Exhibit 10.3(a)
FIRST AMENDED AND RESTATED LOAN AGREEMENT
Agreement, dated the 27th day of September, 2000, by and among the Borrowers (as
hereinafter defined) and Mellon Bank, N.A., a national banking association (the
"Bank").
W I T N E S S E T H:
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WHEREAS, Michael Baker Corporation, a Pennsylvania corporation ("MBC"), Michael
Baker, Jr., Inc., a Pennsylvania corporation ("Michael Baker, Jr."), Baker
Environmental, Inc., a Pennsylvania corporation ("Baker Environmental"),
Baker/MO Services, Inc., a Texas corporation ("Baker/MO"), Baker Support
Services, Inc., a Texas corporation ("Baker Support"), Baker/OTS, Inc., a
Delaware corporation ("Baker/OTS"), Baker/Mellon Stuart Construction, Inc., a
Pennsylvania corporation ("Baker/Mellon Stuart"), Baker Heavy & Highway, Inc., a
Pennsylvania corporation ("Baker Heavy & Highway") and the Bank entered into
that certain Loan Agreement, dated as of June 12, 1997, as amended by that
certain (i) First Amendment to Loan Agreement, dated as of July 24, 1998, and
(ii) Second Amendment to Loan Agreement, dated November 1, 1999, pursuant to
which the Bank extended to MBC, Michael Baker, Jr., Baker Environmental,
Baker/MO, Baker Support and Baker/OTS (and Baker/Mellon Stuart through the date
immediately preceding the date of the Second Amendment and Baker Heavy & Highway
and Baker Support through the date immediately preceding the date of this
Agreement) a revolving credit loan facility in the original principal amount not
to exceed Twenty Five Million and 00/100 Dollars ($25,000,000.00) (as amended,
the "Existing Loan Agreement"); and
WHEREAS, the Borrowers and the Bank desire to amend and restate the Existing
Loan Agreement pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants
contained in this Agreement, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto,
agree as follows:
ARTICLE I.
DEFINITIONS
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1.01 CERTAIN DEFINITIONS. In addition to other words and terms defined
elsewhere in this Agreement, the following words and terms have the following
meanings, respectively, unless the context otherwise clearly requires:
"Affiliate" shall mean, as the date hereof or any time during the term of
this Agreement, any Person which directly or indirectly controls, is controlled
by or is under common control with any Borrower. The term "control" shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
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"Agreement" shall mean the Loan Agreement, dated as of June 12, 1997, by
and among MBC, Michael Baker, Jr., Baker Environmental, Baker/MO, Baker Support,
Baker/Mellon Stuart, Baker Heavy & Highway, Baker/OTS and Bank, (a) as amended
by (i) the First Amendment to Loan Agreement, dated as of July 24, 1998 and (ii)
the Second Amendment to Loan Agreement, dated November 1, 1999 and (b) as
amended and restated by this First Amended and Restated Loan Agreement, as
further amended, modified or supplemented from time to time.
"Authorized Representative" shall mean each Person designated from time to
time, as appropriate, in writing by each Borrower to the Bank for the purposes
of giving notices of borrowing, conversion or continuation of Loans, which
designation shall continue in force and effect until terminated in writing by
such Borrower to the Bank.
"Baker Environmental" shall have the meaning assigned to such term in the
preamble hereof.
"Baker Engineering" shall mean Baker Engineering, Inc., an Illinois
corporation.
"Baker GeoResearch" shall mean Baker GeoResearch, Inc., a District of
Columbia corporation.
"Baker Global" shall mean Baker Global Project Services, Inc., a Delaware
corporation.
"Baker International" shall mean Michael Baker International, Inc., a
Delaware corporation.
"Baker NY" shall mean Baker Engineering NY, Inc., a New York corporation.
"Baker Heavy & Highway" shall have the meaning assigned to such term in the
preamble hereof.
"Baker/Mellon Stuart" shall have the meaning assigned to such term in the
preamble hereof.
"Baker/Mellon Stuart Security Agreement" shall mean the Revolving Credit
Note and Security Agreement, dated November 1, 1999, made by Baker/Mellon Stuart
in favor of MBC, as amended, modified or supplemented from time to time.
"Baker/MO" shall have the meaning assigned to such term in the preamble
hereof.
"Baker/OTS" shall have the meaning assigned to such term in the preamble
hereof.
"Baker Support" shall have the meaning assigned to such term in the
preamble hereof.
"Bank" means Mellon Bank, N.A., a national banking association with its
main office located at Two Mellon Bank Center, Pittsburgh, Pennsylvania 15259.
<PAGE>
"Borrower" or "Borrowers" shall mean singularly or collectively, as the
context may require, MBC, Michael Baker Jr., Baker Environmental, Baker/MO,
Baker/OTS, Baker Engineering, Baker NY, Baker GeoResearch and Baker Global.
"Borrowing Base" shall mean that as set forth in Section 2.01(c) hereof.
"Borrowing Base Certificate" shall mean that as set forth in Section
2.01(d)(i) hereof.
"Business Day" shall mean a day of the year on which banks are not required
or authorized to close in Pittsburgh, Pennsylvania.
"Capital Expenditure" shall mean any expenditure made or liability incurred
which is, in accordance with GAAP, treated as a capital expenditure and not as
an expense item for the year in which it was made or incurred, as the case may
be.
"Capital Lease" shall mean any amount payable with respect to any lease of
any tangible or intangible property (whether real, personal or mixed), however
denoted, which is required by GAAP to be reflected as a liability on the balance
sheet of the lessee.
"Capitalized Lease Obligation" shall mean, with respect to each Capital
Lease, the amount of the liability reflecting the aggregate discounted amount of
future payments under such Capital Lease calculated in accordance with GAAP and
statement of financial accounting standards No. 13 (as supplemented and modified
from time to time, and any corresponding future interpretations by the Financial
Accounting Standards Board or any successor thereto).
"Change of Control" shall mean (i) any Person (other than the Michael Baker
Corporation Employee Stock Ownership Plan and Trust) or group within the meaning
of Rule 13d-5 under the Securities Exchange Act of 1934, as amended, as in
effect on the date of this Agreement, has become the owner of, directly or
indirectly, beneficially or of record, shares representing more than fifty
percent (50%) of the aggregate ordinary voting power represented by the issued
and outstanding capital stock of MBC or (ii) during any period of twelve (12)
consecutive calendar months, individuals who were directors of MBC on the first
day of such period, together with individuals elected as directors by not less
than a majority of the individuals who were directors of the Borrower on the
first day of such period, shall cease to hold at least sixty percent (60%) of
the total number of directors of MBC.
"Closing" shall mean the closing of the transactions provided for in this
Agreement on the Closing Date.
"Closing Date" shall mean September 27th, 2000 or such other date upon
which the parties may agree.
"Code" shall mean the Internal Revenue Code of 1986 as amended along with
the rules, regulations, decisions and other official interpretations in
connection therewith.
<PAGE>
"Collateral Assignment" shall mean the Collateral Assignment, dated
November 1, 1999, made by MBC to the Bank with respect to the Baker/Mellon
Stuart Security Agreement, as amended, modified or supplemented from time to
time.
"Consolidated" shall mean the resulted consolidation of the financial
statements of the Borrowers and their Subsidiaries in accordance with GAAP,
including principles of consolidation consistent with those applied in
preparation of the Consolidated financial statements referred to in Section 3.08
hereof.
"Debt" shall mean, collectively, (A) all Indebtedness, whether of
principal, interest, fees, expenses or otherwise, of any Borrower to Bank,
whether now existing or hereafter incurred including, but not limited to, future
loans and advances, if any, under this Agreement, the Notes and the other Loan
Documents, as the same may from time to time be amended, together with any and
all extensions, renewals, refinancings or refundings thereof in whole or in
part; (B) all other obligations for the repayment of borrowed money, whether of
principal, interest, fees, expenses or otherwise, of any Borrower to Bank now
existing or hereafter incurred, whether under letters or advices of credit,
lines of credit, interest rate protection agreements, other financing
arrangements or otherwise (including, but not limited to, any obligations
arising as a result of any overdrafts), whether or not related to this Agreement
or to the Note, whether or not contemplated by Bank or any Borrower at the date
hereof and whether direct, indirect, matured or contingent, joint or several, or
otherwise, together with any and all extensions, renewals, refinancings or
refundings thereof in whole or in part; (C) all costs and expenses including,
without limitation, to the extent permitted by Law, reasonable attorneys' fees
and legal expenses, incurred by Bank in the collection of any of the
indebtedness referred to in clauses (A) or (B) above in amounts due and owing to
Bank under this Agreement; and (D) any advances made by Bank for the
maintenance, preservation, protection or enforcement of, or realization upon,
any property or assets now or hereafter made subject to a Lien granted pursuant
hereto or pursuant to this Agreement or the other Loan Documents or pursuant to
any agreement, instrument or note relating to any of the Debt, including,
without limitation, advances for taxes, insurance, repairs and the like.
"Distributions" shall mean, for the period of determination, (a) all
distributions of cash, securities or other property (other than capital stock)
on or in respect of any shares of any class of capital stock of any Borrower;
and (b) all purchases, redemptions or other acquisitions by any Borrower of any
shares of any class of capital stock of such Borrower, in each case determined
and Consolidated for the Borrowers and their Subsidiaries in accordance with
GAAP.
"Eligible Accounts" means an account receivable, net of any prepayments,
progress payments, deposits and retentions, owing to a Borrower (other than
Baker/OTS) which met the specifications established from time to time by the
Bank, in its reasonable discretion, at the time it came into existence and
continues to meet such specifications until it is collected in full. As of the
date of this Agreement, an account receivable, to be an Eligible Account, must
meet the following specifications at the time it comes into existence and
continue to meet such specifications until it is collected in full:
(a) The account is not more than ninety (90) days from the date of the
invoice therefor;
<PAGE>
(b) The account arose from the performance of services or an outright
sale of goods by the Borrower in the ordinary course of the Borrower's business
and such goods have been shipped, or services provided, to the account debtor
and the Borrower has possession of, or has delivered to the Bank, in the case of
goods, shipping and delivery receipts evidencing such shipment and, in the case
of services, receipts or other evidence satisfactory to the Bank that such
services have been provided;
(c) The account is not subject to any prior assignment or Lien and the
Borrower will not create any further Lien on the account, nor permit its rights
in the account to be reached by attachment, levy, garnishment or other judicial
process;
(d) The account is not subject to set-off, credit, allowance or
adjustment by the account debtor, except discounts allowed for prompt payment,
and the account debtor has not complained in writing as to its liability on the
account and has not returned, or retained the right to return, any of the goods
from the sale of which the account arose;
(e) The account arose in the ordinary course of the Borrower's
business and did not arise from the performance of services or a sale of goods
to a supplier, an employee or an Affiliate of the Borrower;
(f) The account does not constitute a finance charge or lease
receivable;
(g) No notice of bankruptcy, insolvency or material adverse change of
the account debtor has been received by or is known to the Borrower;
(h) The account is not an account evidenced by an "instrument" or
"chattel paper" (each as defined in the UCC) not in the possession of the Bank;
(i) The Bank has not notified the Borrower that, despite the fact that
the account debtor meets other specifications established by the Bank in
accordance with this Agreement, the Bank has determined, in its reasonable
discretion, that the account or account debtor is unsatisfactory;
(j) The account is payable in freely transferable United States
dollars.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
in effect as of the date of this Agreement and as amended from time to time in
the future.
"ERISA Affiliate" shall mean a Person which is under common control with a
Borrower within the meaning of Section 414(b) of the Code including, but not
limited to, a Subsidiary of such Borrower.
"Event of Default" means any of the Events of Default described in Section
7.01 of this Agreement.
"Excess Amount" shall mean that as set forth in Section 2.01(d) hereof.
<PAGE>
"Existing Loan Agreement" shall have the meaning assigned to such term in
the preamble hereof.
"Expiry Date" shall mean January 31, 2002 or such earlier date on which the
Revolving Credit Facility Commitment shall have been terminated pursuant to this
Agreement.
"Fiscal Quarter(s)" shall mean the period(s) of January 1 through March 31,
April 1 through June 30, July 1 through September 30, and October 1 through
December 31 of each calendar year.
"GAAP" means generally accepted accounting principles (as such principles
may change from time to time), which shall include the official interpretations
thereof by the Financial Accounting Standards Board, applied on a consistent
basis.
"Income From Operations" shall mean income from operations before other
income and expenses and income taxes, as determined and Consolidated for the
Borrowers and their Subsidiaries in accordance with GAAP.
"Indebtedness" shall mean, for any Borrower or its Subsidiaries (i) all
obligations for borrowed money, direct or indirect, incurred, assumed, or
guaranteed (including, without limitation, all notes payable and drafts accepted
representing extensions of credit, all obligations evidenced by bonds,
debentures, notes or similar instruments, all obligations on which interest
charges are customarily paid, all obligations under conditional sale or other
title retention agreements, all obligations for the deferred purchase price of
capital assets and all obligations issued or assumed as full or partial payment
for property whether or not any such notes, drafts or obligations are
obligations for borrowed money), (ii) all obligations secured by any Lien
existing on property owned or acquired subject thereto, whether or not the
obligations secured thereby shall have been assumed, (iii) all reimbursement
obligations (contingent or otherwise), (iv) indebtedness represented by
obligations under a Capital Lease and the amount of such indebtedness shall be
the Capitalized Lease Obligations with respect to such Capital Lease, (v) all
obligations (contingent or otherwise) under any letter of credit, banker's
acceptance, guaranty, indemnification agreement or interest rate protection
agreement, (vi) all obligations to advance funds to, or to purchase assets,
property or services from, any other Person in order to maintain the financial
condition of such Person and (vii) any other transaction (including forward sale
or purchase agreements) having the commercial effect of a borrowing of money
entered into by such Borrower to finance its operations or capital requirements.
"Indemnities" shall mean that as set forth in Section 8.19 hereof.
"Indemnifying Liabilities" shall mean that as set forth in Section 8.19
hereof.
"Interest Period" shall mean, with respect to any Libor Rate Loan, the
period commencing on the date such Loan is made as, continued or converted and
ending on the last day of such period as selected by a Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on the last
day of the immediately preceding Interest Period and ending on the last day of
such period as selected by a Borrower pursuant to the provisions below. The
duration of each Interest Period for any As Offered Rate Loan shall be for any
number of months selected by Borrower upon notice, as set forth in Section
2.01(c) provided that:
<PAGE>
(i) the Interest Period for any Libor Rate Loan shall be one (1),
two (2), three (3) or six (6) months or such other period as may be agreed upon
by Borrowers and Bank;
(ii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest Period
shall occur on the next succeeding Business Day, provided that if such extension
of time would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the last Business Day immediately preceding the last day of such Interest
Period;
(iii) if a Borrower continues any Libor Rate Loan for an
additional Interest Period, the first day of the new Interest Period shall be
the last day of the preceding Interest Period; however, interest shall only be
charged once for such day at the rate applicable to the Libor Rate Loan for the
new Interest Period;
(iv) if a Borrower fails to so select the duration of any
Interest Period in requesting the Bank to make, continue or convert any Libor
Rate Loan, the duration of such Interest Period shall be one (1) month; and
(v) the last day of any Interest Period shall not occur after the
Expiry Date.
"Law" shall mean any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of
any Official Body.
"Lease Obligation" means an obligation of a lessee under a lease of any
tangible or intangible property (whether real, personal or mixed) including,
without limitation, with respect to any period under any such lease, the
aggregate amounts payable by such lessee to or on behalf of the lessor for such
period including, without limitation, property taxes, insurance, interest and
amortized charges which such lessee is required to pay pursuant to such lease.
Whenever it is necessary to determine the amount of Lease Obligations for any
period with respect to which any of the rentals under the relevant lease are not
definitely determinable by the terms of the lease, all such rentals will be
estimated in a reasonable amount for such period.
"Letter of Credit Commission" shall mean that as set forth in Section 2.09
hereof.
"Letter of Credit Face Amount" shall mean, for each Letter of Credit, the
face amount of such Letter of Credit.
"Letters of Credit" shall mean as set forth in Section 2.08 hereof.
"Letter of Credit Related Documents" shall mean any agreements or
instruments relating to a Letter of Credit.
<PAGE>
"Letter of Credit Reserve" shall mean, at any time, an amount equal to (a)
the aggregate Letter of Credit Undrawn Availability at such time plus, without
duplication, (b) the aggregate amount theretofore paid by the issuer under the
Letters of Credit and not debited to the Borrowers' account or otherwise
reimbursed by the Borrowers.
"Letter of Credit Undrawn Availability" at any time, means the maximum
amount available to be drawn at such time under all then outstanding Letters of
Credit, including any amounts drawn thereunder and not reimbursed, regardless of
the existence or satisfaction of any conditions or limitations on drawing.
"Libor Rate" shall mean, for any Interest Period for any Libor Rate Loan, a
fixed rate per annum (rounded upwards to the next higher whole multiple of
1/100% if such rate is not such a multiple) equal at all times during such
Interest Period to the quotient of (a) the rate per annum determined in good
faith by Bank in accordance with its usual procedures (which determination shall
be conclusive absent manifest error) to be the average of the rates per annum
(rounded upwards to the next higher whole multiple of 1/100% if such rate is not
such a multiple) at which deposits in immediately available United States
Dollars are offered at 11:00 a.m. (London, England Time) (or as soon thereafter
as is reasonably practicable) to major money center banks by prime banks in the
London interbank eurodollar market two (2) Business Days prior to the first day
of such Interest Period in an amount and maturity equal to the amount and
maturity of such Libor Rate Loan, divided by (b) a number equal to 1.00 minus
the aggregate (without duplication) of the rates (expressed as a decimal
fraction) of the Libor Reserve Requirements.
"Libor Rate Loan" shall mean any Loan that bears interest with reference to
the Libor Rate.
"Libor Reserve Requirements" shall mean, for any day of any Interest Period
for a Libor Rate Loan, the percentage (rounded upward to the next higher whole
multiple of 1/100% if such rate is not such a multiple) as determined in good
faith by the Bank (which determination shall be conclusive absent manifest
error) as representing the maximum reserves (whether basic, supplemental,
marginal, emergency or otherwise) prescribed by the Board of Governors of the
Federal Reserve System (or any successor) with respect to liabilities or assets
consisting of or including "Eurocurrency Liabilities" (as defined in Regulation
D of the Board of Governors of the Federal Reserve System) in an amount and for
a maturity equal to such Libor Rate Loan and such Interest Period. The Libor
Rate shall be adjusted automatically as of the effective date of each change in
the Libor Reserve Requirement.
"Lien" shall mean any mortgage, deed of trust, pledge, lien, security
interest, charge or other encumbrance or security arrangement of any nature
including, but not limited to, any conditional sale or title retention
arrangement, and any assignment, deposit arrangement or lease intended as, or
having the effect of, security.
"Loan" or "Loans" shall mean the Revolving Credit Loans (whether made as,
continued as or converted to Prime Rate Loans and any other credit to any
Borrower extended by the Bank in accordance with Article II hereof as evidenced
by the Notes, as the case may be.
"Loan Account" shall mean that as set forth in Section 2.16 hereof.
<PAGE>
"Loan Document" or "Loan Documents" mean, singularly or collectively as the
context may require, (i) this Agreement, (ii) the Notes, (iii) the Collateral
Assignment, (iv) the Security Agreement, (v) the Stock Pledge Agreement, (vi)
the Letters of Credit, (vii) the Letter of Credit Related Documents, (viii) all
UCC-1 financial statements filed in accordance with the Security Agreement, the
Collateral Assignment and the Stock Pledge Agreement and (vii) any and all other
documents, instruments, certificates and agreements executed and delivered in
connection with this Agreement, as any of them may be amended, modified,
extended or supplemented from time to time.
"Material Adverse Change" shall mean a material adverse change in the (a)
business, operations or condition (financial or otherwise) of MBC and its
Subsidiaries taken as a whole; (b) the ability of the Borrowers, collectively,
to perform any of their payment or other material obligations under this
Agreement or any of the other Loan Documents to which they are a party; (c) the
legality, validity, or enforceability of the obligations of any Borrower under
this Agreement or any of the other Loan Documents; or (d) the ability of the
Bank to exercise its rights and remedies with respect to, or otherwise realize
upon, any of the collateral or any other security for the Debt.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, operations or condition (financial or otherwise) of MBC and its
Subsidiaries taken as a whole; (b) the ability of the Borrowers, collectively,
to perform any of their payment or other material obligations under this
Agreement or any of the other Loan Documents to which they are a party; (c) the
legality, validity, or enforceability of the obligations of any Borrower under
this Agreement or any of the other Loan Documents; or (d) the ability of the
Bank to exercise its rights and remedies with respect to, or otherwise realize
upon, any of the collateral or any other security for the Debt.
"MBC" shall mean Michael Baker Corporation, a Pennsylvania corporation.
"Michael Baker, Jr." shall have the meaning assigned to such term in the
preamble hereof.
"Net Income" means, for the period of determination, net income (after
taxes), excluding, however, extraordinary gains, in each case determined and
Consolidated for the Borrowers and their Subsidiaries in accordance with GAAP.
"Notes" shall collectively mean the Revolving Credit Note and any other
note of the Borrowers executed and delivered pursuant to this Agreement,
together with all extensions, renewals, refinancings or refundings in whole or
in part.
"Office", when used in connection with the Bank, means its designated
office located at Two Mellon Bank Center, Pittsburgh, Pennsylvania 15259 or such
other office of the Bank as the Bank may designate in writing from time to time.
"Official Body" means any government or political subdivision or any
agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.
"Operating Lease" shall mean any lease other than a Capital Lease.
<PAGE>
"Owners Equity" means, as of the date of determination, net worth, in each
case determined and Consolidated for the Borrowers and their Subsidiaries in
accordance with GAAP.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Title IV of ERISA.
"Person" shall mean an individual, corporation, limited liability company,
partnership, joint venture, trust, or unincorporated organization or government
or agency or political subdivision thereof.
"Plan" means any deferred compensation program, including both single and
multi-employer plans, subject to Title IV of ERISA and established and
maintained for employees of any Borrower or any Subsidiary or any ERISA
Affiliate.
"Potential Default" shall mean any event or condition which with notice or
passage of time , or any combination of the foregoing, would constitute an Event
of Default.
"Prime Rate" shall mean that rate of interest per annum announced by Bank
from time to time as its Prime Rate which may not represent the lowest rate
charged by Bank to other borrowers at any time or from time to time.
"Prime Rate Loan" shall mean any Loan that bears interest with reference to
the Prime Rate.
"Prohibited Transaction" shall mean any transaction which is prohibited
under Section 4975 of the Code or Section 406 of ERISA and not exempt under
Section 4975 of the Code or Section 408 of ERISA.
"Reportable Event" shall mean any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, except any such event as to
which the provision for thirty (30) days notice to the PBGC is waived under
applicable regulations.
"Revolving Credit Facility Commitment" shall mean as set forth in Section
2.01(a) hereof.
"Revolving Credit Loans" shall mean as set forth in Section 2.01(a) hereof.
"Revolving Credit Note" means the joint and several Revolving Credit Note,
dated as of June 12, 1997, as amended by the First Amended and Restated
Revolving Credit Note, dated November 1, 1999, as amended by the Second Amended
and Restated Revolving Credit Note, dated of even date herewith, as the same may
be amended, modified or supplemented from time to time, together with all
extensions, renewals, refinancings or refundings, in whole or in part.
"Security Agreement" shall mean the Security Agreement, dated December 31,
1999, made by MBC, Michael Baker, Jr., Baker Environmental, Baker/MO, Baker
Support and Baker OTS in favor of the Bank, as amended and restated by the First
Amended and Restated Security Agreement, dated of even date herewith, made by
the Borrowers in favor of the Bank, as further amended, modified or supplemented
from time to time.
<PAGE>
"Stock Pledge Agreement" shall mean the Stock Pledge Agreement, dated of
even date herewith, made by MBC, Michael Baker Jr. and Baker International to
the Bank with respect to the issued and outstanding shares of capital stock of
Michael Baker Jr., Baker Environmental, Baker/MO, Baker OTS, Baker Engineering,
Baker NY, Baker GeoResearch and Baker Global, as amended, modified or
supplemented from time to time.
"Subsidiary" of a Borrower at any time means (i) any corporation more than
fifty percent (50%) of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation is owned (directly or indirectly) by such Borrower and/or one or
more Subsidiaries of the Borrower and (ii) any partnership, association, joint
venture or other entity in which the Borrower and/or one or more Subsidiaries of
the Borrower has more than a fifty percent (50%) equity interest.
"Termination Event" shall mean (i) a "Reportable Event, (ii) the
termination of a single employer Plan or the treatment of a single employer Plan
amendment as the termination of such Plan under Section 4041 of ERISA, or the
filing of a notice of intent to terminate a single employer Plan, or (iii) the
institution of proceedings to terminate a single employer Plan by the PBGC under
Section 4042 of ERISA, or (iv) the appointment of a trustee to administer any
single employer Plan.
"UCC" shall mean the Uniform Commercial Code or similar Law as in effect of
the date of this Agreement and as amended from time to time, of the Official
Body having jurisdiction with respect to all or any portion of the collateral
granted or assigned to the Bank from time to time under or in connection with
this Agreement.
1.02 CONSTRUCTION AND INTERPRETATION.
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(a) OBLIGATIONS OF AND REFERENCES TO BORROWERS. Each and every
obligation of the Borrowers contained in this Agreement or any Loan Document,
whether or not expressly stated, shall be the joint and several obligations of
the Borrowers. Any and all references to the Borrowers contained in any
representation or covenant of the Borrowers' hereunder shall be a representation
or covenant with respect to each and every Borrower, both individually and
collectively.
(b) CONSTRUCTION. Unless the context of this Agreement otherwise
clearly requires, references to the plural include the singular, the singular
the plural, the part the whole and "or" has the inclusive meaning represented by
the phrase "and/or". References in this Agreement to "judgments" of Bank include
good faith estimates by Bank (in the case of quantitative judgments) and good
faith beliefs by Bank (in the case of qualitative judgments). The definition of
any document or instrument includes all schedules, attachments, and exhibits
thereto and all renewals, extensions, supplements, restatements and amendments
thereof. "Hereunder", "herein", "hereto", "hereof", "this Agreement" and words
of similar import refer to this entire document; "including" is used by way of
illustration and not by way of limitation, unless the context clearly indicates
to the contrary; and any action required to be taken by any Borrower or all of
the Borrowers is to be taken promptly, unless the context clearly indicates to
the contrary.
(c) ACCOUNTING TERMS. Any accounting term not specifically defined in
Section 1.01 hereofshall have the meaning ascribed thereto by GAAP.
<PAGE>
ARTICLE II.
THE CREDIT FACILITY
2.01 REVOLVING CREDIT FACILITY COMMITMENT.
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(a) REVOLVING CREDIT LOANS. Subject to the terms and conditions and
relying upon the representations and warranties set forth in this Agreement and
the other Loan Documents, the Bank agrees to make, continue or convert loans
(the "Revolving Credit Loans") to the Borrowers at any time or from time to time
on or after the Closing Date and to and including the Business Day immediately
preceding the Expiry Date, in an aggregate principal amount not exceeding at any
one time outstanding the Borrowing Base as described in Section 2.01(c) (the
"Revolving Credit Facility Commitment"). Within the limits of time and amount
set forth in this Section 2.01, and subject to the provisions of this Agreement
including, without limitation, the Bank's right to demand repayment of the
Revolving Credit Loans upon the occurrence of an Event of Default, Borrowers may
borrow, repay and reborrow under this Section 2.01; provided, however, that if a
Borrower prepays any Libor Rate Loan on a day other than the last day of the
applicable Interest Period for such Libor Rate Loan, then the Borrowers shall
comply with the terms and conditions of Section 2.13(c) with respect to such
prepayment.
(b) REVOLVING CREDIT NOTE. The joint and several obligations of
Borrowers to repay the unpaid principal amount of the Revolving Credit Loans
made to Borrowers by the Bank and to pay interest on the unpaid principal amount
thereof is evidenced in part by the Revolving Credit Note.
(c) BORROWING BASE. Subject to the terms and conditions of this
Agreement, the aggregate principal amount of all Revolving Credit Loans
outstanding under this Agreement shall not exceed the lesser of (A) Twenty
Million and 00/100 Dollars ($20,000,000.00) (including the aggregate Letter of
Credit Undrawn Availability) or (B) the difference of (x) up to seventy percent
(70%) of the aggregate gross amount of Eligible Accounts, minus (y) the
aggregate Letter of Credit Undrawn Availability (the lesser of the amounts
described in clauses (A) and (B) of this sentence is sometimes referred to in
this Agreement as the "Borrowing Base"). Notwithstanding anything to the
contrary contained herein, upon the occurrence or existence of any Material
Adverse Change, the Bank may, in its sole discretion, at any time hereafter,
decrease the advance percentage for Eligible Accounts, or increase the level of
any reserves or ineligibles, or define or maintain such other reserves or
ineligibles, as the Bank may deem necessary or appropriate. Any such change
shall become effective immediately upon written notice from the Bank to the
Borrowers for the purpose of calculating the Borrowing Base hereunder.
<PAGE>
(d) MAKING, CONTINUING OR CONVERTING OF REVOLVING CREDIT LOANS.
Subject to the terms and conditions set forth in this Agreement and the other
Loan Documents, and provided that the Borrowers have satisfied all applicable
conditions specified in Article IV hereof and, if applicable, the Bank has
received, reviewed and approved the most recent borrowing base certificate of
the Borrowers in the form of EXHIBIT "B", attached hereto and made a part hereof
(the "Borrowing Base Certificate") due pursuant to Section 5.01(h), properly
completed and setting forth the Borrowing Base calculations for the Borrowers,
together with the appropriate backup documentation, the Bank shall make
Revolving Credit Loans to the Borrowers which, as selected by the Borrowers
pursuant to this Section 2.01(d), shall be Prime Rate Loans or Libor Rate Loans.
(i) Each Revolving Credit Loan that is made as or converted (from
a Libor Rate Loan) into a Prime Rate Loan shall be made or converted on such
Business Day and in such amount as Borrowers shall request by written notice or
telephonic notice from an Authorized Representative (confirmed promptly in
writing which notice shall be irrevocable by and binding on the Borrowers)
received by the Bank no later than 12:00 noon (Pittsburgh, Pennsylvania time) on
the date of requested disbursement of the requested Prime Rate Loan. On each
borrowing date, the Bank shall make the proceeds of the Prime Rate Loan
available to Borrowers at the Bank's Office in immediately available funds not
later than 4:00 p.m. (Pittsburgh, Pennsylvania, time). Unless a Borrower shall
provide the Bank with the required written notice from an Authorized
Representative to convert a Prime Rate Loan into a Libor Rate Loan on the second
(2nd) business day prior to the date of requested conversion, such Prime Rate
Loan shall automatically continue as a Prime Rate Loan. The Bank shall not be
obligated to make any Revolving Credit Loan so long as an Event of Default or
Potential Default has occurred and is continuing.
(ii) Each Revolving Credit Loan that is made as, continued as or converted (from
a Prime Rate Loan) into a Libor Rate Loan shall be made, continued or converted
on such Business Day, in such amount (greater than or equal to Five Hundred
Thousand Dollars ($500,000) provided, however, that any amount in excess of Five
Hundred Thousand Dollars ($500,000) may only be in increments of One Hundred
Thousand Dollars ($100,000)), and with such an Interest Period as Borrowers
shall request by written notice or telephonic notice from an Authorized
Representative (confirmed promptly in writing) received by the Bank no later
than 12:00 noon (Pittsburgh, Pennsylvania time) on the Second (2nd) Business Day
prior to the date of disbursement of, continuation of or conversion into the
requested Libor Rate Loan. On each borrowing date, the Bank shall make the
proceeds of the Libor Rate Loan available to Borrowers at the Bank's Office in
immediately available funds, no later than 12:00 noon (Pittsburgh, Pennsylvania
time). In addition, in the event that Borrowers desire to continue a Libor Rate
Loan for an additional Interest Period, Borrowers shall provide Bank with
written notice or telephonic notice thereof from an Authorized Representative
(confirmed promptly in writing) on the Second (2nd) Business Day prior to the
expiration of the applicable Interest Period. In the event that Borrowers fail
<PAGE>
to provide the Bank with the required notice on the Second (2nd) Business Day
prior to the expiration of the applicable Interest Period for a Libor Rate Loan,
Borrowers shall be deemed to have given notice that such Loan shall be converted
to a Prime Rate Loan on the last day of the applicable Interest Period. Each
notice of any Libor Rate Loan shall be irrevocable and binding on Borrowers and
Borrowers shall indemnify the Bank against any loss or expense incurred by the
Bank as a result of any failure by Borrowers to consummate such transaction
calculated as set forth in Section 2.13(c) hereof.
(iii) all Revolving Credit Loans that are As Offered Rate Loans
(as defined in the Existing Agreement) shall be converted to Prime Rate Loans on
the last day of the applicable Interest Period (as defined in the Existing
Agreement) for each such Revolving Credit Loan. All Revolving Credit Loans that
are ABS Rate Loans (as defined in the Existing Agreement) shall be converted to
Prime Rate Loans on the Closing Date.
(e) MAXIMUM PRINCIPAL BALANCE OF REVOLVING CREDIT LOANS. The aggregate
principal amount of all Revolving Credit Loans (including the Letter of Credit
Undrawn Availability) outstanding shall not exceed the Borrowing Base. The
Borrowers agree that if at any time the aggregate principal amount of all
Revolving Credit Loans outstanding (including the Letter of Credit Undrawn
Availability) exceeds the Borrowing Base ("Excess Amount"), the Borrowers shall
promptly pay to the Bank such Excess Amount. If not sooner paid, all of the
Revolving Credit Loans, all unpaid accrued interest thereon, and all other sums
and costs owed to Bank by Borrowers pursuant to this Agreement with respect to
the Revolving Credit Loans, shall be immediately due and payable on the Expiry
Date, without notice, presentment or demand.
2.02 INTEREST ON REVOLVING CREDIT LOANS. Subject to the terms and
conditions of this Agreement, at all times during the term of this Agreement,
the aggregate outstanding principal balance of all Revolving Credit Loans shall
be, at the option of the Borrowers, as elected pursuant to Section 2.01(c):
(i) Prime Rate Loans which shall bear interest at a rate per
annum equal to the Prime Rate; or
(ii) Libor Rate Loans which shall bear interest during each
Interest Period at a rate per annum equal to the Libor Rate plus two and one
quarter of one percent (2.25%).
2.03 INTEREST PAYMENTS. The Borrowers shall pay to the Bank interest on the
unpaid principal balance of the aggregate outstanding balance of the Revolving
Credit Loans which are Prime Rate Loans in arrears, on the first (1st) day of
the first (1st) full calendar month after the Closing Date and on the first day
of each calendar month thereafter through and including the Expiry Date. The
Borrowers shall pay to the Bank interest on the unpaid principal balance of the
aggregate outstanding balance of the Revolving Credit Loans which are Libor Rate
Loans on the earlier of (i) the last day of the applicable Interest Period for
such Loan or (ii) for such Loans with an applicable Interest Period exceeding
three (3) months, on each and every three (3) month anniversary of each such
Loan during the period from the Closing Date to and including the Expiry Date.
After maturity of any part of the Loans (whether upon the occurrence of an Event
of Default, by acceleration or otherwise), interest on such part of the Loans
shall be immediately due and payable upon delivery by Bank of an invoice for
such interest without further notice, presentment, or demand.
<PAGE>
2.04 INTEREST AFTER DEFAULT; USURY. Whenever the unpaid principal amount of
the Loans or any portion thereof, accrued interest thereon, any fees, or any
other sums payable hereunder shall become due and payable and remain unpaid
(whether at maturity, upon the occurrence of an Event of Default, by
acceleration or otherwise) the amount thereof shall thereafter until paid in
full bear interest at a rate per annum two percent (2.00%) in excess of the
interest rate otherwise applicable to such Loans. In the event the rates of
interest provided for in this section 2.04, or any other section of this
Agreement, are finally determined by any Official Body to exceed the maximum
rate of interest permitted by applicable usury or similar laws, their or its
application will be suspended and there will be charged instead the maximum rate
of interest permitted by such laws.
2.05 [RESERVED]
2.06 FEES. The Borrowers shall pay to Bank a commitment fee on the unused
portion of the Revolving Credit Facility Commitment during the period from the
date of this Agreement to the Expiry Date, payable quarterly in arrears
beginning on October 1, 2000 and continuing on the first (1st) day of each
January, April, July, and October thereafter and on the Expiry Date. Such fee
shall be equal to the amount by which Twenty Million and 00/100 Dollars
($20,000,000.00) has exceeded the average daily closing principal balance of the
Revolving Credit Loans during the preceding calendar quarter, multiplied by
three hundred and seventy-five one- hundredths of one percent (0.375%),
multiplied by a fraction, the numerator of which is the actual number of days in
such calendar quarter and the denominator of which is 360. In addition, the
Borrowers shall pay to the Bank, on or before the Closing Date, a non-refundable
amendment fee in the amount of Twenty Five Thousand and 00/100 Dollars
($25,000.00).
2.07 COMPUTATION OF INTEREST AND FEES; ADJUSTMENT TO PRIME RATE. Interest
on the Prime Rate Loans shall be computed on the basis of a year of three
hundred sixty-five (365) days and paid for the actual number of days elapsed.
Interest on the Libor Rate Loans shall be computed on the basis of a year of
three hundred sixty (360) days and paid for the actual number of days elapsed.
Interest on unpaid fees and other sums payable hereunder shall be computed on
the basis of a year of three hundred sixty five (365) days and paid for the
actual number of days elapsed. In the event of any change in the Prime Rate, the
rate of interest upon each Prime Rate Loan shall be adjusted to immediately
correspond with such change; except any interest charged hereunder shall not
exceed the highest rate permitted by Law.
<PAGE>
2.08 AGREEMENT TO ISSUE LETTERS OF CREDIT. From time to time during the
period from the Closing Date to the Business Day immediately preceding the
Expiry Date, subject to the further terms and conditions hereof, including those
required in connection with the making of Revolving Credit Loans, the Bank shall
issue standby or trade letters of credit (collectively, "Letters of Credit") for
the account of the Borrowers in an amount not to exceed the Revolving Credit
Facility Commitment as a sub-facility of the Revolving Credit Facility
Commitment; PROVIDED, HOWEVER, that on any date on which the Borrowers' request
a Letter of Credit, and after giving effect to the Letter of Credit Face Amount
of such Letter of Credit, the sum of all Revolving Credit Loans outstanding and
the Letter of Credit Undrawn Availability shall not exceed the Revolving Credit
Facility Commitment. All such Letters of Credit shall be issued by the Bank in
accordance with its then current practice relating to the issuance of letters of
credit including, but not limited to, the execution and delivery to Bank of
applications and agreements required by Bank and the payment by the Borrowers of
all applicable fees with respect thereto.
2.09 LETTER OF CREDIT FEES. The Borrowers shall pay to Bank (a) one and
ninety five hundredths of one percent (1.95%) per annum of the Letter of Credit
Face Amount of all Letters of Credit issued and outstanding hereunder, such fee
to be paid quarterly in arrears (the "Letter of Credit Commission"), (b) the
Bank's standard issuance fees for each Letter of Credit issued hereunder, such
fee to be paid on the date of issuance of such Letter of Credit, and (c) any
reasonable out-of-pocket expenses and costs incurred by Bank for the issuance of
any Letter of Credit issued hereunder, such fees to be paid on the day of
issuance of such Letter of Credit. Notwithstanding the foregoing, after the
occurrence and during the continuance of an Event of Default, the Letter of
Credit Commission shall be increased to four percent (4.0%) per annum.
2.10 PAYMENTS UNDER LETTERS OF CREDIT. Upon a draw under any Letter of
Credit, the Borrowers shall immediately reimburse the Bank for such drawing
under a Letter of Credit. If (i) the Borrowers shall not have immediately
reimbursed the Bank for such drawing under such Letter of Credit, (ii) the Bank
must for any reason return or disgorge such reimbursement, or (iii) the
Borrowers are required to make a payment under Section 7.02(a)(ii) hereof and
fail to make such payment, then the amount of each unreimbursed drawing under
such Letter of Credit and payment required to be made under Section 7.02(a)(ii)
hereof shall automatically be converted into a Revolving Credit Loan made on the
date of such drawing for all purposes of this Agreement. The Borrowers'
obligation to reimburse the Bank with respect to each drawing under a Letter of
Credit shall be absolute and unconditional. The Borrowers irrevocably authorize
Bank to treat such draw as a request for a Revolving Credit Loan which shall be
a Prime Rate Loan in the amount of such draw, so long as the Revolving Credit
Facility Commitment has not terminated.
2.11 PERIOD OF ISSUANCE AND TERM OF LETTERS OF CREDIT. Letters of Credit
shall only be issued by Bank for the account of the Borrowers for such terms
which expire prior to or on the Expiry Date.
2.12 [RESERVED]
<PAGE>
2.13 ADDITIONAL COSTS.
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(a) If, due to either (i) the introduction of, or any change in, or in
the interpretation of, any Law or (ii) the compliance with any guideline or
request from any central bank or other governmental authority (whether or not
having the force of Law), there shall be any increase in the cost to, or
reduction in income receivable by, the Bank of making, funding or maintaining
Loans (or commitments to make the Loans), then the Borrowers shall from time to
time, upon demand by the Bank made within a reasonable time after Bank's
determination thereof, pay to the Bank additional amounts sufficient to
reimburse such Bank for any such additional costs or reduction in income. All
such additional amounts shall be determined by Bank in good faith using
appropriate attribution and averaging methods ordinarily employed by the Bank. A
certificate of the Bank submitted to the Borrowers in good faith as to the
amount of such additional costs shall be presumptive evidence of such amount.
Upon notice from the Bank to the Borrowers within ten (10) Business Days after
the Bank notifies the Borrowers of any such additional costs pursuant to this
Section 2.13(a), the Borrowers may (A) repay in full all Loans of any types so
affected then outstanding, together with interest accrued thereon to the date of
such repayment, or (B) convert all Loans of any types so affected then
outstanding into Loans of any other type not so affected upon not less than four
(4) Business Days' notice to the Bank. If any such repayment or conversion of
any Libor Rate Loan occurs on any day other than the last day of the applicable
Interest Period for such Loan, the Borrowers also shall pay to the Bank such
additional amounts as set forth in Section 2.13(c).
(b) If either (i) the introduction of, or any change in, or in the
interpretation of, any Law or (ii) the compliance with any guideline or request
from any central bank or other governmental authority (whether or not having the
force of Law), affects or would affect the amount of capital required or
expected to be maintained by the Bank or any corporation controlling the Bank
and the Bank reasonably determines in good faith that the amount of such capital
is increased by or based upon the existence of the Loans (or commitment to make
the Loans), then, within ten (10) Business Days of demand by the Bank, the
Borrowers shall pay to the Bank from time to time as specified by the Bank
additional amounts sufficient to compensate the Bank in the light of such
circumstances, to the extent that the Bank reasonably determines in good faith
such increase in capital to be allocable to the existence of the Bank's Loans
(or commitment to make the Loans). Any such demand by Bank must be made by the
Bank within a reasonable time. A certificate of the Bank in good faith submitted
to the Borrowers as to such amounts shall be presumptive evidence of such
amounts. Upon notice from the Borrowers to the Bank within ten (10) Business
Days after the Bank notifies the Borrowers of any such additional costs pursuant
to this Section 2.13(b), the Borrowers may (A) repay in full all Loans of any
types so affected then outstanding, together with interest accrued thereon to
the date of such prepayment, or (B) convert all Loans of any types so affected
then outstanding into Loans of any other type not so affected upon not less than
four (4) Business Days' notice to the Bank. If any such prepayment or conversion
of any Libor Rate Loan occurs on any day other than the last day of the
applicable Interest Period for such Loan, the Borrowers also shall pay to the
Bank such additional amounts as set forth in Section 2.13(c).
<PAGE>
(c) If the Borrowers shall repay any Libor Rate Loan on a day other
than the last day of the applicable Interest Period for such Loan (whether such
repayment is permitted by Section 2.13 or 2.14, as a result of the failure of
the Borrowers to consummate a transaction after providing notice as set forth in
Section 2.01(c)(ii), otherwise permitted by Bank or otherwise required under the
terms of this Agreement), the Borrowers shall within ten (10) Business Days of
demand pay to the Bank such additional amounts reasonably determined by Bank in
good faith to be sufficient to indemnify the Bank against any loss, cost, or
expense incurred by the Bank as a result of such prepayment including, without
limitation, any loss (including loss of anticipated profits), costs or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by the Bank to fund such Loan, and a certificate as to the amount of
any such loss, cost or expense submitted by the Bank to the Borrowers in good
faith shall be presumptive evidence of such amount.
2.14 ILLEGALITY; IMPRACTICABILITY. Notwithstanding any other provision
contained in this Agreement, if: (a) it is unlawful, or any central bank or
other governmental authority shall determine that it is unlawful, for the Bank
to perform its obligations hereunder to make, continue, or convert Loans
hereunder; or (b) on any date on which a Libor Rate would otherwise be set, the
Bank shall have in good faith determined (which determination shall be
conclusive absent manifest error) that (i) adequate and reasonable means do not
exist for ascertaining a Libor Rate, (ii) a contingency has occurred which
materially and adversely affects the interbank markets, or (iii) the effective
cost to the Bank of funding a proposed Libor Rate Loan exceeds the Libor Rate
then (y) on notice thereof by the Bank to the Borrowers, the obligation of the
Bank to make or continue a Loan of a type so affected or to convert any type of
Loan into a Loan of a type so affected shall terminate and the Bank shall
thereafter be obligated to make Prime Rate Loans whenever any written notice
requests any type of Loans so affected and (z) upon demand therefor by the Bank
to the Borrowers, the Borrowers shall (i) forthwith prepay in full all Loans of
the type so affected then outstanding, together with interest accrued thereon or
(ii) request that the Bank, upon five (5) Business Days' notice, convert all
Loans of the type so affected then outstanding into Loans of a type not so
affected. If any such prepayment or conversion of any Libor Rate Loan occurs on
any day other than the last day of the applicable Interest Period for such Loan,
the Borrowers also shall pay to the Bank such additional amounts as set forth in
Section 2.13(c).
2.15 PAYMENTS. All payments to be made with respect to principal, interest,
fees or other amounts due from the Borrowers under this Agreement or under the
Notes are payable at 12:00 noon (Pittsburgh, Pennsylvania Time), on the day when
due, without presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived, and an action for the payments will accrue
immediately. All such payments must be made to the Bank at its Office in U.S.
Dollars and in funds immediately available at such Office, without setoff,
counterclaim or other deduction of any nature. The Bank may in its discretion
deduct such payments from the Borrowers' demand or deposit accounts with Bank if
not paid within five (5) days after the due date. All such payments shall be
applied at the option of the Bank to accrued and unpaid interest, outstanding
principal and other sums due under this Agreement in such order as the Bank, in
its sole discretion, shall elect. All such payments shall be made absolutely net
of, without deduction or offset, and altogether free and clear of any and all
present and future taxes, levies, deductions, charges, and withholdings and all
liabilities with respect thereto, excluding income and franchise taxes imposed
on the Bank under the laws of the United States or any state or political
subdivision thereof. If the Borrowers are compelled by law to deduct any such
<PAGE>
taxes or levies (other than such excluded taxes) or to make any such other
deductions, charges, or withholdings, they will pay such additional amounts as
may be necessary in order that the net payments after such deduction, and after
giving effect to any United States federal or state income taxes required to be
paid by the Bank in respect of such additional amounts, shall equal the amount
of such payment without such tax, deduction or withholding.
2.16 LOAN ACCOUNT. The Bank will open and maintain on its books a loan
account (the "Loan Account") for the Borrowers with respect to Loans made,
repayments, prepayments, the computation and payment of interest and fees and
the computation and final payment of all other amounts due and sums paid to the
Bank under this Agreement. The Loan Account for the Borrowers will be
presumptive evidence as to the amount at any time due to the Bank from the
Borrowers under this Agreement or the Notes.
2.17 FINANCING STATEMENTS. Promptly following request by the Bank, the
Borrowers shall execute and deliver and file and record and refile and rerecord
such financing statements, assignments and other such documents in such manner,
at such time or times and in such place or places as may be required by Law and
cause to be taken such other actions as may be required by Law or as may be
requested by Bank in order to cause the Lien granted under the Security
Agreement, the Collateral Assignment, the Stock Pledge Agreement or any other
Loan Document to be, at all times valid, perfected and enforceable against the
Borrowers and all third parties. The Borrowers irrevocably appoint Bank as their
agent and attorney to execute any such financing statements in the Borrowers'
names upon the Borrowers' failure to comply with the first sentence of this
Section 2.17. The Borrowers further agree that a carbon, photographic or other
reproduction of a financing statement is sufficient as a financing statement and
may be filed as such. All expenses of such filing, recording, refiling and
re-recording shall be borne by the Borrowers.
2.18 SECURITY. The Loans shall be secured by the Security Agreement, the
Stock Pledge Agreement, the Collateral Assignment and all UCC financing
statements executed and recorded with respect thereto.
2.19 ESTOPPEL. As further consideration for the entry of the Bank into this
Agreement, Borrowers hereby represent and warrant that they do not presently
have any claims or actions of any kind at Law or in equity against the Bank
arising out of or in any way relating to the Existing Loan Agreement or any
related documents with respect thereto, the transactions referenced in or
contemplated by this Agreement or any acts, transactions, or events that are or
were the subject matter of any other prior loans or agreement or guaranties
involving one or more of the Borrowers and the Bank.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrowers represent and warrant to the Bank that:
3.01. ORGANIZATION AND QUALIFICATION. The Borrowers and their Subsidiaries
are corporations duly organized, validly existing and in good standing under
their respective jurisdictions of incorporation. Except where the failure to be
so qualified or licensed would not have a Material Adverse Effect, the Borrowers
<PAGE>
and their Subsidiaries are duly qualified or licensed to do business as a
foreign corporation or partnership and are in good standing in all jurisdictions
in which the ownership of their properties or the nature of their activities or
both makes such qualification or licensing necessary.
3.02 POWER TO CARRY ON BUSINESS; LICENSES. Each Borrower and its
Subsidiaries have all requisite power and authority to own and operate its
properties and to carry on its business as now conducted and as presently
planned to be conducted. Except where the failure to have any such license,
permit, consent or approval would not have a Material Adverse Effect, each
Borrower and its Subsidiaries have all licenses, permits, consents and
governmental approvals or authorizations necessary to carry on its business as
now conducted and as presently planned to be conducted.
3.03 EXECUTION AND BINDING EFFECT. This Agreement, the Notes, and the other
Loan Documents to which the Borrowers are a party have been duly authorized by
all appropriate corporation action of each Borrower, have been duly and validly
executed and delivered by each Borrower which is a party thereto, and each such
document or agreement constitutes a legal, valid and binding obligation of the
Borrowers who are a party thereto, enforceable in accordance with its terms.
3.04 ABSENCE OF CONFLICTS. Neither the execution and delivery of this
Agreement or the other Loan Documents, nor the consummation of the transactions
contemplated in any of them, nor the performance of or compliance with their
terms and conditions will (a) violate any Law, (b) conflict with or result in a
breach of or a default under the articles of incorporation or by-laws of any
Borrower, (c) conflict with or result in a breach or a default under any
material agreement or instrument to which any Borrower or its Subsidiaries is a
party or by which any of them or any of their properties (now owned or acquired
in the future) may be subject or bound or (d) result in the creation or
imposition of any material Lien upon any property (owned or leased) of any
Borrower or its Subsidiaries.
3.05 AUTHORIZATIONS AND FILINGS. No authorization, consent, approval,
license, exemption or other action by, and no registration, qualification,
designation, declaration or filing with, any Official Body is or will be
necessary or advisable in connection with the execution and delivery of this
Agreement or the other Loan Documents, the consummation of the transactions
contemplated in any of them, or the performance of or compliance with the terms
and conditions of this Agreement or the other Loan Documents.
3.06 [RESERVED]
3.07 TITLE TO PROPERTY. Each Borrower and its Subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all other property purported to be owned by it, including that
reflected in the most recent balance sheet referred to in Section 3.08 of this
Agreement or submitted pursuant to Section 5.01(a) of this Agreement (except as
sold or otherwise disposed of in the ordinary course of business), subject only
to Liens not forbidden by Section 6.01 of this Agreement.
<PAGE>
3.08 FINANCIAL STATEMENTS.
--------------------
(a) The Borrowers have delivered to the Bank a Consolidated balance
sheet and related statements of income, retained earnings and cash flow of the
Borrowers and their Subsidiaries for the fiscal year ending December 31, 1999,
as audited by Pricewaterhouse Coopers LLP without qualification. Such financial
statements (including the notes) present fairly the Consolidated financial
condition of the Borrowers and their Subsidiaries as of the end of such fiscal
period and the results of their operations and the changes in financial position
for the fiscal period then ended, all in accordance with GAAP applied
consistently with that of the preceding fiscal year.
(b) The Borrowers have delivered to the Bank internally prepared
Consolidated and Consolidating balance sheets and related statements of income,
cash flow and retained earnings of the Borrowers and their Subsidiaries and each
Borrower and its Subsidiaries as of, and for the fiscal year ending, December
31, 1999. Such financial statements provided by the Borrowers present fairly the
financial position of each Borrower and its Subsidiaries as of the end of such
period and the results of their operations and their cash flow for the period
then ended, all in conformity with GAAP, applied on a basis consistent with that
of the preceding fiscal periods.
3.09 TAXES. All tax returns required to be filed by each Borrower and its
Subsidiaries have been properly prepared, executed and filed. Except as may be
permitted under Section 5.05 hereof, all material taxes, assessments, fees and
other governmental charges upon each Borrower and their Subsidiaries or upon any
of their properties, income, sales or franchises which are due and payable have
been paid. The reserves and provisions for taxes on the books of the Borrowers
and their Subsidiaries are adequate for all open years and for the current
fiscal period. No Borrower knows of any proposed additional material assessment
or basis for any material assessment for additional taxes (whether or not
reserved against).
3.10 [RESERVED]
3.11 LITIGATION. Except as reflected in MBC's most recent periodic reports
filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, copies of which have been delivered to Bank and, except as
on SCHEDULE 3.11 hereto, there is no pending, or to the best knowledge of MBC,
contemplated or threatened, action, suit or proceeding by or before any Official
Body against or affecting any Borrower or its Subsidiaries, at law or equity,
which, if adversely decided, would have a Material Adverse Effect.
3.12 COMPLIANCE WITH LAWS. To the best of MBC's knowledge, except as set
forth in SCHEDULE 3.12 hereto, no Borrower nor any Subsidiary of a Borrower is
in violation of or subject to any material contingent liability on account of
any Law which in the aggregate would have a Material Adverse Effect.
3.13 PENSION PLANS. Except as described in SCHEDULE 3.13 to this Agreement,
(a) each Plan has been and will be maintained and funded in all material
respects in accordance with its terms and with all provisions of ERISA and other
applicable laws; (b) no Reportable Event, as defined in ERISA, which could have
a Material Adverse Effect, has occurred and is continuing with respect to any
Plan; (c) no material liability to the PBGC has been incurred and is outstanding
with respect to any Plan, other than for premiums due and payable; (d) no Plan
<PAGE>
has been terminated, no proceedings have been instituted to terminate any Plan,
and there exists no intent to terminate or institute proceedings to terminate
any Plan where such termination would have a Material Adverse Effect; (e) no
withdrawal, either complete or partial, has occurred or commenced with respect
to any multi-employer Plan, and there exists no intent to withdraw either
completely or partially from any multi-employer Plan; and (f) there has been no
cessation of, and there is no intent to cease, operations at a facility or
facilities where such cessation could reasonably be expected to result in a
separation from employment of more than 20% of the total number of employees who
are participants under a Plan.
3.14 PATENTS, LICENSES, FRANCHISES. The Borrowers and their Subsidiaries
own or possess the right to use all of the material patents, trademarks, service
marks, trade names, copyrights, licenses, franchises and permits and rights with
respect to the foregoing necessary to own and operate their properties and to
carry on their business as presently conducted and presently planned to be
conducted without conflict with the rights of others. There are no currently
pending or, to the best knowledge of MBC threatened claims with respect to
infringement by or against any Borrower or any Subsidiary of a Borrower of any
of the foregoing.
3.15 ENVIRONMENTAL MATTERS. Except as set forth in SCHEDULE 3.15 hereof,
--------------------- -------------
(a) To the best knowledge of MBC, no Borrower nor any Subsidiary of a
Borrower is in violation of The Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986, The Resource Conservation and Recovery Act of 1976,
as amended by the Hazardous and Solid Waste Amendments of 1984, The Clean Water
Act, The Toxic Substances Control Act and The Clean Air Act or any rule or
regulation promulgated pursuant to any of the foregoing statutes, or any other
federal, state or local environmental law, statute, rule, regulation or
ordinance applicable to any Borrower, its Subsidiaries, or their respective
properties (all of the foregoing are sometimes collectively referred to in this
Section 3.17 as the "Environmental Laws") except where such violations in the
aggregate would not have a Material Adverse Effect;
(b) To the best knowledge of MBC, neither the Borrowers, their
Subsidiaries nor any of their Affiliates, directors, officers, employees, agents
or independent contractors have arranged, by contract, agreement or otherwise,
(i) for the disposal or treatment of, or (ii) with a transporter for the
transport, disposal or treatment of, any Hazardous Substance (as defined by
CERCLA, as amended), owned, used or possessed by any Borrower, whether or not to
a location identified by the EPA on the National Priorities List, 40 C.F.R. Part
300, (or proposed by the EPA in the Federal Register for listing on such
National Priorities List) or identified under any corresponding state statute or
regulation concerning cleanup of waste disposal sites (a "State Superfund Law")
except where the same has been performed in compliance with all Environmental
Laws, the non-compliance with which in the aggregate would not have a Material
Adverse Effect;
(c) To the best knowledge of MBC, no predecessor of a Borrower has
arranged by contract, agreement or otherwise, (i) for the disposal or treatment
of, or (ii) with a transporter for transport for the disposal or treatment of,
any Hazardous Substance (as defined by CERCLA, as amended), owned, used or
possessed by the predecessor, except where the same has been performed in
compliance with all Environmental Laws, the non-compliance with which in the
aggregate would not have a Material Adverse Effect;
<PAGE>
(d) Neither the Borrowers, their Subsidiaries nor any of their
Affiliates "owned" or "operated" any "facility" at the time any Hazardous
Substances were disposed of at such facility within the meaning of CERCLA, as
amended, or any State Superfund Law except where such disposals would not have a
Material Adverse Effect.
3.16 PROCEEDS. The Borrowers will use the proceeds of the Revolving Credit
Loans for general corporate purposes.
3.17 MARGIN STOCK. The Borrowers will make no borrowing under this
Agreement for the purpose of buying or carrying any "margin stock", as such term
is used in Regulation U and related regulations of the Board of Governors of the
Federal Reserve System, as amended from time to time. No Borrower owns any
"margin stock". No Borrower is engaged in the business of extending credit to
others for such purpose, and no part of the proceeds of any borrowing under this
Agreement will be used to purchase or carry any "margin stock" or to extend
credit to others for the purpose of purchasing or carrying any "margin stock".
3.18 NO EVENT OF DEFAULT: COMPLIANCE WITH MATERIAL AGREEMENTS. No event has
occurred and is continuing and no condition exists which constitutes an Event of
Default or Potential Default. No Borrower nor any of its Subsidiaries is (i) in
violation of any term of any charter instrument or bylaw or (ii) in default
under any material agreement, lease or instrument to which it is a party or by
which it or any of its properties (owned or leased) may be subject or bound.
3.19 NO MATERIAL ADVERSE CHANGE. Except as otherwise disclosed herein,
since December 31, 1999, there has been no Material Adverse Change.
3.20 SUBSIDIARIES. SCHEDULE 3.20 to this Agreement sets forth each
Subsidiary of each Borrower, the authorized and outstanding capital stock (or
other equity interest) of such Subsidiary and the outstanding capital stock (or
other equity interest) of such Subsidiary which is owned by any Borrower or any
of its Subsidiaries.
3.21 LABOR CONTROVERSIES. There are no labor controversies pending or, to
the best knowledge of the officers and directors of MBC, threatened, against any
Borrower or any of its Subsidiaries which, if adversely determined, would have a
Material Adverse Effect.
3.22 SOLVENCY. After the making of the Loans, each Borrower (a) will be
able to pay its debts as they become due, (b) will have funds and capital
sufficient to carry on its businesses and all businesses in which it is about to
engage, and (c) will own property having a value at both fair valuation and at
fair saleable value in the ordinary course of its business greater than the
amount required to pay its debts as they become due. No Borrower was insolvent
immediately prior to the date of this Agreement and no Borrower will be rendered
insolvent by the execution and delivery of this Agreement, the borrowing
hereunder and/or the consummation of any transactions contemplated by this
Agreement.
3.23 ACCURATE AND COMPLETE DISCLOSURE. No representation or warranty made
by any Borrower under this Agreement, the other Loan Documents or the schedules
and exhibits attached thereto, and to the best knowledge of the officers and
directors of MBC no statement made by any Borrower or its Subsidiaries in any
financial statement (furnished pursuant to Sections 3.08 or 5.01 or otherwise),
certificate, report, exhibit or document furnished by any Borrower or its
Subsidiaries to the Bank pursuant to or in connection with this Agreement is
false or misleading (including by omission of information necessary to make such
representation, warranty or statement not misleading) in any manner which would
have a Material Adverse Effect.
<PAGE>
3.24 SECURITY INTEREST. The security interests in the collateral granted to
the Bank pursuant to the Security Agreement, the Collateral Assignment and the
Stock Pledge Agreement (the "Collateral") are valid security interests. To the
extent that perfection of such security interests in the Collateral can be
accomplished by the filing of UCC-1 financing statements ("UCC-1 Collateral"),
the presentation of such UCC-1 financing statements for filing in the
appropriate offices of the appropriate jurisdictions, together with the payment
of the appropriate filing fees will constitute all such action necessary to
perfect the security interests of the Bank in the UCC-1 Collateral. Upon the
appropriate filing of such UCC-1 financing statements as described above, the
Bank's security interests in the UCC-1 Collateral (i) constitute and will
continue to constitute perfected security interests under the UCC entitled to
all of the rights, benefits and priorities provided by the UCC and (ii) except
as otherwise permitted under Section 6.01 of this Agreement, are and will
continue to be superior and prior to the rights of all third parties existing on
the date of this Agreement or arising after the date of this Agreement whether
by Lien or otherwise, to the fullest extent provided by Law. All such action as
is necessary or advisable to establish such rights of the Bank has been taken or
will be taken at or prior to the time required for such purpose and there will
be upon execution and delivery of the Loan Documents no necessity of any further
action in order to preserve, protect and continue such rights except the filing
of continuation statements with respect to filed financing statements within six
(6) months prior to each five (5) year anniversary of the filing of such
financing statements and continued possession by the Bank of the collateral
delivered to it. All filing fees and other expenses in connection with each such
action shall be paid by the Borrowers and the Bank shall be reimbursed by the
Borrowers for any such fees and expenses incurred by the Bank.
3.25 ACCOUNT WARRANTIES. With respect to all Eligible Accounts from time to
time scheduled, listed or referred to in any certificate, statement or report
delivered to the Bank, the Borrowers warrant and represent to the Bank that (a)
the accounts are genuine, are in all respects what they purport to be, and are
not evidenced by a note, instrument or judgment; (b) the accounts represent
undisputed, bona fide transactions completed in accordance with the terms and
provisions contained in the documents delivered to the Bank with respect to the
accounts; (c) no payments have been or will be made on the accounts except
payments immediately delivered to the Bank pursuant to this Agreement; (d) there
are no material setoffs, counterclaims or disputes existing or asserted with
respect to the accounts and the Borrower has not made any agreement with any
account debtor for any deduction from any account; (e) there are no facts,
events or occurrences which in any way impair the validity or enforcement of any
account or tend to reduce the amount payable under any account as shown on the
respective certificates and statements, any of the books and records of a
Borrower and all invoices and statements delivered to the Bank with respect to
any account; (f) all account debtors have the capacity to contract and, to the
best of the Borrowers' knowledge, are solvent; (g) the services furnished and/or
goods sold giving rise to any account are not subject to any Lien except that of
the Bank; (h) to the best of the Borrowers' knowledge, there are no proceedings
or actions which are threatened or pending against any account debtor which
might result in any material adverse change in such account debtor's financial
condition; (i) the account is not an account with respect to which the account
debtor is an Affiliate or a director, officer or employee of a Borrower or an
Affiliate; (j) the account does not arise with respect to goods which have not
been shipped or arise with respect to services which have not been fully
<PAGE>
performed and accepted as satisfactory by the account debtor; (k) the account is
not an account with respect to which the account debtor's obligation to pay the
account is conditional upon the account debtor's approval or is otherwise
subject to any repurchase obligation or return right, as with sales made on a
bill-and- hold, guaranteed sale, sale-and-return, or sale on approval basis; and
(l) the amounts shown on the applicable certificates, statements, the books and
records of the Borrowers and all invoices and statements which may be delivered
to the Bank with respect to such accounts are actually and absolutely owing to
one or more Borrower, as the case may be, and are not in any way contingent. The
Borrowers shall immediately notify the Bank in the event that any such Eligible
Account ceases to satisfy the above representations and warranties.
<PAGE>
ARTICLE IV.
CONDITIONS OF LENDING
---------------------
The obligation of the Bank to make any Loan is subject to the satisfaction
of the following conditions:
4.01 REPRESENTATIONS AND WARRANTIES: EVENTS OF DEFAULT AND POTENTIAL
DEFAULTS. The representations and warranties contained in Article III shall be
true and correct on and as of the date of each Loan with the same effect as
though made on and as of each such date. On the date of each Loan, no Event of
Default and no Potential Default shall have occurred and be continuing or exist
or shall occur or exist after giving effect to the Loan to be made on such date.
Each request by the Borrowers for any Loan shall constitute a representation and
warranty by the Borrowers that the conditions set forth in this Section 4.01
have been satisfied as of the date of such request. Failure of the Bank to
receive notice from the Borrowers to the contrary before such Loan is made shall
constitute a further representation and warranty by the Borrowers that the
conditions referred to in this Section 4.01 have been satisfied as of the date
such Loan is made.
4.02 PROCEEDINGS AND INCUMBENCY. As of the Closing Date, each Borrower and
Baker International shall have delivered to the Bank a certificate, in form and
substance satisfactory to the Bank, dated as of the Closing Date and signed on
behalf of such Borrower by the Secretary of such Borrower or Baker
International, as the case may be, certifying as to (a) true copies of the
articles of incorporation and bylaws of such Borrower or Baker International as
in effect on such date, (b) true copies of all corporate action taken by such
Borrower or Baker International relative to this Agreement, the Notes and the
other Loan Documents including, but not limited to, that described in Section
3.03 of this Agreement, and (c) the names, true signatures and incumbency of the
officers of such Borrower or Baker International authorized to execute and
deliver this Agreement, the Notes and the other Loan Documents. The Bank may
conclusively rely on each such certificate unless and until a later certificate
revising the prior certificate has been furnished to the Bank.
4.03 LOAN DOCUMENTS. On or prior to the Closing Date, the Loan Documents,
satisfactory in terms, form and substance to the Bank, shall have been executed
and delivered by the Borrowers to the Bank and all UCC financing statements
required to be filed pursuant to the Loan Documents shall have been duly
executed and shall be prepared for filing thereof.
4.04 OPINION OF COUNSEL. On the Closing Date, there shall have been
delivered to the Bank a written opinion, dated the Closing Date, of counsel to
the Borrowers, in form and substance satisfactory to Bank and its counsel.
4.05 OTHER DOCUMENTS AND CONDITIONS. On or before the Closing Date, the
following documents and conditions shall have been delivered to Bank or
satisfied by or on behalf of the Borrowers:
<PAGE>
(a) GOOD STANDING AND TAX LIEN CERTIFICATES. A good standing
certificate of Baker Engineering, Baker NY, Baker GeoResearch and Baker Global
certifying to the good standing and corporate status of each such Borrower in
its jurisdiction of incorporation, good standing/foreign qualification
certificates from other jurisdictions in which such Borrower is qualified to do
business and tax lien certificates of such Borrower from each jurisdiction in
which such Borrower is qualified to do business.
(b) FINANCIAL STATEMENTS. Financial statements in form and substance
satisfactory to the Bank, as described in Section 3.08 of this Agreement.
(c) INSURANCE. Evidence, in form and substance satisfactory to the
Bank, that the business and all assets of the Borrowers and their Subsidiaries
are adequately insured and that the issuers of such policies shall endeavor to
provide the Bank with thirty (30) days notice of any cancellation or
modification to such policies.
(d) LIEN SEARCH. Copies of record searches (including UCC searches,
judgment, tax and other lien searches) at the local and state office of the
jurisdiction of the chief executive office of each Borrower evidencing that no
Liens exist against any Borrower or any of its Subsidiaries except those Liens
permitted by Section 6.01 of this Agreement.
(e) NO MATERIAL ADVERSE CHANGE. No Material Adverse Change shall have
occurred with respect to any Borrower since December 31, 1999.
(f) STOCK CERTIFICATES AND STOCK POWERS. The original share
certificates with respect to the issued and outstanding shares of capital stock
of each of Michael Baker, Jr., Baker Environmental, Baker/MO, Baker/OTS, Baker
Engineering, Baker NY, Baker GeoResearch and Baker Global along with a stock
power endorsed in blank with respect to each such share certificate.
(g) BORROWING BASE CERTIFICATE. If, on the Closing Date, the aggregate
principal amount of all Revolving Credit Loans (including the Letter of Credit
Undrawn Availability) outstanding exceeds Five Million and 00/100 Dollars
($5,000,000.00), an initial Borrowing Base Certificate of the Borrowers dated as
of the Closing Date.
(h) OTHER DOCUMENTS AND CONDITIONS. Such other documents and
conditions as may be required to be submitted to the Bank by the terms of this
Agreement or of any Loan Document or set forth on the Closing Checklist with
respect to the transaction contemplated by this Agreement.
4.06 DETAILS, PROCEEDINGS AND DOCUMENTS. All legal details and proceedings
in connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory to the Bank and the Bank shall have received all such
counterpart originals or certified or other copies of such documents and
proceedings in connection with such transactions, in form and substance
reasonably satisfactory to the Bank, as the Bank may from time to time request.
4.07 FEES AND EXPENSES. The Borrowers shall have paid all reasonable fees
and charges as required for the Closing and relating to the Closing, including
reasonable legal fees, closing costs, filing and notary fees and any other
similar matters pertinent to the Closing.
<PAGE>
ARTICLE V.
AFFIRMATIVE COVENANTS
---------------------
The Borrowers covenant to the Bank as follows:
5.01 REPORTING AND INFORMATION REQUIREMENTS.
--------------------------------------
(a) ANNUAL AUDITED REPORTS. As soon as practicable, and in any event
within ninety (90) days after the close of each fiscal year of the Borrowers,
the Borrowers will furnish to the Bank Consolidated audited statements of
income, retained earnings and cash flow of the Borrowers and their Subsidiaries
for such fiscal year and a Consolidated audited balance sheet of the Borrowers
and their Subsidiaries as of the close of such fiscal year, and notes to each,
all in reasonable detail, setting forth in comparative form the corresponding
figures for the preceding fiscal year, prepared in accordance with GAAP applied
on a basis consistent with that of the preceding fiscal year (except for changes
in application in which such accountants concur) with such statements and
balance sheet to be certified by independent certified public accountants of
recognized standing selected by the Borrowers and satisfactory to the Bank. The
certificate or report of such accountants shall be free of exception or
qualifications not reasonably acceptable to the Bank and shall in any event
contain a written statement of such accountants substantially to the effect that
such accountants examined such statements and balance sheet in accordance with
generally accepted auditing standards.
(b) QUARTERLY REPORTS. As soon as practicable, and in any event within
forty-five (45) days after the close of each Fiscal Quarter during the term of
this Agreement, the Borrowers will furnish to the Bank Consolidated and
Consolidating statements of income for MBC for such Fiscal Quarter and for the
portion of the fiscal year to the end of such Fiscal Quarter, and a Consolidated
and Consolidating balance sheet of MBC as of the close of such Fiscal Quarter,
all in reasonable detail. All such income statements and balance sheets shall be
prepared by the Borrowers and certified by the President, Chief Financial
Officer or Vice President and Corporate Controller of MBC as presenting fairly
the Consolidated and Consolidating financial position of MBC as of the end of
such Fiscal Quarter and the results of their operations for such periods, in
conformity with GAAP (subject to normal and recurring year- end audit
adjustments) applied in a manner consistent with that of the most recent audited
financial statements furnished to the Bank. For each Borrower and each
Subsidiary which is operating in the construction industry, the Borrowers shall
also, along with the quarterly financial statements referred to above, submit to
the Bank a summary job status report for all on-going construction projects of
such Borrower or Subsidiary.
(c) MONTHLY REPORTS. As soon as practicable, and in any event within
twenty (20) days after the close of each calendar month, the Borrowers will
furnish to the Bank financial statements with respect to the Borrowers
substantially in form and substance as set forth on Exhibit C attached hereto
and made a part hereof.
(d) QUARTERLY COMPLIANCE CERTIFICATE. The income statements and
balance sheets as of and for the end of each Fiscal Quarter which are delivered
pursuant to Section 5.01(b) of this Agreement shall be accompanied by a
<PAGE>
compliance certificate, substantially in the form of Exhibit "A" attached
hereto, executed by the President, Chief Financial Officer or Vice President and
Corporate Controller of MBC, stating that no Event of Default or Potential
Default exists and that the Borrowers are in compliance with all applicable
covenants contained in this Agreement. Such certificate shall include all
figures necessary to calculate the Borrowers' compliance with all financial
covenants set forth in this Agreement. If an Event of Default or Potential
Default has occurred and is continuing or exists, such certificate shall specify
in detail the nature and period of existence of the Event of Default or
Potential Default and any action taken or contemplated to be taken by the
Borrowers.
(e) REPORTS TO GOVERNMENTAL AGENCIES AND OTHER CREDITORS. As soon as
practicable, and in event within ten (10) days after the filing thereof, the
Borrower shall furnish to Bank a copy of its 10-K and 10-Q reports, each proxy
statement, each registration statement and all other reports which any Borrower
is or may be required to file with the United States Securities and Exchange
Commission or any State Securities Commission.
(f) AUDIT REPORTS. Promptly upon receipt thereof, and in any event
within five (5) Business Days after receipt by any Borrower, the Borrowers will
deliver to the Bank one copy of each other report submitted to any Borrower by
its independent accountants, including comment or management letters, in
connection with any annual, interim or special audit report made by them of any
Borrower or its banks and records.
(g) ANNUAL PLAN. On or before January 31 of each calendar year, the
Borrowers shall submit to the Bank projections for the Borrowers and their
Subsidiaries for such calendar year setting forth Consolidated and Consolidating
projected income and cash flow for each quarter and the Consolidated projected
balance sheet as of the end of each quarter. Such projections shall be prepared
in a manner fully and accurately presenting the projected financial condition
and results of operation of the Borrowers and their Subsidiaries and making such
projections not misleading under the circumstances.
(h) MONTHLY BORROWING BASE CERTIFICATE. Within twenty (20) days after
the last day of each calendar month during the term of this Agreement on which
the aggregate principal amount of all Revolving Credit Loans (including the
Letter of Credit Undrawn Availability) outstanding exceeds Five Million and
00/100 Dollars ($5,000,000.00), Borrowers shall furnish to the Bank a Borrowing
Base Certificate signed by the Vice President and Corporate Controller of MBC.
(i) VISITATION: AUDITS. The Borrowers will permit such persons as the
Bank may designate to visit and inspect any of the properties of the Borrowers
and their Subsidiaries to examine, and to make copies and extracts from, the
books and records of the Borrowers and their Subsidiaries and to discuss their
affairs with their officers during normal business hours. Provided that no Event
of Default has occurred, the Bank shall provide the Borrower with reasonable
notice of any such visitation or inspection. Upon the occurrence and during the
continuation of an Event of Default, the Borrowers will permit such persons as
the Bank may designate to visit and inspect any of the properties of the
Borrowers and their Subsidiaries to examine, and to make copies and extracts
from, the books and records of the Borrowers and their Subsidiaries and to
discuss their affairs with their officers and independent accountants at any
time and without notice.
<PAGE>
(j) NOTICE OF EVENT OF DEFAULT. Promptly, and in any event within five
(5) Business Days, after becoming aware of an Event of Default or Potential
Default, the Borrowers will give the Bank notice of the Event of Default or
Potential Default, together with a written statement of the Presidents or Chief
Financial Officers of the Borrowers setting forth the details of the Event of
Default or Potential Default and any action taken or contemplated to be taken by
the Borrowers.
(k) NOTICE OF MATERIAL ADVERSE CHANGE. Promptly, and in any event
within five (5) Business Days, after becoming aware thereof, the Borrowers will
give the Bank telephonic or telegraphic notice (with written confirmation sent
on the same or next Business Day) with respect to any Material Adverse Change or
any development or occurrence which would have a Material Adverse Effect.
(l) NOTICE OF PROCEEDINGS. Promptly, and in any event within five (5)
Business Days, after becoming aware thereof, the Borrowers will give the Bank
notice of the commencement, existence or threat of all proceedings by or before
any Official Body against or affecting any Borrower which, if adversely decided,
would have a Material Adverse Effect.
(m) FURTHER INFORMATION. The Borrowers will promptly, but in any event
within fifteen (15) days, furnish to the Bank such other information, and in
such form, as the Bank may reasonably request from time to time.
5.02 PRESERVATION OF EXISTENCE AND FRANCHISES. Except as otherwise
permitted under this Agreement, the Borrowers will maintain their respective
corporate existences, rights and franchises in full force and effect in their
respective jurisdictions of incorporation unless the Bank provides its prior
written consent otherwise. Except where the failure to be so qualified would not
have a Material Adverse Effect, the Borrowers and their Subsidiaries will
qualify and remain qualified as a foreign corporation in each jurisdiction in
which the ownership of their properties or the nature of their activities or
both makes such qualification necessary.
5.03 INSURANCE. The Borrowers and their Subsidiaries will maintain with
financially sound and reputable insurers insurance with respect to their
properties and business and against such liabilities, casualties and
contingencies and of such types and in such amounts as is reasonably
satisfactory to the Bank and as is customary in the case of corporations or
other entities engaged in the same or similar business or having similar
properties similarly situated. The Borrowers will deliver to the Bank, on the
last day of each fiscal year during the term of this Agreement, a statement or
insurance company certificate in such detail as the Bank may request as to all
insurance coverage of the Borrower and all of its Subsidiaries. The Borrowers
agree to provide the Bank with thirty (30) days advance notice of the
termination of any such insurance coverage.
5.04 MAINTENANCE OF PROPERTIES. Except where the failure to do so would not
have a Material Adverse Effect, the Borrowers and their Subsidiaries will
maintain or cause to be maintained in good repair, working order and condition
(ordinary wear and tear excepted), the properties now or in the future owned,
leased or otherwise possessed by each of them and shall make or cause to be made
all needful and proper repairs, renewals, replacements and improvements to the
properties so that the business carried on in connection with the properties may
be properly and advantageously conducted at all times.
<PAGE>
5.05 PAYMENT OF LIABILITIES. The Borrowers and their Subsidiaries will pay
or discharge:
(a) on or prior to the date on which penalties attach, all taxes,
assessments, fees and other governmental charges or levies imposed upon them or
any of their respective properties, income, sales or franchises other than those
contested with due diligence, in good faith, without the occurrence of any Lien
which would have a Material Adverse Effect and for which the Borrowers and their
Subsidiaries have established sufficient reserves on their books;
(b) on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen, landlords and other like persons
which, if unpaid, might result in the creation of a Lien upon any of their
respective property other than those contested with due diligence, in good
faith, and for which the Borrower or its Subsidiaries have established adequate
reserves on their books and for which the Borrower and its Subsidiaries have put
in place adequate bonds or other security to cover the amount of any such Lien;
(c) on or prior to the date when due, all other lawful claims which,
if unpaid, might result in the creation of a Lien upon any of their property
other than those contested with due diligence, in good faith without the
occurrence of any Lien which would have a Material Adverse Effect and for which
the Borrower and its Subsidiaries have established sufficient reserves on their
books; and
(d) all other current liabilities so that none is due more than one
hundred twenty (120) days after the due date for each liability, except current
liabilities which are subject to good faith dispute and as to which the
Borrowers or their Subsidiaries have created adequate reserves on their books.
5.06 FINANCIAL ACCOUNTING PRACTICES. The Borrowers and their Subsidiaries
will make and keep books, records and accounts which, in reasonable detail,
accurately and fairly reflect their respective transactions and dispositions of
assets and maintain a system of internal accounting controls sufficient to
provide reasonable assurances that (a) transactions are executed in accordance
with management's general or specific authorization, (b) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets, (c) access to
assets is permitted only in accordance with management's general or specific
authorization and (d) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
5.07 COMPLIANCE WITH LAWS. The Borrowers and their Subsidiaries shall
comply with all applicable Laws the non-compliance with which would have a
Material Adverse Effect.
5.08 PENSION PLANS. The Borrowers and their Subsidiaries shall (a) keep in
full force and effect any and all Plans which are presently in existence or may,
<PAGE>
from time to time, come into existence under ERISA, unless such Plans can be
terminated without material liability to any Borrower or its Subsidiary in
connection with such termination; (b) make contributions to each of their Plans
in a timely manner and in a sufficient amount to comply in all material respects
with the requirements of ERISA; (c) comply with all material requirements of
ERISA which relate to such Plans so as to preclude the occurrence of any
Reportable Event, Prohibited Transaction (other than a Prohibited Transaction
subject to an exemption under ERISA) or material accumulated funding deficiency
as such term is defined in ERISA; and (d) notify the Bank immediately upon
receipt by any Borrower or its Subsidiaries of any notice of the institution of
any proceeding or other action which may result in the termination of any Plan.
The Borrowers shall deliver to the Bank, promptly, but in any event within ten
(10) Business Days, after the filing or receipt thereof, copies of all reports
or notices which any Borrower or its Subsidiaries files or receives under ERISA
with or from the Internal Revenue Service, the PBGC, or the U.S. Department of
Labor, other than reports or notices which do not materially or adversely affect
any Borrower, their businesses, assets, financial condition, or the ability of
such Borrower to perform its respective obligations under this Agreement.
5.09 USE OF PROCEEDS. The Borrowers shall use the proceeds of the Loans for
the purposes set forth in Section 3.16 hereof.
5.10 CONTINUATION OF AND CHANGE IN BUSINESS. The Borrowers and their
Subsidiaries will continue to engage generally in business and activities
substantially similar to those described in MBC's Annual Report on Form 10-K for
the fiscal year ended December 31, 1999 (the "1999 Form 10-K") and the Borrowers
and their Subsidiaries will not engage in any other business or activity without
the prior written consent of the Bank.
5.11 LIEN SEARCHES. Upon an Event of Default, the Bank may, but shall not
be obligated to, conduct lien searches of the Borrowers, their Subsidiaries and
their assets and properties at any time. The Borrowers shall reimburse the Bank
for the Bank's out of pocket costs and expenses in connection with such lien
searches.
5.12 FURTHER ASSURANCES. The Borrowers, at their own cost and expense, will
cause to be promptly and duly taken, executed, acknowledged and delivered all
further acts, documents and assurances as the Bank may from time to time
reasonably request in order to more effectively carry out the intent and
purposes of this Agreement and the transactions contemplated by this Agreement.
Upon any failure of the Borrowers to do so, the Bank may make, execute, record
or file any and each Loan Document, instrument, certificate, document and UCC
financing statement for and in the name of any or all of the Borrowers.
5.13 [RESERVED]
5.14. FINANCIAL COVENANTS. The following financial covenants with respect
to the Borrowers shall apply:
(a) INCOME FROM OPERATIONS. The Borrowers shall maintain Income from
Operations in an amount not less than (i) Two Million Seven Hundred Thousand and
00/100 Dollars ($2,700,000.00) for the Fiscal Quarter ending March 31, 2000;
<PAGE>
(ii) Three Million Three Hundred Thousand and 00/100 Dollars ($3,300,000.00) for
the Fiscal Quarter ending June 30, 2000; (iii) Three Million Five Hundred
Thousand and 00/100 Dollars ($3,500,000.00) for the Fiscal Quarters ending
September 30, 2000 and December 31, 2000; and (iv) Three Million and 00/100
Dollars ($3,000,000.00) for the Fiscal Quarter ending March 31, 2001 and for
each Fiscal Quarter thereafter.
(b) MINIMUM OWNER'S EQUITY. The Borrowers shall maintain at all times
Owner's Equity in an amount not less than the sum of (i) Forty-Four Million Five
Hundred Thousand and 00/100 ($44,500,000.00) plus (ii) ninety percent (90%) of
the Net Income of the Borrowers for the Fiscal Quarter ending March 31, 2000 and
each Fiscal Quarter thereafter (excluding any net loss in any such Fiscal
Quarter).
5.15 AMENDMENT TO SCHEDULES. The Borrowers may amend any one or more of the
schedules referred to in this Agreement (subject to prior notice to the Bank)
and any representation, warranty, or covenant contained herein which refers to
any such schedule shall from and after the date of any such amendment refer to
such schedule as so amended; PROVIDED, HOWEVER, that in no event shall the
amendment of any such schedule constitute a waiver by the Bank of any default or
Event of Default that exists notwithstanding the amendment of such schedule.
ARTICLE VI.
NEGATIVE COVENANTS
------------------
The Borrowers covenant to the Bank as follows:
6.01 LIENS. No Borrower, nor any Subsidiary of a Borrower shall, at any
time, incur, create, assume or permit to exist, any Lien on any of their
property or assets, tangible or intangible, now or hereafter owned, or agree to
become liable to do so, except:
(a) such Liens existing on the Closing Date and set forth on SCHEDULE
6.01 to this Agreement;
(b) Liens granted in favor of Bank;
(c) pledges or deposits under workers compensation, unemployment
insurance and social security laws, or to secure the performance of bids,
tenders, contracts (other than for the repayment of borrowed money) or leases or
to secure statutory obligations or surety or similar bonds used in the ordinary
course of business;
(d) Liens arising from taxes, assessments, fees, charges, levies or
claims described in Section 5.05 of this Agreement;
(e) purchase money security interests to secure Indebtedness permitted
under Section 6.02(d); PROVIDED, HOWEVER, that such security interest shall be
limited solely to the equipment purchased with the proceeds of such
Indebtedness;
<PAGE>
(f) any unfiled materialmen's, mechanics, workmen's and repairmen's
liens (provided, that if such a lien shall be filed or perfected, it shall be
discharged of record immediately by payment, bond or otherwise);
(g) attachment, judgment and other similar Liens arising in connection
with court proceedings, so long as the existence of such Liens do not cause an
Event of Default under Section 7.01(h) or 7.01(i) hereof;
(h) reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions, leases and other similar title exceptions
or encumbrances affecting real property, provided that they do not, individually
or in the aggregate, diminish the fair market value of the real property
affected thereby or the utility of such real property for the purposes for which
such property is presently devoted;
(i) Liens or deposits made in connection with contracts with or made
at the request of the United States of America or any department or agency
thereof resulting from progress payments or partial payments under any such
contracts, incurred in the ordinary course of business of the Borrowers or their
Subsidiaries; and
(j) Liens granted by Baker/Mellon Stuart to secure the loans permitted
pursuant to Section 6.04(f) hereof.
6.02 INDEBTEDNESS. No Borrower, nor any Subsidiary of a Borrower shall, at
any time, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness under this Agreement, the Notes, the other Loan
Documents or under any other document, instrument or agreement between any
Borrower and the Bank;
(b) Indebtedness existing on the date hereof, and described in
SCHEDULE 6.02 to this Agreement, including all extension renewals or
refinancings thereof which do not increase the amount thereof;
(c) Current accounts payable, accrued expenses and other current items
arising out of transactions (other than borrowings) in the ordinary course of
business;
(d) Purchase money Indebtedness or Capitalized Lease Obligations for
purchases or leases of equipment in the ordinary course of business and in
amounts which shall not exceed Five Million and 00/100 Dollars ($5,000,000.00)
as to the aggregate, at any time, of all such purchase money Indebtedness and
Capitalized Lease Obligations;
(e) Indebtedness represented by unsecured promissory notes provided
that such Indebtedness shall not exceed Three Million and 00/100 Dollars
($3,000,000.00) as to any single promissory note or Five Million and 00/100
Dollars ($5,000,000.00) as to the aggregate, at any time, of all such
outstanding notes; and
<PAGE>
(f) Indebtedness of Baker/Mellon Stuart to MBC in connection with the
loans permitted pursuant to Section 6.04(f) hereof.
6.03 GUARANTEES AND CONTINGENT LIABILITIES. No Borrower nor any Subsidiary
of a Borrower shall, at any time directly or indirectly assume, guarantee,
endorse or otherwise agree, become or remain directly or contingently liable
upon or with respect to any obligation or liability of any other Person other
than a Borrower or any Subsidiary of a Borrower, except:
(a) indemnities of directors and officers in their capacities as such,
as permitted by Law;
(b) endorsements on negotiable or other instruments in any amount for
deposit or collection or similar transactions in the ordinary course of their
businesses; and
(c) those guarantees existing on the Closing Date and set forth on
SCHEDULE 6.03 attached to this Agreement.
6.04 LOANS AND INVESTMENTS. No Borrower nor any Subsidiary of a Borrower
shall purchase, own or invest in any stock or other securities of any Person, or
make or permit to exist any investment or capital contribution to or acquire any
interest whatsoever in any other Person or permit to exist any loans or advances
to any Person except:
(a) equity investments in the Subsidiaries as set forth on SCHEDULE
3.20 to this Agreement;
(b) Acquisitions permitted under Section 6.05 hereof;
(c) other loans and investments existing on the Closing Date and set
forth on SCHEDULE 6.04 attached to this Agreement; or
(d) investments in (i) direct obligations of the United States of
America or any agency thereof, (ii) obligations guaranteed by the United States
of America, (iii) prime commercial paper (rated by Moody's Investors Service at
not less than a A-2 and by Standard & Poors at not less than P-2), (iv)
certificates of deposit or repurchase agreements issued by Bank or any
commercial bank having capital and surplus in excess of One Hundred Million
Dollars ($100,000,000); (v) deposit accounts in and Banker's acceptances of,
commercial banks, and (vi) investments (other than equity investments listed on
SCHEDULE 3.20) in any other Borrower or Subsidiary incurred in the ordinary
course of business and usual and customary terms in the form of advances to such
Borrower or Subsidiary; provided, however, that (A) the total amount of all such
advances made by the Borrowers to those Subsidiaries which are not Borrowers,
minus (B) the total amount of all such advances made by those Subsidiaries which
are not Borrowers to the Borrowers shall not, at any time, exceed Fifteen
Million and 00/100 Dollars ($15,000,000.00) and provided, further, that the
total amount of all such advances made by the Borrowers to any single Subsidiary
that is not a Borrower shall not exceed Ten Million and 00/100 Dollars
($10,000,000.00);
(e) so long as no Event of Default has occurred or will occur as a
result thereof, additional repurchases of outstanding common stock of MBC as may
hereafter be authorized by the Board of Directors of MBC from time to time; and
<PAGE>
(f) loans made by MBC to Baker/Mellon Stuart pursuant to the
Baker/Mellon Stuart Security Agreement, provided, however, that the aggregate
amount of all such loans shall not exceed an amount equal to Twenty-Six Million
Five Hundred Thousand and 00/100 Dollars ($26,500,000.00).
6.05 ACQUISITIONS. No Borrower nor any Subsidiary of a Borrower shall
acquire, directly or indirectly, substantially all of the assets or all of the
stock, other securities or other equity interest of any Person (whether in a
single or series of related transactions) or make or permit to exist any
agreement for any of the foregoing (any of the foregoing arrangements being
herein referred to as an "Acquisition"), except Acquisitions of Persons in
businesses similar to those described in the 1999 Form 10-K so long as each of
the following conditions are satisfied:
(a) the Bank shall be given at least thirty (30) days advance written
notice of any such Acquisition with a purchase price in excess of Two Million
Dollars ($2,000,000.00);
(b) the Bank shall have received all documentation with respect to
such Acquisition including, but not limited to, the purchase agreement and all
related documentation and approvals as requested by Bank;
(c) if requested by Bank, Bank shall have received pro forma financial
statements of the Borrowers and their Subsidiaries after giving affect to such
Acquisition;
(d) immediately after the closing of such Acquisition, the amount
available under the Revolving Credit Facility Commitment shall be greater than
or equal to Ten Million and 00/100 Dollars ($10,000,000.00);
(e) no Event of Default or Potential Default shall exist prior to such
Acquisition and no Event of Default or Potential Default shall occur or exist as
a result of such Acquisition; and
(f) the aggregate purchase price of all such Acquisitions in any
fiscal year shall not exceed Five Million and 00/100 Dollars ($5,000,000.00) in
the aggregate.
6.06 PARTNERSHIPS, COMBINATIONS, MERGERS OR CONSOLIDATIONS. No Borrower nor
any Subsidiary of a Borrower shall form a partnership or merge or consolidate
with or into any other Person, or agree to do any of the foregoing, except:
(a) the Borrowers may permit any of their Subsidiaries to merge with
or consolidate into a Borrower if the Borrower is the surviving entity;
(b) the Borrowers may permit any of their Subsidiaries to merge with
or consolidate with another Subsidiary;
(c) any Borrower may merge with any other Borrower; and
(d) the Borrowers and their Subsidiaries may complete Acquisitions
permitted under Section 6.05 hereof.
<PAGE>
6.07 DISPOSITIONS OF ASSETS. No Borrower nor any Subsidiary of a Borrower
shall sell, convey, pledge, assign, lease, abandon or otherwise transfer or
dispose of, voluntarily or involuntarily (any of the foregoing being referred to
in this Section as a transaction and any series of related transactions
constituting but a single transaction), any of their respective properties or
assets, tangible or intangible (including stock of Subsidiaries) except:
(a) sales of inventory and other assets in the ordinary course of
business;
(b) sales of assets which are no longer useful to the business of the
Borrowers or their Subsidiaries, made in the ordinary course of business;
(c) so long as no Event of Default or Potential Default shall have
occurred, sales or dispositions of assets in the ordinary course of a Borrower's
business having a fair market value, at the time of disposition, not in excess
of One Million and 00/100 Dollars ($1,000,000.00) in the aggregate for all such
dispositions in any fiscal year.
6.08 DOUBLE NEGATIVE PLEDGE. No Borrower nor any Subsidiary of a Borrower
shall enter into or suffer to exist any agreement with any Person, other than in
connection with this Agreement, which prohibits or limits the ability of the
Borrowers or any Subsidiary to create, incur, assume or suffer to exist any Lien
upon or with respect to any property or assets of any kind (real or personal,
tangible or intangible) of the Borrowers or any Subsidiary, whether now owned or
hereafter acquired or created.
6.09 SELF-DEALING. No Borrower nor any Subsidiary of a Borrower shall enter
into or carry out any loan, advance or other transaction (including, without
limitation, purchasing property or services, or selling property or services)
with any Affiliate, except that shareholders, directors, officers or partners of
a Borrower or a Subsidiary may render services to such Borrower or Subsidiary
for compensation at the same rates generally paid by corporations or
partnerships engaged in the same or similar businesses, and a Borrower or a
Subsidiary may enter into transactions with Affiliates if such transactions are
disclosed to Bank and made on terms comparable to those which could be obtained
in arms length transactions with a Person who is not an Affiliate.
6.10 OPERATING LEASES. No Borrower nor any Subsidiary of a Borrower shall
enter into or become subject to any operating leases which in the aggregate
provide for Lease Obligations to be paid during any one fiscal year in excess of
Twenty Million and 00/100 Dollars ($20,000,000.00).
6.11 [RESERVED]
6.12 MARGIN STOCK. The Borrowers will not use the proceeds of any Loans
directly or indirectly to purchase or carry any "margin stock" (within the
meaning of Regulations U, G, T, or X of the Board of Governors of the Federal
Reserve System) or to extend credit to others for the purpose of purchasing or
carrying, directly or indirectly, any margin stock.
<PAGE>
ARTICLE VII.
DEFAULTS
--------
7.01 EVENTS OF DEFAULT. An Event of Default means the occurrence or
existence of one or more of the following events or conditions (whatever the
reason for such Event of Default and whether voluntary, involuntary or effected
by operation of Law):
(a) The Borrowers shall fail to pay principal on any of the Notes when
due; or
(b) The Borrowers shall fail to pay interest on the Loans or any fees
payable pursuant to Article II of this Agreement within five (5) days of the
date when due; or
(c) The Borrowers shall fail to pay any other fee, or other amount
payable pursuant to this Agreement, the Notes or any of the other Loan Documents
within ten (10) days after notice to MBC by the Bank; or
(d) Any representation or warranty made by any Borrower under this
Agreement, the Notes or any of the other Loan Documents or any statement made by
any Borrower in any financial statement, certificate, report, exhibit or
document furnished by the Borrowers to the Bank pursuant to this Agreement or
the other Loan Documents shall prove to have been false or misleading in any
material respect as of the time when made; or
(e) Any Borrower shall be in default in the performance or observance
of any covenant contained in Sections 5.01(h); 5.01(j); 5.01(k); 5.01(l); 5.14
or any section in Article VI hereof; or
(f) Any Borrower shall be in default in the performance or observance
of any covenant contained in Sections 5.01(a); 5.01(b); 5.01(c); 5.01(d);
5.01(e); 5.01(f); 5.01(g); 5.07 or 5.08 hereof and such default shall not have
been cured within fifteen (15) days of the occurrence of such default; or
(g) Any Borrower shall be in default in the performance or observance
of any covenant contained in Sections 5.02; 5.03; 5.05; 5.09; or 5.10 hereof and
such default shall not have been cured within thirty (30) days of the occurrence
of such default; or
(h) Any Borrower shall be in default in the performance or observance
of any other covenant hereof and such default shall not have been cured within
thirty (30) days after notice to MBC by the Bank;
(i) Any Borrower or any Subsidiary shall (i) default (as principal or
guarantor or other surety) in any payment of principal of or interest on any
obligation (or set of related obligations) for borrowed money in excess of One
Million and 00/100 Dollars ($1,000,000.00), beyond any period of grace with
respect to the payment or, if such obligation (or set of related obligations) is
or are payable or repayable on demand, fails to pay or repay such obligation or
obligations when demanded, or (ii) default in the observance of any other
covenant, term or condition contained in any agreement or instrument by which an
obligation (or set of related obligations) is or are created, secured or
evidenced, if the effect of such default is to cause, or to permit the holder or
holders of such obligation or obligations (or a trustee or agent on behalf of
such holder or holders) to cause, all or part of such obligation or obligations
to become due before its or their otherwise stated maturity; or
<PAGE>
(j) Except for a final judgment in an amount less than or equal to
Five Million and 00/100 Dollars ($5,000,000.00) with respect to the matter
described on Schedule 7.01(j) attached hereto and made a part hereof, one or
more final judgments for the payment of money in excess of One Million and
00/100 Dollars ($1,000,000.00) shall have been entered against any Borrower or
any Subsidiary and, in the case of any such judgment or judgments which in the
aggregate are less than Two Million and 00/100 Dollars ($2,000,000.00), such
judgment or judgments shall have remained undischarged and unstayed for a period
of thirty (30) consecutive days; or
(k) A writ or warrant of attachment, garnishment, execution, distraint
or similar process, exceeding in value the aggregate amount of One Hundred
Thousand and 00/100 Dollars ($100,000.00), shall have been issued against any
Borrower or any Subsidiary or any of their respective properties and, in the
event the value of such matters is in the aggregate less than One Million and
00/100 Dollars ($1,000,000.00), such shall remain undischarged and unstayed for
a period of thirty (30) consecutive days; or
(l) Bank has determined that a Material Adverse Change has occurred or
that the prospect of payment or performance of any covenant, agreement or duty
under this Agreement, the Notes or the other Loan Documents is impaired or that
the Bank is insecure; or
(m) a Change of Control shall occur; or
(n) (i) A Termination Event with respect to a Plan shall occur, (ii)
any Person shall engage in any prohibited transaction involving any Plan, (iii)
an accumulated funding deficiency, whether or not waived, shall exist with
respect to any Plan, (iv) any Borrower or any ERISA Affiliate shall be in
"Default" (as defined in Section 4219(c)(5) of ERISA with respect to payments
due to a multi-employer Plan resulting from such Borrower's or any ERISA
affiliate's, complete or partial withdrawal (as described in Section 4203 or
4205 of ERISA) from such Plan, or (v) any other event or condition shall occur
or exist with respect to a single employer Plan, except that no such event or
condition shall constitute an Event of Default if it, together with all other
events or conditions at the time existing, would not have a Material Adverse
Effect;
(o) A proceeding shall be instituted in respect of any Borrower or any
Subsidiary:
(i) seeking to have an order for relief entered in respect of
such Borrower or any Subsidiary or seeking a declaration or entailing a finding
that such Borrower or any Subsidiary is insolvent or a similar declaration or
finding, or seeking dissolution, winding- up, charter revocation or forfeiture,
liquidation, reorganization, arrangement, adjustment, composition or other
similar relief with respect to such Borrower or any Subsidiary, its assets or
debts under any law relating to bankruptcy, insolvency, relief of debtors or
protection of creditors, termination of legal entities or any other similar law
now or in the future which shall not have been dismissed or stayed within thirty
(30) days after such proceedings were instituted; or
(ii) seeking appointment of a receiver, trustee, custodian,
liquidator, assignee, sequestrator or other similar official for any Borrower or
any Subsidiary or for all or any substantial part of its property which shall
not have been dismissed or stayed within thirty (30) days after such proceedings
were instituted; or
<PAGE>
(p) Any Borrower shall voluntarily suspend transaction of its
business, any Borrower or any Subsidiary shall become insolvent, shall become
generally unable to pay its debts as they become due, shall make a general
assignment for the benefit of creditors, shall institute a proceeding described
in Section 7.01(o)(i) of this Agreement or shall consent to any order for
relief, declaration, finding or relief described in Section 7.01(o)(i) of this
Agreement, shall institute a proceeding described in Section 7.01(o)(ii) of this
Agreement or shall consent to the appointment or to the taking of possession by
any such official of all or any substantial part of its property whether or not
any proceeding is instituted, shall dissolve, wind-up or liquidate itself or any
substantial part of its property, or shall take any action in furtherance of any
of the foregoing.
7.02 CONSEQUENCES OF AN EVENT OF DEFAULT.
-----------------------------------
(a) If an Event of Default specified in subsections (b) through (n) of
Section 7.01 of this Agreement occurs, the Bank will be under no further
obligation to make Loans and may at its option (i) demand the unpaid principal
amount of the Notes, interest accrued on the unpaid principal amount and all
other amounts owing by the Borrowers under this Agreement, the Notes and the
other Loan Documents to be immediately due and payable without presentment,
demand, protest or further notice of any kind, all of which are expressly
waived, and an action for any amounts due shall accrue immediately; and (ii)
require the Borrowers to, and the Borrowers shall thereupon, deposit in a
non-interest bearing account with the Bank, as cash collateral for their
obligations under the Loan Documents, an amount equal to the maximum amount
currently or at any time thereafter available to be drawn on all outstanding
Letters of Credit, and the Borrowers hereby pledge to the Bank, and grant to the
Bank a security interest in, all such cash as security for such obligations of
the Borrowers.
(b) If an Event of Default specified in subsections (a), (o) or (p) of
Section 7.01 of this Agreement occurs and continues or exists, the Bank will be
under no further obligation to make Loans or issue Letters of Credit and the
unpaid principal amount of the Notes, interest accrued on the unpaid principal
amount of the Notes and all other amounts owing by the Borrowers under this
Agreement, the Notes and the other Loan Documents shall automatically become
immediately due and payable without presentment, demand, protest or notice of
any kind, all of which are expressly waived, and an action for any amounts due
shall accrue immediately.
7.03 SET-OFF. If the unpaid principal amount of the Notes, interest
accrued on the unpaid principal amount of the Notes or other amount owing by the
Borrowers under this Agreement, the Notes or the other Loan Documents shall have
become due and payable (at maturity, by acceleration or otherwise), the Bank,
any assignee of the Bank and the holder of any participation in any Loan will
each have the right, in addition to all other rights and remedies available to
it, without notice to the Borrowers, to set-off against and to appropriate and
apply to such due and payable amounts any debt owing to, and any other funds
held in any manner for the account of, any Borrower by the Bank, by such
<PAGE>
assignee or by such holder including, without limitation, all funds in all
deposit accounts (whether time or demand, general or special, provisionally
credited or finally credited, or otherwise) now or in the future maintained by
any Borrower with the Bank, such assignee or such holder. The Borrowers consent
to and confirm the foregoing arrangements and confirm the Bank's rights, such
assignee's rights and such holder's rights of banker's lien and set-off. Nothing
in this Agreement will be deemed a waiver or prohibition of or restriction on
the Bank's rights, such assignee's rights or any such holder's rights of
banker's lien or set-off.
ARTICLE VIII.
MISCELLANEOUS
-------------
8.01 BUSINESS DAYS. Except as otherwise provided in this Agreement,
whenever any payment or action to be made or taken under this Agreement, or
under the Notes or under any of the other Loan Documents is stated to be due on
a day which is not a Business Day, such payment or action will be made or taken
on the next following Business Day and such extension of time will be included
in computing interest or fees, if any, in connection with such payment or
action.
8.02 RECORDS. The unpaid principal amount of the Notes, the unpaid interest
accrued thereon, the interest rate or rates applicable to such unpaid principal
amount and the duration of such applicability shall at all times be ascertained
from the records of the Bank, which shall be conclusive absent manifest error.
8.03 AMENDMENTS AND WAIVERS. The Bank and the Borrowers may from time to
time enter into agreements amending, modifying or supplementing this Agreement,
the Notes or any other Loan Document or changing the rights of the Bank or of
the Borrowers under this Agreement, under the Notes or under any other Loan
Document and the Bank may from time to time grant waivers or consent to a
departure from the due performance of the obligations of the Borrowers under
this Agreement, under the Notes or under any other Loan Document. Any such
agreement, waiver or consent must be in writing and will be effective only to
the extent specifically set forth in such writing. In the case of any such
waiver or consent relating to any provision of this Agreement, any Event of
Default or Potential Default so waived or consented to will be deemed to be
cured and not continuing, but no such waiver or consent will extend to any other
or subsequent Event of Default or Potential Default or impair any right
consequent to any other or subsequent Event of Default or Potential Default or
impair any right consequent thereto.
8.04 NO IMPLIED WAIVER: CUMULATIVE REMEDIES. No course of dealing and no
delay or failure of the Bank in exercising any right, power or privilege under
this Agreement, the Notes or any other Loan Document will affect any other or
future exercise of any such right, power or privilege or exercise of any other
right, power or privilege except as and to the extent that the assertion of any
such right, power or privilege shall be barred by an applicable statute of
limitations; nor shall any single or partial exercise of any such right, power
or privilege or any abandonment or discontinuance of steps to enforce such a
right, power or privilege preclude any further exercise of such right, power or
privilege or of any other right, power or privilege. The rights and remedies of
the Bank under this Agreement, the Notes or any other Loan Document are
cumulative and not exclusive of any rights or remedies which the Bank would
otherwise have.
<PAGE>
8.05 NOTICES. All notices, requests, demands, directions and other
communications (collectively, "Notices") under the provisions of this Agreement
or the Notes must be in writing (including telexed or telecopied communication)
unless otherwise expressly permitted under this Agreement and must be sent by
first-class or first-class express mail, private overnight or next Business Day
courier or by telecopy with confirmation in writing mailed first class, in all
cases with charges prepaid, and any such properly given Notice will be effective
when received. All Notices will be sent to the applicable party at the addresses
stated below or in accordance with the last unrevoked written direction from
such party to the other parties.
If to Borrowers: William P. Mooney
Executive Vice President and Chief Financial Officer
Michael Baker Corporation
Airport Office Park, Building No. 3
420 Rouser Road
Coraopolis, PA 15108
and a copy to: H. James McKnight
Secretary and General Counsel
Michael Baker Corporation
Airport Office Park, Building No. 3
420 Rouser Road
Coraopolis, PA 15108
If to Bank: Mark T. Latterner
Vice President
Mellon Bank, N.A.
Two Mellon Bank Center, Room 152-0230
Pittsburgh, PA 15259-0001
Telecopier: (412) 236-9010
and a copy to: Jeffrey J. Conn, Esquire
Thorp Reed & Armstrong, LLP
One Riverfront Center
Pittsburgh, PA 15222
Telecopier: (412) 394-2555
8.06 EXPENSES; TAXES; ATTORNEYS FEES. The Borrowers agree to pay or cause
to be paid and to save the Bank harmless against liability for the payment of
all reasonable out-of-pocket expenses, including, but not limited to reasonable
fees and expenses of counsel and paralegals for the Bank, incurred by the Bank
from time to time (i) arising in connection with the preparation, execution,
delivery and performance of this Agreement, the Notes and the other Loan
Documents, (ii) relating to any requested amendments, waivers or consents to
this Agreement, the Notes or any of the other Loan Documents and (iii) arising
in connection with the Bank's enforcement or preservation of rights under this
Agreement, the Notes or any of the other Loan Documents including, but not
limited to, such expenses as may be incurred by the Bank in the collection of
the outstanding principal amount of the Loans. The Borrowers agree to pay all
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stamp, document, transfer, recording or filing taxes or fees and similar
impositions now or in the future determined by the Bank to be payable in
connection with this Agreement, the Notes or any other Loan Document. The
Borrowers agree to save the Bank harmless from and against any and all present
or future claims, liabilities or losses with respect to or resulting from any
omission to pay or delay in paying any such taxes, fees or impositions. In the
event of a determination adverse to a Borrower of any action at law or suit in
equity in relation to this Agreement, the Notes or the other Loan Documents, the
Borrowers will pay, in addition to all other sums which the Borrowers may be
required to pay, a reasonable sum for attorneys and paralegals fees incurred by
the Bank or the holder of the Notes in connection with such action or suit. All
payments due from the Borrowers under this Section will be added to and become
part of the Loans until paid in full.
8.07 SEVERABILITY. The provisions of this Agreement are intended to be
severable. If any provision of this Agreement is held invalid or unenforceable
in whole or in part in any jurisdiction, the provision will, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
of the provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
8.08 GOVERNING LAW: CONSENT TO JURISDICTION. This Agreement will be deemed
to be a contract under the laws of the Commonwealth of Pennsylvania and for all
purposes will be governed by and construed and enforced in accordance with the
substantive laws, and not the laws of conflicts, of said Commonwealth. The
Borrowers consent to the exclusive jurisdiction and venue of the federal and
state courts located in Allegheny County, Pennsylvania, in any action on,
relating to or mentioning this Agreement, the Notes, the other Loan Documents,
or any one or more of them.
8.09 PRIOR UNDERSTANDINGS. This Agreement, the Notes and the other Loan
Documents supersede all prior understandings and agreements, whether written or
oral, among the parties relating to the transactions provided for in this
Agreement, the Notes and the other Loan Documents.
8.10 DURATION: SURVIVAL. All representations and warranties of the
Borrowers contained in this Agreement or made in connection with this Agreement
or any of the other Loan Documents shall survive the making of and will not be
waived by the execution and delivery of this Agreement, the Notes or the other
Loan Documents, by any investigation by the Bank, or the making of any Loan.
Notwithstanding termination of this Agreement or an Event of Default, all
covenants and agreements of the Borrowers will continue in full force and effect
from and after the date of this Agreement so long as the Borrowers may borrow
under this Agreement and until payment in full of the Notes, interest thereon,
and all fees and other obligations of the Borrowers under this Agreement or the
Notes. Without limitation, it is understood that all obligations of the
Borrowers to make payments to or indemnify the Bank will survive the payment in
full of the Notes and of all other obligations of the Borrowers under this
Agreement, the Notes and the other Loan Documents.
8.11 TERM OF AGREEMENT. This Agreement will terminate when all Indebtedness
of the Borrowers to Bank including, without limitation, the Loans and interest
on the Loans is paid in full, and the Borrowers have no right to borrow under
this Agreement and the Bank has no obligation to make Loans under this
Agreement.
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8.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties to this Agreement on separate
counterparts each of which, when so executed, will be deemed an original, but
all such counterparts will constitute but one and the same instrument.
8.13 SUCCESSORS AND ASSIGNS. This Agreement will be binding upon and inure
to the benefit of the Bank, the Borrowers and their successors and assigns,
except that the Borrowers may not assign or transfer any of its rights under
this Agreement without the prior written consent of the Bank.
8.14 NO THIRD PARTY BENEFICIARIES. The rights and benefits of this
Agreement and the other Loan Documents are not intended to, and shall not, inure
to the benefit of any third party.
8.15 PARTICIPATION AND ASSIGNMENT. The Bank may from time to time sell,
assign or grant one or more participations in all or any part of the Loans made
by Bank or which may be made by the Bank, or its right, title and interest in
the Loans in or to this Agreement, to another lending office, lender or
financial institution. Except to the extent otherwise required by the context of
this Agreement, the word "Bank" where used in this Agreement means and includes
any holder of a Note originally issued to the Bank and each such holder of a
Note will be bound by and have the benefits of this Agreement, the same if such
holder had been a signatory to this Agreement. In connection with any such sale,
assignment or grant of participation, the Bank may make available to any
prospective purchaser, assignee or participant any information relative to the
Borrowers in the Bank's possession.
8.16. EXHIBITS. All exhibits and schedules attached to this Agreement are
incorporated and made a part of this Agreement.
8.17 HEADINGS. The section headings contained in this Agreement are for
convenience only and do not limit or define or affect the construction or
interpretation of this Agreement in any respect.
8.18 LIMITATION OF LIABILITY. To the fullest extent permitted by Law, no
claim may be made by the Borrowers against the Bank, or by the Bank against the
Borrowers, or by the Borrowers or the Bank against any affiliate, director,
officer, employee, attorney or agent of the other for any special, incidental,
indirect, consequential or punitive damages in respect of any claim arising from
or related to this Agreement or any other Loan Document or any statement, course
of conduct, act, omission or event occurring in connection herewith or therewith
(whether for breach of contract, tort or any other theory of liability). The
Borrowers and the Bank hereby waive, release and agree not to sue upon any claim
for any such damages, whether such claim presently exists or arises hereafter
and whether or not such claim is known or suspected to exist in its favor. This
Section 8.18 shall not limit any rights of the Borrowers or the Bank arising
solely out of gross negligence or willful misconduct.
8.19 INDEMNITIES. In addition to the payment of expenses pursuant to
Section 8.06 hereof, the Borrowers agree to indemnify, pay and hold the Bank and
its officers and directors (collectively, called the "Indemnitees"), harmless
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature whatsoever (including the reasonable fees and
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disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Indemnitee shall be designated a party thereto) that may be
imposed on, incurred by or asserted against that Indemnitee, in any matter
arising from the occurrence of an Event of Default hereunder or under the other
Loan Documents, or the exercise of any right or remedy hereunder or under the
other Loan Documents (the "Indemnified Liabilities"); provided, however, that
the Borrowers shall have no obligation to an Indemnitee hereunder with respect
to Indemnified Liabilities arising from the gross negligence or willful
misconduct of that Indemnitee.
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8.18 WAIVER OF TRIAL BY JURY. INITIALS:
-----------------------
THE BORROWERS AND THE BANK EXPRESSLY, /s/ WPM
KNOWINGLY AND VOLUNTARILY WAIVE ALL -------------------
BENEFIT AND ADVANTAGE OF ANY RIGHT TO A MBC
TRIAL BY JURY, AND NEITHER WILL AT ANY TIME /s/ WPM
INSIST UPON, OR PLEAD OR IN ANY MANNER -------------------
WHATSOEVER CLAIM OR TAKE THE BENEFIT OR Michael Baker, Jr.
ADVANTAGE OF A TRIAL BY JURY IN ANY ACTION /s/ WPM
ARISING IN CONNECTION WITH THIS AGREEMENT, -------------------
THE NOTE OR ANY OF THE OTHER LOAN Baker Environmental
DOCUMENTS. /s/ WPM
-------------------
Baker/MO
/s/ WPM
-------------------
Baker/OTS
/s/ WPM
-------------------
Baker Engineering
/s/ WPM
-------------------
Baker NY
/s/ WPM
-------------------
Baker GeoResearch
/s/ WPM
-------------------
Baker Global
Bank
/s/ ML
-------------------
[INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, and intending to be legally bound, the parties,
by their duly authorized officers, have executed and delivered this Agreement as
of the date set forth at the beginning of this Agreement.
Attest: Michael Baker Corporation
By: /s/ H. James McKnight By: /s/ William P. Mooney
-------------------------- ---------------------------------
Title: Secretary Title: Executive Vice President & CFO
----------------------- ------------------------------
Attest: Michael Baker Jr., Inc.
By: /s/ H. James McKnight By: /s/ William P. Mooney
-------------------------- ---------------------------------
Title: Secretary Title: Executive Vice President & CFO
----------------------- ------------------------------
Attest: Baker Environmental, Inc.
By: /s/ H. James McKnight By: /s/ William P. Mooney
-------------------------- ---------------------------------
Title: Secretary Title: Executive Vice President & CFO
----------------------- ------------------------------
Attest: Baker/MO Services, Inc.
By: /s/ H. James McKnight By: /s/ William P. Mooney
-------------------------- ---------------------------------
Title: Secretary Title: Executive Vice President & CFO
----------------------- ------------------------------
Attest: Baker/OTS, Inc.
By: /s/ H. James McKnight By: /s/ William P. Mooney
-------------------------- ---------------------------------
Title: Secretary Title: Executive Vice President & CFO
----------------------- ------------------------------
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Attest: Baker Engineering, Inc.
By: /s/ H. James McKnight By: /s/ William P. Mooney
-------------------------- ---------------------------------
Title: Secretary Title: Executive Vice President & CFO
----------------------- ------------------------------
Attest: Baker Engineering NY, Inc.
By: /s/ H. James McKnight By: /s/ William P. Mooney
-------------------------- ---------------------------------
Title: Secretary Title: Executive Vice President & CFO
----------------------- ------------------------------
Attest: Baker GeoResearch, Inc.
By: /s/ H. James McKnight By: /s/ William P. Mooney
-------------------------- ---------------------------------
Title: Secretary Title: Executive Vice President & CFO
----------------------- ------------------------------
Attest: Baker Global Project Services, Inc.
By: /s/ H. James McKnight By: /s/ William P. Mooney
-------------------------- ---------------------------------
Title: Secretary Title: Executive Vice President & CFO
----------------------- ------------------------------
Mellon Bank, N.A.
By: /s/Mark Latterner
---------------------------
Vice President
