35
4.09 Subsidiaries........................ 35
4.10 Not an Investment Company........... 36
4.11 No Burdensome Restrictions.......... 36
4.12 Full Disclosure..................... 36
ARTICLE V
COVENANTS
SECTION 5.01 Information......................... 37
5.02 Payment of Obligations.............. 39
5.03 Maintenance of Property; Insurance.. 39
5.04 Conduct of Business and
Maintenance of Existence.......... 40
5.05 Compliance with Laws................ 40
5.06 Inspection of Property,
Books and Records................. 40
5.07 Current Ratio....................... 40
5.08 Debt................................ 41
5.09 Minimum Consolidated Tangible
Net Worth......................... 41
5.10 Interest Coverage................... 41
5.11 Negative Pledge..................... 42
5.12 Consolidations, Mergers and
Sales of Assets................... 42
5.13 Use of Proceeds..................... 43
5.14 Restricted Payments................. 43
5.15 Real Estate Investments............. 43
5.16 Other Investments................... 44
5.17 Aetna Letters of Credit............. 44
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default................... 45
6.02 Cash Cover.......................... 47
6.03 Notice of Default................... 48
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization....... 48
7.02 Agent and Affiliates................ 48
7.03 Action by Agent..................... 48
7.04 Consultation with Experts........... 48
7.05 Liability of Agent.................. 49
7.06 Indemnification..................... 49
7.07 Credit Decision..................... 49
7.08 Successor Agent..................... 49
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Basis for Determining Interest
Rate Inadequate or Unfair.......... 50
8.02 Illegality........................... 51
8.03 Increased Cost and Reduced Return.... 51
8.04 Base Rate Loans Substituted
for Affected Fixed Rate Loans...... 53
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices.............................. 54
9.02 No Waivers........................... 54
9.03 Expenses; Documentary Taxes;
Indemnification.................... 54
9.04 Sharing of Set-Offs.................. 55
9.05 Amendments and Waivers............... 56
9.06 Successors and Assigns............... 56
9.07 Collateral........................... 58
9.08 Governing Law; Submission to
Jurisdiction....................... 58
9.09 Counterparts; Integration............ 58
9.10 WAIVER OF JURY TRIAL................. 58
<PAGE>
Schedule I - Existing Debt
Schedule II - Proposed Guarantees
Schedule III - Aetna Letters of Credit
Schedule IV - Existing Liens
Exhibit A - Note
Exhibit B-1 - Opinion of General Counsel of the Borrower
Exhibit B-2 - Opinion of New York Counsel for the
Borrower
Exhibit C - Opinion of Special Counsel for the
Agent
Exhibit D - Subsidiary Guaranty Agreement
Exhibit E - Assignment and Assumption Agreement
<PAGE>
CREDIT AGREEMENT
AGREEMENT dated as of May 10, 1993 among PERINI CORPORATION, the
BANKS listed on the signature pages hereof and MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Agent.
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein,
have the following meanings:
"Adjusted CD Rate" has the meaning set forth in Section 2.05(b).
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.05(c).
"Administrative Questionnaire" means, with respect to each Bank, the
administrative questionnaire in the form submitted to such Bank by the Agent
and submitted to the Agent (with a copy to the Borrower) duly completed by such
Bank.
"Aetna Letters of Credit" means the letters of credit listed in
Schedule III.
"Agent" means Morgan Guaranty Trust Company of New York in its
capacity as agent for the Banks under the Financing Documents, and its
successors in such capacity.
"Applicable Lending Office" means, with respect to any Bank, (i) in
the case of its Domestic Loans, its Domestic Lending Office and (ii) in the
case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"Assessment Rate" has the meaning set forth in Section 2.05(b).
"Assignee" has the meaning set forth in Section 9.06(c).
"Available LC Amount" means at any time an amount equal to the lesser
of (x) $15,000,000 or (y) the excess, if any, of (i) the aggregate amount of
the Commitments over (ii) the aggregate outstanding principal amount of the
Loans plus the aggregate amount available for drawing under the Aetna Letters
of Credit at such time.
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.06(c), and their respective
successors.
"Base Rate" means, for any day, a rate per annum equal to the higher
of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus Federal
Funds Rate for such day.
"Base Rate Loan" means a Loan to be made by a Bank as a Base Rate
Loan pursuant to the applicable Notice of Borrowing or Article VIII.
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrower" means Perini Corporation, a Massachusetts corporation, and
its successors.
"Borrower's 1992 Form 10-K" means the Borrower's annual report on
Form 10-K for 1992, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.
"Borrowing" means a borrowing under this Agreement consisting of
Loans made to the Borrower at the same time by the Banks pursuant to Article
II. A Borrowing is a "Domestic Borrowing" if such Loans are Domestic Loans or
a "Euro-Dollar Borrowing" if such Loans are Euro-Dollar Loans. A Domestic
Borrowing is a "CD Borrowing" if such Domestic Loans are CD Loans or a "Base
Rate Borrowing" if such Domestic Loans are Base Rate Loans.
"CD Base Rate" has the meaning set forth in Section 2.05(b).
"CD Loan" means a Loan to be made by a Bank as a CD Loan pursuant to
the applicable Notice of Borrowing.
"CD Margin" has the meaning set forth in Section 2.05(b).
"CD Reference Banks" means Bank of America National Trust & Savings
Association and Morgan Guaranty Trust Company of New York.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof, as such amount
may be reduced from time to time pursuant to Sections 2.09 and 2.10.
"Consolidated Capital Base" means, at any date, the Consolidated
Tangible Net Worth of the Borrower at such date plus 75% of the principal
amount of any Special Subordinated Debt outstanding at such date.
"Consolidated Current Assets" means at any date the consolidated
current assets of the Borrower and its Consolidated Subsidiaries excluding
costs related to Claims, all determined as of such date. For purposes of this
definition, "Claims" mean the amount (to the extent reflected in determining
such consolidated current assets) of disputed or unapproved change orders in
regards to scope and/or price that, in Perini project management's opinion (and
approved by Perini senior management), will not be resolved in the normal
course of business (i.e. through the change order process and without resort to
litigation or arbitration) and which have not been previously reflected in the
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of March 31, 1993.
"Consolidated Current Liabilities" means at any date the consolidated
current liabilities of the Borrower and its Consolidated Subsidiaries,
determined as of such date.
"Consolidated Earnings Before Interest and Taxes" means for any
period Consolidated Net Income for such period (x) less (i) the Borrower's
equity share of income (or plus the Borrower's equity share of loss) of
unconsolidated joint ventures for such period and (ii) capitalized real estate
taxes for such period, to the extent not permitted to be capitalized in
accordance with generally accepted accounting principles as in effect on the
date hereof, and (y) plus (i) cash distributions of earnings from
unconsolidated joint ventures for such period and (ii) the aggregate amount
deducted in determining such Consolidated Net Income in respect of Consolidated
Interest Charges and income taxes.
<PAGE>
"Consolidated Interest Charges" means for any period the aggregate
interest expense of the Borrower and its Consolidated Subsidiaries for such
period including, without limitation, (i) the portion of any obligation under
capital leases allocable to interest expense in accordance with generally
accepted accounting principles, (ii) the portion of any debt discount that
shall be amortized in such period and (iii) any interest accrued during such
period which is capitalized in accordance with generally accepted accounting
principles, and without any reduction on account of interest income.
"Consolidated Net Income" means for any period the consolidated net
income (or loss) of the Borrower and its Consolidated Subsidiaries for such
period.
"Consolidated Subsidiary" of any Person means at any date any
Subsidiary of such Person or other entity the accounts of which would be
consolidated with those of such Person in its consolidated financial statements
if such statements were prepared as of such date.
"Consolidated Tangible Net Worth" of any Person means at any date the
consolidated stockholders' equity of such Person and its Consolidated
Subsidiaries less their consolidated Intangible Assets, all determined as of
such date. For purposes of this definition "Intangible Assets" means the
amount (to the extent reflected in determining such consolidated stockholders'
equity) of (i) all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of assets of a going concern business made
within twelve months after the acquisition of such business) subsequent to
December 31, 1992 in the book value of any asset owned by the Borrower or a
Consolidated Subsidiary and (ii) all unamortized debt discount and expense,
capitalized real estate taxes (to the extent not permitted to be capitalized in
accordance with generally accepted accounting principles as in effect on the
date hereof), goodwill, patents, trademarks, service marks, trade names,
copyrights, organization or developmental (other than real estate
developmental) expenses and other intangible items.
"Credit Event" means the making of a Loan or the issuance of a Letter
of Credit or the extension of an Evergreen Letter of Credit.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee which are
capitalized in accordance with generally accepted accounting principles, (v)
all Debt secured by a Lien on any asset of such Person, whether or not such
Debt is otherwise an obligation of such Person, and (vi) all Debt of others
Guaranteed by such Person; provided that advances to the Borrower or a
Subsidiary by a joint venture out of the Borrower's or such Subsidiary's share
of the undistributed earnings of such joint venture shall not constitute Debt.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City or Massachusetts are
authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office located
at its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Agent; provided that any Bank may so designate
separate Domestic Lending Offices for its Base Rate Loans, on the one hand, and
its CD Loans, on the other hand, in which case all references herein to the
Domestic Lending Office of such Bank shall be deemed to refer to either or both
of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in Section
2.05(b).
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 3.01.
"Environmental Laws" means any and all federal state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating
to the environment, the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, Hazardous
Substances or wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to
each Bank, its office, branch or affiliate located at
its address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Euro-Dollar Lending Office) or such other
office, branch or affiliate of such Bank as it may hereafter designate as its
Euro-Dollar Lending Office by notice to the Borrower and the Agent.
"Euro-Dollar Loan" means a Loan to be made by a Bank as a Euro-Dollar
Loan pursuant to the applicable Notice of Borrowing.
"Euro-Dollar Margin" has the meaning set forth in Section 2.05(c).
"Euro-Dollar Reference Banks" means the principal London offices of
Bank of America National Trust & Savings Association and Morgan Guaranty Trust
Company of New York.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.05(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Evergreen Letter of Credit" has the meaning set forth in Section
2.16(b).
"Exempt Group" means (i) any employee benefit plan of the Borrower or
any Subsidiary, (ii) any entity or Person holding shares of common stock of
Borrower organized, appointed or established by the Borrower or any Subsidiary
for or pursuant to the terms of any such plan or (iii) The Perini Memorial
Foundation, Inc., The Joseph Perini Memorial Foundation, or any of the various
trusts established under the wills of Lewis R. Perini, Senior, Joseph R.
Perini, Senior or Charles B. Perini, Senior.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th 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 Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to Morgan Guaranty Trust Company of New
York on such day on such transactions as determined by the Agent.
"Financial Letter of Credit" means any Letter of Credit which
constitutes a financial standby letter of credit within the meaning of Appendix
A to Regulation H of the Board of Governors of the Federal Reserve System or
other applicable capital adequacy guidelines promulgated by bank regulatory
authorities (including without limitation workmen's compensation letters of
credit).
"Financing Documents" means this Agreement, the Subsidiary Guaranty
Agreement and the Notes.
"Fixed Rate Borrowing" means a CD Borrowing or a Euro-Dollar
Borrowing.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or both.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt (whether arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner the holder of
such Debt of the payment thereof or to protect such holder against loss in
respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit or bid and performance bonds
and guarantees in the ordinary course of business. The term "Guarantee" used
as a verb has a corresponding meaning.
"Hazardous Substances" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending one,
two, three or six months thereafter, as the Borrower may elect in the
applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (c) below, end on the last Euro-Dollar Business Day of
a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
(2) with respect to each CD Borrowing, the period commencing on the date of
such Borrowing and ending 30, 60 or 90 days thereafter, as the Borrower may
elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which is not a
Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar
Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date; and
(3) with respect to each Base Rate Borrowing, the period commencing on the
date of such Borrowing and ending 30 days thereafter; provided that:
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which is not a
Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar
Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, Guarantee, time deposit or
otherwise.
"LC Bank" means BayBank Boston, N.A.
"LC Exposure" means, at any time and for any Bank, an amount equal to
such Bank's Percentage of the aggregate amount of Letter of Credit Liabilities
in respect of all Letters of Credit at such time.
"Letter of Credit" has the meaning set forth in Section 2.16(a).
"Letter of Credit Liabilities" means, at any time and in respect of
any Letter of Credit, the sum, without duplication, of (i) the amount available
for drawing under such Letter of Credit plus (ii) the aggregate unpaid amount
of all Reimbursement Obligations in respect of previous drawings made under
such Letter of Credit.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"Loan" means a Domestic Loan or a Euro-Dollar Loan and "Loans" means
Domestic Loans or Euro-Dollar Loans or both.
"Loan Commitment" means for any Bank at any time an amount equal to
the excess, if any, of such Bank's Commitment at such time over such Bank's LC
Exposure at such time.
"London Interbank Offered Rate" has the meaning set forth in Section
2.05(c).
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $10,000,000.
"Material Subsidiary" means at any time a Subsidiary which as of such
time meets the definition of a "significant subsidiary" contained as of the
date hereof in Regulation S-X of the Securities and Exchange Commission.
"Modified Parent Company Debt" means at any date the Debt of the
Borrower (other than Debt payable to a Wholly-Owned Consolidated Subsidiary),
determined on an unconsolidated basis as of such date, less 75% of the
principal amount of any Special Subordinated Debt outstanding on such date.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"Notes" means promissory notes of the Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of the Borrower to repay
the Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"Notice Time" has the meaning set forth in Section 2.16(b).
"Obligor" means each of the Borrower and the Subsidiary Guarantors,
and "Obligors" means all of the foregoing.
"Parent" means, with respect to any Bank, any Person controlling such
Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Percentage" means, with respect to each Bank, the percentage that
such Bank's Commitment constitutes of the aggregate amount of the Commitments.
"Performance Letter of Credit" means a Letter of Credit which
constitutes a performance standby letter of credit within the meaning of
Appendix A to Regulation H of the Board of Governors of the Federal Reserve
system or other applicable capital adequacy guidelines promulgated by bank
regulatory authorities.
"Perini Building Company" means Perini Building Company, Inc., an
Arizona corporation.
"Perini International" means Perini International Corporation, a
Massachusetts corporation.
"Perini Land and Development" means Perini Land and Development
Company, a Delaware corporation.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person
which was at such time a member of the ERISA Group for employees of any Person
which was at such time a member of the ERISA Group.
"Prime Rate" means the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
"Prior Agreement" means the Credit Agreement dated as of October 31,
1986, amended and restated as of March 1, 1989, among the Borrower, the banks
listed therein and Morgan Guaranty Trust Company of New York, as agent for such
banks, as amended to the Effective Date.
"Real Estate Investment" means (i) the acquisition, construction or
improvement of any real property, other than real property used by the Borrower
or a Consolidated Subsidiary in the conduct of its construction business or
(ii) any Investment in any Person (including Perini Land and Development or
another Consolidated Subsidiary, but without duplication of any Real Estate
Investment made by such Person with the proceeds of such Investment) engaged in
real estate investment or development or whose principal assets consist of real
property; provided that the Guarantees contemplated by Section 5.08(b)(ii) and
(iii) shall not constitute Real Estate Investments.
"R. E. Dailey & Co." means R. E. Dailey & Co., a Michigan corporation.
"Reference Banks" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may require, and "Reference Bank" means any one
of such Reference Banks.
"Refunding Borrowing" means a Borrowing which, after application of
the proceeds thereof, results in no net increase in the outstanding principal
amount of Loans made by any Bank.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Reimbursement Obligations" means at any date the obligations of the
Borrower then outstanding under Section 2.16 to reimburse any Bank for the
amount paid by such Bank in respect of a drawing under a Letter of Credit.
"Required Banks" means at any time Banks having at least 60% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 60% of the aggregate unpaid
principal amount of the Loans.
"Restricted Payment" means (i) any dividend or other distribution on
any shares of the Borrower's capital stock (except dividends payable solely in
shares of its capital stock) or (ii) any payment on account of the purchase,
redemption, retirement or acquisition of (a) any shares of the Borrower's
capital stock or (b) any option, warrant or other right to acquire shares of
the Borrower's capital stock; provided that none of the following shall
constitute Restricted Payments: (i) the declaration and payment of dividends on
preferred stock of the Borrower in an aggregate amount with respect to any four
consecutive fiscal quarters not exceeding $2,125,000, (ii)
the exchange of Special Subordinated Debt for the Borrower's $21.25 Convertible
Exchangeable Preferred Shares, or (iii) the redemption, for an aggregate
redemption price not exceeding $200,000, of the "Rights" issued pursuant to the
Shareholder Rights Agreement dated as of September 23, 1988, as amended,
between the Borrower and The First National Bank of Boston, as Rights Agent or
(iv) cash payments in the ordinary course of business in full or partial
settlement of employee stock options or similar incentive compensation
arrangements.
"Special Subordinated Debt" means the 8 1/2% Convertible Subordinated
Debentures due 2012 of the Borrower issuable in exchange for the Borrower's
$21.25 Convertible Exchangeable Preferred Shares in accordance with the terms
of the Certificate of Vote of Directors Establishing a Series of a Class of
Stock fixing the relative rights and preferences of such Shares as originally
filed with the Secretary of the Commonwealth of Massachusetts.
"Subsidiary" of any Person means any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person.
"Subsidiary Guarantor" means each of Perini Building Company, Perini
International, Perini Land and Development, R. E. Dailey & Co. and each other
Subsidiary of the Borrower which becomes a party to the Subsidiary Guaranty
Agreement pursuant to Section 3.01 thereof, and their respective successors.
"Subsidiary Guaranty Agreement" means the Subsidiary Guaranty
Agreement in substantially the form of Exhibit D among the Borrower, the
Subsidiary Guarantors party thereto and the Agent, as executed and delivered
pursuant to Section 3.01(b) and as the same may be amended from time to time in
accordance with the terms thereof.
"Temporary Cash Investment" means investment of cash balances in
United States Government securities or other short-term money market
investments.
"Termination Date" means April 30, 1996 (or if such date is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day).
"Unfunded Liabilities" means, with respect to any Plan at any time,
the amount (if any) by which (i) the value of all benefit liabilities under
such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA
Group to the PBGC or any other Person under Title IV of ERISA.
"Usage" means, at any date, the sum of the aggregate outstanding
principal amount of the Loans at such date plus the aggregate amount of Letter
of Credit Liabilities at such date with respect to all Letters of Credit.
"Wholly-Owned Consolidated Subsidiary" means any Consolidated
Subsidiary of the Borrower all of the shares of capital stock or other
ownership interests of which (except directors' qualifying shares) are at the
time directly or indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. From time to time prior to the
Termination Date, each Bank severally agrees, on the terms and conditions set
forth in this Agreement, to lend to the Borrower from time to time amounts not
to exceed in the aggregate at any one time outstanding the amount of its Loan
Commitment. Each Borrowing under this Section shall be in an aggregate
principal amount of $2,000,000 or any larger multiple of $1,000,000 (except
that any such Borrowing may be in the aggregate amount of the unused Loan
Commitments) and shall be made from the several Banks ratably in proportion to
their respective Commitments. Within the foregoing limits, the Borrower may
borrow under this Section, repay, or to the extent permitted by Section 2.11,
prepay Loans and reborrow at any time prior to the Termination Date under this
Section.
SECTION 2.02. Method of Borrowing. (a) The Borrower shall give the
Agent notice (a "Notice of Borrowing") not later than 10:00 A.M. (New York City
time) at least one Domestic Business Day before each Base Rate Borrowing, at
least two Domestic Business Days before each CD Borrowing and at least three
Euro-Dollar Business Days before each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic Business
Day in the case of a Domestic Borrowing or a Euro-Dollar Business Day in the
case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to be CD Loans,
Base Rate Loans or Euro-Dollar Loans, and
(iv) in the case of a Fixed Rate Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the definition
of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Agent shall promptly
notify each Bank of the contents thereof and of such Bank's ratable share of
such Borrowing and such Notice of Borrowing shall not thereafter be revocable
by the Borrower.
<PAGE>
(c) Not later than 11:00 A.M. (New York City time) on the date of
each Borrowing, each Bank shall (except as provided in subsection (d) of this
Section) make available its ratable share of such Borrowing, in Federal or
other funds immediately available in New York City, to the Agent at its address
referred to in Section 9.01. Unless the Agent determines that any applicable
condition specified in Article III has not been satisfied, the Agent will make
the funds so received from the Banks available to the Borrower at the Agent's
aforesaid address.
(d) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank,
such Bank shall apply the proceeds of its new Loan to make such repayment and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank to
the Agent as provided in subsection (c) of this Section, or remitted by the
Borrower to the Agent as provided in Section 2.12, as the case may be.
(e) Unless the Agent shall have received notice from a Bank prior to
the date of any Borrowing that such Bank will not make available to the Agent
such Bank's share of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such Borrowing in
accordance with subsections (c) and (d) of this Section 2.02 and the Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so
made such share available to the Agent, such Bank and the Borrower severally
agree to repay to the Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the Agent, at
(i) in the case of the Borrower, a rate per annum equal to the higher of the
Federal Funds Rate and the interest rate applicable thereto pursuant to Section
2.05 and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank
shall repay to the Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement.
SECTION 2.03. Notes. (a) The Loans of each Bank shall be evidenced
by a single Note payable to the order of such Bank for the account of its
Applicable Lending Office.
(b) Each Bank may, by notice to the Borrower and the Agent, request
that its Loans of a particular type be evidenced by a separate Note in an
amount equal to the aggregate unpaid principal amount of such Loans. Each such
Note shall be in substantially the form of Exhibit A hereto with appropriate
modifications to reflect the fact that it evidences solely Loans of the
relevant type. Each reference in this Agreement to the "Note" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the
context may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(c),
the Agent shall forward such Note to such Bank. Each Bank shall record the
date, amount, type and maturity of each Loan made by it and the date and amount
of each payment of principal made by the Borrower with respect thereto, and
may, if such Bank so elects in connection with any transfer or enforcement of
its Note, endorse on the schedule forming a part thereof appropriate notations
to evidence the foregoing information with respect to each such Loan then
outstanding; provided that the failure of any Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Notes. Each Bank is hereby irrevocably authorized by the Borrower so
to endorse its Note and to attach to and make a part of its Note a continuation
of any such schedule as and when required.
SECTION 2.04. Maturity of Loans. Each Loan included in any
Borrowing shall mature, and the principal amount thereof shall be due and
payable, on the last day of the Interest Period applicable to such Borrowing.
SECTION 2.05. Interest Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due, at a rate per annum equal to the
sum of 1% plus the Base Rate for such day. Such interest shall be payable for
each Interest Period on the last day thereof. Any overdue principal of or
interest on any Base Rate Loan shall bear interest, payable on demand, for each
day until paid at a rate per annum equal to the sum of 2% plus the rate
otherwise applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto, at a rate per annum
equal to the sum of the CD Margin plus the applicable Adjusted CD Rate;
provided that if any CD Loan or any portion thereof shall, as a result of
clause (2)(b) of the definition of Interest Period, have an Interest Period of
less than 30 days, such portion shall bear interest during such Interest Period
at the rate applicable to Base Rate Loans during such period. Such interest
shall be payable for each Interest Period on the last day thereof and, if such
Interest Period is longer than 90 days, at intervals of 90 days after the first
day thereof. Any overdue principal of or interest on any CD Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 2% plus the higher of (i) the sum of the CD Margin plus the
Adjusted CD Rate applicable to such Loan and (ii) the rate applicable to Base
Rate Loans for such day.
"CD Margin" means 2.375%.
The "Adjusted CD Rate" applicable to any Interest Period means a rate
per annum determined pursuant to the following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the rate of
interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum
bid at 10:00 A.M. (New York City time) (or as soon thereafter as practicable)
on the first day of such Interest Period by two or more New York certificate of
deposit dealers of recognized standing for the purchase at face value from each
CD Reference Bank of its certificates of deposit in an amount comparable to the
principal amount of the CD Loan of such CD Reference Bank to which such
Interest Period applies and having a maturity comparable to such Interest
Period.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of new non-personal time deposits in dollars in New York City having a
maturity comparable to the related Interest Period and in an amount of $100,000
or more. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in
effect on such date which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within the meaning of
C.F.R. X 3227.3(d) (or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such institution in the
United States. The Adjusted CD Rate shall be adjusted automatically on and as
of the effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the sum of the Euro-Dollar Margin plus the applicable
Adjusted London Interbank Offered Rate. Such interest shall be payable for
each Interest Period on the last day thereof and, if such Interest Period is
longer than three months, at intervals of three months after the first day
thereof.
"Euro-Dollar Margin" means 2.25%.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upward, if necessary, to the next higher 1/100 of 1%) by dividing (i) the
applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of 1%)
of the respective rates per annum at which deposits in dollars are offered to
each of the Euro-Dollar Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the
first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference Bank to
which such Interest Period is to apply and for a period of time comparable to
such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or
other assets which includes loans by a non-United States office of any Bank to
United States residents). The Adjusted London Interbank Offered Rate shall be
adjusted automatically on and as of the effective date of any change in the
Euro-Dollar Reserve Percentage.
(d) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day from and including the
date payment thereof was due to but excluding the date of actual payment, at a
rate per annum equal to the sum of 2% plus the higher of (i) the sum of the
Euro-Dollar Margin plus the Adjusted London Interbank Offered Rate applicable
to such Loan and (ii) the Euro-Dollar Margin plus the quotient obtained
(rounded upward, if necessary, to the next higher 1/100 of 1%) by dividing (x)
the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of
the respective rates per annum at which one day (or, if such amount due remains
unpaid more than three Euro-Dollar Business Days, then for such other period of
time not longer than three months as the Agent may elect) deposits in dollars
in an amount approximately equal to such overdue payment due to each of the
Euro-Dollar Reference Banks are offered to such Euro-Dollar Reference Bank in
the London interbank market for the applicable period determined as provided
above by (y) 1.00 minus the Euro-Dollar Reserve Percentage (or, if the
circumstances described in clause (a) or (b) of Section 8.01 shall exist, at a
rate per annum equal to the sum of 2% plus the rate applicable to Base Rate
Loans for such day).
(e) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall give prompt notice to the Borrower and the
Banks of each rate of interest so determined, and its determination thereof
shall be conclusive in the absence of manifest error.
(f) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated hereby. If any Reference Bank does not
furnish a timely quotation, the Agent shall determine the relevant interest
rate on the basis of the quotation or quotations furnished by the remaining
Reference Bank or Banks or, if none of such quotations is available on a timely
basis, the provisions of Section 8.01 shall apply.
SECTION 2.06. Commitment Fees. The Borrower shall pay to the Agent
for the account of each Bank a commitment fee at the rate of 1/2 of 1% per
annum on the daily average unused portion of such Bank's Commitment. Such
commitment fees shall accrue from and including the Effective Date to but
excluding the Termination Date. Such commitment fees shall be payable on the
last day of each fiscal quarter of the Borrower prior to the Termination Date
and on the Termination Date.
SECTION 2.07. Participation Fee. The Borrower shall pay to the
Agent for the account of each Bank on the Effective Date a participation fee in
an amount equal to 1/4 of 1% of such Bank's Commitment.
SECTION 2.08. Agency Fee. The Borrower shall pay to the Agent as
compensation for its services hereunder agency fees payable in the amounts and
at the times heretofore agreed between the Borrower and the Agent.
SECTION 2.09. Optional Termination or Reduction of Commitments. The
Borrower may, upon at least three Domestic Business Days' notice to the Agent,
terminate at any time, or proportionately reduce from time to time by an
aggregate amount of $5,000,000 or any larger multiple of $1,000,000, the unused
portions of the Commitments. If the Commitments are terminated in their
entirety, all accrued commitment fees shall be payable on the effective date of
such termination.
SECTION 2.10. Mandatory Termination or Reduction of Commitments.
(a) The Commitments shall terminate on the Termination Date, and any Loans
then outstanding (together with accrued interest thereon) shall be due and
payable on such date.
(b) On the first Euro-Dollar Business Day of each April prior to the
Termination Date, the Commitments of all Banks shall be automatically and
ratably reduced by an aggregate amount equal to:
(i) if Net Proceeds of all sales and other dispositions of interests
in real estate Deemed Received during the most recently ended fiscal year of
the Borrower are greater than the First Threshold for such fiscal year, 50% of
the amount by which such Net Proceeds Deemed Received during such fiscal year
exceed the First Threshold for such fiscal year (or, if such Net Proceeds
Deemed Received during such fiscal year are greater than the Second Threshold
for such fiscal year, 50% of the amount by which the Second Threshold for such
fiscal year exceeds the First Threshold for such fiscal year)
(ii) plus, if such Net Proceeds Deemed Received during the most
recently ended fiscal year of the Borrower are greater than the Second
Threshold for such fiscal year, 100% of the amount by which such Net Proceeds
Deemed Received during such fiscal year exceed the Second Threshold for such
fiscal year,
provided that no reduction in the Commitments pursuant to this subsection (b)
shall reduce the aggregate amount of the Commitments to less than $40,000,000.
The "Net Proceeds" of any sale or other disposition of any interest
in real property means the gross cash proceeds (plus the fair market value of
the gross non-cash proceeds, if any) of such sale or other disposition received
by the seller thereof, (i) less estimated income taxes incurred by the seller
of such interest, if any, as a result of such sale or other disposition (or, if
as a result of such sale or other disposition, it is estimated that income
taxes payable by such seller shall be reduced, plus the estimated amount of
such reduction), (ii) less estimated cash transaction costs and other taxes
incurred in connection with such sales or other dispositions and (iii) less the
principal amount of Debt of the seller required by its terms to be repaid upon
such sale or upon distribution of the proceeds of such sale (and prepayment
penalty, if any), provided that if the partners or equity owners of such
seller, rather than such seller, are required to pay income taxes on such
seller's income, the portion of the Net Proceeds of such sale or other
disposition that is Deemed Received will be reduced by the estimated income
taxes incurred by the Borrower and its Subsidiaries, if any, as a result of
such sale or other disposition (or, if as a result of such sale or other
disposition, it is estimated that income taxes payable by the Borrower and its
Subsidiaries shall be reduced, the Net Proceeds of such sale or other
disposition Deemed Received will be increased by the estimated amount of such
reduction).
Net Proceeds will be "Deemed Received" at the earlier of: (x) the
time received by the Borrower or any of its Subsidiaries and (y) the time
received by a corporation, a general or limited partnership or a joint venture
(other than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries directly or indirectly has any equity interest, if the Borrower or
any Subsidiary may compel or cause such Person to distribute such Net Proceeds,
to the extent the Borrower and its Subsidiaries would be entitled to such Net
Proceeds on distribution thereof (reduced as described in the proviso to the
definition of Net Proceeds). Amounts paid or held in escrow shall not be
"Deemed Received" until released from escrow. If, pursuant to the express
terms of any sale or other disposition, the seller may be required to repay in
cash a portion of the consideration paid in such sale or other disposition, the
amount "Deemed Received" at the time of such sale or other disposition will be
reduced by the maximum amount the seller may be required so to repay and such
amount (less any repayment actually made by such seller) shall be "Deemed
Received" at the earlier of: (i) when such seller may no longer be required so
to repay such amount pursuant to the terms of such sale or other disposition
and (ii) one year after such sale or other disposition.
The "First Threshold" and the "Second Threshold" for each fiscal year
of the Borrower are $15,000,000 and $25,000,000, respectively.
(c) On each day on which any Commitment is reduced pursuant to this
Section, the Borrower shall repay such principal amount (together with accrued
interest thereon) of each Bank's outstanding Loans, if any, as may be necessary
so that after such repayment, the aggregate unpaid principal amount of such
Bank's Loans does not exceed the amount of such Bank's Loan Commitment after
giving effect to such reduction; provided that if this subsection (c) would
otherwise require prepayment of any Fixed Rate Loan prior to the last day of
the applicable Interest Period, such prepayment shall be deferred to such last
day unless the Required Banks otherwise direct by notice to the Borrower.
SECTION 2.11. Optional Prepayments. (a) The Borrower may, upon at
least one Domestic Business Day's notice to the Agent, prepay any Base Rate
Borrowing in whole at any time, or from time to time in part in amounts
aggregating $2,000,000 or any larger multiple of $1,000,000, by paying the
principal amount to be prepaid together with accrued interest thereon to the
date of prepayment. Each such optional prepayment shall be applied to prepay
ratably the Base Rate Loans of the several Banks included in such Borrowing.
(b) Except as provided in Sections 2.10(c) and 8.02, the Borrower
may not prepay all or any portion of the principal amount of any Fixed Rate
Loan prior to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this Section,
the Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share of such prepayment and such notice shall not thereafter be
revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a) The Borrower
shall make each payment of principal of, and interest on, the Loans and of fees
hereunder, not later than 11:00 A.M. (New York City time) on the date when due,
in Federal or other funds immediately available in New York City, to the Agent
at its address referred to in Section 9.01. The Agent will promptly distribute
to each Bank its ratable share of each such payment received by the Agent for
the account of the Banks. Whenever any payment of principal of, or interest
on, the Domestic Loans or of fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such Bank. If and to the
extent that the Borrower shall not have so made such payment, each Bank shall
repay to the Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan (pursuant to Section 2.10(c),
Article VI or VIII or otherwise) on any day other than the last day of the
Interest Period applicable thereto, or the last day of an applicable period
fixed pursuant to Section 2.05(d), or if the Borrower fails to borrow any Fixed
Rate Loans after notice has been given to any Bank in accordance with Section
2.02(b), the Borrower shall reimburse each Bank on demand for any resulting
loss or expense incurred by it (or by any existing or prospective Participant
in the related Loan), including (without limitation) any loss incurred in
obtaining, liquidating or employing deposits from third parties, but excluding
loss of margin for the period after any such payment or failure to borrow,
provided that such Bank shall have delivered to the Borrower a certificate as
to the amount of such loss or expense, which certificate shall be conclusive in
the absence of manifest error.
SECTION 2.14. Computation of Interest and Fees. Interest based on
the Prime Rate shall be computed on the basis of a year of 365 days (or 366
days in a leap year) and paid for the actual number of days elapsed (including
the first day but excluding the last day). All other interest and all fees
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed (including the first day but excluding the last day).
SECTION 2.15. Maximum Interest Rate. (a) Nothing contained in this
Agreement or the Notes shall require the Borrower to pay interest at a rate
exceeding the maximum rate permitted by applicable law. Neither this Section
nor Section 9.08 is intended to limit the rate of interest payable for the
account of any Bank to the maximum rate permitted by the laws of the State of
New York if a higher rate is permitted with respect to such Bank by supervening
provisions of U.S. federal law.
(b) If the amount of interest payable for the account of any Bank on
any interest payment date in respect of the immediately preceding interest
computation period, computed pursuant to Section 2.05, would exceed the maximum
amount permitted by applicable law to be charged by such Bank, the amount of
interest payable for its account on such interest payment date shall be
automatically reduced to such maximum permissible amount.
(c) If the amount of interest payable for the account of any Bank in
respect of any interest computation period is reduced pursuant to clause (b) of
this Section and the amount of interest payable for its account in respect of
any subsequent interest computation period, computed pursuant to Section 2.05,
would be less than the maximum amount permitted by applicable law to be charged
by such Bank, then the amount of interest payable for its account in respect of
such subsequent interest computation period shall be automatically increased to
such maximum permissible amount; provided that at no time shall the aggregate
amount by which interest paid for the account of any Bank has been increased
pursuant to this clause (c) exceed the aggregate amount by which interest paid
for its account has theretofore been reduced pursuant to clause (b) of this
Section.
SECTION 2.16. Letters of Credit. (a) Subject to the terms and
conditions hereof, the LC Bank agrees to issue letters of credit hereunder from
time to time before the Termination Date upon the request of the Borrower (such
letters of credit issued, the "Letters of Credit"); provided that, immediately
after each such Letter of Credit is issued, the aggregate amount of the Letter
of Credit Liabilities for all Letters of Credit shall not exceed the Available
LC Amount. Upon the date of issuance by the LC Bank of a Letter of Credit in
accordance with this Section 2.16, the LC Bank shall be deemed, without further
action by any party hereto, to have sold to each Bank, and each Bank shall be
deemed, without further action by any party hereto, to have purchased from the
LC Bank, a participation in such Letter of Credit and the related Letter of
Credit Liabilities in proportion to its Percentage.
(b) The Borrower shall give the LC Bank at least three Domestic
Business Days' prior notice (effective upon receipt) specifying the date each
Letter of Credit is to be issued, and describing the proposed terms of such
Letter of Credit and the nature of the transactions proposed to be supported
thereby. Upon receipt of such notice the LC Bank shall promptly notify the
Agent, and the Agent shall promptly notify each Bank of the contents thereof
and of the amount of such Bank's participation in such proposed Letter of
Credit. The issuance by the LC Bank of any Letter of Credit shall, in addition
to the conditions precedent set forth in Article III (the satisfaction of which
the LC Bank shall have no duty to ascertain), be subject to the conditions
precedent that such Letter of Credit shall be satisfactory to the LC Bank and
that the Borrower shall have executed and delivered such other instruments and
agreements relating to such Letter of Credit as the LC Bank shall have
reasonably requested. It is understood that any such Letter of Credit may
include an evergreen or renewal option, pursuant to which the expiry date will
be automatically extended unless notice of non-renewal is given by the LC Bank
(provided that such Letter of Credit has an absolute expiry date not later than
the Termination Date and provided further that the LC Bank shall deliver notice
of non-renewal at the time such notice is required to be given (for any such
Letter of Credit, the "Notice Time") unless requested not to by the Borrower,
which request will be treated in the same manner as a request for issuance of a
new Letter of Credit on the same terms (any such Letter of Credit, an
"Evergreen Letter of Credit"). No Letter of Credit shall have a term extending
beyond the Termination Date.
(c) The Borrower shall pay to the Agent a letter of credit fee at a
rate equal to (i) 1.00% per annum on the aggregate amount available for
drawings under each Performance Letter of Credit issued from time to time and
(ii) 2.25% per annum on the aggregate amount available for drawings under each
Financial Letter of Credit issued from time to time, any such fee to be payable
for the account of the Banks ratably in proportion to their Percentages. Such
fee shall be payable in arrears on the last day of each fiscal quarter of the
Borrower for so long as such Letter of Credit is outstanding and on the date of
termination thereof. The Borrower shall pay to the LC Bank additional fees and
expenses in the amounts and at the times as agreed between the Borrower and the
LC Bank.
(d) Upon receipt from the beneficiary of any Letter of Credit of any
demand for payment or other drawing under such Letter of Credit, the LC Bank
shall notify the Agent and the Agent shall promptly notify the Borrower and
each other Bank as to the amount to be paid as a result of such demand or
drawing and the respective payment date. The responsibility of the LC Bank to
the Borrower and each Bank shall be only to determine that the documents
(including each demand for payment or other drawing) delivered under each
Letter of Credit issued by it in connection with such presentment shall be in
conformity in all material respects with such Letter of Credit. The LC Bank
shall endeavor to exercise the same care in the issuance and administration of
the Letters of Credit as it does with respect to letters of credit in which no
participations are granted, it being understood that in the absence of any
gross negligence or willful misconduct by the LC Bank, each Bank severally
agrees that it shall be unconditionally and irrevocably liable without regard
to the occurrence of any Event of Default or any condition precedent
whatsoever, pro rata to the extent of such Bank's Percentage, to reimburse the
LC Bank on demand for the amount of each payment made by the LC Bank under each
Letter of Credit issued by the LC Bank to the extent such amount is not
reimbursed by the Borrower pursuant to clause (e) below together with interest
on such amount for each day from the date of the LC Bank's demand for such
payment (or, if such demand is made after 11:00 A.M. (New York City time) on
such date, from the next succeeding Domestic Business Day) to the date of
payment by such Bank of such amount at a rate of interest per annum equal to
the Federal Funds Rate for such day.
(e) The Borrower shall be irrevocably and unconditionally obligated
forthwith to reimburse the LC Bank for any amounts paid by the LC Bank upon any
drawing under any Letter of Credit, without presentment, demand, protest or
other formalities of any kind; provided that neither the Borrower nor any Bank
shall hereby be precluded from asserting any claim for direct (but not
consequential) damages suffered by the Borrower or such Bank to the extent, but
only to the extent, caused by (i) the willful misconduct or gross negligence of
the LC Bank in determining whether a request presented under any Letter of
Credit complied with the terms of such Letter of Credit or (ii) such Bank's
failure to pay under any Letter of Credit after the presentation to it of a
request strictly complying with the terms and conditions of the Letter of
Credit. All such amounts paid by the LC Bank and remaining unpaid by the
Borrower shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the rate applicable to Base Rate
Loans for such day. The LC Bank will pay to each Bank ratably in accordance
with its Percentage all amounts received from the Borrower for application in
payment, in whole or in part, of the Reimbursement Obligation in respect of any
Letter of Credit, but only to the extent such Bank has made payment to the LC
Bank in respect of such Letter of Credit pursuant to Section 2.16(d).
(f) If after the date hereof, the adoption of any applicable law,
rule or regulation, or any change in any applicable law, rule or regulation, 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 any Bank with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall impose, modify or deem applicable any tax, reserve,
special deposit or similar requirement against or with respect to or measured
by reference to Letters of Credit issued or to be issued hereunder or
participations therein, and the result shall be to increase the cost to any
Bank of issuing or maintaining any Letter of Credit or any participation
therein, or reduce any amount receivable by any Bank hereunder in respect of
any Letter of Credit (which increase in cost, or reduction in amount
receivable, shall be the result of such Bank's reasonable allocation of the
aggregate of such increases or reductions resulting from such event), then,
upon demand by such Bank (which demand shall not be unreasonably delayed,
provided that a demand within six months of the accrual of such increased cost
or reduction in amount receivable will not be deemed to be unreasonably
delayed), the Borrower agrees to pay to such Bank, from time to time as
specified by such Bank, such additional amounts as shall be sufficient to
compensate such Bank for such increased costs or reductions in amount incurred
by such Bank. A certificate of such Bank submitted by such Bank to the
Borrower shall be conclusive as to the amount thereof in the absence of
manifest error.
(g) The Borrower's obligations under this Section 2.16 shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment which the Borrower may have or
have had against the LC Bank, any Bank or any beneficiary of a Letter of
Credit. The Borrower further agrees with the LC Bank and the Banks that the LC
Bank and the Banks shall not be responsible for, and the Borrower's
Reimbursement Obligation in respect of any Letter of Credit shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even if such documents should in fact prove to be in
any or all respects invalid, fraudulent or forged, or any dispute between or
among the Borrower, any of its Subsidiaries, the beneficiary of any Letter of
Credit or any financing institution or other party to whom any Letter of Credit
may be transferred or any claims or defenses whatsoever of the Borrower or any
of its Subsidiaries against the beneficiary of any Letter of Credit or any such
transferee. The LC Bank shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit issued,
extended or renewed by it. The Borrower agrees that any action taken or
omitted by the LC Bank or any Bank under or in connection with each Letter of
Credit and the related drafts and documents, if done in good faith and without
gross negligence, shall be binding upon the Borrower and shall not put the LC
Bank or any Bank under any liability to the Borrower.
(h) To the extent not inconsistent with clause (g) above, the LC Bank
shall be entitled to rely, and shall be fully protected in relying upon, any
Letter of Credit, draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel, independent accountants and other
experts selected by the LC Bank. The LC Bank shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first have received such advice or concurrence of the Required Banks as it
reasonably deems appropriate or it shall first be indemnified to its reasonable
satisfaction by the Banks against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
Notwithstanding any other provision of this Section 2.16, the LC Bank shall in
all cases be fully protected in acting, or in refraining from acting, under
this Agreement in accordance with a request of the Required Banks, and such
request and any action taken or failure to act pursuant thereto shall be
binding upon the Banks and all future holders of participations in any Letters
of Credit.
(i) The Borrower hereby indemnifies and holds harmless each Bank and
the Agent from and against any and all claims and damages, losses, liabilities,
costs or expenses which such Bank or the Agent may incur (or which may be
claimed against such Bank or the Agent by any Person whatsoever) by reason of
or in connection with the execution and delivery or transfer of or payment or
failure to pay under any Letter of Credit, including, without limitation, any
claims, damages, losses, liabilities, costs or expenses which the LC Bank may
incur by reason of or in connection with the failure of any other Bank to
fulfill or comply with its obligations to the LC Bank hereunder (but nothing
herein contained shall affect any rights the Borrower may have against such
defaulting Bank); provided that the Borrower shall not be required to indemnify
any Bank or the Agent for any claims, damages, losses, liabilities, costs or
expenses to the extent, but only to the extent, caused by (i) the willful
misconduct or gross negligence of the LC Bank in determining whether a request
presented under any Letter of Credit complied with the terms of such Letter of
Credit or (ii) the LC Bank's failure to pay under any Letter of Credit after
the presentation to it of a request strictly complying with the terms and
conditions of the Letter of Credit. Nothing in this Section 2.16(i) is
intended to limit the obligations of the Borrower under any other provision of
this Agreement.
(j) Each Bank shall, ratably in accordance with its Percentage,
indemnify the LC Bank, its affiliates and their respective directors, officers,
agents and employees (to the extent not reimbursed by the Borrower) against any
cost, expense (including reasonable counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from such indemnitees'
gross negligence or willful misconduct or the LC Bank's failure to pay under
any Letter of Credit after the presentation to it of a request strictly
complying with the terms and conditions of the Letter of Credit) that such
indemnitees may suffer or incur in connection with this Section 2.16 or any
action taken or omitted by such indemnitees hereunder.
(k) In its capacity as a Bank the LC Bank shall have the same rights
and obligations as any other Bank.
<PAGE>
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become effective
on the date that each of the following conditions shall have been satisfied (or
waived in accordance with Section 9.05):
(a) receipt by the Agent of counterparts of this Agreement signed by
each of the parties hereto (or, in the case of any party as to which an
executed counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex or other written confirmation from
such party of execution of a counterpart hereof by such party);
(b) receipt by the Agent of counterparts of the Subsidiary Guaranty
Agreement, duly executed by each of the Obligors listed on the signature pages
thereof;
(c) receipt by the Agent of a duly executed Note for the account of
each Bank dated on or before the Effective Date complying with the provisions
of Section 2.03;
(d) receipt by the Agent of (i) an opinion of the General Counsel of
the Borrower and (ii) an opinion of Jacobs Persinger & Parker, counsel for the
Borrower, substantially in the form of Exhibits B-1 and B-2 hereto and covering
such additional matters relating to the transactions contemplated hereby as the
Required Banks may reasonably request;
(e) receipt by the Agent of an opinion of Davis Polk & Wardwell,
special counsel for the Agent, substantially in the form of Exhibit C hereto
and covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(f) the fact that all loans outstanding under the Prior Agreement
shall have been, or shall simultaneously with the effectiveness hereof be,
repaid in full, together with all accrued interest and accrued fees under the
Prior Agreement; and
(g) receipt by the Agent of all documents it may reasonably request
relating to the existence of the Obligors, the corporate authority for and the
validity of the Financing Documents and any other matters relevant hereto, all
in form and substance satisfactory to the Agent;
Provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later
than May 20, 1993. The Agent shall promptly notify the Borrower and the Banks
of the Effective Date, and such notice shall be conclusive and binding on all
parties hereto. The Borrower and each of the Banks which is a party to the
Prior Agreement, comprising the "Required Banks" as defined in the Prior
Agreement, hereby agree that (i) the commitments of the banks under the Prior
Agreement shall terminate simultaneously with the effectiveness of this
Agreement without the notice required under Section 2.09 of the Prior Agreement
and (ii) the Borrower may prepay any Prime Borrowing as defined in the Prior
Agreement on the Effective Date hereof without prior notice. On the Effective
Date hereof the Borrower may make an initial Base Rate Borrowing under this
Agreement by giving the Agent a Notice of Borrowing not later than 12:00 P.M.
(New York City time) on the Effective Date.
SECTION 3.02. Credit Events. The obligation of any Bank to make a
Loan on the occasion of any Borrowing and of the LC Bank to issue a Letter of
Credit (or to permit the extension of an Evergreen Letter of Credit) on the
occasion of a request therefor by the Borrower is subject to the satisfaction
of the following conditions:
(a) receipt (i) by the Agent of a Notice of Borrowing as required by
Section 2.02, in the case of a Borrowing or (ii) by the LC Bank of notice as
required by Section 2.16, in the case of a Letter of Credit or, in the case of
an extension of an Evergreen Letter of Credit, of a request for extension prior
to the Notice Time thereof;
(b) the fact that, after giving effect to such Credit Event, the
Usage plus the aggregate amount available for drawing under the Aetna Letters
of Credit shall not exceed the aggregate amount of the Commitments;
(c) the fact that, immediately after such Credit Event, no Default
shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the Borrower
contained in this Agreement (except, in the case of a Refunding Borrowing, the
representation and warranty set forth in Section 4.04(b) as to any material
adverse change which has theretofore been disclosed in writing by the Borrower
to the Banks) shall be true on and as of the date of such Credit Event.
Each Credit Event shall be deemed to be a representation and warranty by the
Borrower on the date of such Credit Event as to the facts specified in clauses
(b), (c) and (d) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of Massachusetts, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by each Obligor of the
Financing Documents to which it is a party are within its corporate powers,
have been duly authorized by all necessary corporate action, require no action
by or in respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of such Obligor or of any agreement, judgment, injunction, order, decree or
other instrument binding upon such Obligor or any of its Subsidiaries or result
in the creation or imposition of any Lien on any asset of such Obligor or any
of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid
and binding agreement of the Borrower and the Notes, when executed and
delivered in accordance with this Agreement, will constitute valid and binding
obligations of the Borrower in each case enforceable in accordance with their
respective terms. The Subsidiary Guaranty Agreement, when executed and
delivered in accordance with this Agreement, will constitute a valid and
binding agreement of each Obligor enforceable against each Obligor in
accordance with its terms.
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 1992 and the related consolidated
statements of income, stockholders' equity and cash flows for the fiscal year
then ended, reported on by Arthur Andersen & Co. and set forth in the
Borrower's 1992 Form 10-K, a copy of which has been delivered to each of the
Banks, fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year.
(b) Since December 31, 1992 there has been no material adverse
change in the business, financial position, results of operations or prospects
of the Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.05. Litigation. Except as disclosed in the Borrower's
1992 Form 10-K, there is no action, suit or proceeding pending against, or to
the knowledge of the Borrower threatened against or affecting, the Borrower or
any of its Subsidiaries before any court or arbitrator or any governmental
body, agency or official in which there is a reasonable possibility of an
adverse decision which could materially adversely affect the business,
consolidated financial position or consolidated results of operations of the
Borrower and its Consolidated Subsidiaries or which in any manner draws into
question the validity of any Financing Document.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA Group
has fulfilled its obligations under the minimum funding standards of ERISA and
the Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of
the Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting
of a bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability to the PBGC or any other Person under Title IV of ERISA
other than a liability to the PBGC for premiums under Section 4007 of ERISA.
SECTION 4.07. Environmental Matters. In the ordinary course of its
business, the Borrower conducts periodic reviews of the effect of Environmental
Laws on the business, operations and properties of the Borrower and its
Subsidiaries and compliance therewith. The Borrower and its Subsidiaries also
attempt, whenever possible, to negotiate specific provisions in contracts for
construction services that allocate to the contracting governmental agency or
private owner, the entire risk and responsibility for Hazardous Substances
encountered during the course of construction. On the basis of such reviews
and contract provisions and procedures, the Borrower has reasonably concluded
that the costs and associated liabilities of compliance with Environmental Laws
are unlikely to have a material adverse effect on the business, financial
condition, results of operations or prospects of the Borrower and its
Consolidated Subsidiaries, considered as a whole.
SECTION 4.08. Taxes. United States Federal income tax returns of
the Borrower and its Subsidiaries have been examined and closed through the
fiscal year ended December 31, 1986. The Borrower and its Subsidiaries have
filed all United States Federal income tax returns and all other material tax
returns which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the Borrower
or any Subsidiary. The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries in respect of taxes or other governmental charges
are, in the opinion of the Borrower, adequate.
SECTION 4.09. Subsidiaries. Each of the Borrower's corporate
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
SECTION 4.10. Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.11. No Burdensome Restrictions. No contract, lease,
agreement or other instrument to which the Borrower or any of its Subsidiaries
is a party or by which any of its property is bound or affected, no charge,
corporate restriction, judgment, decree or order and no provision of applicable
law or governmental regulation has or is reasonably expected to materially and
adversely affect the business, operations or financial condition of the
Borrower and its Consolidated Subsidiaries, taken as a whole, or the ability of
the Borrower to perform its obligations under this Agreement.
SECTION 4.12. Full Disclosure. All information heretofore furnished
by the Borrower to the Agent or any Bank for purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Borrower to the Agent or any Bank will
be, true and accurate in all material respects (or in the case of projections
and similar information based on reasonable estimates) on the date as of which
such information is stated or certified. The Borrower has disclosed to the
Banks in writing any and all facts which materially and adversely affect or may
reasonably be expected to materially and adversely affect (to the extent the
Borrower can now reasonably foresee), the business, operations or financial
condition of the Borrower and its Consolidated Subsidiaries, taken as a whole,
or the ability of the Borrower to perform its obligations under this Agreement.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid or any Letter of
Credit remains outstanding or any Reimbursement Obligation with respect thereto
remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of the
Banks:
(a) as soon as available and in any event within 90 days after the
end of each fiscal year of the Borrower, consolidated and consolidating balance
sheets of the Borrower and its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated and consolidating statements of
income, stockholders' equity and cash flows for such fiscal year, setting forth
in each case in comparative form the figures for the previous fiscal year, all
reported on in a manner acceptable to the Securities and Exchange Commission by
Arthur Andersen & Co. or other independent public accountants of nationally
recognized standing;
(b) as soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of the Borrower, a
consolidated condensed balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such quarter and the related consolidated
condensed statements of income and cash flows for such quarter and for the
portion of the Borrower's fiscal year ended at the end of such quarter, setting
forth in each case in comparative form the figures for the corresponding
quarter and the corresponding portion of the Borrower's previous fiscal year,
all certified (subject to normal year-end adjustments) as to fairness of
presentation, generally accepted accounting principles and consistency by the
chief financial officer or the chief accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the chief
financial officer or the chief accounting officer of the Borrower (i) setting
forth in reasonable detail the calculations required to establish whether the
Borrower was in compliance with the requirements of Sections 5.07 to 5.10,
inclusive, 5.12, 5.14 and 5.15 on the date of such financial statements and
(ii) stating whether there exists on the date of such certificate any Default
and, if any Default then exists, setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i) whether
anything has come to their attention to cause them to believe that there
existed on the date of such statements any Default and (ii) confirming the
calculations set forth in the officer's certificate delivered simultaneously
therewith pursuant to clause (c) above;
(e) simultaneously with the delivery of each set of financial
statements set forth above, a schedule, dated as of the date of such financial
statements, listing each construction contract which provides for aggregate
total payments in excess of $2,500,000 and with respect to which the Borrower
or a Consolidated Subsidiary of the Borrower is a party or participates through
a joint venture, and setting forth as of the date of such schedule for each
such contract the Borrower's original estimate of revenue and profit, the
Borrower's current estimate of revenue and profit, cumulative realized and
estimated remaining revenue and profit, and the percentage of completion and
anticipated completion date of each such contract, certified as to consistency,
accuracy and reasonableness of estimates by the chief financial officer or the
chief accounting officer of the Borrower;
(f) forthwith upon the occurrence of any Default, a certificate of
the chief financial officer or the chief accounting officer of the Borrower
setting forth the details thereof and the action which the Borrower is taking
or proposes to take with respect thereto;
(g) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(h) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and annual, quarterly or monthly reports which the
Borrower shall have filed with the Securities and Exchange Commission;
(i) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate, impose liability (other than for premiums under Section
407 of ERISA) in respect of, or appoint a trustee to administer any Plan, a
copy of such notice; (iv) applies for a waiver of the minimum funding standard
under Section 412 of the Internal Revenue Code, a copy of such application; (v)
gives notice of intent to terminate any Plan under Section 4041(c) of ERISA, a
copy of such notice and other information filed with the PBGC; (vi) gives
notice of withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of
such notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer or the chief accounting officer of
the Borrower setting forth details as to such occurrence and action, if any,
which the Borrower or applicable member of the ERISA Group is required or
proposes to take; and
(j) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Payment of Obligations. The Borrower will pay and
discharge, and will cause each Subsidiary to pay and discharge, at or before
maturity, all their respective material obligations and liabilities, including,
without limitation, tax liabilities, except where the same may be contested in
good faith by appropriate proceedings, and will maintain, and will cause each
Subsidiary to maintain, in accordance with generally accepted accounting
principles, appropriate reserves for the accrual of any of the same.
SECTION 5.03. Maintenance of Property; Insurance. The Borrower will
keep, and will cause each Subsidiary to keep, all property useful and necessary
in its business in good working order and condition, ordinary wear and tear
excepted; will maintain, and will cause each Subsidiary to maintain (either in
the name of the Borrower or in such Subsidiary's own name) with financially
sound and reputable insurance companies, insurance on all their property in at
least such amounts and against at least such risks as are usually insured
against in the same general area by companies of established repute engaged in
the same or a similar business; and will furnish to the Banks, upon written
request from the Agent, full information as to the insurance carried.
SECTION 5.04. Conduct of Business and Maintenance of Existence. The
Borrower will continue, and will cause each Subsidiary Guarantor to continue,
to engage in business of the same general type as now conducted by the Borrower
and its Subsidiaries, and will preserve, renew and keep in full force and
effect, and will cause each Subsidiary Guarantor to preserve, renew and keep in
full force and effect their respective corporate existence and their respective
rights, privileges and franchises necessary or desirable in the normal conduct
of business.
SECTION 5.05. Compliance with Laws. The Borrower will comply, and
cause each Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA and
the rules and regulations thereunder) except where the necessity of compliance
therewith is contested in good faith by appropriate proceedings.
SECTION 5.06. Inspection of Property, Books and Records. The
Borrower will keep, and will cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries in conformity with
generally accepted accounting principles shall be made of all dealings and
transactions in relation to its business and activities; and will permit, and
will cause each Subsidiary to permit, representatives of any Bank at such
Bank's expense (subject to Section 9.03(a)(ii)) to visit and inspect any of
their respective properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs, finances
and accounts with their respective officers, employees and independent public
accountants, all at such reasonable times and as often as may reasonably be
desired.
SECTION 5.07. Current Ratio. Consolidated Current Assets will at no
time be less than 100% of Consolidated Current Liabilities.
SECTION 5.08. Debt. (a) Modified Parent Company Debt will at no
time (i) at or prior to December 31, 1993, exceed 75% of Consolidated Capital
Base, (ii) after December 31, 1993 and at or prior to December 31, 1994, exceed
70% of Consolidated Capital Base and (iii) after December 31, 1994, exceed 65%
of Consolidated Capital Base.
(b) The Borrower will not permit any Subsidiary to incur or suffer
to exist any Debt other than (i) Debt of Perini Land and Development
outstanding at December 31, 1992, as described in Schedule I, (ii) Debt of
Perini Land and Development in the form of Guarantees issued subsequent to
December 31, 1992 in an aggregate amount not exceeding $14,000,000, as
described in Schedule II, (iii) Debt of Perini Land and Development in the form
of Guarantees, in addition to the Guarantees permitted by clause (ii) above,
issued subsequent to December 31, 1992 in an aggregate amount not exceeding
$5,000,000, (iv) Debt of Perini International Corporation in an aggregate
amount not exceeding $5,000,000, (v) Debt payable to the Borrower or a
Wholly-Owned Consolidated Subsidiary and (vi) any refinancing, extension,
renewal or refunding of the Debt referred to in clauses (i) through (v) above,
provided that such Debt is not increased.
SECTION 5.09. Minimum Consolidated Tangible Net Worth. Consolidated
Tangible Net Worth of the Borrower will at no time be less than the Minimum
Compliance Level, determined as set forth below. The "Minimum Compliance
Level" is an amount equal to $100,000,000 subject to increase (but in no case
subject to decrease) from time to time as follows: (i) at the end of each
fiscal year commencing after December 31, 1992 for which Consolidated Net
Income is a positive number, the Minimum Compliance Level shall be increased
effective at the last day of such fiscal year by an amount equal to 50% of such
Consolidated Net Income; and (ii) on the date of each issuance by the Borrower
subsequent to December 31, 1992 of any capital stock or other equity interest,
the Minimum Compliance Level shall be increased by an amount equal to 75% of
the amount of the net proceeds received by the Borrower on account of such
issuance.
SECTION 5.10. Interest Coverage. One-fourth of Consolidated
Earnings Before Interest and Taxes for each period of four consecutive fiscal
quarters ending on or before December 31, 1993 shall not be less than 175% of
Consolidated Interest Charges for the last of such four fiscal quarters.
One-fourth of Consolidated Earnings Before Interest and Taxes for each period
of four consecutive fiscal quarters ending thereafter shall not be less than
200% of Consolidated Interest Charges for the last of such four fiscal
quarters.
SECTION 5.11. Negative Pledge. Neither the Borrower nor any
Consolidated Subsidiary of the Borrower will create, assume or suffer to exist
any Lien on any asset (including, without limitation, capital stock of
Subsidiaries) now owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement as described in Schedule IV;
(b) any Lien existing on any asset of any corporation at the time
such corporation becomes a Consolidated Subsidiary of the Borrower and not
created in contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed for the
purpose of financing all or any part of the cost of acquiring such asset,
provided that such Lien attaches to such asset concurrently with or within 90
days after the acquisition thereof and such Lien secures only such Debt;
(d) any Lien on any asset of any corporation existing at the time
such corporation is merged or consolidated with or into the Borrower or a
Consolidated Subsidiary of the Borrower and not created in contemplation of
such event;
(e) any Lien existing on any asset prior to the acquisition thereof
by the Borrower or a Consolidated Subsidiary of the Borrower and not created in
contemplation of such acquisition;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that such Debt is not increased and is not
secured by any additional assets; and
(g) Liens incidental to conduct of its business or the ownership of
its assets which (i) do not secure Debt and (ii) do not in the aggregate
materially detract from the value of its assets or materially impair the use
thereof in the operation of its business.
SECTION 5.12. Consolidations, Mergers and Sales of Assets. The
Borrower will not (i) consolidate or merge with or into any other Person or
sell, lease or otherwise transfer all or any substantial part of its assets to
any other Person or (ii) permit any Material Subsidiary (other than a
Subsidiary Guarantor) to consolidate or merge with or into, or transfer all or
any substantial part of its assets to, any Person other than the Borrower or a
Wholly-Owned Consolidated Subsidiary; provided that the Borrower or a Material
Subsidiary other than Perini Land and Development may sell or otherwise
transfer assets if Aggregate Asset Sale Proceeds after such sale less Aggregate
Reinvested Proceeds does not at any time exceed $15,000,000. "Aggregate Asset
Sale Proceeds" means the sum of the proceeds of each sale in a single
transaction or series of related transactions by the Borrower or any
Subsidiary, on or after the Effective Date, of fixed assets yielding proceeds
in excess of 5% of the Consolidated Tangible Net Worth of the Borrower.
"Aggregate Reinvested Proceeds" means the amount of Aggregate Asset Sale
Proceeds used to purchase fixed assets for use in the same general business
presently conducted by the Borrower or the Subsidiary that realized such
proceeds, as the case may be, provided such proceeds are so used within 18
months of receipt thereof. The Borrower will not permit any Subsidiary
Guarantor to consolidate or merge with or into, or transfer all or any
substantial part of its assets to, any Person; provided that the foregoing
shall not prohibit any Subsidiary Guarantor from selling, leasing or otherwise
transferring assets in the ordinary course of its business.
SECTION 5.13. Use of Proceeds. The proceeds of the Loans made under
this Agreement will be used by the Borrower for general corporate purposes.
None of such proceeds will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any
"margin stock" within the meaning of Regulation U.
SECTION 5.14. Restricted Payments. The aggregate amount of all
dividends which constitute Restricted Payments declared and other Restricted
Payments made during any period of four consecutive fiscal quarters will not
exceed an amount equal to 50% of the excess, if any, of (x) Consolidated Net
Income for such period over (y) the aggregate amount of preferred stock
dividends not constituting Restricted Payments paid during such period. The
Borrower will not declare any dividend payable more than 120 days after the
date of declaration thereof.
SECTION 5.15. Real Estate Investments. The Borrower will not, and
will not permit any Consolidated Subsidiary to, make any Real Estate Investment
if, after giving effect thereto, the aggregate amount of Real Estate
Investments made by the Borrower and its Consolidated Subsidiaries during any
fiscal year set forth below shall exceed the applicable amount set forth below
plus, in the case of any such fiscal year ending after December 31, 1993, 25%
of the amount, if any, by which the aggregate Real Estate Investments made by
the Borrower and its Consolidated Subsidiaries in the preceding fiscal year
were less than the applicable limitation specified for such fiscal year in this
Section.
Year Ending
December 31 Amount
1993 $18,000,000
1994 $ 8,000,000
1995 and
thereafter $ 4,000,000
SECTION 5.16. Other Investments. Neither the Borrower nor any
Consolidated Subsidiary will make or acquire any Investment in any Person other
than:
(a) Real Estate Investments permitted by Section 5.15;
(b) Investments in Subsidiaries or joint ventures principally engaged
in the construction business;
(c) Temporary Cash Investments; and
(d) any Investment not otherwise permitted by the foregoing clauses
of this Section if, immediately after such Investment is made or acquired, the
aggregate net book value of all Investments permitted by this clause (d) does
not exceed 5% of Consolidated Tangible Net Worth;
provided that no Real Estate Investment may be made pursuant to clause (b), (c)
or (d) above.
SECTION 5.17. Aetna Letters of Credit. Within 60 days after the
Effective Date, the Borrower will cause all Aetna Letters of Credit to be
terminated.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any
Loan, any fees or any other amount payable hereunder;
(b) the Borrower shall fail to pay when due or within five Business
Days thereof any interest on any Loan;
(c) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.07 to 5.17, inclusive or in Section 3.01 of the
Subsidiary Guaranty Agreement;
(d) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a),
(b) or (c) above) for 10 days after written notice thereof has been given to
the Borrower by the Agent at the request of any Bank;
(e) any representation, warranty, certification or statement made by
the Borrower in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made);
(f) the Borrower shall fail to make any payment in respect of any
Debt (other than the Notes) when due or within any applicable grace period;
(g) any Subsidiary shall fail to make any payment in respect of any
Debt the aggregate principal amount of which is $250,000 or more when due or
within any applicable grace period;
(h) any event or condition shall occur which results in the
acceleration of the maturity of any Debt of the Borrower or any Subsidiary or
enables (or, with the giving of notice or lapse of time or both, would enable)
the holder of such Debt or any Person acting on such holder's behalf to
accelerate the maturity thereof;
(i) the Borrower or any Subsidiary shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment
for the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
(j) an involuntary case or other proceeding shall be commenced
against the Borrower or any Subsidiary seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Subsidiary under the
federal bankruptcy laws as now or hereafter in effect;
(k) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $5,000,000 which it shall have
become liable to pay to the PBGC or any other Person under Title IV of ERISA;
or notice of intent to terminate a Material Plan shall be filed under Title IV
of ERISA by any member of the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate, to impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer any Material Plan; or a condition shall exist by reason
of which the PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans which could cause one
or more members of the ERISA Group to incur a current payment obligation in
excess of $5,000,000;
(l) a judgment or order for the payment of money in excess of
$5,000,000 shall be rendered against the Borrower or any Subsidiary and such
judgment or order shall continue unsatisfied, unstayed and unbonded for a
period of 10 days; or
(m) any of the following: (i) any person or group or persons (within
the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as
amended) (other than the Exempt Group) shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under said Act) of 25% or more of the outstanding shares of common
stock of the Borrower; (ii) fewer than two of the following people shall be
members of the Board of Directors of the Borrower: David Perini, Joseph Perini
and Bart Perini; or (iii) the Borrower shall cease to own 100% of the capital
stock of any Subsidiary Guarantor;
then, and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in aggregate
principal amount of the Loans, by notice to the Borrower declare the Notes
(together with accrued interest thereon) to be, and the Notes shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Obligors;
provided that in the case of any of the Events of Default specified in clause
(i) or (j) above with respect to any Obligor, without any notice to the
Borrower or any other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued interest thereon)
shall become immediately due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Obligors.
SECTION 6.02. Cash Cover. The Borrower hereby agrees, in addition to
the provisions of Section 6.01 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by the Agent upon
instruction from Banks having more than 50% in aggregate amount of the
Commitments, pay (and, in the case of any of the Events of Default specified in
clause (i) or (j) above with respect to any Obligor, forthwith, without any
demand or the taking of any other action by the Agent or any Bank, it shall
pay) to the Agent an amount in immediately available funds equal to the then
aggregate Letter of Credit Liabilities for all Letters of Credit to be held as
security therefor for the benefit of all Banks.
SECTION 6.03. Notice of Default. The Agent shall give notice to the
Borrower under Section 6.01(d) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under the Financing Documents as are delegated to
the Agent by the terms thereof, together with all such powers as are reasonably
incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan Guaranty Trust Company
of New York shall have the same rights and powers under the Financing Documents
as any other Bank and may exercise or refrain from exercising the same as
though it were not the Agent, and Morgan Guaranty Trust Company of New York and
its affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower or any Subsidiary or affiliate of the
Borrower as if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent under
the Financing Documents are only those expressly set forth herein. Without
limiting the generality of the foregoing, the Agent shall not be required to
take any action with respect to any Default, except as expressly provided in
Article VI.
SECTION 7.04. Consultation with Experts. The Agent may consult with
legal counsel (who may be counsel for an Obligor), independent public
accountants 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 in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers, agents or employees
shall be liable for any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks or (ii) in the
absence of its own gross negligence or willful misconduct. Neither the Agent
nor any of its affiliates nor any of their respective directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify (i) any statement, warranty or representation made in
connection with the Financing Documents or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of the
Borrower; (iii) the satisfaction of any condition specified in Article III,
except receipt of items required to be delivered to the Agent; or (iv) the
validity, effectiveness or genuineness of any Financing Document or any other
instrument or writing furnished in connection herewith. The Agent shall not
incur any liability by acting in reliance upon any notice, consent,
certificate, statement, or other writing (which may be a bank wire, telex or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees' gross negligence or willful
misconduct) that such indemnitees may suffer or incur in connection with this
Agreement or any action taken or omitted by such indemnitees hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any time by
giving notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment, within 30 days after the
retiring Agent gives notice of resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a commercial
bank organized or licensed under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$150,000,000. Upon the acceptance of its appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent.
<PAGE>
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any Fixed
Rate Borrowing:
(a) the Agent is advised by the Reference Banks that deposits in
dollars (in the applicable amounts) are not being offered to the Reference
Banks in the relevant market for such Interest Period, or
(b) Banks having 50% or more of the aggregate amount of the
Commitments advise the Agent that the Adjusted CD Rate or the Adjusted London
Interbank Offered Rate, as the case may be, as determined by the Agent will not
adequately and fairly reflect the cost to such Banks of funding their CD Loans
or Euro-Dollar Loans, as the case may be, for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make
CD Loans or Euro-Dollar Loans, as the case may be, shall be suspended. Unless
the Borrower notifies the Agent at least two Domestic Business Days before the
date of any Fixed Rate Borrowing for which a Notice of Borrowing has previously
been given that it elects not to borrow on such date, such Borrowing shall
instead be made as a Base Rate Borrowing.
SECTION 8.02. Illegality. If, after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, 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 any Bank (or its Euro-Dollar Lending Office) 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 any
Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its
Euro-Dollar Loans and such Bank shall so notify the Agent, the Agent shall
forthwith give notice thereof to the other Banks and the Borrower, whereupon
until such Bank notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the obligation of such Bank to
make Euro-Dollar Loans shall be suspended. Before giving any notice to the
Agent pursuant to this Section, such Bank shall designate a different
Euro-Dollar Lending Office if such designation will avoid the need for giving
such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such Bank shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans
to maturity and shall so specify in such notice, the Borrower shall immediately
prepay in full the then outstanding principal amount of each such Euro-Dollar
Loan, together with accrued interest thereon. Concurrently with prepaying each
such Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in an equal
principal amount from such Bank (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans of the other
Banks), and such Bank shall make such a Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, 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 any Bank (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(i) shall subject any Bank (or its Applicable Lending Office) to any
tax, duty or other charge with respect to its Fixed Rate Loans, its Note or its
obligation to make Fixed Rate Loans, or shall change the basis of taxation of
payments to any Bank (or its Applicable Lending Office) of the principal of or
interest on its Fixed Rate Loans or any other amounts due under this Agreement
in respect of its Fixed Rate Loans or its obligation to make Fixed Rate Loans
(except for changes in the rate of tax on the overall net income of such Bank
or its Applicable Lending Office imposed by the jurisdiction in which such
Bank's principal executive office or Applicable Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any such requirement imposed by the Board of Governors of
the Federal Reserve System, but excluding (A) with respect to any CD Loan any
such requirement included in an applicable Domestic Reserve Percentage and (B)
with respect to any Euro-Dollar Loan any such requirement included in an
applicable Euro-Dollar Reserve Percentage), special deposit, insurance
assessment (excluding, with respect to any CD Loan, any such requirement
reflected in an applicable Assessment Rate) or similar requirement against
assets of, deposits with or for the account of, or credit extended by, any Bank
(or its Applicable Lending Office) or shall impose on any Bank (or its
Applicable Lending Office) or on the United States market for certificates of
deposit or the London interbank market any other condition affecting its Fixed
Rate Loans, its Note or its obligation to make Fixed Rate Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Applicable Lending Office) of making or maintaining any Fixed Rate Loan, or
to reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Note with respect
thereto, by an amount deemed by such Bank to be material, then, within 15 days
after demand by such Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank for
such increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, 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 any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days
after demand by such Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank (or
its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate a
different Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment
of such Bank, be otherwise disadvantageous to such Bank. A certificate of any
Bank claiming compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
SECTION 8.04. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03(a) and the Borrower shall, by at least five Euro-Dollar
Business Days' prior notice to such Bank through the Agent, have elected that
the provisions of this Section shall apply to such Bank, then, unless and until
such Bank notifies the Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as CD Loans
or Euro-Dollar Loans, as the case may be, shall be made instead as Base Rate
Loans (on which interest and principal shall be payable contemporaneously with
the related Fixed Rate Loans of the other Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case may
be, has been repaid, all payments of principal which would otherwise be applied
to repay such Fixed Rate Loans shall be applied to repay its Base Rate Loans
instead.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Agent, at its address or telex
or facsimile number set forth on the signature pages hereof, (y) in the case of
any Bank, at its address or telex or facsimile number set forth in its
Administrative Questionnaire or (z) in the case of any party, such other
address or telex or facsimile number as such party may hereafter specify for
the purpose by notice to the Agent and the Borrower. Each such notice, request
or other communication shall be effective (i) if given by telex, when such
telex is transmitted to the telex number specified in this Section and the
appropriate answerback is received, (ii) if given by facsimile transmission,
when such facsimile is transmitted to the facsimile number specified in this
Section and receipt of such facsimile is confirmed, either orally or in
writing, by the party receiving such transmission, (iii) if given by certified
mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or (iv) if given by any other
means, when delivered at the address specified in this Section; provided that
notices to the Agent under Article II or Article VIII shall not be effective
until received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or any
Bank in exercising any right, power or privilege under any Financing Document
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies therein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law.
SECTION 9.03. Expenses; Documentary Taxes; Indemnification. (a)
The Borrower shall pay (i) all out-of-pocket expenses of the Agent, including
fees and disbursements of special counsel for the Agent, in connection with the
preparation of the Financing Documents, any waiver or consent under any
Financing Document, or any amendment of any Financing Document or any Default
or alleged Default and (ii) if an Event of Default occurs, all out-of-pocket
expenses incurred by the Agent and each Bank, including fees and disbursements
of counsel, in connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings resulting therefrom.
The Borrower shall indemnify each Bank against any transfer taxes, documentary
taxes, assessments or charges made by any governmental authority by reason of
the execution and delivery of any Financing Document.
(b) The Borrower agrees to indemnify the Agent and each Bank, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by any Indemnitee in connection
with any investigative, administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) brought or threatened
relating to or arising out of this Agreement or any actual or proposed use of
proceeds of Loans hereunder; provided that no Indemnitee shall have the right
to be indemnified hereunder for such Indemnitee's own gross negligence or
willful misconduct as determined by a court of competent jurisdiction.
SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount due with respect to any Loan or
Reimbursement Obligation owed to it which is greater than the proportion
received by any other Bank in respect of the aggregate amount due with respect
to any Loan or Reimbursement Obligation owed to such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Loans and Reimbursement Obligations owed to the other
Banks, and such other adjustments shall be made, as may be required so that all
such payments with respect to the Loans and Reimbursement Obligations owed to
the Banks shall be shared by the Banks pro rata; provided that nothing in this
Section shall impair the right of any Bank to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such exercise to
the payment of indebtedness of the Borrower other than its indebtedness
hereunder. The 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 the Borrower in the amount of such
participation.
SECTION 9.05. Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent or the LC Bank are affected thereby,
by it); provided that no such amendment or waiver shall, unless signed by all
the Banks, (i) increase or decrease the Commitment of any Bank (except for a
ratable decrease in the Commitments of all Banks) or subject any Bank to any
additional obligation, (ii) reduce the principal of or rate of interest on any
Loan or any fees hereunder, (iii) postpone the date fixed for any payment of
principal of or interest on any Loan, Reimbursement Obligation or any fees
hereunder or for termination of any Commitment, (iv) amend or waive any of the
provisions of Article VIII or (v) change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Notes, or the number of Banks,
which shall be required for the Banks or any of them to take any action under
this Section or any other provision of the Financing Documents.
<PAGE>
SECTION 9.06. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment
or any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such participation agreement may provide that such Bank will not agree to
any modification, amendment or waiver of this Agreement described in clause
(i), (ii) or (iii) of Section 9.05 without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Article VIII with
respect to its participating interest. An assignment or other transfer which
is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement and the Notes, and such Assignee
shall assume such rights and obligations, pursuant to an Assignment and
Assumption Agreement in substantially the form of Exhibit E hereto executed by
such Assignee and such transferor Bank, with (and subject to) the subscribed
consent of the Borrower (which shall not be unreasonably withheld), the LC Bank
and the Agent; provided that if an Assignee is an affiliate of such transferor
Bank, no such consent shall be required. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Bank of an amount
equal to the purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement and shall have
all the rights and obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank, the Agent and the
Borrower shall make appropriate arrangements so that, if required, a new Note
is issued to the Assignee. In connection with any such assignment, the
transferor Bank shall pay to the Agent an administrative fee for processing
such assignment in the amount of $2,500.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.03 than
such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.02 or 8.03 requiring such
Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
SECTION 9.07. Collateral. Each of the Banks represents to the Agent
and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be construed in accordance with and governed by
the law of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Borrower irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.
SECTION 9.09. Counterparts; Integration. 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 thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS, THE AGENT
AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
PERINI CORPORATION
By /s/ James M. Markert
-------------------------
Title: Sr. Vice President
By /s/ Susan C. Mellace
-------------------------
Title: Treasurer
73 Mount Wayte Avenue
Framingham, MA 01701
Facsimile number: (508) 628-2960
<PAGE>
Commitments
$15,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Caroline R. Shapiro
---------------------------
Title: Vice President
Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260
Telex number: 177615 MGT UT
Facsimile number: (212) 648-5018
$15,000,000 BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION
By /s/ Richard J. Cerf
-----------------------------
Title: Vice President
Bank of America National Trust
& Savings Association
555 California Street, 41st Floor
San Francisco, CA 94104
Facsimile number: (415) 622-4585
$15,000,000 SHAWMUT BANK, N.A.
By /s/ Robert Lord
-----------------------------
Title: Vice President
Shawmut Bank, N.A.
One Federal Street
Boston, MA 02211
Facsimile number: (617) 292-2619
$15,000,000 FLEET BANK OF MASSACHUSETTS, N.A.
By /s/ Jeffery Bauer
-----------------------------
Title: Vice President
Fleet Bank of Massachusetts, N.A.
75 State Street
MA BO F04H
Boston, MA 02109-1810
Facsimile number: (617) 346-1833
$10,000,000 BAYBANK BOSTON, N.A., as Bank and
as LC Bank
By /s/ Timothy M. Laurion
------------------------------
Title: Vice President
BayBank Boston, N.A.
175 Federal Street, 10th Floor
Boston, MA 02110
Facsimile number: (617) 556-6594
Total Commitments
$70,000,000
===========
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Caroline R. Shapiro
------------------------------
Title: Vice President
60 Wall Street
New York, New York 10260
Attn: Robert Bottamedi
Telex number: 177615 MGT UT
Facsimile number: (212) 648-5023
<PAGE>
SCHEDULE I
DEBT OF PERINI LAND AND DEVELOPMENT ("PL&D")
OUTSTANDING AT DECEMBER 31, 1992
($000'S)
Loans:
Metrocentre - Barnett $ 3,109
Metrocentre - Boose & Gluckstern 200
Insurance 687
Perini Central (VNB) 708
Capital Plaza (Pioneer Dvlpt.) 811
Sabino Springs (Nickerson) 433
Sabino Springs (Svgs. of America/Tibor Title) 255
Sabino Springs (B of A) 3,330
Southwest Villages 2,195
Marlboro (IDB) 3,145
RWCC (Minn. Mutual) 4,953
Raynham Exec. Bldg. (Durfee Attleboro) 1,200
Raynham Exec. Bldg. (BayBank S/E) 1,188
Easton (Dedham Svgs.) 195
Easton Ind. Park (Citicorp) 3,350
TOTAL $25,759
PL&D Guarantees:
SCA (lease guarantees) $ 2,339
Glenco/Squaw (guarantee) (B of A loan) 10,000
Lake Ridge (B of A loan) 4,594
Rincon II Comm loan 3,500
Rincon T.I. Loan (Sumitomo) 774
Oaks at Buckhead (Citicorp loan) 9,849
$31,056
Letters of Credit: (as Credit Support)
Rincon Center
I (B of A) $ 3,500
II (B of A) 2,750
Squaw Creek (Bay Bank) 2,200
$ 8,450
TOTAL $65,265
<PAGE>
SCHEDULE II
POTENTIAL PL&D GUARANTEES OF JOINT VENTURE OBLIGATIONS
($000)
Squaw Creek
PL&D subject to possible future increase in $ 2,000
letter of credit support under Bank of
America Loan.
Rincon Center
PL&D may be required to undertake additional $ 8,000
guarantees under Citicorp loan in
forthcoming negotiations. Guarantees
would not exceed forecast loan amortization
over 1993-1998.
Oaks at Buckhead
PL&D has guaranteed up to $4 million of $ 4,000
individual mortgages for condominium
purchases if Citicorp initiates them
and if certain repayment milestones
of the mortgages are not met (Agreement
signed in 1993 - not included in 12/31/92
PL&D funded debt).
Total $14,000
<PAGE>
SCHEDULE III
AETNA LETTERS OF CREDIT
1. Letter of Credit No. SB02500/2 issued by BayBank in favor of Aetna Life and
Casualty Co.
2. Letter of Credit No. S-865466 issued by Morgan Guaranty Trust Company of
New York in favor of Aetna Life and Casualty Co.
3. Letter of Credit No. 108808 issued by Bank of America National Trust &
Savings Association in favor of Aetna Casualty & Surety Company.
<PAGE>
SCHEDULE IV
EXISTING LIENS
(All Amounts in Thousands)
IRB 1978 1,254 Framingham H.O. Bldg
IRB 1985 4,000 Framingham H.O. Bldg
Rincon (CA) 6,250 FL Land
Sasson Land 1,020
PBC West Office Bldg 939
Total 13,463
<PAGE>
EXHIBIT A
NOTE
New York, New York
, 19
For value received, Perini Corporation, a Massachusetts corporation
(the "Borrower"), promises to pay to the order of (the "Bank"), for
the account of its Applicable Lending Office, the unpaid principal amount of
each Loan made by the Bank to the Borrower pursuant to the Credit Agreement
referred to below on the last day of the Interest Period relating to such Loan.
The Borrower promises to pay interest on the unpaid principal amount of each
such Loan on the dates and at the rate or rates provided for in the Credit
Agreement. All such payments of principal and interest shall be made in lawful
money of the United States in Federal or other immediately available funds at
the office of Morgan Guaranty Trust Company of New York, 60 Wall Street, New
York, New York.
All Loans made by the Bank, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, if the Bank so elects in connection with any transfer or enforcement
of this note, appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding may be endorsed by the Bank on the
schedule attached hereto, or on a continuation of such schedule attached to and
made a part hereof; provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Credit Agreement
dated as of May 10, 1993 among the Borrower, the banks listed on the signature
pages thereof, and Morgan Guaranty Trust Company of New York, as Agent (as the
same may be amended from time to time, the "Credit Agreement"). Terms defined
in the Credit Agreement are used herein with the same meanings. Reference is
made to the Credit Agreement for provisions for the prepayment hereof and the
acceleration of the maturity hereof.
Payment of principal and interest on this Note is unconditionally
guaranteed, subject to the limitations contained in the Subsidiary Guaranty
Agreement, by the Subsidiary Guarantors pursuant to the Subsidiary Guaranty
Agreement.
PERINI CORPORATION
By________________________
Title:
By________________________
Title:
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
__________________________________________________________________
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
<PAGE>
EXHIBIT B-1
OPINION OF GENERAL
COUNSEL OF THE BORROWER
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
I am General Counsel of Perini Corporation (the "Borrower") and have
acted as such in connection with the Credit Agreement (the "Credit Agreement")
dated as of May 10, 1993 among the Borrower, the banks listed on the signature
pages thereof, and Morgan Guaranty Trust Company of New York, as Agent. Terms
defined in the Credit Agreement are used herein as therein defined. This
opinion is being rendered to you pursuant to Section 3.01(d) of the Credit
Agreement.
I have examined originals or copies, certified or otherwise identified
to my satisfaction, of the Financing Documents and of such other documents,
corporate records, certificates of public officials and officers of the
Borrower and its Subsidiaries and other instruments and have conducted such
other investigations of fact and law as I have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of the Commonwealth of Massachusetts, and
has all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
2. The execution, delivery and performance by each Obligor of the
Financing Documents to which it is a party are within its corporate powers,
have been duly authorized by all necessary corporate action, require no action
by or in respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of such Obligor or of any agreement, judgment, injunction, order, decree or
other instrument binding upon such Obligor or any of its Subsidiaries or result
in the creation or imposition of any Lien on any asset of such Obligor or any
of its Subsidiaries.
3. The choice of New York law to govern the Credit Agreement, the
Notes and the Subsidiary Guaranty Agreement is a valid and effective choice of
law under the laws of the State of Massachusetts.
4. Except as set forth in the Borrower's 1992 Form 10-K, there is no
action, suit or proceeding pending against, or to the best of my knowledge
threatened against or affecting, the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which could materially
adversely affect the business, consolidated financial position or consolidated
results of operations of the Borrower and its Consolidated Subsidiaries,
considered as a whole or which in any manner draws into question the validity
of any Financing Document.
5. Each of the Borrower's Material Subsidiaries is a corporation
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
Very truly yours,
<PAGE>
EXHIBIT B-2
OPINION OF NEW YORK
COUNSEL FOR THE BORROWER
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have acted as counsel for Perini Corporation (the "Borrower") in
connection with the Credit Agreement (the "Credit Agreement") dated as of May
10, 1993 among the Borrower, the banks listed on the signature pages thereof,
and Morgan Guaranty Trust Company of New York, as Agent. Terms defined in the
Credit Agreement are used herein as therein defined. This opinion is being
rendered to you pursuant to Section 3.01(d) of the Credit Agreement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of the Financing Documents and of such other
documents, corporate records, certificates of public officials and officers of
the Borrower and its Subsidiaries and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of the Commonwealth of Massachusetts, and
has all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
2. The execution, delivery and performance by each Obligor of the
Financing Documents to which it is a party are within its corporate powers,
have been duly authorized by all necessary corporate action, require no action
by or in respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of such Obligor or of any agreement, judgment, injunction, order, decree or
other instrument binding upon such Obligor or any of its Subsidiaries or result
in the creation or imposition of any Lien on any asset of such Obligor or any
of its Subsidiaries.
3. The Credit Agreement constitutes a valid and binding agreement of
the Borrower and the Notes constitute valid and binding obligations of the
Borrower in each case enforceable in accordance with their respective terms.
The Subsidiary Guaranty Agreement constitutes a valid and binding agreement of
each Obligor enforceable against each Obligor in accordance with its terms.
4. Except as set forth in the Borrower's 1992 Form 10-K, there is no
action, suit or proceeding pending against, or to the best of our knowledge
threatened against or affecting, the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which could materially
adversely affect the business, consolidated financial position or consolidated
results of operations of the Borrower and its Consolidated Subsidiaries,
considered as a whole or which in any manner draws into question the validity
of any Financing Document.
5. Each of the Borrower's Material Subsidiaries is a corporation
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
The opinion expressed in Paragraph 3 above is subject to bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the
enforcement of creditors' rights generally and subject to general principles of
equity applicable to any enforceability or the granting of the remedy of
specific performance now and hereafter in effect.
The members of this firm are not members of the Bar of any state other
than the State of New York. In giving the foregoing opinion we have relied,
without independent investigation, as to all matters governed by the laws of
Massachusetts, upon the opinion of Robert E. Higgins, General Counsel of the
Borrower, dated May __, 1993, a copy of which has been delivered to you.
Very truly yours,
<PAGE>
EXHIBIT C
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the Credit Agreement (the
"Credit Agreement") dated as of May 10, 1993 among Perini Corporation, a
Massachusetts corporation (the "Borrower"), the banks listed on the signature
pages thereof (the "Banks") and Morgan Guaranty Trust Company of New York, as
Agent (the "Agent"), and have acted as special counsel for the Agent for the
purpose of rendering this opinion pursuant to Section 3.01(e) of the Credit
Agreement. Terms defined in the Credit Agreement are used herein as therein
defined except that, for purposes of this opinion, "Obligors" means the
Borrower, Perini Land and Development, Perini International, Perini Building
Company and R. E. Dailey & Co.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of the Financing Documents and of such other
documents, corporate records, certificates of public officials and other
instruments and have conducted such other investigations of fact and law as we
have deemed necessary or advisable for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate powers and
have been duly authorized by all necessary corporate action.
2. The Credit Agreement constitutes a valid and binding agreement of
the Borrower and the Notes constitute valid and binding obligations of the
Borrower.
3. Assuming that the execution, delivery and performance by each
Obligor other than the Borrower of the Subsidiary Guaranty Agreement are within
such Obligor's corporate powers and have been duly authorized by all necessary
corporate action then the Subsidiary Guaranty Agreement constitutes a valid and
binding agreement of each Obligor.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the federal laws of
the United States of America and the General Corporation Law of the State of
Delaware. Insofar as the foregoing opinion involves matters governed by the
laws of Massachusetts, we have relied, without independent investigation, upon
the opinion of , General Counsel of the Borrower, dated May ,
1993, a copy of which has been delivered to you. In giving the foregoing
opinion, we express no opinion as to the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any Bank is located which
limits the rate of interest that such Bank may charge or collect.
We express no opinion as to the applicability (and, if applicable, the
effect) of Section 548 of the United States Bankruptcy Code or any comparable
provision of state law to the questions addressed above or the conclusions
expressed with respect thereto.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by or furnished to any other person without our prior written
consent.
Very truly yours,
<PAGE>
EXHIBIT D
SUBSIDIARY GUARANTY AGREEMENT
dated as of
May 10, 1993
among
Perini Corporation
The Subsidiary Guarantors Referred to Herein
and
Morgan Guaranty Trust Company of New York,
as Agent
<PAGE>
TABLE OF CONTENTS*<fn1>
Page
ARTICLE I
DEFINITIONS
1.01 Definitions................................ 2
ARTICLE II
GUARANTIES
2.01 The Guaranties............................. 2
2.02 Guaranties Unconditional................... 3
2.03 Limit of Liability......................... 4
2.04 Discharge; Reinstatement in
Certain Circumstances..................... 4
2.05 Waiver..................................... 4
2.06 Subrogation and Contribution .............. 4
2.07 Stay of Acceleration....................... 4
ARTICLE III
COVENANT OF THE BORROWER
3.01 Additional Subsidiary Guarantors........... 5
ARTICLE IV
MISCELLANEOUS
4.01 Notices.................................... 5
4.02 No Waiver.................................. 5
4.03 Amendments and Waivers..................... 6
4.04 Governing Law; Submission to
Jurisdiction; Waiver of a
Jury Trial............................... 6
4.05 Successors and Assigns..................... 6
4.06 Counterparts; Effectiveness................ 6
[FN]
- ------------------
<F1>*The Table of Contents is not a part of this Agreement.
<PAGE>
SUBSIDIARY GUARANTY AGREEMENT
AGREEMENT dated as of May 10, 1993 among Perini Corporation, a
Massachusetts corporation (the "Borrower"), each of the Subsidiary Guarantors
listed on the signature pages hereof under the caption "Subsidiary Guarantors"
and each Person that shall, at any time after the date hereof, become a
"Subsidiary Guarantor" hereunder (collectively, the "Subsidiary Guarantors")
and Morgan Guaranty Trust Company of New York, as Agent.
WHEREAS, the Borrower has entered into a Credit Agreement (as the same
may be amended from time to time, the "Credit Agreement") dated as of May 10,
1993 among the Borrower, the banks listed on the signature pages thereof, and
Morgan Guaranty Trust Company of New York, as Agent, pursuant to which the
Borrower is entitled, subject to certain conditions, to borrow up to
$70,000,000;
WHEREAS, the Credit Agreement provides, among other things, that one
condition to its effectiveness is the execution and delivery by the Borrower
and the Subsidiary Guarantors (the "Obligors") of a subsidiary guaranty
substantially in the form of this Subsidiary Guaranty; and
WHEREAS, in conjunction with the transactions contemplated by the
Credit Agreement and in consideration of the financial and other support that
the Borrower has provided, and such financial and other support as the Borrower
may in the future provide, to the Subsidiary Guarantors, and in order to induce
the Banks and the Agent to enter into the Credit Agreement and to make Loans
and issue Letters of Credit thereunder, the Subsidiary Guarantors are willing
to guaranty the obligations of the Borrower under the Credit Agreement and the
Notes;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Terms defined in the Credit Agreement and
not otherwise defined herein are used herein as therein defined. In addition
the following term, as used herein, has the following meaning:
"Guarantied Obligations" means (i) all obligations of the Borrower in
respect of principal of and interest on the Loans and the Notes, (ii) all
Reimbursement Obligations (including interest thereon) and other obligations of
the Borrower in respect of Letters of Credit, (iii) all other amounts payable
by the Borrower under the Credit Agreement or the Notes and (iv) all renewals
or extensions of the foregoing, in each case whether now outstanding or
hereafter arising. The Guarantied Obligations shall include, without
limitation, any interest, costs, fees and expenses which accrue on or with
respect to any of the foregoing, whether before or after the commencement of
any case, proceeding or other action relating to the bankruptcy, insolvency or
reorganization of any one or more than one of the Borrower and the Subsidiary
Guarantors, and any such interest, costs, fees and expenses that would have
accrued thereon or with respect thereto but for the commencement of such case,
proceeding or other action.
ARTICLE II
GUARANTIES
SECTION 2.01. The Guaranties. Subject to Section 2.03, the
Subsidiary Guarantors hereby jointly, severally, unconditionally and
irrevocably guaranty to the Banks and the Agent and to each of them, the due
and punctual payment of all Guarantied Obligations as and when the same shall
become due and payable, whether at maturity, by declaration or otherwise,
according to the terms thereof. In case of failure by the Borrower punctually
to pay the indebtedness guarantied hereby, the Subsidiary Guarantors, subject
to Section 2.03, hereby jointly, severally and unconditionally agree to cause
such payment to be made punctually as and when the same shall become due and
payable, whether at maturity or by declaration or otherwise, and as if such
payment were made by the Borrower.
SECTION 2.02. Guaranties Unconditional. The obligations of each
Subsidiary Guarantor under this Article II shall be unconditional and absolute
and, without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of any other Obligor under any Financing Document,
by operation of law or otherwise;
(b) any modification or amendment of or supplement to any other
Financing Document;
(c) any modification, amendment, waiver, release, non-perfection or
invalidity of any direct or indirect security, or of any guaranty or other
liability of any third party, for any obligation of any other Obligor under any
Financing Document;
(d) any change in the corporate existence, structure or ownership of
any other Obligor, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting any other Obligor or its assets or any resulting
release or discharge of any obligation of any other Obligor contained in any
Financing Document;
(e) the existence of any claim, set-off or other rights which any
Subsidiary Guarantor may have at any time against any other Obligor, the Agent,
the LC Bank, any Bank or any other Person, whether or not arising in connection
with the Financing Documents; provided that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against any
other Obligor for any reason of any Financing Document, or any provision of
applicable law or regulation purporting to prohibit the payment by any other
Obligor of the principal of or interest on any Note or any Reimbursement
Obligation or any other amount payable by any other Obligor under any Financing
Document; or
(g) any other act or omission to act or delay of any kind by any
other Obligor, the Agent, the LC Bank, any Bank or any other Person or any
other circumstance whatsoever that might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the obligations of any
Subsidiary Guarantor under this Article II.
SECTION 2.03. Limit of Liability. Each Subsidiary Guarantor shall be
liable under this Agreement only for amounts aggregating up to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the United States Bankruptcy Code or any comparable
provisions of any applicable state law.
SECTION 2.04. Discharge; Reinstatement in Certain Circumstances.
Each Subsidiary Guarantor's obligations under this Article II shall remain in
full force and effect until the Commitments are terminated and the Letter of
Credit Liabilities are reduced to zero, and the principal of and interest on
the Notes and all Reimbursement Obligations and all other amounts payable by
the Borrower under the Financing Documents shall have been paid in full. If at
any time any payment of the principal of or interest on any Note or any
Reimbursement Obligation or any other amount payable by the Borrower under any
Financing Document is rescinded or must be otherwise restored or returned upon
the insolvency, bankruptcy or reorganization of any other Obligor or otherwise,
each Subsidiary Guarantor's obligations under this Article II with respect to
such payment shall be reinstated at such time as though such payment had become
due but had not been made at such time.
SECTION 2.05. Waiver. Each Subsidiary Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against any other Obligor or any other Person.
SECTION 2.06. Subrogation and Contribution. Each Subsidiary
Guarantor irrevocably waives any and all rights to which it may be entitled, by
operation of law or otherwise, upon making any payment hereunder (i) to be
subrogated to the rights of the payee against the Borrower with respect to such
payment or otherwise to be reimbursed, indemnified or exonerated by any other
Obligor in respect thereof or (ii) to receive any payment, in the nature of
contribution or for any other reason, from any other Obligor with respect to
such payment.
SECTION 2.07. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Borrower under the Financing Documents is
stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all
such amounts otherwise subject to acceleration under the terms of the Financing
Documents shall nonetheless be payable by each Subsidiary Guarantor hereunder
forthwith on demand by the Agent made at the request of the Required Banks.
ARTICLE III
COVENANT OF THE BORROWER
SECTION 3.01. Additional Subsidiary Guarantors. The Borrower agrees,
within 10 days of each request therefor by the Required Banks, to cause any
Subsidiary which is not at the time a Subsidiary Guarantor hereunder to become
a Subsidiary Guarantor hereunder.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Notices. Unless otherwise specified herein, all
notices, requests and other communications to any party hereunder shall be in
writing (including bank wire, telex, facsimile transmission or similar writing)
and shall be given to such party at its address or telex or facsimile number
set forth on the signature pages hereof (or, in the case of any Subsidiary
Guarantor as to which no such address or telex or facsimile number is so set
forth, to it at the address or telex or facsimile number of the Borrower set
forth on the signature pages hereof) or such other address or telex or
facsimile number as such party may hereafter specify for the purpose by notice
to the Agent. Each such notice, request or other communication shall be
effective (i) if given by telex, when such telex is transmitted to the telex
number specified in or pursuant to this Section 4.01 and the appropriate
answerback is received, (ii) if given by facsimile transmission, when such
facsimile is transmitted to the facsimile transmission number specified in or
pursuant to this Section 4.01 and telephonic confirmation of receipt thereof is
received, (iii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid, addressed as aforesaid
or (iv) if given by any other means, when delivered at the address specified in
this Section 4.01.
SECTION 4.02. No Waiver. No failure or delay by the Agent or any
Bank in exercising any right, power or privilege under this Agreement or any
other Financing Document shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies
herein and therein provided shall be cumulative and not exclusive of any rights
or remedies provided by law.
SECTION 4.03. Amendments and Waivers. Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver is
in writing and is signed by the Borrower, each Subsidiary Guarantor and the
Agent with the prior written consent of the Required Banks under the Credit
Agreement.
SECTION 4.04. Governing Law; Submission to Jurisdiction; Waiver of a
Jury Trial. This Agreement shall be construed in accordance with and governed
by the law of the State of New York. Each of the Subsidiary Guarantors hereby
agrees to be bound by each provision of the Credit Agreement which purports to
bind all Obligors, including Sections 9.08 and 9.10, to the same extent as if
it were a signatory party thereto.
SECTION 4.05. Successors and Assigns. This Agreement is for the
benefit of the Banks and the Agent and their respective successors and assigns
and in the event of an assignment of the Loans, the Reimbursement Obligations,
the Notes or other amounts payable under the Financing Documents, the rights
hereunder, to the extent applicable to the indebtedness so assigned, shall be
transferred with such indebtedness. All the provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
SECTION 4.06. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, and
all of which taken together shall constitute a single instrument, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when the Agent shall have received a
counterpart hereof signed by the Borrower and one or more of the Subsidiary
Guarantors and when the Credit Agreement shall become effective in accordance
with its terms. Thereafter, upon execution and delivery of a counterpart of
this Agreement on behalf of any other Subsidiary Guarantor, this Agreement
shall become effective with respect to such Subsidiary Guarantor as of the date
of such delivery.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the date first
above written.
PERINI CORPORATION
By /s/ James M. Markert
--------------------------
Title: Sr. Vice President
By /s/ Susan C. Mellace
--------------------------
Title: Treasurer
73 Mount Wayte Avenue
Framingham, MA 01701
Telex Number: (508) 628-2960
SUBSIDIARY GUARANTORS
PERINI BUILDING COMPANY, INC.
By /s/ Barry R. Blake
---------------------------
Title: Vice President,
Controller
By /s/ Kenneth A. Isaacs
---------------------------
Title: Sr. Vice President
73 Mount Wayte Avenue
Framingham, MA 01701
Facsimile number: (508) 628-2960
PERINI INTERNATIONAL CORPORATION
By /s/ Joseph A. Haley
---------------------------
Title: President
By /s/ James M. Markert
---------------------------
Title: Treasurer
73 Mount Wayte Avenue
Framingham, MA 01701
Facsimile number: (508) 628-2960
PERINI LAND AND DEVELOPMENT COMPANY
By /s/ John H. Schwarz
-----------------------------
Title: Chief Executive
Officer
By /s/ Bart W. Perini
Title: President and Chief
Operating Officer
73 Mount Wayte Avenue
Framingham, MA 01701
Facsimile number: (508) 628-2960
R. E. DAILEY & CO.
By /s/ Victor E. Cestar
-----------------------------
Title: President and Chief
Operating Officer
By /s/ Patrick D. Monea
-----------------------------
Title: Sr. Vice President,
Finance and Secretary
2000 Town Center, Suite 1600
Southfield, MI 40875
Facsimile number: (313) 352-6280
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Caroline R. Shapiro
-----------------------------
Title: Vice President
<PAGE>
EXHIBIT E
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), PERINI CORPORATION (the "Borrower"),
, as LC Bank (the "LC Bank") and MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement")
relates to the Credit Agreement dated as of May 10, 1993 among the Borrower,
the Assignor and the other Banks party thereto and the Agent (the "Credit
Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans to the Borrower and to participate in Letters of
Credit issued for the benefit of the Borrower and its Subsidiaries, in an
amount equal to $ ;
WHEREAS, Loans made to the Borrower by the Assignor under the Credit
Agreement are outstanding on the date hereof, and participations by the
Assignor in Letters of Credit issued by the LC Bank for the benefit of the
Borrower and its Subsidiaries under the Credit Agreement are outstanding on the
date hereof, in the amounts of $ and $ , respectively; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement in respect of a portion of
its Commitment in an amount equal to $__________, together with a corresponding
portion of its outstanding Loans and its participations in outstanding Letters
of Credit (the "Assigned Amount") and the Assignee proposes to accept
assignment of such rights and assume the corresponding obligations from the
Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Credit Agreement to the extent of the Assigned Amount. Upon the execution and
delivery hereof by the Assignor, the Assignee, the Agent and the LC Bank and
the payment of the amounts specified in Section 3 required to be paid on the
date hereof (i) the Assignee shall, as of the date hereof, succeed to the
rights and be obligated to perform the obligations of a Bank under the Credit
Agreement with a Commitment in an amount equal to the Assigned Amount, holding
Loans and participations in Letters of Credit in amounts corresponding to the
Assigned Amount, and (ii) the Commitment, Loans and Letter of Credit
participations of the Assignor shall, as of the date hereof, be reduced by like
amounts and the Assignor released from its obligations under the Credit
Agreement to the extent such obligations have been assumed by the Assignee.
The assignment provided for herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them. It is
understood that commitment and other fees and Letter of Credit commissions
accrued under the Credit Agreement to the date hereof are for the account of
the Assignor and such fees and commissions accruing from and including the date
hereof are for the account of the Assignee. Each of the Assignor and the
Assignee hereby agrees that if it receives any amount under the Credit
Agreement which is for the account of the other party hereto, it shall receive
the same for the account of such other party to the extent of such other
party's interest therein and shall promptly pay the same to such other party.
SECTION 4. Consent of the Borrower, the Agent and the LC Bank. This
Agreement is conditioned upon the consent of the Borrower, the LC Bank and the
Agent pursuant to Section 9.06(c) of the Credit Agreement. The execution of
this Agreement by the Borrower, the LC Bank and the Agent is evidence of such
consent. Pursuant to Section 9.06(c) the Borrower agrees to execute and
deliver a Note payable to the order of the Assignee to evidence the assignment
and assumption provided for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower or any Subsidiary Guarantor, or the validity and enforceability of the
obligations of the Borrower or any Subsidiary Guarantor in respect of the
Financing Documents. The Assignee acknowledges that it has, independently and
without reliance on the Assignor, and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to
enter into this Agreement and will continue to be responsible for making its
own independent appraisal of the business, affairs and financial condition of
the Borrower and the Subsidiary Guarantors.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
By__________________________
Title:
PERINI CORPORATION
By__________________________
Title:
By__________________________
Title:
[LC BANK]
BY ________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By__________________________
Title:
<PAGE>
[CONFORMED COPY]
AMENDMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT dated as of December 30, 1993 among PERINI CORPORATION (the
"Borrower"), the BANKS listed on the signature pages hereof (the "Banks") and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into a Credit
Agreement dated as of May 10, 1993 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement to provide
for certain changes to the covenant contained in Section 5.15 of the Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement shall
have the meaning assigned to such term in the Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Agreement shall from and after the date hereof refer to the
Agreement as amended hereby.
SECTION 2. Amendment of Section 5.15 of the Agreement. Section 5.15
of the Agreement is amended to read as follows:
The Borrower will not, and will not permit any Consolidated Subsidiary
to, make any Real Estate Investment if, after giving effect thereto, the
cumulative amount of Net Real Estate Investments made (i) at any time during
the period beginning January 1, 1993 and ending December 31, 1994 shall exceed
$26,000,000 or (ii) at any time during the fiscal year ending December 31, 1995
and any fiscal year thereafter shall exceed $4,000,000 plus 25% of the amount,
if any, by which the Net Real Estate Investments made during the preceding
period were less than the applicable limitation specified above for such
period; provided that for any 90 days in any period specified above, other than
the last day of such period, the Net Real Estate Investments made during such
period may exceed by not more than $2,000,000 the applicable limitation
specified above for such period. For purposes of this Section, the cumulative
amount of "Net Real Estate Investments" made during any period, as measured at
any date during such period, is the aggregate amount of Real Estate Investments
made by the Borrower and its Consolidated Subsidiaries from and including the
first day of such period to and including such date, less the sum of all cash
or cash equivalent payments received by the Borrower or one of its Consolidated
Subsidiaries, as the case may be, in respect of Real Estate Investments from
and including the first day of such period to and including such date,
including the receipt of shares in a real estate investment trust if (i) such
shares are listed on a national security exchange and are at the time permitted
to be freely transferred by the Borrower or one of its Consolidated
Subsidiaries, as the case may be, or (ii) such shares have been used by the
Borrower or one of its Consolidated Subsidiaries, as the case may be, to make a
required contribution to any Plan necessary to satisfy its obligation under the
minimum funding standards of ERISA and the Internal Revenue Code with respect
to such Plan, but only to the extent such obligation is reduced by such
contribution; provided that such contribution does not violate the applicable
provisions of ERISA or the Internal Revenue Code.
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts; Effectiveness. This Amendment 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 Amendment shall become effective as of the date hereof when
the Agent shall have received duly executed counterparts hereof signed by the
Borrower and the Required Banks (or, in the case of any party as to which an
executed counterpart shall not have been received, the Agent shall have
received telegraphic, telex or other written confirmation from such party of
execution of a counterpart hereof by such party).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
PERINI CORPORATION
By /s/ James M. Markert
---------------------------
Name: James M. Markert
Title: Senior Vice President
By /s/ Susan C. Mellace
---------------------------
Name: Susan C. Mellace
Title: Treasurer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Caroline R. Shapiro
---------------------------
Name: Caroline R. Shapiro
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION
By /s/ Richard Bryson
--------------------------
Name: Richard Bryson
Title: Vice President
<PAGE>
SHAWMUT BANK, N.A.
By /s/ Robert J. Lord
--------------------------
Name: Robert J. Lord
Title: Vice President
FLEET BANK OF MASSACHUSETTS,
N.A.
By /s/ Jeffrey Bauer
--------------------------
Name: Jeffrey Bauer
Title: Vice President
BAYBANK BOSTON, N.A., as Bank
and LC Bank
By /s/ Timothy M. Laurion
--------------------------
Name: Timothy M. Laurion
Title: Vice President
<PAGE>
CONFORMED COPY
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT dated as of February 11, 1994 among PERINI CORPORATION (the
"Borrower"), the BANKS listed on the signature pages hereof (the "Banks") and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into a Credit
Agreement dated as of May 10, 1993 (as heretofore amended, the "Agreement"); and
WHEREAS, the parties hereto desire to waive compliance by the Borrower
with Section 5.08(a) of the Agreement for a limited period of time;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement shall
have the meaning assigned to such term in the Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Agreement shall from and after the date hereof refer to the
Agreement as amended hereby.
SECTION 2. Limited Waiver. The Banks hereby waive compliance by the
Borrower with the requirements of Section 5.08(a) of the Agreement during the
period from and including the date hereof to but not including March 31, 1994.
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts; Effectiveness. This Amendment 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 Amendment shall become effective as of the date hereof when
the Agent shall have received duly executed counterparts hereof signed by the
Borrower and the Required Banks (or, in the case of any party as to which an
executed counterpart shall not have been received, the Agent shall have
received telegraphic, telex or other written confirmation from such party of
execution of a counterpart hereof by such party).
SECTION 5. No Other Waivers. Other than as specifically provided
herein, this Amendment shall not operate as a waiver of any right, remedy,
power or privilege of the Banks under any Financing Document or of any other
term or condition of any Financing Document.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
PERINI CORPORATION
By /s/ James M. Markert
----------------------------
Name: James M. Markert
Title: Senior Vice President
By /s/ Susan C. Mellace
----------------------------
Name: Susan C. Mellace
Title: Treasurer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Caroline Shapiro
----------------------------
Name: Caroline Shapiro
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION
By /s/ Richard J. Cerf
Name: Richard J. Cerf
Title: Vice President
SHAWMUT BANK, N.A.
By /s/ Amy M. Tsokanis
----------------------------
Name: Amy M. Tsokanis
Title: Vice President
FLEET BANK OF MASSACHUSETTS,
N.A.
By /s/ Jeffrey F. Bauer
----------------------------
Name: Jeffrey F. Bauer
Title: Vice President
BAYBANK BOSTON, N.A., as Bank
and LC Bank
By /s/ Timothy M. Laurion
----------------------------
Name: Timothy M. Laurion
Title: Vice President
<PAGE>
CONFORMED COPY
AMENDMENT NO. 3 TO CREDIT AGREEMENT
AMENDMENT dated as of March 8, 1994 among PERINI CORPORATION (the
"Borrower"), the BANKS listed on the signature pages hereof (the "Banks") and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into a Credit
Agreement dated as of May 10, 1993 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement to modify
certain covenants and permit the Borrower to enter into a proposed credit
agreement to be dated as of March 9, 1994 and to create Liens on certain of its
assets and those of its Subsidiaries to secure its obligations thereunder.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement shall
have the meaning assigned to such term in the Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Agreement shall from and after the date hereof refer to the
Agreement as amended hereby.
SECTION 2. Amendment of Section 1.01 of the Agreement.
(a) Section 1.01 of the Agreement is hereby amended by adding the
following:
"Collateral Documents" means the security agreements, pledge
agreements, deeds of trust, subsidiary guarantees and all other supplemental or
additional security agreements, pledge agreements, mortgages or similar
instruments to be executed by the Borrower and certain of its Subsidiaries to
secure payments of all amounts to be due under the Liquidity Facility and the
Collateral Documents.
(b) Section 1.01 of the Agreement is hereby amended by adding the
following:
"Liquidity Facility" means the credit agreement, with commitments not
exceeding $15,000,000, proposed to be entered into as of March 9, 1994 among
the Borrower, certain banks and Morgan Guaranty Trust Company of New York.
(c) The definition of "Modified Parent Company Debt" in Section 1.01
of the Agreement is hereby amended by adding at the end of the parenthetical
therein "and Debt resulting from the Liquidity Facility."
SECTION 3. Interest Coverage. Section 5.10 of the Agreement is
hereby amended by deleting "December 31, 1993" and substituting "March 31,
1995" therefor.
SECTION 4. Negative Pledge. Section 5.11 of the Agreement is hereby
amended by deleting "and" from the end of subsection (f), deleting the "." at
the end of subsection (g) and substituting therefor "; and" and adding the
following:
(h) Liens on the property of the Borrower or its Subsidiaries as
described in the Collateral Schedule attached hereto.
SECTION 5. Debt.
(a) Section 5.08(a) of the Agreement is hereby amended as follows:
(a) At the end of each fiscal quarter prior to March 31, 1995,
Modified Parent Company Debt shall not exceed 75% of Consolidated Capital Base
and at the end of each fiscal quarter ending on or after March 31, 1995,
Modified Parent Debt shall not exceed 65% of Consolidated Capital Base.
(b) Section 5.08(b) of the Agreement is hereby amended by deleting
"and" at the end of clause (v) and substituting therefor ";" and deleting
clause (vi) and substituting the following:
(vi) Debt of certain of the Subsidiaries in the form of Guarantees
of the Borrower's obligations under the Liquidity Facility and (vii) any
refinancing, extension, renewal or refunding of the Debt referred to in clauses
(i) through (vi) above, provided that such Debt is not increased.
SECTION 6. Successors and Assigns
Section 9.06(c) of the Agreement is hereby amended by adding after
"Notes" the following:
(provided that it at the same time assigns the same ratable portion of
its rights and obligations under the Liquidity Facility and the notes related
thereto)
SECTION 7. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 8. Rights Otherwise Unaffected. This Amendment is limited to
the matters expressly set forth herein. Except to the extent specifically
amended hereby, all terms of the Agreement shall remain in full force and
effect.
SECTION 9. Counterparts; Effectiveness. This Amendment 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 Amendment shall become effective as of the date hereof when
the Agent shall have received duly executed counterparts hereof signed by the
Borrower and the Required Banks (or, in the case of any party as to which an
executed counterpart shall not have been received, the Agent shall have
received telegraphic, telex or other written confirmation from such party of
execution of a counterpart hereof by such party).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first above written.
PERINI CORPORATION
By /s/ James M. Markert
----------------------------
Title: Senior Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Caroline R. Shapiro
----------------------------
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION
By /s/ Richard J. Cerf
----------------------------
Title: Vice President
SHAWMUT BANK, N.A.
By /s/ Robert Lord
----------------------------
Title: Vice President
FLEET BANK OF
MASSACHUSETTS, N.A.
By /s/ Jeffrey F. Bauer
----------------------------
Title: Vice President
BAYBANK BOSTON, N.A. as Bank
and as LC Bank
By /s/ Timothy M. Laurion
----------------------------
Title: Vice President
<PAGE>
SCHEDULE 1
COLLATERAL SCHEDULE
I. Borrower Security Agreement dated as of March 9, 1994 between the Borrower
and the Agent
All of the following property of the Borrower, whether now owned or existing or
hereafter acquired or arising and regardless of where located:
(1) all right, title and interest of the Borrower in, and to receive,
all amounts payable at any time and from time to time by or on behalf of
Tutor-Salibi-Perini JV ("TSP"), a joint venture formed by Borrower and
Tutor-Salibi Corporation on or about August 5, 1985, up to an aggregate amount
equal to the amount of the Borrower's interest in the aggregate payments
received by TSP in respect of its claims against the California State
Department of Highways for cost overruns associated with the construction of
the Redwood Bypass in Humbolt and Del Norte Counties, California;
(2) all right, title and interest of the Borrower in, and to receive,
all amounts payable at any time and from time to time by or on behalf of
Kiewit/Perini ("K/P"), two joint ventures formed by Borrower and Kiewit Eastern
Company on February 18, 1988 and on May 12, 1988, up to an aggregate amount
equal to the amount of the Borrower's interest in the aggregate payments
received by K/P in respect of each of its two claims against the Pennsylvania
Department of Transportation for cost overruns associated with the construction
of two sections of the interstate highway located in suburban Philadelphia,
Pennsylvania;
(3) the Collateral Account, all cash deposited therein from time to
time, the Liquid Investments made pursuant to Section 5(c) and other monies and
property of any kind of the Borrower, to the extent that such other monies and
property are Proceeds of the Collateral, in the possession or under the control
of the Agent;
(4) all books and records (including, without limitation, computer
programs, printouts and other computer materials and records) of the Borrower
pertaining to any of the Collateral; and
(5) all Proceeds of all or any of the Collateral.
II. Borrower Pledge Agreement dated as of March 9, 1994 between the Borrower
and the Agent
The Pledged Instruments, and all of the Borrower's rights and privileges with
respect to the Pledged Instruments as described in Schedule 1 attached thereto,
and all income and profits thereon, and all interest, dividends and other
payments and distributions with respect thereto, and all proceeds of the
foregoing.
Schedule 1 to the Borrower Pledge Agreement lists:
1. Note dated as of March 7, 1994, issued by Perini Land and Development in
favor of the Borrower.
2. Note dated as of March 7, 1994, issued by One Hundred Thirty-Eight Joint
Venture in the amount of $9,969,000, payable to Perini Land and Development and
assigned by Perini Land and Development to the Borrower on or about March 7,
1994.
3. Note dated as of March 7, 1994, issued by Glenco-Perini-HCV Partners in the
amount of $19,626,444, payable to Perini Resorts and assigned by Perini Resorts
to Perini Land and Development on or about March 7, 1994 and assigned by Perini
Land and Development to the Borrower on or about March 7, 1994.
III. Subsidiary Security Agreement dated as of March 9, 1994 among the
Subsidiary Guarantors and the Agent
All of the property of such Subsidiary Guarantor, whether now owned or existing
or hereafter acquired or arising and regardless of where located listed on
Schedule 1 hereto opposite its name.
SCHEDULE 1 To Subsidiary Security Agreement lists:
Paramount Development Associates, Inc. ("Paramount"):
1. All right, title and interest of Paramount in and to the Option Agreement
dated on or about March 21, 1991 between Paramount and New England Development
Company for the sale of 53 acres of real property located in Marlborough,
Massachusetts;
2. All right, title and interest of Paramount in and to I-10 Industrial Park
Developers, a joint venture formed by Paramount and Mardian Development Company
on or about June 14, 1976, including but not limited to the proceeds of the
sale of Airport Commerce Center;
3. All books and records (including, without limitation, credit files,
computer programs, printouts and other computer materials and records) of
Paramount pertaining to any of its Collateral;
4. The Subsidiary Collateral Account, all cash deposited therein from time to
time, the Liquid Investments made pursuant to Section 5(c) and other monies and
property of any kind of Paramount, to the extent that such other monies and
property are Proceeds of the Collateral, in the possession or under the control
of the Agent; and
5. All Proceeds of all or any of the Collateral described above.
Perini Land and Development Company ("PL&D"):
1. All right, title and interest of PL&D in, and to receive, all amounts
payable at any time and from time to time by or on behalf of the Oaks at
Buckhead, a joint venture formed by PL&D and R.S. Atlanta, Inc. on or about
August 31, 1990, up to an aggregate amount of $1,200,000;
2. All books and records (including, without limitation, credit files,
computer programs, printouts and other computer materials and records) of PL&D
pertaining to any of its Collateral;
3. The Subsidiary Collateral Account, all cash deposited therein from time to
time, the Liquid Investments made pursuant to Section 5(c) and other monies and
property of any kind of PL&D, to the extent that such other monies and property
are Proceeds of the collateral, in the possession or under the control of the
Agent; and
4. All Proceeds of all or any of the Collateral described above.
IV. Deeds of Trust by PL&D to the Agent
The first Deed of Trust covers the following property of PL&D:
Land. The parcel or parcels of land located in Maricopa County,
Arizona, more particularly described in Exhibit A (the "Land").
Improvements. All buildings, structures, facilities and other
improvements of every kind and description now or hereafter located on the
Land, including all parking areas, roads, driveways, walks, fences, walls and
berms; all estate, right, title and interest of the Grantor in, to, under or
derived from: all recreation, drainage and lighting facilities and other site
improvements; all water, sanitary and storm sewer, drainage, electricity,
steam, gas, telephone, telecommunications and other utility equipment and
facilities; all plumbing, lighting, heating, ventilating, air-conditioning,
refrigerating, incinerating, compacting, fire protection and sprinkler,
surveillance and security, vacuum cleaning, public address and communications
equipment and systems; all kitchen and laundry appliances; all screens,
awnings, floor coverings, partitions, elevators, escalators, motors,
electrical, computer and other wiring, machinery, pipes, fittings and racking
and shelving; and all other items of fixtures, equipment and personal property
of every kind and description, in each case now or hereafter located on the
Land or affixed (actually or constructively) to the Improvements which by the
nature of their location thereon or affixation thereto are real property under
applicable law; and including all materials intended for the construction,
reconstruction, repair, replacement, alteration, addition or improvement of or
to such buildings, equipment, fixtures, structures and improvements, all of
which materials shall be deemed to be part of the Trust Property immediately
upon delivery thereof on the Land and to be part of the improvements
immediately upon their incorporation therein (the foregoing being collectively
called the "Improvements").
Equipment. All estate, right, title and interest of the Grantor in,
to, under or derived from: all fixtures, chattels and articles of personal
property owned or leased by the Grantor or in which the Grantor has or shall
acquire an interest, wherever situated, and now or hereafter located on or in
the Land or the Improvements, whether or not affixed thereto (actually or
constructively) and which are not real property under applicable law, of every
kind and nature whatsoever owned or leased by the Grantor, or in which the
Grantor has or shall have an interest, now or hereinafter located upon the
Land, or appurtenances thereto, or usable in connection with the present or
future operation or occupancy of the Land or the Improvements, and including
any of the foregoing that is temporarily removed from the Land or Improvements
to be repaired and later reinstalled thereon or therein (the foregoing being
collectively called the "Equipment"; and the Land with the Improvements thereon
and the Equipment therein being collectively called the "Property"). If the
Lien of this Deed of Trust is subject to a security interest covering any
Property described in this GRANTING CLAUSE III, then all of the right, title
and interest of the Grantor in and to any and all such Property is hereby
assigned to the Beneficiary, together with the benefits of all deposits and
payments now or hereafter made thereon by or on behalf of the Grantor.
Appurtenant Rights. All estate, right, title and interest of the
Grantor in, to, under or derived from all tenements, hereditaments and
appurtenances now or hereafter relating to the Property; the streets, roads,
sidewalks and alleys abutting the Property; all strips and gores within or
adjoining the Land; all land in the bed of any body of water adjacent to the
Land; all land adjoining the Land created by artificial means or by accretion;
all air space and rights to use air space above the Land; all development or
similar rights now or hereafter appurtenant to the Land; all rights of ingress
and egress now or hereafter appertaining to the Property; all easements and
rights of way now or hereafter appertaining to the Property; and all royalties
and other rights now or hereafter appertaining to the use and enjoyment of the
Property, including alley, party walls, support, drainage, crop, timber,
agricultural, horticultural, oil, gas and other mineral, water stock, riparian
and other water rights.
Agreements. All estate, right, title and interest of the Grantor in,
to, under or derived from: all Insurance Policies (including all unearned
premiums and dividends thereunder), all guarantees and warranties relating to
the Property, all supply and service contracts for water, sanitary and storm
sewer, drainage, electricity, steam, gas, telephone and other utilities now or
hereafter relating to the Property, and all other contract rights now or
hereafter relating to the use or operation of the Property (the foregoing being
collectively called the "Agreements").
Leases. All estate, right, title and interest of the Grantor in, to,
under or derived from all Leases now or hereafter in effect, whether or not of
record, for the use or occupancy of all or any part of the Property.
Rents, Issues and Profits. All estate, right, title and interest of
the Grantor in, to, under or derived from: all rents, royalties, issues,
profits, receipts, revenue, income and other benefits now or hereafter accruing
with respect to the Property, including all rents and other sums now or
hereafter payable pursuant to the Leases; all other sums now or hereafter
payable with respect to the use, occupancy, management, operation or control of
the Property; and all other claims, rights and remedies now or hereafter
belonging or accruing with respect to the Property, including fixed, additional
and percentage rents, occupancy charges, security deposits, parking,
maintenance, common area, tax, insurance, utility and service charges and
contributions (whether collected under the Leases or otherwise), proceeds of
sale of electricity, gas, heating, air-conditioning and other utilities and
services (whether collected under the Leases or otherwise), and deficiency
rents and liquidated damages following default or cancellation (the foregoing
rents and other sums described in this Granting Clause being collectively
called the "Rents"), all of which the Grantor hereby irrevocably directs be
paid to the Beneficiary, subject to the license granted to the Grantor pursuant
to Section 5.07(b), to be held, applied and disbursed as provided in this Deed
of Trust.
Permits. All estate, right, title and interest of the Grantor in, to,
under or derived from all licenses, authorizations, certificates, variances,
consents, approvals and other permits now or hereafter pertaining to the
ownership, management or operation of the Property (the foregoing being
collectively called the "Permits").
Proceeds and Awards. All estate, right, title and interest of the
Grantor in, to, under or derived from all proceeds of any Transfer, financing,
refinancing or conversion into cash or liquidated claims, whether voluntary or
involuntary, of any of the Trust Property, including all Insurance Proceeds,
Awards and title insurance proceeds under any title insurance policy now or
hereafter held by the Grantor, and all rights, dividends and other claims of
any kind whatsoever (including damage, secured, unsecured, priority and
bankruptcy claims) now or hereafter relating to any of the Trust Property, all
of which the Grantor hereby irrevocably directs be paid to the Beneficiary to
the extent provided hereunder, to be held, applied and disbursed as provided in
this Deed of Trust.
Books and Records. All books and records of the Grantor now or
hereafter pertaining to the ownership, management or operation of the Property.
Other Intangible Property. All estate, right, title and interest of
the Grantor in, to, under or derived from all intangible property, to the
extent not described in the foregoing Granting Clauses, now or hereafter
necessary to operate the Property as a going concern.
Additional Property. All greater, additional or other estate, right,
title and interest of the Grantor in, to, under or derived from the Trust
Property now or hereafter acquired by the Grantor, including all right, title
and interest of the Grantor in, to, under or derived from all extensions,
improvements, betterments, renewals, substitutions and replacements of, and
additions and appurtenances to, any of the Trust Property hereafter acquired by
or released to the Grantor or constructed or located on, or affixed to, the
Property, in each case, immediately upon such acquisition, release,
construction, location or affixation; all estate, right, title and interest of
the Grantor in, to, under or derived from any other property and rights which
are, by the provisions of the Collateral Documents, required to be subjected to
the Lien hereof; all estate, right, title and interest of the Grantor in, to,
under or derived from any other property and rights which are necessary to
maintain the Property and the Grantor's business or operations conducted
therein as a going concern, in each case, to the fullest extent permitted by
law, without any further conveyance, mortgage, assignment or other act by the
Grantor; and all estate, right, title and interest of the Grantor in, to, under
or derived from all other property and rights which are by any instrument or
otherwise subjected to the Lien hereof by the Grantor
together with all estate, right, title and interest of the Grantor and anyone
claiming by, through or under the Grantor in, to, under or derived from the
Trust Property and all rights and appurtenances relating thereto, to the
Beneficiary, forever.
EXHIBIT Aas
Description of the Land
Lots 1 to 15, inclusive, Block 9, NEAHR'S ADDITION TO THE CITY OF
PHOENIX, according to the plat of record in the office of the County Recorder
of Maricopa County, Arizona, in Book 2 of Maps, page 61.
The second Deed of Trust granting clauses are identical with respect to the
following property:
EXHIBIT A
Description of the Land
Lots 1 thru 6; 9 thru 16; 18; 20 thru 30; 32; and 36 thru 42 of SABINO
ESTATES, per map recorded in Book 45, Page 7 of Maps and Plats, in the office
of the Pima County Recorder, Pima County, Arizona.
<PAGE>
CONFORMED COPY
AMENDMENT NO. 4 TO CREDIT AGREEMENT
AMENDMENT dated as of May 3, 1994 among PERINI CORPORATION (the
"Borrower"), the BANKS listed on the signature pages hereof (the "Banks") and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into a Credit
Agreement dated as of May 10, 1993 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement to allow the
Borrower to pay dividends on certain convertible preferred stock.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement shall
have the meaning assigned to such term in the Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Agreement shall from and after the date hereof refer to the
Agreement as amended hereby.
SECTION 2. Amendment of Section 1.01 of the Agreement. The
definition of "Restricted Payment" is hereby amended by deleting the figure
"$2,125,000" appearing in clause (i) of the proviso thereto and substituting
therefor the figure "$5,125,000".
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Rights Otherwise Unaffected. This Amendment is limited to
the matters expressly set forth herein. Except to the extent specifically
amended hereby, all terms of the Agreement shall remain in full force and
effect.
SECTION 5. Counterparts; Effectiveness. This Amendment 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 Amendment shall become effective as of the date hereof when
the Agent shall have received duly executed counterparts hereof signed by the
Borrower and the Required Banks (or, in the case of any party as to which an
executed counterpart shall not have been received, the Agent shall have
received telegraphic, telex or other written confirmation from such party of
execution of a counterpart hereof by such party).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first above written.
PERINI CORPORATION
By /s/ James M. Markert
----------------------------
Title: Senior Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Caroline R. Shapiro
----------------------------
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION
By /s/ Richard J. Cerf
----------------------------
Title: Vice President
SHAWMUT BANK, N.A.
By /s/ Robert J. Lord
----------------------------
Title: Director
FLEET BANK OF MASSACHUSETTS, N.A.
By /s/ Jeffrey Bauer
----------------------------
Title: Vice President
BAYBANK BOSTON, N.A. as Bank
and as LC Bank
By /s/ Timothy M. Laurion
----------------------------
Title: Vice President
EXHIBIT 10(f)
CONFORMED COPY
[EXHIBITS D, E,
F, G, H-1 AND H-2
CONFORMED AS EXECUTED]
$15,000,000
CREDIT AGREEMENT
dated as of
March 9, 1994
among
Perini Corporation
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Agent
<PAGE>
TABLE OF CONTENTS (1)<F1>
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.......................... 1
1.02 Accounting Terms and Determinations.. 13
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments to Lend.................. 13
2.02 Method of Borrowing.................. 14
2.03 Notes................................ 15
2.04 Maturity of Loans.................... 15
2.05 Interest Rates....................... 15
2.06 Commitment Fees...................... 16
2.07 Participation Fee.................... 16
2.08 Agency Fee........................... 16
2.09 Optional Termination or Reduction of
Commitments........................ 16
2.10 Mandatory Termination or Reduction of
Commitments........................ 17
2.11 Prepayments.......................... 18
2.12 General Provisions as to Payments.... 18
2.13 Computation of Interest and Fees..... 19
2.14 Maximum Interest Rate................ 19
ARTICLE III
CONDITIONS
SECTION 3.01 Effectiveness........................ 20
3.02 Conditions to each Borrowing......... 22
[FN]
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<F1>The Table of Contents is not a prat of this Agreement.
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Corporate Existence and Power....... 22
4.02 Corporate and Governmental
Authorization; No Contravention... 23
4.03 Binding Effect; Liens of
Collateral Documents.............. 23
4.04 Financial Information............... 23
4.05 Litigation.......................... 24
4.06 Compliance with ERISA............... 24
4.07 Environmental Matters............... 25
4.08 Taxes............................... 26
4.09 Subsidiaries........................ 26
4.10 Not an Investment Company........... 27
4.11 No Burdensome Restrictions.......... 27
4.12 Full Disclosure..................... 27
4.13 Ownership of Properties; Liens...... 27
ARTICLE V
COVENANTS
SECTION 5.01 Information......................... 28
5.02 Payment of Obligations.............. 31
5.03 Maintenance of Property; Insurance.. 31
5.04 Conduct of Business and
Maintenance of Existence.......... 31
5.05 Compliance with Laws................ 32
5.06 Inspection of Property, Books and
Records........................... 32
5.07 Current Ratio....................... 32
5.08 Debt................................ 32
5.09 Minimum Consolidated Tangible
Net Worth......................... 33
5.10 Interest Coverage................... 33
5.11 Negative Pledge..................... 33
5.12 Consolidations, Mergers and
Sales of Assets................... 34
5.13 Use of Proceeds..................... 35
5.14 Restricted Payments................. 35
5.15 Real Estate Investments............. 35
5.16 Other Investments................... 36
5.17 Further Assurances.................. 37
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default................... 37
6.02 Notice of Default................... 40
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization....... 41
7.02 Agent and Affiliates................ 41
7.03 Action by Agent..................... 41
7.04 Consultation with Experts........... 41
7.05 Liability of Agent.................. 41
7.06 Indemnification..................... 42
7.07 Credit Decision..................... 42
7.08 Successor Agent..................... 42
7.09 Collateral Documents................ 43
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Reduced Return...................... 43
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices.............................. 44
9.02 No Waivers........................... 44
9.03 Expenses; Documentary Taxes;
Indemnification.................... 45
9.04 Sharing of Setoffs................... 46
9.05 Amendments and Waivers............... 46
9.06 Successors and Assigns............... 46
9.07 Collateral........................... 48
9.08 Governing Law; Submission to
Jurisdiction....................... 48
9.09 Counterparts; Integration............ 48
9.10 WAIVER OF JURY TRIAL................. 48
Schedule I - Existing Debt
Schedule II - Proposed Guarantees
Schedule III - Existing Liens
Schedule IV - Mortgaged Facilities
Exhibit A - Note
Exhibit B-1 - Opinion of General Counsel of the Borrower
Exhibit B-2 - Opinion of New York Counsel for the Borrower
Exhibit C-1 - Opinion of Special New York Counsel for the Agent
Exhibit C-2 - Opinion of Special Arizona Counsel for the Agent
Exhibit D - Borrower Security Agreement
Exhibit E - Borrower Pledge Agreement
Exhibit F - Subsidiary Guarantee Agreement
Exhibit G - Subsidiary Security Agreement
Exhibit H-1 - Deed of Trust
Exhibit H-2 - Deed of Trust
Exhibit I - Assignment and Assumption Agreement
CREDIT AGREEMENT
AGREEMENT dated as of March 9, 1994 among PERINI CORPORATION, the
BANKS listed on the signature pages hereof and MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Agent.
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"Administrative Questionnaire" means, with respect to each Bank, the
administrative questionnaire in the form submitted to such Bank by the Agent
and submitted to the Agent (with a copy to the Borrower) duly completed by such
Bank.
"Agent" means Morgan Guaranty Trust Company of New York in its
capacity as agent for the Banks under the Financing Documents, and its
successors in such capacity.
"Assignee" has the meaning set forth in Section 9.06(c).
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.06(c), and their respective
successors.
"Base Rate" means, for any day, a rate per annum equal to the higher
of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrower" means Perini Corporation, a Massachusetts corporation, and
its successors.
"Borrower's 1992 Form 10-K" means the Borrower's annual report on Form
10-K for 1992, as filed with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934.
"Borrower Pledge Agreement" means the Borrower Pledge Agreement in
substantially the form of Exhibit E between the Borrower and the Agent as
executed and delivered pursuant to Section 3.01(c) as the same may be amended
from time to time as permitted herein and in accordance with the terms thereof.
"Borrower Security Agreement" means the Borrower Security Agreement in
substantially the form of Exhibit D between the Borrower and the Agent, as
executed and delivered pursuant to Section 3.01(c) and as the same may be
amended from time to time as permitted herein and in accordance with the terms
thereof.
"Borrowing" means a borrowing under this Agreement consisting of Loans
made to the Borrower at the same time by the Banks pursuant to Article II.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City or Massachusetts are authorized by law
to close.
"Casualty Event" means (i) any destruction of or damage to property
through one or more related events for which the Borrower or any of its
Subsidiaries may be entitled to insurance proceeds or restitution payments or
(ii) any condemnation of property, or any transfer or other disposition of
property in lieu of condemnation, for which the Borrower or any of its
Subsidiaries may be entitled to a condemnation award or other compensation.
"Casualty Proceeds" means, with respect to any Casualty Event, all
insurance proceeds (except proceeds of business interruption insurance),
restitution payments, condemnation awards and other compensation received by
the Borrower or any of its Subsidiaries (or, in the case of a Casualty Event
relating to a Mortgaged Facility, by the Agent in accordance with the
Collateral Documents) in respect thereof.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended from time to time and any rules or
regulations promulgated thereunder.
"Collateral" means all property, real and personal, tangible and
intangible, with respect to which Liens are created or are purported to be
created pursuant to the Collateral Documents.
"Collateral Documents" means the Borrower Security Agreement, the
Borrower Pledge Agreement, the Subsidiary Security Agreement, the Subsidiary
Guarantee Agreement, the Deeds of Trust and all other supplemental or
additional security agreements, pledge agreements, mortgages or similar
instruments delivered pursuant hereto or thereto.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof, as such amount
may be reduced from time to time pursuant to Sections 2.09 and 2.10.
"Consolidated Capital Base" means, at any date, the Consolidated
Tangible Net Worth of the Borrower at such date plus 75% of the principal
amount of any Special Subordinated Debt outstanding at such date.
"Consolidated Current Assets" means at any date the consolidated
current assets of the Borrower and its Consolidated Subsidiaries excluding
costs related to Claims, all determined as of such date. For purposes of this
definition, "Claims" mean the amount (to the extent reflected in determining
such consolidated current assets) of disputed or unapproved change orders in
regards to scope and/or price that, in Perini project management's opinion (and
approved by Perini senior management), will not be resolved in the normal
course of business (i.e. through the change order process and without resort to
litigation or arbitration) and which have not been previously reflected in the
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of March 31, 1993.
"Consolidated Current Liabilities" means at any date the consolidated
current liabilities of the Borrower and its Consolidated Subsidiaries,
determined as of such date.
"Consolidated Earnings Before Interest and Taxes" means for any period
Consolidated Net Income for such period (x) less (i) the Borrower's equity
share of income (or plus the Borrower's equity share of loss) of unconsolidated
joint ventures for such period and (ii) capitalized real estate taxes for such
period, to the extent not permitted to be capitalized in accordance with
generally accepted accounting principles as in effect on the date hereof, and
(y) plus (i) cash distributions of earnings from unconsolidated joint ventures
for such period and (ii) the aggregate amount deducted in determining such
Consolidated Net Income in respect of Consolidated Interest Charges and income
taxes.
"Consolidated Interest Charges" means for any period the aggregate
interest expense of the Borrower and its Consolidated Subsidiaries for such
period including, without limitation, (i) the portion of any obligation under
capital leases allocable to interest expense in accordance with generally
accepted accounting principles, (ii) the portion of any debt discount that
shall be amortized in such period and (iii) any interest accrued during such
period which is capitalized in accordance with generally accepted accounting
principles, and without any reduction on account of interest income.
"Consolidated Net Income" means for any period the consolidated net
income (or loss) of the Borrower and its Consolidated Subsidiaries for such
period.
"Consolidated Subsidiary" of any Person means at any date any
Subsidiary of such Person or other entity the accounts of which would be
consolidated with those of such Person in its consolidated financial statements
if such statements were prepared as of such date.
"Consolidated Tangible Net Worth" of any Person means at any date the
consolidated stockholders' equity of such Person and its Consolidated
Subsidiaries less their consolidated Intangible Assets, all determined as of
such date. For purposes of this definition "Intangible Assets" means the
amount (to the extent reflected in determining such consolidated stockholders'
equity) of (i) all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of assets of a going concern business made
within twelve months after the acquisition of such business) subsequent to
December 31, 1992 in the book value of any asset owned by the Borrower or a
Consolidated Subsidiary and (ii) all unamortized debt discount and expense,
capitalized real estate taxes (to the extent not permitted to be capitalized in
accordance with generally accepted accounting principles as in effect on the
date hereof), goodwill, patents, trademarks, service marks, trade names,
copyrights, organization or developmental (other than real estate
developmental) expenses and other intangible items.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee which are
capitalized in accordance with generally accepted accounting principles, (v)
all Debt secured by a Lien on any asset of such Person, whether or not such
Debt is otherwise an obligation of such Person, and (vi) all Debt of others
Guaranteed by such Person; provided that advances to the Borrower or a
Subsidiary by a joint venture out of the Borrower's or such Subsidiary's share
of the undistributed earnings of such joint venture shall not constitute Debt.
"Deeds of Trust" means the Deed of Trust, Assignment of Leases and
Rents, Security Agreement and Financing Statement dated as of March 9, 1994 for
each of the Mortgaged Facilities, each substantially in the form of Exhibits
H-1 and H-2 hereto.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 3.01.
"Environmental Laws" means any and all federal state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating
to the environment, the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, Hazardous
Substances or wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or
wastes or the clean-up or other remediation thereof.
"Environmental Liabilities" means any and all liabilities of or
relating to the Borrower or any of its Subsidiaries (including any entity which
is, in whole or in part, a predecessor of the Borrower or any of its
Subsidiaries), whether vested or unvested, contingent or fixed, actual or
potential, known or unknown, which arise under or relate to matters covered by
Environmental Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Event of Default" has the meaning set forth in Section 6.01.
"Exempt Group" means (i) any employee benefit plan of the Borrower or
any Subsidiary, (ii) any entity or Person holding shares of common stock of
Borrower organized, appointed or established by the Borrower or any Subsidiary
for or pursuant to the terms of any such plan or (iii) The Perini Memorial
Foundation, Inc., The Joseph Perini Memorial Foundation, or any of the various
trusts established under the wills of Lewis R. Perini, Senior, Joseph R.
Perini, Senior or Charles B. Perini, Senior.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th 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 such day 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, and (ii) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to
Morgan Guaranty Trust Company of New York on such day on such transactions as
determined by the Agent.
"Financing Documents" means this Agreement, the Subsidiary Guarantee
Agreement, the Notes and the Collateral Documents.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt (whether arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner the holder of
such Debt of the payment thereof or to protect such holder against loss in
respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit or bid and performance bonds
and guarantees in the ordinary course of business. The term "Guarantee" used
as a verb has a corresponding meaning.
"Hazardous Substances" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Interest Period" means, with respect to each Borrowing, the period
commencing on the date of such Borrowing and ending 30 days thereafter;
provided that:
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, Guarantee, time deposit or
otherwise.
"Lending Office" means, as to each Bank, its office located at its
address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Lending Office) or such other office as
such Bank may hereafter designate as its Lending Office by notice to the
Borrower and the Agent.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"Loan" means a Loan to be made by a Bank pursuant to Section 2.02.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $10,000,000.
"Material Subsidiary" means at any time a Subsidiary which as of such
time meets the definition of a "significant subsidiary" contained as of the
date hereof in Regulation S-X of the Securities and Exchange Commission.
"Modified Parent Company Debt" means at any date the Debt of the
Borrower (other than Debt payable to any Wholly-Owned Consolidated Subsidiary
or Debt payable pursuant to this Agreement), determined on an unconsolidated
basis as of such date, less 75% of the principal amount of any Special
Subordinated Debt outstanding on such date.
"Mortgaged Facilities" means the properties described on Schedule IV.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"Notes" means promissory notes of the Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of the Borrower to repay
the Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"Notice Time" has the meaning set forth in Section 2.16(b).
"Obligor" means each of the Borrower and the Subsidiary Guarantors,
and "Obligors" means all of the foregoing.
"Paramount Development Associates" means Paramount Development
Associates, a Massachusetts corporation.
"Parent" means, with respect to any Bank, any Person controlling such
Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Percentage" means, with respect to each Bank, the percentage that
such Bank's Commitment constitutes of the aggregate amount of the Commitments.
"Perini Building Company" means Perini Building Company, Inc., an
Arizona corporation.
"Perini International" means Perini International Corporation, a
Massachusetts corporation.
"Perini Land and Development" means Perini Land and Development
Company, a Delaware corporation.
"Permitted Encumbrances" means, with respect to any real property
owned or leased by the Borrower or any of its Subsidiaries:
(a) Liens for taxes, assessments or other governmental charges not
yet due or which are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on the
books of the Borrower or such Subsidiary, as the case may be, in accordance
with generally accepted accounting principles;
(b) carriers', warehousemen's, mechanics', materialmens', repairmens'
or other like Liens arising by operation of law in the ordinary course of
business so long as (A) the underlying obligations are not overdue for a period
of more than 60 days or (B) such Liens are being contested in good faith and by
appropriate proceedings and adequate reserves with respect thereto are
maintained on the books of the Borrower or such Subsidiary, as the case may be,
in accordance with generally accepted accounting principles; and
(c) other Liens or title defects (including matters which an accurate
survey might disclose) which (x) do not secure Debt; (y) do not materially
detract from the value of such real property or materially impair the use
thereof by the Borrower or such Subsidiary in the operation of its business;
and (z) are set forth in the title reports referred to in Section 3.01(h)
hereof.
"Permitted Liens" means the Liens permitted to exist under Section
5.11.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person
which was at such time a member of the ERISA Group for employees of any Person
which was at such time a member of the ERISA Group.
"Prime Rate" means the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
"Primary Credit Facility" means the credit agreement dated as of May
10, 1993 among the Borrower, Morgan Guaranty Trust Company of New York, as
Agent, and the banks listed on the signature pages therein.
"Real Estate Investment" means (i) the acquisition, construction or
improvement of any real property, other than real property used by the Borrower
or a Consolidated Subsidiary in the conduct of its construction business or
(ii) any Investment in any Person (including Perini Land and Development or
another Consolidated Subsidiary, but without duplication of any Real Estate
Investment made by such Person with the proceeds of such Investment) engaged in
real estate investment or development or whose principal assets consist of real
property; provided that the Guarantees contemplated by Section 5.08(b)(ii) and
(iii) shall not constitute Real Estate Investments.
"R. E. Dailey & Co." means R. E. Dailey & Co., a Michigan corporation.
"Refunding Borrowing" means a Borrowing which, after application of
the proceeds thereof, results in no net increase in the outstanding principal
amount of Loans made by any Bank.
"Regulated Activity" means any generation, treatment, storage,
recycling, transportation or Release of any Hazardous Substance.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Release" means any discharge, emission or release, including a
Release as defined in CERCLA at 42 U.S.C. {Sec. Mark} 9601(22). The term
"Released" has a corresponding meaning.
"Required Banks" means at any time Banks having at least 60% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 60% of the aggregate unpaid
principal amount of the Loans.
"Restricted Payment" means (i) any dividend or other distribution on
any shares of the Borrower's capital stock (except dividends payable solely in
shares of its capital stock) or (ii) any payment on account of the purchase,
redemption, retirement or acquisition of (a) any shares of the Borrower's
capital stock or (b) any option, warrant or other right to acquire shares of
the Borrower's capital stock; provided that none of the following shall
constitute Restricted Payments: (i) the declaration and payment of dividends on
preferred stock of the Borrower in an aggregate amount with respect to any four
consecutive fiscal quarters not exceeding $2,125,000, (ii)
the exchange of Special Subordinated Debt for the Borrower's $21.25 Convertible
Exchangeable Preferred Shares, or (iii) the redemption, for an aggregate
redemption price not exceeding $200,000, of the "Rights" issued pursuant to the
Shareholder Rights Agreement dated as of September 23, 1988, as amended,
between the Borrower and The First National Bank of Boston, as Rights Agent or
(iv) cash payments in the ordinary course of business in full or partial
settlement of employee stock options or similar incentive compensation
arrangements.
"Special Subordinated Debt" means the 8 1/2% Convertible Subordinated
Debentures due 2012 of the Borrower issuable in exchange for the Borrower's
$21.25 Convertible Exchangeable Preferred Shares in accordance with the terms
of the Certificate of Vote of Directors Establishing a Series of a Class of
Stock fixing the relative rights and preferences of such Shares as originally
filed with the Secretary of the Commonwealth of Massachusetts.
"Subsidiary" of any Person means any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person.
"Subsidiary Guarantor" means each of Perini Building Company, Perini
International, Perini Land and Development, R. E. Dailey & Co., Paramount
Development Associates and each other Subsidiary of the Borrower which becomes
a party to the Subsidiary Guarantee Agreement pursuant to Section 3.01 thereof,
and their respective successors.
"Subsidiary Guarantee Agreement" means the Subsidiary Guarantee
Agreement in substantially the form of Exhibit F among the Borrower, the
Subsidiary Guarantors party thereto and the Agent, as executed and delivered
pursuant to Section 3.01(b) and as the same may be amended from time to time as
permitted herein and in accordance with the terms thereof.
"Subsidiary Security Agreement" means the Subsidiary Security
Agreement in substantially the form of Exhibit G among the Borrower, the
Subsidiary Guarantors party thereto and the Agent, as executed and delivered
pursuant to Section 3.01(c) and as the same may be amended from time to time as
permitted herein and in accordance with the terms thereof.
"Temporary Cash Investment" means investment of cash balances in
United States Government securities or other short-term money market
investments.
"Termination Date" means December 31, 1994 (or if such date is not a
Business Day, the next preceding Business Day).
"Unfunded Liabilities" means, with respect to any Plan at any time,
the amount (if any) by which (i) the value of all benefit liabilities under
such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA
Group to the PBGC or any other Person under Title IV of ERISA.
"Wholly-Owned Consolidated Subsidiary" means any Consolidated
Subsidiary of the Borrower all of the shares of capital stock or other
ownership interests of which (except directors' qualifying shares) are at the
time directly or indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. From time to time prior to the
Termination Date, each Bank severally agrees, on the terms and conditions set
forth in this Agreement, to lend to the Borrower from time to time amounts not
to exceed in the aggregate at any one time outstanding the amount of its
Commitment. Each Borrowing under this Section shall be in an aggregate
principal amount of $1,000,000 or any larger multiple of $500,000 (except that
any such Borrowing may be in the aggregate amount of the unused Commitments)
and shall be made from the several Banks ratably in proportion to their
respective Commitments. Within the foregoing limits, the Borrower may borrow
under this Section, repay, or to the extent permitted by Section 2.11, prepay
Loans and reborrow at any time prior to the Termination Date under this
Section.
SECTION 2.02. Method of Borrowing. (a) The Borrower shall give the
Agent notice (a "Notice of Borrowing") not later than 10:00 A.M. (New York
City) on the date of each Borrowing specifying the date (which shall be a
Business Day) and the aggregate principal amount of such Borrowing.
(b) Upon receipt of a Notice of Borrowing, the Agent shall promptly
notify each Bank of the contents thereof and of such Bank's ratable share of
such Borrowing and such Notice of Borrowing shall not thereafter be revocable
by the Borrower.
(c) Not later than 11:00 A.M. (New York City time) on the date of
each Borrowing, each Bank shall (except as provided in subsection (d) of this
Section) make available its ratable share of such Borrowing, in Federal or
other funds immediately available in New York City, to the Agent at its address
referred to in Section 9.01. Unless the Agent determines that any applicable
condition specified in Article III has not been satisfied, the Agent will make
the funds so received from the Banks available to the Borrower at the Agent's
aforesaid address.
(d) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank,
such Bank shall apply the proceeds of its new Loan to make such repayment and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank to
the Agent as provided in subsection (c) of this Section, or remitted by the
Borrower to the Agent as provided in Section 2.12, as the case may be.
(e) Unless the Agent shall have received notice from a Bank prior to
the date of any Borrowing that such Bank will not make available to the Agent
such Bank's share of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such Borrowing in
accordance with subsections (c) and (d) of this Section 2.02 and the Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so
made such share available to the Agent, such Bank and the Borrower severally
agree to repay to the Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the Agent, at
(i) in the case of the Borrower, a rate per annum equal to the higher of the
Federal Funds Rate and the interest rate applicable thereto pursuant to Section
2.05 and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank
shall repay to the Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement.
SECTION 2.03. Notes. (a) The Loans of each Bank shall be evidenced
by a single Note payable to the order of such Bank for the account of its
Lending Office.
(b) Upon receipt of each Bank's Note pursuant to Section 3.01(c), the
Agent shall forward such Note to such Bank. Each Bank shall record the date,
amount and maturity of each Loan made by it and the date and amount of each
payment of principal made by the Borrower with respect thereto, and may, if
such Bank so elects in connection with any transfer or enforcement of its Note,
endorse on the schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such Loan then
outstanding; provided that the failure of any Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Notes. Each Bank is hereby irrevocably authorized by the Borrower so
to endorse its Note and to attach to and make a part of its Note a continuation
of any such schedule as and when required.
SECTION 2.04. Maturity of Loans. Each Loan included in any Borrowing
shall mature, and the principal amount thereof shall be due and payable, on the
last day of the Interest Period applicable to such Borrowing.
SECTION 2.05. Interest Rates. (a) Each Loan shall bear interest on
the outstanding principal amount thereof, for each day from the date such Loan
is made until it becomes due, at a rate per annum equal to
(i) the sum of 1.5% plus the Base Rate for such day, if such day falls
on or before September 30, 1994 and the aggregate principal amount of all Loans
outstanding on such day (after giving effect to any Loans borrowed or repaid on
such day) is $7,500,000 or less;
(ii) the sum of 2% plus the Base Rate for such day, if such day falls
on or before September 30, 1994 and the aggregate principal amount of all Loans
outstanding on such day (after giving effect to any Loans borrowed or repaid on
such day) is more than $7,500,000,; or
(iii) the sum of 3% plus the Base Rate for such day, if such day falls
after September 30, 1994.
Such interest shall be payable for each Interest Period on the last day
thereof. Any overdue principal of or interest on any Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the sum
of 2% plus the rate otherwise applicable to Loans for such day.
(b) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall give prompt notice to the Borrower and the
Banks of each rate of interest so determined, and its determination thereof
shall be conclusive in the absence of manifest error.
SECTION 2.06. Commitment Fees. The Borrower shall pay to the Agent
for the account of each Bank a commitment fee at the rate of 1/2 of 1% per
annum on the daily average unused portion of such Bank's Commitment. Such
commitment fees shall accrue from and including the Effective Date to but
excluding the Termination Date. Such commitment fees shall be payable on the
last day of each fiscal quarter of the Borrower prior to the Termination Date
and on the Termination Date.
SECTION 2.07. Participation Fee. The Borrower shall pay to the Agent
for the account of each Bank on the Effective Date a participation fee in an
amount equal to .75% of such Bank's Commitment.
SECTION 2.08. Agency Fee. The Borrower shall pay to the Agent as
compensation for its services hereunder and under the Collateral Documents
agency fees payable in the amounts and at the times heretofore agreed between
the Borrower and the Agent. The Borrower shall also pay to the Agent for its
own account on the Effective Date an arrangement fee in the amount previously
agreed between the Borrower and the Agent.
SECTION 2.09. Optional Termination or Reduction of Commitments. The
Borrower may, upon at least three Business Days' notice to the Agent, terminate
at any time, or proportionately permanently reduce from time to time by an
aggregate amount of $2,500,000 or any larger multiple of $1,000,000, the unused
portions of the Commitments. If the Commitments are terminated in their
entirety, all accrued commitment fees shall be payable on the effective date of
such termination.
SECTION 2.10. Mandatory Termination or Reduction of Commitments. (a)
The Commitments shall terminate on the Termination Date, and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable
on such date.
(b) The Commitments of all Banks shall be permanently, automatically
and ratably reduced:
(i) immediately upon receipt by the Borrower, any Subsidiary
Guarantor or the Agent of the proceeds from the collection, sale or other
disposition (except a Casualty Event) of any item of Collateral (other than any
distribution from Kiewit/Perini) by an amount equal to 100% of such proceeds
net of all out-of-pocket costs, fees, commissions and other expenses reasonably
incurred in respect of such collection, sale or disposition and any taxes paid
or payable (as estimated by a financial officer of the Borrower in good faith)
in respect thereof;
(ii) immediately upon receipt by the Borrower, any Subsidiary
Guarantor or the Agent of Casualty Proceeds in respect of any item of
Collateral, (i) if the Borrower or such Subsidiary Guarantor elects to restore,
repair or replace such Collateral, the amount of such Casualty Proceeds which,
in the aggregate, exceed the actual cost of completing the restoration, repair
or replacement of such property, by an amount equal to 100% of such excess or
(ii) if the Borrower or such Subsidiary Guarantor elects not to restore, repair
or replace such Collateral, by an amount equal to 100% of such Casualty
Proceeds; and
(iii) immediately upon receipt by the Borrower or any Subsidiary of the
proceeds from any issuance of debt excluding Special Subordinated Debt or
equity securities, including any preferred stock, by an amount equal to 100% of
such proceeds net of all costs, fees, commissions and other expenses
attributable to such issuance.
(c) On each day on which any Commitment is reduced pursuant to
subsection (a) or (b) of this Section, the Borrower shall repay such principal
amount (together with accrued interest thereon) of each Bank's outstanding
Loans, if any, as may be necessary so that after such repayment, the aggregate
unpaid principal amount of such Bank's Loans does not exceed the amount of such
Bank's Commitment after giving effect to such reduction.
SECTION 2.11. Prepayments. (a) Optional. The Borrower may, upon at
least one Business Day's notice to the Agent, prepay any Borrowing in whole at
any time, or from time to time in part in amounts aggregating $1,000,000 or any
larger multiple of $500,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment. Each such
optional prepayment shall be applied to prepay ratably the Loans of the several
Banks included in such Borrowing.
(b) Mandatory. In addition to mandatory prepayments pursuant to
Section 2.10(c), if at any time the aggregate principal amount of the loans
outstanding to the Borrower referred to in Section 3.02(b) hereof are less than
the amounts specified in such subsection, the Borrower shall simultaneously, at
such time, prepay all Borrowings outstanding hereunder.
(c) Notice of Prepayment. Upon receipt of a notice of prepayment
pursuant to this Section, the Agent shall promptly notify each Bank of the
contents thereof and of such Bank's ratable share of such prepayment and such
notice shall not thereafter be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a) The Borrower
shall make each payment of principal of, and interest on, the Loans and of fees
hereunder, not later than 11:00 A.M. (New York City time) on the date when due,
in Federal or other funds immediately available in New York City, to the Agent
at its address referred to in Section 9.01. The Agent will promptly distribute
to each Bank its ratable share of each such payment received by the Agent for
the account of the Banks. Whenever any payment of principal of, or interest
on, the Loans or of fees shall be due on a day which is not a Business Day, the
date for payment thereof shall be extended to the next succeeding Business Day.
If the date for any payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such Bank. If and to the
extent that the Borrower shall not have so made such payment, each Bank shall
repay to the Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.13. Computation of Interest and Fees. Interest based on
the Prime Rate shall be computed on the basis of a year of 365 days (or 366
days in a leap year) and paid for the actual number of days elapsed (including
the first day but excluding the last day). Interest based on the Federal Funds
Rate and fees shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed (including the first day but excluding the
last day).
<PAGE>
SECTION 2.14. Maximum Interest Rate. (a) Nothing contained in this
Agreement or the Notes shall require the Borrower to pay interest at a rate
exceeding the maximum rate permitted by applicable law. Neither this Section
nor Section 9.08 is intended to limit the rate of interest payable for the
account of any Bank to the maximum rate permitted by the laws of the State of
New York if a higher rate is permitted with respect to such Bank by supervening
provisions of U.S. federal law.
(b) If the amount of interest payable for the account of any Bank on
any interest payment date in respect of the immediately preceding interest
computation period, computed pursuant to Section 2.05, would exceed the maximum
amount permitted by applicable law to be charged by such Bank, the amount of
interest payable for its account on such interest payment date shall be
automatically reduced to such maximum permissible amount.
(c) If the amount of interest payable for the account of any Bank in
respect of any interest computation period is reduced pursuant to clause (b) of
this Section and the amount of interest payable for its account in respect of
any subsequent interest computation period, computed pursuant to Section 2.05,
would be less than the maximum amount permitted by applicable law to be charged
by such Bank, then the amount of interest payable for its account in respect of
such subsequent interest computation period shall be automatically increased to
such maximum permissible amount; provided that at no time shall the aggregate
amount by which interest paid for the account of any Bank has been increased
pursuant to this clause (c) exceed the aggregate amount by which interest paid
for its account has theretofore been reduced pursuant to clause (b) of this
Section.
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become effective
on the date that each of the following conditions shall have been satisfied (or
waived in accordance with Section 9.05):
(a) receipt by the Agent of counterparts of this Agreement signed by
each of the parties hereto (or, in the case of any party as to which an
executed counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex or other written confirmation from
such party of execution of a counterpart hereof by such party);
(b) receipt by the Agent of counterparts of the Subsidiary Guarantee
Agreement, duly executed by each of the Obligors listed on the signature pages
thereof;
(c) receipt by the Agent of counterparts of the Borrower Security
Agreement, the Borrower Pledge Agreement, the Subsidiary Security Agreement,
the Deeds of Trust and all other documents and certificates to be delivered
pursuant thereto on the Effective Date (including appropriately completed and
duly executed Uniform Commercial Code financing statements required thereby)
duly executed by each of the Obligors listed on the signature pages thereof;
(d) evidence satisfactory to the Agent that arrangements satisfactory
to it shall have been made for recording the Deeds of Trust and filing the
Uniform Commercial Code financing statements referred to in paragraph (c) above
on or promptly after the Effective Date;
(e) receipt by the Agent of all Pledged Instruments;
(f) copies of file search reports from the Uniform Commercial Code
filing officer in each jurisdiction (i) in which any Mortgaged Facility is
located or (ii) in which the chief executive office of the Borrower and each
Subsidiary Guarantor is located, setting forth the results of Uniform
Commercial Code file searches conducted in the name of the Borrower and each
Subsidiary Guarantor, as the case may be;
(g) evidence satisfactory to the Agent of the insurance coverage
required by Section 5.03;
(h) with respect to each of the Mortgaged Facilities, title reports
with respect thereto issued by a title insurance company reasonably acceptable
to the Agent and dated no more than 45 days prior to the Effective Date showing
no Liens except Permitted Encumbrances with respect thereto;
(i) receipt by the Agent of a duly executed Note for the account of
each Bank dated on or before the Effective Date complying with the provisions
of Section 2.03;
(j) receipt by the Agent of (i) an opinion of the General Counsel of
the Borrower and (ii) an opinion of Jacobs Persinger & Parker, New York counsel
for the Borrower, substantially in the forms of Exhibits B-1 and B-2,
respectively, and covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request;
(k) receipt by the Agent of (i) an opinion of Davis Polk & Wardwell,
special New York counsel for the Agent, and (ii) an opinion of Meyer Hendricks
Victor Osborn & Maledon, special Arizona counsel for the Agent, substantially
in the forms of Exhibits C-1 and C-2, respectively, hereto and covering such
additional matters relating to the transactions contemplated hereby as the
Required Banks may reasonably request; and
(l) receipt by the Agent of all documents it may reasonably request
relating to the existence of the Obligors, the corporate authority for and the
validity of the Financing Documents and any other matters relevant hereto, all
in form and substance satisfactory to the Agent;
provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later
than March 31, 1994. The Agent shall promptly notify the Borrower and the
Banks of the Effective Date, and such notice shall be conclusive and binding on
all parties hereto.
SECTION 3.02. Conditions to Each Borrowing. The obligation of any
Bank to make a Loan on the occasion of any Borrowing is subject to the
satisfaction of the following conditions:
(a) receipt by the Agent of a Notice of Borrowing as required by
Section 2.02;
(b) the fact that, after giving effect to such Borrowing and the
application of the proceeds thereof, the aggregate principal amounts of the
loans outstanding to the Borrower plus the aggregate face amount of letters of
credit issued for the account of the Borrower are (i) $70,000,000 under the
Primary Credit Facility, (ii) $5,000,000 under the advised line from Comerica,
(iii) $10,000,000 under the advised line from Hong Kong & Shanghai Bank and
(iv) $3,000,000 under the advised line from State Street Bank;
(c) the fact that, immediately after such Borrowing, no Default shall
have occurred and be continuing; and
(d) the fact that the representations and warranties of each Obligor
contained in each Financing Document to which it is a party (except, in the
case of a Refunding Borrowing, the representation and warranty set forth in
Section 4.04(b) hereof as to any material adverse change which has theretofore
been disclosed in writing by the Borrower to the Banks) shall be true on and as
of the date of such Borrowing.
Each Borrowing shall be deemed to be a representation and warranty by the
Borrower on the date of such Borrowing as to the facts specified in clauses
(b), (c) and (d) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of Massachusetts, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by each Obligor of the
Financing Documents to which it is a party are within its corporate powers,
have been duly authorized by all necessary corporate action, require no action
by or in respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of such Obligor or of any agreement, judgment, injunction, order, decree or
other instrument binding upon such Obligor or any of its Subsidiaries or result
in the creation or imposition of any Lien, except Liens created by the
Collateral Documents, on any asset of such Obligor or any of its Subsidiaries.
SECTION 4.03. Binding Effect; Liens of Collateral Documents. This
Agreement constitutes a valid and binding agreement of the Borrower and the
Notes, when executed and delivered in accordance with this Agreement, will
constitute valid and binding obligations of the Borrower in each case
enforceable in accordance with their respective terms. The Subsidiary
Guarantee Agreement and each Collateral Document, when executed and delivered
in accordance with this Agreement, will constitute a valid and binding
agreement of each Obligor party thereto enforceable against each such Obligor
in accordance with its terms. The Collateral Documents create valid security
interests in, and first mortgage Liens on, the Collateral purported to be
covered thereby, which security interests and mortgage Liens are and will
remain perfected security interests and duly recorded mortgage Liens, prior to
all other Liens except Liens permitted by the Collateral Documents.
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 1992 and the related consolidated
statements of income, stockholders' equity and cash flows for the fiscal year
then ended, reported on by Arthur Andersen & Co. and set forth in the
Borrower's 1992 Form 10-K, a copy of which has been delivered to each of the
Banks, fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year.
(b) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of September 30, 1993 and the related unaudited
consolidated statements of income, stockholders' equity and cash flows for the
nine months then ended, set forth in the Borrower's quarterly report for the
fiscal quarter ended September 30, 1993 as filed with the Securities and
Exchange Commission on Form 10-Q, a copy of which has been delivered to each of
the Banks, fairly present, in conformity with generally accepted accounting
principles applied on a basis consistent with the financial statements referred
to in subsection (a) of this Section, the consolidated financial position of
the Borrower and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such nine month period
(subject to normal year-end adjustments).
(c) Since September 30, 1993 there has been no material adverse
change in the business, financial position, results of operations or prospects
of the Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.05. Litigation. Except as disclosed in the Borrower's 1992
Form 10-K and the Form 10-Q referred to in Section 4.04(b) above, there is no
action, suit or proceeding pending against, or to the knowledge of the Borrower
threatened against or affecting, the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which could materially
adversely affect the business, consolidated financial position or consolidated
results of operations of the Borrower and its Consolidated Subsidiaries or
which in any manner draws into question the validity of any Financing Document.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA Group
has fulfilled its obligations under the minimum funding standards of ERISA and
the Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of
the Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting
of a bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability to the PBGC or any other Person under Title IV of ERISA
other than a liability to the PBGC for premiums under Section 4007 of ERISA.
SECTION 4.07. Environmental Matters. (a) In the ordinary course of
its business, the Borrower conducts periodic reviews of the effect of
Environmental Laws on the business, operations and properties of the Borrower
and its Subsidiaries and compliance therewith. The Borrower and its
Subsidiaries also attempt, whenever possible, to negotiate specific provisions
in contracts for construction services that allocate to the contracting
governmental agency or private owner, the entire risk and responsibility for
Hazardous Substances encountered during the course of construction. On the
basis of such reviews and contract provisions and procedures, the Borrower has
reasonably concluded that the costs and associated liabilities of compliance
with Environmental Laws are unlikely to have a material adverse effect on the
business, financial condition, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
(b) Without limiting the foregoing, as of the Effective Date:
(i) no notice, notification, demand, request for information,
citation, summons, complaint or order has been issued, no complaint has been
filed, no penalty has been assessed and no investigation or review is pending
or, to the knowledge of the Obligors, threatened by any governmental or other
entity with respect to any (A) alleged violation by the Borrower or any of its
Subsidiaries of any Environmental Law involving any Mortgaged Facility, (B)
alleged failure by the Borrower or any of its Subsidiaries to have any
environmental permit, certificate, license, approval, registration or
authorization required in connection with the conduct of its business at any
Mortgaged Facility, (C) Regulated Activity conducted at any Mortgaged Facility
or (D) Release of Hazardous Substances at or in connection with any Mortgaged
Facility;
(ii) other than generation of Hazardous Substances in compliance with
all applicable Environmental Laws, no Regulated Activity has occurred at or on
any Mortgaged Facility;
(iii) no polychlorinated biphenyls, radioactive material, urea
formaldehyde, lead, asbestos, asbestos-containing material or underground
storage tank (active or abandoned) is or has been present at any Mortgaged
Facility;
(iv) no Hazardous Substance has been Released (and no written
notification of such Release has been filed) or is present (whether or not in a
reportable or threshold planning quantity) at, on or under any Mortgaged
Facility;
(v) no Mortgaged Facility is listed or, to the knowledge of the
Obligors, proposed for listing, on the National Priorities List promulgated
pursuant to CERCLA, on CERCLIS (as defined in CERCLA) or on any similar
federal, state or foreign list of sites requiring investigation on clean-up; and
(vi) there are no Liens under Environmental Laws on any Mortgaged
Facility, no government actions have been taken or are in process which could
subject any Mortgaged Property to such Liens and neither the Borrower nor any
of its Subsidiaries would be required to place any notice or restriction
relating to Hazardous Substances in any deed to any Mortgaged Facility.
(c) No environmental investigation, study, audit, test, review or
other analysis has been conducted of which the Obligors have knowledge in
relation to any Mortgaged Facility which has not been delivered to the Banks.
SECTION 4.08. Taxes. United States Federal income tax returns of the
Borrower and its Subsidiaries have been examined and closed through the fiscal
year ended December 31, 1986. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Borrower or any
Subsidiary. The charges, accruals and reserves on the books of the Borrower
and its Subsidiaries in respect of taxes or other governmental charges are, in
the opinion of the Borrower, adequate.
SECTION 4.09. Subsidiaries. Each of the Borrower's corporate
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
SECTION 4.10. Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.11. No Burdensome Restrictions. No contract, lease,
agreement or other instrument to which the Borrower or any of its Subsidiaries
is a party or by which any of its property is bound or affected, no charge,
corporate restriction, judgment, decree or order and no provision of applicable
law or governmental regulation has or is reasonably expected to materially and
adversely affect the business, operations or financial condition of the
Borrower and its Consolidated Subsidiaries, taken as a whole, or the ability of
the Borrower to perform its obligations under this Agreement.
SECTION 4.12. Full Disclosure. All information heretofore furnished
by the Borrower to the Agent or any Bank for purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Borrower to the Agent or any Bank will
be, true and accurate in all material respects (or in the case of projections
and similar information based on reasonable estimates) on the date as of which
such information is stated or certified. The Borrower has disclosed to the
Banks in writing any and all facts which materially and adversely affect or may
reasonably be expected to materially and adversely affect (to the extent the
Borrower can now reasonably foresee), the business, operations or financial
condition of the Borrower and its Consolidated Subsidiaries, taken as a whole,
or the ability of the Borrower to perform its obligations under this Agreement.
SECTION 4.13. Ownership of Property; Liens. The Borrower and its
Subsidiaries have good and marketable title to and are in lawful possession of,
or have valid leasehold interests in, or have the right to use pursuant to
valid and enforceable agreements or arrangements, all of their respective
properties and other assets (real or personal, tangible, intangible or mixed),
except where the failure to have or possess the same with respect to such
properties or other assets could not, in the aggregate, have a material adverse
effect on the business, financial condition, results of operations or prospects
of the Borrower and its Consolidated Subsidiaries, considered as a whole. None
of such properties or other assets is subject to any Lien except Permitted
Liens.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of the
Banks:
(a) as soon as available and in any event within 90 days after the
end of each fiscal year of the Borrower, consolidated and consolidating balance
sheets of the Borrower and its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated and consolidating statements of
income, stockholders' equity and cash flows for such fiscal year, setting forth
in each case in comparative form the figures for the previous fiscal year, all
reported on in a manner acceptable to the Securities and Exchange Commission by
Arthur Andersen & Co. or other independent public accountants of nationally
recognized standing;
(b) as soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of the Borrower, a
consolidated condensed balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such quarter and the related consolidated
condensed statements of income and cash flows for such quarter and for the
portion of the Borrower's fiscal year ended at the end of such quarter, setting
forth in each case in comparative form the figures for the corresponding
quarter and the corresponding portion of the Borrower's previous fiscal year,
all certified (subject to normal year-end adjustments) as to fairness of
presentation, generally accepted accounting principles and consistency by the
chief financial officer or the chief accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the chief
financial officer or the chief accounting officer of the Borrower (i) setting
forth in reasonable detail the calculations required to establish whether the
Borrower was in compliance with the requirements of Sections 5.07 to 5.10,
inclusive, 5.12, 5.14 and 5.15 on the date of such financial statements and
(ii) stating whether there exists on the date of such certificate any Default
and, if any Default then exists, setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i) whether
anything has come to their attention to cause them to believe that there
existed on the date of such statements any Default and (ii) confirming the
calculations set forth in the officer's certificate delivered simultaneously
therewith pursuant to clause (c) above;
(e) simultaneously with the delivery of each set of financial
statements set forth above, a schedule, dated as of the date of such financial
statements, listing each construction contract which provides for aggregate
total payments in excess of $2,500,000 and with respect to which the Borrower
or a Consolidated Subsidiary of the Borrower is a party or participates through
a joint venture, and setting forth as of the date of such schedule for each
such contract the Borrower's original estimate of revenue and profit, the
Borrower's current estimate of revenue and profit, cumulative realized and
estimated remaining revenue and profit, and the percentage of completion and
anticipated completion date of each such contract, certified as to consistency,
accuracy and reasonableness of estimates by the chief financial officer or the
chief accounting officer of the Borrower;
(f) forthwith upon the occurrence of any Default, a certificate of
the chief financial officer or the chief accounting officer of the Borrower
setting forth the details thereof and the action which the Borrower is taking
or proposes to take with respect thereto;
(g) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(h) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and annual, quarterly or monthly reports which the
Borrower shall have filed with the Securities and Exchange Commission;
(i) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate, impose liability (other than for premiums under Section
407 of ERISA) in respect of, or appoint a trustee to administer any Plan, a
copy of such notice; (iv) applies for a waiver of the minimum funding standard
under Section 412 of the Internal Revenue Code, a copy of such application; (v)
gives notice of intent to terminate any Plan under Section 4041(c) of ERISA, a
copy of such notice and other information filed with the PBGC; (vi) gives
notice of withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of
such notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer or the chief accounting officer of
the Borrower setting forth details as to such occurrence and action, if any,
which the Borrower or applicable member of the ERISA Group is required or
proposes to take;
(j) prompt notice of the receipt of any complaint, order, citation,
notice or other written communication from any Person with respect to (i) the
existence or alleged existence of a violation of any applicable Environmental
Law at or on, or of any Environmental Liability arising with respect to, any
Mortgaged Facility, (ii) any Release on any Mortgaged Facility or any part
thereof in a quantity that is reportable under any applicable Environmental
Law, and (iii) any pending or threatened proceeding for the termination,
suspension or non-renewal of any permit required under any applicable
Environmental Law with respect to any Mortgaged Facility;
(k) if a Casualty Event occurs on or after the Closing Date and at
any time after such occurrence a financial officer of the Borrower reasonably
expects that the Borrower or any of its Subsidiaries is or may be entitled to
any Casualty Proceeds in respect thereof which will exceed the expected cost of
any restoration, repair or replacement of the property affected thereby
(whether as a result of a determination not to restore repair or replace or
otherwise), prompt notice of such expectation with respect to such Casualty
Event; and
(l) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Payment of Obligations. The Borrower will pay and
discharge, and will cause each Subsidiary to pay and discharge, at or before
maturity, all their respective material obligations and liabilities, including,
without limitation, tax liabilities, except where the same may be contested in
good faith by appropriate proceedings, and will maintain, and will cause each
Subsidiary to maintain, in accordance with generally accepted accounting
principles, appropriate reserves for the accrual of any of the same.
SECTION 5.03. Maintenance of Property; Insurance. The Borrower will
keep, and will cause each Subsidiary to keep, all property useful and necessary
in its business in good working order and condition, ordinary wear and tear
excepted; will maintain, and will cause each Subsidiary to maintain (either in
the name of the Borrower or in such Subsidiary's own name) with financially
sound and reputable insurance companies, insurance on all their property in at
least such amounts and against at least such risks as are usually insured
against in the same general area by companies of established repute engaged in
the same or a similar business; and will furnish to the Banks, upon written
request from the Agent, full information as to the insurance carried.
SECTION 5.04. Conduct of Business and Maintenance of Existence. The
Borrower will continue, and will cause each Subsidiary Guarantor to continue,
to engage in business of the same general type as now conducted by the Borrower
and its Subsidiaries, and will preserve, renew and keep in full force and
effect, and will cause each Subsidiary Guarantor to preserve, renew and keep in
full force and effect their respective corporate existence and their respective
rights, privileges and franchises necessary or desirable in the normal conduct
of business.
SECTION 5.05. Compliance with Laws. The Borrower will comply, and
cause each Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA and
the rules and regulations thereunder) except where the necessity of compliance
therewith is contested in good faith by appropriate proceedings.
SECTION 5.06. Inspection of Property, Books and Records. The
Borrower will keep, and will cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries in conformity with
generally accepted accounting principles shall be made of all dealings and
transactions in relation to its business and activities; and will permit, and
will cause each Subsidiary to permit, representatives of any Bank at such
Bank's expense (subject to Section 9.03(a)(ii)) to visit and inspect any of
their respective properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs, finances
and accounts with their respective officers, employees and independent public
accountants, all at such reasonable times and as often as may reasonably be
desired.
SECTION 5.07. Current Ratio. Consolidated Current Assets will at no
time be less than 100% of Consolidated Current Liabilities.
SECTION 5.08. Debt. (a) At the end of each fiscal quarter ending
prior to March 31, 1995, Modified Parent Company Debt shall not exceed 75% of
Consolidated Capital Base and at the end of each fiscal quarter ending on or
after March 31, 1995, Modified Parent Debt shall not exceed 65% of Consolidated
Capital Base.
(b) The Borrower will not permit any Subsidiary to incur or suffer to
exist any Debt other than (i) Debt of Perini Land and Development outstanding
at December 31, 1992, as described in Schedule I, (ii) Debt of Perini Land and
Development in the form of Guarantees issued subsequent to December 31, 1992 in
an aggregate amount not exceeding $14,000,000, as described in Schedule II,
(iii) Debt of Perini Land and Development in the form of Guarantees, in
addition to the Guarantees permitted by clause (ii) above, issued subsequent to
December 31, 1992 in an aggregate amount not exceeding $5,000,000, (iv) Debt of
Perini International Corporation in an aggregate amount not exceeding
$5,000,000, (v) Debt payable to the Borrower or a Wholly-Owned Consolidated
Subsidiary, (vi) Debt of any Subsidiary Guarantor under the Subsidiary
Guarantee Agreement and (vii) any refinancing, extension, renewal or refunding
of the Debt referred to in clauses (i) through (vi) above, provided that such
Debt is not increased.
SECTION 5.09. Minimum Consolidated Tangible Net Worth. Consolidated
Tangible Net Worth of the Borrower will at no time be less than the Minimum
Compliance Level, determined as set forth below. The "Minimum Compliance
Level" is an amount equal to $100,000,000 subject to increase (but in no case
subject to decrease) from time to time as follows: (i) at the end of each
fiscal year commencing after December 31, 1992 for which Consolidated Net
Income is a positive number, the Minimum Compliance Level shall be increased
effective at the last day of such fiscal year by an amount equal to 50% of such
Consolidated Net Income; and (ii) on the date of each issuance by the Borrower
subsequent to December 31, 1992 of any capital stock or other equity interest,
the Minimum Compliance Level shall be increased by an amount equal to 75% of
the amount of the net proceeds received by the Borrower on account of such
issuance.
SECTION 5.10. Interest Coverage. One-fourth of Consolidated Earnings
Before Interest and Taxes for each period of four consecutive fiscal quarters
ending on or before March 31, 1995 shall not be less than 175% of Consolidated
Interest Charges for the last of such four fiscal quarters. One-fourth of
Consolidated Earnings Before Interest and Taxes for each period of four
consecutive fiscal quarters ending thereafter shall not be less than 200% of
Consolidated Interest Charges for the last of such four fiscal quarters.
SECTION 5.11. Negative Pledge. Neither the Borrower nor any
Consolidated Subsidiary of the Borrower will create, assume or suffer to exist
any Lien on any asset (including, without limitation, capital stock of
Subsidiaries) now owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement as described in Schedule III;
(b) any Lien existing on any asset of any corporation at the time
such corporation becomes a Consolidated Subsidiary of the Borrower and not
created in contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed for the
purpose of financing all or any part of the cost of acquiring such asset,
provided that such Lien attaches to such asset concurrently with or within 90
days after the acquisition thereof and such Lien secures only such Debt;
(d) any Lien on any asset of any corporation existing at the time
such corporation is merged or consolidated with or into the Borrower or a
Consolidated Subsidiary of the Borrower and not created in contemplation of
such event;
(e) any Lien existing on any asset prior to the acquisition thereof
by the Borrower or a Consolidated Subsidiary of the Borrower and not created in
contemplation of such acquisition;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that such Debt is not increased and is not
secured by any additional assets;
(g) Liens incidental to conduct of its business or the ownership of
its assets which (i) do not secure Debt and (ii) do not in the aggregate
materially detract from the value of its assets or materially impair the use
thereof in the operation of its business;
(h) Permitted Encumbrances; and
(i) Liens created by the Collateral Documents.
SECTION 5.12. Consolidations, Mergers and Sales of Assets. (a) The
Borrower will not (i) consolidate or merge with or into any other Person or
sell, lease or otherwise transfer all or any substantial part of its assets to
any other Person or (ii) permit any Material Subsidiary (other than a
Subsidiary Guarantor) to consolidate or merge with or into, or transfer all or
any substantial part of its assets to, any Person other than the Borrower or a
Wholly-Owned Consolidated Subsidiary; provided that the Borrower or a Material
Subsidiary other than Perini Land and Development may sell or otherwise
transfer assets if Aggregate Asset Sale Proceeds after such sale less Aggregate
Reinvested Proceeds does not at any time exceed $15,000,000. "Aggregate Asset
Sale Proceeds" means the sum of the proceeds of each sale in a single
transaction or series of related transactions by the Borrower or any
Subsidiary, on or after the Effective Date, of fixed assets yielding proceeds
in excess of 5% of the Consolidated Tangible Net Worth of the Borrower.
"Aggregate Reinvested Proceeds" means the amount of Aggregate Asset Sale
Proceeds used to purchase fixed assets for use in the same general business
presently conducted by the Borrower or the Subsidiary that realized such
proceeds, as the case may be, provided such proceeds are so used within 18
months of receipt thereof. The Borrower will not permit any Subsidiary
Guarantor to consolidate or merge with or into, or transfer all or any
substantial part of its assets to, any Person; provided that the foregoing
shall not prohibit any Subsidiary Guarantor from selling, leasing or otherwise
transferring assets in the ordinary course of its business.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, sell, lease or otherwise dispose of any item of Collateral
unless the consideration therefor (i) is at least equal to the fair market
value of such asset (as determined in good faith by a financial officer of the
Borrower or, if such value exceeds $5,000,000, by the board of directors of the
Borrower or a duly constituted committee thereof) and (ii) shall consist of
cash payable at closing.
SECTION 5.13. Use of Proceeds. The proceeds of the Loans made under
this Agreement will be used by the Borrower for general corporate purposes.
None of such proceeds will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any
"margin stock" within the meaning of Regulation U.
SECTION 5.14. Restricted Payments. The aggregate amount of all
dividends which constitute Restricted Payments declared and other Restricted
Payments made during any period of four consecutive fiscal quarters will not
exceed an amount equal to 50% of the excess, if any, of (x) Consolidated Net
Income for such period over (y) the aggregate amount of preferred stock
dividends not constituting Restricted Payments paid during such period. The
Borrower will not declare any dividend payable more than 120 days after the
date of declaration thereof.
SECTION 5.15. Real Estate Investments. The Borrower will not, and
will not permit any Consolidated Subsidiary to, make any Real Estate Investment
if, after giving effect thereto, the cumulative amount of Net Real Estate
Investments made (i) at any time during the period beginning January 1, 1993
and ending December 31, 1994 shall exceed $26,000,000 or (ii) at any time
during the fiscal year ending December 31, 1995 and any fiscal year thereafter
shall exceed $4,000,000 plus 25% of the amount, if any, by which the Net Real
Estate Investments made during the preceding period were less than the
applicable limitation specified above for such period; provided that for any 90
days in any period specified above, other than the last day of such period, the
Net Real Estate Investments made during such period may exceed by not more than
$2,000,000 the applicable limitation specified above for such period. For
purposes of this Section, the cumulative amount of "Net Real Estate
Investments" made during any period, as measured at any date during such
period, is the aggregate amount of Real Estate Investments made by the Borrower
and its Consolidated Subsidiaries from and including the first day of such
period to and including such date, less the sum of all cash or cash equivalent
payments received by the Borrower or one of its Consolidated Subsidiaries, as
the case may be, in respect of Real Estate Investments from and including the
first day of such period to and including such date, including the receipt of
shares in a real estate investment trust if (i) such shares are listed on a
national security exchange and are at the time permitted to be freely
transferred by the Borrower or one of its Consolidated Subsidiaries, as the
case may be, or (ii) such shares have been used by the Borrower or one of its
Consolidated Subsidiaries, as the case may be, to make a required contribution
to any Plan necessary to satisfy its obligation under the minimum funding
standards of ERISA and the Internal Revenue Code with respect to such Plan, but
only to the extent such obligation is reduced by such contribution; provided
that such contribution does not violate the applicable provisions of ERISA or
the Internal Revenue Code.
SECTION 5.16. Other Investments. Neither the Borrower nor any
Consolidated Subsidiary will make or acquire any Investment in any Person other
than:
(a) Real Estate Investments permitted by Section 5.15;
(b) Investments in Subsidiaries or joint ventures principally engaged
in the construction business;
(c) Temporary Cash Investments; and
(d) any Investment not otherwise permitted by the foregoing clauses
of this Section if, immediately after such Investment is made or acquired, the
aggregate net book value of all Investments permitted by this clause (d) does
not exceed 5% of Consolidated Tangible Net Worth;
provided that no Real Estate Investment may be made pursuant to clause (b), (c)
or (d) above.
SECTION 5.17. Further Assurances. (a) The Borrower will, and will
cause each of its Subsidiaries to, at its sole cost and expense, do, execute,
acknowledge and deliver all such further acts, deeds, conveyances, mortgages,
assignments, notices of assignment, transfers and assurances as the Agent shall
from time to time request, which may be necessary or desirable in the
reasonable judgment of the Agent from time to time to assure, perfect, convey,
assign, transfer and confirm unto the Agent the property and rights conveyed or
assigned pursuant to the Collateral Documents, or which the Borrower or such
Subsidiaries may be or may hereafter become bound to convey or assign to the
Agent or which may facilitate the performance of the terms of the Collateral
Documents or the filing, registering or recording of the Collateral Documents.
(b) All costs and expenses in connection with the security interests
and Liens created by the Collateral Documents, including reasonable legal fees
and other reasonable costs and expenses in connection with the granting,
perfecting and maintenance of such security interests and Liens, the
preparation, execution, delivery, recordation or filing of documents and any
other acts in connection with the grant of such security interests and Liens as
the Agent may reasonably request, shall be paid by the Borrower promptly when
due.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any
Loan, any fees or any other amount payable hereunder;
(b) the Borrower shall fail to pay when due or within five Business
Days thereof any interest on any Loan;
(c) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.07 to 5.17, inclusive or in Section 3.01 of the
Subsidiary Guarantee Agreement;
(d) any Obligor shall fail to observe or perform any covenant or
agreement contained in any Financing Document (other than those covered by
clause (a), (b) or (c) above) for 10 days after written notice thereof has been
given to such Obligor by the Agent at the request of any Bank;
<PAGE>
(e) any representation, warranty, certification or statement made by
any Obligor in any Financing Document or in any certificate, financial
statement or other document delivered pursuant thereto shall prove to have been
incorrect in any material respect when made (or deemed made);
(f) the Borrower shall fail to make any payment in respect of any
Debt (other than the Notes) when due or within any applicable grace period;
(g) any Subsidiary shall fail to make any payment in respect of any
Debt the aggregate principal amount of which is $250,000 or more when due or
within any applicable grace period;
(h) any event or condition shall occur which results in the
acceleration of the maturity of any Debt of the Borrower or any Subsidiary or
enables (or, with the giving of notice or lapse of time or both, would enable)
the holder of such Debt or any Person acting on such holder's behalf to
accelerate the maturity thereof;
(i) the Borrower or any Subsidiary shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment
for the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
(j) an involuntary case or other proceeding shall be commenced
against the Borrower or any Subsidiary seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Subsidiary under the
federal bankruptcy laws as now or hereafter in effect;
(k) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $5,000,000 which it shall have
become liable to pay to the PBGC or any other Person under Title IV of ERISA;
or notice of intent to terminate a Material Plan shall be filed under Title IV
of ERISA by any member of the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate, to impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer any Material Plan; or a condition shall exist by reason
of which the PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans which could cause one
or more members of the ERISA Group to incur a current payment obligation in
excess of $5,000,000;
(l) a judgment or order for the payment of money in excess of
$5,000,000 shall be rendered against the Borrower or any Subsidiary and such
judgment or order shall continue unsatisfied, unstayed and unbonded for a
period of 10 days;
(m) any of the following: (i) any person or group or persons (within
the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as
amended) (other than the Exempt Group) shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under said Act) of 25% or more of the outstanding shares of common
stock of the Borrower; (ii) fewer than two of the following people shall be
members of the Board of Directors of the Borrower: David Perini, Joseph Perini
and Bart Perini; or (iii) the Borrower shall cease to own 100% of the capital
stock of any Subsidiary Guarantor; or
(n) any Financing Document shall cease to be in full force and effect
or shall be declared null and void, or the validity or enforceability thereof
shall be contested by any Obligor, or the Agent on behalf of the Banks shall at
any time fail to have a valid and perfected Lien on all of the Collateral
purported to be subject to such Lien, subject to no prior or equal Lien except
Liens permitted by the Collateral Documents, or any Obligor shall so assert in
writing;
then, and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in aggregate
principal amount of the Loans, by notice to the Borrower declare the Notes
(together with accrued interest thereon) to be, and the Notes shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Obligors;
provided that in the case of any of the Events of Default specified in clause
(i) or (j) above with respect to any Obligor, without any notice to the
Borrower or any other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued interest thereon)
shall become immediately due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Obligors.
SECTION 6.02. Notice of Default. The Agent shall give notice to the
Borrower under Section 6.01(d) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under the Financing Documents as are delegated to
the Agent by the terms thereof, together with all such powers as are reasonably
incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan Guaranty Trust Company of
New York shall have the same rights and powers under the Financing Documents as
any other Bank and may exercise or refrain from exercising the same as though
it were not the Agent, and Morgan Guaranty Trust Company of New York and its
affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower or any Subsidiary or affiliate of the
Borrower as if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent under
the Financing Documents are only those expressly set forth herein. Without
limiting the generality of the foregoing, the Agent shall not be required to
take any action with respect to any Default, except as expressly provided in
Article VI.
SECTION 7.04. Consultation with Experts. The Agent may consult with
legal counsel (who may be counsel for an Obligor), independent public
accountants 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 in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers, agents or employees
shall be liable for any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks or (ii) in the
absence of its own gross negligence or willful misconduct. Neither the Agent
nor any of its affiliates nor any of their respective directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify (i) any statement, warranty or representation made in
connection with the Financing Documents or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of the
Borrower; (iii) the satisfaction of any condition specified in Article III,
except receipt of items required to be delivered to the Agent; or (iv) the
validity, effectiveness or genuineness of any Financing Document or any other
instrument or writing furnished in connection herewith. The Agent shall not
incur any liability by acting in reliance upon any notice, consent,
certificate, statement, or other writing (which may be a bank wire, telex or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees' gross negligence or willful
misconduct) that such indemnitees may suffer or incur in connection with this
Agreement or any action taken or omitted by such indemnitees hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any time by
giving notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment, within 30 days after the
retiring Agent gives notice of resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a commercial
bank organized or licensed under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$150,000,000. Upon the acceptance of its appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent.
SECTION 7.09. Collateral Documents. (a) As to any matters not
expressly provided for in the Collateral Documents (including the timing and
methods of realization upon the Collateral), the Agent shall act or refrain
from acting in accordance with written instructions from the Required Banks or,
in the absence of such instructions, in accordance with its discretion;
provided that the Agent shall not be obligated to take any action if the Agent
believes that such action is or may be contrary to any applicable law or might
cause the Agent to incur any loss or liability for which it has not been
indemnified to its satisfaction.
(b) The Agent shall not be responsible for the existence, genuineness
or value of any of the Collateral or for the validity, perfection, priority or
enforceability of the security interests in any of the Collateral, whether
impaired by operation of law or by reason of any action or omission to act on
its part under the Collateral Documents. The Agent shall have no duty to
ascertain or inquire as to the performance or observance of any of the terms of
the Collateral Documents by any Obligor.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Reduced Return. If any Bank shall have determined
that, after the date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any such law, rule or
regulation, 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 any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on capital of such Bank (or its Parent) as a
consequence of such Bank's obligations hereunder to a level below that which
such Bank (or its Parent) could have achieved but for such adoption, change,
request or directive (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, within 15 days after demand by such Bank (with a copy to the
Agent), the Borrower shall pay to such Bank such additional amount or amounts
as will compensate such Bank (or its Parent) for such reduction. A certificate
of any Bank claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, such Bank may use
any reasonable averaging and attribution methods.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Agent, at its address or telex
or facsimile number set forth on the signature pages hereof, (y) in the case of
any Bank, at its address or telex or facsimile number set forth in its
Administrative Questionnaire or (z) in the case of any party, such other
address or telex or facsimile number as such party may hereafter specify for
the purpose by notice to the Agent and the Borrower. Each such notice, request
or other communication shall be effective (i) if given by telex, when such
telex is transmitted to the telex number specified in this Section and the
appropriate answerback is received, (ii) if given by facsimile transmission,
when such facsimile is transmitted to the facsimile number specified in this
Section and receipt of such facsimile is confirmed, either orally or in
writing, by the party receiving such transmission, (iii) if given by certified
mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or (iv) if given by any other
means, when delivered at the address specified in this Section; provided that
notices to the Agent under Article II shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or any
Bank in exercising any right, power or privilege under any Financing Document
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies therein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law.
SECTION 9.03. Expenses; Documentary Taxes; Indemnification. (a) The
Borrower shall pay (i) all out-of-pocket expenses of the Agent, including fees
and disbursements of special counsel for the Agent, in connection with the
preparation of the Financing Documents, any waiver or consent under any
Financing Document, or any amendment of any Financing Document or any Default
or alleged Default and (ii) if an Event of Default occurs, all out-of-pocket
expenses incurred by the Agent and each Bank, including fees and disbursements
of counsel, in connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings resulting therefrom.
The Borrower shall indemnify each Bank against any transfer taxes, documentary
taxes, assessments or charges made by any governmental authority by reason of
the execution and delivery of any Financing Document.
(b) The Borrower agrees to indemnify the Agent and each Bank, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by any Indemnitee in connection
with any investigative, administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) brought or threatened
relating to or arising out of any Financing Document or any actual or proposed
use of proceeds of Loans hereunder; provided that no Indemnitee shall have the
right to be indemnified hereunder for such Indemnitee's own gross negligence or
willful misconduct as determined by a court of competent jurisdiction.
(c) The Borrower agrees to indemnify each Indemnitee and hold each
Indemnitee harmless from and against any and all liabilities, losses, damages,
costs and expenses of any kind (including without limitation reasonable
expenses of investigation by engineers, environmental consultants and similar
technical personnel and reasonable fees and disbursements of counsel) of any
Indemnitee arising out of, in respect of or in connection with any and all
Environmental Liabilities. Without limiting the generality of the foregoing,
the Borrower hereby waives all rights for contribution or any other rights of
recovery with respect to liabilities, losses, damages, costs or expenses
arising under or related to Environmental Laws that it might have by statute or
otherwise against any Indemnitee.
SECTION 9.04. Sharing of Setoffs. Each Bank agrees that if it shall,
by exercising any right of setoff or counterclaim or otherwise, receive payment
of a proportion of the aggregate amount due with respect to any Loan owed to it
which is greater than the proportion received by any other Bank in respect of
the aggregate amount due with respect to any Loan owed to such other Bank, the
Bank receiving such proportionately greater payment shall purchase such
participations in the Loans owed to the other Banks, and such other adjustments
shall be made, as may be required so that all such payments with respect to the
Loans owed to the Banks shall be shared by the Banks pro rata; provided that
nothing in this Section shall impair the right of any Bank to exercise any
right of setoff or counterclaim it may have and to apply the amount subject to
such exercise to the payment of indebtedness of the Borrower other than its
indebtedness hereunder. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in a
Loan, whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of setoff or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation.
SECTION 9.05. Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent are affected thereby, by it);
provided that no such amendment or waiver shall, unless signed by all the
Banks, (i) increase or decrease the Commitment of any Bank (except for a
ratable decrease in the Commitments of all Banks) or subject any Bank to any
additional obligation, (ii) reduce the principal of or rate of interest on any
Loan or any fees hereunder, (iii) postpone the date fixed for any payment of
principal of or interest on any Loan or any fees hereunder or for termination
of any Commitment, (iv) amend or waive any of the provisions of Article VIII,
(v) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the number of Banks, which shall be required
for the Banks or any of them to take any action under this Section or any other
provision of the Financing Documents or (vi) release any Collateral otherwise
than as provided in the relevant Collateral Document.
SECTION 9.06. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment
or any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such participation agreement may provide that such Bank will not agree to
any modification, amendment or waiver of this Agreement described in clause
(i), (ii) or (iii) of Section 9.05 without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Article VIII with
respect to its participating interest. An assignment or other transfer which
is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement and the Notes (provided that it at
the same time assigns the same ratable portion of its rights and obligations
under the Primary Credit Facility and the notes related thereto), and such
Assignee shall assume such rights and obligations, pursuant to an Assignment
and Assumption Agreement in substantially the form of Exhibit I hereto executed
by such Assignee and such transferor Bank, with (and subject to) the subscribed
consent of the Borrower (which shall not be unreasonably withheld) and the
Agent; provided that if an Assignee is an affiliate of such transferor Bank, no
such consent shall be required. Upon execution and delivery of such instrument
and payment by such Assignee to such transferor Bank of an amount equal to the
purchase price agreed between such transferor Bank and such Assignee, such
Assignee shall be a Bank party to this Agreement and shall have all the rights
and obligations of a Bank with a Commitment as set forth in such instrument of
assumption, and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment pursuant to
this subsection (c), the transferor Bank, the Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is issued to the
Assignee. In connection with any such assignment, the transferor Bank shall
pay to the Agent an administrative fee for processing such assignment in the
amount of $2,500.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
SECTION 9.07. Collateral. Each of the Banks represents to the Agent
and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be construed in accordance with and governed by
the law of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Borrower irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.
SECTION 9.09. Counterparts; Integration. 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 thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS, THE AGENT
AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
PERINI CORPORATION
By /s/ James M. Markert
----------------------------
Title: Senior Vice President
By /s/ Susan C. Mellace
----------------------------
Title: Treasurer
73 Mount Wayte Avenue
Framingham, MA 01701
Facsimile number: (508) 628-2960
<PAGE>
Commitments
$ 3,214,285.72 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Robert Bottamedi
-------------------------
Title: Vice President
Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260
Telex number: 177615 MGT UT
Facsimile number: (212) 648-5018
$ 3,214,285.71 BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION
By /s/ Richard J. Cerf
-------------------------
Title: Vice President
$ 3,214,285.72 SHAWMUT BANK, N.A.
By /s/ Robert Lord
----------------------------
Title: Vice President
$ 3,214,285.71 FLEET BANK OF MASSACHUSETTS, N.A.
By /s/ Jeffrey F. Bauer
----------------------------
Title: Vice President
$ 2,142,857.14 BAYBANK BOSTON, N.A.
By /s/ Timothy M. Laurion
----------------------------
Title: Vice President
__________________
Total Commitments
<PAGE>
$15,000,000.00
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Robert Bottamedi
----------------------------
Title: Vice President
60 Wall Street
New York, New York 10260
Attn: Robert Bottamedi
Telex number: 177615 MGT UT
Facsimile number: (212) 648-5023
<PAGE>
SCHEDULE I
DEBT OF PERINI LAND AND DEVELOPMENT ("PL&D")
OUTSTANDING AT DECEMBER 31, 1992
($000'S)
Loans:
Metrocentre - Barnett 3,109
Metrocentre - Boose & Gluckstern 200
Insurance 687
Perini Central (VNB) 708
Capital Plaza (Pioneer Dvlpt.) 811
Sabino Springs (Nickerson) 433
Sabino Springs (Svgs. of America/Tibor Title) 255
Sabino Springs (B of A) 3,330
Southwest Villages 2,195
Marlboro (IDB) 3,145
RWCC (Minn. Mutual) 4,953
Raynham Exec. Bldg. (Durfee Attleboro) 1,200
Raynham Exec. Bldg. (BayBank S/E) 1,188
Easton (Dedham Svgs.) 195
Easton Ind. Park (Citicorp) 3,350
TOTAL $ 25,759
PL&D Guarantees:
SCA (lease guarantees) $ 2,339
Glenco/Squaw (guarantee) (B of A loan) 10,000
Lake Ridge (B of A loan) 4,594
Rincon II Comm loan 3,500
Rincon T.I. Loan (Sumitomo) 774
Oaks at Buckhead (Citicorp loan) 9,849
$ 31,056
Letters of Credit: (as Credit Support)
Rincon Center
I (B of A) $ 3,500
II (B of A) 2,750
Squaw Creek (Bay Bank) 2,200
$ 8,450
TOTAL $ 65,265
<PAGE>
SCHEDULE II
POTENTIAL PL&D GUARANTEES OF JOINT VENTURE OBLIGATIONS
($000)
Squaw Creek
PL&D subject to possible future increase in $ 2,000
letter of credit support under Bank of
America Loan.
Rincon Center
PL&D may be required to undertake additional $ 8,000
guarantees under Citicorp loan in
forthcoming negotiations. Guarantees
would not exceed forecast loan amortization
over 1993-1998.
Oaks at Buckhead
PL&D has guaranteed up to $4 million of $ 4,000
individual mortgages for condominium
purchases if Citicorp initiates them
and if certain repayment milestones
of the mortgages are not met (Agreement
signed in 1993 - not included in 12/31/92
PL&D funded debt). _______
Total $14,000
<PAGE>
SCHEDULE III
EXISTING LIENS
(All Amounts in Thousands)
IRB 1978 1,254 Framingham H.O. Bldg
IRB 1985 4,000 Framingham H.O. Bldg
Rincon (CA) 6,250 FL Land
Sasson Land 1,020
PBC West Office Bldg 939
Total 13,463
<PAGE>
SCHEDULE IV
MORTGAGED FACILITIES
Facility Record Owner
Sabino Springs Title Guaranty Agency of Arizona,
Tucson, Arizona as Trustee under Trust No. T-1208
Capitol Plaza Perini Land and Development Corp.
Phoenix, Arizona
<PAGE>
NOTE
New York, New York
, 1994
For value received, Perini Corporation, a Massachusetts corporation
(the "Borrower"), promises to pay to the order of (the "Bank"), for
the account of its Applicable Lending Office, the unpaid principal amount of
each Loan made by the Bank to the Borrower pursuant to the Credit Agreement
referred to below on the last day of the Interest Period relating to such Loan.
The Borrower promises to pay interest on the unpaid principal amount of each
such Loan on the dates and at the rate or rates provided for in the Credit
Agreement. All such payments of principal and interest shall be made in lawful
money of the United States in Federal or other immediately available funds at
the office of Morgan Guaranty Trust Company of New York, 60 Wall Street, New
York, New York.
All Loans made by the Bank, the maturities thereof and all repayments
of the principal thereof shall be recorded by the Bank and, if the Bank so
elects in connection with any transfer or enforcement of this note, appropriate
notations to evidence the foregoing information with respect to each such Loan
then outstanding may be endorsed by the Bank on the schedule attached hereto,
or on a continuation of such schedule attached to and made a part hereof;
provided that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.
This note is one of the Notes referred to in the Credit Agreement
dated as of March 9, 1994 among the Borrower, the banks listed on the signature
pages thereof, and Morgan Guaranty Trust Company of New York, as Agent (as the
same may be amended from time to time, the "Credit Agreement"). Terms defined
in the Credit Agreement are used herein with the same meanings. Reference is
made to the Credit Agreement for provisions for the prepayment hereof and the
acceleration of the maturity hereof.
Payment of principal and interest on this Note is unconditionally
guaranteed, subject to the limitations contained in the Subsidiary Guarantee
Agreement, by the Subsidiary Guarantors pursuant to the Subsidiary Guarantee
Agreement.
PERINI CORPORATION
By________________________
Title:
By________________________
Title:
<PAGE>
LOANS AND PAYMENTS OF PRINCIPAL
__________________________________________________________________
Amount of
Amount of Principal Maturity Notation
Date Loan Repaid Date Made By
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
<PAGE>
EXHIBIT B-1
OPINION OF GENERAL
COUNSEL OF THE BORROWER
March __, 1994
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
I am General Counsel of Perini Corporation (the "Borrower") and have
acted as such in connection with the Credit Agreement (the "Credit Agreement")
dated as of March 9, 1994 among the Borrower, the banks listed on the signature
pages thereof, and Morgan Guaranty Trust Company of New York, as Agent. Terms
defined in the Credit Agreement are used herein as therein defined. This
opinion is being rendered to you pursuant to Section 3.01(j) of the Credit
Agreement.
I have examined originals or copies, certified or otherwise identified
to my satisfaction, of the Financing Documents and of such other documents,
corporate records, certificates of public officials and officers of the
Borrower and its Subsidiaries and other instruments and have conducted such
other investigations of fact and law as I have deemed necessary or advisable
for purposes of this opinion.
I call your attention to the fact that Financing Documents provide
that they are to be governed by and construed in accordance with the internal
laws of the State of New York and I understand that you are relying on the
advice of Jacobs Persinger & Parker with respect to all matters involving New
York law. For purposes of rendering the opinions expressed below, I have
assumed that the Financing Documents provide that they are to be governed by
and construed in accordance with the internal laws of the Commonwealth of
Massachusetts. Otherwise, the opinions below are limited to matters governed
by the internal laws of the Commonwealth of Massachusetts, the General
Corporation Law of the State of Delaware and the federal laws of the United
States.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of the Commonwealth of Massachusetts, and
has all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
2. The execution, delivery and performance by each Obligor of the
Financing Documents to which it is a party are within its corporate powers,
have been duly authorized by all necessary corporate action, require no action
by or in respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of such Obligor or of any agreement, judgment, injunction, order, decree or
other instrument binding upon such Obligor or any of its Subsidiaries or result
in the creation or imposition of any Lien on any asset of such Obligor or any
of its Subsidiaries, except as otherwise set forth below.
3. The choice of New York law to govern each Financing Document is a
valid and effective choice of law under the laws of the Commonwealth of
Massachusetts.
4. Except as set forth in the Borrower's 1992 Form 10-K and its Form
10-Q for the quarter ended September 30, 1993, there is no action, suit or
proceeding pending against, or to the best of my knowledge threatened against
or affecting, the Borrower or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official in which there is a
reasonable possibility of an adverse decision which could materially adversely
affect the business, consolidated financial position or consolidated results of
operations of the Borrower and its Consolidated Subsidiaries, considered as a
whole, or which in any manner draws into question the validity of any Financing
Document.
5. Each of the Borrower's Material Subsidiaries is a corporation
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
6. The Security Documents (other than the Deeds of Trust) create
valid security interests, for the benefit of the Agent and the Banks, in all
collateral to the extent that Article 9 of the UCC is applicable thereto (the
"Security Interests").
7. UCC financing statements and amendments thereto (collectively,
the "Massachusetts Financing Statements") have been filed in the filing offices
listed in Schedule 6 to the Perfection Certificates (the "Massachusetts Filing
Jurisdictions"), which are all of the Massachusetts offices in which filings
are required to perfect the Security Interests, to the extent the Security
Interests may be perfected by filing under Article 9 of the Massachusetts UCC,
and no further filing or recording of any document or instrument or other
action will be required so to perfect the Security Interests, except that (i)
continuation statements with respect to each Financing Statement must be filed
within the respective time periods set forth on Schedule 7 to the Perfection
Certificates; (ii) additional filings may be necessary if any Obligor changes
its name, identity or corporate structure or the jurisdiction in which its
places of business, its chief executive office or the Collateral are located;
and (iii) I express no opinion on the perfection of, or need for further filing
or recording to perfect, the Security Interests in goods now or hereafter
located in any jurisdiction other than the Filing Jurisdictions.
8. The UCC File Search Reports listed on the attached Exhibit A,
identify, as of the date of such reports, no UCC financing statements which
name any Obligor as debtor or seller and cover any of the Collateral, other
than the Financing Statements, and the financing statements with respect to
Permitted Liens annexed as Schedule 5(A) to the Perfection Certificate. Under
Article 9 of the Massachusetts UCC, all of the Obligors, other than Perini
Building Company, Inc. and R. E. Dailey & Co., Inc., are required to file
financing statements in the offices of the Secretary of State of the
Commonwealth of Massachusetts and the Framingham Town Clerk. There are no
other filings of the Massachusetts Financing Statements required by the laws
of the Commonwealth of Massachusetts to perfect the Security Interests in the
Collateral described therein.
9. There are no notices of the filing of any federal tax lien (filed
pursuant to Section 6323 of the Internal Revenue Code) or any lien of the
Pension Benefit Guaranty Corporation (filed pursuant to Section 4068 of ERISA)
covering any of the Collateral listed in the available records in the UCC
filing offices in States of the Obligors' chief executive offices, which are
the only offices having files which must be searched in order to fully
determine the existence of notices of the filing of federal tax liens (filed
pursuant to Section 6323 of the Internal Revenue Code) and liens of the Pension
Benefit Guaranty Corporation (filed pursuant to Section 4068 of ERISA) on the
Collateral.
10. The Security Interests validly secure the payment of all future
Loans made by the Banks to the Borrower, whether or not at the time such Loans
are made an Event of Default or other event not within the control of the Banks
has relieved or may relieve the Banks from their obligations to make such
Loans, the Security Interests have the same priority (relative to other
security interests arising under Article 9 of the UCC) with respect to such
future Loans as they do with respect to Loans made on the date hereof.
I call your attention to the fact that the opinions expressed herein
do not purport to cover, and I express no opinion with respect to, the
application of Section 548 of the Bankruptcy Code or any comparable provision
of state law. In addition, I express no opinion as to whether a subsidiary may
guarantee or otherwise become liable for, or pledge, its assets to secure
indebtedness incurred by its parent except to the extent such subsidiary may be
determined to have benefitted from the incurrence of such indebtedness by its
parent, or as to whether such benefit may be measured other than by the extent
to which the proceeds of the indebtedness by the parent are directly or
indirectly made available to such subsidiary for its corporate purposes.
The foregoing is solely for your benefit and may not be relied upon by
any person other than you or your counsel in rendering their opinion with
respect to this transaction.
Very truly yours,
<PAGE>
EXHIBIT B-2
OPINION OF NEW YORK
COUNSEL FOR THE BORROWER
March 9, 1994
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have acted as counsel for Perini Corporation (the "Borrower") in
connection with the Credit Agreement (the "Credit Agreement") dated as of March
9, 1994 among the Borrower, the banks listed on the signature pages thereof,
and Morgan Guaranty Trust Company of New York, as Agent. Terms defined in the
Credit Agreement are used herein as therein defined, unless otherwise defined
herein. This opinion is being rendered to you pursuant to Section 3.01(j) of
the Credit Agreement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of the Financing Documents and of such other
documents, corporate records, certificates of public officials and officers of
the Borrower and its Subsidiaries and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
The opinions expressed below are limited to matters governed by the
internal laws of the State of New York, the General Corporation Law of the
State of Delaware and the federal laws of the United States.
When a matter is stated as being "known to us" or "to the best of our
knowledge", we have not conducted an independent investigation into such matter
and are intending to advise you only that in the course of our representation
of the Borrower nothing has come to our attention that leads us to believe, and
we do not believe, that the matter is other than as stated herein.
Upon the basis of the foregoing, and subject to the further
qualifications hereinafter set forth, we are of the opinion that:
1. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of the Commonwealth of Massachusetts, and
has all corporate powers and, to the best of our knowledge, all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
2. The execution, delivery and performance by each Obligor of the
Financing Documents to which it is a party are within its corporate powers,
have been duly authorized by all necessary corporate action, require no action
by or in respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of such Obligor or of any agreement, judgment, injunction, order, decree or
other instrument known to us and binding upon such Obligor or any of its
Subsidiaries or result in the creation or imposition of any Lien on any asset
of such Obligor or any of its Subsidiaries, except as otherwise set forth below.
3. The Credit Agreement constitutes a valid and binding agreement of
the Borrower and the Notes constitute valid and binding obligations of the
Borrower in each case enforceable in accordance with their respective terms.
Each Collateral Document (other than the Deeds of Trust) constitute valid and
binding agreements of each Obligor party thereto enforceable against each such
Obligor in accordance with its terms.
4. To the best of our knowledge, except as set forth in the
Borrower's 1992 Form 10-K and its Form 10-Q for the quarter ended September 30,
1993, there is no action, suit or proceeding pending against, or affecting, the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable
possibility of an adverse decision which could materially adversely affect the
business, consolidated financial position or consolidated results of operations
of the Borrower and its Consolidated Subsidiaries, considered as a whole or
which in any manner draws into question the validity of any Financing Document.
5. Each of the Borrower's Material Subsidiaries is a corporation
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and, to best of our knowledge, all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted.
6. The Collateral Documents (which, for the purposes hereof, are
limited to the Borrower Security Agreement, the Borrower Pledge Agreement, the
Subsidiary Guarantee and the Subsidiary Security Agreement) create valid
security interests, for the benefit of the Agent and the Banks, in all of each
Obligor's right, title and interest in all Collateral (the "Security
Interests").
7. The Security Interests validly secure the payment of all future
Loans made by the Banks to the Borrower, whether or not at the time such Loans
are made an Event of Default or other event not within the control of the Banks
has relieved or may relieve the Banks from their obligations to make such
Loans. Insofar as the priority thereof is governed by Article 9 of the UCC (as
hereinafter defined), the Security Interests have the same priority (relative
to other security interests arising under Article 9 of the UCC) with respect to
such future Loans as they do with respect to Loans made on the date hereof.
The opinion expressed in Paragraph 3 above is subject to bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the
enforcement of creditors' rights generally and subject to general principles of
equity applicable to any enforceability or the granting of the remedy of
specific performance now and hereafter in effect.
The opinions expressed in Paragraphs 6 and 7 above are limited to
Article 9 of the Uniform Commercial Code as in effect in the State of New York
(the "UCC") and therefore do not address (i) laws of jurisdictions other than
New York and of New York except for Article 9 of the UCC and (ii) collateral of
a type not subject to Article 9 of the UCC. Further, except to the extent of
the discussion of relative priorities set forth in Paragraph 7 above, we
express no opinions concerning the perfection or priority of any lien, whether
or not provided for in any Financing Document.
In addition, we express no opinion as to whether a subsidiary may
guarantee or otherwise become liable for, or pledge its assets to secure,
indebtedness incurred by its parent except to the extent such subsidiary may be
determined to have benefitted from the incurrence of such indebtedness by its
parent, or as to whether such benefit may be measured other than by the extent
to which the proceeds of the indebtedness by the parent are directly or
indirectly made available to such subsidiary for its corporate purposes.
The members of this firm are not members of the Bar of any state other
than the State of New York. In giving the foregoing opinion we have relied,
without independent investigation, as to all matters governed by the laws of
Massachusetts, upon the opinion of Robert E. Higgins, General Counsel of the
Borrower, dated March __, 1994, a copy of which has been delivered to you.
Very truly yours,
<PAGE>
EXHIBIT C-1
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
March __, 1994
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the Credit Agreement (the
"Credit Agreement") dated as of
March 9, 1994 among Perini Corporation, a Massachusetts corporation (the
"Borrower"), the banks listed on the signature pages thereof (the "Banks") and
Morgan Guaranty Trust Company of New York, as Agent (the "Agent"), and have
acted as special counsel for the Agent for the purpose of rendering this
opinion pursuant to Section 3.01(k) of the Credit Agreement. Terms defined in
the Credit Agreement are used herein as therein defined except that, for
purposes of this opinion, "Obligors" means the Borrower, Perini Land and
Development, Perini International, Perini Building Company, R. E. Dailey & Co
and Paramount Development Associates.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of the Financing Documents and of such other
documents, corporate records, certificates of public officials and other
instruments and have conducted such other investigations of fact and law as we
have deemed necessary or advisable for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate powers and
have been duly authorized by all necessary corporate action.
2. Each of the Credit Agreement, the Borrower Security Agreement and
the Borrower Pledge Agreement constitutes a valid and binding agreement of the
Borrower and the Notes constitute valid and binding obligations of the Borrower.
3. Assuming that the execution, delivery and performance by each
Obligor other than the Borrower of the Subsidiary Guarantee Agreement and the
Subsidiary Security Agreement are within such Obligor's corporate powers and
have been duly authorized by all necessary corporate action, then the
Subsidiary Guarantee Agreement and the Subsidiary Security Agreement constitute
valid and binding agreements of each Obligor.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the federal laws of
the United States of America and the General Corporation Law of the State of
Delaware. Insofar as the foregoing opinion involves matters governed by the
laws of Massachusetts, we have relied, without independent investigation, upon
the opinion, of Robert E. Higgins, General Counsel of the Borrower, dated March
31, 1994, a copy of which has been delivered to you and our opinion is subject
to the qualifications included therein. In giving the foregoing opinion, we
express no opinion as to the effect (if any) of any law of any jurisdiction
(except the State of New York) in which any Bank is located which limits the
rate of interest that such Bank may charge or collect.
We express no opinion as to the applicability (and, if applicable, the
effect) of Section 548 of the United States Bankruptcy Code or any comparable
provision of state law to the questions addressed above or the conclusions
expressed with respect thereto.
In addition, we express no opinion as to the rights, title or interest
of any Person in or to any properties or assets in which any security interest
are or are purported to be granted pursuant to any of the agreements referred
to above or the creation, perfection or priority of any such security interest.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by or furnished to any other person without our prior written
consent.
Very truly yours,
<PAGE>
EXHIBIT C-2
[Letterhead of Local Counsel]
March 9, 1994
To the Secured Parties
Referred to in the Deed of Trust
described in Schedule A hereto
c/o Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
We have (i) acted as special counsel in the State of Arizona (the
"State") to the Agent (as defined below) in connection with the transactions
contemplated by the Credit Agreement (the "Credit Agreement") dated as of March
9, 1994 among Perini Corporation, a Massachusetts corporation (the "Borrower"),
each Bank which is a party thereto (the "Banks"), Morgan Guaranty Trust Company
of New York, as Agent, and the Subsidiary Guarantee Agreement (the "Subsidiary
Guarantee Agreement") dated as of March 9, 1994 among Perini Land and
Development Company ("Grantor"), the Subsidiary Guarantors (as listed on the
signature pages thereof) and Morgan Guaranty Trust Company of New York as
Agent, and the Borrower (ii) assisted in the preparation of the Deeds of Trust
(as defined below), and (iii) reviewed the form of Financing Statements (as
defined below), and have been requested to render this opinion pursuant to
Section 3.01(j) of the Credit Agreement. Capitalized terms used but not defined
herein have the meanings assigned to them in the Credit Agreement.
We have examined a February 28, 1994 draft of the Credit Agreement,
the deeds of trust described in Schedule A hereto (the "Deeds of Trust"), a
February 21, 1994 draft of the Subsidiary Guarantee Agreement dated as of March
4, 1994, a February 21, 1994 draft of the Subsidiary Security Agreement dated
as of March 4, 1994 between the Subsidiary Guarantors and the Agent (the
"Subsidiary Security Agreement"), and the form of financing statements
described in Schedule B hereto (the "Financing Statements"; and together with
the Credit Agreement, the Subsidiary Guarantee Agreement, the Deeds of Trust,
and the Subsidiary Security Agreement, the "Financing Documents"). The terms
"Trust Property", "Secured Parties" and "Secured Obligations" have the meanings
assigned to them in the Deed of Trust.
In rendering this opinion, we have assumed, without independent
investigation or verification:
(a) The authenticity of all documents submitted to us as originals,
the conformity to authentic original documents of all documents submitted to us
as certified, conformed or photostatic copies, the genuineness, accuracy,
authenticity, and completeness of all signatures on all documents submitted to
us as executed and the legal capacity of all natural persons executing all
documents submitted to us as executed.
(b) That the Grantor is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, has been duly qualified as a foreign corporation for the
transaction of business, is in good standing in the State, and has all
requisite corporate power and all material governmental licenses,
authorizations, consents and approvals necessary to own and operate the Trust
Property.
(c) That the execution, delivery and performance by the Grantor of
the Deeds of Trust (i) are within its corporate powers; (ii) have been duly
authorized by all necessary corporate action; (iii) do not require any
authorization, approval or consent of, or filings or registrations with any
persons or entities not a party to the Deeds of Trust; (iv) do not require any
authorization, approval or consent of any governmental or regulatory authority
or agency outside of the States except for authorizations, consents, approvals
that have already been obtained or filings that have already been made and that
remain in effect; (iv) do not contravene any provision of its certificate of
incorporation or by-laws; and (v) do not contravene or constitute a breach of
or default under any applicable provision of the laws of any jurisdiction other
than the State and the federal laws of the United States or any applicable
regulation thereunder or under any agreement, judgment, injunction, order,
decree or other instrument binding upon it.
(d) That the Financing Documents have been duly authorized, executed
and delivered by all parties thereto and that all Financing Documents to which
the Agent is a party are enforceable against the Agent.
(e) That the Financing Documents other than the Deeds of Trust
constitute legal, valid and binding obligations of the Grantor under the laws
of the State of New York.
(f) That the Grantor owns the Trust Property.
(g) That in exercising its rights and remedies under the Financing
Documents, the Agent will act in a commercially reasonable manner as determined
by applicable law.
As to all questions of fact material to this opinion, we have relied
without independent investigation or verification upon the representations and
warranties of the Grantor and the other parties contained in the Financing
Documents.
Upon the basis of the foregoing, and except as qualified hereafter, we
are of the opinion that, under applicable law in effect on the date of this
opinion:
1. None of the execution, delivery and performance of the Deeds of
Trust by the Grantor (i) contravene or constitute a breach of or default under
any applicable provision of the laws of the State or any applicable regulation
thereunder; (ii) require any authorization, approval or consent of, or filings
or registrations with any State regulatory authority or agency; or (iii) create
any Lien upon any revenues or assets of the Grantor located in the State, other
than the Liens created under the Financing Documents. For the purposes of
rendering the opinion expressed in clause (ii) in the foregoing sentence, we
have assumed that no authorization, approval or consent of, or filings or
registrations with any governmental or regulatory authority or agency within
the State is required regarding the Grantor's compliance with any Legal
Requirement with respect to its performance in connection with the Deeds of
Trust, other than recordings and filings in public offices necessary to secure
the Grantor's payment obligations under the Deeds of Trust and such other
authorizations, approvals and consents that have already been obtained and that
remain in effect.
2. The Deeds of Trust constitute legal, valid and binding
obligations of the Grantor, enforceable in accordance with their terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance or other similar laws relating to the enforcement of
creditors' rights generally, and general equitable principles.
3. None of the Agent or the other Secured Parties is required to pay
any tax or be qualified to do business or file any designation for service of
process or file any reports in the State or comply with any statutory or
regulatory rule or requirement applicable only to financial institutions
chartered or qualified to do business in the State, solely by reason of its
execution and delivery or acceptance of the Deeds of Trust or the other
Financing Documents or solely by reason of its participation in any of the
transactions under or contemplated by the Financing Documents, the making and
receipt of payments pursuant thereto and the exercise of any right or remedy
under or with respect to the Deeds of Trust, and the validity and
enforceability of the Deeds of Trust and the other Financing Documents will not
be affected by any failure to so qualify or file.
4. The Deeds of Trust, upon the attachment of an appropriate legal
description and the recording and filing described in the following sentence,
create valid deed of trust Liens upon such of the Trust Property described
therein as constitutes real property under the law of the State (the "Real
Property") and valid security interests in such of the other Trust Property
described therein (the "UCC Property") as is subject to the provisions of
Article 9 of the Arizona Uniform Commercial Code (the "Local UCC") and in which
a security interest can be perfected by filing, in each case in favor of the
Agent for the ratable benefit of the Secured Parties and securing the Secured
Obligations. The recording of the Deeds of Trust in the office designated in
Schedule A hereto and the filing of the Financing Statements in the offices
designated in Schedule B hereto are the only filings, recordings and
registrations in Arizona necessary to perfect, publish notice of and preserve
the Lien of and security interest in the Trust Property created by the Deeds of
Trust, except that (i) continuation statements relating to the Financing
Statements must be filed within six years, and (ii) additional filings may be
necessary with respect to the UCC Property if the Borrower changes its name,
identity or corporate structure or the jurisdiction in which its places of
business in the State or the UCC Property are located.
6. No taxes or other charges, including, without limitation,
intangible or documentary stamp taxes, mortgage or recording taxes, transfer
taxes or similar charges, are payable by the Agent or other Secured Parties to
the State or to any jurisdiction therein solely on account of the execution or
delivery of the Deeds of Trust or the other Financing Documents, the creation
of the indebtedness evidenced or secured thereby, the creation of the Liens and
security interests thereunder, or the filing, recording or registration of the
Deeds of Trust or the Financing Statements, except for nominal filing or
recording fees.
7. You have requested an opinion whether under Arizona law the Liens
and security interests created by the Deeds of Trust on or in the Trust
Property will validly secure all future Credit Events pursuant to the Credit
Agreement and whether the priority of any such Liens and security interests
will remain the same for Loans made after the Closing Date.
(a) Real Property. The Liens and security interests created by the
Deeds of Trust in the Real Property will validly secure all future credit
Events pursuant to the Credit Agreement, whether or not at the time any such
extension of credit is made an Event of Default or other event not within the
control of the Banks has relieved or may relieve the Banks from their
obligations to make extensions of credit. Arizona Courts have long recognized
that a trust deed or mortgage given to secure indebtedness may include advances
to be made in the future. Griffith v. State Mutual Building and Loan
Association, 46 Ariz. 359, 51 P.2d 246 (1935); Pearl v. Williams, 146 Ariz.
203, 704 P.2d 1348 (App. 1985); La Cholla v. Timm, 173 Ariz. 490, 491, 844 P.2d
657, 658 (App. 1992).
In La Cholla, supra, the Arizona Court of Appeals addressed the
priority of future advances with respect to intervening encumbrances on the
underlying collateral. The court held that the priority of "optional" and
"obligatory" future advances are to be treated differently. Although the case
did not directly define what constitutes an "obligatory" future advance, it did
indicate that the term would include a contractual obligation to advance funds.
Id. at 659. The court adopted the general rule that if the creditor's
obligation to advance is of record, the obligatory advances will have absolute
priority over any intervening liens. Id. Conversely, if the future advance is
optional and the creditor has actual notice of the intervening lien at the time
the advance is made, the optional advance will lose its priority with respect
to the intervening lien regardless of whether the advance was made before the
intervening lien attached. Id. Future advances which are obligatory under a
Loan existing at the time the underlying security interest is perfected fall
squarely within La Cholla, and would thus maintain priority over any
subsequently arising liens.
Based on the foregoing, it is our opinion that in a properly presented
case, an Arizona court should conclude that the priority of liens and security
interests created by the Deeds of Trust in the Real Property securing advances
made pursuant to Loans made would be the same with respect to any advance
pursuant to a Loan made or otherwise outstanding on the Closing Date, except to
the extent that any priority may be affected by (i) any security interest, Lien
or other encumbrance imposed by law in favor of any government or governmental
authority or agency or (ii) a failure by Borrower to satisfy the conditions set
forth in Section 3.02 of the Credit Agreement.
(b) UCC Property. Under A.R.S. {Sec. Mark} 47-9204.C, obligations
secured by a security agreement may include future advances or other value
whether or not the advances or value are given pursuant to a commitment. A.R.S.
47-9105.A.2. defines an "advance made pursuant to a commitment" as "an advance
which the secured party has bound himself to make, whether or riot his
obligations to make such advance is or may be conditioned on an event not
within his control, and whether or not an event not within his control has
relieved or may relieve him from his obligation."
Under A.R.S. {Sec. Mark} 47-9312.F, if future advances are made while a
security interest is perfected, the security interest has the same priority with
respect to the future advances as it does with respect to the first advance. If
a "commitment" is made before or while the security interest is so perfected,
the security interest has the same priority with respect to advances made
pursuant thereto. In other cases a perfected security interest has priority
from the date the advance is made.
Our research has disclosed no reported Arizona decision construing
either the definition of "future advances" or the validity of interests
securing "future advances" within the UCC context. Nor has our research
disclosed any reported Arizona decision construing the statutory provisions
cited in the preceding two paragraphs. As a result, to interpret the foregoing
statutes, we rely solely on the text of each statute. Based on this textual
analysis alone, we believe that in a properly presented case a state court or a
federal court sitting in Arizona should conclude that (a) the Liens and
security interests created by the Deeds of Trust in the UCC Property will
validly secure all future Credit Events pursuant to the Credit Agreement,
whether or not at the time any such extension of credit is made an Event of
Default or other event not within the control of the Banks has relieved or may
relieve the Banks from their obligations to make extensions of credit, and (b)
the priority of the Liens and security interests created by the Deed of Trust
in the UCC Property would be the same with respect to Loans made under the
Credit Agreement after the Closing Date as with respect to any such Loans made
on the Closing Date, except to the extent that any priority may be affected by
any security interest, Lien or other encumbrance imposed by law in favor of any
government or governmental authority or agency.
8. You have requested that we advise you whether an Arizona court
would give effect to the choice of law provisions in the Credit Agreement, the
Subsidiary Security Agreement and Subsidiary Guarantee (collectively, the "New
York Law Documents"). An Arizona court should give effect to the choice of law
provision in these documents, assuming that (a) the Agent has offices in the
State of New York; (b) the Agent and the other Secured Parties do substantial
business in the State of New York; (c) the negotiation of the Financing
Documents has occurred in New York; and (d) the consummation of the
transactions contemplated by the Financing Documents and substantial
performance thereof will occur in New York.
9. In connection with the remedies provided in the Deeds of Trust,
you have asked for advice regarding the so-called "one action rule" or "single
action rule." The following statutes should be considered when a creditor
elects alternative remedies within the context of obligations secured by real
and personal property:
(a) A.R.S. {Sec. Mark} 33-722 regarding limitations on separate
actions to enforce debt obligations and to foreclose a mortgage.
(b) A.R.S. {Sec. Mark} 33-807.B regarding limitations on proceeding
with a trustee's sale and pursuing an action to foreclose a deed of trust
simultaneously.
(c) A.R.S. {Sec. Mark} 33-814 regarding, among other things, the
timely filing of a deficiency action.
(d) A.R.S. {Sec. Mark} 47-9501.D regarding a secured party's right
to proceed under the Local UCC or under applicable real property law.
(e) A.R.S. {Sec. Mark} 12-1566 regarding, among other things,
limitations on the liability of guarantors and other persons liable on a debt
secured by real property.
There is at least one reported Arizona decision that should be
considered when evaluating the procedural limitations imposed by one of the
foregoing statutes. Section 33-722 provides that if separate actions are
brought on a debt and to foreclose a mortgage securing the debt, the creditor
bringing the actions must elect which to prosecute and the other must be
dismissed. In Mid Kansas Federal Sav. and Loan Ass'n of Wichita v. Dynamic
Development Corp., 167 Ariz. 122, 126 N. 2, 804 P.2d 1310, 1314 N. 2 (Ariz.
1991), the Supreme Court of the State of Arizona has held that A.R.S. 33-722
does not apply to a deed of trust unless the deed of trust is judicially
foreclosed. As a result, under the authority of Mid Kansas Federal Sav. and
Loan Ass'n v. Dynamic Development Corp., a creditor may avoid the procedural
restrictions of Section 33-722 by electing not to judicially foreclose a deed
of trust. Other reported Arizona decisions regarding the foregoing statutes
may affect the election of remedies by the Collateral Agent or other Secured
Parties depending on the facts and circumstances that exist at the time of any
such election.
In connection with the remedies provided in the Deeds of Trust, you
have asked for our opinion regarding the effect on the Agent's remedies with
respect to the Real Property and the UCC Property as a result of the exercise
of certain remedies by the Agent in jurisdictions other than the State. We are
aware of no reported Arizona decision providing that the "one action rule" of
Arizona prohibits the exercise of any rights or remedies outside the State with
respect to the Secured Obligations or limits the Agent's ability to foreclose
against, or to exercise any other remedies with respect to, the Real Property
or UCC Property, contemporaneously with, or before or after, the exercise of
such rights or remedies outside the State.
The foregoing opinions are subject to the following:
(a) The enforceability opinion expressed in paragraph 2 above is
subject to limitation by general principals of equity and applicable law,
although such limitations do not in our opinion make the remedies provided for
therein inadequate for the practical realization of the benefits of the
security intended to be afforded thereby.
(b) We express no opinion with respect to any provisions of the
Financing Documents that purport to waive any statutory or common law rights of
the Grantor, or which purport to appoint the Agent or any other party as an
irrevocable attorney-in- fact for any purpose.
(c) Our opinions above are further limited by laws, rules, statutes,
regulations, and judicial decisions restricting or prohibiting the enforcement
of guarantees entered into or liens granted by subsidiary corporations for the
benefit of parent corporations, including without limitation restrictions or
prohibitions based upon the contention that such guarantees or liens have not
been given for a fair or reasonably equivalent consideration, that the
subsidiary corporation is, or by executing such guarantee may become,
insolvent, and that such guarantees or liens may be voidable by creditors of
the subsidiary corporation or by a trustee or receiver of such subsidiary
corporation in bankruptcy or similar proceedings pursuant to applicable
bankruptcy, fraudulent conveyance or similar laws.
(d) We express no opinion as to the availability of any remedies
purportedly available under any of the Financing Documents without notice or
hearing, or any equitable remedies purportedly available as a matter of right,
or any damages provision that purports to fix damages irrespective of the
amount of damages actually suffered, or any other remedies purportedly
available under the Financing Documents except for remedies specifically
provided for by statute.
(e) We express no opinion with respect to the title to the real and
personal property described in the Financing Documents, the accuracy or
sufficiency of any description of collateral, and the priority (other than the
opinion expressed in paragraph 6) of any lien or security interest.
(f) The opinions set forth above with respect to the Financing
Documents relate only to matters as of the date of this opinion, and we express
no opinion with respect to any transaction, transfer, conveyance or obligation
occurring after the date of this opinion. No opinion is expressed herein with
respect to the enforceability of any of the Financing Documents, or with
respect to any other matter, under the laws of any jurisdiction other than the
State of Arizona and the federal laws of the United States, as the same are in
effect as of the date hereof.
This opinion is solely for the benefit of the Agent and the other
Secured Parties in connection with theFinancing Documents and may not be relied
upon by the Agent or the other Secured Parties for any other purpose or relied
upon or furnished to any other person or entity without our prior written
consent.
Very truly yours,
MEYER, HENDRICKS, VICTOR, OSBORN & MALEDON, P.A.
By: ______________________________
<PAGE>
Schedule A
Deed of Trust
1. Deed of Trust, Assignment of Leases and Rents, Security Agreement
and Financing Statement dated as of March 4, 1994, from the Grantor, as the
trustor, for the benefit of the Agent, as the beneficiary, relating to property
at Sabino Springs, Pima County, Arizona to be filed for record in Pima County,
Arizona.
2. Deed of Trust, Assignment of Leases and Rents, Security Agreement
and Financing Statement dated as of March 4, 1994, from the Grantor, as the
trustor, for the benefit of the Agent, as the beneficiary, relating to property
at Capitol Plaza, Maricopa County, Arizona to be filed for record in Maricopa
County, Arizona.
<PAGE>
Schedule B
Financing Statements
See attachment 1, 2, and 3, consisting of:
1. Financing Statement on form UCC-1 listing the Grantor as debtor
and the Agent as secured party, relating to all of debtor's right, title and
interest in and to the land, improvements, equipment, appurtenant rights,
agreements leases, rents, issues and profits, permits, proceeds and awards,
books and records, other intangible property and additional property, in each
case as described in Schedule I attached to the respective UCC-1, to be filed
in the County Recorders' offices in Pima County, Arizona.
2. Financing Statement on form UCC-1 listing the Grantor as debtor
and the Agent as secured party, relating to all of debtor's right, title and
interest in and to the land, improvements, equipment, appurtenant rights,
agreements leases, rents, issues and profits, permits, proceeds and awards,
books and records, other intangible property and additional property, in each
case as described in Schedule I attached to the respective UCC-1, to be filed
in the County Recorders' offices in Maricopa County, Arizona.
3. Financing Statement on form UCC-1 listing the Grantor as debtor
and the Agent as secured party, relating to all of debtor's right, title and
interest in and to the land, improvements, equipment, appurtenant rights,
agreements leases, rents, issues and profits, permits, proceeds and awards,
books and records, other intangible property and additional property, in each
case as described in Schedule I attached to the respective UCC-1, to be filed
in the Office of the Secretary of the State of Arizona.
<PAGE>
[CONFORMED COPY]
EXHIBIT D
BORROWER SECURITY AGREEMENT
AGREEMENT dated as of March 9, 1994 between PERINI CORPORATION (with
its successors, the "Borrower") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Agent.
W I T N E S S E T H :
WHEREAS, the Borrower, certain banks and Morgan Guaranty Trust Company
of New York, as agent for such banks are parties to a Credit Agreement of even
date herewith (as the same may be amended from time to time, the "Credit
Agreement"); and
WHEREAS, in order to induce said banks and Morgan Guaranty Trust
Company of New York, as agent for such banks, to enter into the Credit
Agreement, the Borrower has agreed to grant a continuing security interest in
and to the Collateral (as hereafter defined) to secure its obligations under
the Credit Agreement and the Notes issued pursuant thereto;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions
Terms defined in the Credit Agreement and not otherwise defined herein
have, as used herein, the respective meanings provided for therein. The
following additional terms, as used herein, have the following respective
meanings:
"Collateral" has the meaning set forth in Section 3(a).
"Collateral Account" has the meaning set forth in Section 5.
"Liquid Investments" has the meaning set forth in Section 5(c).
"Perfection Certificate" means a certificate substantially in the form
of Exhibit A, completed and supplemented with the schedules and attachments
contemplated thereby to the satisfaction of the Agent, and duly executed by the
chief executive officer and the chief legal officer of the Borrower.
"Permitted Liens" means the Security Interests and the Liens on the
Collateral permitted to be created, assumed or exist pursuant to Section 5.11
of the Credit Agreement.
"Proceeds" means all proceeds of, and all other profits, products,
rents or receipts, in whatever form, arising from the collection, sale, lease,
exchange, assignment, licensing or other disposition of, or other realization
upon, the Collateral, including without limitation all claims of the Borrower
against third parties for loss of, damage to or destruction of, or for proceeds
payable under, or unearned premiums with respect to, policies of insurance in
respect of, any Collateral, and any condemnation or requisition payments with
respect to any Collateral, in each case whether now existing or hereafter
arising.
"Secured Obligations" means the obligations secured under the
Financing Documents including, without limitation, (a) all principal of and
interest (including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of any Obligor, whether or not allowed
or allowable as a claim in any such proceeding) on any loan under, or any note
issued pursuant to, the Credit Agreement, (b) all other amounts payable by any
Obligor under any Financing Document and (c) any renewals or extensions of any
of the foregoing.
"Security Interests" means the security interests in the Collateral
granted hereunder securing the Secured Obligations.
"UCC" means the Uniform Commercial Code as in effect on the date
hereof in the State of New York; provided that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection
of the Security Interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than New York, "UCC" means
the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection.
SECTION 2. Representations and Warranties
The Borrower represents and warrants as follows:
(a) The Borrower has good and marketable title to all of the
Collateral, free and clear of any Liens other than the Permitted Liens.
(b) The Borrower has not performed any acts which might prevent the
Agent from enforcing any of the terms of this Agreement or which would limit
the Agent in any such enforcement. Other than financing statements or other
similar or equivalent documents or instruments with respect to the Security
Interests and Permitted Liens, no financing statement, mortgage, security
agreement or similar or equivalent document or instrument covering all or any
part of the Collateral is on file or of record in any jurisdiction in which
such filing or recording would be effective to perfect a Lien on such
Collateral. No Collateral is in the possession of any Person (other than the
Borrower) asserting any claim thereto or security interest therein, except that
the Agent or its designee may have possession of Collateral as contemplated
hereby.
(c) Not less than five Domestic Business Days prior to the date of
the first Borrowing under the Credit Agreement, the Borrower shall deliver the
Perfection Certificate to the Agent. The information set forth therein shall
be correct and complete. Not later than 60 days following the date of the
first Borrowing, the Borrower shall furnish to the Agent file search reports
from each UCC filing office set forth in Schedule 1 to the Perfection
Certificate confirming the filing information set forth in such Schedule.
(d) The Security Interests constitute valid security interests under
the UCC securing the Secured Obligations. When UCC financing statements in the
form specified in Exhibit A shall have been filed in the offices specified in
the Perfection Certificate, the Security Interests shall constitute perfected
security interests in the Collateral to the extent that a security interest
therein may be perfected by filing pursuant to the UCC, prior to all other
Liens and rights of others therein except for the Permitted Liens.
SECTION 3. The Security Interests
(a) In order to secure the full and punctual payment of the Secured
Obligations in accordance with the terms thereof, and to secure the performance
of all of the obligations of the Borrower hereunder and under the Credit
Agreement, the Borrower hereby grants to the Agent for the ratable benefit of
the Banks a continuing security interest in and to all of the following
property of the Borrower, whether now owned or existing or hereafter acquired
or arising and regardless of where located (all being collectively referred to
as the "Collateral"):
(1) all right, title and interest of the Borrower in, and to
receive, any amounts payable by Tutor-Saliba-Perini JV ("TSP"), a joint venture
formed by Borrower and Tutor-Saliba Corporation on or about August 5, 1985, up
to an aggregate amount equal to the amount of the Borrower's interest in the
aggregate payments received by TSP in respect of its claims against the
California State Department of Highways for cost overruns associated with the
construction of the Redwood Bypass in Humbolt and Del Norte Counties,
California;
(2) all right, title and interest of the Borrower in, and to
receive, any amounts payable by Kiewit/Perini ("K/P"), two joint ventures
formed by Borrower and Kiewit Eastern Company on February 18, 1988 and on May
12, 1988, up to an aggregate amount equal to the amount of the Borrower's
interest in the aggregate payments received by K/P in respect of each of its
two claims against Pennsylvania Department of Transportation for cost overruns
associated with the construction of two sections of the interstate highway
located in suburban Philadelphia, Pennsylvania;
(3) the Collateral Account, all cash deposited therein from time to
time, the Liquid Investments made pursuant to Section 5(c) and other monies and
property of any kind of the Borrower, to the extent that such other monies and
property are Proceeds of the Collateral, in the possession or under the control
of the Agent;
(4) all books and records (including, without limitation, computer
programs, printouts and other computer materials and records) of the Borrower
pertaining to any of the Collateral; and
(5) all Proceeds of all or any of the Collateral.
(b) The Security Interests are granted as security only and shall not
subject the Agent or any Bank to, or transfer or in any way affect or modify,
any obligation or liability of the Borrower with respect to any of the
Collateral or any transaction in connection therewith.
SECTION 4. Further Assurances; Covenants
(a) The Borrower will not change its name, identity or corporate
structure in any manner unless it shall have given the Agent prior notice
thereof and delivered an opinion of counsel with respect thereto in accordance
with Section 4(l). The Borrower will not change the location of (i) its chief
executive office or chief place of business or (ii) the locations where it
keeps or holds any Collateral or any records relating thereto from the
applicable location described in the Perfection Certificate unless it shall
have given the Agent prior notice thereof and delivered an opinion of counsel
with respect thereto in accordance with Section 4(l). The Borrower shall not
in any event change the location of any Collateral if such change would cause
the Security Interests in such Collateral to lapse or cease to be perfected.
(b) The Borrower will, from time to time, at its expense, execute,
deliver, file and record any statement, assignment, instrument, document,
agreement or other paper and take any other action, (including, without
limitation, any filings of financing or continuation statements under the UCC)
that from time to time may be necessary or desirable, or that the Agent may
request, in order to create, preserve, perfect, confirm or validate the
Security Interests or to enable the Agent and the Banks to obtain the full
benefits of this Agreement, or to enable the Agent to exercise and enforce any
of its rights, powers and remedies hereunder with respect to any of the
Collateral. To the extent permitted by applicable law, the Borrower hereby
authorizes the Agent to execute and file financing statements or continuation
statements without the Borrower's signature appearing thereon. The Borrower
agrees that a carbon, photographic, photostatic or other reproduction of this
Agreement or of a financing statement is sufficient as a financing statement.
The Borrower shall pay the costs of, or incidental to, any recording or filing
of any financing or continuation statements concerning the Collateral.
(c) If any Collateral is at any time in the possession or control of
any warehouseman, bailee or any of the Borrower's agents or processors, the
Borrower shall notify such warehouseman, bailee, agent or processor of the
Security Interests created hereby and to hold all such Collateral for the
Agent's account subject to the Agent's instructions.
(d) The Borrower shall keep full and accurate books and records
relating to the Collateral, and stamp or otherwise mark such books and records
in such manner as the Required Banks may reasonably require in order to reflect
the Security Interests.
(e) Without the prior written consent of the Required Banks, the
Borrower will not sell, lease, exchange, assign or otherwise dispose of, or
grant any option with respect to, any Collateral.
(f) The Borrower will, promptly upon request, provide to the Agent
all information and evidence it may reasonably request concerning the
Collateral to enable the Agent to enforce the provisions of this Agreement.
(g) Not more than six months nor less than 30 days prior to (i) each
anniversary of the date hereof during the term of the Credit Agreement and (ii)
each date on which the Borrower proposes to take any action contemplated by
Section 4(a), the Borrower shall, at its cost and expense, cause to be
delivered to the Banks an opinion of counsel, satisfactory to the Agent,
substantially in the form of Exhibit B-1 to the Credit Agreement to the effect
that all financing statements and amendments or supplements thereto,
continuation statements and other documents required to be recorded or filed in
order to perfect and protect the Security Interests for a period, specified in
such opinion, continuing until a date not earlier than eighteen months from the
date of such opinion, against all creditors of and purchasers from the Borrower
have been filed in each filing office necessary for such purpose and that all
filing fees and taxes, if any, payable in connection with such filings have
been paid in full.
(h) From time to time upon request by the Agent, the Borrower shall,
at its cost and expense, cause to be delivered to the Banks an opinion of
counsel satisfactory to the Agent as to such matters relating to the
transactions contemplated hereby as the Required Banks may reasonably request.
SECTION 5. Collateral Account
(a) There is hereby established with the Agent a cash collateral
account (the "Collateral Account") in the name and under the control of the
Agent into which there shall be deposited from time to time the cash proceeds
of the Collateral required to be delivered to the Agent pursuant to any
provision of this Agreement. Any income received by the Agent with respect to
the balance from time to time standing to the credit of the Collateral Account,
including any interest or capital gains on Liquid Investments, shall remain, or
be deposited, in the Collateral Account. All right, title and interest in and
to the cash amounts on deposit from time to time in the Collateral Account
together with any Liquid Investments from time to time made pursuant to
subsection (c) of this Section shall vest in the Agent, shall constitute part
of the Collateral hereunder and shall not constitute payment of the Secured
Obligations until applied thereto as hereinafter provided.
(b) The Borrower agrees that if the proceeds of any Collateral
hereunder shall be received by it, the Borrower shall as promptly as possible
deposit such proceeds into the Collateral Account. Until so deposited, all
such proceeds shall be held in trust by the Borrower for and as the property of
the Agent and the Banks and shall not be commingled with any other funds or
property of the Borrower.
(c) The balance from time to time standing to the credit of the
Collateral Account shall, except upon the occurrence and continuation of an
Event of Default, be distributed to the Agent to the extent necessary to pay
the principal of and interest on any Loans then due and unpaid and the
remainder, if any, to the Borrower upon the order of the Borrower. If
immediately available cash on deposit in the Collateral Account is not
sufficient to make any distribution referred to in the previous sentence of
this Section 5(b), the Agent shall liquidate as promptly as practicable Liquid
Investments as required to obtain sufficient cash to make such distribution
and, notwithstanding any other provision of this Section 5, such distribution
shall not be made until such liquidation has taken place. Upon the occurrence
and continuation of an Event of Default, the Agent shall, if so instructed by
the Required Banks, apply or cause to be applied (subject to collection) any or
all of the balance from time to time standing to the credit of the Collateral
Account in the manner specified in Section 9.
(d) Amounts on deposit in the Collateral Account shall be invested
and re-invested from time to time in such Liquid Investments as the Borrower
shall determine, which Liquid Investments shall be held in the name and be
under the control of the Agent, provided that, if an Event of Default has
occurred and is continuing, the Agent shall, if instructed by the Required
Banks, liquidate any such Liquid Securities and apply or cause to be applied
the proceeds thereof to the payment of the Secured Obligations in the manner
specified in Section 9. For this purpose, "Liquid Investments" means Temporary
Cash Investments; provided that (i) each Liquid Investment shall mature within
30 days after it is acquired by the Agent and (ii) in order to provide the
Agent, for the benefit of the Banks, with a perfected security interest
therein, each Liquid Investment shall be either:
(i) evidenced by negotiable certificates or instruments, or if
non-negotiable then issued in the name of the Agent, which (together with any
appropriate instruments of transfer) are delivered to, and held by, the Agent
or an agent thereof (which shall not be the Borrower or any of its Affiliates)
in the State of New York; or
(ii) in book-entry form and issued by the United States and subject to
pledge under applicable state law and Treasury regulations and as to which (in
the opinion of counsel to the Agent) appropriate measures shall have been taken
for perfection of the Security Interests.
SECTION 6. General Authority
The Borrower hereby irrevocably appoints the Agent its true and lawful
attorney, with full power of substitution, in the name of the Borrower, the
Agent, the Banks or otherwise, for the sole use and benefit of the Agent and
the Banks, but at the Borrower's expense, to the extent permitted by law to
exercise, at any time and from time to time while an Event of Default has
occurred and is continuing, all or any of the following powers with respect to
all or any of the Collateral:
(i) to demand, sue for, collect, receive and give acquittance for any
and all monies due or to become due thereon or by virtue thereof,
(ii) to settle, compromise, compound, prosecute or defend any action
or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or with the same
or the proceeds or avails thereof, as fully and effectually as if the Agent
were the absolute owner thereof, and
(iv) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto;
provided that the Agent shall give the Borrower not less than ten days' prior
written notice of the time and place of any sale or other intended disposition
of any of the Collateral, except any Collateral which is perishable or
threatens to decline speedily in value or is of a type customarily sold on a
recognized market. The Borrower agrees that such notice constitutes
"reasonable notification" within the meaning of Section 9-504(3) of the UCC.
SECTION 7. Remedies upon Event of Default
(a) If any Event of Default has occurred and is continuing, the Agent
may exercise on behalf of the Banks all rights of a secured party under the UCC
(whether or not in effect in the jurisdiction where such rights are exercised)
and, in addition, the Agent may, without being required to give any notice,
except as herein provided or as may be required by mandatory provisions of law,
(i) withdraw all cash and Liquid Investments in the Collateral Account and
apply such cash and Liquid Investments and other cash, if any, then held by it
as Collateral as specified in Section 9 and (ii) if there shall be no such cash
or Liquid Investments or if such cash and Liquid Investments shall be
insufficient to pay all the Secured Obligations in full, sell the Collateral or
any part thereof at public or private sale, for cash, upon credit or for future
delivery, and at such price or prices as the Agent may deem satisfactory. The
Agent or any Bank may be the purchaser of any or all of the Collateral so sold
at any public sale (or, if the Collateral is of a type customarily sold in a
recognized market or is of a type which is the subject of widely distributed
standard price quotations, at any private sale). The Borrower will execute and
deliver such documents and take such other action as the Agent deems necessary
or advisable in order that any such sale may be made in compliance with law.
Upon any such sale the Agent shall have the right to deliver, assign and
transfer to the purchaser thereof the Collateral so sold. Each purchaser at
any such sale shall hold the Collateral so sold to it absolutely and free from
any claim or right of whatsoever kind, including any equity or right of
redemption of the Borrower which may be waived, and the Borrower, to the extent
permitted by law, hereby specifically waives all rights of redemption, stay or
appraisal which it has or may have under any law now existing or hereafter
adopted. The notice (if any) of such sale required by Section 6 shall (1) in
case of a public sale, state the time and place fixed for such sale, and (2) in
the case of a private sale, state the day after which such sale may be
consummated. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Agent may fix in the
notice of such sale. At any such sale the Collateral may be sold in one lot as
an entirety or in separate parcels, as the Agent may determine. The Agent
shall not be obligated to make any such sale pursuant to any such notice. The
Agent may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time
and place fixed for the sale, and such sale may be made at any time or place to
which the same may be so adjourned. In case of any sale of all or any part of
the Collateral on credit or for future delivery, the Collateral so sold may be
retained by the Agent until the selling price is paid by the purchaser thereof,
but the Agent shall not incur any liability in case of the failure of such
purchaser to take up and pay for the Collateral so sold and, in case of any
such failure, such Collateral may again be sold upon like notice. The Agent,
instead of exercising the power of sale herein conferred upon it, may proceed
by a suit or suits at law or in equity to foreclose the Security Interests and
sell the Collateral, or any portion thereof, under a judgment or decree of a
court or courts of competent jurisdiction.
(b) For the purpose of enforcing any and all rights and remedies
under this Agreement the Agent may (i) require the Borrower to, and the
Borrower agrees that it will, at its expense and upon the request of the Agent,
forthwith assemble all or any part of the Collateral as directed by the Agent
and make it available at a place designated by the Agent which is, in its
opinion, reasonably convenient to the Agent and the Borrower, whether at the
premises of the Borrower or otherwise, (ii) to the extent permitted by
applicable law, enter, with or without process of law and without breach of the
peace, any premise where any of the Collateral is or may be located, and
without charge or liability to it seize and remove such Collateral from such
premises, (iii) have access to and use the Borrower's books and records
relating to the Collateral and (iv) prior to the disposition of the Collateral,
store or transfer it without charge in or by means of any storage or
transportation facility owned or leased by the Borrower, process, repair or
recondition it or otherwise prepare it for disposition in any manner and to the
extent the Agent deems appropriate and, in connection with such preparation and
disposition, use without charge any trademark, trade name, copyright, patent or
technical process used by the Borrower. The Agent may also render any or all
of the Collateral unusable at the Borrower's premises and may dispose of such
Collateral on such premises without liability for rent or costs.
SECTION 8. Limitation on Duty of Agent
in Respect of Collateral.
Beyond the exercise of reasonable care in the custody thereof, the
Agent shall have no duty as to any Collateral in its possession or control or
in the possession or control of any agent or bailee or any income thereon or as
to the preservation of rights against prior parties or any other rights
pertaining thereto. The Agent shall be deemed to have exercised reasonable
care in the custody of the Collateral in its possession if the Collateral is
accorded treatment substantially equal to that which it accords its own
property, and shall not be liable or responsible for any loss or damage to any
of the Collateral, or for any diminution in the value thereof, by reason of the
act or omission of any warehouseman, carrier, forwarding agency, consignee or
other agent or bailee selected by the Agent in good faith.
SECTION 9. Application of Proceeds
Upon the occurrence and during the continuance of an Event of Default,
the proceeds of any sale of, or other realization upon, all or any part of the
Collateral and any cash held in the Collateral Account shall be applied by the
Agent in the following order of priorities:
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Agent, and all
expenses, liabilities and advances incurred or made by the Agent in connection
therewith, and any other unreimbursed expenses for which the Agent or any Bank
is to be reimbursed pursuant to Section 9.03 of the Credit Agreement or Section
12 hereof or under any other Collateral Document and unpaid fees owing to the
Agent under the Credit Agreement;
second, to the ratable payment of unpaid principal of the Secured
Obligations;
third, to the ratable payment of accrued but unpaid interest on the
Secured Obligations in accordance with the provisions of the Credit Agreement;
fourth, to the ratable payment of all other Secured Obligations, until
all Secured Obligations shall have been paid in full; and
finally, to payment to the Borrower or its successors or assigns, or
as a court of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
The Agent may make distributions hereunder in cash or in kind or, on a ratable
basis, in any combination thereof.
SECTION 10. Concerning the Agent
The provisions of Article VII of the Credit Agreement shall inure to
the benefit of the Agent in respect of this Agreement and shall be binding upon
the parties to the Credit Agreement in such respect. In furtherance and not in
derogation of the rights, privileges and immunities of the Agent therein set
forth:
(a) The Agent is authorized to take all such action as is provided to
be taken by it as Agent hereunder and all other action reasonably incidental
thereto. As to any matters not expressly provided for herein (including,
without limitation, the timing and methods of realization upon the Collateral)
the Agent shall act or refrain from acting in accordance with written
instructions from the Required Banks or, in the absence of such instructions,
in accordance with its discretion.
(b) The Agent shall not be responsible for the existence, genuineness
or value of any of the Collateral or for the validity, perfection, priority or
enforceability of the Security Interests in any of the Collateral, whether
impaired by operation of law or by reason of any action or omission to act on
its part hereunder. The Agent shall have no duty to ascertain or inquire as to
the performance or observance of any of the terms of this Agreement by the
Borrower.
SECTION 11. Appointment of Co-Agents
At any time or times, in order to comply with any legal requirement in
any jurisdiction, the Agent may appoint another bank or trust company or one or
more other persons, either to act as co-agent or co-agents, jointly with the
Agent, or to act as separate agent or agents on behalf of the Banks with such
power and authority as may be necessary for the effectual operation of the
provisions hereof and may be specified in the instrument of appointment (which
may, in the discretion of the Agent, include provisions for the protection of
such co-agent or separate agent similar to the provisions of Section 10).
SECTION 12. Expenses
In the event that the Borrower fails to comply with the provisions of
the Credit Agreement or this Agreement, such that the value of any Collateral
or the validity, perfection, rank or value of any Security Interest is thereby
diminished or potentially diminished or put at risk, the Agent if requested by
the Required Banks may, but shall not be required to, effect such compliance on
behalf of the Borrower, and the Borrower shall reimburse the Agent for the
costs thereof on demand. All insurance expenses and all expenses of
protecting, storing, warehousing, appraising, insuring, handling, maintaining,
and shipping the Collateral, any and all excise, property, sales, and use taxes
imposed by any state, federal, or local authority on any of the Collateral, or
in respect of periodic appraisals and inspections of the Collateral to the
extent the same may be requested by the Required Banks from time to time, or in
respect of the sale or other disposition thereof shall be borne and paid by the
Borrower; and if the Borrower fails to promptly pay any portion thereof when
due, the Agent or any Bank may, at its option, but shall not be required to,
pay the same and charge the Borrower's account therefor, and the Borrower
agrees to reimburse the Agent or such Bank therefor on demand. All sums so
paid or incurred by the Agent or any Bank for any of the foregoing and any and
all other sums for which the Borrower may become liable hereunder and all costs
and expenses (including attorneys' fees, legal expenses and court costs)
reasonably incurred by the Agent or any Bank in enforcing or protecting the
Security Interests or any of their rights or remedies under this Agreement,
shall, together with interest thereon until paid at the rate applicable to
Prime Borrowings, be additional Secured Obligations hereunder.
SECTION 13. Termination of Security
Interests; Release of Collateral
Upon the repayment in full of all Secured Obligations and the
termination of the Commitments under the Credit Agreement, the Security
Interests shall terminate and all rights to the Collateral shall revert to the
Borrower. At any time and from time to time prior to such termination of the
Security Interests, the Agent may release any of the Collateral with the prior
written consent of the Required Banks. Upon any such termination of the
Security Interests or release of Collateral, the Agent will, at the expense of
the Borrower, execute and deliver to the Borrower such documents as the
Borrower shall reasonably request to evidence the termination of the Security
Interests or the release of such Collateral, as the case may be.
SECTION 14. Notices
All notices, communications and distributions hereunder shall be given
in accordance with Section 9.01 of the Credit Agreement.
SECTION 15. Waivers, Non-Exclusive Remedies
No failure on the part of the Agent to exercise, and no delay in
exercising and no course of dealing with respect to, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise by the Agent of any right under the Credit Agreement or this Agreement
preclude any other or further exercise thereof or the exercise of any other
right. The rights in this Agreement and the Credit Agreement are cumulative
and are not exclusive of any other remedies provided by law.
SECTION 16. Successors and Assigns
This Agreement is for the benefit of the Agent and the Banks and their
successors and assigns, and in the event of an assignment of all or any of the
Secured Obligations, the rights hereunder, to the extent applicable to the
indebtedness so assigned, may be transferred with such indebtedness. This
Agreement shall be binding on the Borrower and its successors and assigns.
SECTION 17. Changes in Writing
Neither this Agreement nor any provision hereof may be changed,
waived, discharged or terminated orally, but only in writing signed by the
Borrower and the Agent with the consent of the Required Banks.
SECTION 18. New York Law
This Agreement shall be construed in accordance with and governed by
the laws of the State of New York, except as otherwise required by mandatory
provisions of law and except to the extent that remedies provided by the laws
of any jurisdiction other than New York are governed by the laws of such
jurisdiction.
SECTION 19. Severability
If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction
and shall be liberally construed in favor of the Agent and the Banks in order
to carry out the intentions of the parties hereto as nearly as may be possible;
and (ii) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
PERINI CORPORATION
By /s/ James M. Markert
---------------------------
Title: Senior Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Caroline R. Shapiro
---------------------------
Title: Vice President
<PAGE>
EXHIBIT A
To Borrower
Security Agreement
PERFECTION CERTIFICATE
The undersigned, the chief executive officer and chief legal officer
of Perini Corporation, a Massachusetts corporation (the "Borrower"), hereby
certify with reference to the Security Agreement dated as of March 9, 1994
between the Borrower and Morgan Guaranty Trust Company of New York, as Agent
(terms defined therein being used herein as therein defined), to the Agent and
each Bank as follows:
1. Names. (a) The exact corporate name of the Borrower as it
appears in its certificate of incorporation is as follows:
Perini Corporation
(b) Set forth below is each other corporate name the Borrower has had
since its organization, together with the date of the relevant change:
Perini & Cedario January 5, 1918
- December 10, 1919
Perini & Sons December 11, 1919
- July 29, 1931
B. Perini & Sons, Inc. July 30, 1931 -
December 2, 1956
(c) Except as set forth below, the Borrower has not changed its
identity or corporate structure in any way within the past five years.
During 1992, Perini Corporation transferred its building operations
(i.e., the Western Building Division and the Eastern Building Division) to
Perini Building Company, Inc., an Arizona corporation.
In 1993, Perini Corporation acquired substantially all the assets and
contracts of Gust K. Newberg Construction Co. of Chicago, IL. Those assets and
contracts were used to form the Newberg/Perini Division of Perini Corporation.
(d) The following is a list of all other names (including trade names
or similar appellations) used by the Borrower or any of its divisions or other
business units at any time during the past five years:
"PERINI." The Borrower registered three service marks using the
single word Perini in different logo formats
2. Current Locations. (a) The chief executive office of the
Borrower is located at the following address:
Mailing Address County State
73 Mount Wayte Avenue Middlesex Massachusetts
Framingham, MA 01701-9610
(b) The following are all the places of business of the Borrower not
identified above:
Name Mailing Address County State
Metropolitan 2 Skyline Drive Westchester New York
New York Division Hawthorne
Newberg/Perini Division 651 Washington Blvd Cook Illinois
Chicago
3. Prior Locations. Set forth below is the information required by
subparagraph (a) of paragraph 2 with respect to each location or place of
business maintained by the Borrower at any time during the past five years:
Metropolitan New York Division
615 Broadway
Hastings-on-Hudson, NY 10706
Newberg/Perini Division
2040 North Ashland Avenue
Chicago, IL 60614
Western Building Division
75 Broadway
San Francisco, CA 94111
Eastern Building Division
73 Mt. Wayte Avenue
Framingham, MA 01701
4. File Search Reports. Attached hereto as Schedule 4(A) is a true
copy of a file search report from the Uniform Commercial Code filing officer in
each jurisdiction identified in paragraph 2 or 3 above with respect to each
name set forth in paragraph 1 above. Attached hereto as Schedule 4(B) is a
true copy of each financing statement or other filing identified in such file
search reports.
5. UCC Filings. A duly signed financing statement on Form UCC-1 in
substantially the form of Schedule 5(A) hereto has been duly filed in the
Uniform Commercial Code filing office in each jurisdiction identified in
paragraph 2(a) hereof. Attached hereto as Schedule 5(B) is a true copy of each
such filing duly acknowledged by the filing officer.
6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule
setting forth filing information with respect to the filings described in
paragraph 5 above.
7. Filing Fees. All filing fees and taxes payable in connection with
the filings described in paragraph 6 above have been paid.
IN WITNESS WHEREOF, we have hereunto set our hands this day of
March, 1994.
____________________________
Title:
____________________________
Title:
SCHEDULE 6
to the Borrower
Security Agreement
SCHEDULE OF FILINGS
Debtor Filing Officer File Number Date of Filing*
_______________
* Indicate lapse date, if other than fifth anniversary.
<PAGE>
[CONFORMED COPY]
EXHIBIT E
BORROWER PLEDGE AGREEMENT
AGREEMENT dated as of March 9, 1994 between PERINI CORPORATION (with
its successors, the "Borrower") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Agent.
W I T N E S S E T H :
WHEREAS, the Borrower, certain banks and Morgan Guaranty Trust
Company of New York, as agent for such banks are parties to a Credit Agreement
of even date herewith (as the same may be amended from time to time, the
"Credit Agreement"); and
WHEREAS, in order to induce said banks and Morgan Guaranty Trust
Company of New York, as agent for such banks, to enter into the Credit
Agreement, the Borrower has agreed to grant a continuing security interest in
and to the Collateral (as hereafter defined) to secure its obligations under
the Credit Agreement and the Notes issued pursuant thereto;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions.
Terms defined in the Credit Agreement and not otherwise defined
herein have, as used herein, the respective meanings provided for therein. The
following additional terms, as used herein, have the following respective
meanings:
"Collateral" has the meaning assigned to such term in Section 3(a).
"Issuer" means any of Perini Land and Development Company, a
Massachusetts corporation, Glenco-Perini-HCV, a California limited partnership,
and One Hundred Thirty-Eight Joint Venture, a Georgia general partnership.
"Pledged Instruments" means (i) all notes executed by the Issuers as
described in Schedule 1 attached hereto and (ii) any instrument required to be
pledged to the Agent pursuant to Section 3(b).
"Secured Obligations" means the obligations secured under the
Financing Documents including, without limitation, (a) all principal of and
interest (including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of any Obligor, whether or not allowed
or allowable as a claim in any such proceeding) on any loan under, or any note
issued pursuant to, the Credit Agreement, (b) all other amounts payable by any
Obligor under any Financing Document and (c) any renewals or extensions of any
of the foregoing.
"Security Interests" means the security interests in the Collateral
granted hereunder securing the Secured Obligations.
Unless otherwise defined herein, or unless the context otherwise
requires, all terms used herein which are defined in the New York Uniform
Commercial Code as in effect on the date hereof shall have the meanings therein
stated.
SECTION 2. Representations and Warranties.
The Borrower represents and warrants as follows:
(a) Title to Pledged Instruments. The Borrower owns all of the
Pledged Instruments, free and clear of any Liens other than the Security
Interests. The Borrower is not and will not become a party to or otherwise
bound by any agreement, other than this Agreement, which restricts in any
manner the rights of any present or future holder of any of the Pledged
Instruments with respect thereto.
(b) Validity, Perfection and Priority of Security Interests. Upon
the delivery of the Pledged Instruments to the Agent in accordance with Section
4 hereof, the Agent will have valid and perfected security interests in the
Collateral subject to no prior Lien. No registration, recordation or filing
with any governmental body, agency or official is required in connection with
the execution or delivery of this Agreement or necessary for the validity or
enforceability hereof or for the perfection or enforcement of the Security
Interests. Neither the Borrower nor any of its Subsidiaries has performed or
will perform any acts which might prevent the Agent from enforcing any of the
terms and conditions of this Agreement or which would limit the Agent in any
such enforcement.
(c) UCC Filing Locations. The chief executive office of the Borrower
is located at its address set forth on the signature pages of the Credit
Agreement. Under the Uniform Commercial Code as in effect in the State in
which such office is located, no local filing is required to perfect a security
interest in collateral consisting of instruments.
SECTION 3. The Security Interests.
In order to secure the full and punctual payment of the Secured
Obligations in accordance with the terms thereof, and to secure the performance
of all the obligations of the Borrower hereunder:
(a) The Borrower hereby assigns and pledges to and with the Agent
for the benefit of the Banks and grants to the Agent for the benefit of the
Banks security interests in the Pledged Instruments, and all of its rights and
privileges with respect to the Pledged Instruments as described Schedule 1
attached hereto, and all income and profits thereon, and all interest,
dividends and other payments and distributions with respect thereto, and all
proceeds of the foregoing (the "Collateral").
(b) In the event that any Issuer at any time issues any substitute
note, or owes any other Debt to the Borrower, the Borrower will immediately
pledge and deposit with the Agent such note or an instrument evidencing such
other Debt as additional security for the Secured Obligations. All such
shares, notes and instruments constitute Pledged Securities and are subject to
all provisions of this Agreement.
(c) The Security Interests are granted as security only and shall
not subject the Agent or any Bank to, or transfer or in any way affect or
modify, any obligation or liability of the Borrower with respect to any of the
Collateral or any transaction in connection therewith.
<PAGE>
SECTION 4. Delivery of Pledged Instruments.
All Pledged Instruments shall be delivered to the Agent by the
Borrower pursuant hereto indorsed to the order of the Agent, and accompanied by
any required transfer tax stamps, all in form and substance satisfactory to the
Agent.
SECTION 5. Further Assurances.
(a) The Borrower agrees that it will, at its expense and in such
manner and form as the Agent may require, execute, deliver, file and record any
financing statement, specific assignment or other paper and take any other
action that may be necessary or desirable, or that the Agent may request, in
order to create, preserve, perfect or validate any Security Interest or to
enable the Agent to exercise and enforce its rights hereunder with respect to
any of the Collateral. To the extent permitted by applicable law, the Borrower
hereby authorizes the Agent to execute and file, in the name of the Borrower or
otherwise, Uniform Commercial Code financing statements (which may be carbon,
photographic, photostatic or other reproductions of this Agreement or of a
financing statement relating to this Agreement) which the Agent in its sole
discretion may deem necessary or appropriate to further perfect the Security
Interests.
(b) The Borrower agrees that it will not change (i) its name,
identity or corporate structure in any manner or (ii) the location of its chief
executive office unless it shall have given the Agent not less than 30 days'
prior notice thereof.
SECTION 6. Right to Receive Distributions on Collateral.
The Agent shall have the right to receive and, during the continuance
of any Default, to retain as Collateral hereunder all dividends, interest and
other payments and distributions made upon or with respect to the Collateral
and the Borrower shall take all such action as the Agent may deem necessary or
appropriate to give effect to such right. All such dividends, interest and
other payments and distributions which are received by the Borrower shall be
received in trust for the benefit of the Agent and the Banks and, if the Agent
so directs during the continuance of a Default, shall be segregated from other
funds of the Borrower and shall, forthwith upon demand by the Agent during the
continuance of a Default, be paid over to the Agent as Collateral in the same
form as received (with any necessary endorsement). After all Defaults have
been cured, the Agent's right to retain dividends, interest and other payments
and distributions under this Section 6 shall cease and the Agent shall pay over
to the Borrower any such Collateral retained by it during the continuance of a
Default.
SECTION 7. General Authority
The Borrower hereby irrevocably appoints the Agent its true and
lawful attorney, with full power of substitution, in the name of the Borrower,
the Agent, the Banks or otherwise, for the sole use and benefit of the Agent
and Banks, but at the expense of the Borrower, to the extent permitted by law
to exercise, at any time and from time to time while an Event of Default has
occurred and is continuing, all or any of the following powers with respect to
all or any of the Collateral:
(i) to demand, sue for, collect, receive and give acquittance for any
and all monies due or to become due upon or by virtue thereof,
(ii) to settle, compromise, compound, prosecute or defend any action
or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or with the same
or the proceeds or avails thereof, as fully and effectually as if the Agent
were the absolute owner thereof, and
(iv) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto;
provided that the Agent shall give the Borrower not less than ten days' prior
written notice of the time and place of any sale or other intended disposition
of any of the Collateral except any Collateral which is perishable or threatens
to decline speedily in value or is of a type customarily sold on a recognized
market. The Agent and the Borrower agree that such notice constitutes
"reasonable notification" within the meaning of Section 9-504(3) of the Uniform
Commercial Code.
SECTION 8. Remedies upon Event of Default
If any Event of Default shall have occurred and be continuing, the
Agent may exercise on behalf of the Banks all the rights of a secured party
under the Uniform Commercial Code (whether or not in effect in the jurisdiction
where such rights are exercised) and, in addition, the Agent may, without being
required to give any notice, except as herein provided or as may be required by
mandatory provisions of law, (i) apply the cash, if any, then held by it as
Collateral as specified in Section 11 and (ii) if there shall be no such cash
or if such cash shall be insufficient to pay all the Secured Obligations in
full, sell the Collateral or any part thereof at public or private sale or at
any broker's board or on any securities exchange, for cash, upon credit or for
future delivery, and at such price or prices as the Agent may deem
satisfactory. Any Bank may be the purchaser of any or all of the Collateral so
sold at any public sale (or, if the Collateral is of a type customarily sold in
a recognized market or is of a type which is the subject of widely distributed
standard price quotations, at any private sale). The Agent is authorized, in
connection with any such sale, if it deems it advisable so to do, (i) to
restrict the prospective bidders on or purchasers of any of the Pledged
Instruments to a limited number of sophisticated investors who will represent
and agree that they are purchasing for their own account for investment and not
with a view to the distribution or sale of any of such Pledged Instruments,
(ii) to cause to be placed on certificates for any or all of the Pledged
Instruments or on any other securities pledged hereunder a legend to the effect
that such security has not been registered under the Securities Act of 1933 and
may not be disposed of in violation of the provision of said Act, and (iii) to
impose such other limitations or conditions in connection with any such sale as
the Agent deems necessary or advisable in order to comply with said Act or any
other law. The Borrower covenants and agrees that it will execute and deliver
such documents and take such other action as the Agent deems necessary or
advisable in order that any such sale may be made in compliance with law. Upon
any such sale the Agent shall have the right to deliver, assign and transfer to
the purchaser thereof the Collateral so sold. Each purchaser at any such sale
shall hold the Collateral so sold absolutely and free from any claim or right
of whatsoever kind, including any equity or right of redemption of the Borrower
which may be waived, and the Borrower, to the extent permitted by law, hereby
specifically waives all rights of redemption, stay or appraisal which it has or
may have under any law now existing or hereafter adopted. The notice (if any)
of such sale required by Section 7 shall (1) in case of a public sale, state
the time and place fixed for such sale, (2) in case of sale at a broker's board
or on a securities exchange, state the board or exchange at which such sale is
to be made and the day on which the Collateral, or the portion thereof so being
sold, will first be offered for sale at such board or exchange, and (3) in the
case of a private sale, state the day after which such sale may be consummated.
Any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Agent may fix in the notice
of such sale. At any such sale the Collateral may be sold in one lot as an
entirety or in separate parcels, as the Agent may determine. The Agent shall
not be obligated to make any such sale pursuant to any such notice. The Agent
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or place to
which the same may be so adjourned. In case of any sale of all or any part of
the Collateral on credit or for future delivery, the Collateral so sold may be
retained by the Agent until the selling price is paid by the purchaser thereof,
but the Agent shall not incur any liability in case of the failure of such
purchaser to take up and pay for the Collateral so sold and, in case of any
such failure, such Collateral may again be sold upon like notice. The Agent,
instead of exercising the power of sale herein conferred upon it, may proceed
by a suit or suits at law or in equity to foreclose the Security Interests and
sell the Collateral, or any portion thereof, under a judgment or decree of a
court or courts of competent jurisdiction.
SECTION 9. Expenses
The Borrower agrees that it will forthwith upon demand pay to the
Agent:
(i) the amount of any taxes which the Agent may have been required to
pay by reason of the Security Interests or to free any of the Collateral from
any Lien thereon, and
(ii) the amount of any and all out-of-pocket expenses, including the
fees and disbursements of counsel and of any other experts, which the Agent may
incur in connection with (w) the administration or enforcement of this
Agreement, including such expenses as are incurred to preserve the value of the
Collateral and the validity, perfection, rank and value of any Security
Interest, (x) the collection, sale or other disposition of any of the
Collateral, (y) the exercise by the Agent of any of the rights conferred upon
it hereunder or (z) any Default or Event of Default.
Any such amount not paid on demand shall bear interest at the rate applicable
to Prime Borrowings plus 2%.
SECTION 10. Limitation on Duty of Agent in Respect of
Collateral
Beyond the exercise of reasonable care in the custody thereof, the
Agent shall have no duty as to any Collateral in its possession or control or
in the possession or control of any agent or bailee or any income thereon or as
to the preservation of rights against prior parties or any other rights
pertaining thereto. The Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which it accords
its own property, and shall not be liable or responsible for any loss or damage
to any of the Collateral, or for any diminution in the value thereof, by reason
of the act or omission of any agent or bailee selected by the Agent in good
faith.
SECTION 11. Application of Proceeds
Upon the occurrence and during the continuance of an Event of
Default, the proceeds of any sale of, or other realization upon, all or any
part of the Collateral and any cash held shall be applied by the Agent in the
following order of priorities:
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Agent, and all
expenses, liabilities and advances incurred or made by the Agent in connection
therewith, and any other unreimbursed expenses for which the Agent or any Bank
is to be reimbursed pursuant to Section 9.03 of the Credit Agreement or under
any other Collateral Document and unpaid fees owing to the Agent under the
Credit Agreement;
second, to the ratable payment of unpaid principal of the Secured
Obligations;
third, to the ratable payment of accrued but unpaid interest on the
Secured Obligations in accordance with the provisions of the Credit Agreement;
fourth, to the ratable payment of all other Secured Obligations, until
all Secured Obligations shall have been paid in full; and
finally, to payment to the Borrower or its successors or assigns, or
as a court of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
SECTION 12. Concerning the Agent
The provisions of Article VII of the Credit Agreement shall inure to
the benefit of the Agent in respect of this Agreement and shall be binding upon
the parties to the Credit Agreement in such respect. In furtherance and not in
derogation of the rights, privileges and immunities of the Agent therein set
forth:
(a) The Agent is authorized to take all such action as is provided
to be taken by it as Agent hereunder and all other action reasonably incidental
thereto. As to any matters not expressly provided for herein (including,
without limitation, the timing and methods of realization upon the Collateral)
the Agent shall act or refrain from acting in accordance with written
instructions from the Required Banks or, in the absence of such instructions,
in accordance with its discretion.
(b) The Agent shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity, perfection,
priority or enforceability of the Security Interests in any of the Collateral,
whether impaired by operation of law or by reason of any action or omission to
act on its part hereunder. The Agent shall have no duty to ascertain or
inquire as to the performance or observance of any of the terms of this
Agreement by the Borrower.
SECTION 13. Appointment of Co-Agents
At any time or times, in order to comply with any legal requirement
in any jurisdiction, the Agent may appoint another bank or trust company or one
or more other persons, either to act as co-agent or co-agents, jointly with the
Agent, or to act as separate agent or agents on behalf of the Banks with such
power and authority as may be necessary for the effectual operation of the
provisions hereof and may be specified in the instrument of appointment (which
may, in the discretion of the Agent, include provisions for the protection of
such co-agent or separate agent similar to the provisions of Section 12).
SECTION 14. Termination of Security Interests;
Release of Collateral
Upon the repayment in full of all Secured Obligations and the
termination of the Commitments under the Credit Agreement, the Security
Interests shall terminate and all rights to the Collateral shall revert to the
Borrower. At any time and from time to time prior to such termination of the
Security Interests, the Agent may release any of the Collateral with the prior
written consent of the Required Banks. Upon any such termination of the
Security Interests or release of Collateral, the Agent will, at the expense of
the Borrower, execute and deliver to the Borrower such documents as the
Borrower shall reasonably request to evidence the termination of the Security
Interests or the release of such Collateral, as the case may be.
SECTION 15. Notices
All notices hereunder shall be given in accordance with Section 9.01
of the Credit Agreement.
SECTION 16. Waivers, Non-Exclusive Remedies
No failure on the part of the Agent to exercise, and no delay in
exercising and no course of dealing with respect to, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise by the Agent of any right under the Credit Agreement or this Agreement
preclude any other or further exercise thereof or the exercise of any other
right. The rights in this Agreement and the Credit Agreement are cumulative
and are not exclusive of any other remedies provided by law.
SECTION 17. Successors and Assigns
This Agreement is for the benefit of the Agent and the Banks and
their successors and assigns, and in the event of an assignment of all or any
of the Secured Obligations, the rights hereunder, to the extent applicable to
the indebtedness so assigned, may be transferred with such indebtedness. This
Agreement shall be binding on the Borrower and its successors and assigns.
SECTION 18. Changes in Writing
Neither this Agreement nor any provision hereof may be changed,
waived, discharged or terminated orally, but only in writing signed by the
Borrower and the Agent with the consent of the Required Banks.
SECTION 19. New York Law
This Agreement shall be construed in accordance with and governed by
the laws of the State of New York, except as otherwise required by mandatory
provisions of law and except to the extent that remedies provided by the laws
of any jurisdiction other than New York are governed by the laws of such
jurisdiction.
SECTION 20. Severability
If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction
and shall be liberally construed in favor of the Agent and the Banks in order
to carry out the intentions of the parties hereto as nearly as may be possible;
and (ii) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
PERINI CORPORATION
By /s/ James M. Markert
---------------------------
Title: Senior Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Caroline R. Shapiro
---------------------------
Title: Vice President
<PAGE>
Schedule 1
to the Borrower
Pledge Agreement
1. Note dated as of March 7, 1994, issued by Perini Land and Development in
favor of the Borrower.
2. Note dated as of March 7, 1994, issued by One Hundred Thirty-Eight Joint
Venture in the amount of $9,969,000, payable to Perini Land and Development and
assigned by Perini Land and Development to the Borrower on or about March 7,
1994.
3. Note dated as of March 7, 1994, issued by Glenco-Perini-HCV Partners in the
amount of $19,626,444, payable to Perini Resorts and assigned by Perini Resorts
to Perini Land and Development on or about March 7, 1994 and assigned by Perini
Land and Development to the Borrower on or about March 7, 1994.
<PAGE>
[CONFORMED COPY]
EXHIBIT F
SUBSIDIARY GUARANTEE AGREEMENT
AGREEMENT dated as of March 9, 1994 among Perini Corporation, a
Massachusetts corporation (the "Borrower"), each of the Subsidiary Guarantors
listed on the signature pages hereof under the caption "Subsidiary Guarantors"
and each Person that shall, at any time after the date hereof, become a
"Subsidiary Guarantor" hereunder (collectively, the "Subsidiary Guarantors")
and Morgan Guaranty Trust Company of New York, as Agent.
WHEREAS, the Borrower has entered into a Credit Agreement (as the same
may be amended from time to time, the "Credit Agreement") dated as of March 9,
1994 among the Borrower, the banks listed on the signature pages thereof, and
Morgan Guaranty Trust Company of New York, as Agent, pursuant to which the
Borrower is entitled, subject to certain conditions, to borrow up to
$15,000,000;
WHEREAS, the Credit Agreement provides, among other things, that one
condition to its effectiveness is the execution and delivery by the Borrower
and the Subsidiary Guarantors (the "Obligors") of this Subsidiary Guarantee
Agreement; and
WHEREAS, in conjunction with the transactions contemplated by the
Credit Agreement and in consideration of the financial and other support that
the Borrower has provided, and such financial and other support as the Borrower
may in the future provide, to the Subsidiary Guarantors, and in order to induce
the Banks and the Agent to enter into the Credit Agreement and to make Loans
thereunder, the Subsidiary Guarantors are willing to guarantee the obligations
of the Borrower under the Credit Agreement and the Notes;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Terms defined in the Credit Agreement and
not otherwise defined herein are used herein as therein defined. In addition
the following term, as used herein, has the following meaning:
"Guaranteed Obligations" means (i) all obligations of the Borrower in
respect of principal of and interest on the Loans and the Notes, (ii) all other
amounts payable by the Borrower under the Credit Agreement or the Notes and
(iii) all renewals or extensions of the foregoing, in each case whether now
outstanding or hereafter arising. The Guaranteed Obligations shall include,
without limitation, any interest, costs, fees and expenses which accrue on or
with respect to any of the foregoing, whether before or after the commencement
of any case, proceeding or other action relating to the bankruptcy, insolvency
or reorganization of any one or more than one of the Borrower and the
Subsidiary Guarantors, and any such interest, costs, fees and expenses that
would have accrued thereon or with respect thereto but for the commencement of
such case, proceeding or other action.
ARTICLE II
Guarantees
SECTION 2.01. The Guarantees. Subject to Section 2.03, the
Subsidiary Guarantors hereby jointly, severally, unconditionally and
irrevocably guarantee to the Banks and the Agent and to each of them, the due
and punctual payment of all Guaranteed Obligations as and when the same shall
become due and payable, whether at maturity, by declaration or otherwise,
according to the terms thereof. In case of failure by the Borrower punctually
to pay the indebtedness guaranteed hereby, the Subsidiary Guarantors, subject
to Section 2.03, hereby jointly, severally and unconditionally agree to cause
such payment to be made punctually as and when the same shall become due and
payable, whether at maturity or by declaration or otherwise, and as if such
payment were made by the Borrower.
SECTION 2.02. Guarantees Unconditional. The obligations of each
Subsidiary Guarantor under this Article II shall be unconditional and absolute
and, without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of any other Obligor under any Financing Document,
by operation of law or otherwise;
(b) any modification or amendment of or supplement to any other
Financing Document;
(c) any modification, amendment, waiver, release, non-perfection or
invalidity of any direct or indirect security, or of any guarantee or other
liability of any third party, for any obligation of any other Obligor under any
Financing Document;
(d) any change in the corporate existence, structure or ownership of
any other Obligor, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting any other Obligor or its assets or any resulting
release or discharge of any obligation of any other Obligor contained in any
Financing Document;
(e) the existence of any claim, set-off or other rights which any
Subsidiary Guarantor may have at any time against any other Obligor, the Agent,
any Bank or any other Person, whether or not arising in connection with the
Financing Documents; provided that nothing herein shall prevent the assertion
of any such claim by separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against any
other Obligor for any reason of any Financing Document, or any provision of
applicable law or regulation purporting to prohibit the payment by any other
Obligor of the principal of or interest on any Note or any other amount payable
by any other Obligor under any Financing Document; or
(g) any other act or omission to act or delay of any kind by any
other Obligor, the Agent, any Bank or any other Person or any other
circumstance whatsoever that might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of the obligations of any Subsidiary
Guarantor under this Article II.
SECTION 2.03. Limit of Liability. Each Subsidiary Guarantor shall be
liable under this Agreement only for amounts aggregating up to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the United States Bankruptcy Code or any comparable
provisions of any applicable state law.
SECTION 2.04. Discharge; Reinstatement in Certain Circumstances.
Each Subsidiary Guarantor's obligations under this Article II shall remain in
full force and effect until the Commitments are terminated and the principal of
and interest on the Notes and all other amounts payable by the Borrower under
the Financing Documents shall have been paid in full. If at any time any
payment of the principal of or interest on any Note or any other amount payable
by the Borrower under any Financing Document is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of any
other Obligor or otherwise, each Subsidiary Guarantor's obligations under this
Article II with respect to such payment shall be reinstated at such time as
though such payment had become due but had not been made at such time.
SECTION 2.05. Waiver. Each Subsidiary Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against any other Obligor or any other Person.
SECTION 2.06. Subrogation and Contribution. Each Subsidiary
Guarantor irrevocably waives any and all rights to which it may be entitled, by
operation of law or otherwise, upon making any payment hereunder (i) to be
subrogated to the rights of the payee against the Borrower with respect to such
payment or otherwise to be reimbursed, indemnified or exonerated by any other
Obligor in respect thereof or (ii) to receive any payment, in the nature of
contribution or for any other reason, from any other Obligor with respect to
such payment.
SECTION 2.07. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Borrower under the Financing Documents is
stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all
such amounts otherwise subject to acceleration under the terms of the Financing
Documents shall nonetheless be payable by each Subsidiary Guarantor hereunder
forthwith on demand by the Agent made at the request of the Required Banks.
ARTICLE III
COVENANT OF THE BORROWER
SECTION 3.01. Additional Subsidiary Guarantors. The Borrower agrees,
within 10 days of each request therefor by the Required Banks, to cause any
Subsidiary which is not at the time a Subsidiary Guarantor hereunder to become
a Subsidiary Guarantor hereunder.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Notices. Unless otherwise specified herein, all
notices, requests and other communications to any party hereunder shall be in
writing (including bank wire, telex, facsimile transmission or similar writing)
and shall be given to such party at its address or telex or facsimile number
set forth on the signature pages hereof (or, in the case of any Subsidiary
Guarantor as to which no such address or telex or facsimile number is so set
forth, to it at the address or telex or facsimile number of the Borrower set
forth on the signature pages hereof) or such other address or telex or
facsimile number as such party may hereafter specify for the purpose by notice
to the Agent. Each such notice, request or other communication shall be
effective (i) if given by telex, when such telex is transmitted to the telex
number specified in or pursuant to this Section 4.01 and the appropriate
answerback is received, (ii) if given by facsimile transmission, when such
facsimile is transmitted to the facsimile transmission number specified in or
pursuant to this Section 4.01 and telephonic confirmation of receipt thereof is
received, (iii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid, addressed as aforesaid
or (iv) if given by any other means, when delivered at the address specified in
this Section 4.01.
SECTION 4.02. No Waiver. No failure or delay by the Agent or any
Bank in exercising any right, power or privilege under this Agreement or any
other Financing Document shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies
herein and therein provided shall be cumulative and not exclusive of any rights
or remedies provided by law.
SECTION 4.03. Amendments and Waivers. Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver is
in writing and is signed by the Borrower, each Subsidiary Guarantor and the
Agent with the prior written consent of the Required Banks under the Credit
Agreement.
SECTION 4.04. Governing Law; Submission to Jurisdiction; Waiver of a
Jury Trial. This Agreement shall be construed in accordance with and governed
by the law of the State of New York. Each of the Subsidiary Guarantors hereby
agrees to be bound by each provision of the Credit Agreement which purports to
bind all Obligors, including Sections 9.08 and 9.10, to the same extent as if
it were a signatory party thereto.
SECTION 4.05. Successors and Assigns. This Agreement is for the
benefit of the Banks and the Agent and their respective successors and assigns
and in the event of an assignment of the Loans, the Notes or other amounts
payable under the Financing Documents, the rights hereunder, to the extent
applicable to the indebtedness so assigned, shall be transferred with such
indebtedness. All the provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
SECTION 4.06. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, and
all of which taken together shall constitute a single instrument, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when the Agent shall have received a
counterpart hereof signed by the Borrower and one or more of the Subsidiary
Guarantors and when the Credit Agreement shall become effective in accordance
with its terms. Thereafter, upon execution and delivery of a counterpart of
this Agreement on behalf of any other Subsidiary Guarantor, this Agreement
shall become effective with respect to such Subsidiary Guarantor as of the date
of such delivery.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the date first
above written.
PERINI CORPORATION
By /s/ James M. Markert
-----------------------------
Title: Senior Vice President
By /s/ Susan C. Mellace
-----------------------------
Title: Treasurer
73 Mount Wayte Avenue
Framingham, MA 01701
Telex Number: (508) 628-2960
SUBSIDIARY GUARANTORS
PERINI BUILDING COMPANY, INC.
By /s/ Robert Band
-----------------------------
Title: Vice President
73 Mount Wayte Avenue
Framingham, MA 01701
Facsimile number: (508) 628-2960
PERINI INTERNATIONAL CORPORATION
By /s/ Donald Paula
-----------------------------
Title: Vice President, Controller
73 Mount Wayte Avenue
Framingham, MA 01701
Facsimile number: (508) 628-2960
PERINI LAND AND DEVELOPMENT COMPANY
By /s/ John H. Schwarz
-------------------------------
Title: Chief Executive Officer
73 Mount Wayte Avenue
Framingham, MA 01701
Facsimile number: (508) 628-2960
R. E. DAILEY & CO.
By /s/ Lawrence C. Dailey
-------------------------------
Title: Chairman
2000 Town Center, Suite 1600
Southfield, MI 40875
Facsimile number: (313) 352-6280
PARAMOUNT DEVELOPMENT
ASSOCIATES, INC.
By /s/ Bart W. Perini
-------------------------------
Title: President and Chief
Executive Officer
73 Mount Wayte Avenue
Framingham, MA 01701
Facsimile number: (508) 628-2960
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Caroline R. Shapiro
--------------------------------
Title: Vice President
<PAGE>
[CONFORMED COPY]
EXHIBIT G
SUBSIDIARY SECURITY AGREEMENT
AGREEMENT dated as of March 9, 1994 among PERINI LAND AND DEVELOPMENT
COMPANY ("PL&D"), PARAMOUNT DEVELOPMENT ASSOCIATES, INC. (collectively with any
other Subsidiary Guarantor becoming a party hereto, the "Subsidiary
Guarantors") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent.
W I T N E S S E T H :
WHEREAS, Perini Corporation (the "Borrower"), certain banks and Morgan
Guaranty Trust Company of New York, as agent for such banks, are parties to a
Credit Agreement of even date herewith (as the same may be amended from time to
time, the "Credit Agreement");
WHEREAS, the Subsidiary Guarantors, certain other Subsidiaries of the
Borrower, the Borrower and the Agent are parties to a Subsidiary Guarantee
Agreement of even date herewith (as may be amended from time to time, the
"Subsidiary Guarantee Agreement"); and
WHEREAS, each of the Subsidiary Guarantors is a direct or indirect
subsidiary of the Borrower; and
WHEREAS, in order to induce said banks and the Agent to enter into the
Credit Agreement and accept the Subsidiary Guarantee Agreement, each Subsidiary
Guarantor has agreed to grant a continuing security interest in and to the
Collateral (as hereafter defined) to secure its obligations under the
Subsidiary Guarantee Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions
Terms defined in the Credit Agreement and not otherwise defined herein
have, as used herein, the respective meanings provided for therein. The
following additional terms, as used herein, have the following respective
meanings:
"Collateral" has the meaning set forth in Section 3(a).
"Liquid Investments" has the meaning set forth in Section 5(d).
"Perfection Certificate" means, with respect to any Subsidiary
Guarantor, a certificate substantially in the form of Exhibits A-1 and A-2,
completed and supplemented with the schedules and attachments contemplated
thereby to the satisfaction of the Agent, and duly executed by the chief
executive officer and the chief legal officer of such Subsidiary Guarantor.
"Permitted Liens" means the Security Interests and the Liens on the
Collateral permitted to be created, assumed or exist pursuant to Section 5.13
of the Credit Agreement.
"Proceeds" means all proceeds of, and all other profits, products,
rents or receipts, in whatever form, arising from the collection, sale, lease,
exchange, assignment, licensing or other disposition of, or other realization
upon, the Collateral, including without limitation all claims of each
Subsidiary Guarantor against third parties for loss of, damage to or
destruction of, or for proceeds payable under, or unearned premiums with
respect to, policies of insurance in respect of, any Collateral, and any
condemnation or requisition payments with respect to any Collateral, in each
case whether now existing or hereafter arising.
"Secured Obligations" means the obligations secured under the
Financing Documents including, without limitation, (a) all principal of and
interest (including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of any Obligor, whether or not allowed
or allowable as a claim in any such proceeding) on any loan under, or any note
issued pursuant to, the Credit Agreement, (b) all other amounts payable by any
Obligor under any Financing Document and (c) any renewals or extensions of any
of the foregoing.
"Security Interests" means the security interests in the Collateral
granted hereunder securing the Secured Obligations.
"Subsidiary Collateral Account" has the meaning set forth in Section 5.
"UCC" means the Uniform Commercial Code as in effect on the date
hereof in the State of New York; provided that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection
of the Security Interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than New York, "UCC" means
the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection.
SECTION 2. Representations and Warranties
Each Subsidiary Guarantor represents and warrants as follows:
(a) Such Subsidiary Guarantor has good and marketable title to the
Collateral set forth opposite its name on Schedule 1 hereto, free and clear of
any Liens other than the Permitted Liens.
(b) None of the Subsidiary Guarantors has performed any acts which
might prevent the Agent from enforcing any of the terms of this Agreement or
which would limit the Agent in any such enforcement. Other than financing
statements or other similar or equivalent documents or instruments with respect
to the Security Interests and Permitted Liens, no financing statement,
mortgage, security agreement or similar or equivalent document or instrument
covering all or any part of the Collateral is on file or of record in any
jurisdiction in which such filing or recording would be effective to perfect a
Lien on such Collateral. No Collateral is in the possession of any Person
(other than the Subsidiary Guarantors) asserting any claim thereto or security
interest therein, except that the Agent or its designee may have possession of
Collateral as contemplated hereby.
(c) Not less than five Domestic Business Days prior to the date of
the first Borrowing under the Credit Agreement, each Subsidiary Guarantor shall
deliver a Perfection Certificate to the Agent. The information set forth
therein shall be correct and complete. Not later than 60 days following the
date of the first Borrowing, each Subsidiary Guarantor shall furnish to the
Agent file search reports from each UCC filing office set forth in Schedule 6
to the Perfection Certificates confirming the filing information set forth in
such Schedules.
(d) The Security Interests constitute valid security interests under
the UCC securing the Secured Obligations. When UCC financing statements in the
form specified in Exhibits A-1 and A-2 shall have been filed in the offices
specified in the Perfection Certificates, the Security Interests shall
constitute perfected security interests in the Collateral to the extent that a
security interest therein may be perfected by filing pursuant to the UCC, prior
to all other Liens and rights of others therein except for the Permitted Liens.
SECTION 3. The Security Interests
(a) In order to secure the full and punctual payment of the Secured
Obligations in accordance with the terms thereof, and to secure the performance
of all of the obligations of the Borrower under the Credit Agreement, the
obligations of the Subsidiary Guarantors hereunder and under the Subsidiary
Guarantee Agreement, each Subsidiary Guarantor hereby grants to the Agent for
the ratable benefit of the Banks a continuing security interest in and to all
of the property of such Subsidiary Guarantor, whether now owned or existing or
hereafter acquired or arising and regardless of where located listed on
Schedule 1 hereto opposite its name (all being collectively referred to as the
"Collateral").
(b) The Security Interests are granted as security only and shall not
subject the Agent or any Bank to, or transfer or in any way affect or modify,
any obligation or liability of each Subsidiary Guarantor with respect to any of
the Collateral or any transaction in connection therewith.
SECTION 4. Further Assurances; Covenants
(a) No Subsidiary Guarantor will change its name, identity or
corporate structure in any manner unless it shall have given the Agent prior
notice thereof and delivered an opinion of counsel with respect thereto in
accordance with Section 4(l). No Subsidiary Guarantor will change the location
of (i) its chief executive office or chief place of business or (ii) the
locations where it keeps or holds any Collateral or any records relating
thereto from the applicable location described in the Perfection Certificate
unless it shall have given the Agent prior notice thereof and delivered an
opinion of counsel with respect thereto in accordance with Section 4(l). No
Subsidiary Guarantor shall in any event change the location of any Collateral
if such change would cause the Security Interests in such Collateral to lapse
or cease to be perfected.
(b) Each Subsidiary Guarantor will, from time to time, at its
expense, execute, deliver, file and record any statement, assignment,
instrument, document, agreement or other paper and take any other action,
(including, without limitation, any filings of financing or continuation
statements under the UCC) that from time to time may be necessary or desirable,
or that the Agent may request, in order to create, preserve, perfect, confirm
or validate the Security Interests or to enable the Agent and the Banks to
obtain the full benefits of this Agreement, or to enable the Agent to exercise
and enforce any of its rights, powers and remedies hereunder with respect to
any of the Collateral. To the extent permitted by applicable law, each
Subsidiary Guarantor hereby authorizes the Agent to execute and file financing
statements or continuation statements without such Subsidiary Guarantor's
signature appearing thereon. Each Subsidiary Guarantor agrees that a carbon,
photographic, photostatic or other reproduction of this Agreement or of a
financing statement is sufficient as a financing statement. Each Subsidiary
Guarantor shall pay the costs of, or incidental to, any recording or filing of
any financing or continuation statements concerning the Collateral.
(c) If any Collateral is at any time in the possession or control of
any warehouseman, bailee or any of a Subsidiary Guarantor's agents or
processors, such Subsidiary Guarantor shall notify such warehouseman, bailee,
agent or processor of the Security Interests created hereby and to hold all
such Collateral for the Agent's account subject to the Agent's instructions.
(d) Each Subsidiary Guarantor shall keep full and accurate books and
records relating to the Collateral, and stamp or otherwise mark such books and
records in such manner as the Required Banks may reasonably require in order to
reflect the Security Interests.
(e) Without the prior written consent of the Required Banks, no
Subsidiary Guarantor will sell, lease, exchange, assign or otherwise dispose
of, or grant any option with respect to, any Collateral.
(f) Each Subsidiary Guarantor will, promptly upon request, provide to
the Agent all information and evidence it may reasonably request concerning the
Collateral to enable the Agent to enforce the provisions of this Agreement.
(g) Not more than six months nor less than 30 days prior to (i) each
anniversary of the date hereof during the term of the Credit Agreement and (ii)
each date on which any of the Subsidiary Guarantors proposes to take any action
contemplated by Section 4(a), such Subsidiary Guarantor shall, at its cost and
expense, cause to be delivered to the Banks an opinion of counsel, satisfactory
to the Agent, substantially in the form of Exhibit B-1 to the Credit Agreement
to the effect that all financing statements and amendments or supplements
thereto, continuation statements and other documents required to be recorded or
filed in order to perfect and protect the Security Interests for a period,
specified in such opinion, continuing until a date not earlier than eighteen
months from the date of such opinion, against all creditors of and purchasers
from such Subsidiary Guarantor have been filed in each filing office necessary
for such purpose and that all filing fees and taxes, if any, payable in
connection with such filings have been paid in full.
(h) From time to time upon request by the Agent, each Subsidiary
Guarantor shall, at its cost and expense, cause to be delivered to the Banks an
opinion of counsel satisfactory to the Agent as to such matters relating to the
transactions contemplated hereby as the Required Banks may reasonably request.
SECTION 5. Collateral Account
(a) There is hereby established with the Agent a cash collateral
account (the "Subsidiary Collateral Account") in the name and under the control
of the Agent into which there shall be deposited from time to time the cash
proceeds of the Collateral required to be delivered to the Agent pursuant to
any provision of this Agreement. Any income received by the Agent with respect
to the balance from time to time standing to the credit of the Subsidiary
Collateral Account, including any interest or capital gains on Liquid
Investments, shall remain, or be deposited, in the Subsidiary Collateral
Account. All right, title and interest in and to the cash amounts on deposit
from time to time in the Subsidiary Collateral Account together with any Liquid
Investments from time to time made pursuant to subsection (c) of this Section
shall vest in the Agent, shall constitute part of the Collateral hereunder and
shall not constitute payment of the Secured Obligations until applied thereto
as hereinafter provided.
(b) Each Subsidiary Guarantor agrees that if the proceeds of any
Collateral hereunder shall be received by it, such Subsidiary Guarantor shall
as promptly as possible deposit such proceeds into the Subsidiary Collateral
Account. Until so deposited, all such proceeds shall be held in trust by such
Subsidiary Guarantor for and as the property of the Agent and the Banks and
shall not be commingled with any other funds or property of such Subsidiary
Guarantor.
(c) The balance from time to time standing to the credit of the
Subsidiary Collateral Account shall, except upon the occurrence and
continuation of an Event of Default, be distributed to the Agent to the extent
necessary to pay the principal of and interest on any Loans then due and unpaid
and the remainder, if any, to the relevant Subsidiary Guarantor upon the order
of such Subsidiary Guarantor. If immediately available cash on deposit in the
Subsidiary Collateral Account is not sufficient to make any distribution
referred to in the previous sentence of this Section 5(c), the Agent shall
liquidate as promptly as practicable Liquid Investments as required to obtain
sufficient cash to make such distribution and, notwithstanding any other
provision of this Section 5, such distribution shall not be made until such
liquidation has taken place. Upon the occurrence and continuation of an Event
of Default, the Agent shall, if so instructed by the Required Banks, apply or
cause to be applied (subject to collection) any or all of the balance from time
to time standing to the credit of the Subsidiary Collateral Account in the
manner specified in Section 9. Notwithstanding any of the foregoing, the
Collateral Agent shall disburse any Casualty Proceeds to PL&D from time to time
upon receipt of a certificate of a financial officer of PL&D prepared in good
faith and stating that either (x) the Casualty Proceeds to be so disbursed do
not exceed, on a cumulative basis, the amounts theretofore expended by PL&D to
restore or replace such Mortgaged Facility or (y) the restoration or
replacement of such Mortgaged Facility has been completed, provided that no
such certificate shall be required in respect of, and the Agent shall promptly
disburse to PL&D upon its receipt of, Casualty Proceeds aggregating $100,000 or
less with respect to any Casualty or Condemnation.
(d) Amounts on deposit in the Subsidiary Collateral Account shall be
invested and re-invested from time to time in such Liquid Investments as the
relevant Subsidiary Guarantor shall determine, which Liquid Investments shall
be held in the name and be under the control of the Agent, provided that, if an
Event of Default has occurred and is continuing, the Agent shall, if instructed
by the Required Banks, liquidate any such Liquid Securities and apply or cause
to be applied the proceeds thereof to the payment of the Secured Obligations in
the manner specified in Section 9. For this purpose, "Liquid Investments"
means Temporary Cash Investments; provided that (i) each Liquid Investment
shall mature within 30 days after it is acquired by the Agent and (ii) in order
to provide the Agent, for the benefit of the Banks, with a perfected security
interest therein, each Liquid Investment shall be either:
(i) evidenced by negotiable certificates or instruments, or if
non-negotiable then issued in the name of the Agent, which (together with any
appropriate instruments of transfer) are delivered to, and held by, the Agent
or an agent thereof (which shall not be the Borrower or any of its Affiliates)
in the State of New York; or
(ii) in book-entry form and issued by the United States and subject to
pledge under applicable state law and Treasury regulations and as to which (in
the opinion of counsel to the Agent) appropriate measures shall have been taken
for perfection of the Security Interests.
SECTION 6. General Authority
Each Subsidiary Guarantor hereby irrevocably appoints the Agent its
true and lawful attorney, with full power of substitution, in the name of such
Subsidiary Guarantor, the Agent, the Banks or otherwise, for the sole use and
benefit of the Agent and the Banks, but at such Subsidiary Guarantor's expense,
to the extent permitted by law to exercise, at any time and from time to time
while an Event of Default has occurred and is continuing, all or any of the
following powers with respect to all or any of the Collateral:
(i) to demand, sue for, collect, receive and give acquittance for any
and all monies due or to become due thereon or by virtue thereof,
(ii) to settle, compromise, compound, prosecute or defend any action
or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or with the same
or the proceeds or avails thereof, as fully and effectually as if the Agent
were the absolute owner thereof, and
(iv) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto;
provided that the Agent shall give such Subsidiary Guarantor not less than ten
days' prior written notice of the time and place of any sale or other intended
disposition of any of the Collateral, except any Collateral which is perishable
or threatens to decline speedily in value or is of a type customarily sold on a
recognized market. Each Subsidiary Guarantor agrees that such notice
constitutes "reasonable notification" within the meaning of Section 9-504(3) of
the UCC.
SECTION 7. Remedies upon Event of Default
(a) If any Event of Default has occurred and is continuing, the Agent
may exercise on behalf of the Banks all rights of a secured party under the UCC
(whether or not in effect in the jurisdiction where such rights are exercised)
and, in addition, the Agent may, without being required to give any notice,
except as herein provided or as may be required by mandatory provisions of law,
(i) withdraw all cash and Liquid Investments in the Subsidiary Collateral
Account and apply such cash and Liquid Investments and other cash, if any, then
held by it as Collateral as specified in Section 9 and (ii) if there shall be
no such cash or Liquid Investments or if such cash and Liquid Investments shall
be insufficient to pay all the Secured Obligations in full, sell the Collateral
or any part thereof at public or private sale, for cash, upon credit or for
future delivery, and at such price or prices as the Agent may deem
satisfactory. The Agent or any Bank may be the purchaser of any or all of the
Collateral so sold at any public sale (or, if the Collateral is of a type
customarily sold in a recognized market or is of a type which is the subject of
widely distributed standard price quotations, at any private sale). The
relevant Subsidiary Guarantor will execute and deliver such documents and take
such other action as the Agent deems necessary or advisable in order that any
such sale may be made in compliance with law. Upon any such sale the Agent
shall have the right to deliver, assign and transfer to the purchaser thereof
the Collateral so sold. Each purchaser at any such sale shall hold the
Collateral so sold to it absolutely and free from any claim or right of
whatsoever kind, including any equity or right of redemption of the relevant
Subsidiary Guarantor which may be waived, and the relevant Subsidiary
Guarantor, to the extent permitted by law, hereby specifically waives all
rights of redemption, stay or appraisal which it has or may have under any law
now existing or hereafter adopted. The notice (if any) of such sale required
by Section 6 shall (1) in case of a public sale, state the time and place fixed
for such sale, and (2) in the case of a private sale, state the day after which
such sale may be consummated. Any such public sale shall be held at such time
or times within ordinary business hours and at such place or places as the
Agent may fix in the notice of such sale. At any such sale the Collateral may
be sold in one lot as an entirety or in separate parcels, as the Agent may
determine. The Agent shall not be obligated to make any such sale pursuant to
any such notice. The Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and such sale may be
made at any time or place to which the same may be so adjourned. In case of
any sale of all or any part of the Collateral on credit or for future delivery,
the Collateral so sold may be retained by the Agent until the selling price is
paid by the purchaser thereof, but the Agent shall not incur any liability in
case of the failure of such purchaser to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may again be sold upon
like notice. The Agent, instead of exercising the power of sale herein
conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the Security Interests and sell the Collateral, or any portion
thereof, under a judgment or decree of a court or courts of competent
jurisdiction.
(b) For the purpose of enforcing any and all rights and remedies
under this Agreement the Agent may (i) require each Subsidiary Guarantor to,
and each Subsidiary Guarantor agrees that it will, at its expense and upon the
request of the Agent, forthwith assemble all or any part of the Collateral as
directed by the Agent and make it available at a place designated by the Agent
which is, in its opinion, reasonably convenient to the Agent and such
Subsidiary Guarantor, whether at the premises of such Subsidiary Guarantor or
otherwise, (ii) to the extent permitted by applicable law, enter, with or
without process of law and without breach of the peace, any premise where any
of the Collateral is or may be located, and without charge or liability to it
seize and remove such Collateral from such premises, (iii) have access to and
use such Subsidiary Guarantor's books and records relating to the Collateral
and (iv) prior to the disposition of the Collateral, store or transfer it
without charge in or by means of any storage or transportation facility owned
or leased by such Subsidiary Guarantor, process, repair or recondition it or
otherwise prepare it for disposition in any manner and to the extent the Agent
deems appropriate and, in connection with such preparation and disposition, use
without charge any trademark, trade name, copyright, patent or technical
process used by such Subsidiary Guarantor. The Agent may also render any or
all of the Collateral unusable at such Subsidiary Guarantor's premises and may
dispose of such Collateral on such premises without liability for rent or costs.
SECTION 8. Limitation on Duty of Agent
in Respect of Collateral.
Beyond the exercise of reasonable care in the custody thereof, the
Agent shall have no duty as to any Collateral in its possession or control or
in the possession or control of any agent or bailee or any income thereon or as
to the preservation of rights against prior parties or any other rights
pertaining thereto. The Agent shall be deemed to have exercised reasonable
care in the custody of the Collateral in its possession if the Collateral is
accorded treatment substantially equal to that which it accords its own
property, and shall not be liable or responsible for any loss or damage to any
of the Collateral, or for any diminution in the value thereof, by reason of the
act or omission of any warehouseman, carrier, forwarding agency, consignee or
other agent or bailee selected by the Agent in good faith.
SECTION 9. Application of Proceeds
Upon the occurrence and during the continuance of an Event of Default,
the proceeds of any sale of, or other realization upon, all or any part of the
Collateral and any cash held in the Subsidiary Collateral Account shall be
applied by the Agent in the following order of priorities:
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Agent, and all
expenses, liabilities and advances incurred or made by the Agent in connection
therewith, and any other unreimbursed expenses for which the Agent or any Bank
is to be reimbursed pursuant to the Subsidiary Guarantee Agreement or Section
9.03 of the Credit Agreement or Section 12 hereof or under any other Collateral
Document and unpaid fees owing to the Agent under the Credit Agreement;
second, to the ratable payment of unpaid principal of the Secured
Obligations;
third, to the ratable payment of accrued but unpaid interest on the
Secured Obligations in accordance with the provisions of the Credit Agreement;
fourth, to the ratable payment of all other Secured Obligations, until
all Secured Obligations shall have been paid in full; and
finally, to payment to each Subsidiary Guarantor, as appropriate, or
its successors or assigns, or as a court of competent jurisdiction may direct,
of any surplus then remaining from such proceeds.
The Agent may make distributions hereunder in cash or in kind or, on a ratable
basis, in any combination thereof.
SECTION 10. Concerning the Agent
The provisions of Article VII of the Credit Agreement shall inure to
the benefit of the Agent in respect of this Agreement and shall be binding upon
the parties to the Credit Agreement in such respect. In furtherance and not in
derogation of the rights, privileges and immunities of the Agent therein set
forth:
(A) The Agent is authorized to take all such action as is provided to
be taken by it as Agent hereunder and all other action reasonably incidental
thereto. As to any matters not expressly provided for herein (including,
without limitation, the timing and methods of realization upon the Collateral)
the Agent shall act or refrain from acting in accordance with written
instructions from the Required Banks or, in the absence of such instructions,
in accordance with its discretion.
(B) The Agent shall not be responsible for the existence, genuineness
or value of any of the Collateral or for the validity, perfection, priority or
enforceability of the Security Interests in any of the Collateral, whether
impaired by operation of law or by reason of any action or omission to act on
its part hereunder. The Agent shall have no duty to ascertain or inquire as to
the performance or observance of any of the terms of this Agreement by any
Subsidiary Guarantor.
SECTION 11. Appointment of Co-Agents
At any time or times, in order to comply with any legal requirement in
any jurisdiction, the Agent may appoint another bank or trust company or one or
more other persons, either to act as co-agent or co-agents, jointly with the
Agent, or to act as separate agent or agents on behalf of the Banks with such
power and authority as may be necessary for the effectual operation of the
provisions hereof and may be specified in the instrument of appointment (which
may, in the discretion of the Agent, include provisions for the protection of
such co-agent or separate agent similar to the provisions of Section 10).
SECTION 12. Expenses
In the event that any Subsidiary Guarantor fails to comply with the
provisions of the Subsidiary Guarantee Agreement or this Agreement, such that
the value of any Collateral or the validity, perfection, rank or value of any
Security Interest is thereby diminished or potentially diminished or put at
risk, the Agent if requested by the Required Banks may, but shall not be
required to, effect such compliance on behalf of such Subsidiary Guarantor, and
the Subsidiary Guarantor shall reimburse the Agent for the costs thereof on
demand. All insurance expenses and all expenses of protecting, storing,
warehousing, appraising, insuring, handling, maintaining, and shipping the
Collateral, any and all excise, property, sales, and use taxes imposed by any
state, federal, or local authority on any of the Collateral, or in respect of
periodic appraisals and inspections of the Collateral to the extent the same
may be requested by the Required Banks from time to time, or in respect of the
sale or other disposition thereof shall be borne and paid by the Subsidiary
Guarantor; and if such Subsidiary Guarantor fails to promptly pay any portion
thereof when due, the Agent or any Bank may, at its option, but shall not be
required to, pay the same and charge such Subsidiary Guarantor's account
therefor, and each Subsidiary Guarantor agrees to reimburse the Agent or such
Bank therefor on demand. All sums so paid or incurred by the Agent or any Bank
for any of the foregoing and any and all other sums for which a Subsidiary
Guarantor may become liable hereunder and all costs and expenses (including
attorneys' fees, legal expenses and court costs) reasonably incurred by the
Agent or any Bank in enforcing or protecting the Security Interests or any of
their rights or remedies under this Agreement, shall, together with interest
thereon until paid at the rate applicable to Prime Borrowings, be additional
Secured Obligations hereunder.
SECTION 13. Termination of Security
Interests; Release of Collateral
Upon the repayment in full of all Secured Obligations and the
termination of the Commitments under the Credit Agreement, the Security
Interests shall terminate and all rights to the Collateral shall revert to each
Subsidiary Guarantor, as appropriate. At any time and from time to time prior
to such termination of the Security Interests, the Agent may release any of the
Collateral with the prior written consent of the Required Banks. Upon any such
termination of the Security Interests or release of Collateral, the Agent will,
at the expense of the corresponding Subsidiary Guarantor, execute and deliver
to such Subsidiary Guarantor such documents as such Subsidiary Guarantor shall
reasonably request to evidence the termination of the Security Interests or the
release of such Collateral, as the case may be.
SECTION 14. Notices
All notices, communications and distributions hereunder shall be given
in accordance with Section 4.01 of the Subsidiary Guarantee Agreement.
SECTION 15. Waivers, Non-Exclusive Remedies
No failure on the part of the Agent to exercise, and no delay in
exercising and no course of dealing with respect to, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise by the Agent of any right under the Credit Agreement, the Subsidiary
Guarantee Agreement or this Agreement preclude any other or further exercise
thereof or the exercise of any other right. The rights in this Agreement, the
Credit Agreement and the Subsidiary Guarantee Agreement are cumulative and are
not exclusive of any other remedies provided by law.
SECTION 16. Successors and Assigns
This Agreement is for the benefit of the Agent and the Banks and their
successors and assigns, and in the event of an assignment of all or any of the
Secured Obligations, the rights hereunder, to the extent applicable to the
indebtedness so assigned, may be transferred with such indebtedness. This
Agreement shall be binding on each Subsidiary Guarantor and its successors and
assigns.
SECTION 17. Changes in Writing
Neither this Agreement nor any provision hereof may be changed,
waived, discharged or terminated orally, but only in writing signed by each
Subsidiary Guarantor and the Agent with the consent of the Required Banks.
SECTION 18. New York Law
This Agreement shall be construed in accordance with and governed by
the laws of the State of New York, except as otherwise required by mandatory
provisions of law and except to the extent that remedies provided by the laws
of any jurisdiction other than New York are governed by the laws of such
jurisdiction.
SECTION 19. Severability
If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction
and shall be liberally construed in favor of the Agent and the Banks in order
to carry out the intentions of the parties hereto as nearly as may be possible;
and (ii) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
PARAMOUNT DEVELOPMENTS
ASSOCIATES, INC.
By /s/ Bart W. Perini
-------------------------------
Title: President and Chief
Executive Officer
PERINI LAND AND DEVELOPMENT COMPANY
By /s/ John H. Schwarz
-------------------------------
Title: Chief Executive Officer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Caroline R. Shapiro
-------------------------------
Title: Vice President
<PAGE>
SCHEDULE 1
To Subsidiary
Security Agreement
Paramount Development Associates, Inc. ("Paramount"):
1. All right, title and interest of Paramount in and to the Option Agreement
dated on or about March 21, 1991 between Paramount and New England Development
Company for the sale of 53 acres of real property located in Marlborough,
Massachusetts;
2. All right, title and interest of Paramount in and to I-10 Industrial Park
Developers, a joint venture formed by Paramount and Mardian Development Company
on or about June 14, 1976, including but not limited to all amounts payable to
such joint venture and the proceeds of the sale of Airport Commerce Center;
3. All books and records (including, without limitation, credit files,
computer programs, printouts and other computer materials and records) of
Paramount pertaining to any of its Collateral;
4. The Subsidiary Collateral Account, all cash deposited therein from time to
time, the Liquid Investments made pursuant to Section 5(c) and other monies and
property of any kind of Paramount, to the extent such other monies and property
are Proceeds of the Collateral, in the possession or under the control of the
Agent; and
5. All Proceeds of all or any of the Collateral described above.
Perini Land and Development Company ("PL&D"):
1. All right, title and interest of PL&D in, and to receive, any amounts
payable by the Oaks at Buckhead, a Georgia partnership formed by PL&D and R.S.
Atlanta, Inc. on or about August 31, 1990, up to an aggregate amount of
$1,200,000;
2. All books and records (including, without limitation, credit files,
computer programs, printouts and other computer materials and records) of PL&D
pertaining to any of its Collateral;
3. The Subsidiary Collateral Account, all cash deposited therein from time to
time, the Liquid Investments made pursuant to Section 5(c) and other monies and
property of any kind of PL&D, to the extent such other monies and property are
Proceeds of the Collateral, in the possession or under the control of the
Agent; and
4. All Proceeds of all or any of the Collateral described above.
<PAGE>
EXHIBIT A-1
To Subsidiary
Security Agreement
PERFECTION CERTIFICATE
The undersigned, the chief executive officer and chief legal officer
of Perini Land and Development Company, a Delaware corporation (the "Subsidiary
Guarantor"), hereby certify with reference to the Security Agreement dated as
of March 9, 1994 between the Subsidiary Guarantor and Morgan Guaranty Trust
Company of New York, as Agent (terms defined therein being used herein as
therein defined), to the Agent and each Bank as follows:
1. Names. (a) The exact corporate name of the Subsidiary Guarantor
as it appears in its certificate of incorporation is as follows:
Perini Land and Development Company
(b) Set forth below is each other corporate name the Subsidiary
Guarantor has had since its organization, together with the date of the
relevant change:
(c) Except as set forth below, the Subsidiary Guarantor has not
changed its identity or corporate structure in any way within the past five
years.
[Changes in identity or corporate structure would include mergers,
consolidations and acquisitions, as well as any change in the form, nature or
jurisdiction of corporate organization. If any such change has occurred,
include the information required by paragraphs 1, 2 and 3 of this certificate
as to each acquiree or constituent party to a merger or consolidation.]
(d) The following is a list of all other names (including trade names
or similar appellations) used by the Subsidiary Guarantor or any of its
divisions or other business units at any time during the past five years:
2. Current Locations. (a) The chief executive office of the
Subsidiary Guarantor is located at the following address:
Mailing Address County State
73 Mount Wayte Avenue Middlesex Massachusetts
Framingham
(b) The following are all the places of business of the Subsidiary
Guarantor not identified above:
Mailing
Name Address County State
3. Prior Locations. Set forth below is the information required by
subparagraph (a) of paragraph 2 with respect to each location or place of
business maintained by the Subsidiary Guarantor at any time during the past
five years:
4. File Search Reports. Attached hereto as Schedule 4(A) is a true
copy of a file search report from the Uniform Commercial Code filing officer in
each jurisdiction identified in paragraph 2 or 3 above with respect to each
name set forth in paragraph 1 above. Attached hereto as Schedule 4(B) is a
true copy of each financing statement or other filing identified in such file
search reports.
5. UCC Filings. A duly signed financing statement on Form UCC-1 in
substantially the form of Schedule 5(A) hereto has been duly filed in the
Uniform Commercial Code filing office in each jurisdiction identified in
paragraph 2 hereof. Attached hereto as Schedule 5(B) is a true copy of each
such filing duly acknowledged by the filing officer.
6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule
setting forth filing information with respect to the filings described in
paragraph 5 above.
7. Filing Fees. All filing fees and taxes payable in connection with
the filings described in paragraph 6 above have been paid.
IN WITNESS WHEREOF, we have hereunto set our hands this day of
March, 1994.
____________________________
Title:
____________________________
Title:
<PAGE>
SCHEDULE 6
To Subsidiary
Security Agreement
Perfection
Certificate
SCHEDULE OF FILINGS
Debtor Filing Officer File Number Date of Filing*<F1>
[FN]
_______________
<F1>* Indicate lapse date, if other than fifth anniversary.
<PAGE>
EXHIBIT A-2
To Subsidiary
Security Agreement
PERFECTION CERTIFICATE
The undersigned, the chief executive officer and chief legal officer
of Paramount Development Associates, Inc., a Massachusetts corporation (the
"Subsidiary Guarantor"), hereby certify with reference to the Security
Agreement dated as of March 9, 1994 between the Subsidiary Guarantor and Morgan
Guaranty Trust Company of New York, as Agent (terms defined therein being used
herein as therein defined), to the Agent and each Bank as follows:
1. Names. (a) The exact corporate name of the Subsidiary Guarantor
as it appears in its certificate of incorporation is as follows:
Paramount Development Associates, Inc.
(b) Set forth below is each other corporate name the Subsidiary
Guarantor has had since its organization, together with the date of the
relevant change:
(c) Except as set forth below, the Subsidiary Guarantor has not
changed its identity or corporate structure in any way within the past five
years.
[Changes in identity or corporate structure would include mergers,
consolidations and acquisitions, as well as any change in the form, nature or
jurisdiction of corporate organization. If any such change has occurred,
include the information required by paragraphs 1, 2 and 3 of this certificate
as to each acquiree or constituent party to a merger or consolidation.]
(d) The following is a list of all other names (including trade names
or similar appellations) used by the Subsidiary Guarantor or any of its
divisions or other business units at any time during the past five years:
2. Current Locations. (a) The chief executive office of the
Subsidiary Guarantor is located at the following address:
Mailing Address County State
73 Mount Wayte Avenue Middlesex Massachusetts
Framingham
(b) The following are all the places of business of the Subsidiary
Guarantor not identified above:
Mailing
Name Address County State
3. Prior Locations. Set forth below is the information required by
subparagraph (a) of paragraph 2 with respect to each location or place of
business maintained by the Subsidiary Guarantor at any time during the past
five years:
4. File Search Reports. Attached hereto as Schedule 4(A) is a true
copy of a file search report from the Uniform Commercial Code filing officer in
each jurisdiction identified in paragraph 2 or 3 above with respect to each
name set forth in paragraph 1 above. Attached hereto as Schedule 4(B) is a
true copy of each financing statement or other filing identified in such file
search reports.
5. UCC Filings. A duly signed financing statement on Form UCC-1 in
substantially the form of Schedule 5(A) hereto has been duly filed in the
Uniform Commercial Code filing office in each jurisdiction identified in
paragraph 2 hereof. Attached hereto as Schedule 5(B) is a true copy of each
such filing duly acknowledged by the filing officer.
6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule
setting forth filing information with respect to the filings described in
paragraph 5 above.
7. Filing Fees. All filing fees and taxes payable in connection with
the filings described in paragraph 6 above have been paid.
IN WITNESS WHEREOF, we have hereunto set our hands this day of
March, 1994.
____________________________
Title:
____________________________
Title:
<PAGE>
SCHEDULE 6
To Subsidiary
Security Agreement
Perfection
Certificate
SCHEDULE OF FILINGS
Debtor Filing Officer File Number Date of Filing*<F1>
[FN]
_______________
<F1>* Indicate lapse date, if other than fifth anniversary.
<PAGE>
EXHIBIT I
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), PERINI CORPORATION (the "Borrower")
and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement")
relates to the Credit Agreement dated as of March 9, 1994 among the Borrower,
the Assignor and the other Banks party thereto and the Agent (the "Credit
Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans to the Borrower in an amount equal to $ ;
WHEREAS, Loans made to the Borrower by the Assignor under the Credit
Agreement are outstanding on the date hereof in the amount of $ ; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement in respect of a portion of
its Commitment in an amount equal to $__________, together with a corresponding
portion of its outstanding Loans (the "Assigned Amount") and the Assignee
proposes to accept assignment of such rights and assume the corresponding
obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Credit Agreement to the extent of the Assigned Amount. Upon the execution and
delivery hereof by the Assignor, the Assignee and the Agent, and the payment of
the amounts specified in Section 3 required to be paid on the date hereof (i)
the Assignee shall, as of the date hereof, succeed to the rights and be
obligated to perform the obligations of a Bank under the Credit Agreement with
a Commitment in an amount equal to the Assigned Amount, holding Loans in
amounts corresponding to the Assigned Amount, and (ii) the Commitment and
Loans, of the Assignor shall, as of the date hereof, be reduced by like amounts
and the Assignor released from its obligations under the Credit Agreement to
the extent such obligations have been assumed by the Assignee. The assignment
provided for herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them. It is
understood that commitment and other fees accrued under the Credit Agreement to
the date hereof are for the account of the Assignor and such fees and
commissions accruing from and including the date hereof are for the account of
the Assignee. Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Credit Agreement which is for the account of the
other party hereto, it shall receive the same for the account of such other
party to the extent of such other party's interest therein and shall promptly
pay the same to such other party.
SECTION 4. Consent of the Borrower and the Agent. This Agreement is
conditioned upon the consent of the Borrower and the Agent pursuant to Section
9.06(c) of the Credit Agreement. The execution of this Agreement by the
Borrower and the Agent is evidence of such consent. Pursuant to Section
9.06(c) the Borrower agrees to execute and deliver a Note payable to the order
of the Assignee to evidence the assignment and assumption provided for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower or any Subsidiary Guarantor, or the validity and enforceability of the
obligations of the Borrower or any Subsidiary Guarantor in respect of the
Financing Documents. The Assignee acknowledges that it has, independently and
without reliance on the Assignor, and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to
enter into this Agreement and will continue to be responsible for making its
own independent appraisal of the business, affairs and financial condition of
the Borrower and the Subsidiary Guarantors.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
By__________________________
Title:
PERINI CORPORATION
By__________________________
Title:
By__________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By__________________________
Title:
<PAGE>
CONFORMED COPY
AMENDMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT dated as of May 3, 1994 among PERINI CORPORATION (the
"Borrower"), the BANKS listed on the signature pages hereof (the "Banks") and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into a Credit
Agreement dated as of March 9, 1994 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement to allow the
Borrower to pay dividends on certain convertible preferred stock.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement shall
have the meaning assigned to such term in the Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Agreement shall from and after the date hereof refer to the
Agreement as amended hereby.
SECTION 2. Amendment of Section 1.01 of the Agreement. The
definition of "Restricted Payment" is hereby amended by deleting the figure
"$2,125,000" appearing in clause (i) of the proviso thereto and substituting
therefor the figure "$5,125,000".
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Rights Otherwise Unaffected. This Amendment is limited to
the matters expressly set forth herein. Except to the extent specifically
amended hereby, all terms of the Agreement shall remain in full force and
effect.
SECTION 5. Counterparts; Effectiveness. This Amendment 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 Amendment shall become effective as of the date hereof when
the Agent shall have received duly executed counterparts hereof signed by the
Borrower and the Required Banks (or, in the case of any party as to which an
executed counterpart shall not have been received, the Agent shall have
received telegraphic, telex or other written confirmation from such party of
execution of a counterpart hereof by such party).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first above written.
PERINI CORPORATION
By /s/ James M. Markert
---------------------------
Title: Senior Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Caroline R. Shapiro
---------------------------
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION
By /s/ Richard J. Cerf
---------------------------
Title: Vice President
SHAWMUT BANK, N.A.
By /s/ Robert J. Lord
---------------------------
Title: Director
FLEET BANK OF MASSACHUSETTS, N.A.
By /s/ Jeffrey Bauer
---------------------------
Title: Vice President
BAYBANK BOSTON, N.A.
By /s/ Timothy M. Laurion
---------------------------
Title: Vice President
<TABLE>
EXHIBIT 12
PERINI CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
<CAPTION>
-------------------------------------------------------------------------------------
3 MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
In thousands except ratio 1994 1993 1992 1991 1990 1989
data ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Income from continuing
operations before income 1,299 8,126 (26,354) 4,438 (6,260) 22,552
Add:
(a) Fixed charges as
calculated below ..... 1,993 9,060 10,819 14,843 10,548 7,980
(b) Amortiziation of
previously capitalized
interest ............. 276 2,352 759 750 513 1,110
(c) Distributions in
excess of earnings of
less-than-50%-owned
affiliates, net ...... -- -- 12,479 -- 1,317 --
(d) Minority interest in
earnings of greater-
than-50%-owned
affiliates with fixed
charges .............. -- -- 4,130 1,068 -- 1,434
Deduct:
(a) Interest capitalized
during the period .... -- 215 243 2,789 3,319 2,709
(b) Undistributed earnings
of less-than-50%-owned
affiliates, net ...... 122 5,884 -- 3,144 -- 1,045
(c) Adjustment for
minority share of
losses in greater-
than-50%-owned,
unconsolidated
affiliates ........... 32 166 156 585 80 199
----- ----- ----- ----- ----- -----
Earnings, as adjusted ...... 3,414 13,273 1,434 14,581 2,719 29,123
----- ----- ----- ----- ----- -----
Fixed Charges:
Interest on indebtedness,
expensed or capitalized .... 1,806 8,425 10,188 14,195 9,948 7,359
Interest portion of rents 151 545 628 645 597 618
Amortization of debt
discount and expense ....... 36 90 3 3 3 3
----- ----- ----- ----- ----- -----
Fixed charges .............. 1,993 9,060 10,819 14,843 10,548 7,980
----- ----- ----- ----- ----- -----
Preferred Stock Dividend
Requirements:
Dividends declared ....... 531 2,125 2,125 2,125 2,125 2,125
Divided by 1 minus tax
rate ....................... 60% 60% 61% 61% 66% 63%
----- ----- ----- ----- ----- -----
Preferred dividends, pretax
equivalent ................. 885 3,542 3,484 3,484 3,220 3,373
----- ----- ----- ----- ----- -----
Fixed Charges and Preferred
Stock Dividend
Requirements ............. 2,878 12,602 14,303 18,327 13,768 11,353
----- ----- ----- ----- ----- -----
Ratio of Earnings to
Combined Fixed Charges and
Preferred Stock Dividend
Requirements ............. 1.19x 1.05x .10x .80x .20x 2.57x
Fixed Charges and Preferred
Dividend Requirements in
Excess of Earnings before
Fixed Charges ............ -- -- 12,869 3,746 11,049 --
</TABLE>
<PAGE>
<TABLE>
PERINI CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF ADJUSTED EBIT TO INTEREST AND
PREFERRED STOCK DIVIDEND REQUIREMENTS
<CAPTION>
---------------------------------------------------------------------------------
3 MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
In thousands except ratio data ---- ---- ---- ---- ---- ----
EBIT:
Income before income taxes ... 1,299 8,126 (26,354) 4,438 (6,260) 22,552
Add -- Interest expense ...... 1,247 5,655 7,651 9,022 6,238 3,987
-- Adjustment for
provision to reduce
carrying value of
certain real estate to
net realizable value .. -- -- 31,400 2,800 -- --
---- ----- ----- ----- ---- -----
Adjusted EBIT .................. 2,546 13,781 12,697 16,260 (22) 26,539
---- ----- ----- ----- ---- -----
Interest:
Add -- Interest expense ...... 1,247 5,655 7,651 9,022 6,238 3,987
-- Capitalized interest .. -- 215 243 2,180 3,305 2,709
---- ----- ----- ----- ---- -----
Interest ....................... 1,247 5,870 7,894 11,202 9,543 6,696
---- ----- ----- ----- ---- -----
Preferred Stock Dividend Requirements:
Dividends declared ........... 531 2,125 2,125 2,125 2,125 2,125
Divided by 1 minus tax rate .. 60% 60% 61% 61% 66% 63%
---- ----- ----- ----- ---- -----
Preferred stock, pretax
equivalent ..................... 885 3,542 3,484 3,484 3,220 3,373
---- ----- ----- ----- ---- -----
Ratio of Adjusted EBIT to
Interest and Preferred
Dividend Requirement ......... 1.19x 1.46x 1.12x 1.11x -- 2.64x
</TABLE>
EXHIBIT 23(D)
CONSENT OF ARTHUR ANDERSEN & CO.
As independent public accountants, we hereby consent to the use of our reports
dated February 11, 1994 and August 16, 1993 and to all references to our firm
included in or made a part of this Registration Statement.
ARTHUR ANDERSEN & CO.
May 26, 1994
EXHIBIT 23(E)
CONSENT OF ALEXANDER X. KUHN & CO.
We hereby consent to the use of our report dated August 16, 1993 covering the
audited statements of construction revenues and costs of Newberg/Perini for
the years ended December 31, 1991 and December 31, 1990, and to all references
to our firm included in or made a part of this Registration Statement.
ALEXANDER X. KUHN & CO.
May 26, 1994
EXHIBIT 23(F)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement of Perini Corporation on
Form S-2 of our report dated January 21, 1993 (relating to the financial
statements of Ebasco/Newburg, a Joint Venture, not presented separately
herein), appearing in the Prospectus, which is part of this Registration
Statement.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
DELOITTE & TOUCHE
Nashville, Tennessee
May 26, 1994
