UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1995
TRANSITION REPORT PURSUANT TO SECTION 13 OF 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to _________________
Commission file number 1-6314
Perini Corporation
(Exact name of registrant as specified in its charter)
Massachusetts 04-1717070
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State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
73 Mt. Wayte Avenue, Framingham, Massachusetts 01701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 508-628-2000
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of each exchange on which registered
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Common Stock, $1.00 par value The American Stock Exchange
$2.125 Depositary Convertible The American Stock Exchange
Exchangeable Preferred Shares, each
representing 1/10th Share of $21.25
Convertible Exchangeable Preferred
Stock, $1.00 par value
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
The aggregate market value of voting stock held by nonaffiliates of the
registrant is $29,652,513 as of March 1, 1996.
The number of shares of Common Stock, $1.00 par value per share, outstanding at
March 1, 1996 is 4,723,754.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the annual proxy statement for the year ended December 31, 1995 are
incorporated by reference into Part III.
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PERINI CORPORATION
INDEX TO ANNUAL REPORT
ON FORM 10-K
PAGE
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PART I
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Item 1: Business 2
Item 2: Properties 13
Item 3: Legal Proceedings 13
Item 4: Submission of Matters to a Vote of Security Holders 14
PART II
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Item 5: Market for the Registrant's Common Stock and Related 15
Stockholder Matters
Item 6: Selected Financial Data 15
Item 7: Management's Discussion and Analysis of Financial 16
Condition and Results of Operations
Item 8: Financial Statements and Supplementary Data 19
Item 9: Disagreements on Accounting and Financial Disclosure 19
PART III
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Item 10: Directors and Executive Officers of the Registrant 20
Item 11: Executive Compensation 20
Item 12: Security Ownership of Certain Beneficial Owners and 20
Management
Item 13: Certain Relationships and Related Transactions 20
PART IV
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Item 14: Exhibits, Financial Statement Schedules and Reports on 21
Form 8-K
Signatures 22
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PART I.
ITEM 1. BUSINESS
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General
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Perini Corporation and its subsidiaries (the "Company" unless the
context indicates otherwise) is engaged in two principal businesses:
construction and real estate development. The Company was incorporated in 1918
as a successor to businesses which had been engaged in providing construction
services since 1894.
The Company provides general contracting, construction management and
design-build services to private clients and public agencies throughout the
United States and selected overseas locations. Historically, the Company's
construction business involved four types of operations: civil and environmental
("heavy"), building, international and pipeline. However, the Company sold its
pipeline construction business in January, 1993.
The Company's real estate development operations are conducted by
Perini Land & Development Company, a wholly-owned subsidiary with extensive
development interests concentrated in historically attractive markets in the
United States - Arizona, California, Florida, Georgia and Massachusetts, but has
not commenced the development of any new real estate projects since 1990.
Because the Company's results consist in part of a limited number of
large transactions in both construction and real estate, results in any given
fiscal quarter can vary depending on the timing of transactions and the
profitability of the projects being reported. As a consequence, quarterly
results may reflect such variations.
In 1988, the Company, in conjunction with two other companies, formed a
new entity called 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. The Company's investment in Perland was
increased from 47 1/2% to 100% in recent years as a result of Perland
repurchasing its stock owned by the outside investors. During 1995, Perland's
name was changed to Perini Environmental Services, Inc.
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.
Although Majestic was profitable in both 1992 and 1991, it participated
in a sector of the construction business that was not directly related to the
Company's core construction operations. The sale of Majestic served to generate
liquid assets which improved the Company's financial condition without affecting
its core construction business.
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) $1 million in cash paid by the
Company and (iii) 50% of the aggregate 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 has been accounted for as a purchase.
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Information on lines of business and foreign business is included under
the following captions of this Annual Report on Form 10-K for the year ended
December 31, 1995.
Annual Report
On Form 10-K
Caption Page Number
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Selected Consolidated Financial Information Page 15
Management's Discussion and Analysis Page 16
Footnote 13 to the Consolidated Financial Statements,
entitled Business Segments and Foreign Operations Page 40
While the "Selected Consolidated Financial Information" presents
certain lines of business information for purposes of consistency of
presentation for the five years ended December 31, 1995, additional information
(business segment and foreign operations) required by Statement of Financial
Accounting Standards No. 14 for the three years ended December 31, 1995 is
included in Note 13 to the Consolidated Financial Statements.
A summary of revenues by product line for the three years ended
December 31, 1995 is as follows:
Revenues (in thousands)
Year Ended December 31,
------------------------------------------------
1995 1994 1993
---- ---- ----
Construction:
Building $ 770,427 $ 640,721 $ 762,451
Heavy 286,246 310,163 267,890
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Total Construction Revenues $1,056,673 $ 950,884 $1,030,341
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Real Estate:
Sales of Real Estate $ 10,738 $ 33,188 $ 40,053
Building Rentals 16,799 16,388 19,313
Interest Income 12,396 7,031 6,110
All Other 4,462 4,554 4,299
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Total Real Estate Revenues $ 44,395 $ 61,161 $ 69,775
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Total Revenues $1,101,068 $1,012,045 $1,100,116
========== ========== ==========
Construction
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The general contracting and construction management services provided
by the Company consist of planning and scheduling 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 was engaged in over 160 construction projects in the
United States and overseas during 1995. The Company has three principal
construction operations: heavy, building, and international, having sold its
Canadian pipeline construction business in January 1993. The Company also has a
subsidiary engaged in hazardous waste remediation.
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, marine projects, piers and waste water treatment facilities.
The Company has been active in heavy operations since 1894, and believes that it
has particular expertise in large and complex projects. The Company believes
that infrastructure
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rehabilitation is and will continue to be a significant market in the 1990's.
The building operation provides its services through regional offices
located in several metropolitan areas: Boston and Philadelphia, serving New
England and the Mid-Atlantic area; Detroit and Chicago, operating in Michigan
and the Midwest region; and Phoenix, Las Vegas, Los Angeles and San Francisco,
serving Arizona, Nevada and California. In 1992, the Company combined its
building operations into a new wholly-owned subsidiary, Perini Building Company,
Inc. This new company combines substantial resources and expertise to better
serve clients within the building construction market, and enhances Perini's
name recognition in this market. The Company undertakes a broad range of
building construction projects including health care, correctional facilities,
sports complexes, hotels, casinos, residential, commercial, civic, cultural and
educational facilities.
The international operation engages in both heavy and building
construction services overseas, funded primarily in U.S. dollars by agencies of
the United States government. In selected situations, it pursues private work
internationally.
Construction Strategy
---------------------
The Company plans to continue to increase the amount of heavy
construction work it performs because of the relatively higher margin
opportunities available from such work. The Company believes the best
opportunities for growth in the coming years are in the urban infrastructure
market, particularly in Boston, metropolitan New York, Chicago, Los Angeles and
other major cities where it has a significant presence, and in other large,
complex projects. The Company's acquisition during 1993 of Chicago-based Newberg
referred to above is consistent with this strategy. The Company's strategy in
building construction is to maximize profit margins; 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. Finally, the Company
continues to expand its expertise to assist public owners to develop necessary
facilities through creative public/private ventures.
Backlog
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As of December 31, 1995, the Company's construction backlog was $1.53
billion compared to backlogs of $1.54 billion and $1.24 billion as of December
31, 1994 and 1993, respectively.
Backlog (in thousands) as of December 31,
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1995 1994 1993
----------------- ----------------- -----------------
Northeast $ 749,017 49% $ 803,967 52% $ 552,035 45%
Mid-Atlantic 179,324 12 26,408 2 34,695 3
Southeast 33,223 2 783 - 34,980 3
Midwest 325,055 21 293,168 19 143,961 12
Southwest 94,725 6 174,984 11 314,058 25
West 134,259 9 193,996 13 143,251 11
Other Foreign 18,919 1 45,473 3 15,161 1
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Total $1,534,522 100% $1,538,779 100% $1,238,141 100%
========== ==== ========== ==== ========== ====
The Company includes a construction project in its backlog at such time
as a contract is awarded or a firm letter of commitment is obtained. As a
result, the backlog figures are firm, subject only to the cancellation
provisions contained in the various contracts. The Company estimates that
approximately $657 million of its backlog will not be completed in 1996.
The Company's backlog in the Northeast region of the United States
remains strong because of its ability to meet the needs of the growing
infrastructure construction and rehabilitation market in this region,
particularly in the metropolitan Boston and New York City areas. The increase in
the Midwest region primarily reflects an increase in building work in that area.
Other fluctuations in backlog are viewed by management as transitory.
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Types of Contracts
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The four general types of contracts in current use in the construction
industry are:
o Fixed price contracts ("FP"), which include unit price contracts,
usually transfer more risk to the contractor but offer the opportunity,
under favorable circumstances, for greater profits. With the Company's
increasing move into heavy and publicly bid building construction in
response to current opportunities, the percentage of fixed price
contracts continue to represent the major portion of the backlog.
o Cost-plus-fixed-fee contracts ("CPFF") which provide greater safety for
the contractor from a financial standpoint but limit profits.
o 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.
o 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.
Historically, a high percentage of company contracts have been of the
fixed price type. Construction management contracts remain a relatively small
percentage of company contracts. A summary of revenues and backlog by type of
contract for the most recent three years follows:
Revenues - Year Ended Backlog As Of
December 31, December 31,
- --------------------- --------------------
1995 1994 1993 1995 1994 1993
- ---- ---- ---- ---- ---- ----
67% 54% 56% Fixed Price 74% 68% 65%
33 46 44 CPFF, GMP or CM 26 32 35
- ---- ---- ---- ---- ---- ---
100% 100% 100% 100% 100% 100%
==== ==== ==== ==== ==== ====
Clients
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During 1995, the Company was active in the building, heavy and
international construction markets. The Company performed work for over 100
federal, state and local governmental agencies or authorities and private
customers during 1995. No material part of the Company's business is dependent
upon a single or limited number of private customers; the loss of any one of
which would not have a materially adverse effect on the Company. As illustrated
in the following table, the Company continues to serve a significant number of
private owners. During the period 1993-1995, the portion of construction
revenues derived from contracts with various governmental agencies remains
relatively constant at 56% in 1995 and 1994, and 54% in 1993.
Revenues by Client Source
-------------------------
Year Ended December 31,
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1995 1994 1993
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Private Owners 44% 44% 46%
Federal Governmental Agencies 8 11 12
State, Local and Foreign Governments 48 45 42
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100% 100% 100%
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All Federal government contracts are subject to termination provisions, but as
shown in the table above, the Company does not have a material amount of such
contracts.
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<PAGE>
General
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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.
The Company will endeavor to spread the financial and/or operational
risk, as it has from time to time in the past, by participating in construction
joint ventures, both in a majority and in a minority position, for the purpose
of bidding on projects. These joint ventures are generally based on a standard
joint venture agreement whereby each of the joint venture participants is
usually committed to supply a predetermined percentage of capital, as required,
and to share in the same predetermined percentage of income or loss of the
project. 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 cost and expenses. For a possible
example of this situation, see "Legal Proceedings" on page 13. For further
information regarding certain joint ventures, see Note 2 to Notes to
Consolidated Financial Statements.
While the Company's construction business may experience some adverse
consequences if shortages develop or if prices for materials, labor or equipment
increase excessively, provisions in certain types of contracts often shift all
or a major portion of any adverse impact to the customer. On fixed price type
contracts, the Company attempts to insulate itself from the unfavorable effects
of inflation by incorporating escalating wage and price assumptions, where
appropriate, into its construction bids. Gasoline, diesel fuel and other
materials used in the Company's construction activities are generally available
locally from multiple sources and have been in adequate supply during recent
years. Construction work in selected overseas areas primarily employs expatriate
and local labor which can usually be obtained as required. The Company does not
anticipate any significant impact in 1996 from material and/or labor shortages
or price increases.
Economic and demographic trends tend not to have a material impact on
the Company's heavy construction operation. Instead, the Company's heavy
construction markets are dependent on the amount of heavy civil infrastructure
work funded by various governmental agencies which, in turn, may depend on the
condition of the existing infrastructure or the need for new expanded
infrastructure. The building markets in which the Company participates are
dependent on economic and demographic trends, as well as governmental policy
decisions as they impact the specific geographic markets.
The Company has minimal exposure to environmental liability as a result
of the activities of Perini Environmental Services, Inc. ("Perini
Environmental"), a wholly-owned subsidiary of the Company. Perini Environmental
provides hazardous waste engineering and construction services to both private
clients and public agencies nationwide. Perini Environmental is responsible for
compliance with applicable law in connection with its clean up activities and
bears the risk associated with handling such materials.
In addition to strict procedural guidelines for conduct of this work,
the Company and Perini Environmental generally carry insurance or receive
satisfactory indemnification from customers to cover the risks associated with
this business.
The Company also owns real estate nationwide, most of which is
residential, and as an owner, is subject to laws governing environmental
responsibility and liability based on ownership. The Company is not aware of any
environmental liability associated with its ownership of real estate property.
The Company has been subjected to a number of claims from former
employees of subcontractors regarding exposure to asbestos on the Company's
projects. None of the claims have been material. The Company also operates
construction machinery in its business and will, depending on the project or the
ease of access to fuel for such machinery, install fuel tanks for use on-site.
Such tanks run the risk of leaking hazardous fluids into the environment. The
Company, however, is not aware of any emissions associated with such tanks or of
any other environmental liability associated with its construction operations or
any of its corporate activities.
Progress on projects in certain areas may be delayed by weather
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conditions depending on the type of project, stage of completion and severity of
the weather. Such delays, if they occur, may result in more volatile quarterly
operating results.
In the normal course of business, the Company periodically evaluates its
existing construction markets and seeks to identify any growing markets where it
feels it has the expertise and management capability to successfully compete or
withdraw from markets which are no longer economically attractive.
Real Estate
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The Company's real estate development operations are conducted by Perini
Land & Development Company ("PL&D"), a wholly-owned subsidiary, which has been
involved in real estate development since the early 1950's. PL&D engages in real
estate development in Arizona, California, Florida, Georgia and Massachusetts.
However, in 1993, PL&D significantly reduced its staff in California and has
suspended any new land acquisition in that area. PL&D's development operations
generally involve identifying attractive parcels, planning and development,
arranging financing, obtaining needed zoning changes and permits, site
preparation, installation of roads and utilities and selling the land.
Originally, PL&D concentrated on land development. In appropriate situations,
PL&D has also constructed buildings on the developed land for rental or sale.
For the past five years PL&D has been affected by the reduced liquidity
in real estate markets brought on by the cutbacks in real estate funding by
commercial banks, insurance companies and other institutional lenders. Many
traditional buyers of PL&D properties are other developers or investors who
depend on third party sources for funding. As a result, some potential PL&D
transactions have been cancelled, altered or postponed because of financing
problems. Over this period, PL&D looked to foreign buyers not affected by U.S.
banking policies or in some cases, provided seller financing to complete
transactions. Based on a weakening in property values which has come with the
industry credit crunch and the national real estate recession, PL&D took a $31
million pre-tax net realizable value writedown against earnings in 1992. The
charge affected those properties which PL&D had decided to sell in the near
term. Currently it is management's belief that its remaining real estate
properties are not carried at amounts in excess of their net realizable values.
PL&D periodically reviews its portfolio to assess the desirability of
accelerating its sales through price concessions or sale at an earlier stage of
development. In circumstances in which asset strategies are changed and
properties brought to market on an accelerated basis, those assets, if
necessary, are adjusted to reflect the lower of cost or market value. To achieve
full value for some of its real estate holdings, in particular its investments
in Rincon Center and the Resort at Squaw Creek, the Company may have to hold
those properties several years and currently intends to do so.
Real Estate Strategy
--------------------
Since 1990, PL&D has taken a number of steps to minimize the adverse
financial impact of current market conditions. In early 1990, all new real
estate investment was suspended pending market improvement, all but critical
capital expenditures were curtailed on on-going projects and PL&D's workforce
was cut by over 60%. Certain project loans were extended, with such extension
usually requiring paydowns and increased annual amortization of the remaining
loan balance. Going forward, PL&D will operate with a reduced staff and adjust
its activity to meet the demands of the market.
PL&D's real estate development project mix includes planned community,
industrial park, commercial office, multi-unit residential, urban mixed use,
resort and single family home developments. Given the current real estate
environment, PL&D's emphasis is on the sale of completed product and also
developing the projects in its inventory with the highest near term sales
potential. It may also selectively seek new development opportunities in which
it serves as development manager with limited equity exposure, if any.
Real Estate Properties
----------------------
The following is a description of the Company's major development
projects and properties by geographic area:
Florida
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West Palm Beach and Palm Beach County - In 1994, PL&D completed the sale
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of all of the original 1,428 acres located in West Palm Beach at the development
known as "The Villages of Palm Beach Lakes". PL&D's only continuing interest in
the project is its ownership in the Bear Lakes Country Club which under
agreement with the membership can be turned over to the members when membership
reaches 650. Current membership is 438. The club includes two championship golf
courses designed by Jack Nicklaus.
At Metrocentre, a 51-acre commercial/office park at the intersection of
Interstate 95 and 45th Street in West Palm Beach, one site totaling 2.78 acres
was sold in 1995. That site was sold to a national motel chain. The park
consists of 17 parcels, of which 2 1/4 (7.3 acres) currently remain unsold. The
park provides for 570,500 square feet of mixed commercial uses.
Massachusetts
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Perini Land and Development or Paramount Development Associates, Inc.
("Paramount"), a wholly-owned subsidiary of PL&D, owns the following projects:
Raynham Woods Commerce Center, Raynham - In 1987, Paramount acquired a
409-acre site located in Raynham, Massachusetts, on which it had done
preliminary investigatory and zoning work under an earlier purchase option
period. During 1988, Paramount secured construction financing and completed
infrastructure work on a major portion of the site (330 acres) which is being
developed as a mixed use corporate campus style park known as "Raynham Woods
Commerce Center". During 1989, Paramount completed the sale of a 24-acre site to
be used as a headquarters facility for a division of a major U.S. company.
During 1990, construction was completed on this facility. In 1990 construction
was also completed on two new commercial buildings by Paramount. During 1992, a
17-acre site was sold to a developer who was working with a major national
retailer. The site has since been developed into the first retail project in the
park. No new land sales were made in 1993, but in 1994, an 11-acre site was sold
to the same major U.S. company which had acquired land in 1989, and in 1995 a
4-acre site was sold to a major insurance company. Although the two Paramount
commercial buildings owned within the park experienced some tenant turnover in
late 1994 and into 1995, they remain 90% occupied. The park is planned to
eventually contain 2.5 million square feet of office, R&D, light industrial and
mixed commercial space.
Easton Business Center, Easton - In 1989, Paramount acquired a 40-acre
site in Easton, Massachusetts, which had already been partially developed.
Paramount completed the work in 1990 and is currently marketing the site to
commercial/industrial users. No sales were closed in 1995.
Wareham - In early 1990, Paramount acquired an 18.9-acre parcel of land
at the junction of Routes 495 and 58 in Wareham, Massachusetts. The property is
being marketed to both retail and commercial/industrial users. No sales were
closed in 1995.
Georgia
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The Villages at Lake Ridge, Clayton County - During 1987, PL&D (49%)
entered into a joint venture with 138 Joint Venture partners to develop a
348-acre planned commercial and residential community in Clayton County to be
called "The Villages at Lake Ridge", six miles south of Atlanta's Hartsfield
International Airport. By year end 1990, the first phase infrastructure and
recreational amenities were in place. In 1991, the joint venture completed the
infrastructure on 48 lots for phased sales of improved lots to single family
home builders and sold nine. During 1992, the joint venture sold an additional
60 lots and also sold a 16-acre parcel for use as an elementary school. During
1993, unusually wet weather in the spring delayed construction on improvements
required to deliver lots as scheduled. As a result, the sale of an additional 58
lots in 1993 were below expectation. Although 1994 started off strong, rising
interest rates created a slowdown in activity later in the year. For the year,
52 lots were sold. In 1995, the pace picked up again and a record 72 lots were
sold. Because most of the homes built within the development are to first time
buyers, demand is highly sensitive to mortgage rates and other costs of
ownership. Financing restrictions generally require the joint venture to allow
developers to take down finished lots only as homes built on previously acquired
lots are sold. As a result, any slowdown in home sales will influence joint
venture sales quickly thereafter. The development plan calls for mixed
residential densities of apartments and moderate priced single-family homes
totaling 1,158 dwelling units in the residential tracts plus 220,000 square feet
of retail and 220,000 square feet of office space in the commercial tracts.
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The Oaks at Buckhead, Atlanta - Sales commenced on this 217-unit
residential condominium project at a site in the Buckhead section of Atlanta
near the Lenox Square Mall in 1992. The project consists of 201 residences in a
30-story tower plus 16 adjacent three-story townhome residences. At year end 207
units were either sold or under contract. Sixty-nine of these units were closed
in 1995, up from 53 for 1994. PL&D (50%) is developing this project in joint
venture with a subsidiary of a major Taiwanese company.
California
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Rincon Center, San Francisco - Major construction on this mixed-use
project in downtown San Francisco was completed in 1989. The project,
constructed in two phases, consists of 320 residential rental units,
approximately 423,000 square feet of office space, 63,000 square feet of retail
space, and a 700-space parking garage. Following its completion in 1988, the
first phase of the project was sold and leased back by the developing
partnership. The first phase consists of about 223,000 square feet of office
space and 42,000 square feet of retail space. The Phase I office space continues
to be close to 100% leased with the regional telephone directory company as the
major tenant on leases which run into early 1998. The retail space is currently
90% leased. Phase II of the project, which began operations in late 1989,
consists of approximately 200,000 square feet of office space, 21,000 square
feet of retail space, a 14,000 square foot U.S. postal facility, and 320
apartment units. Currently, close to 100% of the office space, 94% of the retail
space and virtually all of the 320 residential units are leased. The major
tenant in the office space in Phase II is the Ninth Circuit Federal Court of
Appeals which is leasing approximately 176,000 square feet. That lease expires
at the end of 1996. Currently, the space is being shown to potential tenants for
possible 1997 occupancy. PL&D currently holds a 46% interest in and is managing
general partner of the partnership which is developing the project. The land
related to this project is being leased from the U.S. Postal Service under a
ground lease which expires in 2050.
In addition to the project financing and guarantees disclosed in the
first, second and third paragraphs of Note 11 to Notes to Consolidated Financial
Statements, the Company has advanced approximately $78 million to the
partnership through December 31, 1995, of which approximately $5 million was
advanced during 1995, primarily to paydown some of the principal portion of
project debt which was renegotiated during 1993. In 1995, operations before
principal repayment of debt created a positive cash flow on an annual basis.
Two major loans on this property in 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 $6 million
in new funds which were used to reduce the principal balances of the loans. In
1995 and over the next three years, additional amortization will be required,
some of which may not be covered by operating cash flow and, therefore, at least
80% of those funds not covered by operations will be provided by PL&D as
managing general partner. Lease payments and loan amortization obligations at
Rincon Center through 1997 are as follows: $7.5 million in 1996 and $7.3 million
in 1997. Based on Company forecasts, it could be required to contribute as much
as $9.4 million to cover these and possible tenant improvement requirements not
covered by project cash flow through 1997. While the budgeted shortfall includes
an estimate for tenant improvements, they may or may not be required. Although
management believes operating expenses will be covered by operating cash flow at
least through 1997, the interest rates on much of the debt financing covering
Rincon Center are variable based on various rate indices. With the exception of
approximately $20 million of the financing, none of the debt has been hedged or
capped and is subject to market fluctuations. From time to time, the Company
reviews the costs and anticipated benefits from hedging Rincon Center's interest
rate commitments. Based on current costs to further hedge rate increases and
market conditions, the Company has elected not to provide any additional hedges
at this time.
As part of the Rincon One sale and operating lease-back transaction, the
joint venture agreed to obtain an additional financial commitment on behalf of
the lessor to replace at least $33 million of long-term financing by January 1,
1998. If the joint venture has not secured 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 of approximately $18.8 million in excess of the then
outstanding debt. Management currently believes it will be able to extend the
financing or refinance the building such that this sale back to the Company will
not occur.
During 1993 PL&D agreed, if necessary, to lend Pacific Gateway
- 9 -
<PAGE>
Properties (PGP), the other General Partner in the project, funds to meet its
20% share of cash calls. In return PL&D receives 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, 1994
and 1995, PL&D advanced $1.7 million, $.3 million and $.9 million, respectively,
under this agreement, primarily to meet the principal payment obligations of the
loan extensions described above.
The Resort at Squaw Creek - During 1990, construction was completed on
the 405-unit first phase of the hotel complex of this major resort-conference
facility. In mid-December of that year, the resort was opened. In 1991, final
work was completed on landscaping the golf course, as well as the remaining
facilities to complete the first phase of the project. The first phase of the
project includes a 405-unit hotel, 36,000 square feet of conference facilities,
a Robert Trent Jones, Jr. golf course, 48 single-family lots, all but three of
which had been sold or put under contract by early 1993, three restaurants, an
ice skating rink, pool complex, fitness center and 11,500 square feet of various
retail support facilities. The second phase of the project is planned to include
an additional 409-unit hotel facility, 36 townhouses, 27,000 square feet of
conference space, 5,000 square feet of retail space and a parking structure. No
activity on the second phase will begin until stabilization is attained on phase
one and market conditions warrant additional investment.
While PL&D has an effective 18% ownership interest in this joint
venture, it has additional financial commitments as described below.
In addition to the project financing and guarantees disclosed in
paragraphs four and five of Note 11 to Notes to Consolidated Financial
Statements, the Company has advanced approximately $76 million to the joint
venture through December 31, 1995, of which approximately $3.3 million was
advanced during 1995, for the cost of operating expenses, debt amortization and
interest payments. Further, it is anticipated the project may require additional
funding by PL&D before it reaches stabilization which may take several years.
During 1992, the majority partner in the joint venture sold its interest to a
group put together by an existing limited partner. As a part of that
transaction, PL&D relinquished its managing general partnership position to the
buying group, but retained a wide range of approval rights. The result of the
transaction was to strengthen the financial support for the project and led to
an extension of the bank financing on the project to mid-1995. The $48 million
of bank financing on the project was extended again in 1995 and currently
matures in May, 1997, with an option by the borrower to extend an additional
year.
As part of Squaw Creek Associates partnership agreement, either partner
may initiate a buy/sell agreement on or after January 1, 1997. Such buy/sell
agreement, which is similar to those often found in real estate development
partnerships, provides for the recipient of the offer to have the option of
selling its share or purchasing its partners share at the proportionate amount
applicable based on the offer price and the specific priority of payout as
called for under the partnership agreement based on a sale and termination of
the partnership. The Company does not anticipate such a circumstance, because
until the end of the year 2001, the partner would lose the certainty of a $2
million annual preferred return currently guaranteed by the Company. However, an
exercise of the buy/sell agreement by its partner could force the Company to
sell its ownership at a price possibly significantly less than its full value
should the Company be unable to buy out its partner and forced to sell at the
price initiated by its partner.
The operating results of this project are weather sensitive. For
example, a large snowfall in late 1994 helped improve results during the 1994-5
ski season. As a result, through October of 1995, the resort showed marked
improvement over the previous year. Snowfall in late 1995, however, did not
match the previous year which adversely affected results in late 1995 and in
early 1996.
Corte Madera, Marin County - After many years of intensive planning,
PL&D obtained approval for a 151 single-family home residential development on
its 85-acre site in Corte Madera and, in 1991, was successful in gaining water
rights for the property. In 1992, PL&D initiated development on the site which
was continued into 1993. This development is one of the last remaining in-fill
areas in southern Marin County. In 1993, when PL&D decided to scale back its
operations in California, it also decided to sell this development in a
transaction which closed in early 1994. The transaction calls for PL&D to get
the majority of its funds from the sale of residential units or upon the sixth
anniversary of the sale whichever takes place first and, although indemnified,
to leave in place certain bonds and other assurances previously given to the
town of Corte Madera guaranteeing performance in compliance with approvals
previously obtained. Sale of the units began in August of 1995 and by year end,
10 units were under contract or closed.
- 10 -
<PAGE>
Arizona
-------
I-10 West, Phoenix - In 1979, I-10 Industrial Park Developers ("I-10"),
an Arizona partnership between Paramount Development Associates, Inc. (80%) and
Mardian Development Company (20%), purchased approximately 160 acres of
industrially zoned land located immediately south of the Interstate 10 Freeway,
between 51st and 59th Avenues in the City of Phoenix. The project experienced
strong demand through 1988. With the downturn in the Arizona real estate
markets, subsequent to 1988, sales slowed. However, in 1995 the remaining 13.3
acres were sold and this project is sold out.
Airport Commerce Center, Tucson - In 1982, the I-10 partnership
purchased 112 acres of industrially zoned property near the Tucson International
Airport. During 1983, the partnership added 54 acres to that project, bringing
its total size to 166 acres. This project has experienced a low level of sales
activity due to an excess supply of industrial property in the marketplace.
However, the partnership built and fully leased a 14,600 square foot
office/warehouse building in 1987 on a building lot in the park, which was sold
during 1991. In 1990, the partnership sold 14 acres to a major airline for
development as a processing center and, in 1992, sold a one acre parcel adjacent
to the existing property. After experiencing no new sales in 1993, approximately
12 acres were sold in 1994 and an additional 24 acres were sold in 1995.
Currently, 87 acres remain to be sold.
Perini Central Limited Partnership, Phoenix - In 1985, PL&D (75%)
entered into a joint venture with the Central United Methodist Church to master
plan and develop approximately 4.4 acres of the church's property in midtown
Phoenix. Located adjacent to the Phoenix Art Museum and near the Heard Museum,
the project is positioned to become the mixed use core of the newly formed
Phoenix Arts District. In 1990, the project was successfully rezoned to permit
development of 580,000 square feet of office, 37,000 square feet of retail and
162 luxury apartments. Plans for the first phase of this project, known as "The
Coronado" have been put on hold pending improved market conditions. In 1993,
PL&D obtained a three-year extension of the construction start date required
under the original zoning and for the present is continuing to hold the project
in abeyance.
Grove at Black Canyon, Phoenix - The project consists of an office park
complex on a 30-acre site located off of Black Canyon Freeway, a major Phoenix
artery, approximately 20 minutes from downtown Phoenix. When complete, the
project will include approximately 650,000 square feet of office, hotel,
restaurant and/or retail space. Development, which began in 1986, is scheduled
to proceed in phases as market conditions dictate. In 1987, a 150,000 square
foot office building was completed within the park and now is 97% leased with
approximately half of the building leased to a major area utility company.
During 1993, PL&D (50%) successfully restructured the financing on the project
by obtaining a seven year extension with some amortization and a lower fixed
interest rate. The annual amortization commitment is not currently covered by
operating cash flow, which caused PL&D to have to provide approximately $1.2
million in 1994 and $.7 million in 1995 to cover the shortfall. In the near term
it appears approximately $700,000 per year of support to cover loan amortization
will continue to be required. No new development within the park was begun in
1994 nor were any land sales consummated. However, the lease covering space
occupied by the major office tenant was extended an additional seven years to
the year 2004 on competitive terms. In 1995, a day care center was completed on
an 8-acre site along the north entrance of the park.
Sabino Springs Country Club, Tucson - During 1990, the Tucson Board of
Supervisors unanimously approved a plan for this 410-acre residential golf
course community close to the foothills on the east side of Tucson. In 1991,
that approval, which had been challenged, was affirmed by the Arizona Supreme
Court. When developed, the project will consist of 496 single-family homes. An
18-hole Robert Trent Jones, Jr. designed championship golf course and clubhouse
were completed within the project in 1995. In 1993, PL&D recorded the master
plat on the project and sold a major portion of the property to an international
real estate company. Although it will require some infrastructure development
before sale, PL&D still retains 33 estate lots for sale in future years.
Capitol Plaza, Phoenix - In 1988, PL&D acquired a 1.75-acre parcel of
land located in the Governmental Mall area of Phoenix. Original plans were to
either develop a 200,000 square foot office building on the site to be available
to government and government related tenants or to sell the site. The project
has currently been placed on hold pending a change in market conditions.
- 11 -
<PAGE>
General
-------
The Company's real estate business is influenced by both economic
conditions and demographic trends. A depressed economy may result in lower real
estate values and longer absorption periods. Higher inflation rates may increase
the values of current properties, but often are accompanied by higher interest
rates which may result in a slowdown in property sales because of higher
carrying costs. Important demographic trends are population and employment
growth. A significant reduction in either of these may result in lower real
estate prices and longer absorption periods.
The well publicized real estate problems experienced by the commercial
bank and savings and loan industries in the early 90's have resulted in sharply
curtailed credit available to acquire and develop real estate; further, the
continuing national weakness in commercial office markets has significantly
slowed the pace at which PL&D has been able to proceed on certain of its
development projects and its ability to sell developed product. In some or all
cases, it has also reduced the sales proceeds realized on such sales and/or
required extended payment terms.
Generally, there has been no material impact on PL&D's real estate
development operations over the past 10 years due to interest rate increases.
However, an extreme and prolonged rise in interest rates could create market
resistance for all real estate operations in general, and is always a potential
market obstacle. PL&D, in some cases, employs hedges or caps to protect itself
against increases in interest rates on any of its variable rate debt and,
therefore, is insulated from extreme interest rate risk on borrowed funds,
although specific projects may be impacted if the decision has been made not to
hedge or to hedge at higher than current rates.
The Company has been replacing relatively low cost debt-free land in
Florida acquired in the late 1950's with land purchased at current market
prices. In 1995 and into the future, as the mix of land sold contains
proportionately less low cost land, the gross margin on real estate revenues
will decrease.
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, both
directly owned and 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 over 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 and the Company occasionally has encountered
limits imposed by its surety, these limits have not had an adverse impact on its
operations.
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 1995, the maximum number of
employees employed was approximately 3,000 and the minimum was approximately
2,100.
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.
- 12 -
<PAGE>
ITEM 2. PROPERTIES
- -------------------
Properties applicable to the Company's real estate development
activities are described in detail by geographic area in Item 1. Business on
pages 7 through 12. All other properties used in operations are summarized
below:
Owned or Leased Approximate Approximate Square
Principal Offices by Perini Acres Feet of Office Space
- ----------------- --------------- ----------- --------------------
Framingham, MA Owned 9 110,000
Phoenix, AZ Leased - 22,000
Southfield, MI Leased - 13,900
San Francisco, CA Leased - 3,500
Hawthorne, NY Leased - 12,500
West Palm Beach, FL Leased - 5,000
Los Angeles, CA Leased - 2,000
Las Vegas, NV Leased - 3,000
Atlanta, GA Leased - 1,700
Chicago, IL Leased - 14,700
Philadelphia, PA Leased - 2,100
-- -------
9 190,400
== =======
Principal Permanent Storage Yards
- ---------------------------------
Bow, NH Owned 70
Framingham, MA Owned 6
E. Boston, MA Owned 3
Las Vegas, NV Leased 2
Novi, MI Leased 3
--
84
==
The Company's properties are generally well maintained, in good
condition, adequate and suitable for the Company's purpose and fully utilized.
ITEM 3. LEGAL PROCEEDINGS
- --------------------------
As previously reported, the Company is a party to an action entitled
Mergentime Corporation et. al. v. Washington Metropolitan Transit Authority v.
Insurance Company of North America (Civil Action No. 89-1055) in the U.S.
District Court for the District of Columbia. The action involves WMATA's
termination of the general contractor, a joint venture in which the Company was
a minority partner, on two contracts to construct a portion of the Washington,
D.C. subway system, and certain claims by the joint venture against WMATA for
claimed delays and extra work.
On July 30, 1993, the Court upheld the termination for default, and
found both joint venturers and their surety jointly and severally liable to
WMATA for damages in the amount of $16.5 million, consisting primarily of
WMATA's excess reprocurement costs, but specifically deferred ruling on the
amount of the joint venture's claims against WMATA. Since the other joint
venture partner may be unable to meet its financial obligations under the award,
the Company could be liable for the entire amount.
At the direction of the judge now presiding over the action, during the
third quarter of 1995, the parties submitted briefs on the issue of WMATA's
liability on the joint venture's claims for delays and for extra work. As a
result of that process, the company established a reserve with respect to the
litigation. Management believes the reserve should be adequate to cover the
potential ultimate liability in this matter.
- 13 -
<PAGE>
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 results of future operations and financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
None.
- 14 -
<PAGE>
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
- --------------------------------------------------------------------------------
The Company's common stock is traded on the American Stock Exchange
under the symbol "PCR". The quarterly market price ranges (high-low) for 1995
and 1994 are summarized below:
1995 1994
-------------- --------------
Market Price Range per Common Share: High Low High Low
- ----------------------------------- ------ ----- ------ -----
Quarter Ended
March 31 11 7/8 - 9 3/8 13 7/8 - 11 1/4
June 30 11 1/2 - 9 1/2 13 3/8 - 10 7/8
September 30 13 3/8 - 10 1/8 11 1/2 - 9 1/8
December 31 12 1/4 - 7 7/8 11 1/8 - 9 1/8
For information on dividend payments, see Selected Financial Data in
Item 6 below and "Dividends" under Management's Discussion and Analysis on Item
7 below.
As of March 1, 1996, there were approximately 1,327 record holders of
the Company's Common Stock.
ITEM 6. SELECTED FINANCIAL DATA
- --------------------------------
<TABLE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(In thousands, except per share data)
<CAPTION>
OPERATING SUMMARY 1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenues
Construction operations $1,056,673 $ 950,884 $1,030,341 $1,023,274 $ 919,641
Real estate operations 44,395 61,161 69,775 47,578 72,267
----------- ----------- ----------- ----------- ----------
Total Revenues $1,101,068 $1,012,045 $1,100,116 $1,070,852 $ 991,908
----------- ----------- ----------- ----------- ----------
Gross Profit $ 14,855 $ 51,797 $ 52,786 $ 22,189 $ 60,854
General, Administrative & Selling
Expenses (37,283) (42,985) (44,212) (41,328) (48,530)
----------- ----------- ----------- ----------- -----------
Income (Loss) From Operations $ (22,428) $ 8,812 $ 8,574 $ (19,139) $ 12,324
Other Income (Expense), Net 814 (856) 5,207 436 1,136
Interest Expense (8,582) (7,473) (5,655) (7,651) (9,022)
----------- ----------- ----------- ----------- -----------
Income (Loss) Before Income Taxes $ (30,196) $ 483 $ 8,126 $ (26,354) $ 4,438
(Provision) Credit for Income Taxes 2,611 (180) (4,961) 9,370 (1,260)
----------- ----------- ----------- ----------- -----------
Net Income (Loss) $ (27,585) $ 303 $ 3,165 $ (16,984) $ 3,178
----------- ----------- ----------- ----------- ----------
Per Share of Common Stock:
Earnings (loss) $ (6.38) $ (.42) $ .24 $ (4.69) $ .27
----------- ----------- ----------- ----------- ----------
Cash dividends declared $ - $ - $ - $ - $ -
----------- ----------- ----------- ----------- ------
Book value $ 17.06 $ 23.79 $ 24.49 $ 23.29 $ 28.96
----------- ----------- ----------- ----------- ----------
Weighted Average Number
of Common Shares Outstanding 4,655 4,380 4,265 4,079 3,918
----------- ----------- ----------- ----------- ----------
FINANCIAL POSITION SUMMARY
Working Capital $ 36,545 $ 29,948 $ 36,877 $ 31,028 $ 30,724
----------- ----------- ----------- ----------- ----------
Current Ratio 1.12:1 1.13:1 1.17:1 1.14:1 1.16:1
Long-term Debt, less current
maturities $ 84,155 $ 76,986 $ 82,366 $ 85,755 $ 96,294
----------- ----------- ----------- ----------- ----------
Stockholders' Equity $ 105,606 $ 132,029 $ 131,143 $ 121,765 $ 138,644
----------- ----------- ----------- ----------- ----------
Ratio of Long-term Debt to Equity .80:1 .58:1 .63:1 .70:1 .69:1
----------- ----------- ----------- ----------- ----------
Total Assets $ 539,251 $ 482,500 $ 476,378 $ 470,696 $ 498,574
----------- ----------- ----------- ----------- ----------
OTHER DATA
Backlog at Year-end $1,534,522 $1,538,779 $1,238,141 $1,169,553 $1,233,958
----------- ----------- ----------- ----------- ----------
</TABLE>
- 15 -
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
- --------------------------------------------------------------------------------
RESULTS OF OPERATIONS -
1995 COMPARED TO 1994
The Company's 1995 operations resulted in a net loss of $27.6 million or
$6.38 per common share on revenues of $1.1 billion compared to net income of $.3
million or a loss of $.42 per common share (after giving effect to the dividend
payments required on its preferred stock) on revenues of $1.0 billion in 1994.
The primary reasons for this decrease in earnings were a pretax charge of $25.6
million in connection with previously disclosed litigation in Washington, D.C.
and downward revisions in estimated probable recoveries on certain outstanding
contract claims, and lower than normal profit margins on certain heavy
construction contracts, including a significant reduction in the profit level on
a tunnel project in the Midwest.
Revenues reached a record level of $1.101 billion in 1995, an increase
of $89 million (or 9%) compared to the 1994 revenues of $1.012 billion. This
increase resulted primarily from an increase in construction revenues of $106
million (or 11%) from $.951 billion in 1994 to $1.057 billion in 1995. This
increase in construction revenues resulted primarily from an increase in
building construction revenues of $122 million (or 19%), from $626 million in
1994 to $748 million in 1995, primarily due to substantially increased volume in
the Midwest region resulting from a substantially higher backlog in that area
entering 1995 combined with several hotel/casino projects acquired during 1995.
This increase was partially offset by a decrease in building construction
revenues in the Eastern and Western regions, as well as in the overall heavy
construction operations, due primarily to the timing in the start-up of several
significant new projects and the completion early in 1995 of several other major
projects. Revenues from real estate operations also decreased by $16.8 million
(or 27%) from $61.2 million in 1994 to $44.4 million in 1995 due to the
non-recurring sale in 1994 of two investment properties ($8.3 million) and fewer
land sales in Massachusetts and California during 1995.
In spite of the 9% increase in revenues, the gross profit in 1995
decreased by $36.9 million, from $51.8 million in 1994 to $14.9 million in 1995,
due primarily to an overall decrease in gross profit from construction
operations of $32.1 million (or 67%), from $48.0 million in 1994 to $15.9
million in 1995. The primary reasons for this decrease were a pretax charge of
$25.6 million in connection with previously disclosed litigation in Washington,
D.C. (as more fully discussed in Note 11 to Notes to Consolidated Financial
Statements) and downward revisions in estimated probable recoveries on certain
outstanding contract claims, and lower than normal profit margins on certain
heavy construction contracts, including a significant reduction in the profit
level on a tunnel project in the Midwest. In addition, the overall gross profit
from real estate operations decreased by $4.8 million, from a profit of $3.8
million in 1994 to a loss of $1.0 million in 1995 due to the sale in 1994 of the
last parcels of high margin land in Florida and in a project in Massachusetts
which was partially offset by improved operating results in 1995 from its two
major on-going operating properties in California.
Total general, administrative and selling expenses decreased by $5.7
million (or 13%) from $43.0 million in 1994 to $37.3 million in 1995. This
decrease primarily reflects reduced bonuses, an increased allocation of various
insurance costs to projects in 1995, and a continuation during 1995 of the
Company's re-engineering efforts commenced in prior years.
The increase in other income (expense), net, of $1.7 million, from a net
expense of $.9 million in 1994 to a net income of $.8 million in 1995, is
primarily due to an increase in interest income and, to a lesser extent, a gain
realized on the sale of certain underutilized operating facilities, including a
quarry, in 1995.
The increase in interest expense of $1.1 million (or 15%), from $7.5
million in 1994 to $8.6 million in 1995, primarily results from a higher average
level of borrowings during 1995.
The Company recognized a tax benefit in 1995 equal to $2.6 million or 9%
of the pretax loss. A portion of the tax benefit related to the 1995 loss was
not recognized because of certain accounting limitations. However, an amount
estimated to be approximately $20 million of future pretax earnings should
benefit from minimal, if any, tax charges.
----------------------------------------------------------
Looking ahead, we must consider the Company's construction backlog and
- 16 -
<PAGE>
remaining inventory of real estate projects. The overall construction backlog at
the end of 1995 was $1.535 billion which approximates the 1994 record year-end
backlog of $1.539 billion. This backlog has a better balance between building
and heavy work and a higher overall estimated profit margin.
With the sale of the final 21 acres during 1994, the Company's Villages
of Palm Beach Lakes, Florida land inventory was completely sold out. Because of
its low book value, sales of this acreage have provided a major portion of the
Company's real estate profit in recent years. With the sale of this property
complete, the Company's ability to generate profit from real estate sales and
the related gross margin will be reduced as was the case in 1995. Between 1989
and 1995, property prices in general have fallen substantially due to the
reduced liquidity in real estate markets and reduced demand. Recently, the
Company has noted improvement in some property areas. This trend has had some
effect on residential property sales which were closed in 1995. However, this
trend is still neither widespread nor proven to be sustainable.
RESULTS OF OPERATIONS -
1994 COMPARED TO 1993
The Company's 1994 operations resulted in net income of $.3 million on revenues
of $1.0 billion and a loss of 42 cents per common share (after giving effect to
the dividend payments required on its preferred stock) compared to net income of
$3.2 million or 24 cents per common share on revenues of $1.1 billion in 1993.
In spite of the overall decrease in revenues during 1994, income from operations
increased slightly compared to 1993 results. An increase in interest expense in
1994 and the non-recurring $1 million net gain after tax in 1993 from the sale
by the Company of its 74%-ownership interest in Majestic Contractors Limited
("Majestic"), its Canadian pipeline subsidiary, contributed to the overall
decrease in net income.
Revenues amounted to $1.012 billion in 1994 compared to $1.100 billion in 1993,
a decrease of $88 million (or 8%). This decrease resulted primarily from a net
decrease in construction revenues of $79 million (or 8%) from $1.030 billion in
1993 to $.951 billion in 1994 due to a decrease in volume from building
operations of $126 million (or 17%), from $752 million in 1993 to $626 million
in 1994. The decrease in revenue from building operations was primarily due to
the prolonged start-up phases on certain projects. This decrease was partially
offset by an increase in revenues from civil and environmental construction
operations of $47 million (or 17%), from $278 million in 1993 to $325 million in
1994, due to an increased heavy construction backlog going into 1994. In
addition to the overall decrease in construction revenues, revenues from real
estate operations decreased $8.6 million (or 12%), from $69.8 million in 1993 to
$61.2 million in 1994, due primarily to the non-recurring sale ($23.2 million)
in 1993 of a partnership interest in certain commercial rental properties in San
Francisco and a $5.2 million decrease in land sales in Arizona. The decrease in
real estate revenues was partially offset from the sale of two investment
properties in 1994 ($8.3 million) and increased land sales in Massachusetts
($5.4 million) and California ($4.9 million).
In spite of the 8% decrease in total revenues, the gross profit in 1994
decreased only $1.0 million (or 2%), from $52.8 million in 1993 to $51.8 million
in 1994. The gross profit from construction operations decreased $1.1 million
(or 2.3%), from $49.1 million in 1993 to $48.0 million in 1994, due to the
negative profit impact from the reduction in building construction revenues
referred to above and a loss from international operations resulting from
unstable economic and political conditions in a certain overseas location where
the Company is working. These decreases were partially offset by slightly higher
margins on the construction work performed in 1994 (5.0% in 1994 compared with
4.8% in 1993) and a slight overall increase ($.1 million) in the gross profit
from real estate operations, from $3.7 million in 1993 compared to $3.8 million
in 1994.
Total general, administrative and selling expenses decreased by $1.2 million (or
3%) in 1994, from $44.2 million in 1993 to $43.0 million in 1994 due to several
factors, the more significant ones being a $2.1 million expense for severance
incurred in 1993 in connection with re-engineering some of the business units,
which was partially offset by the full year impact of expenses related to the
acquisition referred to in Note 1 to Notes to Consolidated Financial Statements.
The decrease in other income (expense), net of $6.1 million, from income of $5.2
million in 1993 to a net loss of $.9 million in 1994 is primarily due to the
pretax gain in 1993 of $4.6 million on the sale of Majestic and, to a lesser
degree, an increase in other expenses in 1994, primarily bank fees.
The increase in interest expense of $1.8 million (or 32%), from $5.7 million in
1993 to $7.5 million in 1994 primarily results from higher interest rates during
1994 and higher average level of borrowings.
- 17 -
<PAGE>
FINANCIAL CONDITION
CASH AND WORKING CAPITAL
During 1995, the Company provided $24.6 million in cash from operating
activities, primarily due to an overall increase in accounts payable and
advances from joint ventures; $9.0 million from financing activities due to an
increase in borrowings under its revolving credit facility; and $23.9 million
from cash distributions from certain joint ventures. These increases in cash
were used to increase cash on hand by $21.2 million, with the balance used for
various investment activities, primarily to fund construction and real estate
joint ventures. In addition, the Company has future financial commitments to
certain real estate joint ventures as described in Note 11 to Notes to
Consolidated Financial Statements.
During 1994, the Company used $15.6 million in cash for investment activities,
primarily to fund construction and real estate joint ventures; $7.4 million for
financing activities, primarily to pay down company debt; and $5.0 million to
fund operating activities, primarily changes in working capital.
During 1993, the Company used $39.1 million of cash for investment activities,
primarily to fund construction and 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.
Since 1990, the Company has paid down $44.3 million of real estate debt on
wholly-owned real estate projects (from $50.9 million to $6.6 million),
utilizing proceeds from sales of property and general corporate funds.
Similarly, real estate joint venture debt has been reduced by $158 million over
the same period. As a result, the Company has reached a point at which revenues
from further real estate sales that, in the past, have been largely used to
retire real estate debt will be increasingly available to improve general
corporate liquidity. With the exception of the major properties referred to in
Note 11 to Notes to Consolidated Financial Statements, this trend should
continue over the next several years with debt on projects often being fully
repaid prior to full project sell-out. On the other hand, 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 during the
period from $70 million to $114.5 million at December 31, 1995. Effective
February 26, 1996, the Company entered into a Bridge Loan Agreement for an
additional $15 million through July 31, 1996 (see Note 4 to Notes to
Consolidated Financial Statements). Management believes that cash generated from
operations, existing credit lines and additional borrowings should probably be
adequate to meet the Company's funding requirements for at least the next twelve
months. However, the withdrawal of many commercial lending sources from both the
real estate and construction markets and/or restrictions on new borrowings and
extensions on maturing loans by these very same sources cause uncertainties in
predicting liquidity. In addition to internally generated funds, the Company has
access to additional funds under its long-term revolving credit facility and
Bridge Loan Agreement. At December 31, 1995, the Company has $24.5 million
available under its revolving credit facility and, effective February 26, 1996,
an additional $15 million became available under the Bridge Loan Agreement. The
financial covenants to which the Company is subject include minimum levels of
working capital, debt/net worth ratio, net worth level and interest coverage,
all as defined in the loan documents. Although the Company was in violation of
certain of the covenants during the latter part of 1995, it obtained waivers of
such violations and, effective February 26, 1996, received modifications to the
Credit Agreement which eliminated any non-compliance.
- 18 -
<PAGE>
The working capital current ratio stood at 1.12:1 at the end of 1995, compared
to 1.13:1 at the end of 1994 and to 1.17:1 at the end of 1993. Of the total
working capital of $36.5 million at the end of 1995, approximately $6 million
may not be converted to cash within the next 12 to 18 months.
LONG-TERM DEBT
Long-term debt was $84.2 million at the end of 1995, which represented an
increase of $7.2 million compared with $77 million at the end of 1994, which was
a decrease of $5.4 million compared with $82.4 million at the end of 1993. The
ratio of long-term debt to equity increased from .58:1 at the end of 1994 to
.80:1 at the end of 1995 due to the increase in long-term debt coupled with the
negative impact on equity as a result of the net loss experienced by the Company
in 1995. The ratio of long-term debt to equity improved from .63:1 at the end of
1993 to .58:1 at the end of 1994 due to the decrease in long-term debt achieved
in 1994.
STOCKHOLDERS' EQUITY
The Company's book value per common share stood at $17.06 at December 31, 1995,
compared to $23.79 per common share and $24.49 per common share at the end of
1994 and 1993, respectively. The major factor impacting stockholders' equity
during the three-year period under review was the net loss recorded in 1995 and,
to a lesser extent, preferred dividends paid or accrued, and treasury stock
issued in partial payment of incentive compensation.
At December 31, 1995, there were 1,346 common stockholders of record based on
the stockholders list maintained by the Company's transfer agent.
DIVIDENDS
During 1993 and 1994, the Company paid the regular quarterly cash dividends of
$5.3125 per share on the Company's convertible exchangeable preferred shares for
an 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). During 1995, the Board of Directors continued to declare and pay the
regular quarterly cash dividend on the Company's preferred stock through
December 15, 1995. In conjunction with the covenants of the new Amended
Revolving Credit Agreement (see Note 4 to Notes to Consolidated Financial
Statements), the Company is required to suspend the payment of quarterly
dividends on its preferred stock until the Bridge Loan commitment is no longer
outstanding, if a default exists under the terms of the Amended Revolving Credit
Agreement, or if the ratio of long-term debt to equity exceeds 50%. Therefore,
the dividend that normally would have been declared during December of 1995 and
payable on March 15, 1996 has not been declared (although it has been fully
accrued due to the "cumulative" feature of the preferred stock). The Board of
Directors intends to resume payment of the cumulative dividend on the Company's
preferred stock as the Company satisfies the terms of the new credit agreement
and the Board deems it prudent to do so. There were no cash dividends declared
during the three-year period ended December 31, 1995 on the Company's
outstanding common stock. It is Management's intent to recommend reinstating
dividends on common stock once it is prudent to do so.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ----------------------------------------------------
The Reports of Independent Public Accountants, Consolidated Financial
Statements, and Supplementary Schedules, are set forth on the pages that follow
in this Report and are hereby incorporated herein.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
- 19 -
<PAGE>
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- ------------------------------------------------------------
Reference is made to the information to be set forth in the section
entitled "Election of Directors" in the definitive proxy statement involving
election of directors in connection with the Annual Meeting of Stockholders to
be held on May 16, 1996 (the "Proxy Statement"), which section is incorporated
herein by reference. The Proxy Statement will be filed with the Securities and
Exchange Commission not later than 120 days after December 31, 1995 pursuant to
Regulation 14A of the Securities and Exchange Act of 1934, as amended.
Listed below are the names, offices held, ages and business experience
of all executive officers of the Company.
NAME, OFFICES HELD YEAR FIRST ELECTED TO PRESENT OFFICE
AND AGE AND BUSINESS EXPERIENCE
David B. Perini, He has served as a Director, President, Chief Executive
Director, Chairman, Officer and Acting Chairman since 1972. He became Chairman
President and on March 17, 1978 and has worked for the Company since 1962
Chief Executive in various capacities. Prior to being elected President, he
Officer - 58 served as Vice President and General Counsel.
Richard J. Rizzo, He has served in this capacity since January, 1994, which
Executive Vice entails overall responsibility for the Company's building
President, Building construction operations. Prior thereto, he served as
Construction - 52 President of Perini Building Company (formerly known as
Mardian Construction Co.) since 1985, and in various other
operating capacities since 1977.
John H. Schwarz, He has served as Executive Vice President, Finance and
Executive Vice Administration since August, 1994, and as Chief Executive
President, Finance Officer of Perini Land and Development Company, which
and Administration entails overall responsibility for the Company's real estate
of the Company and operations since April, 1992. Prior to that, he served as
Chief Executive Vice President, Finance and Controls of Perini Land and
Officer of Perini Development Company. Previously, he served as Treasurer from
Land and August, 1984, and Director of Corporate Planning since May,
Development 1982. He joined the Company in 1979 as Manager of Corporate
Company - 57 Development.
Donald E. Unbekant, He has served in this capacity since January, 1994, which
Executive Vice entails overall responsibility for the Company's civil and
President, Civil environmental construction operations. Prior thereto, he
and Environmental served in the Metropolitan New York Division of the Company
Construction - 64 as President since 1992, Vice President and General Manager
since 1990 and Division Manager since 1984.
The Company's officers are elected on an annual basis at the Board of
Directors Meeting immediately following the Shareholders Meeting in May, to hold
such offices until the Board of Directors Meeting following the next Annual
Meeting of Shareholders and until their respective successors have been duly
appointed or until their tenure has been terminated by the Board of Directors,
or otherwise.
ITEM 11. EXECUTIVE COMPENSATION
- --------------------------------
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ------------------------------------------------------------------------
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------
In response to Items 11-13, reference is made to the information to be
set forth in the section entitled "Election of Directors" in the Proxy
Statement, which is incorporated herein by reference.
- 20 -
<PAGE>
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
- -------------------------------------------------------------------------
PERINI CORPORATION AND SUBSIDIARIES
-----------------------------------
(a)1. The following financial statements and supplementary financial
information are filed as part of this report:
Pages
-----
Financial Statements of the Registrant
--------------------------------------
Consolidated Balance Sheets as of December 31, 1995 and
1994 23 - 24
Consolidated Statements of Operations for the three
years ended December 31, 1995, 1994 and 1993 25
Consolidated Statements of Stockholders' Equity for the
three years ended December 31, 1995, 1994 and 1993 26
Consolidated Statements of Cash Flows for the three years
ended December 31, 1995, 1994 and 1993 27 - 28
Notes to Consolidated Financial Statements 29 - 41
Report of Independent Public Accountants 42
(a)2. The following financial statement schedules are filed as part of this
report:
Pages
-----
Report of Independent Public Accountants on Schedule 43
Schedule II -- Valuation and Qualifying Accounts and Reserves 44
All other schedules are omitted because of the absence of the
conditions under which they are required or because the required
information is included in the Consolidated Financial Statements or in
the Notes thereto. Separate condensed financial information of the
Company has been omitted since restricted net assets of subsidiaries
included in the consolidated financial statements and its equity in the
undistributed earnings of 50% or less owned persons accounted for by
the equity method do not, in the aggregate, exceed 25% of consolidated
net assets.
(a)3. Exhibits
The exhibits which are filed with this report or which are incorporated
herein by reference are set forth in the Exhibit Index which appears on
pages 45 and 46. The Company will furnish a copy of any exhibit not
included herewith to any holder of the Company's common and preferred
stock upon request.
(b) During the quarter ended December 31, 1995, the Registrant made no
filings on Form 8-K.
- 21 -
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, hereunto duly authorized.
PERINI CORPORATION
(Registrant)
Dated: March 27, 1996 s/David B. Perini
-----------------
David B. Perini
Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Company and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
(i) Principal Executive Officer
David B. Perini Chairman, President and
Chief Executive Officer
s/David B. Perini March 27, 1996
- ------------------
David B. Perini
(ii) Principal Financial Officer
John H. Schwarz Executive Vice President,
Finance & Administration
s/John H. Schwarz March 27, 1996
- ------------------
John H. Schwarz
(iii) Principal Accounting Officer
Barry R. Blake Vice President and
Controller
s/Barry R. Blake March 27, 1996
- ------------------
Barry R. Blake
(iv) Directors
David B. Perini )
Joseph R. Perini ) By
Richard J. Boushka )
Marshall M. Criser ) s/David B. Perini
-----------------
Thomas E. Dailey ) David B. Perini
Albert A. Dorman )
Arthur J. Fox, Jr. ) Attorney in Fact
John J. McHale ) Dated: March 27, 1996
Jane E. Newman )
Bart W. Perini )
- 22 -
<PAGE>
<TABLE>
Consolidated Balance Sheets
December 31, 1995 and 1994
<CAPTION>
(In thousands except per share data)
Assets
- ------
1995 1994
---- ----
<S> <C> <C>
CURRENT ASSETS:
Cash, including cash equivalents of $29,059 and $3,518 (Note 1) $ 29,059 $ 7,841
Accounts and notes receivable, including retainage of $69,884 and $63,344 180,978 151,620
Unbilled work (Note 1) 28,304 20,209
Construction joint ventures (Notes 1 and 2) 61,846 66,346
Real estate inventory, at the lower of cost or market (Note 1) 14,933 11,525
Deferred tax asset (Notes 1 and 5) 13,039 6,066
Other current assets 2,186 3,041
-------- --------
Total current assets $330,345 $266,648
-------- --------
REAL ESTATE DEVELOPMENT INVESTMENTS:
Land held for sale or development (including land development costs) at
the lower of cost or market (Note 1) $ 41,372 $ 43,295
Investments in and advances to real estate joint ventures
(Notes 1, 2 and 11) 148,225 148,843
Real estate properties used in operations, less accumulated depreciation
of $3,444 and $3,698 2,964 6,254
Other 302 80
-------- --------
Total real estate development investments $192,863 $198,472
-------- --------
PROPERTY AND EQUIPMENT, at cost:
Land $ 809 $ 1,134
Buildings and improvements 13,548 13,653
Construction equipment 15,597 15,249
Other equipment 9,911 12,552
-------- --------
$ 39,865 $ 42,588
Less - Accumulated depreciation (Note 1) 27,299 29,082
-------- --------
Total property and equipment, net $ 12,566 $ 13,506
-------- --------
OTHER ASSETS:
Other investments $ 1,839 $ 2,174
Goodwill (Note 1) 1,638 1,700
-------- --------
Total other assets $ 3,477 $ 3,874
-------- --------
$539,251 $482,500
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 23 -
<PAGE>
<TABLE>
Liabilities and Stockholders' Equity
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
CURRENT LIABILITIES:
Current maturities of long-term debt (Note 4) $ 5,697 $ 5,022
Accounts payable, including retainage of $58,749 and $52,224 197,052 148,055
Advances from construction joint ventures (Note 2) 34,830 8,810
Deferred contract revenue (Note 1) 23,443 38,929
Accrued expenses 32,778 35,884
--------- --------
Total current liabilities $293,800 $236,700
--------- --------
DEFERRED INCOME TAXES AND OTHER LIABILITIES (Notes 1, 5 & 6) 52,663 $ 33,488
--------- --------
LONG-TERM DEBT, less current maturities included above (Note 4):
Real estate development $ 3,660 $ 6,502
Other 80,495 70,484
--------- --------
Total long-term debt $ 84,155 $ 76,986
--------- --------
MINORITY INTEREST (Note 1) $ 3,027 $ 3,297
--------- --------
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
Series A junior participating preferred stock, $1 par value -
Authorized - 200,000
Issued - none - -
Common stock, $1 par value -
Authorized - 15,000,000 shares
Issued - 4,985,160 shares 4,985 4,985
Paid-in surplus 57,659 59,001
Retained earnings 52,062 81,772
ESOT related obligations (4,965) (6,009)
--------- ---------
$109,841 $139,849
Less - Common stock in treasury, at cost - 265,735 shares and 490,674 shares 4,235 7,820
--------- --------
Total stockholders' equity $105,606 $132,029
--------- --------
$539,251 $482,500
</TABLE>
- 24 -
<PAGE>
<TABLE>
Consolidated Statements of Operations
For the years ended December 31, 1995, 1994 & 1993
(In thousands, except per share data)
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
REVENUES (Notes 2 and 13) $1,101,068 $1,012,045 $1,100,116
----------- ----------- ----------
COSTS AND EXPENSES (Notes 2 and 10):
Cost of operations $1,086,213 $ 960,248 $1,047,330
General, administrative and selling expenses 37,283 42,985 44,212
----------- ----------- ----------
$1,123,496 $1,003,233 $1,091,542
----------- ----------- ----------
INCOME (LOSS) FROM OPERATIONS (Note 13) $ (22,428) $ 8,812 $ 8,574
----------- ----------- ----------
Other income (expense), net (Note 6) 814 (856) 5,207
Interest expense (Notes 3 and 4) (8,582) (7,473) (5,655)
----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES $ (30,196) $ 483 $ 8,126
(Provision) credit for income taxes (Notes 1 and 5) 2,611 (180) (4,961)
----------- ----------- -----------
NET INCOME (LOSS) $ (27,585) $ 303 $ 3,165
=========== =========== ==========
EARNINGS (LOSS) PER COMMON SHARE (Note 1) $ (6.38) $ (.42) $ .24
=========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 25 -
<PAGE>
<TABLE>
Consolidated Statements of Stockholders' Equity
For the Years Ended December 31, 1995, 1994 & 1993
(In thousands, except per share data)
<CAPTION>
Cumulative ESOT
Preferred Common Paid-In Retained Translation Related Treasury
Stock Stock Surplus Earnings Adjustment Obligation Stock
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------- ------------- --------- ------------ ------------ ------------- --------------- --------------
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*) - - - (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 - - - 303 - - -
Preferred stock-cash
dividends declared
($21.25 per share*) - - - (2,125) - - -
Treasury stock issued in
partial payment of
incentive compensation - - (835) - - - 2,444
Restricted stock awarded - - (39) - - - 165
Payments related to ESOT -
notes - - - - - 973
- -------------------------------- ------------- --------- ------------ ------------ ------------- --------------- --------------
Balance-December 31, 1994 $100 $4,985 $59,001 $ 81,772 $ - $(6,009) $ (7,820)
- -------------------------------- ------------- --------- ------------ ------------ ------------- --------------- --------------
Net Loss - - - (27,585) - - -
Preferred stock-cash
dividends declared or
accrued ($21.25 per
share*) - - - (2,125) - - -
Treasury stock issued in
partial payment of
incentive compensation - - (1,342) - - - 3,585
Payments related to ESOT
notes - - - - - 1,044 -
- -------------------------------- ------------- --------- ------------ ------------ ------------- --------------- --------------
Balance-December 31, 1995 $100 $4,985 $57,659 $ 52,062 $ - $(4,965) $ (4,235)
- -------------------------------- ------------- --------- ------------ ------------ ------------- --------------- --------------
</TABLE>
*Equivalent to $2.125 per depositary share (see Note 7).
The accompanying notes are an integral part of these financial statements.
- 26 -
<PAGE>
<TABLE>
Consolidated Statements of Cash Flows
For the years ended December 31, 1995, 1994 & 1993
(In thousands)
<CAPTION>
Cash Flows from Operating Activities: 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Net income (loss) $(27,585) $ 303 $ 3,165
Adjustments to reconcile net income (loss) to net cash from
operating activities -
Depreciation and amortization 2,769 2,879 3,515
Non-current deferred taxes and other liabilities 19,175 (5,306) 11,239
Distributions greater (less) than earnings of joint ventures
and affiliates 12,880 2,995 (2,821)
Gain on sale of Majestic (Note 6) - - (4,631)
Cash provided from (used by) changes in components of working capital other
than cash, notes payable and current maturities
of long-term debt 16,571 (14,119) (19,653)
Real estate development investments other than joint ventures 2,757 11,451 10,908
Other non-cash items, net (2,174) (3,231) (3,299)
--------- --------- ---------
NET CASH PROVIDED FROM (USED BY) OPERATING ACTIVITIES $ 24,573 $ (5,028) $ (1,577)
--------- --------- ---------
Cash Flows from Investing Activities:
Proceeds from sale of property and equipment $ 3,115 $ 989 $ 1,344
Cash distributions of capital from unconsolidated joint
ventures $ 23,858 13,112 4,977
Acquisition of property and equipment (1,960) (2,493) (4,387)
Improvements to land held for sale or development (193) (334) (4,227)
Improvements to real estate properties used
in operations (263) (140) (614)
Capital contributions to unconsolidated joint ventures (29,373) (20,199) (24,579)
Advances to real estate joint ventures, net (7,735) (6,559) (16,031)
Proceeds from sale of Majestic, net of subsidiary's cash - - 4,377
Investments in other activities 190 14 -
--------- --------- ------
NET CASH USED BY INVESTING ACTIVITIES $(12,361) $(15,610) $(39,140)
--------- --------- ---------
- 27 -
<PAGE>
<CAPTION>
Consolidated Statements of Cash Flows (Continued)
For the years ended December 31, 1995, 1994 & 1993
<S> <C> <C> <C>
(In thousands)
Cash Flows from Financing Activities:
Proceeds from long-term debt $ 12,033 $ 3,127 $ 8,014
Repayment of long-term debt (3,145) (10,129) (11,600)
Cash dividends paid (2,125) (2,125) (2,125)
Treasury stock issued 2,243 1,735 2,736
--------- --------- --------
NET CASH PROVIDED FROM (USED BY) FINANCING ACTIVITIES $ 9,006 $ (7,392) $ (2,975)
--------- --------- ---------
Net Increase (Decrease) in Cash $ 21,218 $(28,030) $(43,692)
Cash and Cash Equivalents at Beginning of Year 7,841 35,871 79,563
--------- --------- --------
Cash and Cash Equivalents at End of Year $ 29,059 $ 7,841 $ 35,871
========= ========= ========
Supplemental Disclosures of Cash Paid During the Year For:
Interest $ 8,715 $ 7,308 $ 5,947
========= ========= ========
Income tax payments $ 121 $ 1,176 $ 843
========= ========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 28 -
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 1995 1994 & 1993
[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 currently wholly-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. All significant intercompany
profits between the Company and its joint ventures have been eliminated in
consolidation. Taxes are provided on joint venture results in accordance with
Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for
Income Taxes".
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) $1 million in cash paid by the Company, 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 has been accounted for as a purchase. If this
acquisition had been consummated as of January 1, 1993, the 1993 pro forma
results would have been. Revenues of $1,134,264,000 and Net Income of $3,724,000
($.37 per common share).
[b] Use of Estimates
- --------------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. The most significant
estimates with regard to these financial statements relate to the estimating of
final construction contract profits in accordance with accounting for long term
contracts (see Note 1(c) below), estimating of net realizable value of real
estate development projects (see Note 1(d) below) and estimating potential
liability in conjunction with certain contingencies and commitments, as
discussed in Note 11. Actual results could differ from these estimates.
[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 that 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.
- 29 -
<PAGE>
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. Real estate investments are stated at the lower of cost, which
includes applicable interest and real estate taxes during the development and
construction phases, or market. The market or net realizable value of a
development is determined by estimating the sales value of the development in
the ordinary course of business less the estimated costs of completion (to the
stage of completion assumed in determining the selling price), holding and
disposal. Estimated sales values are forecast based on comparable local sales
(where applicable), trends as foreseen by knowledgeable local commercial real
estate brokers or others active in the business and/or project specific
experience such as offers made directly to the Company relating to the property.
If the net realizable value of a development is less than the cost of a
development, a provision is made to reduce the carrying value of the development
to net realizable value. At present, the Company believes its real estate
properties are carried at amounts at or below their net realizable values
considering the expected timing of their disposal.
[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
- ----------------
The Company follows Statement of Financial Accounting Standards (SFAS) No. 109,
"Accounting for Income Taxes," (see Note 5).
[h] Earnings (Loss) Per Common Share
- ------------------------------------
Computations of earnings (loss) 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, 1995, earnings (loss)
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 (loss) 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.
- 30 -
<PAGE>
[2] JOINT VENTURES
The Company, in the normal conduct of its business, has entered into partnership
arrangements, referred to as "joint ventures," for certain 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, 1995 follows:
CONSTRUCTION JOINT VENTURES
Financial position at December 31, 1995 1994 1993
--------- --------- ---------
Current assets $227,578 $232,025 $241,905
Property and equipment, net 22,491 19,386 17,228
Current liabilities (151,311) (132,326) (151,181)
--------- --------- ---------
Net assets $ 98,758 $119,085 $107,952
========= ========= =========
Operations for the year ended December 31,
1995 1994 1993
--------- --------- ---------
Revenue $348,730 $544,546 $626,327
Cost of operations 329,414 505,347 574,383
--------- --------- ---------
Pretax income $ 19,316 $ 39,199 $ 51,944
========= ========= =========
Company's share of joint ventures
Revenue $182,799 $241,784 $293,547
Cost of operations 177,990 224,039 272,137
--------- --------- ---------
Pretax income $ 4,809 $ 17,745 $ 21,410
========= ========= =========
Equity $ 61,846 $ 66,346 $ 61,156
========= ========= =========
The Company has a centralized cash management arrangement with most construction
joint ventures in which it is the sponsor. Under this arrangement, excess cash
is controlled by the Company; cash is made available to meet the individual
joint venture requirements, as needed; and interest income is credited to the
ventures at competitive market rates. In addition, certain joint ventures
sponsored by other contractors, in which the Company participates, distribute
cash at the end of each quarter to the participants who will then return these
funds at the beginning of the next quarter. Of the total cash advanced at the
end of 1995 ($34.8 million) and 1994 ($8.8 million), approximately $12.1 million
in 1995 and $5.5 million in 1994 was deemed to be temporary.
REAL ESTATE JOINT VENTURES
Financial position at December 31, 1995 1994 1993
--------- --------- ---------
Property held for sale or development $ 18,350 $ 28,885 $ 35,855
Investment properties, net 173,468 177,258 191,606
Other assets 61,700 62,101 61,060
Long-term debt (72,603) (77,968) (103,090)
Other liabilities* (305,755) (277,184) (256,999)
---------- --------- ---------
Net assets (liabilities) $(124,840) $(86,908) $(71,568)
========== ========= =========
Operations for the year ended December 31, 1995 1994 1993
--------- --------- ---------
Revenue $ 49,560 $ 58,326 $ 83,710
---------- --------- ---------
Cost of operations -
Depreciation $ 7,304 $ 7,245 $ 8,660
Other 73,829 71,211 92,963
---------- --------- ---------
$ 81,133 $ 78,456 $101,623
---------- --------- ---------
Pretax income (loss) $ (31,573) $(20,130) $(17,913)
========== ========= =========
Company's share of joint ventures
Revenue $ 23,424 $ 27,059 $ 43,590
---------- --------- ---------
Cost of operations -
Depreciation $ 3,275 $ 3,323 $ 4,033
Other ** 20,888 26,682 40,716
---------- --------- ---------
$ 24,163 $ 30,005 $ 44,749
---------- --------- ---------
Pretax income (loss) $ (739) $ (2,946) $ (1,159)
========== ========= =========
Equity *** $ (49,580) $(33,091) $(27,768)
========== ========= =========
- 31 -
<PAGE>
* Included in "Other liabilities" are advances from joint venture partners
in the amount of $236.8 million in 1993, $259.3 million in 1994, and
$287.6 million in 1995. Of the total advances from joint venture
partners, $165.9 million in 1993, $181.9 million in 1994, and $198.7
million in 1995 represented advances from the Company.
** Other costs are reduced by the amount of interest income recorded by the
Company on its advances to the respective joint ventures.
*** When the Company's equity in a real estate joint venture is combined
with advances by the Company to that joint venture, each joint venture
has a positive investment balance at December 31, 1995.
[3] NOTES PAYABLE TO BANKS
During 1994, the Company maintained unsecured short-term lines of credit
totaling $18 million. In support of these credit lines, the Company paid fees
approximating 1/4 of 1% of the amount of the lines. These lines were canceled as
of December 12, 1994 upon the effective date of the expanded credit agreement
referred to in Note 4 below. Information relative to the Company's short-term
debt activity under such lines in 1994 follows (in thousands):
1994
Borrowings during the year:
Average $10,992
Maximum $18,000
At year-end $ -
Weighted average interest rates:
During the year 7.4%
At year-end -
[4] LONG-TERM DEBT
<TABLE>
Long-term debt of the Company at December 31, 1995 and 1994 consists of the
following (in thousands):
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Real Estate Development:
Industrial revenue bonds, at 65% of prime, payable in semi-annual installments $ 1,034 $ 1,310
Mortgages on real estate, at rates ranging from prime plus 1 1/2% to 10.82%,
payable in installments 5,521 6,588
------- -------
Total $ 6,555 $ 7,898
Less - current maturities 2,895 1,396
------- -------
Net real estate development long-term debt $ 3,660 $ 6,502
======= =======
Other:
Revolving credit loans at an average rate of 8.1% in 1995 and 8.6% in 1994 $73,000 $62,000
ESOT Notes at 8.24%, payable in semi-annual installments (Note 7) 4,484 5,396
Industrial revenue bonds at various rates, payable in installments to 2005 4,000 4,000
Other indebtedness 1,813 2,714
------- -------
Total $83,297 $74,110
Less - current maturities 2,802 3,626
------- -------
Net other long-term debt $80,495 $70,484
======= =======
</TABLE>
Payments required under these obligations amount to approximately $5,697 in
1996, $74,877 in 1997, $3,128 in 1998, $2,150 in 1999, $ - in 2000 and $4,000
for the years 2001 and beyond.
Effective December 12, 1994, the Company entered into a new revolving credit
agreement with a group of major banks which provided, among other things, for
the Company to borrow up to an aggregate of $125 million (aggregate limit under
previous agreements was $85 million), with a $25 million maximum of such amount
also being available for letters of credit, of which $17 million was outstanding
at December 31, 1995. 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 December 6, 1997, 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
- 32 -
<PAGE>
of 1% annually on the unused portion of the commitment.
The aggregate $125 million commitment is subject to permanent partial reductions
based on certain events, as defined, such as proceeds from real estate sales
over a defined annual minimum, certain claims and future equity offerings and
was reduced accordingly during 1995 by $10.5 million.
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. As a result of the
loss in the third quarter of 1995, the Company was in violation of certain of
these financial covenants; however, the Company obtained waivers of any such
violations and effective February 26, 1996, received modifications to the Credit
Agreement which eliminated any non-compliance.
Other modifications included, among other things, a requirement to reduce the
amount of this loan commitment by $2 million per month for four months
commencing the later of September 1, 1996 or the date of repayment and
cancellation of the Bridge Loan referred to below; additional collateral which
consists of all available assets not included as collateral in other agreements;
and suspension of payment of the 53 1/8 cent per share quarterly dividend on the
Company's Depositary Convertible Exchangeable Preferred Shares (see Note 7)
until certain financial criteria are met.
Also, effective February 26, 1996, the Company entered into a Bridge Loan
Agreement with its revolver banks to borrow up to an additional $15 million
through July 31, 1996 at an interest rate of prime plus 2%. The Bridge Loan
Agreement provides for, among other things, interim mandatory reductions in the
amount of the commitment equal to the net proceeds from sale of collateral not
included in the Company's 1996 budget and 50% of the net proceeds from any new
equity.
[5] INCOME TAXES
The Company accounts for income taxes in accordance with SFAS No. 109. This
standard determines deferred income taxes based on the estimated future tax
effects of differences between the financial statement and tax bases of assets
and liabilities, given the provisions of enacted tax laws.
The (provision) credit for income taxes is comprised of the following (in
thousands):
Federal State Total
------- ----- -----
1995
Current $ - $ (11) $ (11)
Deferred 2,726 (104) 2,622
-------- -------- --------
$ 2,726 $ (115) $ 2,611
======== ======== ========
1994
Current $ - $ (21) $ (21)
Deferred (108) (51) (159)
-------- -------- --------
$ (108) $ (72) $ (180)
======== ======== ========
1993
Current $(2,824) $ (430) $(3,254)
Deferred (1,808) 101 (1,707)
-------- -------- --------
$(4,632) $ (329) $(4,961)
======== ======== ========
The table below reconciles the difference between the statutory federal income
tax rate and the effective rate provided in the statements of operations.
1995 1994 1993
---- ---- ----
Statutory federal income tax rate (34)% 34 % 34 %
State income taxes, net of federal tax benefit - 4 2
Change in valuation allowance 25 - -
Sale of Canadian subsidiary - - 24
Goodwill and other - (1) 1
----- ----- -----
Effective tax rate (9)% 37 % 61 %
===== ===== =====
- 33 -
<PAGE>
The following is a summary of the significant components of the Company's
deferred tax assets and liabilities as of December 31, 1995 and 1994 (in
thousands):
<TABLE>
<CAPTION>
1995 1994
---------------------------------- -------------------------------
Deferred Deferred Tax Deferred Deferred Tax
Tax Assets Liabilities Tax Assets Liabilities
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Provision for estimated losses $ 5,646 $ - $ 6,203 $ -
Contract losses 5,642 - 887 -
Joint ventures - construction - 4,929 - 8,088
Joint ventures - real estate - 20,419 - 25,668
Timing of expense recognition 4,253 - 13,867 -
Capitalized carrying charges - 2,187 - 1,776
Net operating loss carryforwards 13,675 - 5,960 -
Alternative minimum tax credit
carryforwards 2,419 - 2,300 -
General business tax credit
carryforwards 3,532 - 3,637 -
Foreign tax credit carryforwards 978 - 978 -
Other, net 576 985 685 861
-------- -------- -------- --------
$36,721 $28,520 $34,517 $36,393
Valuation allowance for deferred
tax assets (9,342) - (1,846) -
-------- -------- -------- --------
Total $27,379 $28,520 $32,671 $36,393
======== ======== ======== ========
</TABLE>
The net of the above is deferred taxes in the amount of $1,141 in 1995 and
$3,722 in 1994 which is classified in the respective Consolidated Balance Sheets
as follows:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Long-term deferred tax liabilities (included in "Deferred Income
Taxes and Other Liabilities") $14,180 $ 9,788
Short-term Deferred Tax Asset 13,039 6,066
------- -------
$ 1,141 $ 3,722
======= =======
</TABLE>
A valuation allowance is provided to reduce the deferred tax assets to a level
which, more likely than not, will be realized. The net deferred assets reflect
management's estimate of the amount which will be realized from future taxable
income which can be predicted with reasonable certainty.
At December 31, 1995, the Company has unused tax credits and net operating loss
carryforwards for income tax reporting purposes which expire as follows (in
thousands):
Unused Investment Foreign Net Operating Loss
Tax Credits Tax Credits Carryforwards
----------- ----------- -------------
1996-2000 $ - $ 978 $ -
2001-2004 3,532 - 968
2005-2010 - - 39,251
------ ------ -------
$3,532 $ 978 $40,219
====== ====== =======
Approximately $2.8 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.
- 34 -
<PAGE>
[6] DEFERRED INCOME TAXES AND OTHER LIABILITIES AND OTHER INCOME (EXPENSE), NET
DEFERRED INCOME TAXES AND OTHER LIABILITIES
Deferred income taxes and other liabilities at December 31, 1995 and 1994
consist of the following (in thousands):
1995 1994
------- ------
Deferred Income Taxes $14,180 $ 9,788
Insurance related liabilities 20,484 18,000
Employee benefit-related liabilities 5,110 4,700
Other 12,889 1,000
------- -------
$52,663 $33,488
======= =======
OTHER INCOME (EXPENSE), NET
Other income (expense) items for the three years ended December 31, 1995 are as
follows (in thousands):
1995 1994 1993
------- ------- -------
Interest and dividend income $ 1,369 $ 205 $ 624
Minority interest (Note 1) 10 24 167
Gain on sale of Majestic - - 4,631
Bank fees (1,099) (1,100) (584)
Miscellaneous income (expense), net 534 15 369
-------- -------- -------
$ 814 $ (856) $5,207
======== ======== =======
[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 preferred stock of the Company, as
evidenced by ownership of depositary shares, 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 preferred stock is redeemable at the
option of the Company at any time, in whole or in part, at declining premiums
until June 1997 and thereafter at $25 per share plus any unpaid dividends. The
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
- 35 -
<PAGE>
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 December 31, 1995 and 1994, 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. Options for 240,000 shares common stock 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, 1993 434,425 $11.06-$33.06 143,000
Granted 20,000 $13.00
Canceled (32,900) $11.06-$33.06
Outstanding at December 31, 1994 421,525 $11.06-$33.06 251,525
Granted 10,000 $10.44
Canceled (52,875) $11.06-$33.06
Outstanding at December 31, 1995 378,650 $10.44-$33.06 198,650
When options are exercised, the proceeds are credited to stockholders' equity.
In addition, the income tax savings attributable to nonqualified options
exercised are 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 1995, 1994 and 1993 follows (in
thousands):
1995 1994 1993
------ ------ ------
Service cost - benefits earned during the period $ 988 $ 1,178 $ 1,000
Interest cost on projected benefit obligation 2,956 2,936 2,862
Return on plan assets:
Actual (6,971) 1,229 (4,002)
Deferred 4,217 (3,839) 1,309
Other - - 19
-------- -------- --------
Net pension cost $ 1,190 $ 1,504 $ 1,188
======== ======== ========
Actuarial assumptions used:
Discount rate 7 %* 8 3/4%** 7 1/2%
Rate of increase in compensation 4 %* 5 1/2% 5 1/2%
Long-term rate of return on assets 8 % 8 % 8 %
* Rates were changed effective December 31, 1995 and resulted in a net
increase of $6.8 million in the projected benefit obligation referred to
below.
** Rate was changed effective December 31, 1994 and resulted in a net
decrease of $5.6 million in the projected benefit obligation referred to
below.
- 36 -
<PAGE>
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,
1995 1994
-------- --------
<S> <C> <C>
Assets available for benefits:
Funded plan assets at fair value $37,542 $31,762
Accrued pension expense 4,122 3,610
-------- --------
Total assets $41,664 $35,372
-------- --------
Actuarial present value of benefit obligations:
Accumulated benefit obligations, including vested benefits of $39,050 and $39,760 $30,537
$30,179
Effect of future salary increases 3,831 4,546
-------- --------
Projected benefit obligations $43,591 $35,083
-------- --------
Assets available more (less) than projected benefits $(1,927) $ 289
======== ========
Consisting of:
Unamortized net liability existing at date of adopting SFAS No. 87 $ (29) $ (36)
Unrecognized net loss (2,408) (268)
Unrecognized prior service cost 510 593
-------- --------
$(1,927) $ 289
======== ========
</TABLE>
The Company also has a contributory Section 401(k) plan and a noncontributory
employee stock ownership plan (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.
The Company's policy is generally to fund currently the costs accrued under the
pension plan and the Section 401(k) plan.
The Company also has an unfunded supplemental retirement plan for certain
employees whose benefits under principal salaried retirement plans are reduced
because of compensation limitations under federal tax laws. Pension expense for
this plan was $.2 million in 1995 and 1994 and $.1 million in 1993. At December
31, 1995 the projected benefit obligation was $1.3 million. A corresponding
accumulated benefit obligation of $.8 million has been recognized as a liability
in the consolidated balance sheet and is equal to the amount of the vested
benefits.
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 $7.6
million in 1995, $9.2 million in 1994 and $8.5 million in 1993.
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 $12.6 million in 1995,
$12.4 million in 1994, and $5.2 million in 1993. 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
In connection with the Rincon Center 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 $59 million; has issued a secured letter of credit to collateralize
$3.7 million of these borrowings; has guaranteed amortization payments on these
borrowings which the Company estimates to be a maximum of $7.2 million; and has
guaranteed a master lease under a sale operating lease-back transaction. In
calculating the potential obligation under the master lease guarantee, the
Company has an agreement with its lenders which employs a 10% discount rate and
no increases in future rental rates beyond current lease terms. Based on these
assumptions, management believes its additional future obligation will not
- 37 -
<PAGE>
exceed $2.3 million. The Company has also guaranteed the $3.7 million letter of
credit, $5.0 million of the subsidiary's $7.2 million amortization guaranty and
any obligation under the master lease during the next three 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 to the lessor sufficient to
reduce the financing from $46.5 million to $40.5 million. Subsequent payments
through 1995 have further reduced the loan to $38.2 million. In addition, as
part of the obligations of the extension, the partnership will have to further
amortize the debt from its current level to $33 million through additional lease
payments over the next three 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 approximately $18.8
million in excess of the then outstanding debt.
In 1993, the joint venture also extended $29 million of the $61 million
financing then outstanding through October 1, 1998. This extension required a
$.6 million up front paydown. Subsequent payments through 1995 further reduced
the loan by $2.7 million. The joint venture may be required to amortize up to
$9.1 million more of the principal, however, under certain conditions, that
amortization could be as low as $6.8 million. Total lease payments and loan
amortization obligations at Rincon Center through 1997 are as follows: $7.5
million in 1996 and $7.3 million in 1997. It is expected that some but not all
of these requirements will be generated by the project's operations. The
Company's real estate subsidiary and, to a more limited extent, the Company, is
obligated to fund any of the loan amortization and/or lease payments at Rincon
in the event sufficient funds are not generated by the property or contributed
to it by its partners. Based on current Company forecasts, it is expected the
maximum exposure to service these commitments in each of the years through 1997
is as follows: $5.4 million in 1996 and $4.0 million in 1997. Both years include
an estimate for tenant improvements which may or may not be required.
In a separate agreement related to this same property, the 20% co-general
partner has indicated it does not currently 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. The subsidiary has advanced approximately $3 million
to date under this agreement.
In connection with a second real estate development joint venture known as the
Resort at Squaw Creek, 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 $46 million; has guaranteed $10 million of loan
principal; has posted a letter of credit for $2.0 million as its part of credit
support required to extend the maturity of the loan to May 1997; and has
guaranteed leases which aggregate $1.1 million on a present value basis as
discounted at 10%. Effective May 1, 1995, the loan was renewed for an additional
two years with an option to renew for a third year. Required principal payments
are $250,000 per quarter for the first year and $500,000 per quarter for the
second year.
The subsidiary also has an obligation through the year 2001 to cover
approximately a $2 million per year preferred return to its joint venture
partner at the Resort if the funds are not generated from hotel operations.
Although results have shown improvement since the Resort opened in late 1990, it
is not expected that hotel operations will contribute to the obligation during
1996. Under the terms of the loan extension, payment of the preferred return out
of operating profits requires lender approval.
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 dividend 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
- 38 -
<PAGE>
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. As a
result of developments in the case during the third quarter of 1995, the Company
established a reserve with respect to the litigation. Management believes the
reserve should be adequate to cover the potential ultimate liability in this
matter.
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 (some of which are for
significant amounts). In the opinion of management, the resolution of these
matters will not have a material effect on the accompanying financial
statements.
- 39 -
<PAGE>
[12] UNAUDITED QUARTERLY FINANCIAL DATA
The following table sets forth unaudited quarterly financial data for the years
ended December 31, 1995 and 1994 (in thousands, except per share amounts):
<TABLE>
<CAPTION>
1995 by Quarter
---------------------------------------------------------
1st 2nd 3rd 4th
--- --- --- ---
<S> <C> <C> <C> <C>
Revenues $263,089 $306,961 $232,974 $298,044
Net income (loss) $ 872 $ 886 $(30,674) $ 1,331
Earnings (loss) per common share $ .08 $ .08 $ (6.61) $ .17
<CAPTION>
1994 by Quarter
---------------------------------------------------------
1st 2nd 3rd 4th
--- --- --- ---
<S> <C> <C> <C> <C>
Revenues $174,391 $243,105 $304,776 $289,773
Net income (loss) $ 792 $ (2,649) $ 984 $ 1,176
Earnings (loss) per common share $ .06 $ (.73) $ .10 $ .15
</TABLE>
[13] BUSINESS SEGMENTS AND FOREIGN OPERATIONS
The Company is currently engaged in the construction and real estate development
businesses. The Company provides general contracting, construction management
and design-build services to private clients and public agencies throughout the
United States and selected overseas locations. The Company's construction
business involves three types of operations: civil and environmental ("heavy"),
building and international. The Company's real estate development operations are
concentrated in Arizona, California, Florida, Georgia and Massachusetts;
however, the Company has not commenced the development of any new real estate
projects since 1990. The following tables set forth certain business and
geographic segment information relating to the Company's operations for the
three years ended December 31, 1995 (in thousands):
Business Segments
Revenues
1995 1994 1993
------------ ----------- ----------
Construction $1,056,673 $ 950,884 $1,030,341
Real Estate 44,395 61,161 69,775
------------ ----------- ----------
$1,101,068 $1,012,045 $1,100,116
============ =========== ==========
Income (Loss) From Operations
1995 1994 1993
------------ ----------- ----------
Construction $ (15,322) $ 13,989 $ 15,164
Real Estate (2,921) 732 240
Corporate (4,185) (5,909) (6,830)
------------ ----------- -----------
$ (22,428) $ 8,812 $ 8,574
============ =========== ===========
Assets
1995 1994 1993
------------ ------------ ----------
Construction $ 298,564 $ 262,850 $ 219,604
Real Estate 209,789 209,635 218,715
Corporate* 30,898 10,015 38,059
------------ ------------ ----------
$ 539,251 $ 482,500 $ 476,378
============ ============ ==========
Capital Expenditures
1995 1994 1993
----------- ----------- ----------
Construction $ 1,960 $ 2,491 $ 4,387
Real Estate 9,555 10,274 23,590
----------- ----------- ----------
$ 11,515 $ 12,765 $ 27,977
=========== =========== ==========
- 40 -
<PAGE>
Depreciation
1995 1994 1993
----------- ----------- -----------
Construction $ 2,369 $ 2,551 $ 2,552
Real Estate** 400 328 963
----------- ----------- -----------
$ 2,769 $ 2,879 $ 3,515
=========== =========== ===========
Geographic Segments
Revenues
1995 1994 1993
------------ ----------- -----------
United States $1,084,390 $ 996,832 $1,064,380
Foreign 16,678 15,213 35,736
----------- ----------- -----------
$1,101,068 $1,012,045 $1,100,116
=========== =========== ===========
Income (Loss) From Operations
1995 1994 1993
----------- ----------- -----------
United States $ (15,405) $ 17,275 $ 17,249
Foreign (2,838) (2,554) (1,845)
Corporate (4,185) (5,909) (6,830)
----------- ----------- -----------
$ (22,428) $ 8,812 $ 8,574
=========== =========== ===========
Assets
1995 1994 1993
----------- ----------- -----------
United States $503,114 $ 467,298 $ 433,488
Foreign 5,239 5,187 4,831
Corporate* 30,898 10,015 38,059
----------- ----------- -----------
$539,251 $ 482,500 $ 476,378
=========== =========== ===========
* In all years, corporate assets consist principally of cash, cash
equivalents, marketable securities and other investments available for
general corporate purposes.
** Does not include approximately $3 to $4 million of depreciation that
represents its share from real estate joint ventures. (See Note 2 to
Notes to the Consolidated Financial Statements.)
Contracts with various federal, state, local and foreign governmental agencies
represented approximately 56% of construction revenues in 1995 and 1994, and 54%
in 1993.
- 41 -
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders of Perini Corporation:
We have audited the accompanying consolidated balance sheets of PERINI
CORPORATION (a Massachusetts corporation) and subsidiaries as of December 31,
1995 and 1994, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1995. 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, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 26, 1996
- 42 -
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE
----------------------------------------------------
To the Stockholders of Perini Corporation:
We have audited, in accordance with generally accepted auditing
standards, the consolidated financial statements included in this Form 10-K, and
have issued our report thereon dated February 26, 1996. Our audits were made for
the purpose of forming an opinion on the consolidated financial statements taken
as a whole. The supplemental schedule listed in the accompanying index is the
responsibility of the Company's management and is presented for purpose of
complying with the Securities and Exchange Commission's rules and is not part of
the basic financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states, in all material respects, the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 26, 1996
- 43 -
<PAGE>
SCHEDULE II
PERINI CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
Additions
----------------------
Balance at Charged Charged to Deductions Balance
Beginning to Costs Other from at End
Description of Year & Expenses Accounts Reserves of Year
- ----------- ---------- ---------- ---------- ---------- -------
Year Ended December 31, 1995
- ----------------------------
<S> <C> <C> <C> <C> <C>
Reserve for doubtful accounts $ 351 $ - $ - $ - $ 351
======= ======= ==== ====== =======
Reserve for depreciation on $ 3,698 $ 387 $ - $ 641 (1) $ 3,444
======= ======= ==== ====== =======
real estate properties used
in operations
Reserve for real estate $11,471 $ - $ - $ 974 (2) $10,497
======= ======= ==== ====== =======
investments
Year Ended December 31, 1994
- ----------------------------
Reserve for doubtful accounts $ 351 $ - $ - $ - $ 351
======= ======= ==== ====== =======
Reserve for depreciation on $ 3,637 $ 328 $ - $ 267 (2) $ 3,698
======= ======= ==== ====== =======
real estate properties used
in operations
Reserve for real estate $20,838 $ - $ - $9,367 (2) $11,471
======= ======= ==== ====== =======
investments
Year Ended December 31, 1993
- ----------------------------
Reserve for doubtful accounts $ 351 $ - $ - $ - $ 351
======= ======= ==== ====== =======
Reserve for depreciation on
real estate properties used
in operations $ 3,181 $ 920 $ - $ 464 (2) $ 3,637
======= ======= ==== ====== =======
Reserve for real estate
investments $29,968 $ - $ - $9,130 (2) $20,838
======= ======= ==== ====== =======
</TABLE>
(1) Represents reserve reclassed with related asset to "Real estate inventory".
(2) Represents sales of real estate properties.
- 44 -
<PAGE>
EXHIBIT INDEX
The following designated exhibits are, as indicated below, either filed herewith
or have heretofore been filed with the Securities and Exchange Commission under
the Securities Act of 1933 or the Securities Act of 1934 and are referred to and
incorporated herein by reference to such filings.
Exhibit 3. Articles of Incorporation and By-laws
Incorporated herein by reference:
3.1 Restated Articles of Organization - As
amended through July 7, 1994 - Exhibit 3.1
to 1994 Form 10-K, as filed.
3.2 By-laws - As amended through September 14,
1990 - Exhibit 3.2 to 1991 Form 10-K, as
filed.
Exhibit 4. Instruments Defining the Rights of Security Holders,
Including Indentures
Incorporated herein by reference:
4.1 Certificate of Vote of Directors
Establishing a Series of a Class of Stock
determining the relative rights and
preferences of the $21.25 Convertible
Exchangeable Preferred Stock - Exhibit 4(a)
to Amendment No. 1 to Form S-2 Registration
Statement filed June 19, 1987; SEC
Registration No. 33-14434.
4.2 Form of Deposit Agreement, including form of
Depositary Receipt - Exhibit 4(b) to
Amendment No. 1 to Form S-2 Registration
Statement filed June 19, 1987; SEC
Registration No. 33-14434.
4.3 Form of Indenture with respect to the 8 1/2%
Convertible Subordinated Debentures Due June
15, 2012, including form of Debenture -
Exhibit 4(c) to Amendment No. 1 to Form S-2
Registration Statement filed June 19, 1987;
SEC Registration No. 33-14434.
4.4 Shareholder Rights Agreement 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, as amended and restated as
of May 17, 1990 - filed herewith.
Exhibit 10. Material Contracts
Incorporated herein by reference:
10.1 1982 Stock Option and Long Term Performance
Incentive Plan - Exhibit A to Registrant's
Proxy Statement for Annual Meeting of
Stockholders dated April 15, 1992.
10.2 Perini Corporation Amended and Restated
General Incentive Compensation Plan -
Exhibit 10.2 to 1991 Form 10-K, as filed.
10.3 Perini Corporation Amended and Restated
Construction Business Unit Incentive
Compensation Plan - Exhibit 10.3 to 1991
Form 10-K, as filed.
10.4 $125 million Credit Agreement dated as of
December 6, 1994 among Perini Corporation,
the Banks listed herein, Morgan Guaranty
Trust Company of New York, as Agent, and
Shawmut Bank, N.A., Co-Agent Exhibit 10.4 to
1994 Form 10-K, as filed.
- 45 -
<PAGE>
EXHIBIT INDEX
(Continued)
10.5 Amendment No. 1 as of February 26, 1996 to
the Credit Agreement dated as of December 6,
1994 among Perini Corporation, the Banks
listed herein, Morgan Guaranty Trust Company
of New York, as Agent, and Fleet National
Bank of Massachusetts (f/k/a Shawmut Bank,
N.A.), as Co- Agent - filed herewith.
10.6 Bridge Credit Agreement dated as of February
26, 1996 among Perini Corporation, the
Bridge Banks listed herein, Morgan Guaranty
Trust Company of New York, as Agent, and
Fleet National Bank of Massachusetts (f/k/a
Shawmut Bank, N.A.) as Co-Agent - filed
herewith.
Exhibit 22. Subsidiaries of Perini Corporation - filed herewith.
Exhibit 23. Consent of Independent Public Accountants - filed herewith.
Exhibit 24. Power of Attorney - filed herewith.
Exhibit 27. Financial Data Schedule - filed herewith.
- 46 -
<PAGE>
EXHIBIT 22
PERINI CORPORATION
SUBSIDIARIES OF THE REGISTRANT
<TABLE>
Percentage of
Interest or
<CAPTION>
Voting
Name Place of Organization Securities Owned
---- --------------------- ----------------
<S> <C> <C>
Perini Corporation Massachusetts
Perini Building Company, Inc. Arizona 100%
Pioneer Construction, Inc. West Virginia 100%
Perini Environmental Services, Inc. Delaware 100%
International Construction Management Delaware 100%
Services, Inc.
Percon Constructors, Inc. Delaware 100%
Perini International Corporation Massachusetts 100%
Bow Leasing Company, Inc. New Hampshire 100%
Perini Land & Development Company Massachusetts 100%
Paramount Development Massachusetts 100%
Associates, Inc.
I-10 Industrial Park Developers Arizona General 80%
Partnership
Perini Resorts, Inc. California 100%
Glenco-Perini - HCV Partners California Limited 45%
Partnership
Squaw Creek Associates California General 40%
Partnership
Perland Realty Associates, Inc. Florida 100%
Rincon Center Associates California Limited 46%
Partnership
Perini Central Limited Partnership Arizona Limited 75%
Partnership
Perini Eagle Limited Partnership Arizona Limited 50%
Partnership
Perini/138 Joint Venture Georgia General 49%
Partnership
Perini/RSEA Partnership Georgia General 50%
Partnership
</TABLE>
- 47 -
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports, dated February 26, 1996, included in Perini Corporation's Annual Report
on this Form 10-K for the year ended December 31, 1995, and into the Company's
previously filed Registration Statements Nos. 2-82117, 33-24646, 33-46961,
33-53190, 33-53192, 33-60654, 33- 70206, 33-52967 and 33-58519.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
March 26, 1996
- 48 -
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
We, the undersigned, Directors of Perini Corporation, hereby severally
constitute David B. Perini, John H. Schwarz and Richard E. Burnham, and each of
them singly, our true and lawful attorneys, with full power to them and to each
of them to sign for us, and in our names in the capacities indicated below, any
Annual Report on Form 10-K pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 to be filed with the Securities and Exchange Commission and
any and all amendments to said Annual Report on Form 10-K, hereby ratifying and
confirming our signatures as they may be signed by our said Attorneys to said
Annual Report on Form 10-K and to any and all amendments thereto and generally
to do all such things in our names and behalf and in our said capacities as will
enable Perini Corporation to comply with the provisions of the Securities
Exchange Act of 1934, as amended, and all requirements of the Securities and
Exchange Commission.
WITNESS our hands and common seal on the date set forth below.
s/David B. Perini Director March 13, 1996
- ----------------- -------- --------------
David B. Perini Date
s/Joseph R. Perini Director March 13, 1996
- ------------------ -------- --------------
Joseph R. Perini Date
s/Richard J. Boushka Director March 13, 1996
- -------------------- -------- --------------
Richard J. Boushka Date
s/Marshall M. Criser Director March 13, 1996
- -------------------- -------- --------------
Marshall M. Criser Date
s/Thomas E. Dailey Director March 13, 1996
- ------------------ -------- --------------
Thomas E. Dailey Date
s/Albert A. Dorman Director March 13, 1996
- ------------------ -------- --------------
Albert A. Dorman Date
s/Arthur J. Fox, Jr. Director March 13, 1996
- -------------------- -------- --------------
Arthur J. Fox, Jr. Date
Director March 13, 1996
- -------------------- -------- --------------
Nancy Hawthorne Date
s/John J. McHale Director March 13, 1996
- ---------------- -------- --------------
John J. McHale Date
s/Jane E. Newman Director March 13, 1996
- ---------------- -------- --------------
Jane E. Newman Date
s/Bart W. Perini Director March 13, 1996
- ---------------- -------- --------------
Bart W. Perini Date
- 49 -
$15,000,000
BRIDGE CREDIT AGREEMENT
dated as of
February 26, 1996
among
Perini Corporation
The Bridge Banks Listed Herein
Morgan Guaranty Trust Company of New York,
as Agent
Fleet National Bank of Massachusetts
(f/k/a Shawmut Bank, N.A.), as Co-Agent
1
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions...................................... 1
SECTION 1.02. Accounting Terms and
Determinations....................... 16
ARTICLE II
THE CREDITS
SECTION 2.01. The Bridge Loans. ............................... 16
SECTION 2.02. Method of Bridge Borrowing....................... 16
SECTION 2.03. Bridge Notes..................................... 18
SECTION 2.04. Maturity of Bridge Loans......................... 18
SECTION 2.05. Interest Rates. ................................. 18
SECTION 2.06. Bridge Commitment Fees........................... 18
SECTION 2.07. Participation Fee................................ 19
SECTION 2.08. Agency Fee. ..................................... 19
SECTION 2.09. Optional Termination or
Reduction of Bridge
Commitments.......................... 19
SECTION 2.10. Mandatory Termination or
Reduction of Bridge
Commitments.......................... 19
SECTION 2.11. Optional Prepayments............................. 20
SECTION 2.12. General Provisions as to
Payments............................. 21
SECTION 2.13. Computation of Interest and
Fees................................. 21
SECTION 2.14. Maximum Interest Rate............................ 21
SECTION 2.15. Bridge Letters of Credit......................... 22
- --------
The Table of Contents is not a part of this Agreement.
Page
----
ARTICLE III
CONDITIONS
SECTION 3.01. Bridge Effectiveness........................................ 30
SECTION 3.02. Credit Events............................................... 32
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power.
............................................... 34
SECTION 4.02. Corporate and Governmental
Authorization; No
Contravention................................... 34
SECTION 4.03. Binding Effect; Liens of
Collateral Documents............................ 35
SECTION 4.04. Financial Information....................................... 35
SECTION 4.05. Litigation. ................................................ 36
SECTION 4.06. Compliance with ERISA....................................... 36
SECTION 4.07. Environmental Matters....................................... 37
SECTION 4.08. Taxes. ................................................ 38
SECTION 4.09. Subsidiaries................................................ 39
SECTION 4.10. Not an Investment Company................................... 39
SECTION 4.11. No Burdensome Restrictions; No
Derivatives Obligations;
Certain Existing Agreements..................... 39
SECTION 4.12. Full Disclosure............................................. 39
SECTION 4.13. Ownership of Property; Liens................................ 40
ARTICLE V
COVENANTS
SECTION 5.01. Information................................................. 40
SECTION 5.02. Payment of Obligations; No
Derivatives Obligations......................... 44
SECTION 5.03. Maintenance of Property;
Insurance....................................... 44
Page
----
SECTION 5.04. Conduct of Business and
Maintenance of Existence....... 44
SECTION 5.05. Compliance with Laws....................... 45
SECTION 5.06. Inspection of Property, Books
and Records.................... 45
SECTION 5.07. Current Ratio.............................. 45
SECTION 5.08. Debt. ............................... 45
SECTION 5.09. Minimum Consolidated Tangible
Net Worth...................... 46
SECTION 5.10. Interest Coverage.......................... 46
SECTION 5.11. Negative Pledge............................ 47
SECTION 5.12. Consolidations, Mergers and
Sales of Assets................ 48
SECTION 5.13. Use of Proceeds............................ 49
SECTION 5.14. Restricted Payments........................ 49
SECTION 5.15. Real Estate Investments.................... 50
SECTION 5.16. Other Investments.......................... 50
SECTION 5.17. Further Assurances......................... 50
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default............. 51
SECTION 6.02. Cash Cover .................. 54
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization.
........................ 55
SECTION 7.02. Agent and Affiliates................. 55
SECTION 7.03. Action by Agent...................... 55
SECTION 7.04. Consultation with Experts............ 55
SECTION 7.05. Liability of Agent................... 55
SECTION 7.06. Indemnification...................... 56
SECTION 7.07. Credit Decision...................... 56
SECTION 7.08. Successor Agent...................... 56
SECTION 7.09. Collateral Documents................. 57
Page
----
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Notices. ......................... 57
SECTION 8.02. No Waivers. ......................... 58
SECTION 8.03. Expenses; Documentary Taxes;
Indemnification.......... 58
SECTION 8.04. Sharing of Setoffs................... 59
SECTION 8.05. Amendments and Waivers............... 60
SECTION 8.06. Successors and Assigns............... 60
SECTION 8.07. Certain Collateral................... 62
SECTION 8.08. Governing Law; Submission to
Jurisdiction............. 62
SECTION 8.09. Counterparts; Integration............ 62
SECTION 8.10. WAIVER OF JURY TRIAL................. 62
Schedule I - Existing Debt
Schedule II - Existing Liens
Schedule III - Real and Personal Property Interests Owned
by the Borrower and Its Subsidiaries
Schedule IV - Certain Existing Agreements
Schedule V - Other Reimbursement Obligations
Schedule VI - Subsidiaries of the Borrower
Schedule VII - Projected Net Cash from Claims, JV Capital
Calls/Distributions and Sales of Certain
Real Estate in 1996
Exhibit A - Bridge Note
Exhibit B-1 - Opinion of Assistant 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 C-3 - Opinion of Special Massachusetts Counsel
for the Agent
Exhibit C-4 - Opinion of Special Florida Counsel for
the Agent
Exhibit D - Borrower Security Agreement
Exhibit E - Borrower Pledge Agreement
Exhibit F-1 - Subsidiary Guarantee Agreement
Exhibit F-2 - Amendment No. 1 to the Subsidiary
Guarantee Agreement
Exhibit G - Subsidiary Security Agreement
Exhibit H-1 - Deed of Trust
Exhibit H-2 - Deed of Trust
Exhibit I-1 - Form of Mortgage (Palm Beach County,
Florida)
Exhibit I-2 - Form of Mortgage (Plymouth County,
Massachusetts)
Exhibit I-3 - Form of Mortgage (First; Bristol County
Massachusetts)
Exhibit I-4 - Form of Mortgage (Second; Bristol County
Massachusetts)
Exhibit I-5 - Form of Mortgage (Middlesex County,
Massachusetts)
Exhibit I-6 - Form of Mortgage (Merrimack County, New
Hampshire)
Exhibit I-7 - Form of Mortgage (Wayne County,
Michigan)
Exhibit J - Subsidiary Pledge Agreement
Exhibit K - Form of Assignment and Assumption
Agreement
Exhibit L - Bonding Company Letter
BRIDGE CREDIT AGREEMENT
-----------------------
AGREEMENT dated as of February 26, 1996 among PERINI
CORPORATION, the BRIDGE 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
Bridge Bank, the administrative questionnaire in the form submitted to such
Bridge Bank by the Agent and submitted to the Agent (with a copy to the
Borrower) duly completed by such Bridge Bank.
"Agent" means Morgan Guaranty Trust Company of New York in its
capacity as agent for the Bridge Banks under the Financing Documents, and its
successors in such capacity.
"Assignee" has the meaning set forth in Section 8.06(c).
"Available Bridge LC Amount" means at any time an amount equal
to the excess, if any, of (i) the aggregate amount of the Bridge Commitments
over (ii) the aggregate outstanding principal amount of the Bridge Loans.
"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.
"Bonding Company" means Fidelity and Deposit Company of
Maryland.
"Borrower" means Perini Corporation, a Massachusetts
corporation, and its successors.
"Borrower Pledge Agreement" means the Borrower Pledge
Agreement dated as of December 6, 1994 between the Borrower and the Agent, as
amended and restated as of February 26, 1996 in substantially the form of
Exhibit E hereto, and 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 dated as of February 26, 1996 in substantially the form of Exhibit D
hereto between the Borrower and the Agent and as the same may be amended from
time to time as permitted herein and in accordance with the terms thereof (the
Borrower Security Agreement dated as of December 6, 1994 executed and delivered
in connection with the execution and delivery of the Credit Agreement having
terminated upon collection by the Borrower of all the Collateral pledged
thereunder).
"Borrower's 1994 Form 10-K" means the Borrower's amended
annual report on Form 10-K for 1994, as filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934.
"Bridge Bank" means each bank listed on the signature pages
hereof, each Assignee which becomes a Bridge Bank pursuant to Section 8.06(c),
and their respective successors.
"Bridge Borrowing" means a borrowing hereunder consisting of
Bridge Loans made to the Borrower at the same time by of one or more Bridge
Banks on a single date and for a single Interest Period.
"Bridge Commitment" means, with respect to each Bridge Bank,
the amount set forth opposite the name of such Bridge Bank on the signature
pages hereof as its Bridge Commitment, as such amount may be reduced from time
to time pursuant to Section 2.09 and Section 2.10.
"Bridge Effective Date" means the date this Agreement becomes
effective in accordance with Section 3.01.
"Bridge LC Bank" means BayBank, N.A. or such other Bridge Bank
as the Borrower may designate from time to time (with the consent of such other
Bridge Bank).
"Bridge LC Exposure" means, at any time and for any Bridge
Bank, an amount equal to such Bridge Bank's Percentage of the aggregate amount
of Bridge Letter of Credit Liabilities in respect of all Bridge Letters of
Credit at such time.
"Bridge Letter of Credit" has the meaning set forth in Section
2.15(a).
"Bridge Letter of Credit Liabilities" means, at any time and
in respect of any Bridge Letter of Credit, the sum, without duplication, of (i)
the amount available for drawing under such Bridge Letter of Credit plus (ii)
the aggregate unpaid amount of all Bridge Reimbursement Obligations in respect
of previous drawings made under such Bridge Letter of Credit.
"Bridge Loan" means a loan made by a Bridge Bank pursuant to
Section 2.02.
"Bridge Loan Commitment" means for any Bridge Bank at any time
an amount equal to the excess, if any, of such Bridge Bank's Bridge Commitment
at such time over such Bridge Bank's Bridge LC Exposure at such time.
"Bridge Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit A hereto, evidencing the obligation of the
Borrower to repay the Bridge Loans, and "Bridge Note" means any one of such
promissory notes issued hereunder.
"Bridge Reimbursement Obligations" means at any date the
obligations of the Borrower then outstanding under Section 2.15 to reimburse any
Bridge Bank for the amount paid by such Bridge Bank in respect of a drawing
under a Bridge Letter of Credit.
"Bridge Termination Date" means July 31, 1996.
"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.
"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 Pledge Agreement,
the Borrower Security Agreement, the Subsidiary Security Agreement, the
Subsidiary Pledge Agreement, the Deeds of Trust, the Mortgages and all other
supplemental or additional security agreements, pledge agreements, mortgages or
similar instruments delivered pursuant hereto or thereto.
"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 the Borrower's project
management's opinion (and approved by the Borrower's 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 September 30, 1995.
"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 September
30, 1996 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 Agreement" means the $125,000,000 Credit Agreement
dated as of December 6, 1994 among the Borrower, the banks listed therein and
Morgan Guaranty Trust Company of New York, as agent for such banks, as amended
to the Bridge Effective Date.
"Credit Event" means the making of a Bridge Loan or the
issuance of a Bridge Letter of Credit or the extension of an Evergreen Bridge
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 non-contingent obligations of such Person as lessee
which are capitalized in accordance with generally accepted accounting
principles, (v) all obligations of such Person to reimburse issuers of letters
of credit for drawings under such letters of credit (other than the Other
Reimbursement Obligations and the obligation to reimburse Hong Kong and Shanghai
Bank for $1,800,000 of letters of credit issued by it and outstanding on the
date hereof), (vi) 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 (vii)
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 December 6,
1994 for each of the properties described as Items 1 and 2 on Schedule III
hereto, each substantially in the form of Exhibits H-1 and H-2 to the Credit
Agreement.
"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.
"Derivatives Obligations" of any Person means all obligations
of such Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"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
liabilities derived from an 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.
"Financial Bridge Letter of Credit" means any Bridge 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 Credit
Agreement, the Subsidiary Guarantee Agreement, the Notes (as defined in the
Credit Agreement), the Bridge 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 8.03(b).
"Interest Period" means with respect to each Bridge Borrowing
the period commencing on the date of such Bridge Borrowing and ending 30 days
thereafter; provided that any Interest Period which would otherwise end after
the Bridge Termination Date shall end on the Bridge 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 Bridge Bank, its office
located at its address set forth in its Administrative Questionnaire or such
other office as such Bridge 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.
"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) determined on an unconsolidated basis as of such date, less 75% of
the principal amount of any Special Subordinated Debt
outstanding on such date.
"Mortgage Banks" means (i) Comerica Bank, as successor to
Manufacturers National Bank of Detroit, in its capacity as holder of a
Promissory Note of the Borrower dated April 4, 1991, in the original principal
amount of $1,200,000, and the mortgagee pursuant to a mortgage on the property
described as Item 15 in Part I of Schedule III hereto which secures such
Promissory Note, and its successors and assigns, (ii) Harris Trust and Savings
Bank, as successor to Barclays Bank PLC, Boston Branch, in its capacity as the
issuer of a letter of credit for the account of the Borrower in the initial
stated amount of $4,106,850, the maker of a commitment to lend up to $4,106,850
to the Borrower pursuant to the Letter of Credit and Reimbursement Agreement
dated as of October 1, 1985 and the "Bank" described in the mortgage on the
property described as Item 12 in Part I of Schedule III hereto which secured the
obligations of the under such Letter of Credit and Reimbursement Agreement and
(iii) Fleet Credit Corporation, as the lessor of computer equipment and other
personal property to the Borrower and certain of its Subsidiaries and joint
ventures pursuant to the Master Equipment Lease No. 1100641700 dated December
30, 1988 (including the Addendum thereto dated December 30, 1988), and the
schedules executed thereunder prior to February 26, 1996.
"Mortgaged Facilities" means the properties described as Items
1, 2, 3, 4, 5, 6, 8, 9, 12, 13 and 15 in Part I of Schedule III hereto.
"Mortgages" means the Mortgage, Assignment of Leases and
Rents, Security Agreement and Financing Statement dated as of February 26, 1996
for each of the Mortgaged Facilities described as Items 3, 4, 5, 6, 8, 9, 12, 13
and 15 in Part I of Schedule III hereto, each substantially in
the form of Exhibits I-1 through I-7 hereto.
"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.
"Notice of Bridge Borrowing" has the meaning set forth in
Section 2.02.
"Obligor" means each of the Borrower and the Subsidiary
Guarantors, and "Obligors" means all of the foregoing.
"Other LC Bank" means each Bank listed on Schedule V attached
hereto and its successors and assigns.
"Other Letters of Credit" means the letters of credit
described on Schedule V attached hereto.
"Other Mortgage/Lease Obligations" means the obligations of
the Borrower to any Mortgage Banks under the documents, agreements and
instruments described in the definition of Mortgage Banks, and all other
supplemental or additional documents, agreements and instruments delivered in
connection therewith prior to February 26, 1996.
"Other Reimbursement Obligations" means at any date the
obligations of the Borrower, whether or not contingent at such time and whether
direct or as a guarantee, to reimburse any Other LC Banks for the amount paid or
payable by such Other LC Bank in respect of a drawing under an Other Letter of
Credit.
"Paramount Development Associates" means Paramount Development
Associates, Inc., a Massachusetts corporation.
"Parent" means, with respect to any Bridge Bank, any Person
controlling such Bridge Bank.
"Participant" has the meaning set forth in Section 8.06(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 Bridge Bank, the
percentage that such Bridge Bank's Bridge Commitment constitutes of the
aggregate amount of the Bridge Commitments.
"Performance Bridge Letter of Credit" means a Bridge 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, and its successor by merger, Perini
Land and Development Company, Inc., a Massachusetts corporation, upon its
reincorporation in Massachusetts on December 30, 1994.
"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; and (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;
"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.
"Pledged Securities" has the meaning set forth in Section 1 of
the Borrower Pledge Agreement and the Subsidiary Pledge Agreement.
"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.
"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 Debt contemplated by Section
5.08(b)(ii) shall not constitute Real Estate Investments.
"R. E. Dailey & Co." means R. E. Dailey & Co., a
Michigan corporation.
"Refunding Bridge Borrowing" means a Bridge Borrowing which,
after application of the proceeds thereof, results in no net increase in the
outstanding principal amount of Bridge Loans made by any Bridge 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. ss. 9601(22). The term "Released" has a corresponding
meaning.
"Required Bridge Banks" means at any time Bridge Banks having
at least 60% of the aggregate amount of the Bridge Commitments or, if the Bridge
Commitments shall have been terminated, holding Bridge Notes evidencing at least
60% of the aggregate unpaid principal amount of the Bridge 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 $5,125,000, (ii) the
exchange of Special Subordinated Debt for the Borrower's $21.25 Convertible
Exchangeable Preferred Shares, (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 State Street Bank and Trust Company, 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.
"Rincon Swap" means the interest rate exchange transaction
between Rincon Center Associates, a California limited partnership, as Fixed
Rate Payor, and Citicorp Real Estate, Inc., as Variable Rate Payor, as confirmed
by the Confirmation for Interest Rate Exchange Transaction date October 18, 1993
with Transaction Reference Number 931913.
"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 Guarantee Agreement" means the Subsidiary
Guarantee Agreement dated as of December 6, 1994 between the Borrower, the
Subsidiary Guarantors party thereto and the Agent, as executed and delivered
pursuant to Section 3.01(c) of the Credit Agreement and attached hereto as
Exhibit F-1, as amended by Amendment No. 1 dated as of February 26, 1996 in
substantially the form of Exhibit F-2 hereto, and as the same may be amended
from time to time as permitted herein and in accordance with the terms thereof.
"Subsidiary Guarantor" means each of Perini Building Company,
Perini International, Perini Land and Development, R. E. Dailey & Co., Paramount
Development Associates, Pioneer Construction, Inc., a West Virginia corporation,
Perini Environmental Services, Inc., a Delaware corporation, Perini Resorts,
Inc., a California corporation and each other Subsidiary of the Borrower which
becomes a party to the Subsidiary Guarantee Agreement, and their respective
successors.
"Subsidiary Pledge Agreement" means the Subsidiary Pledge
Agreement dated as of February 26, 1996 in substantially the form of Exhibit J
hereto among the Subsidiary Guarantors party thereto and the Agent, as executed
and delivered pursuant to Section 3.01(c) hereof 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 dated as of December 6, 1994 among the Subsidiary Guarantors party
thereto and the Agent, as amended and restated as of February 26, 1996 in
substantially the form of Exhibit G hereto, 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.
"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 Bridge Loans at such date plus the aggregate
amount of Bridge Letter of Credit Liabilities at such date with respect to all
Bridge 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 Bridge Banks.
ARTICLE II
THE CREDITS
SECTION 2.01. The Bridge Loans. From time to time prior to the
Bridge Termination Date, each Bridge 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 Bridge Loan Commitment. Each Bridge 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 Bridge Borrowing may be in the aggregate
amount of the unused Bridge Commitments) and shall be made from the several
Bridge Banks ratably in proportion to their respective Bridge Commitments.
Within the foregoing limits, the Borrower may borrow under this Section, repay,
or to the extent permitted by Section 2.10 or Section 2.11, prepay Bridge Loans
and reborrow at any time prior to the Bridge Termination Date under this
Section.
SECTION 2.02. Method of Bridge Borrowing. (a) The Borrower
shall give the Agent notice (a "Notice of Bridge Borrowing") not later than
11:30 A.M. (New York City time) on the date of each Bridge Borrowing specifying
the date (which shall be a Business Day) and amount of such Bridge Borrowing.
(b) Upon receipt of a Notice of Bridge Borrowing, the Agent
shall promptly notify each Bridge Bank of the contents thereof and of such
Bridge Bank's ratable share of such Bridge Borrowing and such Notice of Bridge
Borrowing shall not thereafter be revocable by the Borrower.
(c) Not later than 1:30 P.M. (New York City time) on the date
of each Bridge Borrowing, each Bridge Bank shall (except as provided in
subsection (d) of this Section) make available its ratable share of such Bridge
Borrowing, in Federal or other funds immediately available in New York City, to
the Agent at its address referred to in Section 8.01. 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 Bridge Banks
available to the Borrower at the Agent's aforesaid address.
(d) If any Bridge Bank makes a new Bridge Loan hereunder on a
day on which the Borrower is to repay all or any part of an outstanding Bridge
Loan from such Bridge Bank, such Bridge Bank shall apply the proceeds of its new
Bridge 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 Bridge 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 Bridge
Bank prior to noon (New York City time) on the date of such Bridge Borrowing
that such Bridge Bank will not make available to the Agent such Bridge Bank's
share of such Bridge Borrowing, the Agent may assume that such Bridge Bank has
made such share available to the Agent on the date of such Bridge 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 Bridge Bank shall not have
so made such share available to the Agent, such Bridge 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 Bridge Bank, the Federal Funds Rate.
If such Bridge Bank shall repay to the Agent such corresponding amount, such
amount so repaid shall constitute such Bridge Bank's Bridge Loan included in
such Bridge Borrowing for purposes of this Agreement.
SECTION 2.03. Bridge Notes. (a) The Bridge Loans of each
Bridge Bank shall be evidenced by a single Bridge Note payable to the order of
such Bridge Bank for the account of its Lending Office.
(b) Upon receipt of each Bridge Bank's Bridge Note pursuant to
Section 3.01(c), the Agent shall forward such Bridge Note to such Bridge Bank.
Each Bridge Bank shall record the date, amount and maturity of each Bridge 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 Bridge Bank so elects in
connection with any transfer or enforcement of its Bridge Note, endorse on the
schedule forming a part thereof appropriate notations to evidence the foregoing
information with respect to each such Bridge Loan then outstanding; provided
that the failure of any Bridge Bank to make any such recordation or endorsement
shall not affect the obligations of the Borrower hereunder or under the Bridge
Notes. Each Bridge Bank is hereby irrevocably authorized by the Borrower so to
endorse its Bridge Note and to attach to and make a part of its Bridge Note a
continuation of any such schedule as and when required.
SECTION 2.04. Maturity of Bridge Loans. Each Bridge Loan
included in any Bridge Borrowing shall mature, and the principal amount thereof
shall be due and payable, on the last day of the Interest Period applicable to
such Bridge Borrowing.
SECTION 2.05. Interest Rates. Each Bridge Loan shall bear
interest on the outstanding principal amount thereof, for each day from the date
such Bridge Loan is made until it becomes due, at a rate per annum equal to the
sum of 2% 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 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 Bridge Loans for such day.
SECTION 2.06. Bridge Commitment Fees. The Borrower shall pay
to the Agent for the account of each Bridge Bank a commitment fee at the rate of
0.6% per annum on the daily average unused portion of such Bridge Bank's Bridge
Commitments. Such commitment fees shall accrue from and including the Bridge
Effective Date to but excluding the Bridge Termination Date. Such commitment
fees shall be payable on the last day of each fiscal quarter of the Borrower
prior to the Bridge Termination Date and on the Bridge Termination Date. SECTION
2.07. Participation Fee. The Borrower shall pay to the Agent for the account of
each Bridge Bank on the Bridge Effective Date a participation fee in an amount
equal to 2.0% of such Bridge Bank's Bridge 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.
SECTION 2.09. Optional Termination or Reduction of Bridge
Commitments. The Borrower may, upon 3 Business Days' notice to the Agent,
terminate at any time, or proportionately permanently reduce from time to time
by an aggregate amount of $1,000,000 or any larger multiple of $1,000,000, the
unused portions of the Bridge Commitments. If the Bridge 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 Bridge
Commitments. (a) The Bridge Commitments shall terminate on the Bridge
Termination Date, and any Bridge Loans then outstanding (together with accrued
interest thereon) shall be due and payable on such date.
(b) The Bridge Commitments of all Bridge Banks shall be
permanently, automatically and ratably reduced:
(i) immediately upon receipt by the Borrower or any Subsidiary
of the proceeds from the collection, sale or other disposition of any
Collateral (excluding (A) payments in the ordinary course on
construction contracts, (B) operating receipts from Real Estate
Investments, (C) liability insurance proceeds and (D) income of not
more than $35,000 earned from Temporary Cash Investments) by an amount
equal to 100% of such proceeds net of all out-of-pocket costs, all
senior mortgage debt, 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; provided that no such
reduction shall be required unless and until, and then only to the
extent that, the aggregate amount of such net proceeds received by the
Borrower and its Subsidiaries exceeds, in the case of an item of
Collateral specified in Schedule VII hereto, the amount set forth
opposite such item or, in the case of other Collateral, $2,000,000 in
the aggregate for all such other Collateral; and
(ii) by $15,000,000 upon the completion of an issuance by the
Borrower of convertible preferred stock or other equity issue; provided
that in the event that the proceeds of such issuance net of all
out-of-pocket expenses reasonably incurred in respect of such issuance
and any taxes paid or payable (as estimated by a financial officer of
the Borrower in good faith) in respect thereof exceeds $30,000,000, the
aggregate amount of the Commitments shall be reduced by an amount not
less than the sum of $15,000,000 plus 50% of the excess over
$30,000,000 of such proceeds.
(c) On each day on which any Bridge Commitment is reduced
pursuant to this Section, the Borrower shall repay such principal amount
(together with accrued interest thereon) of each Bridge Bank's outstanding
Bridge Loans as may be necessary so that after such repayment the aggregate
unpaid principal amount of such Bridge Bank's Bridge Loans, together with such
Bridge Bank's Percentage of the aggregate amount of Bridge Letter of Credit
Liabilities, does not exceed the amount of such Bridge Bank's Bridge Commitment
after giving effect to such reduction. In the event that the aggregate amount of
the Bridge Commitments is reduced to an amount less than the aggregate amount of
Bridge Letter of Credit Liabilities at such time in respect of all Bridge
Letters of Credit, the Borrower hereby agrees that it shall forthwith, without
any demand or taking of any other action by the Required Bridge Banks or the
Agent, pay to the Agent an amount in immediately available funds equal to the
difference to be held as security for the Bridge Letter of Credit Liabilities
for the benefit of all Bridge Banks.
(d) Any reduction of the Bridge Commitments described in
clauses (a) and (b) above shall be applied to reduce the Bridge Commitments pro
rata.
SECTION 2.11. Optional Prepayments. (a) The Borrower may, upon
notice to the Agent not later than 11:30 A.M. (New York City time) on any
Business Day, prepay on such Business Day any Base Rate Bridge 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 Bridge
Loans of the several Bridge Banks included in such Bridge Borrowing.
(b) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bridge Bank of the contents
thereof and of such Bridge 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 Bridge
Loans and of fees hereunder, not later than 1:30 P.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 8.01. The Agent will
promptly distribute to each Bridge Bank its ratable share of each such payment
received by the Agent for the account of the Bridge Banks. Whenever any payment
of principal of, or interest on, the Bridge 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 Bridge 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 Bridge Bank on such due date an amount equal to the amount then due such
Bridge Bank. If and to the extent that the Borrower shall not have so made such
payment, each Bridge Bank shall repay to the Agent forthwith on demand such
amount distributed to such Bridge Bank together with interest thereon, for each
day from the date such amount is distributed to such Bridge Bank until the date
such Bridge 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). All other interest and commitment
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 2.14. Maximum Interest Rate. (a) Nothing contained in
this Agreement or the Bridge Notes shall require the Borrower to pay interest at
a rate exceeding the maximum rate permitted by applicable law. Neither this
Section nor Section 8.08 is intended to limit the rate of interest payable for
the account of any Bridge 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 Bridge Bank
by supervening provisions of U.S. federal law.
(b) If the amount of interest payable for the account of any
Bridge 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 Bridge 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
Bridge 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 Bridge 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
Bridge 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 2.15. Bridge Letters of Credit. (a) Subject to the
terms and conditions hereof, the Bridge LC Bank agrees to issue letters of
credit hereunder from time to time before the Bridge Termination Date upon the
request of the Borrower (such letters of credit issued, the "Bridge Letters of
Credit"); provided that, immediately after each such Bridge Letter of Credit is
issued, the aggregate amount of the Bridge Letter of Credit Liabilities for all
Bridge Letters of Credit shall not exceed the Available Bridge LC Amount. Upon
the date of issuance by the Bridge LC Bank of a Bridge Letter of Credit in
accordance with this Section 2.15, the Bridge LC Bank shall be deemed, without
further action by any party hereto, to have sold to each Bridge Bank, and each
Bridge Bank shall be deemed, without further action by any party hereto, to have
purchased from the Bridge LC Bank, a participation in such Bridge Letter of
Credit and the related Bridge Letter of Credit Liabilities in proportion to its
Percentage.
(b) The Borrower shall give the Bridge LC Bank at least three
Business Days' prior notice (effective upon receipt) specifying the date each
Bridge Letter of Credit is to be issued, and describing the proposed terms of
such Bridge Letter of Credit and the nature of the transactions proposed to be
supported thereby. Upon receipt of such notice the Bridge LC Bank shall promptly
notify the Agent, and the Agent shall promptly notify each Bridge Bank of the
contents thereof and of the amount of such Bridge Bank's participation in such
proposed Bridge Letter of Credit. The issuance by the Bridge LC Bank of any
Bridge Letter of Credit shall, in addition to the conditions precedent set forth
in Article III (the satisfaction of which the Bridge LC Bank shall have no duty
to ascertain), be subject to the conditions precedent that such Bridge Letter of
Credit shall be satisfactory to the Bridge LC Bank and that the Borrower shall
have executed and delivered such other instruments and agreements relating to
such Bridge Letter of Credit as the Bridge LC Bank shall have reasonably
requested. Each Bridge Letter of Credit shall have an expiry date not later than
the Bridge Termination Date.
(c) The Borrower shall pay to the Agent a letter of credit fee
at a rate equal to (i) 1.75% per annum on the aggregate amount available for
drawings under each Performance Bridge Letter of Credit issued from time to time
and (ii) 2.75% per annum on the aggregate amount available for drawings under
each Financial Bridge Letter of Credit issued from time to time, any such fee to
be payable for the account of the Bridge 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 Bridge Letter of Credit is
outstanding and on the date of termination thereof. The Borrower shall pay to
the Bridge LC Bank additional fees and expenses in the amounts and at the times
as agreed between the Borrower and the Bridge LC Bank.
(d) Upon receipt from the beneficiary of any Bridge Letter of
Credit of any demand for payment or other drawing under such Bridge Letter of
Credit, the Bridge LC Bank shall notify the Agent and the Agent shall promptly
notify the Borrower and each other Bridge 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 Bridge LC Bank to the Borrower and each Bridge Bank shall
be only to determine that the documents (including each demand for payment or
other drawing) delivered under each Bridge Letter of Credit issued by it in
connection with such presentment shall be in conformity in all material respects
with such Bridge Letter of Credit. The Bridge LC Bank shall endeavor to exercise
the same care in the issuance and administration of the Bridge 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 Bridge LC Bank, each Bridge 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 Bridge Bank's Percentage, to reimburse the Bridge LC
Bank on demand for the amount of each payment made by the Bridge LC Bank under
each Bridge Letter of Credit issued by the Bridge 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 Bridge 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 Business Day) to the date of
payment by such Bridge 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 Bridge LC Bank for any amounts paid by the
Bridge LC Bank upon any drawing under any Bridge Letter of Credit, without
presentment, demand, protest or other formalities of any kind; provided that
neither the Borrower nor any Bridge Bank shall hereby be precluded from
asserting any claim for direct (but not consequential) damages suffered by the
Borrower or such Bridge Bank to the extent, but only to the extent, caused by
(i) the willful misconduct or gross negligence of the Bridge LC Bank in
determining whether a request presented under any Bridge Letter of Credit
complied with the terms of such Bridge Letter of Credit or (ii) such Bridge
Bank's failure to pay under any Bridge Letter of Credit after the presentation
to it of a request strictly complying with the terms and conditions of the
Bridge Letter of Credit. All such amounts paid by the Bridge 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 Bridge Loans for such day. The Bridge LC Bank will pay to each
Bridge Bank ratably in accordance with its Percentage all amounts received from
the Borrower for application in payment, in whole or in part, of the Bridge
Reimbursement Obligation in respect of any Bridge Letter of Credit, but only to
the extent such Bridge Bank has made payment to the Bridge LC Bank in respect of
such Bridge Letter of Credit pursuant to Section 2.15(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 Bridge 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 Bridge Letters of Credit issued or
to be issued hereunder or participations therein, and the result shall be to
increase the cost to any Bridge Bank of issuing or maintaining any Bridge Letter
of Credit or any participation therein, or reduce any amount receivable by any
Bridge Bank hereunder in respect of any Bridge Letter of Credit (which increase
in cost, or reduction in amount receivable, shall be the result of such Bridge
Bank's reasonable allocation of the aggregate of such increases or reductions
resulting from such event), then, upon demand by such Bridge 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 Bridge
Bank, from time to time as specified by such Bridge Bank, such additional
amounts as shall be sufficient to compensate such Bridge Bank for such increased
costs or reductions in amount incurred by such Bridge Bank. A certificate of
such Bridge Bank submitted by such Bridge 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 2.15 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 Bridge LC Bank, any Bridge Bank or any beneficiary of a
Bridge Letter of Credit. The Borrower further agrees with the Bridge LC Bank and
the Bridge Banks that the Bridge LC Bank and the Bridge Banks shall not be
responsible for, and the Borrower's Bridge Reimbursement Obligation in respect
of any Bridge 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 Bridge Letter of Credit or any financing
institution or other party to whom any Bridge 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 Bridge Letter of Credit or any such
transferee. The Bridge 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 Bridge Letter of Credit
issued, extended or renewed by it. The Borrower agrees that any action taken or
omitted by the Bridge LC Bank or any Bridge Bank under or in connection with
each Bridge 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 Bridge LC Bank or any Bridge Bank under any liability to the
Borrower.
(h) To the extent not inconsistent with clause (g) above, the
Bridge LC Bank shall be entitled to rely, and shall be fully protected in
relying upon, any Bridge 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 Bridge LC Bank. The Bridge 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 Bridge Banks as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Bridge 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 2.15, the Bridge 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 Bridge Banks, and such request and any action taken or
failure to act pursuant thereto shall be binding upon the Bridge Banks and all
future holders of participations in any Bridge Letters of Credit.
(i) The Borrower hereby indemnifies and holds harmless each
Bridge Bank and the Agent from and against any and all claims and damages,
losses, liabilities, costs or expenses which such Bridge Bank or the Agent may
incur (or which may be claimed against such Bridge 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 Bridge Letter of Credit,
including, without limitation, any claims, damages, losses, liabilities, costs
or expenses which the Bridge LC Bank may incur by reason of or in connection
with the failure of any other Bridge Bank to fulfill or comply with its
obligations to the Bridge LC Bank hereunder (but nothing herein contained shall
affect any rights the Borrower may have against such defaulting Bridge Bank);
provided that the Borrower shall not be required to indemnify any Bridge 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 Bridge LC Bank in determining whether a request presented
under any Bridge Letter of Credit complied with the terms of such Bridge Letter
of Credit or (ii) the Bridge LC Bank's failure to pay under any Bridge Letter of
Credit after the presentation to it of a request strictly complying with the
terms and conditions of the Bridge Letter of Credit. Nothing in this Section
2.15(i) is intended to limit the obligations of the Borrower under any other
provision of this Agreement.
(j) Each Bridge Bank shall, ratably in accordance with its
Percentage, indemnify the Bridge 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 Bridge LC
Bank's failure to pay under any Bridge Letter of Credit after the presentation
to it of a request strictly complying with the terms and conditions of the
Bridge Letter of Credit) that such indemnitees may suffer or incur in connection
with this Section 2.15 or any action taken or omitted by such indemnitees
hereunder.
(k) In its capacity as a Bridge Bank the Bridge LC Bank shall
have the same rights and obligations as any other Bridge Bank.
SECTION 2.16. Taxes. (a) For purposes of this Section, the
following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings with respect to any payment
by the Borrower pursuant to this Agreement or under any Bridge Note, and all
liabilities with respect thereto, excluding (i) in the case of each Bridge Bank
and the Agent, taxes imposed on its income, and franchise or similar taxes
imposed on it, by a jurisdiction under the laws of which such Bridge Bank or the
Agent (as the case may be) is organized or in which its principal executive
office is located or, in the case of each Bridge Bank, in which its Lending
Office is located and (ii) in the case of each Bridge Bank, any United States
withholding tax imposed on such payments but only to the extent that such Bridge
Bank is subject to United States withholding tax at the time such Bridge Bank
first becomes a party to this Agreement.
"Other Taxes" means any present or future stamp or documentary
taxes and any other excise or property taxes, or similar charges or levies,
which arise from any payment made pursuant to this Agreement or under any Bridge
Note or from the execution or delivery of, or otherwise with respect to, this
Agreement or any Bridge Note.
(b) Any and all payments by the Borrower to or for the account
of any Bridge Bank or the Agent hereunder or under any Bridge Note shall be made
without deduction for any Taxes or Other Taxes; provided that, if the Borrower
shall be required by law to deduct any Taxes or Other Taxes from any such
payments, the sum payable hereunder or under any Bridge Note to any Bridge Bank
or the Agent, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) such Bridge Bank or the Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Borrower shall
furnish to the Agent, at its address referred to in Section 8.01, the original
or a certified copy of a receipt evidencing payment thereof.
(c) In addition, the Borrower agrees to pay all Other Taxes.
(d) The Borrower agrees to indemnify each Bridge Bank and the
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section) paid by such Bridge Bank or the Agent (as
the case may be) and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. This indemnification shall be paid
within 15 days after such Bridge Bank or the Agent (as the case may be) makes
demand therefor.
(e) Each Bridge Bank organized under the laws of a
jurisdiction outside the United States, on or prior to the date of its execution
and delivery of this Agreement in the case of each Bridge Bank listed on the
signature pages hereof and on or prior to the date on which it becomes a Bridge
Bank in the case of each other Bridge Bank, and from time to time thereafter if
requested in writing by the Borrower (but only so long as such Bridge Bank
remains lawfully able to do so), shall provide the Borrower and the Agent with
Internal Revenue Service form 1001 or 4224, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such Bridge
Bank is entitled to benefits under an income tax treaty to which the United
States is a party which exempts the Bridge Bank from United States withholding
tax or reduces the rate of withholding tax on payments of interest for the
account of such Bridge Bank or certifying that the income receivable pursuant to
this Agreement is effectively connected with the conduct of a trade or business
in the United States. If the form provided by a Bridge Bank at the time such
Bridge Bank first becomes a party to this Agreement indicates a United States
interest withholding tax rate in excess of zero, withholding tax at such rate
shall be considered excluded from "Taxes" as defined in subsection (a) of this
Section.
(f) For any period with respect to which a Bridge Bank has
failed to provide the Borrower or the Agent with the appropriate form pursuant
to subsection (d) of this Section (unless such failure is due to a change in
treaty, law or regulation occurring subsequent to the date on which such form
originally was required to be provided), such Bridge Bank shall not be entitled
to indemnification under subsection (b) or (c) of this Section with respect to
Taxes imposed by the United States; provided that if a Bridge Bank, which is
otherwise exempt from or subject to a reduced rate of withholding tax, becomes
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Bridge Bank shall reasonably request
to assist such Bridge Bank to recover such Taxes.
(g) If the Borrower is required to pay additional amounts to
or for the account of any Bridge Bank pursuant to this Section, then such Bridge
Bank will change the jurisdiction of its Lending Office if, in the judgment of
such Bridge Bank, such change (i) will eliminate or reduce any such additional
payment which may thereafter accrue and (ii) if such change, in the judgment of
such Bridge Bank, is not otherwise disadvantageous to such Bridge Bank.
ARTICLE III
CONDITIONS
SECTION 3.01. Bridge 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 8.05):
(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, facsimile,
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 Amendment No. 1 to
the Subsidiary Guarantee Agreement duly executed by each of the
Obligors listed on the signature pages thereof;
(c) receipt by the Agent of (i) counterparts of the following,
each dated the date hereof and duly executed by the parties specified
below:
(1) the Borrower Pledge Agreement between the Agent and the
Borrower,
(2) the Borrower Security Agreement between the Agent and the
Borrower,
(3) the Subsidiary Security Agreement among the Agent and the
Subsidiary Guarantors,
(4) the Subsidiary Pledge Agreement among the Agent and the
Subsidiary Guarantors and
(ii) and all other documents and certificates to be delivered
pursuant to the foregoing on the Bridge Effective Date (including
appropriately completed and duly executed Uniform Commercial Code
financing statements required thereby);
(d) receipt by the Agent of evidence satisfactory to the Agent
that arrangements satisfactory to it shall have been made for recording
the Mortgages on the Mortgaged Facilities described in Items 3, 4, 5,
6, 8, 9 and 12 in Part I of Schedule III and filing the Uniform
Commercial Code financing statements referred to in paragraph (c) above
on or promptly after the Bridge Effective Date;
(e) receipt by the Agent of all Pledged Securities;
(f) receipt by the Agent of 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) receipt by the Agent of evidence satisfactory to the Agent
of the insurance coverage required by Section 5.03;
(h) with respect to the Mortgaged Facilities described in
Items 3 and 4 in Part I of Schedule III, receipt by the Agent of 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 Bridge Effective Date showing no Liens except Permitted Liens
with respect thereto;
(i) receipt by the Agent of duly executed Bridge Notes for the
account of each Bridge Bank dated on or before the Bridge Effective
Date complying with the provisions of Section 2.03;
(j) receipt by the Agent of (i) an opinion of the Assistant
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 Bridge Banks may reasonably request;
(k) receipt by the Agent of (i) an opinion of Davis Polk &
Wardwell, special New York counsel for the Agent, (ii) an opinion of
Meyer, Hendricks, Victor, Ruffner & Bivens, special Arizona counsel for
the Agent, (iii) an opinion of Goodwin, Proctor & Hoar, Massachusetts
counsel for the Borrower and (iv) Greenberg, Traurig, Hoffman, Lipoff,
Rosen & Quentel, P.A., special Florida counsel for the Agent,
substantially in the forms of Exhibits C-1, C-2, C-3 and C-4,
respectively, hereto and covering such additional matters relating to
the transactions contemplated hereby as the Required Bridge Banks may
reasonably request;
(l) receipt by the Agent of counterparts of Amendment No. 1 to
the Credit Agreement dated the date hereof duly executed by the
Borrower, the Banks and the Agent;
(m) receipt by the Agent of a Bonding Company Letter
substantially in the form of Exhibit L hereto dated not later than the
Bridge Effective Date and duly executed by the Borrower and the Bonding
Company; and
(n) 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 February 29, 1996. The Agent shall promptly
notify the Borrower and the Bridge Banks of the Bridge Effective Date,
and such notice shall be conclusive and binding on all parties hereto.
SECTION 3.02. Credit Events. The obligation of any Bridge Bank
to make a Bridge Loan on the occasion of any Bridge Borrowing and of the Bridge
LC Bank to issue a Bridge Letter of Credit (or to permit the extension of an
Evergreen Bridge 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 Bridge Borrowing
as required by Section 2.02, in the case of a Bridge Borrowing or (ii)
by the Bridge LC Bank of notice as required by Section 2.15, in the
case of a Bridge Letter of Credit;
(b) the fact that, after giving effect to such Credit Event,
the Usage shall not exceed the aggregate amount of the Bridge
Commitments and the fact that the Commitments (as defined in the Credit
Agreement) shall be fully utilized;
(c) the fact that, immediately after such Credit Event, no
Default shall have occurred and be continuing;
(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 Bridge Borrowing, the
representation and warranty set forth in Section 4.04(c) hereof as to
any material adverse change which has theretofore been disclosed in
writing by the Borrower to the Bridge Banks) shall be true on and as of
the date of such Bridge Borrowing;
(e) the ability of the Borrower to obtain bonding for new
construction projects shall not be less than or more limited than at
the date hereof;
(f) the payment by the Borrower of all amounts theretofore
payable pursuant to Section 8.03 within seven days of demand;
(g) at any time on or after March 8, 1996, receipt by the
Agent of (i) evidence of recording of the Mortgages on the Mortgaged
Facilities described in Items 13 and 15 in Part I of Schedule III and
(ii) opinions of counsel in each jurisdiction in which the foregoing
Mortgages are recorded in form and substance satisfactory to the Agent
covering such matters relating thereto as the Required Bridge Banks may
reasonably request;
(h) at any time on or after March 28, 1996, receipt by the
Agent of a policy of title insurance with respect to each Mortgage and
Deed of Trust relating to the Mortgaged Facilities described as Items
1, 2, 3, 4, 5, 6, 9 and 13 in Part I of Schedule III, insuring the
perfection, enforceability and first priority of the Lien created under
such Mortgage or Deed of Trust, as the case may be, as a valid first
mortgage or deed of trust Lien, as the case may be, on the Mortgaged
Facilities described therein, in form and substance reasonably
satisfactory to the Agent and in the respective amounts specified in
Part I of Schedule III (with all premiums, expenses and fees paid or
caused to be paid by the Borrower), each of which policies shall (i) be
issued by a title company reasonably satisfactory to the Agent, (ii)
have been supplemented by such endorsements as shall be reasonably
requested by the Agent (including, without limitation, endorsements
relating to usury, revolving credit, doing business and restrictions)
and (iii) contain only such exceptions to title as shall be reasonably
satisfactory to the Agent, provided that the parties hereto agree that
the Permitted Liens constitute satisfactory exceptions to title.
Each Bridge Borrowing shall be deemed to be a representation and warranty by the
Borrower on the date of such Bridge Borrowing as to the facts specified in
clauses (b), (c), (d), (e) and (f) 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. (a) 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.
(b) The execution, delivery and performance by each Obligor of
the amendments to the Financing Documents to which it is a party and the
performance by each Obligor of the Financing Documents as so amended 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 as so amended, on any asset of such
Obligor or any of its Subsidiaries.
SECTION 4.03. Binding Effect; Liens of Collateral Documents.
(a) This Agreement constitutes a valid and binding agreement of the Borrower and
the Bridge 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 Borrower Security
Agreement and the Subsidiary Pledge Agreement, when executed and delivered in
accordance with this Agreement, will constitute valid and binding agreements of
each Obligor party thereto enforceable against each such Obligor in accordance
with their respective terms. Each amendment to each Financing Document, when
executed and delivered in accordance with this Agreement, and each Financing
Document as so amended will constitute a valid and binding agreement of the
Obligor party thereto in each case enforceable in accordance with its terms.
(b) All real property in which the Borrower or any of its
Subsidiaries has an interest, directly or indirectly (whether through an
interest in a joint venture or partnership or otherwise) as of the date hereof
is listed in Part 1 of Schedule III hereto. The list of property of the Borrower
and each of its Subsidiaries, security interests in which are governed by
Article IX of the UCC as in effect in the relevant jurisdictions, set forth in
Part 2 of Schedule III hereto is complete in all material respects. The
location, ownership, status and lien information provided in Schedule III for
each item of real property and each type of personal property are complete and
correct.
(c) 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
(except in the case of inventory located at construction sites) 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, 1994 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
1994 Form 10-K, a copy of which has been delivered to each of the Bridge 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, 1995 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, 1995 as filed with the Securities and
Exchange Commission on Form 10-Q, a copy of which has been delivered to each of
the Bridge 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, 1995 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 1994 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 Bridge 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 Addtional 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 or 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 Bridge
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, 1989. 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. All of the Borrower's Subsidiaries
and all joint ventures and partnerships in which the Borrower or any of its
Subsidiaries have an interest as of the date hereof are listed in Schedule VI
hereto and the state of incorporation or organization and the ownership interest
of each Subsidiary, joint venture and partnership specified therein are complete
and correct. 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 Derivatives
Obligations; Certain Existing Agreements. (a) 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.
(b) Neither the Borrower nor any of its Subsidiaries is party
to any Derivatives Obligation except the Rincon Swap.
(c) All agreements to which the Borrower or any Subsidiary
Guarantor is a party or by which it is bound (other than the Financing
Documents) containing a negative pledge or limitations on its incurrence of Debt
or sale of assets are listed on Schedule IV hereto.
SECTION 4.12. Full Disclosure. All information heretofore
furnished by the Borrower to the Agent or any Bridge 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
Bridge 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 Bridge 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 Bridge Bank has any
Bridge Commitment hereunder or any amount payable under any Bridge Note remains
unpaid or any Bridge Letter of Credit remains outstanding or any Bridge
Reimbursement Obligation with respect thereto remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each
of the Bridge 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) (1) 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 and consolidating condensed balance
sheet of the Borrower and its Consolidated Subsidiaries as of the end
of such quarter and the related consolidated and consolidating
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;
(2) as soon as available and in any event within 45 days after
the end of each quarter of each fiscal year of Perini Land and
Development, a cash flow statement for Perini Land and Development for
such quarter in a format consistent with the format of the cash flow
statement for Perini Land and Development for the quarter ended
December 31, 1995 previously delivered to the Bridge Banks;
(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) prompt notice of any change in the Borrower's ability to
obtain bonding for new construction projects (including without
limitation a reduction in the amount of bonding commitments of any
bonding company to the Borrower and any restrictions on use of such
commitments);
(l) prompt notice of any decision by the Borrower or any of
its Subsidiaries not to meet a capital call by any joint venture in
which the Borrower or any such Subsidiary is participating;
(m) prompt notice of the Borrower or any Subsidiary obtaining
or increasing an interest in a joint venture or partnership which, in
the case of any construction joint venture, need not be given until
reasonably promptly after a bid by such joint venture for a
construction contract shall have been accepted; and
(n) 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 Bridge Bank, may reasonably
request.
SECTION 5.02. Payment of Obligations; No Derivatives
Obligations. (a) 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.
(b) The Borrower will not, nor will it permit any of its
Subsidiaries to, become a party to any Derivatives Obligation except the Rincon
Swap.
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 Bridge 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 Bridge Bank at such
Bridge Bank's expense (subject to Section 8.03(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; provided that in any event the Borrower shall hold a meeting for
representatives of the Bridge Banks at least once each fiscal quarter, at a time
and place in Framingham, Boston or New York City to be determined by the Agent
on 10 Business Days' notice, for purposes of holding such discussions with such
of the Borrower's officers, employees and independent public accountants as the
Agent shall designate at the reasonable request of any Bridge Bank.
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) After the date hereof, the Borrower
will not incur or suffer to exist any Debt other than (i) Debt existing on
December 31, 1995 and listed on Schedule I hereof, (ii) Debt under this
Agreement, (iii) Debt under the Credit Agreement, (iv) Debt owing to joint
ventures in which the Borrower is participating, (v) up to $3,000,000 of Debt to
finance insurance premiums, (vi) Debt owing by the Borrower to a Subsidiary and
evidenced by an intercompany note pledged to the Agent under the Subsidiary
Pledge Agreement and (vii) any refinancing, extension, renewal or refunding of
the Debt referred to in clauses (i) through (v) above; provided that in any
event at no time shall Modified Parent Company Debt exceed $150,000,000 and at
no time shall the aggregate outstanding amount of Debt to finance insurance
premiums and any refinancing, extension, renewal or refunding thereof exceed
$3,000,000.
(b) After the date hereof, the Borrower will not permit any
Subsidiary to incur or suffer to exist any Debt other than (i) Debt existing on
December 31, 1995 and listed on Schedule I hereof, (ii) Debt under the
Subsidiary Guarantee Agreement, (iii) Debt owing to joint ventures in which such
Subsidiary is participating, (iv) Debt owing by a Subsidiary to the Borrower and
evidenced by an intercompany note pledged to the Agent under the Borrower
Security Agreement and (v) any refinancing, extension, renewal or refunding of
the Debt referred to in clauses (i) through (iv) above.
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 the Base Compliance Amount 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, 1996 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, 1996 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.
For purposes of this Section, "Base Compliance Amount" means (i) for any date
during the period from and including December 31, 1995 to but excluding June 30,
1996, $100,000,000 and (ii) for any date during the period from and including
June 30, 1996 to the Bridge Termination Date, $105,000,000.
SECTION 5.10. Interest Coverage. Consolidated Earnings Before
Interest and Taxes for each fiscal period specified below shall be not less than
the percentage specified below of Consolidated Interest Charges for such fiscal
period:
quarter ending March 31, 1996 300%
two quarters ending June 30, 1996 300%
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 December 31, 1995 securing Debt
outstanding on December 31, 1995 as described in Schedule II;
(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;
(i) Liens (whether statutory, by contract or at common law and
whether in the nature of a security interest or constructive trust or
otherwise) of subcontractors, architects, engineers, surveyors,
laborers, materialmen, bonding companies and other Persons performing
labor or services or providing material for construction projects in
and under construction contracts to which the Borrower or any of its
Subsidiaries is a party as general or prime contractor, subcontractor
or construction manager;
(j) Liens granted to the Bonding Company to secure amounts
owing by the Borrower or any of its Subsidiaries in connection with
surety bonds, undertakings and instruments of guarantee issued by the
Bonding Company on behalf of the Borrower or any of its Subsidiaries in
the ordinary course of their respective businesses; and
(k) 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 Bridge 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 (i) any Subsidiary Guarantor from
selling, leasing or otherwise transferring assets in the ordinary course of its
business or (ii) R. E. Dailey & Co. from transferring all of its assets to
Perini Building Company.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, sell, lease or otherwise dispose of any item of Collateral
(except Accounts, Inventory and items listed in Schedule VII hereto up to the
amounts specified therein) unless (i) each of the Bridge Banks shall have given
its prior written consent thereto and (ii) the consideration therefor (x) shall
be 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
$15,000,000, by the board of directors of the Borrower or a duly constituted
committee thereof) and (y) in the case of any agreement entered into on or after
the Bridge Effective Date for the sale, lease or other disposition of such
Collateral shall consist of cash payable at closing; provided that the prior
written consent of the Bridge Banks shall not be required for any sale, lease or
other disposition of any item of Collateral having a fair market value not
exceeding $100,000 if the aggregate amount of the fair market value of all such
items of Collateral sold, leased or otherwise disposed of during any fiscal year
does not exceed $500,000 and the Borrower delivers to each of the Bridge Banks
prompt written notice of each such sale, lease or other disposition.
SECTION 5.13. Use of Proceeds. The proceeds of the Bridge
Loans made under this Agreement will be used by the Borrower for general
corporate purposes other than for making or carrying Real Estate Investments.
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; provided that the Borrower will not declare or pay any
preferred stock dividend until the Bridge Credit Agreement is repaid in full and
terminated.
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,
1996 and ending December 31, 1996 shall exceed $4,000,000 or (ii) during 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. 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.
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 Bridge Loan, any Bridge Reimbursement Obligation, 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 Bridge 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 clauses (a), (b) and (c) above) for 10 days after written
notice thereof has been given to such Obligor by the Agent at the
request of any Bridge Bank;
(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 Bridge Notes or Bridge Reimbursement
Obligations) 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 Bridge 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 Bridge Banks
having more than 50% in aggregate amount of the Bridge Commitments, by notice to
the Borrower terminate the Bridge Commitments and they shall thereupon
terminate, and (ii) if requested by Bridge Banks holding Bridge Notes evidencing
more than 50% in aggregate principal amount of the Bridge Loans, by notice to
the Borrower declare the Bridge Notes (together with accrued interest thereon)
to be, and the Bridge 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
Bridge Banks, the Bridge Commitments shall thereupon terminate and the Bridge
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 instructions from Bridge Banks having more than 50% in aggregate
amount of the Bridge 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 Bridge Bank, it shall pay) to the Agent an amount in immediately available
funds equal to the then aggregate Bridge Letter of Credit Liabilities for all
Bridge Letters of Credit to be held as security therefor for the benefit of all
Bridge 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 Bridge Bank and shall thereupon notify all the Bridge Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bridge 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 Bridge 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 Bridge 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 Bridge Bank shall, ratably
in accordance with its Bridge 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 Bridge Bank acknowledges
that it has, independently and without reliance upon the Agent or any other
Bridge 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 Bridge Bank also acknowledges that it will, independently and
without reliance upon the Agent or any other Bridge 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 Bridge Banks and the Borrower. Upon any
such resignation, the Required Bridge Banks shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Bridge 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 Bridge 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 Bridge 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
MISCELLANEOUS
SECTION 8.01. 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
Bridge 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 8.02. No Waivers. No failure or delay by the Agent or
any Bridge 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 8.03. 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 Bridge Bank, including fees and
disbursements of counsel (including allocated costs of internal counsel and
disbursements of internal counsel), in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom. The Borrower shall indemnify each Bridge 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 Bridge
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 (including allocated costs of internal counsel and
disbursements of internal 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 Bridge 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 including
allocated costs of internal counsel and disbursements of internal 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 8.04. Sharing of Setoffs. Each Bridge 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
Bridge Loan or Bridge Reimbursement Obligation owed to it which is greater than
the proportion received by any other Bridge Bank in respect of the aggregate
amount due with respect to any Bridge Loan or Bridge Reimbursement Obligation
owed to such other Bridge Bank, the Bridge Bank receiving such proportionately
greater payment shall purchase such participations in the Bridge Loans and
Bridge Reimbursement Obligations owed to the other Bridge Banks, and such other
adjustments shall be made, as may be required so that all such payments with
respect to the Bridge Loans and Bridge Reimbursement Obligations owed to the
Bridge Banks shall be shared by the Bridge Banks pro rata; provided that (i)
nothing in this Section shall impair the right of any Bridge 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 or under the Credit Agreement and (ii) nothing in any
Financing Documents shall require any Bridge Bank to share any payments received
by such Bridge Bank if such payments were made in respect of any obligations
(including without limitation Other Reimbursement Obligations and Other
Mortgage/Lease Obligations) not constituting Bridge Loans or Bridge
Reimbursement Obligations. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in a
Bridge Loan or Bridge Reimbursement Obligation, 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 8.05. Amendments and Waivers. Any provision of this
Agreement or the Bridge 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
Bridge 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
Bridge Banks, (i) increase or decrease the Bridge Commitment of any Bridge Bank
(except for a ratable decrease in the Bridge Commitments of all Bridge Banks),
amend Section 2.10(d) hereof or subject any Bridge Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any Bridge Loan
or any fees hereunder, (iii) postpone the date fixed for any payment of
principal of or interest on any Bridge Loan, any Bridge Reimbursement Obligation
or any fees hereunder or for termination of any Bridge Commitment (provided that
the Required Banks may extend the Bridge Termination Date from time to time up
to but no later than September 30, 1996), (iv) change the percentage of the
Bridge Commitments or of the aggregate unpaid principal amount of the Bridge
Notes, or the number of Bridge Banks, which shall be required for the Bridge
Banks or any of them to take any action under this Section or any other
provision of the Financing Documents, (v) release any Subsidiary Guarantor from
the Subsidiary Guarantee Agreement, (vi) amend Section 8.04 or 8.06 hereof or
(vii) notwithstanding any provision of any Collateral Document to the contrary,
release any item of Collateral from the Lien provided by the Collateral
Documents except for the sale or other disposition of such item by the Agent in
the exercise of its rights as provided therein (provided that unless an Event of
Default has occurred and is continuing, the Agent may release any Collateral at
the request of the Borrower, without the consent of each of the Bridge Banks, if
(i) such release is required in connection with any sale, lease or other
disposition of such Collateral and (ii) such sale, lease or other disposition is
in accordance with and permitted by the terms hereof (including without
limitation Sections 2.10(b)(i) and 5.12(b)) and of the Credit Agreement).
SECTION 8.06. 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 Bridge Banks.
(b) Any Bridge Bank may at any time grant to one bank or other
institution (a "Participant") a participating interest in its Bridge Commitment
and its Bridge Loans in the full amount of its Bridge Commitment. In the event
of any such grant by a Bridge Bank of a participating interest to a Participant,
whether or not upon notice to the Borrower and the Agent, such Bridge 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
Bridge Bank in connection with such Bridge Bank's rights and obligations under
this Agreement. Any agreement pursuant to which any Bridge Bank may grant such a
participating interest shall provide that such Bridge 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 Bridge Bank will not agree to any modification,
amendment or waiver of this Agreement described in clause (i), (ii) or (iii) of
Section 8.05 without the consent of the Participant. 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 Bridge Bank may assign to one bank or other
institution (each an "Assignee") all of its rights and obligations under this
Agreement and the Bridge Notes and such Assignee shall assume such rights and
obligations, pursuant to an Assignment and Assumption Agreement in substantially
the form of Exhibit K hereto executed by such Assignee and such transferor
Bridge 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 Bridge Bank or another Bridge Bank, no such
consent shall be required. Upon execution and delivery of such instrument and
payment by such Assignee to such transferor Bridge Bank of an amount equal to
the purchase price agreed between such transferor ... Bridge Bank and such
Assignee, such Assignee shall be a Bridge Bank party to this Agreement and shall
have all the rights and obligations of a Bridge Bank with a Bridge Commitment as
set forth in such instrument of assumption, and the transferor Bridge 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 Bridge Bank,
the Agent and the Borrower shall make appropriate arrangements so that, if
required, a new Bridge Note is issued to the Assignee. In connection with any
such assignment, the transferor Bridge Bank shall pay to the Agent an
administrative fee for processing such assignment in the amount of $2,500.
(d) Any Bridge Bank may at any time assign all or any portion
of its rights under this Agreement and its Bridge Note to a Federal Reserve
Bank. No such assignment shall release the transferor Bridge Bank from its
obligations hereunder.
SECTION 8.07. Certain Collateral. Each of the Bridge Banks
represents to the Agent and each of the other Bridge 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 8.08. Governing Law; Submission to Jurisdiction. This
Agreement and each Bridge 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 8.09. 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 8.10. WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS, THE
AGENT AND THE BRIDGE 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.
SECTION 8.11. Reduced Return. If any Bridge 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 Bridge Bank (or its Parent) as a consequence
of such Bridge Bank's obligations hereunder to a level below that which such
Bridge 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 Bridge Bank to be material, then
from time to time, within 15 days after demand by such Bridge Bank (with a copy
to the Agent), the Borrower shall pay to such Bridge Bank such additional amount
or amounts as will compensate such Bridge Bank (or its Parent) for such
reduction. Each Bridge 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 Bridge Bank to compensation pursuant to this Section. A certificate
of any Bridge 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 Bridge Bank
may use any reasonable averaging and attribution methods.
SECTION 8.12. Other Reimbursement Obligations. The execution
of this Agreement and any other documents, agreements or instruments in
connection herewith does not constitute a waiver or amendment of any term or
condition of any documents, agreements or instruments evidencing or otherwise
delivered in connection with the Other Reimbursement Obligations or the Other
Mortgage/Lease Obligations. No Bridge Bank or Bank (as defined in the Credit
Agreement) shall have any rights or obligations under any such documents,
agreements or instruments unless party thereto and as set forth therein. Nothing
in any Financing Documents requires any Bridge Bank or Bank to obtain any
consent from any other Bridge Bank or any other Bank in taking actions permitted
to be taken in accordance with the terms and conditions of any documents,
agreements or instruments evidencing or otherwise delivered in connection with
the Other Reimbursement Obligations or Other Mortgage/Lease Obligations to which
it is a party, or in omitting to take any such actions.
SECTION 8.13. Subordinate Mortgages. (a) Harris Trust and
Savings Bank hereby consent to the execution, delivery and recordation of the
Mortgage relating to the Mortgaged Facility described as Item 12 in Part I of
Schedule III.
(b) Comerica Bank hereby consents to the execution, delivery
and recordation of the Mortgage relating to the Mortgaged Facility described as
Item 15 in Part I of Schedule III.
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/ David B. Perini
Title: President & CEO
By /s/ John H. Schwarz
Title: Executive Vice President
73 Mount Wayte Avenue
Framingham, MA 01701
Facsimile number: (508) 628-2960
Bridge Commitments
- ------------------
Bridge Commitment: MORGAN GUARANTY TRUST COMPANY
$ 3,096,000.00 OF NEW YORK
By /s/ D. Linda Scheuplein
Title: Vice President
Bridge Commitment: FLEET NATIONAL BANK OF
$ 5,280,000.00 MASSACHUSETTS
f/k/a SHAWMUT BANK, N.A.
By /s/ Lisa S. Coney
Title: Vice President
Bridge Commitment: BANK OF AMERICA NATIONAL TRUST AND
$ 2,184,000.00 SAVINGS ASSOCIATION
By /s/ Donald J. Chin
Title: Vice President
Bridge Commitment: BAYBANK, N.A.,
$ 1,440,00.00 as Bridge Bank and
as Bridge LC Bank
By /s/ Timothy M. Laurion
Title: Vice President
Bridge Commitment: COMERICA BANK
$ 1,200,000.00
By /s/ Angela B. Petersen
Title: First Vice President
Bridge Commitment: HARRIS TRUST & SAVINGS BANK
$ 1,200,000.00
By /s/ Sandra J. Sanders
Title: Vice President
Bridge Commitment: STATE STREET BANK AND TRUST COMPANY
$ 600,000.00
By /s/ Linda A. Moulton
Title: Vice President
- -----------------
Total Bridge Commitments
$15,000,000
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ D. Linda Scheuplein
Title: Vice President
60 Wall Street
New York, New York 10260
Attn: Robert Bottamedi
Telex number: 177615 MGT UT
Facsimile number: (212) 648-5023
AMENDMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT NO. 1 dated as of February 26, 1996 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 December 6, 1994 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement as
provided hereinafter.
NOW, THEREFORE, the parties hereto agree as follows:
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.
2. Amendment of Section 1.01 of the Agreement. Section 1.01 of the
Agreement is amended hereby by: (A) adding thereto the following definitions:
"Bridge Bank" means each bank listed on the signature pages of the
Bridge Credit Agreement, each Assignee (as defined therein) which becomes a
Bridge Bank pursuant to Section 8.06(c) thereof, and their respective
successors.
"Bridge Commitment" means a commitment by a Bridge Bank under the
Bridge Credit Agreement.
"Bridge Credit Agreement" means the Agreement dated as of February
26, 1996 among Perini Corporation, the Bridge Banks and Morgan Guaranty
Trust Company, as Agent.
"Bridge Loan" means a loan made by a Bridge Bank under the Bridge
Credit Agreement.
"Derivatives Obligations" of any Person means all obligations of
such Person in respect of any rate swap transaction, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index
swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including
any option with respect to any of the foregoing transactions) or any
combination of the foregoing transactions.
"Mortgage Banks" means (i) Comerica Bank, as successor to
Manufacturers National Bank of Detroit, in its capacity as holder of a
Promissory Note of the Borrower dated April 4, 1991, in the original
principal amount of $1,200,000, and the mortgagee pursuant to a mortgage on
the property described as Item 15 in Part I of Schedule III hereto which
secures such Promissory Note, and its successors and assigns, (ii) Harris
Trust and Savings Bank, as successor to Barclays Bank PLC, Boston Branch,
in its capacity as the issuer of a letter of credit for the account of the
Borrower in the initial stated amount of $4,106,850, the maker of a
commitment to lend up to $4,106,850 to the Borrower pursuant to the Letter
of Credit and Reimbursement Agreement dated as of October 1, 1985 and the
"Bank" described in the mortgage on the property described as Item 12 in
Part I of Schedule III hereto which secured the obligations of the under
such Letter of Credit and Reimbursement Agreement and (iii) Fleet Credit
Corporation, as the lessor of computer equipment and other personal
property to the Borrower and certain of its Subsidiaries and joint ventures
pursuant to the Master Equipment Lease No. 1100641700 dated December 30,
1988 (including the Addendum thereto dated December 30, 1988), and the
schedules executed thereunder prior to February 26, 1996.
"Other LC Bank" means each bank listed on Schedule V attached
hereto, its successors and assigns.
"Other Letters of Credit" means the letters of credit described on
Schedule V attached hereto.
"Other Mortgage/Lease Obligations" means the obligations of the
Borrower to any Mortgage Banks under the documents, agreements and
instruments described in the definition of Mortgage Banks, and all other
supplemental or additional documents, agreements and instruments delivered
in connection therewith prior to February 26, 1996.
"Other Reimbursement Obligations" means at any date the
obligations of the Borrower, whether or not contingent at such time, to
reimburse any Other LC Banks for the amount paid or payable by such Other
LC Bank in respect of a drawing under an Other Letter of Credit.
"Rincon Swap" means the interest rate exchange transaction between
Rincon Center Associates, a California limited partnership, as Fixed Rate
Payor, and Citicorp Real Estate, Inc., as Variable Rate Payor, as confirmed
by the Confirmation for Interest Rate Exchange Transaction date October 18,
1993 with Transaction Reference Number 931913.
(B) deleting the definition of "Construction Claim"; (C) deleting "two, three or
six" in clause (1) of the definition of "Interest Period" and inserting in lieu
thereof "two or three"; (D) revising each of the following definitions to
read as follows:
"Borrower Pledge Agreement" means the Borrower Pledge Agreement
dated as of December 6, 1994 between the Borrower and the Agent, as amended
and restated as of February 26, 1996 in substantially the form of Exhibit
E-2 hereto, and 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 dated as of February 26, 1996 in substantially the form of
Exhibit D hereto between the Borrower and the Agent and as the same may be
amended from time to time as permitted herein and in accordance with the
terms thereof (the Borrower Security Agreement dated as of December 6, 1994
executed and delivered in connection with the execution and delivery of
this Agreement having terminated upon collection by the Borrower of all the
Collateral pledged thereunder).
"Collateral Documents" means the Borrower Pledge Agreement, the
Borrower Security Agreement, the Subsidiary Security Agreement, the
Subsidiary Pledge Agreement, the Deeds of Trust, the Mortgages and all
other supplemental or additional security agreements, pledge agreements,
mortgages or similar instruments delivered pursuant hereto or thereto.
"Deeds of Trust" means the Deed of Trust, Assignment of Leases and
Rents, Security Agreement and Financing Statement dated as of December 6,
1994 for each of the properties described as Items 1 and 2 on Schedule III
hereto, each substantially in the form of Exhibits H-1 and H-2 hereto.
"Financing Documents" means this Agreement, the Bridge Credit
Agreement, the Subsidiary Guarantee Agreement, the Notes, the Bridge Notes
(as defined in the Bridge Credit Agreement) and the Collateral Documents.
"Mortgaged Facilities" means the properties described as Items 1,
2, 3, 4, 5, 6, 8, 9, 12, 13 and 15 in Part I of Schedule III hereto.
"Mortgages" means the Mortgage, Assignment of Leases and Rents,
Security Agreement and Financing Statement dated as of February 26, 1996
for each of the Mortgaged Facilities described as Items 3, 4, 5, 6, 8, 9,
12, 13 and 15 in Part I of Schedule III hereto, each substantially in the
form of Exhibits I-1 through I-5 hereto.
"Paramount Development Associates" means Paramount Development
Associates, Inc., a Massachusetts corporation.
"Perini Land and Development" means Perini Land and Development
Company, a Delaware corporation, and its successor by merger, Perini Land
and Development Company, Inc., a Massachusetts corporation, upon its
reincorporation in Massachusetts on December 30, 1994.
"Subsidiary Guarantee Agreement" means the Subsidiary Guarantee
Agreement dated as of December 6, 1994 between the Borrower, the Subsidiary
Guarantors party thereto and the Agent, as executed and delivered pursuant
to Section 3.01(c) hereof and attached hereto as Exhibit F-1, as amended by
Amendment No. 1 dated as of February 26, 1996 in substantially the form of
Exhibit F-2 hereto, and as the same may be amended from time to time as
permitted herein and in accordance with the terms thereof.
"Subsidiary Guarantor" means each of Perini Building Company,
Perini International, Perini Land and Development, R. E. Dailey & Co.,
Paramount Development Associates, Pioneer Construction, Inc., a West
Virginia corporation, Perini Environmental Services, Inc., a Delaware
corporation, Perini Resorts, Inc., a California corporation and each other
Subsidiary of the Borrower which becomes a party to the Subsidiary
Guarantee Agreement, and their respective successors.
"Subsidiary Pledge Agreement" means the Subsidiary Pledge
Agreement dated as of February 26, 1996 in substantially the form of
Exhibit J hereto among the Subsidiary Guarantors party thereto and the
Agent, as executed and delivered pursuant to Section 3.01(c) of the Bridge
Credit Agreement 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 dated as of December 6, 1994 among the Subsidiary Guarantors
party thereto and the Agent, as amended and restated as of February 26,
1996 in substantially the form of Exhibit G hereto, and as the same may be
amended from time to time as permitted herein and in accordance with the
terms thereof.
(E) changing "Perini" to "the Borrower's" each time it appears in "Consolidated
Current Assets"; and (F) renumbering clauses (v) and (vi) as (vi) and (vii) in
the definition of "Debt" and adding the following clause:
"(v) all non-contingent obligations of such Person to reimburse issuers of
letters of credit for drawings under such letters of credit (other than the
Other Reimbursement Obligations and the obligation to reimburse Hong Kong
and Shanghai Bank for $1,800,000 of letters of credit issued by it and
outstanding on the date hereof),"
3. Amendment of Section 2.09 of the Agreement. Section 2.09 of the
Agreement is hereby amended by adding the following proviso at the end of the
first sentence:
"; provided that any such voluntary termination or reduction of Commitments
may only be made after the repayment in full of the Bridge Loans and Bridge
Reimbursement Obligations and termination of the Bridge Commitments under
the Bridge Credit Agreement and termination of the Bridge Letters of
Credit."
4. Amendment of Section 2.10(b) of the Agreement. Clauses (i)
through (iii) of Section 2.10(b) of the Agreement are hereby amended to read in
their entirety as follows:
"(i) immediately upon receipt by the Borrower or any Subsidiary of
the proceeds from the collection, sale or other disposition of any
Collateral (excluding (A) payments in the ordinary course on construction
contracts, (B) operating receipts from Real Estate Investments, (C)
liability insurance proceeds and (D) income of not more than $70,000 earned
from Temporary Cash Investments during any fiscal year) by an amount equal
to (1) 100% of such proceeds net of all out-of-pocket costs, all senior
mortgage debt, 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 less (2) the amount by which the Bridge Commitments are
reduced pursuant to Section 2.10(b)(i) of the Bridge Credit Agreement with
respect to such sale or other disposition; provided that no such reduction
shall be required unless and until, and then only to the extent that, the
aggregate amount of such net proceeds received by the Borrower and its
Subsidiaries exceeds, in the case of an item of Collateral specified in
Schedule VII hereto, the amount set forth opposite such item or, in the
case of other Collateral, $2,000,000 in the aggregate for all such other
Collateral;
(ii) immediately upon the completion of an issuance by the
Borrower of convertible preferred stock or other equity issue, by an amount
equal to (1) $15,000,000 less (2) the amount by which the Bridge
Commitments are reduced pursuant to Section 2.10(b)(ii) of the Bridge
Credit Agreement with respect to such issuance; provided that in the event
that the proceeds of such issuance net of all out-of-pocket expenses
reasonably incurred in respect of such issuance and any taxes paid or
payable (as estimated by a financial officer of the Borrower in good faith)
in respect thereof exceeds $30,000,000, the aggregate amount of the
Commitments shall be reduced by an amount not less than the sum of (A)
$15,000,000 plus (B) 50% of the excess over $30,000,000 of such proceeds
less (C) the amount by which the Bridge Commitments are reduced pursuant to
Section 2.10(b)(ii) of the Bridge Credit Agreement with respect to such
issuance; and
(iii) by $2,000,000 on the first Euro-Dollar Business Day of each
month during the period beginning the later of (x) the repayment of all
amounts payable under, and termination of, the Bridge Credit Agreement or
(y) September 1, 1996 and ending December 31, 1996 unless such period is
extended by the Required Banks at any time or from time to time prior to
the end of such period as it may be so extended from time to time."
5. Amendment of Section 2.11(a) of the Agreement. Section 2.11(a)
of the Agreement is hereby amended by adding the following proviso at the end of
the first sentence:
"; provided that any such voluntary prepayments may only be made after
repayment in full of the Bridge Loans and Bridge Reimbursement Obligations
and termination of the Bridge Commitments under the Bridge Credit Agreement
and termination of the Bridge Letters of Credit."
6. Amendment of Section 2.16(c) of the Agreement. Section 2.16(c)
of the Agreement is hereby amended by: (A) changing "1.00%" to "1.75%" in clause
(i); and (B) changing "2.25%" to "2.75%" in clause (ii).
7. Amendment of Section 2.17 of the Agreement. Section 2.17 of the
Agreement is hereby amended to read in its entirety.
"2.17. Taxes. (a) For purposes of this Section, the following
terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by
the Borrower pursuant to this Agreement or under any Note, and all
liabilities with respect thereto, excluding (i) in the case of each Bank
and the Agent, taxes imposed on its income, and franchise or similar taxes
imposed on it, by a jurisdiction under the laws of which such Bank or the
Agent (as the case may be) is organized or in which its principal executive
office is located or, in the case of each Bank, in which its Lending Office
is located and (ii) in the case of each Bank, any United States withholding
tax imposed on such payments but only to the extent that such Bank is
subject to United States withholding tax at the time such Bank first
becomes a party to this Agreement.
"Other Taxes" means any present or future stamp or documentary
taxes and any other excise or property taxes, or similar charges or levies,
which arise from any payment made pursuant to this Agreement or under any
Note or from the execution or delivery of, or otherwise with respect to,
this Agreement or any Note.
(b) Any and all payments by the Borrower to or for the account of
any Bank or the Agent hereunder or under any Note shall be made without
deduction for any Taxes or Other Taxes; provided that, if the Borrower
shall be required by law to deduct any Taxes or Other Taxes from any such
payments, the sum payable hereunder or under any Note to any Bank or the
Agent, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section) such Bank or the Agent (as the
case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law and
(iv) the Borrower shall furnish to the Agent, at its address referred to in
Section 8.01, the original or a certified copy of a receipt evidencing
payment thereof.
(c) In addition, the Borrower agrees to pay all Other Taxes.
(d) The Borrower agrees to indemnify each Bank and the Agent for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts
payable under this Section) paid by such Bank or the Agent (as the case may
be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be paid
within 15 days after such Bank or the Agent (as the case may be) makes
demand therefor.
(e) Each Bank organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of
this Agreement in the case of each Bank listed on the signature pages
hereof and on or prior to the date on which it becomes a Bank in the case
of each other Bank, and from time to time thereafter if requested in
writing by the Borrower (but only so long as such Bank remains lawfully
able to do so), shall provide the Borrower and the Agent with Internal
Revenue Service form 1001 or 4224, as appropriate, or any successor form
prescribed by the Internal Revenue Service, certifying that such Bank is
entitled to benefits under an income tax treaty to which the United States
is a party which exempts the Bank from United States withholding tax or
reduces the rate of withholding tax on payments of interest for the account
of such Bank or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business
in the United States. If the form provided by a Bank at the time such Bank
first becomes a party to this Agreement indicates a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall
be considered excluded from "Taxes" as defined in subsection (a) of this
Section.
(f) For any period with respect to which a Bank has failed to
provide the Borrower or the Agent with the appropriate form pursuant to
subsection (d) of this Section (unless such failure is due to a change in
treaty, law or regulation occurring subsequent to the date on which such
form originally was required to be provided), such Bank shall not be
entitled to indemnification under subsection (b) or (c) of this Section
with respect to Taxes imposed by the United States; provided that if a
Bank, which is otherwise exempt from or subject to a reduced rate of
withholding tax, becomes subject to Taxes because of its failure to deliver
a form required hereunder, the Borrower shall take such steps as such Bank
shall reasonably request to assist such Bank to recover such Taxes.
(g) If the Borrower is required to pay additional amounts to or
for the account of any Bank pursuant to this Section, then such Bank will
change the jurisdiction of its Lending Office if, in the judgment of such
Bank, such change (i) will eliminate or reduce any such additional payment
which may thereafter accrue and (ii) if such change, in the judgment of
such Bank, is not otherwise disadvantageous to such Bank."
8. Amendment of Section 3.01(j) of the Agreement. Section 3.01(j)
of the Agreement is hereby amended by changing "General Counsel" to "Vice
President-Counsel".
9. Amendment of Section 3.02 of the Agreement. Section 3.02 of the
Agreement is hereby amended by: (A) changing the period at the end of clause (d)
to "; and"; (B) adding the following clause after clause (d):
"(e) the ability of the Borrower to obtain bonding for new
construction projects shall not be less than or more limited than at the
date hereof;
(f) the payment by the Borrower of all amounts theretofore payable
pursuant to Section 9.03 within seven days of demand; and
(g) at any time on or after March 8, 1996, receipt by the Agent of
(i) evidence of recording of the Mortgages on the Mortgaged Facilities
described in Items 13 and 15 in Schedule III and (ii) opinions of counsel
in each jurisdiction in which the foregoing Mortgages are recorded in form
and substance satisfactory to the Agent covering such matters relating
thereto as the Required Banks may reasonably request; and
(h) at any time on or after March 28, 1996, receipt by the Agent
of a policy of title insurance with respect to each Mortgage and Deed of
Trust relating to the Mortgaged Facilities described as Items 1, 2, 3, 4,
5, 6, 9 and 13 in Part I of Schedule III, insuring the perfection,
enforceability and first priority of the Lien created under such Mortgage
or Deed of Trust, as the case may be, as a valid first mortgage or deed of
trust Lien, as the case may be, on the Mortgaged Facilities described
therein, in form and substance satisfactory to the Agent and in the
respective amounts specified in Part I of Schedule III (with all premiums,
expenses and fees paid or caused to be paid by the Borrower), each of which
policies shall (i) be issued by a title company reasonably satisfactory to
the Agent, (ii) have been supplemented by such endorsements as shall be
requested by the Agent (including, without limitation, endorsements
relating to usury, revolving credit, doing business and restrictions) and
(iii) contain only such exceptions to title as shall be reasonably
satisfactory to the Agent, provided that the parties hereto agree that the
Permitted Liens (excluding for this purpose Permitted Encumbrances
described in clause (c) of the definition thereof unless satisfactory to
the Agent) constitute satisfactory exceptions to title.
and (C) changing the phrase "(c) and (d)" in the last sentence of such Section
to "(c), (d), (e) and (f)".
10. Amendment of Section 4.02 of the Agreement. Section 4.02 of
the Agreement is hereby amended by: (A) adding "(a)" at the beginning thereof;
and (B) by adding the following at the end thereof:
"(b) The execution, delivery and performance by each Obligor of
the amendments dated as of February 26, 1996 to the Financing Documents to
which it is a party and the performance by each Obligor of the Financing
Documents as so amended 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 as so amended, on any asset of
such Obligor or any of its Subsidiaries."
11. Amendment of Section 4.03 of the Agreement. Section 4.03 of
the Agreement is hereby amended by: (A) adding "(a)" at the beginning thereof;
(B) adding the following after the second sentence of subsection (a):
"The Borrower Security Agreement and the Subsidiary Pledge Agreement, when
executed and delivered in accordance with the Bridge Credit Agreement, will
constitute valid and binding agreements of each Obligor party thereto
enforceable against each such Obligor in accordance with their respective
terms. Each amendment to each Financing Document, when executed and
delivered in accordance with the Bridge Credit Agreement, and each
Financing Document as so amended will constitute a valid and binding
agreement of the Obligor party thereto in each case enforceable in
accordance with its terms."
(C) adding at the end of subsection (a) the following:
"(b) All real property in which the Borrower or any of its
Subsidiaries has an interest, directly or indirectly (whether through an
interest in a joint venture or partnership or otherwise) are listed in Part
1 of Schedule III hereto. The list of personal property of the Borrower and
each of its Subsidiaries, security interests in which are governed by
Article IX of the UCC as in effect in the relevant jurisdictions, set forth
in Part 2 of Schedule III hereto is complete in all material respects. The
location, ownership, status and lien information provided in Schedule III
for each item of real property and each type of personal property are
complete and correct.
(c) The"
(D) deleting "Subject to Section 2.17, the" in subsection (c); and (E) adding ",
as amended by the amendments thereto dated as of February 26, 1996," before
"create valid" in subsection (c).
12. Amendment of Section 4.08 of the Agreement. Section 4.08 of
the Agreement is hereby amended by changing the date of "1986" to "1989".
13. Amendment of Section 4.09 of the Agreement. Section 4.09 of
the Agreement is hereby amended by adding the following before the first
sentence thereof:
"All of the Borrower's Subsidiaries and all joint ventures and partnerships
in which the Borrower or any of its Subsidiaries have an interest as of the
date hereof are listed in Schedule VI hereto and the state of incorporation
or organization and the ownership interest of each thereof specified
therein are complete and correct."
14. Amendment of Section 4.11 of the Agreement. Section 4.11 of
the Agreement is hereby amended by: (A) adding at the end of the caption ; No
Derivatives Obligations; Certain Existing Agreements"; (B) adding "(a)" after
the caption; and (C) by adding the following subsection at the end of the
section:
"(b) Neither the Borrower nor any of its Subsidiaries is party to
any Derivatives Obligation except the Rincon swap.
(c) All agreements to which the Borrower or any Subsidiary
Guarantor is a party or by which it is bound (other than the Financing
Documents) containing a negative pledge or limitations on its incurrence of
Debt or sale of assets are listed on Schedule IV hereto."
15. Amendment of Section 5.01 of the Agreement. Section 5.01 of
the Agreement is hereby amended by: (A) adding "(1)" at the beginning of
subsection (b) and adding the following at the end of subsection (b):
"(2) as soon as available and in any event within 45 days after
the end of each quarter of each fiscal year of Perini Land and Development,
a cash flow statement for Perini Land and Development for such quarter in a
format consistent with the format of the cash flow statement for Perini
Land and Development for the quarter ended December 31, 1995 previously
delivered to the Banks;"
(B) changing the letter designation of clause (k) to "(n)"; and (C) adding the
following new clauses (k), (l) and (m):
"(k) prompt notice of any change in the Borrower's ability to
obtain bonding for new construction projects (including without limitation
a reduction in the amount of bonding commitments of any bonding company to
the Borrower and any restrictions on use of such commitments);
(l) prompt notice of any decision by the Borrower or any of its
Subsidiaries not to meet a capital call by any joint venture in which the
Borrower or any such Subsidiary is participating;
(m) prompt notice of the Borrower's or any Subsidiary's obtaining
or increasing an interest in a joint venture or partnership which, in the
case of any construction joint venture, need not be given until reasonably
promptly after a bid by such joint venture for a construction contract
shall have been accepted; and"
16. Amendment of Section 5.02 of the Agreement. Section 5.02 of
the Agreement is hereby amended by: (A) adding "; No Derivatives Obligations" in
the caption; (B) adding "(a)" after the caption; and (C) adding the following
subsection at the end of subsection (a):
"(b) The Borrower will not, nor will it permit any of its
Subsidiaries to, become a party to any Derivatives Obligation except the
Rincon swap."
17. Amendment of Section 5.06 of the Agreement. Section 5.06 of
the Agreement is hereby amended by adding at the end thereof:
"; provided that in any event the Borrower shall hold a meeting for
representatives of the Banks at least once each fiscal quarter, at a time
and place in Framingham, Boston or New York City to be determined by the
Agent on 10 Business Days' notice, for purposes of holding such discussions
with such of the Borrower's officers, employees and independent public
accountants as the Agent shall designate at the reasonable request of any
Bank."
18. Amendment of Section 5.08 of the Agreement. Section 5.08 of
the Agreement is hereby amended by: (A) revising subsection (a) to read in its
entirety as follows:
"(a) After the date hereof, the Borrower will not incur or suffer
to exist any Debt other than (i) Debt existing on December 31, 1995 and
listed on Schedule I hereof, (ii) Debt under this Agreement, (iii) Debt
under the Bridge Credit Agreement, (iv) Debt owing to joint ventures in
which the Borrower is participating, (v) up to $3,000,000 of Debt to
finance insurance premiums, (vi) Debt owing by the Borrower to a Subsidiary
and evidenced by an intercompany note pledged to the Agent under the Pledge
Agreement and (vii) any refinancing, extension, renewal or refunding of the
Debt referred to in clauses (i) through (v) above; provided that in any
event at no time shall Modified Parent Company Debt exceed $150,000,000 and
at no time shall the aggregate outstanding amount of Debt to finance
insurance premiums and any refinancing, extension, renewal or refunding
thereof exceed $3,000,000."
and (B) revising subsection (b) to read in its entirety as
follows:
"(b) After the date hereof, the Borrower will not permit any
Subsidiary to incur or suffer to exist any Debt other than (i) Debt
existing on December 31, 1995 and listed on Schedule I hereof, (ii) Debt
under the Subsidiary Guarantee Agreement, (iii) Debt owing to joint
ventures in which such Subsidiary is participating, (iv) Debt owing by a
Subsidiary to the Borrower and evidenced by an intercompany note pledged to
the Agent under the Borrower Security Agreement and (vi) any refinancing,
extension, renewal or refunding of the Debt referred to in clauses (i)
through (iv) above."
19. Amendment of Section 5.09 of the Agreement. Section 5.09 of
the Agreement is hereby amended by: (A) changing "1993" to "1996" both times it
appears in the second sentence; and (B) revising the third sentence to read as
follows:
"For purposes of this Section, "Base Compliance Amount" means (i) for any
date during the period from and including December 31, 1995 to but
excluding June 30, 1996, $100,000,000, (ii) for any date during the period
from and including June 30, 1996 to but excluding September 30, 1996,
$105,000,000, (iii) for any date during the period from and including
September 30, 1996 to but excluding December 31, 1996, $112,000,000, (iv)
for any date during the period from and including December 31, 1996 to but
excluding March 31, 1997, $125,000,000 and (v) for any date during the
period from and including March 31, 1997 to the Termination Date,
$125,000,000 plus 50% of Consolidated Net Income during such period without
giving effect to any negative amount of Consolidated Net Income during any
fiscal quarter or fiscal year during such period."
20. Amendment of Section 5.10 of the Agreement. Section 5.10 of
the Agreement is hereby amended to read in its entirety as follows:
"Consolidated Earnings Before Interest and Taxes for each fiscal period
specified below shall be not less than the percentage specified below of
Consolidated Interest Charges for such fiscal period:
quarter ending March 31, 1996 300%
two quarters ending June 30, 1996 300%
three quarters ending September 30, 1996 250%
four quarters ending December 31, 1996 250%
four quarters ending each March 31,
June 30, September 30 and December 31
thereafter 200%"
21. Amendment of Section 5.11(i) of the Agreement. Section 5.11 is
hereby amended by: (A) relettering clause (i) as clause (k) and (B) adding after
clause (h) the following:
"(i) Liens (whether statutory, by contract or at common law and
whether in the nature of a security interest or constructive trust or
otherwise) of subcontractors, architects, engineers, surveyors, laborers,
materialmen, bonding companies and other Persons performing labor or
services or providing material for construction projects in and under
construction contracts to which the Borrower or any of its Subsidiaries is
a party as general or prime contractor, subcontractor or construction
manager;
(j) Liens granted to Fidelity and Deposit Company of Maryland (the
"Bonding Company") to secure amounts owing by the Borrower or any of its
Subsidiaries in connection with surety bonds, undertakings and instruments
of guarantee issued by the Bonding Company on behalf of the Borrower or any
of its Subsidiaries in the ordinary course of their respective businesses;
and"
22. Amendment of Section 5.12 of the Agreement. Section 5.12 of
the Agreement is amended by: (A) revising the proviso in the last sentence of
subsection (a) to read in its entirety as follows:
"provided that the foregoing shall not prohibit (i) any Subsidiary
Guarantor from selling, leasing or otherwise transferring assets in the
ordinary course of its business or (ii) R. E. Dailey & Co. from
transferring all of its assets to Perini Building Company."
(B) revising subsection (b) to read in its entirety as follows:
"(b) The Borrower will not, and will not permit any of its
Subsidiaries to, sell, lease or otherwise dispose of any item of Collateral
(except Accounts, Inventory and items listed in Schedule VII hereto up to
the amounts specified therein) unless (i) each of the Banks shall have
given its prior written consent thereto and (ii) the consideration therefor
(x) shall be 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 $15,000,000, by the board of directors of the Borrower or a
duly constituted committee thereof) and (y) in the case of any agreement
entered into on or after the Effective Date of the Bridge Credit Agreement
for the sale, lease or other disposition of Collateral shall consist of
cash payable at closing; provided that the prior written consent of the
Required Banks shall not be required for any sale, lease or other
disposition of any item of Collateral having a fair market value not
exceeding $100,000 if the aggregate amount of the fair market value of all
such items of Collateral sold, leased or otherwise disposed of during any
fiscal year does not exceed $500,000 and the Borrower delivers to each of
the Banks prompt written notice of each such sale, lease or other
disposition."
23. Amendment of Section 5.14 of the Agreement. The first sentence
of Section 5.14 of the Agreement is hereby amended by adding the following
proviso at the end thereof:
"; provided that the Borrower will not declare or pay any preferred stock
dividend while (i) any Bridge Commitment or Bridge Letter of Credit is
outstanding or any Bridge Loan or Bridge Reimbursement Obligation is
outstanding or (ii) any Default is continuing or (iii) the aggregate
outstanding amount of the Borrower's Debt exceeds 50% of the Borrower's
Consolidated Tangible Net Worth."
24. Amendment of Section 6.01(n) of the Agreement. Section 6.01(n)
of the Agreement is hereby amended by deleting "subject to Section 2.17,".
25. Amendment of Section 7.01 of the Agreement. Section 7.01 of
the Agreement is hereby amended by adding at the end thereof the following:
"Each Bank which is also an Other LC Bank or a Mortgage Bank also makes the
foregoing appointment in its capacity as an Other LC Bank or a Mortgage
Bank, as the case may be, and agrees that the provisions of this Article
VII, including without limitation Sections 7.05 and 7.06, shall be for the
benefit of the Agent mutatis mutandis when acting in respect of such Other
LC Bank or Mortgage Bank, its Other Reimbursement Obligations, its Other
Letters of Credit or its Other Mortgage/Lease Obligations."
26. Amendment of Section 9.04 of the Agreement. Section 9.04 of
the Agreement is hereby amended by adding at the end of the proviso in the first
sentence "or under the Bridge Credit Agreement and nothing in any Financing
Documents shall require any Bank to share any payments received by such Bank if
such payments were made in respect of any obligations (including without
limitation Other Reimbursement Obligations and Other Mortgage/Lease Obligations)
not constituting Loans or Reimbursement Obligations."
27. Amendment of Section 9.05 of the Agreement. Section 9.05 of
the Agreement is hereby amended by adding at the end thereof:
", (vii) amend Section 9.04 or 9.06 hereof or (viii) notwithstanding any
provision of any Collateral Document to the contrary, release any item of
Collateral from the Lien provided by the Collateral Documents, except for
the sale or other disposition of such item by the Agent in the exercise of
its rights as provided therein (provided that unless an Event of Default
has occurred and is continuing, the Agent may release any Collateral at the
request of the Borrower, without the consent of each of the Banks, if (i)
such release is required in connection with any sale, lease or other
disposition of such Collateral and (ii) such sale, lease or other
disposition is in accordance with and permitted by the terms hereof
(including without limitation Sections 2.10(b)(i) and 5.12(b)) and of the
Bridge Credit Agreement)."
28. Amendment of Section 9.06 of the Agreement. Section 9.06 of
the Agreement is amended by: (A) adding "in amounts of at least the lesser of
its Commitment and $5,000,000" at the end of the first sentence of subsection
(b) and after "or a proportionate part" in the first sentence of subsection (c);
(B) adding "or another Bank" after "transferor Bank" in the proviso to the first
sentence of subsection (c); and (C) changing "Exhibit I" to "Exhibit K" in
subsection (c).
29. Amendment of Schedules to the Agreement. The Schedules to the
Agreement are hereby deleted and Schedules I to VII in the form attached hereto
are added to the Agreement.
30. Amendment of Table of Contents of the Agreement. The Table of
Contents of the Agreement is hereby amended as appropriate to reflect the
foregoing amendments.
31. Consent to Other Financing Documents and Amendments of Other
Financing Documents. Each Bank hereby consents to the execution and delivery of
the Borrower Security Agreement, the Borrower Pledge Agreement, Amendment No. 1
to the Subsidiary Guarantee Agreement, the Subsidiary Security Agreement and the
Subsidiary Pledge Agreement.
32. Representations and Warranties. The Borrower represents and
warrants that the representations and warranties of each Obligor contained in
each Financing Document, as amended, to which it is a party are true on and as
of the date hereof.
33. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
34. 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/ David B. Perini
Title: President & CEO
By /s/ John H. Schwarz
Title: Executive Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ D. Linda Scheuplein
Title: Vice President
FLEET NATIONAL BANK OF
MASSACHUSETTS
(f/k/a SHAWMUT BANK, N.A.)
By /s/ Lisa S. Coney
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By /s/ Donald J. Chin
Title: Vice President
BAYBANK, N.A.,
as Bank and as LC Bank
By /s/ Timothy M. Laurion
Title: Vice President
COMERICA BANK
By /s/ Angela B. Petersen
Title: First Vice President
HARRIS TRUST & SAVINGS BANK
By /s/ Sandra J. Sanders
Title: Vice President
STATE STREET BANK AND TRUST COMPANY
By /s/ Linda M. Moulton
Title: Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ D. Linda Scheuplein
Title: Vice President
PERINI CORPORATION
and
THE FIRST NATIONAL BANK OF BOSTON
as Rights Agent
Shareholder Rights Agreement
Dated as of September 23, 1988
as amended and restated
as of May 17, 1990
<PAGE>
Table of Contents
-----------------
SECTION PAGE
1 Certain Definitions........................... 1
2 Appointment of Rights Agent................... 5
3 Issue of Right Certificates................... 6
4 Form of Right Certificates.................... 8
5 Countersignature and Registration............. 9
6 Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right
Certificates................................ 10
7 Exercise of Rights; Exercise Price; Expiration
Date of Rights.............................. 11
8 Cancellation and Destruction of
Right Certificates.......................... 13
9 Reservation and Availability of
Preferred Stock............................. 13
10 Preferred Stock Record Date................... 15
11 Adjustment of Exercise Price, Number and Kind
of Shares or Number of Rights............... 15
12 Certificate of Adjusted Exercise Price or
Number of Shares............................ 25
13 Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.................. 25
14 Fractional Rights and Fractional Shares....... 28
15 Rights of Action.............................. 29
16 Agreement of Right Holders.................... 29
17 Right Certificate Holder Not Deemed
a Shareholder............................... 30
18 Concerning the Rights Agent................... 30
19 Merger or Consolidation or Change of Name
of Rights Agent.......................... 31
20 Duties of Rights Agent........................ 32
21 Change of Rights Agent........................ 34
22 Issuance of New Right Certificates............ 35
23 Redemption and Termination.................... 36
24 Exchange .................................... 38
25 Notice of Certain Events...................... 38
26 Notices.................................... 39
27 Supplements and Amendments.................... 40
28 Successors.................................... 41
29 Determinations and Actions by the
Board of Directors....................... 41
30 Benefits of this Agreement.................... 42
31 Severability............................... 42
32 Governing Law................................. 42
33 Counterparts.................................. 42
34 Descriptive Headings.......................... 43
Exhibit A -- Form of Certificate of Vote of
Directors Establishing
Series A Junior Participating
Cumulative Preferred Stock
Exhibit B -- Form of Right Certificate
Exhibit C -- Form of Summary of Rights
SHAREHOLDER RIGHTS AGREEMENT
Agreement, dated as of September 23, 1988, as amended and restated as
of May 17, 1990, between Perini Corporation, a Massachusetts corporation (the
"Company"), and The First National Bank of Boston, a national banking
association (the "Rights
Agent").
W I T N E S S E T H
WHEREAS, on September 23, 1988 the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as hereinafter
defined) for each outstanding share of Common Stock, par value $1.00 per share,
of the Company (the "Common Stock") outstanding as of the close of business on
October 6, 1988 (the "Record Date"), (other than shares of Common Stock held in
the Company's treasury on the Record Date), and contemplates the issuance of one
Right for each share of Common Stock of the Company issued (whether originally
issued or sold from the Company's treasury) between the Record Date and the
earlier of the Distribution Date and the Expiration Date (as such terms are
defined in Section 3 hereof), each Right initially representing the right to
purchase one one-hundredth of a share of Series A Junior Participating
Cumulative Preferred Stock of the Company having the rights, powers and
preferences set forth in the form of Certificate of Vote of Directors
Establishing a Series of a Class of Stock attached hereto as Exhibit A, upon the
terms and subject to the conditions hereinafter set forth (the "Rights");
WHEREAS, in accordance with the terms of the Shareholder Rights
Agreement dated as of September 23, 1988 (the "Rights Agreement") between the
Company and the Rights Agent, the Company deems it advisable and in the best
interests of its shareholders to make certain amendments to the Rights
Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree that the Rights Agreement
is hereby amended and restated as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, shall be the Beneficial Owner (as such term is hereinafter defined)
of 20% or more of the shares of Common Stock then outstanding, but shall not
include (i) the Company, (ii) any Subsidiary of the Company (as such term is
hereinafter defined), (iii) any employee benefit plan of the Company or any
Subsidiary of the Company (as such term is hereinafter defined), (iv) any entity
or Person holding shares of Common Stock organized, appointed or established by
the Company or any Subsidiary for or pursuant to the terms of any such plan or
(v) The Perini Memorial Foundation, Inc., The Joseph Perini Memorial Foundation,
or any of the various trusts established under the Wills of Louis R. Perini,
Sr., Joseph R. Perini, Sr. or Charles B. Perini, Sr. The Persons described in
clauses (i) through (v) above are referred to herein as "Exempt Persons."
Notwithstanding the foregoing, no Person shall become an "Acquiring Person" as
the result of an acquisition of Common Stock by the Company which, by reducing
the number of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 20% or more of the Common Stock of the
Company then outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 20% or more of the Common Stock of the Company then
outstanding by reason of share purchases by the Company and shall, after such
share purchases by the Company, become the Beneficial Owner of any additional
shares of Common Stock of the Company, then such Person shall be deemed to be an
"Acquiring Person".
(b) "Adverse Person" shall mean any Person declared to be an
Adverse Person by the Board of Directors upon a determination of the Board of
Directors that the criteria set forth in Section 11(a)(ii)(B) apply to such
Person.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement; provided, however, that no
Person who is a director or officer of the Company shall be deemed an Affiliate
or an Associate of any other director or officer of the Company solely as a
result of his or her position as director or officer of the Company.
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, beneficially owns (as determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Exchange Act, as in
effect on the date of this Agreement) or has the right to dispose of;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has
(A) the right to acquire (whether such right is exercisable
immediately or after the passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the exercise of conversion
rights, exchange rights, rights (other than these Rights), warrants or options,
or otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (1) securities tendered
pursuant to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; (2) securities issuable upon exercise of Rights at any
time prior to the occurrence of a Triggering Event; or (3) securities issuable
upon exercise of Rights from and after the occurrence of a Triggering Event,
which Rights were acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Sections 3(a), 11(i) or
22 hereof; or
(B) the right to vote pursuant to any agreement, arrangement
or understanding (whether or not in writing); provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "beneficially own," any
security under this clause (B) if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy given in response to
a public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations of the Exchange Act and (2) is not also
then reportable by such person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which such
Person or any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as described in
clause (B) of Section 1(d)(ii) hereof) or disposing of any securities of the
Company; provided, however, that (1) no Person engaged in business as an
underwriter of securities shall be deemed the Beneficial Owner of any securities
acquired through such Person's participation as an underwriter in good faith in
a firm commitment underwriting until the expiration of 40 days after the date of
such acquisition and (2) no Person who is a director or an officer of the
Company shall be deemed, solely as a result of his or her position as director
or officer of the Company, the Beneficial Owner of any securities of the Company
that are beneficially owned by any other director or officer of the Company.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the Commonwealth of
Massachusetts are authorized or obligated by law or executive order to close.
(f) "Close of business" on any given date shall mean 5:00
P.M., Boston time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Boston time, on the next succeeding
Business Day.
(g) "Common Stock" shall mean the Common Stock, par value
$1.00 per share, of the Company, except that "Common Stock" when used with
reference to any Person other than the Company shall mean the capital stock with
the greatest voting power, or the equity securities or other equity interests
having power to control or direct the management, of such Person or, if such
Person is a Subsidiary of another Person, the Person which ultimately controls
such first-mentioned Person and which has issued and outstanding such capital
stock, equity securities or equity interests.
(h) "Disinterested Director" shall mean (i) any member of the
Company's Board of Directors who is not an employee of the Company or any of its
Subsidiaries and is not an Acquiring Person, an Adverse Person or an Affiliate
or Associate of any such Person or a representative or nominee of an Acquiring
Person, an Adverse Person or any such Affiliate or Associate and was a member of
the Company's Board of Directors prior to the date of this Agreement, and (ii)
any person who subsequently becomes a member of the Company's Board of Directors
who is not an Acquiring Person, an Adverse Person or an Affiliate or Associate
of any such Person or a representative or nominee of an Acquiring Person, an
Adverse Person or of any such Affiliate or Associate, if such Person's
nomination is recommended or approved by a majority of the Disinterested
Directors.
(i) "Distribution Date" shall have the meaning defined in
Section 3(a) hereof.
(j) "Exercise Price" shall have the meaning defined in Section
7(b) hereof.
(k) "Expiration Date" and "Final Expiration Date" shall have
the meanings defined in Section 7(a) hereof.
(l) "Fair Market Value" of any securities or other property
shall be as determined in accordance with Section 11(d) hereof.
(m) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(n) "Preferred Stock" shall mean shares of Series A Junior
Participating Cumulative Preferred Stock, par value $1.00 per share, of the
Company having the rights and preferences set forth in the form of Certificate
of Vote of Directors Establishing a Series of a Class of Stock attached hereto
as Exhibit A.
(o) "Principal Party" shall have the meaning defined in
Section 13(b) hereof.
(p) "Redemption Price" shall have the meaning defined in
Section 23 hereof.
(q) "Section 11(a)(ii) Event" shall mean any event described
in Section 11(a)(ii) hereof.
(r) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(s) "Stock Acquisition Date" shall mean 5:00 p.m. Boston time
on the date of the first public announcement (which, for purposes of this
definition shall include, without limitation, a press release or a report filed
pursuant to Section 13(d) under the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such.
(t) A "Subsidiary" of any Person shall mean any other Person
of which a majority of the voting power of the voting equity securities or
voting interests is owned, directly or indirectly, by such Person, or which is
otherwise controlled by such Person.
(u) "Triggering Event" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date (as
hereinafter defined in Section 3(a)) also be the holders of the Common Stock) in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable. In the event the Company
appoints one or more Co- Rights Agents, the respective duties of the Rights
Agent and any Co-Rights Agents shall be as the Company shall determine.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the close of business on the
tenth day after the Stock Acquisition Date, (ii) the close of business on the
tenth Business Day after the date of the commencement, by any Person, other than
an Exempt Person, of a tender or exchange offer if, upon consummation thereof,
such Person would be an Acquiring Person or (iii) the determination by the Board
of Directors of the Company, pursuant to the criteria set forth in Section
11(a)(ii)(B) hereof, that a Person is an Adverse Person (including any such date
which is after the date of this Agreement and prior to the issuance of the
Rights) (the earliest of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by certificates for the Common Stock
registered in the names of the holders of the Common Stock (which certificates
for Common Stock shall be deemed also to be certificates for Rights) and not by
separate certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock. As soon
as practicable after the Company has notified the Rights Agent of the occurrence
of the Distribution Date, the Rights Agent will send, by first-class, insured,
postage prepaid mail, to each record holder of the Common Stock as of the close
of business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more certificates, in substantially the form of
Exhibit B hereto (the "Right Certificates"), evidencing one Right for each share
of Common Stock so held. In the event that an adjustment in the number of Rights
per share of Common Stock has been made pursuant to Section 11(o) hereof, the
Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) at the time of distribution of the Right
Certificates, so that Right Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional Rights. As of
and after the close of business on the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) Not later than ten days after the Record Date, the Company
will send a copy of a Summary of Rights, in substantially the form attached
hereto as Exhibit C (the "Summary of Rights"), by first-class, postage prepaid
mail, to each record holder of the Common Stock as of the close of business on
the Record Date, at the address of such holder shown on the records of the
Company. With respect to certificates for the Common Stock outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock with or without a copy of the Summary of
Rights attached thereto, and the registered holders of the Common Stock shall
also be the registered holders of the associated Rights. Until the Distribution
Date (or earlier redemption, expiration or termination of the Rights), the
transfer of any of the certificates for the Common Stock outstanding on the
Record Date, even without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate.
(c) Certificates for the Common Stock issued after the Record
Date, but prior to the earlier of the Distribution Date or the Expiration Date,
shall be deemed also to be certificates for Rights, and shall bear the following
legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a Shareholder
Rights Agreement between Perini Corporation and The First
National Bank of Boston, as Rights Agent, dated as of
September 23, 1988, as amended as of May , 1990 (the "Rights
Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal
offices of Perini Corporation. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be
evidenced by this certificate. Perini Corporation may redeem
the Rights at a redemption price of $0.02 per Right, subject
to adjustment, under the terms of the Rights Agreement. Perini
Corporation will mail to the holder of this certificate a copy
of the Rights Agreement, as in effect on the date of mailing,
without charge promptly after receipt of a written request
therefor. Under certain circumstances, Rights issued to or
held by Acquiring Persons, Adverse Persons or any Affiliates
or Associates thereof (as defined in the Rights Agreement) and
any subsequent holder of such Rights may become null and void.
With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date or the Expiration Date, the Rights associated
with the Common Stock represented by such certificates shall be evidenced by
such certificates alone, and the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificates. In the event that the Company purchases or
acquires any shares of Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock shall be deemed
cancelled and retired so that the Company shall not be entitled to exercise any
Rights associated with the shares of Common Stock which are no longer
outstanding.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase shares and of assignment and certificate to be printed on the reverse
thereof) shall each be substantially in the form of Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law, rule or regulation or with any rule or
regulation of any stock exchange on which the Rights may from time to time be
listed, or to conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Right Certificates, whenever distributed, shall be dated
as of the Record Date, and on their face shall entitle the holders thereof to
purchase such number of one one-hundredths of a share of Preferred Stock as
shall be set forth therein at the price set forth therein (the "Exercise
Price"), but the number of such shares and the Exercise Price shall be subject
to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by (i) an Acquiring
Person, an Adverse Person or any Associate or Affiliate of such a Person, (ii) a
transferee of an Acquiring Person or an Adverse Person (or of any such Associate
or Affiliate) who becomes a transferee after the Acquiring Person or Adverse
Person becomes such, or (iii) a transferee of an Acquiring Person or an Adverse
Person (or of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person or Adverse Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or Adverse Person to holders of equity
interests in such Acquiring Person or Adverse Person or to any Person with whom
the Acquiring Person or Adverse Person has any continuing agreement, arrangement
or understanding regarding the transferred Rights or (B) a transfer which the
Board of Directors of the Company has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect the avoidance of
Section 7(e) hereof, and any Right Certificate issued pursuant to Section 6 or
Section 11 upon transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall contain the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person, an Adverse Person or an Affiliate or an Associate of
an Acquiring Person or an Adverse Person (as such terms are
defined in the Rights Agreement). This Right Certificate and
the Rights represented hereby may become null and void under
certain circumstances as specified in Section 7(e) of the
Rights Agreement.
The Company shall give notice to the Rights Agent promptly after it becomes
aware of the existence and identity of any Acquiring Person or Adverse Person or
any Associate or Affiliate thereof.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any Vice President and by
its Treasurer or any Assistant Treasurer, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Clerk or any Assistant Clerk of the
Company, either manually or by facsimile signature. The Right Certificates shall
be manually countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent, and issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates had not ceased to
be such officer of the Company; and any Right Certificates may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at one of its offices designated as the appropriate
place for surrender of Right Certificates upon exercise or transfer, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the Expiration
Date, any Right Certificate or Certificates may be transferred, split up,
combined or exchanged for another Right Certificate or Certificates, entitling
the registered holder to purchase a like number of one one-hundredths of a share
of Preferred Stock (or following a Triggering Event, Preferred Stock, cash
property, debt securities, common stock or any combination thereof) as the Right
Certificate or Certificates surrendered then entitled such holder to purchase.
Any registered holder desiring to transfer, split up, combine or exchange any
Right Certificate shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Certificates to be
transferred, split up, combined or exchanged, with the form of assignment and
certificate duly executed, at the office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Right Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e) and
Section 14 hereof, countersign and deliver to the Person entitled thereto a
Right Certificate or Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will execute and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, the registered holder of
any Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the office or offices of the Rights Agent
designated for such purpose, together with payment of the aggregate Exercise
Price for the total number of one one-hundredths of a share of Preferred Stock
(or other securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercised, at or prior to the earlier of (i) the
close of business on September 23, 1999 (the "Final Expiration Date") or (ii)
the time at which the Rights are redeemed as provided in Section 23 hereof (the
earlier of (i) or (ii) being herein referred to as the "Expiration Date").
Except as set forth in Section 7(e) hereof and notwithstanding any other
provision of this Agreement, any Person who prior to the Distribution Date
becomes a record holder of shares of Common Stock may exercise all of the rights
of a registered holder of a Right Certificate with respect to the Rights
associated with such shares of Common Stock in accordance with the provisions of
this Agreement, as of the date such Person becomes a record holder of shares of
Common Stock.
(b) The Exercise Price for each one one-hundredth of a share
of Preferred Stock pursuant to the exercise of a Right shall initially be
$100.00, shall be subject to adjustment from time to time as provided in Section
11 and Section 13(a) hereof and shall be payable in lawful money of the United
States of America in accordance with Section 7(c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and the certificate on
the reverse side thereof duly executed, accompanied by payment of the Exercise
Price for the shares to be purchased and an amount equal to any applicable
transfer tax (as determined by the Rights Agent) in cash, or by certified check
or bank draft payable to the order of the Company, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i)(A) requisition from any
transfer agent of Preferred Stock (or make available, if the Rights Agent is the
transfer agent therefor) certificates for the number of one one-hundredths of a
share of Preferred Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of shares of Preferred
Stock issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of one one-hundredths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) when appropriate, requisition from the Company the
amount of cash, if any, to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) promptly after receipt of such
certificates or depositary receipts, cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder and (iv) when appropriate,
after receipt promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate. In the event that the Company is obligated to
issue other securities (including Common Stock) of the Company, pay cash or
distribute other property pursuant to Section 11(a) hereof, the Company will
make all arrangements necessary so that such other securities, cash or other
property are available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person, an Adverse Person or any
Associate or Affiliate of such a Person or (ii) a transferee of an Acquiring
Person or an Adverse Person (or of any such Associate or Affiliate) who becomes
a transferee after the Acquiring Person becomes such or (iii) a transferee of an
Acquiring Person or an Adverse Person (or of any such Associate or Affiliate)
who becomes a transferee prior to or concurrently with the Acquiring Person or
Adverse Person becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person or Adverse
Person to holders of equity interests in such Acquiring Person or Adverse Person
or to any Person with whom the Acquiring Person or Adverse Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), shall become null
and void without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person, an Adverse Person or any Affiliates or
Associates thereof or any transferee of any of them hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of Rights upon the
occurrence of any purported exercise as set forth in this Section 7 unless such
registered holder shall have (i) completed and signed the certificate contained
in the form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock or any authorized and issued shares of Preferred Stock held in
its treasury, the number of shares of Preferred Stock that will be sufficient to
permit the exercise in full of all outstanding and exercisable Rights.
(b) The Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares of Preferred Stock
issued or reserved for issuance to be listed, upon official notice of issuance,
upon the principal national securities exchange, if any, upon which the Common
Stock is listed or, if the principal market for the Common Stock is not on any
national securities exchange, to be eligible for quotation on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or any
successor thereto or other comparable quotation system.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the occurrence of a
Section 11(a)(ii) Event as of which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, or as soon as required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing and (iii) cause such registration statement to remain
effective (with a prospectus that at all times meets the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities, and (B) the Expiration Date. The Company
will also take such action as may be appropriate under, and which will ensure
compliance with, the securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. The Company may temporarily
suspend for a period of time not to exceed ninety (90) days after the date set
forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. Notwithstanding any such provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Preferred Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Exercise Price), be duly
and validly authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any certificates for shares of Preferred Stock upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of
Right Certificates to a person other than, or in respect of the issuance or
delivery of securities in a name other than that of, the registered holder of
the Right Certificates evidencing Rights surrendered for exercise or to issue or
deliver any certificates for securities in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for Preferred Stock is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the shares of
Preferred Stock represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Exercise Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Stock transfer books of the Company
are closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Stock transfer books of the Company are open. Prior to
the exercise of the Right evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a shareholder of the Company with respect
to shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Exercise Price, Number and Kind of Shares or
Number of Rights. The Exercise Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C)
combine the outstanding Preferred Stock into a smaller number of shares or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Exercise Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock transfer books of the Company were
open, he would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both Section 11(a)(i) and
Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii) hereof.
(ii) In the event
(A) any Person, alone or together with its Affiliates and
Associates, shall become an Acquiring Person; or
(B) the Board of Directors of the Company shall declare any
Person to be an Adverse Person, after (x) a determination that such Person,
alone or together with its Affiliates and Associates, has become the Beneficial
Owner of 10% or more of the outstanding shares of Common Stock and (y) a
determination by the Board of Directors, after reasonable inquiry and
investigation, including such consultation, if any, with such persons as such
directors shall deem appropriate, that (a) such Beneficial Ownership by such
Person is intended to cause, is reasonably likely to cause or will cause the
Company to repurchase the Common Stock beneficially owned by such Person or to
cause pressure on the Company to take action or enter into a transaction or
series of transactions which would provide such Person with short-term financial
gain under circumstances where the Board of Directors determines that the best
long-term interests of the Company and its shareholders, but for the actions and
possible actions of such Person, would not be served by taking such action or
entering into such transactions or series of transactions at that time or (b)
such Beneficial Ownership is causing or reasonably likely to cause a material
adverse impact (including, but not limited to, impairment of relationships with
customers or impairment of the Company's ability to maintain its competitive
position) on the business or prospects of the Company; provided, however, that
the Board of Directors of the Company may not declare a Person to be an Adverse
Person if, prior to the time that such Person acquired 10% or more of the shares
of Common Stock then outstanding, such Person provided to the Board of Directors
in writing a statement of such Person's purpose and intentions in connection
with the proposed acquisition of Common Stock, together with any other
information reasonably requested of such Person by the Board of Directors, and
the Board of Directors, based on such statement and reasonable inquiry and
investigation, including such consultation, if any, with such persons as the
directors shall deem appropriate, determines to notify and notifies such Person
in writing that it will not declare such Person to be an Adverse Person;
provided further, that the Board of Directors may expressly condition in any
manner a determination not to declare a Person an Adverse Person on such
conditions as the Board of Directors may select, including without limitation,
such Person's not acquiring more than a specified amount of stock and/or on such
Person's not taking actions inconsistent with the purposes and intentions
disclosed by such Person in the statement provided to the Board of Directors. No
delay or failure by the Board of Directors to declare a Person to be an Adverse
Person shall in any way waive or otherwise affect the power of the Board of
Directors subsequently to declare a Person to be an Adverse Person. In the event
that the Board of Directors should at any time determine, upon reasonable
inquiry and investigation, including consultation with such persons as the
directors shall deem appropriate, that such Person has not met or complied with
any condition specified by the Board of Directors, the Board of Directors may at
any time thereafter declare such Person to be an Adverse Person pursuant to the
provisions of this Section 11(a)(ii)(B);
then, and in each such case, promptly following any such occurrence, proper
provision shall be made so that each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have a right to receive, upon exercise
thereof at the then current Exercise Price in accordance with the terms of this
Agreement, such number of shares of Preferred Stock of the Company as shall
equal the result obtained by (x) multiplying the then current Exercise Price by
the then number of one one-hundredths of a share of Preferred Stock for which a
Right was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event and dividing that product by (y) 50% of the Fair Market Value
per one one-hundredth of a share of the Preferred Stock (determined pursuant to
Section 11(d)) on the date of the occurrence of any one of the events listed
above in this Section 11(a)(ii); provided, however, that if the transaction that
would otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13 hereof, then only the provisions of Section 13 shall
apply and no adjustment shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that there shall not be sufficient Treasury
shares or authorized but unissued shares of Preferred Stock to permit the
exercise in full of the Rights in accordance with the foregoing Section
11(a)(ii), the Company shall take all action as may be necessary to authorize
and reserve for issuance such number of additional shares of Preferred Stock as
may from time to time be required to be issued upon the exercise in full of all
Rights outstanding and, if necessary, shall use its best efforts to obtain
shareholder approval thereof. Notwithstanding the foregoing provisions of this
Section 11(a)(iii), in lieu of issuing shares of Preferred Stock in accordance
with Section 11(a)(ii) hereof, if a majority of the Disinterested Directors then
in office determines that such action is necessary or appropriate and is not
contrary to the interests of the holders of the Rights, they may elect to cause
the Company to pay, and if sufficient shares of Preferred Stock cannot be issued
for such purpose in accordance with the provisions hereof, the Company shall
issue or pay upon the exercise of the Rights, cash, property, debt securities,
shares of Preferred Stock or Common Stock, or any combination thereof, having an
aggregate Fair Market Value equal to the Fair Market Value of the shares of
Preferred Stock which otherwise would have been issuable pursuant to Section
11(a)(ii). Any such election by a majority of the Disinterested Directors of the
Company must be made and publicly announced within 30 days of the date on which
any Section 11(a)(ii) Event first occurs following the Stock Acquisition Date.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Stock (or securities having the same rights,
privileges and preferences as the shares of Preferred Stock ("preferred stock
equivalents")) or securities convertible into Preferred Stock or preferred stock
equivalents at a price per share of Preferred Stock or per share of preferred
stock equivalents (or having a conversion price per share, if a security
convertible into Preferred Stock or preferred stock equivalents) less than the
Fair Market Value (as determined pursuant to Section 11(d) hereof) per share of
Preferred Stock on such record date, the Exercise Price to be in effect after
such record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock outstanding on such record
date, plus the number of shares of Preferred Stock which the aggregate offering
price of the total number of shares of Preferred Stock to be offered (and the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Fair Market Value and the denominator of which
shall be the number of shares of Preferred Stock outstanding on such record
date, plus the number of additional shares of Preferred Stock and preferred
stock equivalents to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be the Fair
Market Value thereof determined in accordance with Section 11(d) hereof. Shares
of Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustments
shall be made successively whenever such a record date is fixed; and in the
event that such rights or warrants are not so issued, the Exercise Price shall
be adjusted to be the Exercise Price which would then be in effect if such
record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a regular
periodic cash dividend out of the earnings or retained earnings of the Company),
assets (other than a dividend payable in Preferred Stock, but including any
dividend payable in stock other than Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b)), the Exercise Price to
be in effect after such record date shall be determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the Fair Market Value (as determined pursuant to
Section 11(d) hereof) per one one-hundredth of a share of Preferred Stock on
such record date, less the Fair Market Value (as determined pursuant to Section
11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such convertible securities, subscription rights or
warrants applicable to one one-hundredth of a share of Preferred Stock and the
denominator of which shall be the Fair Market Value (as determined pursuant to
Section 11(d) hereof) per one one-hundredth of a share of Preferred Stock. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Exercise Price shall
again be adjusted to be the Exercise Price which would be in effect if such
record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value"
of any share of Preferred Stock, Common Stock or any other stock or any Right or
other security or any other property shall be determined as provided in this
Section 11(d).
(i) In the case of a publicly-traded stock or other security,
the Fair Market Value on any date shall be deemed to be the average of the daily
closing prices per share of such stock or per unit of such other security for
the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, provided, however, that in the event that the
Fair Market Value per share of any share of stock is determined during a period
following the announcement by the issuer of such stock of (x) a dividend or
distribution on such stock payable in shares of such stock or securities
convertible into shares of such stock or (y) any subdivision, combination or
reclassification of such stock, and prior to the expiration of the 30 Trading
Day period after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then, and in
each such case, the Fair Market Value shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the securities are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which such security is listed or admitted to trading; or, if not listed or
admitted to trading on any national securities exchange, the last quoted price
(or, if not so quoted, the average of the last quoted high bid and low asked
prices) in the over-the-counter market, as reported by NASDAQ or such other
system then in use; or, if on any such date no bids for such security are quoted
by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in such security
selected by the Board of Directors of the Company. If on any such date no market
maker is making a market in such security, the Fair Market Value of such
security on such date shall be determined reasonably and with utmost good faith
to the holders of the Rights by the Board of Directors of the Company,
including, if at the time of such determination there is an Acquiring Person or
an Adverse Person, a majority of the Disinterested Directors then in office, or
if there are no Disinterested Directors, by a nationally recognized investment
banking firm selected by the Board of Directors, which determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which such security
is listed or admitted to trading is open for the transaction of business or, if
such security is not listed or admitted to trading on any national securities
exchange, a Business Day.
(ii) If a security is not publicly held or not so listed or
traded, "Fair Market Value" shall mean the fair value per share of stock or per
other unit of such security, determined reasonably and with utmost good faith to
the holders of the Rights by the Board of Directors of the Company, including,
if at the time of such determination there is an Acquiring Person or an Adverse
Person, a majority of the Disinterested Directors then in office, or if there
are no Disinterested Directors, by a nationally recognized investment banking
firm selected by the Board of Directors, which determination shall be described
in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights; provided, however, that for the purposes of
making any adjustment provided for by Section 11(a)(ii) hereof, the Fair Market
Value of a share of Preferred Stock shall not be less than the product of the
then Fair Market Value of a share of Common Stock multiplied by the higher of
the then Dividend Multiple or Vote Multiple applicable to the Preferred Stock
(as defined in the Certificate of Vote of Directors establishing the Preferred
Stock attached as Exhibit A hereto) and shall not exceed 105% of the product of
the then Fair Market Value of a share of Common Stock multiplied by the higher
of the then Dividend Multiple or Vote Multiple applicable to the Preferred
Stock.
(iii) In the case of property other than securities, the Fair
Market Value thereof shall be determined reasonably and with utmost good faith
to the holders of Rights by the Board of Directors of the Company, including, if
at the time of such determination there is an Acquiring Person, a majority of
the Disinterested Directors then in office, or if there are no Disinterested
Directors, by a nationally recognized investment banking firm selected by the
Board of Directors, which determination shall be described in a statement filed
with the Rights Agent and shall be binding upon the Rights Agent and the holders
of the Rights.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Exercise Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Exercise Price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest ten-thousandth of a share of Common Stock or
one-millionth of a share of Preferred Stock, as the case may be. Notwithstanding
the first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three (3) years from
the date of the transaction which mandates such adjustment or (ii) the
Expiration Date.
(f) If as a result of any provision of Section 11(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Section 11(a), (b), (c), (e), (g) through (k) and
(m), inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with
respect to the Preferred Stock shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of one one-hundredths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Exercise Price as a
result of the calculations made in Section 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Exercise Price, that number of one
one-hundredths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one one-hundredths
of a share of Preferred Stock for which a Right may be exercisable immediately
prior to this adjustment by (y) the Exercise Price in effect immediately prior
to such adjustment of the Exercise Price and (ii) dividing the product so
obtained by the Exercise Price in effect immediately after such adjustment of
the Exercise Price.
(i) The Company may elect on or after the date of any
adjustment of the Exercise Price to adjust the number of Rights, in substitution
for any adjustment in the number of shares of Preferred Stock purchasable upon
the exercise of a Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of one one-hundredths
of a share of Preferred Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated to the
nearest one ten- thousandth) obtained by dividing the Exercise Price in effect
immediately prior to adjustment of the Exercise Price by the Exercise Price in
effect immediately after adjustment of the Exercise Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Exercise Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least ten (10) days later than the
date of the public announcement. If Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and may bear, at
the option of the Company, the adjusted Exercise Price) and shall be registered
in the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Exercise
Price or the number of one one-hundredths of a share of Preferred Stock issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Exercise Price per share and the
number of shares which were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Exercise Price below the then stated value, if any, of the number
of one one-hundredths of a share of Preferred Stock issuable upon exercise of
the Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable shares of Preferred Stock at such
adjusted Exercise Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the number of one one-hundredths of a share of Preferred Stock or other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of one one-hundredths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Exercise Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Exercise Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any consolidation or subdivision of the Preferred
Stock, issuance wholly for cash of any shares of Preferred Stock at less than
the Fair Market Value, issuance wholly for cash of shares of Preferred Stock or
securities which by their terms are convertible into or exchangeable for shares
of Preferred Stock, stock dividends or issuance of rights, options or warrants
referred to hereinabove in this Section 11, hereafter made by the Company to
holders of its Preferred Stock, shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with, (ii) merge with or into,
or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries taken as a whole, to any other Person or Persons if (x) at the time
of or immediately after such consolidation, merger or sale there are any rights,
warrants or other instruments outstanding or agreements or arrangements in
effect which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale the shareholders of a
Person who constitutes, or would constitute, the "Principal Party" for the
purposes of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates. The
Company further covenants and agrees that after the Distribution Date it will
not, except as permitted by Section 23 or Section 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
(o) In the event the Company shall at any time after the date
of this Agreement and prior to the Distribution Date (i) declare a dividend on
the outstanding Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, (iii) combine the outstanding Common Stock into a
smaller number of shares or (iv) issue any shares of its capital stock in a
reclassification of the outstanding Common Stock, the number of Rights
associated with each share of Common Stock shall be proportionately adjusted so
that the number of Rights thereafter associated with each share of Common Stock
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock immediately prior to
such event by a fraction, the numerator of which shall be the total number of
shares of Common Stock outstanding immediately prior to the occurrence of any
such event listed in clauses (i), (ii), (iii) or (iv) above and the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event listed in clauses (i), (ii),
(iii) or (iv) above.
(p) The exercise of Rights under Section 11(a)(ii) shall only
result in the loss of rights under Section 11(a)(ii) to the extent so exercised
and shall not otherwise affect the rights of holders of Right Certificates under
this Rights Agreement, including rights to purchase securities of the Principal
Party following a Section 13 Event which has occurred or may thereafter occur,
as set forth in Section 13 hereof. Upon exercise of a Right Certificate under
Section 11(a)(ii), the Rights Agent shall return such Right Certificate duly
marked to indicate that such exercise has occurred.
Section 12. Certificate of Adjusted Exercise Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11, Section 13 or Section
23(d) hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer agent
for the Preferred Stock and the Common Stock a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate in accordance
with Section 26 hereof. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment contained therein and shall not be
deemed to have knowledge of any such adjustment unless and until it shall have
received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a
transaction which is not prohibited by Section 11(n) hereof), and the Company
shall not be the continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in a transaction
which is not prohibited by Section 11(n) hereof) shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash or any other
property, or (z) the Company shall sell, mortgage or otherwise transfer (or one
or more of its Subsidiaries shall sell, mortgage or otherwise transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company or any Subsidiary of the Company in one or more transactions, each of
which is not prohibited by Section 11(n) hereof), then, and in each such case,
proper provision shall be made so that: (i) each holder of a Right, except as
provided in Section 7(e) hereof, shall have the right to receive, upon the
exercise thereof at the then current Exercise Price in accordance with the terms
of this Agreement, such number of validly authorized and issued, fully paid and
nonassessable shares of freely tradeable Common Stock of the Principal Party (as
hereinafter defined in Section 13(b)), free and clear of rights of call or first
refusal, liens, encumbrances or other adverse claims, as shall be equal to the
result obtained by (1) multiplying the number of such one one-hundredths of a
share for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event) by the Exercise Price in effect
immediately prior to such first occurrence, and dividing that product by (2) 50%
of the Fair Market Value (determined pursuant to Section 11(d) hereof) per share
of the Common Stock of such Principal Party on the date of consummation of such
consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply to such Principal Party; and (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock to permit exercise of all
outstanding Rights in accordance with this Section 13(a)) in connection with
such consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted in
such merger or consolidation, and if no securities are so issued, the Person
that is the other party to the merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions;
provided, however, that in any such case, (x) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary of another Person the Common Stock of which is and
has been so registered, "Principal Party" shall refer to such other Person; and
(y) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value of shares
outstanding.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto (x) the Principal Party shall have
a sufficient number of authorized shares of its Common Stock which have not been
issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13, and (y) the Company and each Principal Party
and each other Person who may become a Principal Party as a result of such
consolidation, merger, sale or transfer shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth in
Section 13(a) and (b) and further providing that, as soon as practicable after
the date of any consolidation, merger, sale or transfer of assets mentioned in
Section 13(a), the Principal Party at its own expense will
(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, use its best efforts to cause
such registration statement to become effective as soon as practicable after
such filing and use its best efforts to cause such registration statement to
remain effective (with a prospectus that at all times meets the requirements of
the Securities Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the Rights under the blue sky
laws of such jurisdictions as may be necessary or appropriate;
(iii) use its best efforts to list (or continue the listing
of) the Rights and the securities purchasable upon exercise of the Rights on a
national securities exchange or to meet the eligibility requirements for
quotation on NASDAQ; and
(iv) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all material respects with the requirements for registration on Form 10 under
the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(o)
hereof, or to distribute Right Certificates which evidence fractional Rights. If
the Company elects not to issue such fractional Rights, the Company shall pay,
in lieu of such fractional Rights, to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the Fair Market Value
of a whole Right, as determined pursuant to Section 11(d) hereof.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples of
one one-hundredth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock). If the Company elects not to issue such fractional
shares, the Company shall pay, in lieu of fractional shares of Preferred Stock
that are not integral multiples of one one-hundredth of a share of Preferred
Stock, to the registered holders of Right Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same fraction of
the Fair Market Value of one one-hundredth of a share of Preferred Stock. For
purposes of this Section 14(b), the Fair Market Value of one one-hundredth of a
share of Preferred Stock shall be determined pursuant to Section 11(d) hereof
for the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant to
Sections 18 and 20 hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Right Certificate
(or, prior to the Distribution Date, of the Common Stock), without the consent
of the Right Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Stock), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Right evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Holders of Rights shall be entitled to recover the reasonable costs and
expenses, including attorneys' fees, incurred by them in any action to enforce
the provisions of this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, each Right will be
transferable only simultaneously and together with the transfer of shares of
Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office or offices of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the
person in whose name a Right Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as the result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligations; provided, however, that the Company must use
its best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of Preferred
Stock or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of any
Right Certificate, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and Administration of this Agreement, including the costs and expenses of
defending against any claim of liability arising therefrom, directly or
indirectly. The indemnity provided for herein shall survive the expiration of
the Rights and the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Right
Certificate or certificate for Common Stock, Preferred Stock, or other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or shareholder services business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases
such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel selected
by it (who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of "Fair Market Value") be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by a
person believed by the Rights Agent to be the Chairman of the Board, a Vice
Chairman of the Board, the President, a Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or an Assistant Secretary, the Clerk or an
Assistant Clerk of the Company and delivered to the Rights Agent. Any such
certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 7(e) hereof) or any
adjustment required under the provisions of Sections 11, 13 or 23(c) hereof or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after receipt of a certificate describing any such adjustment furnished in
accordance with Section 12 hereof), nor shall it be responsible for any
determination by the Board of Directors of the Company of current market value
of the Rights or Preferred Stock pursuant to the provisions of Section 14
hereof; nor shall it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any shares of Common Stock
or Preferred Stock to be issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of Common Stock or Preferred Stock will,
when so issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from any person believed
by the Rights Agent to be the Chairman of the Board, any Vice Chairman of the
Board, the President, a Vice President, the Secretary or an Assistant Secretary,
the Clerk, an Assistant Clerk, the Treasurer or an Assistant Treasurer of the
Company, and is authorized to apply to such officers for advice or instructions
in connection with its duties, and it shall not be liable for any action taken
or suffered to be taken by it in good faith in accordance with instructions of
any such officer. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent under this
Agreement and the date on or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in such application on or after the date specified in such application
(which date shall not be less than five Business Days after the date any officer
of the Company actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the Rights Agent
shall have received written instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, omission, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Company or to the holders
of the Rights resulting from any such act, omission, default, neglect or
misconduct, provided reasonable care was exercised in the selection and
continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause (1) or clause
(2) thereof, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and the Preferred Stock, by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
(with or without cause) upon thirty (30) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock and Preferred Stock by registered or certified mail,
and to the holders of the Right Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of thirty (30) days after giving
notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the incumbent Rights Agent or
the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a corporation organized and doing business under the laws of the United States
or of the Commonwealth of Massachusetts or the State of New York (or of any
other state of the United States so long as such corporation is authorized to do
business as a banking institution in the Commonwealth of Massachusetts or the
State of New York), in good standing, which is authorized under such laws to
exercise stock transfer or corporate trust powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000 or (b) an Affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock
and the Preferred Stock, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Exercise Price per share and the number or kind or class of shares of
stock or other securities or property purchasable under the Right Certificates
made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Right Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the person to whom such Right Certificate
would be issued, and (ii) no such Right Certificate shall be issued if, and to
the extent that, appropriate adjustments shall otherwise have been made in lieu
of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option,
redeem all but not less than all of the then outstanding Rights at a redemption
price of $0.02 per Right, subject to adjustments as provided in Section 23(d)
hereof (such redemption price being hereinafter referred to as the "Redemption
Price"). The Rights may be redeemed only until the earliest of (i) 5:00 p.m.,
Boston time, on the tenth day after the Stock Acquisition Date, (ii) the
declaration by the Board of Directors that any Person is an Adverse Person,
(iii) the occurrence of a Section 13 Event, or (iv) the Final Expiration Date.
The Rights may not be redeemed at any time while there is an Acquiring Person or
an Adverse Person or at any time on or after the date of a change (resulting
from one or more proxy or consent solicitations) in a majority of the directors
in office at the commencement of any such solicitation if any Person who is a
participant in any such solicitation is an Adverse Person or has stated (or, if
upon the commencement of such solicitation a majority of the Board of Directors
of the Company has determined in good faith) that such Person (or any of its
Affiliates or Associates) intends to take, or may consider taking, any action
which would result in such person becoming an Acquiring Person or which would
cause the occurrence of a Triggering Event unless there are Disinterested
Directors then in office and redemption of the Rights is authorized by the Board
of Directors, including at least a majority of the Disinterested Directors.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of the Board
of Directors ordering the redemption of the Rights, the Company shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to the Rights Agent and to all such
holders at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
Transfer Agent for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any Rights at
any time in any manner other than that specifically set forth in this Section
23, or in connection with the purchase, acquisition or redemption of shares of
Common Stock prior to the Distribution Date.
(c) The Company may, at its option, pay the Redemption Price
in cash, shares of Common Stock (based on the Fair Market Value of the Common
Stock as of the time of redemption) or any other form of consideration deemed
appropriate by the Board.
(d) In the event the Company shall at any time after the date
of this Rights Agreement (i) pay any dividend on Common Stock in shares of
Common Stock, (ii) subdivide the outstanding shares of Common Stock into a
greater number of shares or (iii) combine the outstanding shares of Common Stock
into a smaller number of shares of the outstanding shares of Common Stock, then
and in each such event the Redemption Price after such event shall equal the
Redemption Price immediately prior to such event multiplied by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which is the number of
shares of Common Stock outstanding immediately after such event; provided,
however, that in each case such adjustment to the Redemption Price shall be made
only if the amount of the Redemption Price shall be reduced or increased by
$0.002 per Right.
Section 24. Exchange
(a) The Company may, only if there are Disinterested Directors
then in office and such action is authorized by the Board of Directors,
including at least a majority of the Disinterested Directors then in office, at
any time on or after the occurrence of a Section 11(a)(ii) Event, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 7(e) hereof)
for shares of Common Stock or Preferred Stock (or any combination thereof) at an
exchange ratio of one share of Common Stock or one one-hundredth of a share of
Preferred Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
(b) Immediately upon the action of the Company ordering the
exchange of any Rights pursuant to subsection (a) of this Section 24 and without
any further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of shares of Common Stock or one one-hundredths of a
share of Preferred Stock (or any combination thereof) equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give notice of any such exchange in accordance with Section 26
hereof; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. Each such notice of
exchange will state the method by which the exchange of the shares of Common
Stock or Preferred Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular periodic cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of Common
Stock or Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Common Stock or Preferred Stock or shares of stock of any
class or any other securities, rights or options, or (iii) to effect any
reclassification of its Common Stock or Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of Common
Stock or Preferred Stock), or (iv) to effect any consolidation or merger into or
with, or to effect any sale, mortgage or other transfer (or to permit one or
more of its Subsidiaries to effect any sale, mortgage or other transfer), in one
transaction or a series of related transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person (other than a Subsidiary of the Company in one or more transactions
each of which is not prohibited by Section 11(n) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least twenty (20) days
prior to the record date for determining holders of the shares of Common or
Preferred Stock for purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
shares of Common or Preferred Stock, whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then the
Company shall as soon as practicable thereafter give to each registered holder
of a Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Perini Corporation
73 Mt. Wayte Avenue
Framingham, Massachusetts 01701
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
The First National Bank of Boston
P.O. Box 1865
Boston, MA 02105-1865
Attention: Shareholder Services Division
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, prior to
the Distribution Date, to the holder of any certificate representing shares of
Common Stock) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 27, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement as the Company may deem necessary or desirable without the
approval of any holders of certificates representing shares of Common Stock.
From and after the Distribution Date and subject to the penultimate sentence of
this Section 27, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holder
of Right Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen any time period
hereunder (which shortening or lengthening shall be effective only if there are
Disinterested Directors then in office and shall require the concurrence of such
Disinterested Directors if (A) such supplement or amendment occurs at or after
the time a Person becomes an Acquiring Person or an Adverse Person or (B) such
supplement or amendment occurs on or after the date of a change (resulting from
one or more proxy or consent solicitations) in a majority of the directors then
in office at the commencement of such solicitation if any Person who is a
participant in such solicitation is an Adverse Person or has stated (or, if upon
the commencement of such solicitation, a majority of the Board of Directors of
the Company has determined in good faith) that such Person (or any of its
Affiliates or Associates) intends to take, or may consider taking, any action
which would result in such Person becoming an Acquiring Person or which would
cause the occurrence of a Triggering Event), or (iv) to change or supplement the
provisions hereof in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders of
Right Certificates (other than an Acquiring Person, an Adverse Person or any
Affiliate or Associate of such a Person); provided, however, that this Agreement
may not be supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable or (B) any other time period unless
such lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and the benefits to, the holders of Rights. Upon the delivery of such
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or amendment
shall be made on or after the Distribution Date which changes the Redemption
Price, the Final Expiration Date, the Exercise Price or the number of one
one-hundredths of a share of Preferred Stock for which a Right is exercisable or
which affects any right vested in the Rights Agent. Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors. For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act as in effect on the date hereof. The Board of Directors
of the Company (with, where specifically provided for herein, the concurrence of
the Disinterested Directors) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board (with, where specifically provided for herein, the
concurrence of the Disinterested Directors) or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including
without limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors (or, where specifically provided for herein, by the Disinterested
Directors) in good faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and
(y) not subject any member of the Board of Directors or any of the Disinterested
Directors to any liability to the holders of the Rights or to any other person.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, registered holders
of the Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company (including, if at the time of such determination, there
is an Acquiring Person or an Adverse Person, a majority of the Disinterested
Directors then in office) determines in its good faith judgment that severing
the invalid language from the Agreement would adversely affect the purpose or
effect of the Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth day following the date of such determination by the Board of Directors.
Section 32. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the Commonwealth of Massachusetts and for all purposes shall be governed
by and construed in accordance with the laws of such Commonwealth applicable to
contracts to be made and to be performed entirely within Massachusetts.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed, all
as of the day and year first above written.
[Corporate Seal]
PERINI CORPORATION
By
Name:
Title:
[Corporate Seal]
THE FIRST NATIONAL
BANK OF BOSTON, as
Rights Agent
By
Name:
Title:
EXHIBIT A
- ----------
FORM OF
CERTIFICATE OF VOTE OF DIRECTORS ESTABLISHING
SERIES A JUNIOR PARTICIPATING CUMULATIVE
PREFERRED STOCK
of
PERINI CORPORATION
Pursuant to General Laws, Chapter 156B, Section 26
of the Commonwealth of Massachusetts
We, David B. Perini, President, and Patricia A. Kelly, Clerk, of Perini
Corporation, located at 73 Mt. Wayte Avenue, Framingham, Massachusetts 07101, do
hereby certify that at a meeting of the directors of the corporation held on
September 23, 1988, the following vote establishing and designating a series of
a class of stock and determining relative rights and preferences thereof was
duly adopted.
VOTED: That pursuant to the authority vested in the Board of Directors
of this Corporation in accordance with the provisions of its Articles of
Organization, a series of Preferred Stock of the Corporation is hereby created
and that the designation and amount thereof and the voting powers, preferences
and relative, participating, optional and other special rights of the shares of
such series, and the qualifications, limitations or restrictions thereof are as
follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Cumulative Preferred Stock" (the
"Series A Preferred Stock"), and the number of shares constituting such series
shall be 200,000.
Section 2. Dividends and Distributions.
(A) (i) The holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on
the first day of March, June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $20.00 or (b)
subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, par value $1.00 per share, of the
Corporation (the "Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Preferred Stock. The multiple of cash and non-cash dividends declared on the
Common Stock to which holders of the Series A Preferred Stock are entitled,
which shall be 100 initially but which shall be adjusted from time to time as
hereinafter provided, is hereinafter referred to as the "Dividend Multiple". In
the event the Corporation shall at any time after September 23, 1988 (the
"Rights Declaration Date") declare or pay any dividend on Common Stock payable
in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
Dividend Multiple thereafter applicable to the determination of the amount of
dividends which holders of shares of Series A Preferred Stock shall be entitled
to receive shall be the Dividend Multiple applicable immediately prior to such
event multiplied by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
(ii) Notwithstanding anything else contained in this paragraph
(A), the Corporation shall, out of funds legally available for that purpose,
declare a dividend or distribution on the Series A Preferred Stock as provided
in this paragraph (A) immediately after it declares a dividend or distribution
on the Common Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$20.00 per share on the Series A Preferred Stock shall nevertheless be paid out
of funds legally available for the purpose on such subsequent Quarterly Dividend
Payment Date.
(B) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 60 days prior to the date fixed
for the payment thereof.
Section 3. Voting Rights. In addition to any other voting rights
required by law, the holders of shares of Series A Preferred Stock shall have
the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 100 votes
on all matters submitted to a vote of the stockholders of the Corporation. The
number of votes which a holder of a share of Series A Preferred Stock is
entitled to cast, as the same may be adjusted from time to time as hereinafter
provided, is hereinafter referred to as the "Vote Multiple". In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the Vote Multiple thereafter
applicable to the determination of the number of votes per share to which
holders of shares of Series A Preferred Stock shall be entitled shall be the
Vote Multiple immediately prior to such event multiplied by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Preferred Stock shall
be in arrears in an amount equal to six (6) quarterly dividends thereon, the
occurrence of such contingency shall mark the beginning of a period (herein
called a "default period") which shall extend until such time when all accrued
and unpaid dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series A Preferred Stock then
outstanding shall have been declared and paid or set apart for payment. During
each default period, the holders of the Series A Preferred Stock shall have the
right to elect two (2) Directors.
(ii) During any default period, such voting right of the
holders of Series A Preferred stock may be exercised initially at a special
meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any
annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that such voting right shall not be exercised unless the
holders of ten percent (10%) in number of shares of Series A Preferred Stock
outstanding shall be present in person or by proxy. The absence of a quorum of
the holders of Common Stock shall not affect the exercise by the holders of
Series A Preferred Stock of such voting right. At any meeting at which the
holders of Series A Preferred Stock shall exercise such voting right initially
during an existing default period, they shall have the right, voting as a class,
to elect Directors to fill such vacancies, if any, in the Board of Directors as
may then exist up to two (2) Directors or, if such right is exercised at an
annual meeting, to elect two (2) Directors. If the number which may be so
elected at any special meeting does not amount to the required number, the
holders of the Series A Preferred Stock shall have the right to make such
increase in the number of Directors as shall be necessary to permit the election
by them of the required number.
(iii) Unless the holders of Series A Preferred Stock shall,
during an existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Series A Preferred Stock outstanding may request, the
calling of a special meeting of the holders of Series A Preferred Stock, which
meeting shall thereupon be called by the President, a Vice President or the
Clerk of the Corporation. Notice of such meeting and of any annual meeting at
which holders of Series A Preferred Stock are entitled to vote pursuant to this
paragraph (C)(iii) shall be given to each holder of record of Series A Preferred
Stock by mailing a copy of such notice to him at his last address as the same
appears on the books of the Corporation. Such meeting shall be called for a time
not earlier than 20 days and not later than 60 days after such order or request
or, in default of the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Series A Preferred Stock outstanding. Notwithstanding
the provisions of this paragraph (C)(iii), no such special meeting shall be
called during the period within 60 days immediately preceding the date fixed for
the next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of Series A
Preferred Stock shall have exercised their right to elect two (2) Directors
voting as a class, after the exercise of which right (x) the Directors so
elected by the holders of Series A Preferred Stock shall continue in office
until their successors shall have been elected by such holders or until the
expiration of the default period, and (y) any vacancy in the Board of Directors
may (except as provided in paragraph (C)(ii) of this Section 3) be filled by
vote of a majority of the remaining Directors theretofore elected by the holders
of the class of stock which elected the Director whose office shall have become
vacant. References in this paragraph (C) to Directors elected by the holders of
a particular class of stock shall include Directors elected by such Directors to
fill vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Series A Preferred Stock to elect Directors shall
cease, (y) the term of any Directors elected by the holders of Series A
Preferred Stock as a class shall terminate, and (z) the number of Directors
shall be such number as may be provided for in the Articles of Organization or
by-laws irrespective of any increase made pursuant to the provisions of
paragraph (C)(ii) of this Section 3 (such number being subject, however, to
change thereafter in any manner provided by law or in the Articles of
Organization or by-laws). Any vacancies in the Board of Directors effected by
the provisions of clauses (y) and (z) in the preceding sentence may be filled by
a majority of the remaining Directors.
(D) Except as otherwise required by applicable law or as set forth
herein, holders of Series A Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Series A Preferred Stock and all
such parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a parity
with the Series A Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon any voluntary
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (x) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, plus an amount equal to the greater of (1) $10,000.00 per share or
(2) an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be distributed
per share to holders of Common Stock, or (y) to the holders of any other class
or series of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all other
such parity stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding up. In
the event the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(x) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Neither the consolidation of nor merging of the Corporation with or
into any other corporation or corporations, nor the sale or other transfer of
all or substantially all of the assets of the Corporation, shall be deemed to be
a liquidation, dissolution or winding up of the Corporation withih the meaning
of this Section 6.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, then in any such case the shares of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash or any other property (payable in kind), as the case may be,
into which or for which each share of Common Stock is changed or exchanged, plus
accrued and unpaid dividends, if any, payable with respect to the Series A
Preferred Stock. In the event the Corporation shall at any time declare or pay
any dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Preferred Stock shall be adjusted
by multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. Redemption.
(A) For purposes of this Section 8, the following terms have the
meanings indicated:
(i) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, shall be the Beneficial Owner (as such term is hereinafter defined)
of 20% or more of the shares of Common Stock then outstanding, but shall not
include the Corporation, any subsidiary of the Corporation, any employee benefit
plan of the Corporation or any subsidiary thereof or any entity holding shares
of Common Stock organized, appointed or established by the Corporation or any
subsidiary thereof for or pursuant to the terms of any such plan.
(ii) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
(iii) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(a) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly (as
determined pursuant to Rule 13d-3 of the General Rules and Regulations
under the Exchange Act) or has the right to dispose of;
(b) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether such
right is exercisable immediately or after the passage of time) pursuant
to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights,
rights (other than rights initially exercisable for Series A Preferred
Stock), warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for purchase
or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this clause (B) if the
agreement, arrangement or understanding to vote such security (1)
arises solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations of the Exchange Act and (2) is not
also then reportable by such person on Schedule 13D under the Exchange
Act (or any comparable or successor report); or
(c) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof)
with which such Person or any of such Person's Affiliates or Associates
has any agreement, arrangement or understanding (whether or not in
writing), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in clause (B) of
subparagraph (b) of this paragraph (iii)) or disposing of any
securities of the Corporation.
(iv) "Disinterested Director" shall mean (A) any member of the
Corporation's Board of Directors who is not an officer or employee of the
Corporation or any of its subsidiaries and who is not an Acquiring Person or an
Affiliate or an Associate of an Acquiring Person or nominee of an Acquiring
Person or any such Affiliate or Associate and was a member of the Corporation's
Board of Directors prior to the Rights Declaration Date, and (B) any Person who
subsequently becomes a member of the Company's Board of Directors who is not an
Acquiring Person or an Affiliate or an Associate of an Acquiring Person or
nominee of an Acquiring Person or any such Affiliate or Associate, if such
Person's nomination is recommended or approved by a majority of the
Disinterested Directors.
(v) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(B) Subject to Section 4 hereof, the Corporation may, at any time
(unless otherwise prevented by law) by the affirmative vote of a majority of the
directors then in office, including, if at the time of such vote there is an
Acquiring Person, a majority of the Disinterested Directors, redeem all or any
portion of the Series A Preferred Stock then outstanding. The amount per share
of Series A Preferred Stock to be redeemed to be paid upon any such redemption
shall be equal to $10,000.00 plus accrued and unpaid dividends, if any, payable
with respect thereto. The total sum payable per share of Series A Preferred
Stock on the date on which the Corporation redeems any shares of Series A
Preferred Stock (the "Redemption Date") is hereinafter referred to as the
"Redemption Price."
(C) If less than all of the outstanding shares of Series A Preferred
Stock are to be redeemed, the Corporation shall select the shares to be redeemed
by lot. Notice of redemption pursuant to this Section 8 shall be sent by
first-class mail, postage prepaid, to the holders of record of the shares of
Series A Preferred Stock to be redeemed at their respective addresses as the
same shall appear on the books of the Corporation. Such notice shall be mailed
not less than 30 nor more than 60 days in advance of the applicable Redemption
Date and shall specify the Redemption Date, the Redemption Price and the place
at which payment may be obtained as to such shares. At any time on or after the
Redemption Date applicable thereto, the holders of record of shares of Series A
Preferred Stock to be redeemed on such Redemption Date shall be entitled to
receive the Redemption Price therefor upon actual delivery to the Corporation or
its agent of the certificates representing the shares to be redeemed.
If such notice of redemption shall have been duly given, and if on or
before any Redemption Date the funds necessary for such redemption (taking into
account any conversions) shall have been deposited by the Corporation with a
bank or trust company designated by the Board of Directors and having capital
and surplus of at least $50,000,000 in trust for the pro rata benefit of the
holders of the shares of Series A Preferred Stock so called for redemption,
then, notwithstanding that any certificate for shares of Series A Preferred
Stock so called for redemption shall not have been surrendered for cancellation,
from and after such Redemption Date (unless there shall have been a default in
payment of the Redemption Price) all shares of Series A Preferred Stock so
called for redemption shall no longer be deemed to be outstanding and all rights
with respect to such shares shall forthwith cease and terminate, except only the
right of the holders thereof to receive from such bank or trust company upon
surrender of their certificate or certificates at any time after the time of
such deposit the funds so deposited, without interest. The balance of any funds
so deposited and unclaimed at the end of one year from such Redemption Date
shall be released or repaid to the Corporation, after which the holders of the
shares so called for redemption shall look only to the Corporation for payment
thereof, without interest.
Section 9. Ranking. Unless otherwise provided in the Articles of
Organization of the Corporation or a Certificate of Vote of Directors
Establishing a Class of Stock relating to a subsequently-designated series of
Preferred Stock of the Corporation, the Series A Preferred Stock shall rank
junior to the Corporation's $21.25 Convertible Exchangeable Preferred Stock and
any other series of the Corporation's Preferred Stock, as to the payment of
dividends and the distribution of assets on liquidation, dissolution or winding
up and and shall rank senior to the Common Stock.
Section 10. Amendment. The Articles of Organization of the Corporation
and this Certificate of Vote shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely (within the meaning of
Section 77 of Chapter 156B of the Massachusetts General Laws) without the
affirmative vote of the holders of two-thirds or more of the outstanding shares
of Series A Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series A Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto
signed our names this 23rd day of September in the year 1988.
President
Clerk
EXHIBIT B
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[Form of Right Certificate]
Certificate No. R- ____________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 23, 1998 OR EARLIER IF NOTICE OF REDEMPTION IS
GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$0.02 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. [UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID]. (THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME VOID UNDER CERTAIN CIRCUMSTANCES AS SPECIFIED IN SECTION 7(6) OF THE
RIGHTS AGREEMENT.]
Right Certificate
PERINI CORPORATION
This certifies that ___________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the
Shareholder Rights Agreement dated as of September 23, 1988, as amended as of
May 17, 1990 (the "Rights Agreement") between Perini Corporation, a
Massachusetts corporation (the "Company"), and The First National Bank of Boston
(the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
the close of business on September 23, 1998 at the office or offices of the
Rights Agent designated for such purpose, or its successors as Rights Agent, one
one-hundredth of a share of a fully paid, non-assessable share of the Series A
Junior Participating Cumulative Preferred Stock (the "Preferred Stock") of the
Company, at a purchase price of $________ per one one-hundredth of a share (the
"Exercise Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase and the related Certificate duly executed.
The number of Rights evidenced by this Right Certificate (and the number of
shares which may be purchased upon exercise thereof) set forth above, and the
Exercise Price per share set forth above, are the number and Exercise Price as
of September 23, 1988, based on the Preferred Stock as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights Agreement),
(ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii)
under certain circumstances specified in the Rights Agreement, a transferee of a
Person who, after such transfer, became a Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights from and after
the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Exercise Price and the number of
shares of Preferred Stock or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal offices of the
Company and the Rights Agent and are also available upon written request to the
Company or the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Preferred Stock as the Rights evidenced by the
Right Certificate or Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Board of Directors of the Company at its
option at a redemption price of $0.02 per Right (payable in cash, Common Stock
or other consideration deemed appropriate by the Board of Directors).
No fractional shares of stock will be issued upon the exercise of any Right
or Rights evidenced hereby (other than fractions which are integral multiples of
one one-hundredth of a share of Preferred Stock, which may, at the election of
the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of Preferred Stock,
Common Stock or any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
[Corporate Seal] PERINI CORPORATION
Attested: By___________________________
Name:
Title: [Chairman, President
By________________________ or Vice President]
[Clerk or Assistant Clerk]
Countersigned: _____________________________
Name:
THE FIRST NATIONAL BANK OF Title: [Treasurer or
BOSTON, as Rights Agent Assistant Treasurer]
- --------------------------
Authorized Signature
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
FOR VALUE RECEIVED_____________________________________________
hereby sells, assigns and transfers unto
- ---------------------------------------------------------------
(Please print name and address of transferee)
- ---------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _______________, 19__
----------------------------
Signature
Signature Guaranteed:________________________
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate ____ are _____ are
not being transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned ___ did ___ did not directly or indirectly acquire the Rights
evidenced by this Right Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: _____________, 19__ _____________________________
Signature
NOTICE
------
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificate.)
To PERINI CORPORATION:
The undersigned hereby irrevocably elects to exercise ____________ Rights
represented by this Right Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of:
Please insert social security
or other identifying number: ___________________________________
- ----------------------------------------------------------------
(Please print name and address)
- ----------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance of such Rights shall
be registered in the name of and delivered to:
Please insert social security
or other identifying number:____________________________________
- ----------------------------------------------------------------
(Please print name and address)
- ----------------------------------------------------------------
- ----------------------------------------------------------------
Dated: ______________, 19__
-----------------------------
Signature
Signature Guaranteed:_______________________
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate ____ are ____ are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned ____ did ____ did not directly or indirectly acquire the Rights
evidenced by this Right Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated:_________________, 19__ _____________________________
Signature
NOTICE
------
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
EXHIBIT C
- ---------
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On September 23, 1988, the Board of Directors of Perini Corporation
(the "Company") declared a dividend distribution of one Preferred Stock Purchase
Right for each outstanding share of Common Stock of the Company to stockholders
of record at the close of business on October 6, 1988. 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 "Preferred Stock"), at a cash
Exercise Price of $100.00 per Unit, subject to adjustment. The description and
terms of the Rights are set forth in a Shareholder Rights Agreement dated as of
September 23, 1988, as amended as of May 17, 1990 between the Company and The
First National Bank of Boston, as Rights Agent.
Initially, the Rights will not be exercisable and will be attached to
all outstanding shares of Common Stock. No separate Right Certificates will be
distributed until the Distribution Date. The Rights will separate from the
Common Stock and the Distribution Date will occur upon the earliest 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"), (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."
The Board of Directors could declare a person to be an Adverse Person
after (1) a determination that such person, alone or together with its
affiliates and associates, has become the beneficial owner of 10% or more of the
outstanding shares of Common Stock and (2) a determination by the Board of
Directors, after reasonable inquiry and investigation, including such
consultation, if any, with such persons as such directors shall deem
appropriate, that (a) such beneficial ownership by such person is intended to
cause, is reasonably likely to cause or will cause the Company to repurchase the
Common Stock beneficially owned by such person or to cause pressure on the
Company to take action or enter into a transaction or series of transactions
which would provide such person with short-term financial gain under
circumstances where the Board of Directors determines that the best long-term
interests of the Company and its stockholders, but for the actions and possible
actions of such person, would not be served by taking such action or entering
into such transaction or series of transactions at that time or (b) such
beneficial ownership is causing or is reasonably likely to cause a material
adverse impact (including, but not limited to, impairment of relationships with
customers or impairment of the Company's ability to maintain its competitive
position) on the business or prospects of the Company; provided, however, that
the Board of Directors of the Company may not declare a person to be an Adverse
Person if, prior to the time that such person acquired 10% or more of the shares
of Common Stock then outstanding, such person provided to the Board of Directors
in writing a statement of such person's purpose and intentions in connection
with the proposed acquisition of Common Stock, together with any other
information reasonably requested of such person by the Board of Directors, and
the Board of Directors, based on such statement and such reasonable inquiry and
investigation, including such consultation, if any, with such persons as the
directors shall deem appropriate, determines to notify and notifies such person
in writing that it will not declare such person to be Adverse Person; provided
further, that the Board of Directors may expressly condition in any manner a
determination not to declare a person an Adverse Person on such conditions as
the Board of Directors may select, including without limitation such person's
not acquiring more than a specified amount of stock and/or on such person's not
taking actions inconsistent with the purposes and intentions disclosed by such
person in the statement provided to the Board of Directors. No delay or failure
by the Board of Directors to declare a person to be an Adverse Person shall in
any way waive or otherwise affect the power of the Board of Directors
subsequently to declare a person to be an Adverse Person. In the event that the
Board of Directors should at any time determine, upon reasonable inquiry and
investigation, including consultation with such persons as the directors shall
deem appropriate, that such person has not met or complied with any condition
specified by the Board of Directors, the Board of Directors may at any time
thereafter declare the person to be an Adverse Person.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), (a) the Rights will be evidenced by the Common Stock certificates and
will be transferred with and only with such Common Stock certificates, (b) new
Common Stock certificates issued after October 6, 1988 will contain a notation
incorporating the Shareholder Rights Agreement by reference, and (c) 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, Right 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 Right 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 each holder of a Right will thereafter have the right to receive
upon exercise that number of Units of 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"). 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, 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 Preferred Stock at an
exchange ratio of one share of Common Stock or one Unit of Preferred Stock per
Right.
The Exercise Price payable, and the number of Units of Preferred Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or convertible securities at
less than the current market price of the Preferred Stock, or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Exercise Price will be
required until cumulative adjustments amount to at least 1% of the Exercise
Price. The Company is not obligated to issue fractional Units. If the Company
elects not to issue fractional Units, in lieu thereof an adjustment in cash will
be made based on the fair market value of the Preferred Stock on the last
trading date prior to the date of exercise.
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 stockholder), including
the right to vote or to receive dividends. While the distribution of the Rights
will not be 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 Preferred Stock (or other consideration) of the
Company or for common stock of an acquiring company as set forth above.
A copy of the Shareholder Rights Agreement dated as of September 23,
1988, as amended and restated as of May 17, 1990, has been filed with the
Securities and Exchange Commission as an Exhibit to a Current Report on Form 8-K
dated May 17, 1990. A copy of the Shareholder Rights Agreement is available free
of charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Shareholder Rights Agreement.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Consolidated
Balance Sheets as of December 31, 1995 and the Consolidated Statements of
Operations for the twelve months ended December 31, 1995 as qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000077543
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 29,059
<SECURITIES> 0
<RECEIVABLES> 180,978
<ALLOWANCES> 0
<INVENTORY> 14,933
<CURRENT-ASSETS> 330,345 <F1>
<PP&E> 39,865
<DEPRECIATION> (27,299)
<TOTAL-ASSETS> 539,251 <F2>
<CURRENT-LIABILITIES> 293,800
<BONDS> 84,155
100
0
<COMMON> 4,985
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 539,251 <F3>
<SALES> 0
<TOTAL-REVENUES> 1,101,068
<CGS> 0
<TOTAL-COSTS> (1,086,213)
<OTHER-EXPENSES> 814
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (8,582)
<INCOME-PRETAX> (30,196)<F4>
<INCOME-TAX> 2,611
<INCOME-CONTINUING> (27,585)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (27,585)
<EPS-PRIMARY> (6.38)
<EPS-DILUTED> 0
<FN>
<F1> Includes Equity in Construction Joint Ventures of $61,846, Unbilled Work of
$28,304, and Other Short-Term Assets of $15,225, not currently reflected in
this tag list.
<F2> Includes investments in and advances to Real Estate Joint Ventures of
$148,225, Land Held for Sale or Development of $41,372, and Other Long-Term
Assets of $6,743 not currently reflected in this tag list.
<F3> Includes Deferred Income Taxes and Other Liabilities of $52,663, Minority
Interest of $3,027, Paid-In Surplus of $57,659, Retained Earnings of
$52,062, ESOT Related Obligations of $(4,965), and Treasury Stock of
$(4,235).
<F4> Includes General, Administrative and Selling Expenses of $37,283, not
currently reflected on this tag list.
</FN>
</TABLE>
