-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Oyu99iS2OfaZqbFUnENMdNIMEJuwzibmhSRnGQv84EicUTQDT/At00K4CuAYFaVk jugNxzIAYxFdlPFdzH13WQ== 0000950156-94-000011.txt : 19940531 0000950156-94-000011.hdr.sgml : 19940531 ACCESSION NUMBER: 0000950156-94-000011 CONFORMED SUBMISSION TYPE: S-2 PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19940527 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PERINI CORP CENTRAL INDEX KEY: 0000077543 STANDARD INDUSTRIAL CLASSIFICATION: 1540 IRS NUMBER: 041717070 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-2 SEC ACT: 1933 Act SEC FILE NUMBER: 033-53859 FILM NUMBER: 94531090 BUSINESS ADDRESS: STREET 1: 73 MT WAYTE AVE CITY: FRAMINGHAM STATE: MA ZIP: 01701 BUSINESS PHONE: 5086282000 S-2 1 FORM S-2 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON REGISTRATION NO. 33- - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------- FORM S-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------- PERINI CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER) MASSACHUSETTS 04-1717070 (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.) 73 MT. WAYTE AVENUE, FRAMINGHAM, MASSACHUSETTS 01701 (508) 628-2000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) DAVID B. PERINI PERINI CORPORATION 73 Mt. Wayte Avenue, Framingham, Massachusetts 01701 (508) 628-2000 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) Copies to: THOMAS W. JACKSON GERALD S. TANENBAUM JACOBS PERSINGER & PARKER CAHILL GORDON & REINDEL 77 Water Street, New York, New York 10005 80 Pine Street, New York, New York 10005 (212) 607-6231 (212) 701-3224 --------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the Registration Statement is declared effective. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [] If the Registrant elects to deliver its latest annual report to security holders, or a complete and legible facsimile thereof, pursuant to Item 11(a) (1) of this Form, check the following box. [] CALCULATION OF REGISTRATION FEE - --------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS OF AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF SECURITIES TO BE TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION REGISTERED REGISTERED(1) UNIT(2) PRICE(1)(2) FEE - --------------------------------------------------------------------------------------------------------- Depositary Shares, each representing 1/10th share of $ Convertible Exchangeable Junior Preferred Stock ...... 1,150,000 shares $25 $28,750,000 $9,914 $ Convertible Exchangeable Junior Preferred Stock, par value $1 per share (3) ..... 115,000 shares - -------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------- (1) Includes 150,000 Depositary Shares which may be purchased by the Underwriter to cover over-allotments, if any, representing an aggregate of 15,000 shares of $ Convertible Exchangeable Junior Preferred Stock. (2) Estimated solely for the purpose of calculating the registration fee. (3) This Registration Statement also covers such indeterminate principal amount of % Convertible Subordinated Debentures due 2019 as may be exchanged by the Company for the $ Convertible Exchangeable Junior Preferred Stock and such indeterminate number of shares of Common Stock of the Company as may be issuable upon conversion of such shares of $ Convertible Exchangeable Junior Preferred Stock or such Debentures, as well as such additional shares of Common Stock as may become issuable pursuant to any anti-dilution provisions governing such $ Convertible Exchangeable Junior Preferred Stock or such Debentures. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement will thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. - -------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------
PERINI CORPORATION CROSS REFERENCE SHEET PURSUANT TO ITEM 501 OF REGULATION S-K
REGISTRATION STATEMENT ITEM NUMBER AND CAPTION CAPTION IN PROSPECTUS - ---------------------------------------------- --------------------- 1. Forepart of Registration Statement and Outside Front Cover Page of Prospectus ............................ Facing Page; Cross Reference Sheet; Outside Front Cover Page. 2. Inside Front Page and Outside Back Cover Pages of Prospectus .......................................... Inside Front Page and Outside Back Cover Page. 3. Summary Information, Risk Factors and Ratio of Earnings to Fixed Charges ........................... Prospectus Summary; The Company. 4. Use of Proceeds ...................................... Use of Proceeds. 5. Determination of Offering Price ...................... * 6. Dilution ............................................. * 7. Selling Security Holders ............................. * 8. Plan of Distribution ................................. Underwriting. 9. Description of Securities to be Registered ........... Description of Convertible Preferred Stock; Description of Depositary Shares; Description of Debentures; Description of Outstanding Capital Stock -- Common Stock. 10. Interests of Named Experts and Counsel ............... Experts; Legal Matters. 11. Information with Respect to the Registrant ........... Prospectus Summary; The Company; Price Range of Common Stock; Dividends; Selected Financial Data; Management's Discussion and Analysis of Financial Condition and Results of Operations; Business. 12. Incorporation of Certain Information by Reference .... Incorporation of Certain Documents by Reference. 13. Disclosure of Commission Position on Indemnification for Securities Act Liabilities ...... * - --------- <*Not Applicable.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. PROSPECTUS Subject to Completion Dated May 27, 1994 1,000,000 Shares PERINI CORPORATION Depositary Convertible Exchangeable Junior Preferred Shares Each Representing 1/10th Share of $ Cumulative Convertible Exchangeable Junior Preferred Stock Each of the Depositary Convertible Exchangeable Junior Preferred Shares (the "Depositary Shares") represents ownership of 1/10th of a share of the $ Cumulative Convertible Exchangeable Junior Preferred Stock, par value $1.00 per share (the "Convertible Preferred Stock") of Perini Corporation, a Massachusetts corporation (the "Company" or "Perini"), and entitles the holder to all proportional rights and preferences of the underlying Convertible Preferred Stock. The proportionate dividend rate per annum and liquidation value of the Depositary Shares are $ and $25, respectively, per share. See "Description of Convertible Preferred Stock" and "Description of Depositary Shares." The Depositary Shares are convertible at the option of the holder at any time, unless previously redeemed, into shares of common stock, par value $1.00 per share, of the Company (the "Common Stock") at a conversion price of $ per share of Common Stock (equivalent to a conversion rate of shares of Common Stock for each Depositary Share), subject to adjustment under certain circumstances. The Common Stock is listed on the American Stock Exchange under the symbol "PCR." On May 26, 1994, the reported last sale price of the Common Stock on the American Stock Exchange was $12 1/4 per share. The Depositary Shares are exchangeable at the option of the Company, in whole but not in part, on any dividend payment date commencing September 15, 1996 for the Company's % Convertible Subordinated Debentures Due 2019 (the "Debentures") at the rate of $25 principal amount of Debentures for each Depositary Share. See "Description of Convertible Preferred Stock," "Description of Depositary Shares" and "Description of Debentures." The Depositary Shares are redeemable on or after September 15, 1997, in whole or in part, at the option of the Company, at the redemption prices set forth herein, plus accrued and unpaid dividends to the date of redemption. Dividends on the Convertible Preferred Stock at an annual rate of $ per share (equivalent to $ per Depositary Share) will be cumulative and payable quarterly beginning September 15, 1994. See "Description of Convertible Preferred Stock." The Convertible Preferred Stock is junior in right of payment of dividends and in liquidation to the Company's outstanding $21.25 Convertible Exchangeable Preferred Stock. THE DEPOSITARY SHARES AND THE CONVERTIBLE PREFERRED STOCK, AND THE DEBENTURES AND COMMON STOCK ISSUABLE UPON THE EXCHANGE OR CONVERSION THEREOF, HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. - ------------------------------------------------------------------------------ UNDERWRITING PRICE TO DISCOUNTS AND PROCEEDS TO PUBLIC(1) COMMISSIONS(2) COMPANY(3) - ------------------------------------------------------------------------------ Per Depositary Share $ $ $ - ------------------------------------------------------------------------------ Total(4) $ $ $ - ------------------------------------------------------------------------------ (1) Plus accrued dividends, if any, from July , 1994. (2) The Company has agreed to indemnify the Underwriter against certain liabilities, including liabilities under the Securities Act. See "Underwriting." (3) Before deducting expenses estimated at $ , which are payable by the Company. (4) The Company has granted the Underwriter a 30-day option to purchase up to an additional 150,000 Depositary Shares on the same terms as set forth above, solely to cover over-allotments, if any. If such over-allotment option is exercised in full, the total Price to Public, Underwriting Discounts and Commissions and Proceeds to Company will be $ , $ and $ , respectively. See "Underwriting." The Depositary Shares offered by this Prospectus are being offered by the Underwriter, subject to prior sale, when, as and if delivered to and accepted by the Underwriter, and subject to approval of certain legal matters by Cahill Gordon & Reindel, counsel for the Underwriter. It is expected that delivery of the Depositary Shares will be made against payment therefor on or about July , 1994 at the offices of J.P. Morgan Securities Inc., 60 Wall Street, New York, New York. J.P. MORGAN SECURITIES INC. July , 1994 THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. IN CONNECTION WITH THE OFFERING OF THE DEPOSITARY SHARES, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEPOSITARY SHARES OFFERED HEREBY OR THE COMPANY'S COMMON STOCK OR THE COMPANY'S $21.25 CONVERTIBLE EXCHANGEABLE PREFERRED STOCK OR THE DEPOSITARY CONVERTIBLE EXCHANGEABLE PREFERRED SHARES REPRESENTING SUCH PREFERRED STOCK AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE AMERICAN STOCK EXCHANGE (IN THE CASE OF THE COMMON STOCK), IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. No person has been authorized to give any information or to make any representation other than those contained in this Prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by the Company or by the Underwriter. This Prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, the securities being offered hereby in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create any implications that there has been no change in the affairs of the Company since the date hereof or that the information contained herein is correct as of any time subsequent to its date. TABLE OF CONTENTS
Page Page Available Information ................................. 3 Business .......................................... 16 Incorporation of Certain Documents by Reference ....... 3 Description of Convertible Preferred Stock ........ 25 Prospectus Summary .................................... 4 Description of Depositary Shares .................. 28 The Company ........................................... 7 Description of Debentures ......................... 31 Price Range of Common Stock ........................... 8 Description of Outstanding Capital Stock .......... 34 Dividends ............................................. 8 Certain Federal Income Tax Consequences ........... 36 Use of Proceeds ....................................... 8 Underwriting ...................................... 41 Capitalization ........................................ 9 Experts ........................................... 42 Selected Financial Data ............................... 10 Legal Matters ..................................... 42 Management's Discussion and Analysis of Financial Statements .............................. F-1 Financial Condition and Result of Operations ........ 12
AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information filed by the Company with the Commission, can be inspected and copied at prescribed rates, at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of the Commission: New York Regional Office, 7 World Trade Center, 13th floor, New York, New York 10048; and Chicago Regional Office, Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Such reports and other information concerning the Company can also be inspected at the offices of the American Stock Exchange, 86 Trinity Place, New York, New York 10006. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents, heretofore filed by the Company with the Commission pursuant to Section 13 of the 1934 Act, are hereby incorporated by reference: 1. The Company's Annual Report on Form 10-K (File No. 1-6314) for the fiscal year ended December 31, 1993. 2. The Company's Quarterly Report on Form 10-Q for the three months ended March 31, 1994, as amended by Form 10-Q/A filed May 16, 1994. 3. The Company's Proxy Statement dated April 13, 1994 and Supplement to the Proxy Statement dated April 29, 1994 used in connection with the Annual Meeting of Stockholders held on May 19, 1994. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15 (d) of the 1934 Act subsequent to the date of this Prospectus and prior to the termination of the Offering shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents. Any statement contained in this Prospectus or in any document incorporated herein by reference shall be deemed modified or superseded for purposes of this Prospectus to the extent that any statement contained herein or in any subsequently filed document that also is or is deemed to be incorporated by reference modifies or supercedes such statement. The Company will provide without charge to each person to whom a copy of this Prospectus is delivered, upon the written or oral request of such person, a copy of any of the documents described above (other than exhibits unless such exhibits are expressly incorporated by reference in such documents). Requests for such copies should be directed to Robert E. Higgins, Esq., Secretary, Perini Corporation, 73 Mt. Wayte Avenue, Framingham, Massachusetts 01701, telephone number (508) 628-2000. PROSPECTUS SUMMARY The following summary is qualified in its entirety by the more detailed information and Consolidated Financial Statements appearing elsewhere in this Prospectus. Unless otherwise indicated, the information in this Prospectus assumes that the Underwriter's over-allotment option is not exercised. THE COMPANY The Company provides diversified construction services for public and private clients in North America and selected overseas locations. The Company believes it is one of the largest general contractors in the United States. During 1993, the Company's construction segment had revenues of $1.03 billion and at March 31, 1994, the Company had a backlog of uncompleted construction work of $1.31 billion. This backlog is broadly diversified by geographic section of the country and project category. The Company also has significant investments in real estate, but has not commenced the development of any new real estate projects since 1990. The Company was incorporated in 1918 as the successor of businesses which have been engaged since 1894 in providing construction services. CONSTRUCTION The general contracting services provided by the Company consist of planning for, providing and managing the manpower, equipment, materials and subcontractors required for the timely completion of a project in accordance with the terms and specifications contained in a construction contract. The Company operates through two distinct business groups: Civil and Environmental Construction and Building Construction. The Civil and Environmental ("heavy") operation undertakes large civil construction projects throughout the United States, with current emphasis on major metropolitan areas, such as Boston, New York, Chicago and Los Angeles. Based on its 100 year history in heavy operations, the Company believes that it has particular expertise in large and complex projects. The Building Construction ("building") operation pursues the construction of a broad range of buildings and facilities through eight regional offices located in major metropolitan areas. The Company undertakes a wide range of heavy and building construction projects including: Highways Mass Transportation Hotels & Casinos Correctional Facilities Tunnels Dams Bridges Educational Facilities Health Care Facilities Sports Complexes Office & Retail Buildings Airports Waste Water Treatment Plants Civic & Cultural Facilities Environmental Remediation Projects
REAL ESTATE The Company's real estate development operations are conducted by Perini Land and Development Company ("PL&D"), a wholly-owned subsidiary, which began operations in the 1950's. As a result of the prolonged recession and reduced liquidity existing in the real estate industry over the past few years, PL&D embarked on a strategy in 1991 designed to substantially reduce its real estate holdings, pay down related debt and reduce overhead associated with those operations. The Company also suspended all investment in new projects and limited development expenditures to only those necessary to bring properties to market or to preserve permits or other entitlements. THE OFFERING SECURITIES OFFERED ................................... 1,000,000 Depositary Convertible Exchangeable Junior Preferred Shares (each representing 1/10th of a share of $ Cumulative Convertible Exchangeable Junior Preferred Stock). See "Description of Convertible Preferred Stock" and "Description of Depositary Shares." DIVIDENDS ............................................ Annual cumulative dividends of $ per Depositary Share, payable quarterly commencing September 15, 1994. See "Description of Convertible Preferred Stock-- Dividends" and "Description of Depositary Shares-- Dividends and Other Distributions." CONVERSION RIGHTS .................................... Convertible at any time into Common Stock at a conversion price of $ per share of Common Stock, subject to adjustment under certain circumstances. See "Description of Convertible Preferred Stock--Conversion," "Description of Depositary Shares--Conversion" and "Description of Debentures--Conversion Rights." OPTIONAL REDEMPTION BY THE COMPANY ................... Redeemable at any time on or after September 15, 1997 at the option of the Company, in whole or in part, at an initial redemption price of $ per Depositary Share, declining annually to $25 per Depositary Share on or after September 15, 2004. See "Description of Convertible Preferred Stock--Optional Redemption," "Description of Depositary Shares--Redemption of Depositary Shares" and "Description of Debentures--Optional Redemption." EXCHANGE PROVISION ................................... Exchangeable at the option of the Company, in whole but not in part, on any dividend payment date commencing September 15, 1996, for the Company's % Convertible Subordinated Debentures Due 2019, at a rate equivalent to $25 principal amount of Debentures for each Depositary Share. See "Description of Convertible Preferred Stock-- Exchange," "Description of Depositary Shares--Exchange" and "Description of Debentures." RANKING .............................................. The Convertible Preferred Stock represented by the Depositary Shares is junior in rank to the presently issued and outstanding shares of $21.25 Convertible Exchangeable Preferred Stock, par value $1.00 per share, of the Company. See "Description of Outstanding Capital Stock -- $21.25 Preferred Stock." LIQUIDATION PREFERENCE ............................... $25 per Depositary Share. See "Description of Convertible Preferred Stock--Liquidation." AMERICAN STOCK EXCHANGE SYMBOL FOR THE COMMON STOCK ................................... PCR USE OF PROCEEDS ...................................... For general corporate purposes, including temporary reduction of outstanding balances under the Company's long term revolving credit facility and short term lines of credit and repayment of any amounts outstanding under the Company's short-term revolving credit facility. The proceeds will serve to increase the Company's available working capital to support its construction operations. See "Use of Proceeds."
SUMMARY FINANCIAL INFORMATION ------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED MARCH 31, YEAR ENDED DECEMBER 31, Dollars in thousands, ------------------------- --------------------------------------------------------------------------- except share and ratio data 1994 1993 1993 1992 1991 1990 1989 ---------- ----------- ----------- ----------- ----------- ----------- ---------- STATEMENT OF OPERATIONS DATA Revenues: Construction $ 154,191 $ 244,487 $1,030,341 $1,023,274 $ 919,641 $ 983,689 $ 830,553 Real estate development 20,200 13,556 69,775 47,578 72,267 31,331 70,216 Net income (loss) 792 745 3,165 (16,984)\1/ 3,178\1/ (2,575) 13,152 Earnings (loss) per common share $ .06 $ .05 $ .24 $ (4.69) $ .27 $ (1.20) $ 3.11 Weighted average number of shares outstanding 4,331 4,150 4,265 4,079 3,918 3,916 3,545 Ratio of earnings to combined fixed charges and preferred stock dividend requirements\2/ 1.19x 1.05x .10x .80x .20x 2.57x OTHER DATA Ratio of Adjusted EBIT to interest and preferred stock dividend requirements\3/ 1.19x 1.46x 1.12x 1.11x --\4/ 2.64x
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AT MARCH 31, AT DECEMBER 31, ------------------------- ---------------------------------------------------------------------- 1994 1993 1993 1992 1991 1990 1989 ---------- ---------- ---------- ----------- ---------- ---------- ---------- BALANCE SHEET DATA Working capital $ 26,175 $ 30,848 $ 36,877 $ 31,028 $ 30,724 $ 33,756 $ 40,203 Long-term debt, less current maturities 76,169 82,012 82,366 85,755 96,294 100,912 82,848 Stockholders' equity 131,404 126,675 131,143 121,765 138,644 136,682 142,970 Total assets 429,547 469,331 476,378 470,696 498,574 509,707 456,000 BACKLOG $1,315,218 $1,071,160 $1,238,141 $1,169,553 $1,233,958 $1,091,077 $1,018,912 - ---------- \1/ Net income (loss) in 1992 and 1991 includes pretax writedowns of $31.4 million and $2.8 million, respectively, to reduce the carrying value of certain real estate to net realizable value. \2/ For purposes of computing the ratio of earnings from continuing operations to combined fixed charges and preferred stock dividend requirements, "earnings" consists of earnings from continuing operations before income taxes, as adjusted for (1) fixed charges, (2) differences between distributions from and share of earnings or losses of less-than-50%-owned affiliates, (3) minority interest in earnings of greater-than-50%-owned affiliates with fixed charges and (4) minority share of losses in greater- than-50%-owned affiliates. "Fixed charges" consists of interest, whether capitalized or expensed, that portion of rental expenses estimated to be representative of the interest factor and amortization of deferred debt expenses and finance fees. "Preferred stock dividend requirements" consist of dividends declared on outstanding preferred stock as adjusted to the pre-tax equivalent required to cover such dividends. The Company has guaranteed debt of certain less-than-50%-owned affiliates. The amount of fixed charges related to these debt guarantees was approximately $314,000 for the three months ended March 31, 1994 and $1,275,000, $1,448,000 and $1,925,000 for the years ended December 31, 1993, 1992 and 1991, respectively. These amounts are included in the computation of the above ratios. For the years ended December 31, 1992, 1991 and 1990 the Company's earnings before fixed charges was insufficient to cover fixed charges and preferred dividends by approximately $12,869,000, $3,746,000 and $11,049,000, respectively. \3/ The ratio is calculated by dividing (a) income before income taxes plus interest expense and the writedowns referred to in footnote (1) above by (b) interest expense (including capitalized interest) plus dividends declared on outstanding preferred stock as adjusted to the pre-tax equivalent required to cover such dividends. \4/ The ratio was not meaningful in 1990 since Adjusted EBIT was negative.
THE COMPANY The Company provides diversified construction services for public and private clients in North America and selected overseas locations. The Company believes it is one of the largest general contractors in the United States. During 1993, the Company's construction segment had revenues of $1.03 billion and at March 31, 1994, the Company had a backlog of uncompleted construction work of $1.31 billion. This backlog is broadly diversified by geographic section of the country and project category. The Company also has significant investments in real estate, but has not commenced the development of any new real estate projects since 1990. The Company was incorporated in 1918 as the successor of businesses which have been engaged since 1894 in providing construction services. CONSTRUCTION The general contracting services provided by the Company consist of planning for, providing and managing the manpower, equipment, materials and subcontractors required for the timely completion of a project in accordance with the terms and specifications contained in a construction contract. The Company operates through two distinct business groups: Civil and Environmental Construction and Building Construction. The Civil and Environmental ("heavy") operation undertakes large civil construction projects throughout the United States, with current emphasis on major metropolitan areas, such as Boston, New York, Chicago and Los Angeles. Based on its 100 year history in heavy operations, the Company believes that it has particular expertise in large and complex projects. The Building Construction ("building") operation pursues the construction of a broad range of buildings and facilities through eight regional offices located in major metropolitan areas. The Company undertakes a wide range of heavy and building construction projects including:
Highways Mass Transportation Hotels & Casinos Correctional Facilities Tunnels Dams Bridges Educational Facilities Health Care Facilities Sports Complexes Office & Retail Buildings Airports Waste Water Treatment Plants Civic & Cultural Facilities Environmental Remediation Projects
The Company plans to continue to increase the amount of heavy construction work it performs because of the opportunities to realize relatively higher margins on such work. The Company believes the best opportunities for growth in the coming years are in the urban infrastructure market. The growth in this market is expected to be positively influenced by the Federal government's $155 billion Intermodal Surface Transportation Efficiency Act which is expected over time to stimulate demand for heavy construction in highways and mass transit projects. The Company's strategy in building construction is to increase profit margins by improving productivity and quality through efforts now underway, to take advantage of certain market niches and to expand into new markets compatible with its expertise. REAL ESTATE The Company's real estate development operations are conducted by Perini Land and Development Company ("PL&D"), a wholly-owned subsidiary, which began operations in the 1950's. As a result of the prolonged recession and reduced liquidity existing in the real estate industry over the past few years, PL&D embarked on a strategy in 1991 designed to substantially reduce its real estate holdings, pay down related debt and reduce overhead associated with those operations. The Company also suspended all investment in new projects and limited development expenditures to only those necessary to bring properties to market or to preserve permits or other entitlements. PRICE RANGE OF COMMON STOCK The Common Stock is listed on the American Stock Exchange. The following table sets forth the high and low sales prices per share of the Common Stock as reported on the American Stock Exchange Composite Tape for the periods indicated.
------------------------ High Low ---- --- 1992 ---- First Quarter $14 3/8 $11 3/4 Second Quarter 14 3/4 11 5/8 Third Quarter 13 1/8 10 7/8 Fourth Quarter 18 3/4 10 1/4 1993 ---- First Quarter $18 5/8 $14 1/8 Second Quarter 14 7/8 13 Third Quarter 13 1/2 9 7/8 Fourth Quarter 12 3/4 10 1/8 1994 ---- First Quarter $13 7/8 $11 1/4 Second Quarter (through May 25) 13 3/8 11 5/8
The reported last sale price of the Common Stock on the American Stock Exchange Composite Tape on May 26, 1994 was $12 1/4 per share. On April 29, 1994, there were approximately 1,519 holders of record of Common Stock. DIVIDENDS There were no cash dividends paid on the Common Stock in 1993, 1992 or 1991. The Company periodically reviews reinstating the Common Stock cash dividend but it has no present intention to do so. The Company has paid dividends on its $21.25 Convertible Exchangeable Preferred Stock, par value $1.00 per share (the "$21.25 Preferred Stock") since its issuance in 1987. USE OF PROCEEDS The net proceeds to the Company from the sale of the 1,000,000 Depositary Shares offered hereby are estimated to be $23,680,000 (approximately $27,280,000 if the Underwriter's over-allotment option is exercised in full). The Company intends to use such proceeds for general corporate purposes, including temporary reduction of outstanding balances under the Company's long-term revolving credit facility and short-term lines of credit and repayment of any amounts outstanding under the Company's short-term revolving credit facility. The proceeds will serve to increase the Company's available working capital to support its construction operations. In March 1994, the Company entered into a credit agreement with a group of banks to provide for a $15 million short-term revolving credit facility through December 31, 1994. The short-term credit facility is secured by, among other things, two parcels of real property in Arizona. This short-term revolving credit facility will be reduced dollar-for-dollar by the amount of net proceeds from the sale of the Depositary Shares offered hereby. As a consequence, upon completion of the Offering, such credit facility will terminate and, if any amounts are outstanding thereunder, a portion of the proceeds from the Offering will be used to repay such amounts. At May 26, 1994, no amount was outstanding under such credit facility. CAPITALIZATION The following table sets forth the consolidated short-term debt and capitalization of the Company at March 31, 1994, and as adjusted to reflect the issuance of the 100,000 shares of Convertible Preferred Stock represented by the 1,000,000 Depositary Shares offered hereby, and as adjusted to reflect the use of a portion of the net proceeds therefrom to repay current indebtedness:
------------------------- ACTUAL AS ADJUSTED ------ ----------- (IN THOUSANDS) Short-term debt: Notes payable to banks $ 4,000 $ -- Current maturities of long-term debt 5,194 5,194 -------- -------- Total short-term debt $ 9,194 $ 5,194 -------- -------- Long-term debt: Real estate development $ 7,696 $ 7,696 Other 68,473 68,473 -------- -------- Total long-term debt $ 76,169 $ 76,169 -------- -------- Preferred stock, $1.00 par value Authorized - 1,000,000 shares Issued 100,000 shares of $21.25 Convertible Exchangeable Preferred Stock, liquidation value of $25,000,000 $ 100 $ 100 100,000 shares of $ Cumulative Convertible Exchangeable Junior Preferred Stock, liquidation value of $25,000,000 0 100 Common Stock, $1.00 par value Authorized - 15,000,000 shares\1/ Issued - 4,985,160 shares 4,985 4,985 Paid-in surplus 59,875 83,455 Retained earnings 83,855 83,855 ESOT related obligations (6,982) (6,982) Less - Common Stock in treasury, at cost - 654,353 shares (10,429) (10,429) -------- -------- Total stockholders' equity 131,404 155,084 -------- -------- Total capitalization $207,573 $231,253 -------- -------- - ---------- \1/ Reflects an increase of 7,500,000 shares approved by the stockholders of the Company at the Annual Meeting of Stockholders held May 19, 1994.
SELECTED FINANCIAL DATA The selected financial data of the Company shown below for the five year period ended December 31, 1993, other than backlog data which is unaudited, has been derived from Consolidated Financial Statements audited by Arthur Andersen & Co., independent public accountants. The information as of and for the three months ended March 31, 1994 and 1993 has been derived from unaudited financial statements and, in the opinion of the Company, includes all adjustments (consisting only of normal recurring adjustments) necessary to present fairly such financial information in accordance with generally accepted accounting principles applied on a consistent basis. The Company's results reflect a limited number of large transactions in both construction and real estate. Consequently, quarterly results can vary depending on the timing of transactions and the profitability of the projects being reported. For the foregoing and other reasons, results for the three months ended March 31, 1994 may not necessarily be indicative of results to be expected for the full year. The selected financial data should be read in conjunction with the Consolidated Financial Statements and related notes and Management's Discussion and Analysis of Financial Condition and Results of Operations, which are included elsewhere in this Prospectus.
------------------------------------------------------------------------------------------------------- THREE MONTHS Dollars in thousands, ENDED MARCH 31, YEAR ENDED DECEMBER 31, except ---------------------------- ------------------------------------------------------------------------- share and ratio data 1994 1993 1993 1992 1991 1990 1989 --------- --------- --------- --------- --------- --------- --------- STATEMENT OF OPERATIONS DATA Revenues: Construction $ 154,191 $ 244,487 $1,030,341 $1,023,274 $ 919,641 $ 983,689 $ 830,553 Real estate development 20,200 13,556 69,775 47,578 72,267 31,331 70,216 --------- --------- --------- --------- --------- --------- --------- Total revenues $ 174,391 $ 258,043 $1,100,116 $1,070,852 $ 991,908 $1,015,020 $ 900,769 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Costs and expenses: Cost of operations $ 161,615 $ 247,038 $1,047,330 $1,048,663 $ 931,054 $ 971,632 $ 826,392 General, administrative and selling expenses 9,810 9,027 44,212 41,328 48,530 46,841 50,615 --------- --------- --------- --------- --------- --------- --------- Total costs and expenses $ 171,425 $ 256,065 $1,091,542 $1,089,991 $ 979,584 $1,018,473 $ 877,007 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Income (loss) from operations $ 2,966 $ 1,978 $ 8,574 $ (19,139) $ 12,324 $ (3,453) $ 23,762 Other income (expense), net (420) 5,055 5,207 436 1,136 3,431 2,777 Interest expense, net of capitalized amounts (1,247) (1,188) (5,655) (7,651) (9,022) (6,238) (3,987) --------- --------- --------- --------- --------- --------- --------- Income (loss) before income taxes $ 1,299 $ 5,845 $ 8,126 $ (26,354) $ 4,438 $ (6,260) $ 22,552 (Provision) credit for income taxes (507) (5,100) (4,961) 9,370 (1,260) 3,685 (9,400) --------- --------- --------- --------- --------- --------- --------- Net income (loss) $ 792 $ 745 $ 3,165 $ (16,984)\1/ $ 3,178\1/ $ (2,575) $ 13,152 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Per common share: Earnings (loss) $ .06 $ .05 $ .24 $ (4.69) $ .27 $ (1.20) $ 3.11 Cash dividends declared $ -- $ -- $ -- $ -- $ -- $ .60 $ .80 Ratio of earnings to combined fixed charges and preferred stock dividend requirements\2/ 1.19x 1.05x .10x .80x .20x 2.57x Weighted average number of shares outstanding 4,331 4,150 4,265 4,079 3,918 3,916 3,545 OTHER DATA Ratio of Adjusted EBIT to interest and preferred stock dividend requirements\3/ 1.19x 1.46x 1.12x 1.11x --\4/ 2.64x ------------------------------------------------------------------------------------------------------- AT MARCH 31, AT DECEMBER 31, ---------------------------- ------------------------------------------------------------------------- 1994 1993 1993 1992 1991 1990 1989 --------- --------- --------- --------- --------- --------- --------- BALANCE SHEET DATA Working capital $ 26,175 $ 30,848 $ 36,877 $ 31,028 $ 30,724 $ 33,756 $ 40,203 Long-term debt, less current maturities 76,169 82,012 82,366 85,755 96,294 100,912 82,848 Stockholders' equity 131,404 126,675 131,143 121,765 138,644 136,682 142,970 Total assets 429,54 469,331 476,378 470,696 498,574 509,707 456,000 BACKLOG $1,315,218 $1,071,160 $1,238,141 $1,169,553 $1,233,958 $1,091,077 $1,018,912 - --------- \1/ Net income (loss) in 1992 and 1991 includes pretax writedowns of $31.4 million and $2.8 million, respectively, to reduce the carrying value of certain real estate to net realizable value. \2/ For purposes of computing the ratio of earnings from continuing operations to combined fixed charges and preferred stock dividend requirements, "earnings" consists of earnings from continuing operations before income taxes, as adjusted for (1) fixed charges, (2) differences between distributions from and share of earnings or losses of less-than-50%-owned affiliates, (3) minority interest in earnings of greater-than-50%-owned affiliates with fixed charges and (4) minority share of losses in greater- than-50%-owned affiliates. "Fixed charges" consists of interest, whether capitalized or expensed, that portion of rental expenses estimated to be representative of the interest factor and amortization of deferred debt expenses and finance fees. "Preferred stock dividend requirements" consist of dividends declared on outstanding preferred stock as adjusted to the pre-tax equivalent required to cover such dividends. The Company has guaranteed debt of certain less-than-50%-owned affiliates. The amount of fixed charges related to these debt guarantees was approximately $314,000 for the three months ended March 31, 1994 and $1,275,000, $1,448,000 and $1,925,000 for the years ended December 31, 1993, 1992 and 1991, respectively. These amounts are included in the computation of the above ratios. For the years ended December 31, 1992, 1991 and 1990 the Company's earnings before fixed charges was insufficient to cover fixed charges and preferred dividends by approximately $12,869,000, $3,746,000 and $11,049,000, respectively. \3/ The ratio is calculated by dividing (a) income before income taxes plus interest expense and the writedowns referred to in footnote (1) above by (b) interest expense (including capitalized interest) plus dividends declared on outstanding preferred stock as adjusted to the pre-tax equivalent required to cover such dividends. \4/ The ratio was not meaningful in 1990 since Adjusted EBIT was negative.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATION First Quarter 1994 Compared to First Quarter 1993 Revenues decreased $83.7 million (or 32.4%), from $258.1 million in 1993 to $174.4 million in 1994. This decrease resulted from decreased construction revenues of $90.3 million (or 37%), from $244.5 million in 1993 to $154.2 million in 1994, due primarily to a decrease in revenues from building operations of $105 million (or 53%), from $199 million in 1993 to $94 million in 1994. This decrease in revenue was due to the timing in the start-up of certain hotel/casino projects obtained late in 1993 compared to a few similar projects that were well underway during the first quarter of 1993. This decrease was partially offset by an increase in revenues from the heavy construction operations of $14 million (or 30%), from $46 million in 1993 to $60 million in 1994, due to the acquisition of assets of Gust K. Newberg Construction Co. ("Newberg") in mid-1993 and an increased heavy backlog going into 1994. This decrease was also partially offset by an increase in revenues from real estate operations of $7 million, from $13 million in 1993 to $20 million in 1994, caused primarily by the sale of two investment properties in 1994. The gross profit in 1994 increased by $1.8 million, from $11 million in 1993 to $12.8 million in 1994, due primarily to a $2.6 million increase from construction operations, from $9.7 million in 1993 to $12.3 million in 1994. This improvement from construction operations was due to the mix of the work performed, relatively more of the higher margin heavy construction work, from 19% of total construction volume in 1993 to 39% in 1994. This increase in gross profit was partially offset by a decrease in gross profit from real estate of $.8 million, from $1.3 million in 1993 to $.5 million in 1994, due primarily to a decrease in high margin land sales in Florida. The increase in general, administrative and selling expenses of $.8 million (or 9%), from $9 million in 1993 to $9.8 million in 1994, resulted primarily from the Newberg/Perini Division which was formed in mid-1993. The $5.4 million decrease in other income from income of $5 million in 1993 to a loss of $.4 million in 1994 was due primarily to the non-recurring gain ($4.6 million) on the sale by the Company of its 74%-owned interest in Majestic Contractors Limited ("Majestic"), its Canadian pipeline subsidiary, in January, 1993. The higher-than-normal tax rate in 1993 was due to tax provided at an additional 66% rate on the gain on the sale of Majestic, which represented a combination of an additional tax provision for the difference between book and tax basis of the Company's investment in this subsidiary and a valuation reserve in the first quarter of 1993 related to the gain based upon the Company's estimate of its utilization of the related foreign tax credits. 1993 Compared to 1992 The improved operating results in 1993 resulted in net income of $3.2 million (or $.24 per common share) compared to a net loss in 1992 of $17 million (or $4.69 per common share). The primary reason for this improvement was the nominal profit generated by real estate operations in 1993 compared to a $47 million operating loss in 1992 which included a $31.4 million pretax net realizable value writedown on certain real estate assets management decided to liquidate in the near-term. However, profits from construction operations decreased due primarily to the mix of work performed in 1993, relatively more of the lower margin building construction work and relatively less of the higher margin heavy and pipeline construction work, the latter being due to the sale by the Company of Majestic in January, 1993. Revenues reached a new record for the second consecutive year and amounted to $1.100 billion in 1993 compared to $1.071 billion in 1992, an increase of $29 million (or 3%). This increase resulted primarily from a net increase in construction revenues of $7 million from $1.023 billion in 1992 to $1.030 billion in 1993 due primarily to an increase in volume from building operations of $113 million (or 19%), from $604 million in 1992 to $717 million in 1993 due to an increased backlog going into 1993 and certain hotel/casino projects included in the backlog, and to a lesser degree, a small increase in heavy construction revenues. These increases more than offset the $101 million decrease in revenues from pipeline construction due to the sale of Majestic referred to above and a $14 million decrease from engineering services due to the sale of Monenco Group Ltd. ("Monenco"), a Canadian-based consulting, engineering and project management company, in the first quarter of 1992. In addition, revenues from real estate operations increased by $22.2 million, from $47.6 million in 1992 to $69.8 million in 1993 due primarily to the sale of a partnership interest in certain commercial rental properties in San Francisco and, to a lesser degree, an increase in land sales in Florida. Gross profit in 1993 increased by $30.6 million, from $22.2 million in 1992 to $52.8 million in 1993 due primarily to a $47.2 million improvement in the Company's real estate operations, from a $43.5 million loss in 1992 to a $3.7 million profit in 1993. This improvement in the Company's real estate operations is due primarily to the non-recurring $31.4 million pretax net realizable value writedown in 1992 referred to previously, the sale of certain commercial rental properties in San Francisco, profitable land sales in Florida and an improvement in results from a major ongoing operating property, The Resort at Squaw Creek. This increase in gross profit was offset by a decrease in gross profit from construction operations of $16.6 million from $65.7 million in 1992 to $49.1 million in 1993 due primarily to the sales of Majestic and Monenco referred to above, a combined $18 million decrease. Total general, administrative and selling expenses increased by $2.9 million (or 7%) in 1993, from $41.3 million in 1992 to $44.2 million in 1993 due to several factors, including $2.2 million related to the acquisition of Newberg (see Note 1 to Notes to the Consolidated Financial Statements), a $2.1 million expense for severance incurred in connection with re-engineering some of the business units and additional personnel for the Company's ongoing heavy construction operations. These increases were partially offset by the $5.1 million decrease resulting from the sale of Majestic referred to above. The increase in other income of $4.8 million, from $.4 million in 1992 to $5.2 million in 1993 is due to the gain of $4.6 million on the sale of Majestic and a decrease in the deduction for minority interest, both of which were partially offset by the nonrecurring gain of $2 million from the sale of Monenco in 1992. The decrease in interest expense of $2 million (or 26%), from $7.7 million in 1992 to $5.7 million in 1993 primarily results from lower interest rates during 1993 and lower average borrowings due to the continued pay down of real estate and other debt, and, to a lesser degree, less interest expense related to Majestic due to the sale. The higher-than-normal tax rate in 1993 is due to additional tax provided on the gain on the sale of Majestic for the difference between the book and tax bases of the Company's investment in this subsidiary. 1992 Compared to 1991 Operations in 1992 resulted in a net loss of $17 million (or $4.69 per common share) compared to 1991 net income of $3.2 million (or $.27 per common share). The primary reason for this decline in earnings was a substantial loss recorded by the Company's real estate operations, due to a combination of significant operating losses and a $31.4 million pre-tax net realizable value writedown in 1992 on certain real estate assets management decided to liquidate in the near-term. These losses and writedown resulted from a weakening in property values caused by the continuing adverse impact of the national real estate recession, the surplus of real estate product for sale in most markets, and severely restricted financing sources (both domestic and foreign) for potential buyers due to the well-publicized problems in the commercial banking industry. Overall construction operations, on the other hand, reached an all-time record level of profitability in 1992 due to the fourth consecutive year of record earnings from domestic construction operations, as well as a significant increase in earnings from Canadian pipeline operations. In January, 1993, the Company sold its investment in the Canadian pipeline operations (see Note 1 to Notes to the Consolidated Financial Statements). Revenues reached a record of $1,071 billion in 1992 compared to $992 million in 1991, an increase of $79 million (or 8%). This increase reflected an overall increase in construction revenues of $103 million (or 11%), from $920 million in 1991 to $1.023 billion in 1992, which was partially offset by a decline in real estate revenues of $24 million (or 33%), from $72 million in 1991 to $48 million in 1992. The increase in construction revenues was due primarily to increased volume from building construction operations which increased $97 million (or 19%), from $507 million in 1991 to $604 million in 1992, resulting from a high level of activity in the hotel/casino market as well as a higher overall backlog of work going into 1992 compared to 1991. In addition, revenues from Canadian pipeline operations increased $32 million (or 46%), from $69 million in 1991 to $101 million in 1992, due primarily to higher margins on projects obtained in the resurgent Canadian natural gas pipeline construction market. Revenues from international construction operations increased $32 million, more than tripling the 1991 level of $15 million, due primarily to a higher backlog of work entering 1992 compared to 1991. These increases in construction revenues were partially offset by a decrease in volume from engineering services of $41 million, from $54 million in 1991 to $13 million in 1992 due to the sale in the first quarter of 1992 of the Company's investment in Monenco and, to a lesser degree, a decrease in volume from heavy operations of $10 million (or 4%) from $263 million in 1991 to $253 million in 1992 due to the timing in start-up of new projects. The decrease in real estate revenues was due to a decrease in real estate closings, primarily in the California and Florida market areas where sales activity remained constrained due to the factors noted above. Gross profit in 1992 decreased $38.7 million (or 64%), from $60.9 million in 1991 to $22.2 million in 1992 due primarily to a $43.1 million decrease from real estate operations, from a $.4 million loss in 1991 to a $43.5 million loss in 1992, caused by the reasons mentioned above. Gross profit from construction operations increased $4.4 million (or 7%), from $61.3 million in 1991 to $65.7 million in 1992 due primarily to the higher revenues discussed above as well as strong operating results achieved in Canada where certain pipeline projects were successfully completed. Total general, administrative and selling expenses decreased $7.2 million (or 15%) from $48.5 million in 1991 to $41.3 million in 1992 due primarily to the impact of cost reduction programs implemented in recent years throughout the Company's corporate, construction and real estate operations and, to a lesser degree, a reduction in sales commissions resulting from the decrease in real estate land sales. Other income decreased $.7 million, from $1.1 million in 1991 to $.4 million in 1992. A $2 million gain relating to the Company's sale of its 45%-interest in Monenco in 1992 was more than offset by the increase in the deduction for minority interest in the 1992 earnings of Majestic. Interest expense decreased $1.4 million from $9 million in 1991 to $7.6 million in 1992, due primarily to lower average interest rates on borrowings under the Company's credit facilities and repayment of loans in early 1992 relating to the sale of Monenco. The tax credit for 1992 reflects an effective tax rate of 36% compared to the Federal statutory rate of 34%, because of the impact of foreign and state tax credits. FINANCIAL CONDITION Cash and Working Capital During the first three months of 1994, the Company used $20.3 million of cash for operations, primarily to fund a decrease in payables; $9.1 million of cash for investing activities, primarily in construction joint ventures; and $5.2 million of cash for financial activities, primarily to pay down debt. The source of cash was a $34.6 million reduction in cash on hand. In addition to internally generated funds, the Company has access to additional funds under its $18 million short-term lines of credit, its $70 million long-term revolving credit facility and, effective March 31, 1994, a $15 million short-term, collateralized revolving credit facility. At March 31, 1994, there was $14 million available under the short-term lines of credit, $.2 million available under the long-term credit facility and $15 million available under the new short-term credit facility. The full amount available under these facilities may be borrowed during any fiscal quarter. However, financial covenants limiting the debt to equity ratio contained in the agreements governing these facilities limit the amount of borrowings which may be outstanding at the end of any fiscal quarter. Based on these covenants, $4.5 million of additional borrowing capacity was available at March 31, 1994. The $15 million short-term revolving credit facility will terminate upon the completion of this Offering. Following this Offering, management believes that cash generated from operations, unused credit lines and various real estate borrowings will be adequate to meet the Company's funding requirements, although the withdrawal of many commercial lending sources from both the real estate and construction markets has significantly slowed the Company's real estate sales and/or put restrictions on new borrowings and extensions on maturing loans by these very same sources, causing uncertainties in predicting liquidity. During 1993, the Company used $39.1 million of cash for investment activities, primarily to fund construction joint ventures and to repay indebtedness of real estate joint ventures; $3 million for financing activities, primarily to pay down company debt; and $1.6 million to fund operating activities, primarily changes in working capital. The source of cash was a $43.7 reduction in cash on hand. During 1992, the Company provided $55.4 million of cash from operations and $14.2 million of cash from the sale of its investment in Monenco. Of this amount $29.9 million was used for investing activities, primarily in two real estate joint ventures and, to a lesser degree, real estate properties used in operations; $7.1 million was used for financing activities, primarily to pay down company debt; and the remaining amount ($31.7 million, net) increased cash on hand. During 1991, the Company used $50.9 million of cash for investing activities, primarily in two real estate joint ventures and, to a lesser degree, in land held for sale or development and construction equipment, and a net of $24.2 million of cash primarily to pay down company debt. These uses of cash were funded by cash provided by operations ($70.9 million) and an overall reduction in cash of $4.2 million. As mentioned previously, the softening of the national real estate market coupled with problems in the commercial banking industry have significantly reduced credit availability for both new real estate development projects and the sale of completed product, sources historically relied upon by the Company and its customers to meet liquidity needs for its real estate development business. The Company has addressed this problem by relying on corporate borrowings, extending certain maturing real estate loans (with such extensions usually requiring pay downs and increased annual amortization of the remaining loan balance), suspending the acquisition of new real estate inventory, significantly reducing development expenses on certain projects, utilizing treasury stock in partial payment of amounts due under certain of its incentive compensation plans, utilizing cash internally generated from operations and, during the first quarter of 1992, selling its interest in Monenco. In addition, in January 1993, the Company sold its majority interest in Majestic for approximately $31.7 million in cash. Since Majestic had been fully consolidated, the net result to the Company was to increase working capital by $8 million and cash by $4 million. In addition, the Company implemented a company-wide cost reduction program in 1990, and again in 1991 and 1993 to improve long-term financial results and suspended the dividend on its common stock during the fourth quarter of 1990. Also, the Company increased the aggregate amount available under its revolving credit agreement from $53 million to $70 million in May 1993. Working capital decreased $10.7 million, from $36.9 million at the end of 1993 to $26.2 million at March 31, 1994 and the current ratio decreased from 1.17:1 to 1.14:1. At the end of 1993, the working capital current ratio improved to 1.17:1 compared to 1.14:1 at the end of 1992 and 1.16:1 at the end of 1991. Long-term Debt Long-term debt at March 31, 1994 was $76.2, representing a decrease of $6.2 million from year end. This was primarily the result of the repayment of certain mortgaged indebtedness relating to real estate properties sold during the quarter. At March 31, 1994, the long-term debt to equity ratio was .58:1. Long-term debt was $82.4 million at the end of 1993 which represented a decrease of $3.4 million compared with $85.8 million at the end of 1992, which was a decrease of $10.5 million from the $96.3 million at the end of 1991. Of the total decrease in 1992, $5.5 million was due to repayment of loans relating to the purchase of Monenco in 1987 and, to a lesser degree, equipment financings. The ratio of long-term debt to equity stood at .63:1 at the end of 1993 compared to .70:1 at the end of 1992 and .69:1 at the end of 1991. Stockholders' Equity The Company's book value per common share at March 31, 1994 was $24.55. The Company's book value per common share stood at $24.49 at December 31, 1993, compared to $23.29 per common share and $28.96 per common share at the end of 1992 and 1991, respectively. The major factors impacting stockholders' equity during the three-year period under review were results of operations, preferred dividends and, in 1992 and 1993, treasury stock issued in partial payment of incentive compensation. Dividends There were no cash dividends paid during 1993, 1992 or 1991 on the Company's outstanding common stock. The Company periodically reviews reinstating the Common Stock cash dividend but it has no present intention to do so. In 1987, the Company issued 1,000,000 depositary convertible exchangeable preferred shares, each depositary share representing ownership of 1/10 of a share of the $21.25 Preferred Stock. During the three-year period ended December 31, 1993, the Board of Directors declared regular quarterly cash dividends of $5.3125 per share for the annual total of $21.25 per share (equivalent to quarterly dividends of $.53125 per depositary share for an annual total of $2.125 per depositary share). Dividends on preferred shares are cumulative and are payable quarterly before any dividends may be declared or paid on the common stock of the Company (see Note 7 to Notes to the Consolidated Financial Statements). Dividends on the $21.25 Preferred Stock are cumulative and no dividend may be paid on the Convertible Preferred Stock if there is a dividend arrearage on the $21.25 Preferred Stock. BUSINESS The Company provides diversified construction services for public and private clients in North America and selected overseas locations. The Company believes it is one of the largest general contractors in the United States. The Company also has significant investments in real estate but has not commenced the development of any new real estate projects since 1990. CONSTRUCTION The general contracting services provided by the Company consist of planning for, providing and managing the manpower, equipment, materials and subcontractors required for the timely completion of a project in accordance with the terms and specifications contained in a construction contract. The Company is currently engaged in over 100 construction projects in the United States and overseas. The Company operates through two distinct business groups: Civil and Environmental ("heavy") Construction and Building ("building") Construction. The heavy operation undertakes large civil construction projects throughout the United States, with current emphasis on major metropolitan areas, such as Boston, New York City, Chicago and Los Angeles. The heavy operation performs construction and rehabilitation of highways, subways, tunnels, dams, bridges, airports, waste water and water treatment facilities and marine projects. Based on its 100 year history in heavy operations, the Company believes that it has particular expertise in large and complex projects. As part of the Company's strategy to increase the amount of heavy construction work it performs, effective July 1, 1993, the Company acquired the interest of Newberg, a Chicago-based construction company, in certain construction projects and related equipment. The Newberg acquisition gave the Company, among other things, a local presence in the Chicago metropolitan area and Newberg's power plant construction and maintenance experience. The building operation pursues the construction of a broad range of buildings and facilities through eight regional offices located in major metropolitan areas. In 1992, the Company combined its building operations, which previously had been conducted under three separate names, into a wholly-owned subsidiary, Perini Building Company, Inc. This subsidiary combines substantial resources and expertise to better serve clients within the building construction market and enhances Perini's name recognition in this market. The building operation undertakes a broad range of projects including health care facilities, correctional facilities, sports complexes, hotels, casinos and residential, commercial, civic and cultural and educational facilities. The international operation also engages in both heavy and building construction services, funded primarily in U.S. dollars by agencies of the United States government. In selected situations, it pursues private work internationally. The Company owns 90% of Perland Environmental Technologies, Inc. ("Perland"). Perland provides consulting, engineering and construction services primarily on a turn-key basis for hazardous material management and clean-up to both private clients and public agencies nationwide. As part of its effort to focus on its core construction operations, in March 1992, Majestic, the Company's 74%-owned Canadian pipeline operation, sold its 41% interest in Monenco, a Canadian-based consulting, engineering and project management company, and in January 1993, the Company sold its 74% interest in Majestic. The sale of these companies served to generate liquid assets which improved the Company's financial condition without affecting its core construction business. Construction Strategy The Company plans to continue to increase the amount of heavy construction work it performs because of the opportunities to realize relatively higher margins on such work. The Company believes the best opportunities for growth in the coming years are in the urban infrastructure market. The growth in this market is expected to be positively influenced by the Federal government's $155 billion Intermodal Surface Transportation Efficiency Act which is expected over time to stimulate demand for heavy construction in highways and mass transit projects. The Company's strategy in building construction is to increase profit margins by improving productivity and quality through efforts now underway, to take advantage of certain market niches and to expand into new markets compatible with its expertise. Internally, the Company plans to continue both to strengthen its management through management development and job rotation programs and to improve efficiency through strict attention to the control of overhead expenses and implementation of improved project management systems. Backlog At March 31, 1994, the Company's construction backlog was $1.31 billion. As of December 31, 1993, backlog was $1.24 billion compared to backlogs of $1.17 billion and $1.23 billion as of December 31, 1992 and 1991, respectively. The following is a table of backlog by geographic region as of December 31, 1993, 1992 and 1991:
--------------------------------------------------------------------------------------- BACKLOG AS OF DECEMBER 31, (DOLLARS IN THOUSANDS) 1993 1992 1991 ------------------- ----------------------------------------- ------------------------ Northeast .......................... $ 552,035 45% $ 451,746 39% $ 460,482 37% Mid-Atlantic ....................... 34,695 3 34,840 3 92,130 8 Southeast .......................... 34,980 3 53,971 5 8,847 1 Midwest ............................ 143,961 12 211,649 18 129,103 11 Southwest .......................... 314,058 25 256,973 22 91,897 7 West ............................... 143,251 11 123,384 10 274,657 22 Canada ............................. -- -- 711 -- 90,152 7 Other Foreign ...................... 15,161 1 36,279 3 86,690 7 --------- --- --------- --- --------- --- Total ............................ $1,238,141 100% $1,169,553 100% $1,233,958 100% --------- --- --------- --- --------- --- --------- --- --------- --- --------- ---
The Company includes a construction project in its backlog at such time as a contract is awarded or a firm letter of commitment obtained. As a result, the backlog figures are firm, subject only to the cancellation provisions contained in the various contracts. The Company anticipates that approximately $475 million of its backlog at December 31, 1993 will not be completed in 1994. The Company's backlog in the Northeast region of the United States remains strong in part because of the Company's particular knowledge of costs and subcontractor capabilities in the metropolitan Boston and New York areas, which allows the Company to bid more competitively in that region. The increases in the Southwest region generally reflect certain hotel/casino projects. The decreases in the Other Foreign region reflect a decline in U.S. Government-sponsored foreign construction. Other fluctuations in backlog are viewed by management as transitory. Clients During 1993, the Company performed work for over 100 federal, state and local governmental agencies or authorities and private customers. No material part of the Company's business is dependent upon a single or limited number of customers, the loss of which would have a material adverse effect on the Company. The following table illustrates the portion of construction revenues derived from contracts with various types of customers. REVENUES BY CLIENT SOURCES
---------------------------------------- YEAR ENDED DECEMBER 31, 1993 1992 1991 ---- ---- ---- Private owners ............................................. 46% 43% 44% Federal governmental agencies .............................. 12 6 2 State, local and foreign governments ....................... 42 51 54 --- --- --- 100% 100% 100% --- --- ---
Construction Contracts The five general types of contracts in current use in the construction industry, and in the table which follows, are: * Fixed price contracts ("FP") which usually transfer more risk to the contractor but offer the opportunity, under favorable circumstances, for greater profits. Since current market opportunities are concentrated in heavy and publicly-bid building construction, fixed price contracts represent the major portion of the Company's backlog. * Unit price contracts ("UP") which provide that the owner pay the contractor a specified amount for each unit of work completed under the contract. For contracts where precise quantities cannot be determined in advance, it is less risky than a fixed price contract. * Guaranteed maximum price contracts ("GMP") which provide for a cost- plus-fee arrangement up to a maximum agreed price. These contracts place risks on the contractor but may permit an opportunity for greater profits than cost-plus-fixed-fee contracts through sharing agreements with the client on any cost savings. GMP contracts are typically used in building construction projects for private owners. * Construction management contracts ("CM") under which a contractor agrees to manage a project for the owner for an agreed-upon fee which may be fixed or may vary based upon negotiated factors. The contractor generally provides services to supervise and coordinate the construction work on a project, but does not directly purchase contract materials, provide construction labor and equipment or enter into subcontracts. Construction management contracts remain a relatively small percentage of the Company's contracts. * Cost-plus-fixed-fee contracts ("CPFF") under which the contractor performs the contract for a negotiated fee above the cost incurred provide less risk for the contractor from a financial standpoint but limit profits. Since construction contracts often extend over long periods of time, significant changes may occur in the availability of labor and materials, prevailing wage scales and the general economy. Difficulty in estimating the extent of these changes results in greater risks with long-term contracts, especially fixed-price contracts. The Company attempts to reduce the effect of certain risks inherent in long-term contracts through the following policies and procedures: * The Company usually requires performance and payment bonds or other adequate assurances of operational and financial capability from subcontractors and major vendors in order to reduce the potential for losses caused by subcontractors' and suppliers' defaults. * When operating under fixed-price contracts, the Company generally has sought to award principal subcontracts on a fixed-price basis at the same time that it enters the general contract. * The Company seeks to reduce the risks inherent in bid-based projects by pursuing negotiated contracts, including teaming up with developers and designers on projects that provide for a fixed fee, budgeted contingencies and pre-qualified, reputable subcontractors. * The Company will endeavor, as it has from time to time in the past, to participate in construction joint ventures, both in a majority and in a minority position, for the purpose of bidding on projects. Although joint ventures tend to spread the risk of loss, the Company's initial obligations to the venture may increase if one of the other participants is financially unable to bear its portion of costs and expenses. For further information regarding certain joint ventures, see Note 2 of Notes to Consolidated Financial Statements. Consistent with practices in the construction industry, nearly all of the Company's contracts are subject to termination provisions. If terminated, the Company is generally entitled to be paid for work completed or in process and related profit to the date of termination. Selected Construction Projects The Company's two largest recently completed and on-going building construction projects are the Luxor Hotel/Casino in Las Vegas, Nevada, completed in October 1993, and an as yet to be named Hotel/Casino in Reno, Nevada, scheduled for completion in June 1995. The overall project value of each of these projects is in the $300 million range, although the Company's portion thereof has not been separately disclosed. The following is a summary of other selected on-going and recently completed construction projects of the Company:
COMPLETION APPROXIMATE OR ESTIMATED TYPE OF PERINI CONTRACT COMPLETION PROJECT LOCATION CONTRACT --------------- ---------- ------- -------- -------- AMOUNT DATE (IN 000'S) HEAVY Residuals Waste Water Treatment Boston, MA FP $173,176\1/ March 1995 Facility Combined Sewage Overflow Tunnel Chicago, IL FP 100,857\1/ May 1997 Routes I-93/1 Interchange Charlestown, MA FP 98,668\1/ October 1994 Wilshire/Western Station Los Angeles, CA FP 84,924\1/ March 1995 to Wilshire/Alvarado Subway Lock and Dam No. 5 Caddo Parish, LA FP 78,259\1/ January 1995 Route I-95 Baldwin Bridge Old Saybrook, CT FP 54,802\1/ June 1993 Route I-295 Bordentown, NJ FP 51,659 August 1993 Coney Island-Water New York, NY FP 51,512 December 1994 Pollution Control Plant Coney Island-West Water Treatment New York, NY FP 40,985 September 1996 Plant Pulaski Bridge Rehab New York, NY UP 38,875 December 1994 Hunts Point Water New York, NY FP 38,826 June 1993 Pollution Control Plant San Francisco Muni-Metro Railway San Francisco, CA FP/UP 34,576\1/ September 1996 Rehab South Boston Approach- Central Boston, MA FP 33,286\1/ May 1995 Artery NJ Route 3 Union, NJ FP 31,516 September 1996 Logan Airport Ramps Boston, MA UP 27,300 July 1995 Minidoka Power Plant Minidoka, ID FP 23,127 April 1997 39th Street Bridge New York, NY FP 22,552 June 1997 Stillwell Avenue New York, NY FP 21,383 February 1997 Stevenson Expressway Chicago, IL UP 18,165 October 1994 Vermont/Sunset Station Los Angeles, CA FP/UP 17,987\1/ January 1997 Vermont/Beverly Station Los Angeles, CA FP/UP 16,383\1/ October 1994 Spectacle Island Material Site- Boston, MA UP 15,596 December 1996 Central Artery NJ Route 78 Union, NJ FP 13,737 December 1995 BUILDING San Jose Multi-Purpose Arena San Jose, CA FP 96,456 August 1993 Bus Terminal and Parking Deck Boston, MA FP 85,084 August 1995 Veterans Administration Medical Detroit, MI FP 80,724\1/ July 1995 Center Police Building Santa Ana, CA FP 78,300 December 1995 Research Center-Dana Boston, MA GMP 75,000 October 1996 Farber Cancer Institute Research Facility at MIT, Lincoln Bedford, MA GMP 73,736 February 1995 Laboratories Grand Slam Canyon Theme Park Las Vegas, NV GMP 73,600 July 1993 Prudential Center Retail Phase I Boston, MA GMP 67,357 June 1994 University of California-Berkeley Berkeley, CA CPFF 65,068 August 1994 Life Sciences Building Federal Correction Institution and Greenville, IL FP 58,431 May 1994 Prison Ramada Express Hotel Casino Laughlin, NV GMP 57,244 September 1993 Expansion Integrated Project Controls- Boston, MA FP 50,870 July 1998 Central Artery Clark County Government Building Las Vegas, NV FP 48,398 August 1995 Riverside Resort Laughlin, NV GMP 41,373 December 1994 Veterinary Hospital and Research Ithaca, NY FP 39,480\1/ March 1995 Facility at Cornell University Boston College- Chestnut Hill, MA FP 38,030 December 1993 Residence Halls Federal Triangle Complex Washington, D.C. CM 35,581\2/ July 1996 Northeast Prison Philadelphia, PA FP 33,053\1/ June 1995 Beaumont Hospital Troy, MI CM 29,908 July 1994 Hard Rock Cafe Las Vegas, NV GMP 26,704 December 1994 Argonne Laboratory Chicago, IL FP 23,447 July 1995 Primus Auto-Office Nashville, TN GMP 22,000 October 1995 Forensic Center Trenton, NJ FP 19,143 July 1995 INTERNATIONAL SAMIR Oil Tank Farm Morocco FP $ 43,582 February 1994 U.S. Embassy-Caracas Venezuela FP 36,632 July 1994 Peace Vector II Egypt CP 24,474 March 1994 Embassy Housing Turkmenistan/Moldova FP 6,108 December 1994 HAZARDOUS WASTE New Bedford Harbor Remediation New Bedford, MA FP $ 20,433 November 1994 Tybouts Center New Castle, DE FP 12,304 October 1994 Remediation - --------- \1/Joint venture participation--represents the Company's share of the final or estimated final contract price. \2/Total Company-managed project value of approximately $550 million.
Competition The construction business is highly competitive. Competition is based primarily on price, reputation for quality, reliability and financial strength of the contractor. While the Company experiences a great deal of competition from other large general contractors, some of which may be larger with greater financial resources than the Company, as well as from a number of smaller local contractors, it believes it has sufficient technical, managerial and financial resources to be competitive in each of its major market areas. REAL ESTATE The Company's real estate development operations are conducted by Perini Land and Development Company ("PL&D"), a wholly-owned subsidiary, which began operations in the 1950's. As a result of the prolonged recession and reduced liquidity existing in the real estate industry over the past few years, PL&D in 1991 embarked on a strategy to substantially reduce its real estate holdings, pay down related debt and reduce overhead associated with those operations. The Company also suspended all investment in new projects and limited development expenditures to only those necessary to bring properties to market or to preserve permits or other entitlements. Between 1991 and the end of the first quarter of 1994, property sales have reduced PL&D's inventory from 31 properties to 16. In many cases, the Company's investment in the remaining properties has been reduced due to sales of portions of the properties. Of the remaining inventory, two properties, plus several tracts or units of larger multi-unit properties, are currently under contract for sale in 1994. Since 1990, PL&D revenues from sales have totalled approximately $107 million and the Company has reduced its real estate related debt plus contingent liabilities associated with real estate by approximately $46 million. In addition, the Company refinanced all of its major properties during the 1992 through 1994 period. Historically, PL&D has maintained offices in five states - Arizona, California, Florida, Georgia and Massachusetts. The Company continues to hold properties in each of those markets, but in late 1993, PL&D significantly reduced its staff in California and currently plans to administer its existing California assets from other offices. Over the past three and one-half years, PL&D has reduced administrative personnel throughout its organization from over 60 people to fewer than 20 people. Although PL&D has no current plans to acquire new properties, it will continue to make investments that are necessary to bring existing properties to market. It will also explore opportunities in which existing personnel could be used to generate fee income in situations where no associated capital commitment is required or, in association with construction units, to help generate building opportunities for Perini units. Of PL&D's current holdings, two northern California projects, The Resort at Squaw Creek, a deluxe resort-conference center hotel near Lake Tahoe, and Rincon Center, a mixed-use commercial and residential building located in San Francisco's business district, make up more than 50% of the Company's real estate development investments. In 1992 and 1991, the Company took writedowns of $31.4 million and $2.8 million, respectively, to reduce the carrying value of certain real estate assets to net realizable value. Such writedowns did not include Rincon Center and The Resort at Squaw Creek. See "Investments in and Refinancing of Rincon Center and The Resort at Squaw Creek." Rincon Center, which was refinanced in 1993, is currently generating sufficient cash to cover its operating expenses plus interest expense and is expected in 1994 to contribute toward its required annual principal amortization. The Resort at Squaw Creek covered its operating expenses and contributed toward debt service for the first time in 1993. The $48 million financing on The Resort at Squaw Creek matures in May 1995 and conversations with the project's lead bank suggests there is interest on its part to extend the loan on the property with no significant cash paydown based on the expected appraisal value. Negotiations are expected to begin this year. Real Estate Properties The following is a description of the Company's real estate development investments:
APPROXIMATE STATUS AS OF PROJECT LOCATION SITE DESCRIPTION PERINI INTEREST MARCH 31, 1994 ------- -------- ---- ----------- --------------- -------------- ARIZONA Sabino Springs Tucson 33 residential Estate lots adjoining a 100% Further development Country Club lots planned residential golf awaiting completion of course community infrastructure on adjacent golf course community I-10 West Phoenix 160 acres Industrially zoned land 80% 13 acres remain to be sold Airport Commerce Center Tucson 166 acres Industrially zoned land 80% 123 acres remain to be sold Perini Central Phoenix 4.4 acres Zoned for office, retail and 75% On hold pending Limited Partnership residential use improvement in market Grove at Black Phoenix 30 acres Office park complex 50% 150,000 sq. ft. office Canyon building fully leased; further development on hold Capitol Plaza Phoenix 1.75 acres Commercially zoned land 100% On hold pending improvement in market CALIFORNIA Rincon Center San Francisco 320 apartment Mixed-use office, retail and 46% Almost 100% of the units, 63,000 residential complex office space, 94% of the sq. ft. retail retail space and all but space, 416,000 10 of the residential sq. ft. units were leased commercial space The Resort at Squaw Squaw 405 units Ski resort/conference hotel 18% Opened December 1990; Creek Valley golf course completed 1992 FLORIDA The Villages of Palm West Palm 1,428 acres Planned community of 6,750 100% Ongoing development; 14 Beach Beach residential units with acres remain to be sold commercial development and two golf courses Metrocentre West Palm 17 lots Commercial/office 100% 5 lots remain to be sold Beach park development GEORGIA The Oaks at Buckhead Atlanta 217 condominium 201 high-rise units plus 16 50% 76 units closed; 15 units town homes under contract The Villages at Lake Clayton 348 acres Planned Community 49% Large portion of Ridge County infrastructure and all recreational amenities complete; 18.5 acres sold for apartment development; 16 acres sold to local school board; 148 single family lots delivered to builders MASSACHUSETTS Raynham Woods Commerce Raynham 409 acres Office park and retail 100% 206 salable acres remain Center development after accounting for wetlands, public use, and previously sold acreage, also two fully leased commercial buildings owned on site Robin Hill Marlboro 53 acres Office park development 100% Final 53 acres currently under contract for sale in 1994 Easton Business Center Easton 40 acres Commercially zoned land 100% Remains to be sold Commercial/Retail Wareham 19 acres Commercially zoned land 100% Remains to be sold
Investments in and Refinancing of Rincon Center and The Resort at Squaw Creek Rincon Center. Rincon Center is a large mixed-use project in the financial district of San Francisco. The project is located on the site of the U.S. Postal Service's historic Rincon Annex. The land is in the ninth year of a 65- year leasehold from the U.S. Postal Service. Rincon Center is controlled by Rincon Center Associates, a California limited partnership of which PL&D and Pacific Gateway Properties, Inc. ("PGP") are the general partners. PL&D is the managing general partner and owns 46% of the equity interest of the partnership. The commercial portion of the project known as Rincon One, which includes approximately 223,000 square feet of office space and 42,000 square feet of retail space, was sold and leased back by the developing partnership in 1988. The commercial portion of the project known as Rincon Two, which includes approximately 200,000 square feet of office space, 21,000 square feet of retail space and a 14,000 square foot U.S. postal facility, is financed by a $28 million bank loan which matures in 1998. The residential portion of Rincon Two contains 320 apartment units which were financed by $34 million of tax- free bonds which mature in 2006. The Company has advanced approximately $70 million to the partnership since its formation in 1984 through December 31, 1993. Approximately $8 million of this amount was advanced during 1993, primarily to pay down some of the principal portion of project debt which was renegotiated during 1993. Although the project is close to fully occupied, commercial rent concessions during 1993 prevented operations from exceeding breakeven on a cash flow basis. Those concessions have ended, and in 1994 operations are expected to generate positive cash flow before any required principal paydowns on loans. Two major loans on this property in the aggregate totaling over $75 million were scheduled to mature in 1993. During 1993, both loans were extended for five additional years. To extend these loans, PL&D provided approximately $7 million in new funds which were used to reduce the principal balance of the loans. Additional amortization of these loans will be required. To the extent operating cash flow is insufficient to cover required principal payments, PL&D will be responsible for 80% of the shortfall. In addition, during 1993, PL&D agreed, if necessary, to lend PGP funds to meet its 20% share of cash calls, in which case, PL&D will receive a priority return from the partnership on those funds and penalty fees in the form of rights to certain distributions due PGP by the partnership controlling Rincon. During 1993, PL&D advanced $1.7 million under this agreement, primarily to meet the principal payment obligations of the loan extensions described above. The various financings are secured by a pledge of the project, two letters of credit aggregating $9 million ($4.5 million from the Company and $4.5 million from PGP) and PL&D's corporate guaranty of $3.5 million. PL&D has guaranteed the payment of any operating deficits and the payment of interest on both the bonds and the bank loan. Perini has guaranteed PL&D's share of the operating deficits on Rincon One over the next five years and $5 million of the principal amortization payable on Rincon Two over the next five years. The Resort at Squaw Creek. The Resort at Squaw Creek is a resort-conference hotel which was completed and put into operation in December of 1990. Ownership of the project is held by Squaw Creek Associates, a California general partnership ("SCA"). PL&D as a partner in Glenco-Perini-HCV ("GPHCV"), a California limited partnership and a general partner in SCA, owns 18% of the project. PL&D, however, has full responsibility for GPHCV's 40% share of all operating deficits of the project and 100% of any portion of a $2 million annual preferred return to the majority partner which is not funded from operating cash flow. The financing on the project is an approximately $48 million bank loan which matures May 1, 1995. Under the terms of that loan, PL&D has guaranteed $10 million of principal and all interest payments and provides a $1.0 million letter of credit as its share of an overall $2.5 million commitment. See Note 11 to the Notes to Consolidated Financial Statements. At December 31, 1993, PL&D had advanced $68 million, of which $2.8 million was advanced during 1993, to the partnership to cover construction overruns, operating deficits or preferred return commitments. Approximately $15 million of these advances, and accrued interest thereon, currently have a priority position, second only to the bank loan. At March 31, 1994, such interest accrual amounted to approximately $5 million. INSURANCE AND BONDING All of the Company's properties and equipment, both directly owned or owned through partnerships or joint ventures with others, are covered by insurance and management believes that such insurance is adequate. However, due to conditions in the insurance market, the Company's California properties, owned in partnership with others, are not fully covered by earthquake insurance. In conjunction with its construction business, the Company is often required to provide various types of surety bonds. The Company has dealt with the same surety for approximately 75 years and it has never been refused a bond. Although from time-to-time the surety industry encounters limitations affecting the bondability of very large projects, the Company has not encountered any limit on its bonding ability that has adversely impacted its operations. LEGAL PROCEEDINGS On July 30, 1993, the U.S. District Court for the District of Columbia upheld the Contracting Officer's termination for default, both dated May 11, 1990, on two adjacent contracts for subway construction between Mergentime-Perini (two joint ventures) and the Washington Metropolitan Area Transit Authority ("WMATA") and found the Mergentime Corporation, Perini Corporation and the Insurance Company of North America, the surety, jointly and severally liable to WMATA for damages in the amount of $16.5 million, consisting primarily of excess reprocurement costs. The court deferred ruling on the net value of the joint ventures' major claims against WMATA. Any such amounts awarded to the joint ventures could serve to offset the above damages award. Originally Mergentime Corporation was the sponsor and manager of both joint ventures with a 60% interest in each. Perini held the remaining 40%. The contracts were awarded in 1985 and 1986 but in 1987, Perini and Mergentime entered into an agreement whereby Perini withdrew from the joint ventures, but remained obligated to WMATA under the contracts and related bonds. At that point, Mergentime assumed full control over the performance of both projects. After the termination of the joint ventures' contracts in May 1990, Perini, acting independently, was awarded a separate contract by WMATA to finish these projects, both of which were successfully completed on schedule. Mergentime may be unable to meet its financial obligations under the award. In such event the Company, as a joint venture partner, could be liable for the entire amount. Currently both parties have filed post-trial motions with the District Court attacking the decision and award. For the purposes of these motions, the successor judge (who was recently named) is treating the judgment as one that is not a final judgment and thus not one from which an appeal lies pending rulings on the motions. Although no date has been set for a review of the post-trial motions, the Court has indicated that such consideration will require substantial effort and that it intends to give this case the consideration it deserves. The ultimate financial impact, if any, of this judgment is not yet determinable, and therefore, no impact is reflected in the Consolidated Financial Statements. In the ordinary course of its construction business, the Company is engaged in other lawsuits. The Company believes that such lawsuits are usually unavoidable in major construction operations and that their resolution will not materially affect its business. EMPLOYEES The total number of personnel employed by the Company is subject to seasonal fluctuations, the volume of construction in progress and the relative amount of work performed by subcontractors. During 1993, the maximum number of employees involved in operations was approximately 2,600 and the minimum was approximately 1,900. Included in these figures are 1,000 core salaried employees. The Company operates as a union contractor. As such, it is a signatory to numerous local and regional collective bargaining agreements, both directly and through trade associations, throughout the country. These agreements cover all necessary union crafts and are subject to various renewal dates. Estimated amounts for wage escalation related to the expiration of union contracts are included in the Company's bids on various projects, and as a result, the expiration of any union contract in the current fiscal year is not expected to have any material impact on the Company. DESCRIPTION OF CONVERTIBLE PREFERRED STOCK Each of the Depositary Shares offered hereby represents 1/10th of a share of the Convertible Preferred Stock. See "Description of Depositary Shares." The Restated Articles of Organization, as amended, of the Company (the "Restated Articles") authorize the issuance of one million shares of preferred stock, par value $1.00 per share. Currently, there are 100,000 shares of $21.25 Convertible Exchangeable Preferred Stock outstanding. See "Description of Outstanding Capital Stock--$21.25 Preferred Stock." The summary of terms of the Company's preferred stock (including the Convertible Preferred Stock) contained in this Prospectus does not purport to be complete and is subject to, and qualified in its entirety by, the provisions of the Company's Restated Articles and the Certificate of Vote of Directors Establishing a Series of a Class of Stock fixing the relative rights and preferences of the Convertible Preferred Stock (the "Certificate") which is an exhibit to the Registration Statement of which this Prospectus is a part. GENERAL The Company's preferred stock may be issued from time to time in one or more series, without stockholders' approval. Subject to limitations prescribed by law and by the Restated Articles, the Board of Directors is authorized to determine the relative rights and preferences for each series of preferred stock that may be issued, and to fix the number of shares of each such series. Without obtaining the favorable vote of the holders of two-thirds of the outstanding Convertible Preferred Stock, the Company is prohibited by the terms of the Convertible Preferred Stock from issuing additional preferred stock that is senior to the Convertible Preferred Stock as to dividends and liquidation. The Company may issue additional series of preferred stock ranking on a parity with the Convertible Preferred Stock as to dividends and liquidation without the vote of the outstanding Convertible Preferred Stock. See "Voting Rights" below. Notwithstanding the fixing of the number of shares constituting a particular series, the Board of Directors may at any time authorize the issuance of additional shares of the same series. The Convertible Preferred Stock offered hereby will be a single series consisting of up to 100,000 shares, plus up to 15,000 shares issuable pursuant to the Initial Purchaser's over-allotment option. Any Convertible Preferred Stock converted, redeemed, exchanged or otherwise acquired by the Company will, upon cancellation, have the status of authorized but unissued preferred stock undesignated as to series subject to reissuance by the Board of Directors. DIVIDENDS Holders of the shares of Convertible Preferred Stock are entitled to receive, when and as declared by the Board of Directors of the Company out of funds of the Company legally available for payment, an annual cash dividend of $ per share, payable quarterly in arrears on September 15, December 15, March 15 and June 15 of each year (beginning September 15, 1994), unless any such date is a non-business day, in which event the dividend will be payable on the next business day. Dividends on the Convertible Preferred Stock will be cumulative from the date of original issue and shall be payable to the holder of record on the record date fixed for such payment. Accumulated but undeclared dividends will not bear interest. When dividends are not paid in full upon any series of preferred stock ranking senior as to dividends to the Convertible Preferred Stock, then no dividend shall be paid or declared and set apart for payment on the Convertible Preferred Stock unless and until all accrued and unpaid dividends with respect to such other stock shall have been paid or declared and funds therefor set apart for payment. When dividends are not paid in full upon the Convertible Preferred Stock and upon any other stock ranking on a parity as to dividends with the Convertible Preferred Stock, all dividends declared upon shares of Convertible Preferred Stock and any other stock ranking on a parity as to dividends with the Convertible Preferred Stock shall be declared pro rata based on the ratio that accrued and unpaid dividends on each series of stock bears to each other. Except as provided in the preceding sentence, unless full cumulative dividends on the Convertible Preferred Stock have been paid or declared and funds therefor set apart for such payment, the Company shall not declare, pay or set apart for payment, any cash dividends or make any other cash distribution upon the Common Stock of the Company or any other stock of the Company ranking junior to or on a parity with the Convertible Preferred Stock as to dividends. CONVERSION Holders of the Convertible Preferred Stock will be entitled at any time to convert shares of Convertible Preferred Stock into Common Stock of the Company at the conversion rate set forth on the cover page of this Prospectus, except that, with respect to shares of Convertible Preferred Stock called for redemption or exchange, conversion rights will expire at the close of business on the redemption date or exchange date, so long as there has been no default in the payment of the redemption price or exchange price. Except as provided below, no payment or adjustment on account of dividends accumulated and unpaid upon Convertible Preferred Stock or in respect of dividends on Common Stock will be issued upon conversion, but if such conversion would otherwise result in a fractional share being issued, an amount will be paid in cash by the Company equal to the market value of the fractional interest. Convertible Preferred Stock surrendered for conversion during the period between the record date for payment of dividends and the dividend payment date (except for Convertible Preferred Stock called for redemption or exchange with a redemption date or exchange date during such period) must be accompanied by payment of an amount equal to the dividend thereon which the holder is to receive on the dividend payment date. The conversion price is subject to adjustment upon the occurrence of certain events, including the issuance of Common Stock of the Company as a dividend or distribution on the Common Stock, subdivisions and combinations of the Common Stock, certain reclassifications of the Common Stock, the issuance to the holders of Common Stock of certain rights or warrants entitling them to subscribe for Common Stock at less than the then current market price (as defined) and the distribution to the holders of Common Stock of shares of capital stock other than Common Stock, debt securities of the Company or assets or rights or warrants to purchase securities of the Company (excluding cash dividends or distributions paid out of earnings or surplus as shown on the books of the Company). No adjustment in the conversion price will be required in respect of a change in the par value of the Common Stock or issuances of rights to purchase Common Stock pursuant to a Company plan for reinvestment of dividends or interest. No adjustment in the conversion price will be required unless such an adjustment would require a change of at least 1% in the price then in effect, but any adjustment that would otherwise be required to be made shall be carried forward and taken into account in any subsequent adjustment. No adjustment need be made if the holders of Convertible Preferred Stock participate in the transaction that would have resulted in an adjustment absent such participation. The Company may at any time reduce the conversion price by any amount for a minimum period of 20 days upon notice to the holders of the Convertible Preferred Stock 15 days prior to the date the decreased conversion price takes effect. In the event of certain mergers, consolidations or any sale, lease or transfer of all or substantially all of the assets of the Company, the right of a holder of Convertible Preferred Stock to convert such stock into Common Stock of the Company will be converted into the right to receive whatever securities or other property, including cash, the holders of such number of shares of Common Stock into which the Convertible Preferred Stock might have been converted prior to such merger, consolidation, sale, lease or transfer. A conversion rate adjustment made according to the provisions of the Convertible Preferred Stock (or the absence of provision for such an adjustment) might result in a constructive distribution to the holders of Convertible Preferred Stock or holders of Common Stock that would be subject to taxation as a dividend. EXCHANGE The Convertible Preferred Stock is exchangeable, in whole but not in part, at the option of the Company on any dividend payment date on or after September 15, 1996, for the Company's % Convertible Subordinated Debentures Due 2019 (the "Debentures"). See "Description of Debentures." Holders of the Convertible Preferred Stock will be entitled to receive $250 principal amount of the Debentures in exchange for each share of Convertible Preferred Stock held by them at the time of exchange. At such time, the rights of the holders of the Convertible Preferred Stock as stockholders of the Company shall cease (except the right to receive Debentures and accrued and unpaid dividends to the date of exchange), and the person or persons entitled to receive the Debentures issuable upon such exchange shall be treated for all purposes as the registered holder or holders of such Debentures. The Company will mail notice of its intention to exchange to each holder of record of the Convertible Preferred Stock no less than 30 nor more than 60 days prior to the date of exchange. The Convertible Preferred Stock will be convertible into Common Stock up to the close of business on the date of exchange. OPTIONAL REDEMPTION The Convertible Preferred Stock will not be redeemable by the Company prior to September 15, 1997. Thereafter, the Convertible Preferred Stock is redeemable at the option of the Company, in whole or in part, at the following redemption prices per share, if redeemed during the 12-month period beginning September 15 in each of the years indicated:
YEAR PRICE YEAR PRICE ---- ----- ---- ----- 1997 ....................... $ 2001 ..................... $ 1998 ....................... 2002 ..................... 1999 ....................... 2003 ..................... 2000 .......................
and on or after September 15, 2004, at $250 per share, plus, in each case, accumulated and unpaid dividends to the date of redemption. If full cumulative dividends on the Convertible Preferred Stock have not been paid, no shares of Convertible Preferred Stock may be redeemed and the Company may not acquire any shares of the Convertible Preferred Stock other than pursuant to a purchase or exchange offer made on the same terms to all holders of Convertible Preferred Stock unless the holders of two-thirds of the Convertible Preferred Stock shall have consented thereto. The Company will mail notice of redemption to each holder of record of Convertible Preferred Stock to be redeemed not less than 30 nor more than 60 days prior to the redemption date. On and after the date of redemption, dividends shall cease to accumulate on the Convertible Preferred Stock so called for redemption, such shares shall no longer be deemed to be outstanding and all rights of the holders of such shares as stockholders of the Company shall cease, except the right to receive the amounts payable upon such redemption, without interest, upon surrender of the certificates evidencing such shares. If less than all of the outstanding shares of Convertible Preferred Stock are to be redeemed, the Company will select those to be redeemed pro-rata or by lot or in such manner as the Company shall deem appropriate or fair. There is no mandatory redemption or sinking fund obligation with respect to the Convertible Preferred Stock. LIQUIDATION In the event of involuntary liquidation, dissolution or winding up of the Company, the holders of the shares of Convertible Preferred Stock are entitled to receive out of the assets of the Company available for distribution to stockholders, before any distribution of assets is made to holders of Common Stock or any other stock ranking junior to the Convertible Preferred Stock as to liquidation, liquidating distributions in the amount of $25 per share plus accumulated and unpaid dividends. In the event of voluntary liquidation, dissolution or winding up of the Company, the holders of shares of Convertible Preferred Stock are entitled to receive out of the assets of the Company available for distribution to stockholders, subject to the rights of any series of preferred stock ranking senior to the Convertible Preferred Stock as to liquidation, but before any distribution of assets is made to holders of Common Stock or any other stock ranking junior to the Convertible Preferred Stock as to liquidation, liquidating distributions in the amounts set forth under "Optional Redemption" above, plus accumulated and unpaid dividends. If upon any liquidation of the Company, or any other distribution of its assets, the amounts payable with respect to the Convertible Preferred Stock or any other outstanding shares of preferred stock of the Company ranking as to any such distribution on a parity with the Convertible Preferred Stock are not paid in full, the holders of the Convertible Preferred Stock and of such other shares of stock will share ratably in any such distribution of assets of the Company in proportion to the full respective preferential amounts to which they are entitled. After payment of the full amount of the liquidating distribution to which they are entitled, the holders of shares of Convertible Preferred Stock will not be entitled to any participation in any distribution of assets by the Company. VOTING RIGHTS The Convertible Preferred Stock is not entitled to vote, except as provided below and in accordance with Massachusetts law and, in such case, the holders of the Convertible Preferred Stock shall have one vote per share. The Company may not amend, alter or repeal any of the preferences or rights (including voting rights) of the holders of the Convertible Preferred Stock or authorize, create or increase the amount of any class or series of stock ranking prior to the Convertible Preferred Stock as to dividends or liquidation without the favorable vote of the holders of at least two-thirds of the then outstanding shares of Convertible Preferred Stock, voting together as a class with the holders of any other outstanding shares of preferred stock which rank on parity with the Convertible Preferred Stock as to dividends and liquidation. The number of authorized shares of the Company's preferred stock may be increased by the affirmative vote of the holders of at least a majority of the voting stock of the Company, voting together. Any amendments to the Restated Articles which adversely affect the preferences or rights of the holders of the Convertible Preferred Stock require a two-thirds vote of the Convertible Preferred Stock voting separately as a class. The Company may issue additional series of preferred stock ranking on a parity with the Convertible Preferred Stock as to dividends and liquidation without the vote of the outstanding Convertible Preferred Stock. If an amount equal to six quarterly dividends on the Convertible Preferred Stock shall have accumulated and be unpaid, the number of directors of the Company will be increased by two and the holders of the Convertible Preferred Stock, voting together as a class with any other series of preferred stock on parity with the Convertible Preferred Stock as to dividends or liquidation rights and which is similarly affected, will be entitled to elect such additional two directors until all dividends in default have been paid or declared and funds therefor set apart for payment, at which time such two directors will resign from the board and the number of directors of the Company will be reduced by two. When such voting rights have vested in the holders of the Convertible Preferred Stock, a special meeting to elect such directors may be called by the Chief Executive Officer or Chairman of the Company or by the holders of 25% or more of the shares of preferred stock of all series affected. OTHER PROVISIONS The holders of the Convertible Preferred Stock have no preemptive rights with respect to any shares of capital stock of the Company or any other securities of the Company convertible into or carrying rights or options to purchase any such shares. The Convertible Preferred Stock, upon issuance against full payment of the purchase price therefor, will be fully paid and nonassessable. The transfer agent, conversion agent and registrar for the Convertible Preferred Stock will be State Street Bank & Trust Co. DESCRIPTION OF DEPOSITARY SHARES Each Depositary Share represents one-tenth of a share of Convertible Preferred Stock deposited under the Deposit Agreement (the "Deposit Agreement") among the Company, State Street Bank & Trust Co., as depositary (the "Depositary"), and the holders from time to time of the depositary receipts (the "Depositary Receipts") issued thereunder. Subject to the term of the Deposit Agreement, each owner of a Depositary Share is entitled, proportionately, to all of the rights and preferences of the Convertible Preferred Stock represented thereby (including dividend, conversion, redemption, exchange, liquidation and voting rights) contained in the Company's Restated Articles and in the Certificate and summarized above under "Description of Convertible Preferred Stock." The Depositary Shares are evidenced by Depositary Receipts issued pursuant to the Deposit Agreement. The Company does not expect that there will be any trading market for the Convertible Preferred stock except as may be represented by the Depositary Shares. The following summary does not purport to be complete and is subject in all respects to the Deposit Agreement and form of Depositary Receipt, copies of which are attached as an exhibit to the Registration Statement of which this Prospectus is a part. ISSUANCE OF DEPOSITARY RECEIPTS Immediately following the issuance and delivery of the Convertible Preferred Stock by the Company to the Initial Purchaser at the closing as contemplated herein, the Initial Purchaser will deposit the Convertible Preferred Stock with the Depositary which will then issue the Depositary Receipts representing Depositary Shares to the Initial Purchaser. WITHDRAWAL OF CONVERTIBLE PREFERRED STOCK Upon surrender of the Depositary Receipts at the shareholder services office of the Depositary (unless the underlying Depositary Shares have previously been called for redemption or exchange), the owner of the Depositary Shares evidenced thereby is entitled to delivery at such office, to or upon his order, of the number of whole shares of Convertible Preferred Stock and any money or other property represented by such Depositary Shares. Owners of Depositary Shares will be entitled to receive whole shares of Convertible Preferred Stock on the basis of one share of Convertible Preferred Stock for every ten Depositary Shares surrendered. In no event will fractional shares of Convertible Preferred Stock (or cash in lieu thereof) be distributed by the Depositary. If any Depositary Receipt delivered by any holder evidences a number of Depositary Shares in excess of the number of Depositary Shares representing the number of whole shares of Convertible Preferred Stock to be withdrawn, the Depositary will deliver to the holder at the same time a new Depositary Receipt evidencing such excess number of Depositary Shares. REDEMPTION OF DEPOSITARY SHARES Whenever the Company redeems shares of Convertible Preferred Stock from the Depositary, the Depositary will redeem as of the same redemption date the Depositary Shares representing the shares of Convertible Preferred Stock so redeemed upon no less than 30 nor more than 60 days' notice, from the proceeds received by the Depositary in respect of the redemption of such shares of Convertible Preferred Stock held by the Depositary. The redemption price per Depositary Share will be equal to one-tenth of the redemption price per share payable with respect to a share of Convertible Preferred Stock. See "Description of Convertible Preferred Stock -- Optional Redemption." If less than all of the Depositary Shares are to be redeemed, the Depositary Shares to be redeemed shall be selected pro rata or by lot or in such manner as the Company shall deem appropriate and fair. After the date fixed for redemption, the Depositary Shares so called for redemption will no longer be deemed to be outstanding and all rights of the holders of the Depositary Shares will cease, except the right to receive the amounts payable on such redemption and any money or other property to which the holder of such Depositary Shares was entitled upon such redemption, upon surrender to the Depositary of the Depositary Receipt evidencing such Depositary Shares. CONVERSION Each record holder of Depositary Shares will have the right, at any time, to surrender Depositary Receipts representing one or more whole shares of Convertible Preferred Stock to the Depositary with written instructions to convert a number of underlying whole shares of Convertible Preferred Stock to which such holder would be entitled into shares of the Company's Common Stock at the then effective conversion price (subject to the same terms and conditions set forth in "Description of Convertible Preferred Stock -- Conversion"). If only a portion of the Depositary Shares evidenced by a Depositary Receipt is to be converted, a new Depositary Receipt or Receipts will be issued for any Depositary Shares not to be converted. No fractional shares of Common Stock will be issued upon conversion of Depositary Shares, and if such conversion would otherwise result in a fractional share of Common Stock being issued, an amount will be paid in cash by the Company equal to the market value of the fractional interest. EXCHANGE On or after September 15, 1996, upon election by the Company to exchange the Convertible Preferred Stock for the Debentures, the Depositary Shares will be exchanged, upon no less than 30 nor more than 60 days' notice, by the Depositary for the Debentures at the rate of $25 principal amount of Debentures for each Depositary Share then outstanding. See "Description of Convertible Preferred Stock -- Exchange." Upon such exchange, the Depositary Shares will no longer be deemed outstanding and all rights of the holders of the Depositary Shares will cease, except the right to receive the Debentures and any other money or other property to which the holders of Depositary Shares were entitled upon such exchange, upon surrender to the Depositary of the Depositary Receipts evidencing such Depositary Shares. DIVIDENDS AND OTHER DISTRIBUTIONS The Depositary will distribute all cash dividends or other cash distributions received in respect of the Convertible Preferred Stock to the record holders of Depositary Shares in proportion, insofar as practicable, to the number of Depositary Shares owned by such holders. In the event of a distribution other than in cash, including a distribution of the Debentures in the event of the exchange of the Convertible Preferred Stock, the Depositary will distribute property received by it to the record holders of Depositary Shares entitled thereto, unless the Depositary determines that it is not feasible to make such distribution, in which case the Depositary may, with the approval of the Company, adopt such method as it deems equitable and practical for the purpose of effecting such distribution, including the sale of such property and distribution of the net proceeds from such sale to such holders. The amount distributed in all of the foregoing cases will be reduced by any amounts required to be withheld by the Company or the Depositary on account of any taxes. VOTING THE CONVERTIBLE PREFERRED STOCK Upon receipt of notice of any meeting at which the owners of the Convertible Preferred Stock are entitled to vote, the Depositary will mail the information contained in such notice of meeting to the record holders of Depositary Shares. Each record holder of Depositary Shares on the record date (which will be the same date as the record date for the Convertible Preferred Stock) will be entitled to instruct the Depositary as to the exercise of the voting rights pertaining to the number of shares of Convertible Preferred Stock represented by such holder's Depositary Shares. The Depositary will endeavor, insofar as practicable, to vote the number of shares of Convertible Preferred Stock represented by such Depositary Shares in accordance with such instructions, and the Company has agreed to take all action which may be deemed necessary by the Depositary in order to enable the Depositary to do so. The Depositary will abstain from voting shares of Convertible Preferred Stock to the extent it does not receive specific instructions from the holders of Depositary Shares representing such Convertible Preferred Stock. AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT The form of Depositary Receipts evidencing the Depositary Shares and any provision of the Deposit Agreement may at any time be amended by agreement between the Company and the Depositary. However, any amendment which imposes or increases any fees, taxes or charges upon owners of Depositary Shares (other than taxes and other governmental charges, fees and telegram, telex, delivery or other expenses payable by such owners as stated below under "Charges of Depositary"), or which otherwise prejudices any substantial rights of holders of Depositary Shares or materially prejudices the rights of holders of Convertible Preferred stock, will not take effect as to outstanding Depositary Shares until the expiration of 90 days after notice of such amendment has been mailed to the record holders of outstanding Depositary Shares. In no event may any amendment impair the right of any owner of any Depositary Share, subject to the conditions specified in the Deposit Agreement, to surrender Depositary Receipts evidencing Depositary Shares to the Depositary with written instructions to convert such Depositary Shares into Common Stock or to deliver to such holder the Convertible Preferred Stock underlying such Depositary Shares and any money or other property, including the Debentures, represented thereby, except in order to comply with mandatory provisions of applicable law. Whenever directed by the Company, the Depositary will terminate the Deposit Agreement by mailing notice of such termination to the record holders of all outstanding Depositary Shares at least 30 days prior to the date of termination. The Depositary may likewise terminate the Deposit Agreement at any time 60 days after the Depositary shall have delivered to the Company a written notice of its election to resign if a successor depositary shall not theretofore have been appointed and accepted its appointment. If any Depositary Shares remain outstanding after the date of termination, the Depositary thereafter will discontinue the transfer of Depositary Receipts, will suspend the distribution of dividends to the owners thereof, and will not give any further notices (other than notice of such termination) or perform any further acts under the Deposit Agreement except as provided below and except that the Depositary will continue (a) to collect dividends on the Convertible Preferred Stock and any other distributions with respect thereto or, if applicable, principal of, and premium, if any, and interest on the Debentures, and (b) to deliver Convertible Preferred Stock or, if applicable, the Debentures, together with such dividends and distributions, or the principal, premium, if any, and interest, and the net proceeds of any sales of rights, preferences, privileges or other property, without liability for interest, in exchange for Depositary Receipts surrendered. At any time after the expiration of two years from the date of termination, the Depositary may sell the Convertible Preferred Stock or, if applicable, the Debentures then held by it, at public or private sales, at such place or places and upon such terms as it deems proper and may thereafter hold the net proceeds of any such sale, together with any money and other property then held by it, without liability for interest, for the pro rata benefit of the holders of Depositary Receipts which shall not theretofore have been surrendered. The Company does not intend to terminate the Deposit Agreement or to permit the resignation of the Depositary without appointing a successor depositary. CHARGES OF DEPOSITARY All charges in connection with the initial deposit of the Convertible Preferred Stock and the initial issuance of the Depositary Shares will be borne by the Company, as will all charges of the Depositary in connection with initial withdrawals of Convertible Preferred Stock by the owners of Depositary Shares following the initial deposit by the Initial Purchaser or conversions of Convertible Preferred Stock or the exchange of Convertible Preferred Stock for Debentures. The Depositary will charge the party to whom Depositary Receipts are delivered against subsequent deposits of Convertible Preferred Stock $ for each 100 Depositary Shares evidenced by Depositary Receipts so delivered. The Company will pay all other charges of the Depositary except for taxes (including transfer taxes, if any) and other governmental charges, and such telegram, telex, delivery or other charges as are expressly provided in the Deposit Agreement to be at the expense of holders of Depositary Shares or persons depositing Convertible Preferred Stock. RIGHTS AND DUTIES OF DEPOSITARY The Depositary will make available to holders of Depositary Shares, upon request of such holders, all reports and communications from the Company which are delivered to the Depositary and made generally available to the holders of Convertible Preferred Stock. Neither the Depositary nor the Company will be liable if it is prevented or delayed by law or any circumstance beyond its control in performing its obligations under the Deposit Agreement. The obligations of the Company and the Depositary under the Deposit Agreement are limited to performance in good faith of the duties undertaken by each of them thereunder and neither is obligated to prosecute or defend any legal proceeding in respect of any Depositary Shares, Convertible Preferred Stock or other securities described herein unless satisfactory indemnity is furnished. They may rely upon advice of or information from counsel, accountants, persons presenting Convertible Preferred Stock for deposit, holders of Depositary Receipts or other persons believed to be competent and on documents believed to be genuine. The Depositary and the Depositary's agents may own and deal in any class of securities of the Company and its affiliates and in Depositary Receipts. The Depositary may also act as transfer agent or registrar of any of the securities of the Company and its affiliates, may loan money to the Company and its affiliates and may engage in any other business with or for the Company and its affiliates. DESCRIPTION OF DEBENTURES The Company will issue the Debentures under an indenture (the "Indenture") between the Company and State Street Bank & Trust Co. (the "Trustee"). The terms of the Debentures will include those stated in the Indenture, a form of which is attached as an exhibit to the Registration Statement of which this Prospectus is a part. The Debentures will be unsecured subordinated obligations of the Company limited to $25,000,000 principal amount. GENERAL The Debentures are in registered form without coupons in denominations of $25 and any whole multiple of $25. The Company will pay interest on the Debentures semiannually on September 15 and March 15 of each year at the rate of % per annum. It will pay interest on the Debentures to the persons who are registered holders at the close of business on the last day of the month before the interest payment date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Company may pay principal and interest by its check and may mail an interest check to a holder's registered address. The Debentures mature on September 15, 2019. CONVERSION RIGHTS The holders of Debentures will be entitled at any time on or before September 15, 2019, to convert the Debentures into Common Stock of the Company initially at the conversion rate for the Depositary Shares set forth on the cover of this Prospectus, except that, with respect to Debentures called for redemption, conversion rights will terminate at the close of business on the redemption date. Notice of redemption must be given not less than 30 nor more than 60 days before the redemption date. Except as provided below, no payment or adjustment is to be made on conversion for interest accrued on the Debentures or for dividends on the Common Stock issued on conversion of any Debenture. Debentures surrendered for conversion between the record date for payment of interest and the interest payment date (except Debentures called for redemption during such period) must be accompanied by payment of the interest on the Debentures, if any, that the holder is to receive on the interest payment date. No fractional shares of Common Stock will be issued upon conversion of the Debentures, and if such conversion would otherwise result in a fractional share of Common Stock being issued, an amount will be paid in cash by the Company equal to the market value of the fractional interest. The conversion price is subject to adjustment on the occurrence of certain events, including the issuance of Common Stock of the Company as a dividend or distribution on the Common Stock, subdivisions and combinations of the Common Stock, certain reclassifications of the Common Stock, the issuance to the holders of Common Stock of certain rights or warrants entitling them to subscribe for Common Stock at less than the then current market price (as defined) and the distribution to the holders of Common Stock of shares of capital stock other than Common Stock, debt securities of the Company or assets or any rights or warrants to purchase securities of the Company (excluding cash dividends or distributions paid out of earnings or surplus as shown on the books of the Company). No adjustment in the conversion price will be required in respect of a change in the par value of the Common Stock or issuance of rights to purchase Common Stock pursuant to a Company plan for reinvestment of dividends or interest. No adjustment in the conversion price will be required unless cumulative adjustments would require a change of at least 1% in the price then in effect, but any adjustment that would otherwise be required to be made shall be carried forward and taken into account in any subsequent adjustment. No adjustment need be made if Debentureholders participate in the transaction that would have resulted in an adjustment absent such participation. The Company may at any time reduce the conversion price by any amount for a minimum period of 20 days upon notice to holders of the Debentures 15 days prior to the date the described conversion price adjustment is to take effect. In the event of certain mergers, consolidations or any sale, lease or transfer of all or substantially all of the assets of the Company, the right of a holder of Debentures to convert such Debentures into Common Stock of the Company will be converted into the right to receive whatever securities or other property, including cash, the holders of such number of shares of Common Stock into which the Debentures might have been converted prior to such merger, consolidation, sale, lease or transfer. SUBORDINATION The payment of the principal, premium, if any, and interest on the Debentures and sinking fund amounts is subordinated in right of payment, as set forth in the Indenture, to the payment of all Senior Debt of the Company, whether outstanding on the date of the Indenture or incurred after that date. Senior Debt is defined as (a) the principal of, premium, if any, and accrued and unpaid interests on (1) indebtedness of the Company for money borrowed, (2) guaranties by the Company of indebtedness for money borrowed by any other person, (3) indebtedness evidenced by notes, debentures, bonds or other instruments of indebtedness for the payment of which the Company is responsible or liable, by guaranty, or otherwise (other than debentures issued in exchange for the $21.25 Preferred Stock, which shall be pari passu with the Debentures) and (4) obligations of the Company under any agreement to lease, or lease of any real or personal property, (b) any other indebtedness, liability or obligation, contingent or otherwise, of the Company and any guaranty, endorsement or other contingent obligation in respect thereof, and (c) modifications, renewals, extensions, and refundings of any such indebtedness, liabilities or obligations, unless, in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such indebtedness, liabilities or obligations, or such modification, renewal, extension or refunding, or the obligations of the Company pursuant to such guaranty, are not superior in right of payment to the Debentures. Senior Debt will not include any obligation of the Company to any subsidiary of the Company. The Debentures will be pari passu with any debentures issued in exchange for shares of the $21.25 Preferred Stock. There are no restrictions in the Indenture on the amount of Senior Debt the Company may have outstanding. No payment on account of principal, premium, if any, and interest on the Debentures and sinking fund requirements may be made if at the time of such payment there exists a default with respect to any Senior Debt and the default is the subject of judicial proceedings or the Company receives notice from certain authorized persons that payments may not be made. On any distribution of the assets of the Company on any dissolution, liquidation or reorganization of or similar proceeding relating to the Company, the holders of Senior Debt will be entitled to receive payment in full before the Debentureholders are entitled to receive any payment. By reason of such subordination, in the event of insolvency, creditors of the Company who are holders of Senior Debt, as well as general creditors of the Company, may recover more, ratably, than the holders of the Debentures. SINKING FUND The Indenture requires the Company to redeem through a mandatory sinking fund commencing on September 15, 2005, or on the first September 15, following the date of initial issuance of the Debentures, whichever is later, and on each succeeding September 15, to and including September 15, 2018, 5% of the original principal amount of the Debentures, at a redemption price equal to their principal amount plus interest accrued to the redemption date. Debentures converted into Common Stock or acquired or redeemed by the Company and delivered to the Trustee for cancellation, otherwise than through the mandatory sinking fund, may be used, at their principal amount (excluding any premium), to reduce the amount of any mandatory sinking fund payment. The right to convert Debentures called for redemption through the sinking fund terminates at the close of business on the date of redemption. OPTIONAL REDEMPTION The Debentures will not be redeemable by the Company prior to September 15, 1997. Thereafter, the Debentures are redeemable at the option of the Company, on at least 30 and not more than 60 days' notice, in whole or in part, at the following redemption prices (expressed as percentage of principal), if redeemed during the 12-month period beginning on September 15 in each of the years indicated:
YEAR PERCENTAGE YEAR PERCENTAGE ---- ---------- ---- ---------- 1997 ............................. 2001 ......................... 1998 ............................. 2002 ......................... 1999 ............................. 2003 ......................... 2000 .............................
and on or after September 15, 2004, at the principal amount plus, in each case, any accrued interest to the date of redemption. On and after the redemption date, interest ceases to accrue on Debentures or portions of them called for redemption. CONSOLIDATION, MERGER AND SALE OF ASSETS The Company, without the consent of any holders of Debentures, may consolidate with or merge into, or sell, lease or transfer all or substantially all its assets to, another entity, provided (1) the resulting, surviving or transferee entity assumes all the Company's obligations on the Debentures and under the Indenture, except as to conversion in certain circumstances, (2) that after giving effect to such transaction no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, has happened and is continuing and (3) certain other requirements are met. In the case of a sale, lease or transfer of assets, the predecessor entity will be relieved of its obligations under the Indenture. MODIFICATION AND WAIVER Subject to certain exceptions, the Indenture may be amended or supplemented with the consent of the holders of at least 66-2/3% in principal amount of the Debentures then outstanding, and any past default or compliance with any provisions may be waived with the consent of the holders of a majority in principal amount of the Debentures then outstanding. Without the consent of any Debentureholder, the Company may amend or supplement the Indenture or the Debentures to cure any ambiguity, omission, defect or inconsistency or to provide for uncertificated Debentures in addition to or in place of certificated Debentures or to make any change that does not materially adversely affect the right of any Debentureholder. Without the consent of any Debentureholder, the Trustee may waive compliance with any provision of the Indenture or the Debentures if the waiver does not materially adversely affect the rights of any Debentureholder. When a successor corporation, trustee, paying agent or registrar assumes all the obligations of its predecessor under the Debentures and the Indenture, the predecessor will released from those obligations. DEFAULTS AND REMEDIES An Event of Default under the Indenture includes default for 30 days in payment of interest on the Debentures, default in payment of principal on the Debentures at maturity or pursuant to a mandatory redemption, failure by the Company for 60 days after notice to it to comply with any of the other provisions of the Indenture or Debentures, and certain events of bankruptcy or insolvency. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the Debentures outstanding may declare the Debentures to be due and payable immediately, subject to the subordination provisions contained in the Indenture, but under certain conditions such acceleration may be rescinded by the holders of a majority in principal amount of the Debentures then outstanding. The Indenture will require the Company to file with the Trustee annually a certificate of two Company officers stating whether the signers know of any default under the Indenture that occurred during the previous fiscal year. Debentureholders may not enforce the Indenture or the Debentures except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Debentures unless it receives indemnity satisfactory to it. Subject to certain limitations, holders of a majority in principal amount of the Debentures may direct the Trustee in its exercise of any trust or power under the Indenture. The Trustee may withhold from Debentureholders notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in their interest. A director, officer, employee or stockholder, as such, of the Company will not have any liability for any obligations of the Company under the Debentures or the Indenture or for any claim based on, in respect of or by reason of, such obligations or their creation. Each Debentureholder by accepting a Debenture waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Debentures. TRANSFER AND EXCHANGE A holder may transfer or exchange Debentures in accordance with the Indenture. The Registrar may require a holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not transfer or exchange any Debentures selected for redemption. However, if public notice has been given that a Debenture is to be redeemed in part, the portion of the Debenture not to be redeemed may be transferred. REGISTRAR, PAYING AGENT AND CONVERSION AGENT The Trustee will maintain an office or agency where the Debentures may be presented for registration of transfer or for exchange, an office or agency where the Debentures may be presented for payment and an office where the Debentures may be presented for conversion. SATISFACTION AND DISCHARGE OF THE INDENTURE The Indenture will be discharged and cancelled upon payment or redemption of all the Debentures or on the 91st day following the deposit with the Trustee of funds or U.S. Government Obligations sufficient to pay principal and interest on the Debentures to maturity or redemption. DESCRIPTION OF OUTSTANDING CAPITAL STOCK COMMON STOCK The Restated Articles of the Company authorize the issuance of 15,000,000 shares of Common Stock, par value $1.00 per share, including an increase of 7,500,000 shares approved by the stockholders of the Company at the Annual Meeting of Stockholders held May 19, 1994. At the close of business on April 29, 1994, there were 4,363,143 shares of Common Stock outstanding, 662,252 shares of Common Stock reserved for issuance upon conversion of the $21.25 Convertible Exchangeable Preferred Stock, 202,664 shares of Common Stock reserved for payment of 1993 incentive compensation awards to employees payable in stock and 481,610 shares of Common Stock reserved for issuance upon exercise of outstanding employee stock options. Subject to the rights of the holders of preferred stock then outstanding, holders of Common Stock are entitled to one vote per share on matters to be voted on by stockholders and are entitled to receive such dividends, if any, as may be declared from time to time by the Board of Directors of the Company in its discretion out of funds legally available therefor. Upon any liquidation or dissolution of the Company, the holders of Common Stock are entitled to receive pro rata all assets remaining available for distribution to stockholders after payment of all liabilities and provision for the liquidation of any shares of preferred stock at the time outstanding. The Common Stock has no preemptive or other subscription rights, and there are no conversion rights or redemption or sinking fund provisions with respect to such stock. The payment of dividends on the Common Stock is subject to the prior payment of dividends on the outstanding preferred stock and the Convertible Preferred Stock offered hereby. Further, the Company's revolving credit agreement, as well as certain other agreements, provides for, among other things, maintaining specified working capital and tangible net worth levels and limitations on indebtedness, all of which could impact the ability of the Company to pay dividends. In addition to the above, payment of dividends on Common Stock will be at the discretion of the Board of Directors. The foregoing summary of the Common Stock does not purport to be complete and is subject to and qualified in its entirety by the Restated Articles and the laws of the Commonwealth of Massachusetts. PREFERRED STOCK The Restated Articles authorize the issuance of one million shares of preferred stock, par value $1.00 per share. The Company's authorized but unissued preferred stock may be issued from time to time in one or more series, without stockholders' approval. Subject to limitations prescribed by law and by the Restated Articles, the Board of Directors is authorized to determine the relative rights and preferences for each series of preferred stock that may be issued, and to fix the number of shares of such series. Thus, the Board of Directors, without stockholder approval, could authorize the issuance of additional preferred stock with voting, conversion and other rights that could adversely affect the voting power and other rights of holders of Common Stock or that could make it more difficult for another company to effect certain business combinations with the Company. Notwithstanding the fixing of the number of shares constituting a particular series, the Board of Directors may at any time authorize the issuance of additional shares of the same series. Any preferred stock converted, redeemed, exchanged or otherwise acquired by the Company will, upon cancellation, have the status of authorized but unissued preferred stock undesignated as to series subject to reissuance by the Board of Directors. $21.25 PREFERRED STOCK The Company currently has issued and outstanding 100,000 shares of $21.25 Convertible Exchangeable Preferred Stock, par value $1.00 per share (the "$21.25 Preferred Stock"), represented by 1,000,000 depositary shares. On April 29, 1994, there were 182 record holders of the $21.25 Convertible Exchangeable Preferred Stock. Each depositary share represents 1/10th of a share of the $21.25 Preferred Stock and each owner of a depositary share is entitled, proportionately, to all of the rights and preferences of the $21.25 Preferred Stock described below. The $21.25 Preferred Stock ranks senior to the Convertible Preferred Stock with respect to dividends and liquidation. Holders of the shares of $21.25 Preferred Stock are entitled to receive an annual cash dividend of $21.25 per share ($2.125 per depositary share). Unless full cumulative dividends have been paid or declared, no cash dividends may be declared or paid or other distribution made on the Common Stock or the Convertible Preferred Stock. Holders of the $21.25 Preferred Stock will be entitled at any time to convert shares of $21.25 Preferred Stock into Common Stock of the Company at the conversion price of $377.50 ($37.75 per depositary share), subject to adjustment in certain circumstances. Each share of the $21.25 Preferred Stock is exchangeable, in whole but not in part, at the option of the Company, for $250 principal amount of the Company's 8-1/2% Convertible Subordinated Debentures Due 2012 ($25 per depositary share). Holders of such debentures will be entitled at any time to convert such debentures into Common Stock at the conversion price of $37.75, subject to adjustment in certain circumstances. The $21.25 Preferred Stock is redeemable at the option of the Company, in whole or in part, at specified redemption prices per share. The $21.25 Preferred Stock is not entitled to vote, except as to certain matters in regard to creation of additional series of preferred stock or in the event of an arrearage on dividends. If six quarterly dividends on the $21.25 Preferred Stock shall have accumulated and been unpaid, the number of directors of the Company will be increased by two and the holders of the $21.25 Preferred Stock, voting together as a class with any other series of preferred stock with the same rank similarly affected, will be entitled to elect such additional two directors until all dividends in default have been paid or declared and funds have been set apart for payment therefor, at which time such two directors will resign from the board and the number of directors of the Company will be reduced by two. Holders of the $21.25 Preferred Stock are entitled to receive a liquidating distribution of $250 per share in the event of an involuntary liquidation, or an amount equal to the then applicable optional redemption price in the event of a voluntary liquidation. SHAREHOLDERS' RIGHTS PLAN The Company has adopted a Shareholder Rights Plan pursuant to which it issued one Preferred Stock Purchase Right (each, a "Right") for each outstanding share of Common Stock. Each Right entitles the registered holder to purchase from the Company a unit consisting of one one-hundredth of a share (a "Unit") of Series A Junior Participating Cumulative Preferred Stock, par value $1.00 per share (the "Series A Preferred Stock"), at a cash Exercise Price of $100 per Unit, subject to adjustment. As set forth below, the Shareholder Rights Plan may have the effect of delaying, deferring or preventing a change in control of the Company. State Street Bank & Trust Co. is the agent for the Rights. Currently, the Rights are not exercisable and are attached to all outstanding shares of Common Stock. No separate Right Certificates will be distributed until the Distribution Date. The "Distribution Date" will occur (and the Rights will separate from the Common Stock) upon the earlier of (i) 10 days following a public announcement that a person or group of affiliated or associated persons (other than the Company and certain of its affiliates and other exempted persons) (an "Acquiring Person") has acquired beneficial ownership of 20% or more of the outstanding shares of Common Stock (the date of said announcement being referred to as the "Stock Acquisition Date"), or (ii) 10 business days following the commencement of a tender offer or exchange offer that would result in a person or group becoming an Acquiring Person, or (iii) the declaration by the Board of Directors that any person is an "Adverse Person". Until the Distribution Date (or earlier redemption or expiration of the Rights), (i) the Rights will be evidenced by the Common Stock certificates and will be transferred with such Common Stock certificates, (ii) new Common Stock certificates will contain a notation incorporating the Shareholder Rights Agreement by reference, and (iii) the surrender for transfer of any certificates for Common Stock will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate. The Rights are not exercisable until the Distribution Date and will expire at the close of business on September 23, 1998, unless previously redeemed by the Company as described below. As soon as practicable after the Distribution Date, Rights Certificates will be mailed to holders of record of Common Stock as of the close of business on the Distribution Date and, thereafter, the separate Rights Certificates alone will represent the Rights. Except as otherwise determined by the Board of Directors, only shares of Common Stock issued prior to the Distribution Date will be issued with Rights. In the event that a Stock Acquisition Date occurs or the Board of Directors determines that a person is an Adverse Person, proper provision will be made so that after the Distribution Date each holder of a Right will thereafter have the right to receive upon exercise that number of Units of Series A Preferred Stock of the Company having a market value of two times the exercise price of the Right (such right being referred to as the "Subscription Right"). Additionally, in the event that, at any time following the Stock Acquisition Date, (i) the Company is acquired in a merger or other business combination transaction or (ii) 50% or more of the Company's assets or earning power is sold, after the Distribution Date each holder of a Right shall thereafter have the right to receive, upon exercise, common stock of the acquiring company having a market value equal to two times the exercise price of the Right (such right being referred to as the "Merger Right"). The holder of a Right will continue to have the Merger Right whether or not such holder has exercised the Subscription Right. Rights that are or were beneficially owned by an Acquiring Person or an Adverse Person may (under certain circumstances specified in the Shareholder Rights Agreement) become null and void. At any time after a Stock Acquisition Date occurs or the Board of Directors determines that a person is an Adverse Person, the Board of Directors may, at its option, exchange all or any part of the then outstanding and exercisable Rights for shares of Common Stock or Units of Series A Preferred Stock at an exchange ratio of one share of Common stock or one Unit of Series A Preferred Stock per Right. The Exercise Price payable, and the number of units of Series A Preferred Stock or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution. With certain exceptions, no adjustment in the Exercise Price will be required until cumulative adjustments amount to at least 1% of the Exercise Price. Any of the provisions of the Shareholder Rights Agreement may be amended by the Board of Directors of the Company at any time prior to the Distribution Date. From and after the Distribution Date, the Board of Directors of the Company may subject to certain limitations specified in the Rights Agreement, amend the Rights Agreement to cure any ambiguity, defect or inconsistency, to shorten or lengthen any time period under the Rights Agreement, or to make other changes that do not adversely affect the interests of the Rights holders (excluding the interests of Acquiring Persons, Adverse Persons or their Affiliates or Associates). The Rights may be redeemed in whole, but not in part, at a price of $0.02 per Right (payable in cash, Common Stock or other consideration deemed appropriate by the Board of Directors) by the Board of Directors at any time prior to the date on which a person is declared to be an Adverse Person, the tenth day after the Stock Acquisition Date or the occurrence of an event giving rise to the Merger Right. Immediately upon the action of the Board of Directors ordering redemption of the Rights, the Rights will terminate and thereafter the only right of the holders of Rights will be to receive the redemption price. Until a Right is exercised, the holder will have no rights as a stockholder of the Company (beyond those as an existing common stockholder), including the right to vote or to receive dividends. While the distribution of the Rights in 1988 was not taxable to stockholders or to the Company, stockholders may, depending upon the circumstances, recognize taxable income in the event that the Rights become exercisable for Series A Preferred Stock (or other consideration) of the Company or for common stock of an acquiring company as set forth above. CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following is a brief description of certain Federal income tax aspects of this offering that should be considered by most investors. It is a summary only and is not intended as a substitute for careful tax planning. The discussion of the Federal income tax consequences set forth below is based upon currently existing provisions of the Internal Revenue Code of 1986, as amended (the "Code"), judicial decisions, and administrative interpretations including, but not limited to, Treasury Regulations relating to original issue discount (the "OID Regulations"), all of which are subject to change, which change could apply retroactively and adversely affect a holder of Depositary Shares, Convertible Preferred Stock or Debentures. No information is provided herein with respect to foreign, state and local or estate and gift tax considerations. This information is directed herein to investors who will hold the Convertible Preferred Stock, and Debentures and the Common Stock as "capital assets" within the meaning of the Code Section 1221. In addition, the discussion does not address the tax consequences to certain holders subject to special rules, including life insurance companies, tax-exempt organizations, banks and dealers in securities. PURCHASERS OF THE DEPOSITARY SHARES OFFERED HEREBY SHOULD CONSULT THEIR OWN TAX ADVISERS AS TO THE TAX CONSEQUENCES TO THEM OF AN INVESTMENT THEREIN, INCLUDING THE APPLICATION OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS. Holders of the Depositary Shares will be treated for Federal income tax purposes as if they were holders of the Convertible Preferred Stock represented by the Depositary Shares. Accordingly, (i) no gain or loss will be recognized for Federal income tax purposes upon the withdrawal of Convertible Preferred Stock in exchange for Depositary Shares as provided in the Deposit Agreement, (ii) the tax basis of each share of Convertible Preferred Stock to an exchanging holder of Depositary Shares will be the same as the aggregate tax basis of the Depositary Shares exchanged therefor and (iii) the holding period of the Convertible Preferred Stock received in exchange for the Depositary Shares will include the period during which the Depositary Shares were held. DIVIDENDS ON CONVERTIBLE PREFERRED STOCK The tax treatment of convertible exchangeable preferred stock with terms closely comparable to those of the Convertible Preferred Stock has not been the subject of any regulations, published rulings or judicial decisions currently in effect. However, under applicable authorities the Convertible Preferred Stock should be treated as equity for Federal income tax purposes and the remainder of this discussion of Federal income tax consequences assumes that they will be so treated. Dividends paid on the Convertible Preferred Stock will be taxable as ordinary income to the extent of the Company's current or accumulated earnings and profits, if any. To the extent a dividend exceeds a holder's allocable share of the Company's current or accumulated earnings and profits, the dividend will first be treated as a reduction of the holder's tax basis in the Convertible Preferred Stock, and then as capital gain (provided the Convertible Preferred Stock is held as a capital asset) to the extent in excess of such tax basis. To the extent that dividends paid on the Convertible Preferred Stock are treated as ordinary income, such dividends will be taxable as ordinary income but may qualify for the 70 percent dividends-received deduction under Section 243 of the Code, although the benefit of such deduction may be reduced or eliminated by the corporate alternative minimum tax. Under Section 246A of the Code, to the extent that a corporation incurs indebtedness "directly attributable" to a portfolio stock investment in another company (which would include the Convertible Preferred Stock), the 70 percent deduction for dividends received on such stock is generally disallowed. In addition, under Section 246(c) of the Code the 70 percent dividends-received deduction will not be available with respect to stock which is held for 45 days or less (90 days in the case of a dividend attributable to a period or periods aggregating more than 366 days). The length of time that a taxpayer is deemed to have held stock for these purposes is reduced for periods during which the taxpayer's risk of loss with respect to the stock is diminished by reason of the existence of certain options, contracts to sell or other similar transactions. Moreover, Section 1059 of the Code would require a corporate shareholder to reduce its basis (but not below zero) in the Convertible Preferred Stock by the nontaxed portion of any "extraordinary dividend" if the Convertible Preferred Stock has not been held for at least two years before the date of announcement or agreement with respect to such dividend. In addition, a holder disposing of Convertible Preferred Stock would have to recognize additional gain, if any, in an amount equal to nontaxed portions of any extraordinary dividends that would have reduced the holder's basis but for the limitation on reducing basis below zero. An "extraordinary dividend" on the Convertible Preferred Stock would generally be a dividend that (a) equals or exceeds five percent of the holder's basis in such stock, treating all dividends having ex-dividend dates within an 85-day period as one dividend, or (b) exceeds 20 percent of the holder's basis in such stock, treating all dividends having ex-dividend dates within a 365-day period as one dividend; provided that market value, if it can be established by the holder, may be substituted for stock basis for purposes of these tests. In addition, an amount treated as a dividend in the case of a redemption of the Convertible Preferred Stock that is either non-pro rata as to all stockholders or in partial liquidation would also constitute an "extraordinary dividend" without regard to the length of time the Convertible Preferred Stock has been held. The length of time that a taxpayer is deemed to have held stock for purposes of Section 1059 is determined under principles similar to those contained in Section 246(c) of the Code as discussed above. Corporate shareholders are urged to consult their tax advisors with respect to the possible application of this rule to a redemption or exchange for Debentures (see discussion below regarding redemption and exchange for Debentures). REDEMPTION PREMIUM Under Section 305 of the Code and the applicable Treasury Regulations, if the redemption price of redeemable preferred stock exceeds its issue price, a portion of such excess may constitute an unreasonable redemption premium taxable as a distribution in amounts determined under the economic accrual principles of Section 1272 of the Code over the period during which the preferred stock cannot be redeemed. Such constructive distribution is taxed as a dividend to the extent of the issuing corporation's current or accumulated earnings and profits. Under existing Treasury Regulations which are anticipated to apply in the case of redeemable preferred stock, such as the Convertible Preferred Stock, that the issuer is not required to redeem at a specified time (and which is not puttable by a shareholder), a premium is considered to be reasonable if it is in the nature of a penalty for a premature redemption and if such premium does not exceed the amount which the issuer would be required to pay for such redemption right under market conditions existing at the time of issuance of the preferred stock. The Revenue Reconciliation Act of 1990, however, authorized the Treasury to promulgate new regulations regarding the federal income tax treatment of redemption premiums with respect to preferred stock, which regulations are generally expected to be prospective with respect to the Convertible Preferred Stock, but which could be retroactive. Thus, no assurance can be given as to the treatment of the redemption premium with respect to the Convertible Preferred Stock under any such regulations. The redemption premium for the Convertible Preferred Stock is believed to be a reasonable penalty for premature redemption of the Convertible Preferred Stock based on existing market conditions; however, because of the factual nature of the determination, there is no certainty as to the reasonableness of the redemption premium and tax counsel is unable to provide any opinion thereon. The Company will not report any portion of the redemption premium as a constructive distribution which may be treated as a dividend. REDEMPTION AND EXCHANGE FOR DEBENTURES A redemption of Convertible Preferred Stock for cash or in exchange for Debentures will be a taxable event. A redemption of Convertible Preferred Stock for cash will be treated under Section 302 of the Code as a distribution that is taxable as a dividend to the extent of the Company's allocable current or accumulated earnings and profits unless the redemption (a) results in a "complete termination" of the shareholder's stock interest in the Company under Section 302(b)(3) of the Code; (b) is "substantially disproportionate" with respect to the shareholder under Section 302(b)(2) of the Code; or (c) is "not essentially equivalent to a dividend" with respect to the shareholder under Section 302(b)(1) of the Code. In determining whether any of these tests has been met, shares considered to be owned by the shareholder by reason of certain constructive ownership rules set forth in Section 318 of the Code, as well as shares actually owned, must generally be taken into account. A distribution to a shareholder will be "not essentially equivalent to a dividend" if it results in a "meaningful reduction" in the shareholder's stock interest in the Company. The Internal Revenue Service has issued a published ruling indicating that a redemption which results in a reduction in the proportionate interest in the Company (taking into account the Section 318 constructive ownership rules) of a shareholder whose relative stock interest is minimal (an interest of less than one percent should satisfy this requirement) and who exercises no control over Company affairs should be treated as being "not essentially equivalent to a dividend." If any of these three tests is met, the redemption of the Convertible Preferred Stock for cash would result in taxable gain or loss equal to the difference between the amount of cash received (less any portion thereof attributable to accumulated and declared unpaid dividends, which will be taxable as a dividend to the extent of the Company's current or accumulated earnings and profits) and the shareholder's adjusted tax basis in the Convertible Preferred Stock redeemed. Such gain or loss would be capital gain or loss if the Convertible Preferred Stock were held as a capital asset, and would be long-term capital gain or loss if the holding period for the Convertible Preferred Stock were to exceed one year. For purposes of this discussion, the "issue price" of the Debentures would, pursuant to the OID Regulations, be determined in the manner described below for purposes of computing original issue discount (if any) on the Debentures. See the discussion below under "Original Issue Discount". The issue price of the Debentures should generally be taken into account as the payment received for the stock for purposes of computing the amount of gain or loss realized by a holder upon the exchange of Convertible Preferred Stock for Debentures (and such holder's tax basis in the Debentures). A redemption of Convertible Preferred Stock by exchange for Debentures will be subject to the same rules as a redemption for cash, but because of their conversion feature, the receipt of Debentures in exchange for the Convertible Preferred Stock cannot qualify under the "complete termination" or "substantially disproportionate" tests described above unless, as a result of other transactions (such as contemporaneous sales of Debentures), the interest in the Company of the holder of Convertible Preferred Stock is sufficiently reduced. The redemption would, therefore, be treated as a distribution to the extent of the issue price of the Debentures and taxable as a dividend to the extent of the Company's allocable current or accumulated earnings and profits unless it satisfied the "not essentially equivalent to a dividend" test. Because a holder of convertible debentures is considered to own the underlying stock for purposes of the Section 318 constructive ownership rules, and because a redemption which does not result in any reduction in the interest of a shareholder holding less than a one percent interest does not satisfy the "meaningful reduction" standard, the exchange of Debentures for Convertible Preferred Stock may not result in a "meaningful reduction" of the holder's constructive interest in the Common Stock. Accordingly, no assurance can be given that the "not essentially equivalent to a dividend" test can be satisfied. If such a test were met such dividend treatment would not apply and the holder would instead recognize gain or loss equal to the difference between the issue price of the Debentures (less any portion thereof attributable to accumulated and declared unpaid dividends, which will be taxable as a dividend to the extent of the Company's current or accumulated earnings and profits) and the shareholder's adjusted tax basis in the Convertible Preferred Stock. Such gain or loss would be capital gain or loss and would be long-term capital gain or loss if the holding period for the Convertible Preferred Stock were to exceed one year. It is not anticipated that the conditions for the use of the installment method will be available for reporting such gain. If a redemption of the Convertible Preferred Stock is treated as a distribution that is taxable as a dividend, the amount of the distribution will be measured by the amount of cash or the issue price of the Debentures, as the case may be, received by the stockholder. The stockholder's basis in the redeemed Convertible Preferred Stock will be transferred to any remaining stockholdings in the Company. If the stockholder does not retain any stock ownership in the Company, he might be permitted to transfer such basis to any Debentures received in the redemption or he might lose such basis entirely. Any redemption of the Convertible Preferred Stock that is treated as a dividend and that is non-pro rata as to all shareholders may be subject to the "extraordinary dividend" provisions of section 1059 of the Code applicable to certain corporate shareholders, discussed above. See "Dividends on Convertible Preferred Stock" above. ORIGINAL ISSUE DISCOUNT If the Convertible Preferred Stock is exchanged for Debentures at a time when the stated redemption price at maturity of such Debentures exceeds their issue price (including the value of the conversion feature) by an amount equal to or greater than one-fourth of 1% of the stated redemption price at maturity times the number of complete years to maturity, the Debentures will be treated as having original issue discount ("OID") equal to the entire amount of such excess. If the Debentures and the Convertible Preferred Stock are traded on an established securities market within the meaning of section 1273(b)(3) of the Code, the issue price of the Debentures will be their fair market value (including the value of the conversion feature) as of the issue date. Moreover, if the Convertible Preferred Stock (but not the Debentures issued and exchanged therefor) is traded on an established securities market at the time of the exchange, then the issue price of the Debentures should be equal to the fair market value of the Convertible Preferred Stock at the time of the exchange. It is not possible to predict whether the Convertible Preferred Stock or the Debentures will be traded on an established securities market at the time of exchange. If neither the Preferred Stock nor the Debentures are traded on an established securities market, and absent any "potentially abusive situation," the issue price of the Debentures will be their stated principal amount, or, in the event the Debentures do not bear "adequate stated interest" within the meaning of section 1274 of the Code, their "imputed principal amount" as determined under section 1274 of the Code. A holder of a Debenture would generally be required under section 1272 of the Code to include in gross income (irrespective of its method of accounting) a portion of such OID for each year during which it holds such a Debenture, even though the cash to which such income is attributable would not be received until maturity or redemption of the Debenture. The amount of any OID included in income for each year would be calculated under a constant yield to maturity formula that would result in the allocation of less OID to the early years of the term of the Debenture and more OID for later years. If the Debentures are issued with OID and the Company were found to have had an intention to call the Debentures before maturity, any gain realized on a sale, exchange or redemption of Debentures prior to maturity would be considered ordinary income to the extent of any unamortized OID for the period remaining to the stated maturity of the Debentures. The Company cannot predict whether it would have an intention to call the Debentures before their maturity at the time, if ever, it issues the Debentures. Moreover, the Internal Revenue Service may take the position that the Company's right to redeem the Debentures manifests an intention on the part of the Company to call the Debentures prior to their maturity. Under the OID Regulations, however, debt instruments that are publicly offered such as the Debentures would be exempt from these "intention-to-call" rules. In addition, under the OID Regulations it is possible, although unlikely, that the Internal Revenue Service would take the position that because of the existence of a sinking fund the Debentures are to be treated as installment obligations. That position would affect the calculation of original issue discount as well as the application of the de minimis 1/4 percent exception described above. If issued with OID, the Debentures may be subject to the provisions of the Code dealing with high yield discount obligations in which case the Company may not be entitled to claim a deduction with respect to a certain portion of the OID (the "Disqualified Portion") and the remainder of the OID may not be claimed as a deduction until paid. In such case, the Disqualified Portion of the OID may be treated as a dividend with respect to the stock of the Company and the rules applicable to distributions with respect to the Convertible Preferred Stock may apply. BOND PREMIUM ON DEBENTURES If the Convertible Preferred Stock is exchanged for Debentures at a time when the issue price of such Debentures (excluding the amount thereof attributable to the conversion feature as determined under Treasury Regulations section 1.171-2(c)(2)) exceeds the amount payable at the maturity date (or earlier redemption date, if appropriate) of the Debentures, such excess will be deductible, subject to certain limitations with respect to individuals, by the holder of such Debentures as amortizable bond premium over the term of the Debentures (taking into account earlier call dates, as appropriate), under a yield to maturity formula but only if an election by the taxpayer under section 171 of the Code is in effect or is made. An election under section 171 of the Code is available only if the Debentures are held as capital assets. Such election is binding once made and applies to all debt obligations owned or subsequently acquired by the taxpayer. Under the Code, the amortizable bond premium will be treated as an offset to interest income on the Debentures rather than as a separate deduction item unless otherwise provided in future Treasury Regulations. MARKET DISCOUNT ON RESALE OF DEBENTURES The market discount provisions of sections 1276 through 1278 of the Code may adversely affect a disposition (including a redemption or retirement) of the Debentures. If a holder acquires a Debenture at a market discount which equals or exceeds one-fourth of 1% of the stated redemption price at maturity times the number of remaining complete years to maturity and thereafter recognizes gain upon a disposition of the Debentures, the lesser of (i) such gain, or (ii) the portion of the market discount which accrued while the Debenture was held by such holder, will be treated as ordinary income (and not as capital gain) at the time of the disposition. For these purposes, market discount equals the excess of the stated redemption price at maturity (or, if the Debenture is issued with OID, its revised issue price as defined in the Code) over the adjusted tax basis of the debenture in the hands of a holder immediately after its acquisition. Market discount would generally accrue on a straight line basis over the term of the Debenture, except that, at the election of the holder, it will accrue on an economic accrual basis. A holder of a Debenture may elect to include any market discount in income currently rather than upon disposition of the Debenture. This election is revocable only with the consent of the Internal Revenue Service and applies to all market discount bonds acquired by the holder on or after the first day of the taxable year in which the holder makes the election. A holder of any Debenture acquired at a market discount may be required to defer the deduction of all or a portion of any interest paid or accrued on any indebtedness incurred or continued to purchase or carry the Debenture until the market discount is recognizable upon a subsequent disposition of the Debenture. Such deferral is not required, however, if the holder elects to include accrued market discount in income currently. REDEMPTION OR SALE OF DEBENTURES Generally any redemption or sale of the Debentures by a holder would result in taxable gain or loss equal to the difference between the amount of cash received (except to the extent the cash received is attributable to accrued stated interest) and the holder's adjusted tax basis in the Debentures. The adjusted tax basis of a holder who received the Debentures in exchange for the Convertible Preferred Stock will generally be equal to the issue price of such Debentures at that time plus any OID previously included in income and less any bond premium previously amortized by such holder. Except as described above, such gain or loss would be capital gain or loss if the Debentures were held as a capital asset and would be taxed as described under "Redemption and Exchange for Debentures" above. However, if the Company were found to have an intention at the time the Debentures were issued to call them before maturity, the gain would be ordinary income to the extent of any unamortized OID, unless the exception for "publicly offered" debt instruments as set forth in the OID Regulations would be available. See "Original Issue Discount" above." BACKUP WITHHOLDING Under backup withholding rules, a holder of Convertible Preferred Stock or a Debenture may be subject to backup withholding at the rate of 31 percent with respect to dividends or interest paid, OID accrued with respect to, or the proceeds of a sale, exchange or redemption of, Convertible Preferred Stock, Debentures or Common Stock, as the case may be, unless (a) such holder is a corporation or comes within certain other exempt categories and, when required, demonstrates this fact or (b) provides a taxpayer identification number, certifies as to no loss of exemption from backup withholding, and otherwise complies with applicable requirements of the backup withholding rules. Amounts paid as backup withholding do not constitute an additional tax and will be credited against the holder's federal income tax liabilities, so long as the required information is provided to the Internal Revenue Service. The Company will report to the holders of Convertible Preferred Stock, Debentures or Common Stock and to the Internal Revenue Service the amount of any "reportable payments" for each calendar year and the amount of tax withheld, if any, with respect to payment on the securities. CONVERSION OF CONVERTIBLE PREFERRED STOCK OR DEBENTURES INTO COMMON STOCK In general, no gain or loss will be recognized for Federal income tax purposes on conversion of the Convertible Preferred Stock or the Debentures solely into shares of Common Stock. If dividends on the Convertible Preferred Stock were in arrears at the time of conversion, however, a portion of the Common Stock received in exchange for Convertible Preferred Stock would be viewed under Code Section 305(c) as a distribution with respect to the Convertible Preferred Stock, taxable as if it were a dividend distribution. The tax basis for the shares of Common Stock received upon conversion (other than shares attributable to dividend arrearages) will be equal to the tax basis of the Convertible Preferred Stock or Debentures converted and, provided that the Convertible Preferred Stock or the Debentures were held as capital assets, the holding period of the shares of Common Stock will include the holding period of the Convertible Preferred Stock or the Debentures converted. Gain realized upon the receipt of cash paid in lieu of fractional shares of Common Stock will be taxed immediately. Any accrued market discount not previously included in income as of the date of the conversion of Debentures will carry over to the Common Stock received on conversion and will be treated as ordinary income upon subsequent disposition of the Common Stock. ADJUSTMENT OF CONVERSION PRICE Section 305 of the Code treats as a taxable dividend certain actual or constructive distributions of stock with respect to stock and convertible securities. Treasury Regulations treat holders of convertible preferred stock or convertible debentures as having received such a constructive distribution where the conversion price of such preferred stock or debentures is adjusted to reflect certain taxable distributions with respect to the stock into which such preferred stock or debentures are convertible. Thus, an adjustment in the conversion price of the Convertible Preferred Stock or the Debentures may be taxable to the holders thereof as a dividend. UNDERWRITING Under the terms and conditions contained in the Underwriting Agreement dated July , 1994 (the "Underwriting Agreement"), J.P. Morgan Securities Inc. (the "Underwriter"), has agreed to purchase from the Company, and the Company has agreed to sell it, all of the Convertible Preferred Stock represented by Depositary Shares offered hereby. Under the terms and conditions of the Underwriting Agreement, the Underwriter is obligated to take and pay for all of the Convertible Preferred Stock represented by the Depositary Shares offered hereby if any are purchased. The Underwriter proposes to offer the Depositary Shares in part directly to the public at the public offering price set forth on the cover page of this Prospectus and in part to certain securities dealers at such price less a concession not in excess of $. per Depositary Share. The Underwriter may allow, and such dealers may reallow, a concession not in excess of $. per Depositary Share to certain other brokers and dealers. After the Depositary Shares are released for sale to the public, the offering price and such concessions thereon may from time to time be changed. The Company has granted to the Underwriter an option to purchase up to an additional 15,000 shares of Convertible Preferred Stock represented by 150,000 Depositary Shares at the initial offering price, less the discount, provided that any closing of such option will take place no later than , 1994. The Underwriter may exercise such option solely for the purpose of covering over-allotments, if any, made in connection with the sale of the Depositary Shares offered hereby. Without the prior written consent of the Underwriter, the Company has agreed, with certain limited exceptions, not to, for a period of 90 days after the date of this Prospectus, directly or indirectly, sell, offer to sell, grant any option for the sale of, or otherwise dispose of, any shares of Convertible Preferred Stock, Common Stock or any securities convertible into or exchangeable or exercisable for any such shares (other than upon conversion of the $21.25 Preferred Stock or pursuant to existing employee benefit plans). The Company has agreed to indemnify the Underwriter against certain liabilities, including liabilities under the Securities Act or to contribute to payments which the Underwriter may be required to make in respect thereof. There is currently no trading market for the Depositary Shares or the Convertible Preferred Stock represented thereby and no assurance can be given as to the development or liquidity of any trading market for the Depositary Shares or the Convertible Preferred Stock, although the Common Stock into which such securities are convertible is quoted on the American Stock Exchange. The Depositary Shares and the Convertible Preferred Stock represented by the Depositary Shares will not be listed on any exchange and the Company does not expect that there will be any trading market for the Convertible Preferred Stock except as represented by the Depositary Shares. In the ordinary course of its business, the Underwriter or any of its affiliates may engage in ordinary commercial banking and investment banking transactions with the Company in the future. In addition, Morgan Guaranty Trust Company of New York, a wholly-owned subsidiary of J.P. Morgan & Co. Incorporated and an affiliate of the Underwriter is the agent bank under credit agreements with the Company dated as of May 10, 1993 and March 9, 1994, under which the Company owed as of March 31, 1994 approximately $14,956,000 to Morgan Guaranty Trust Company of New York. Morgan Guaranty Trust Company of New York is also issuer of a letter of credit in the amount of $7,196,598 as of March 31, 1994, which supports debt of the Company's Employee Stock Ownership Trust. EXPERTS The audited Consolidated Financial Statements of the Company and the statement of construction revenues and costs of Newberg/Perini for the year ended December 31, 1992 included in this Prospectus and incorporated by reference in the Registration Statement of which this Prospectus is a part have been audited by Arthur Andersen & Co., independent public accountants, to the extent and for the periods indicated in their report thereon, which appears elsewhere herein and in the Registration Statement, and have been so included in reliance upon the report of Arthur Andersen & Co. given upon their authority as experts in accounting and auditing. The related statements of construction revenues and costs of Newberg/Perini for the years ended December 31, 1991 and 1990 have been audited by Alexander X. Kuhn & Co., independent public accountants, as indicated in their report with respect thereto and are included herein in reliance upon the authority of said firm as experts in accounting and auditing. The financial statements of Ebasco/Newberg, a Joint Venture, as of December 31, 1992 and 1991, and for each of the two years in the period ended December 31, 1992, not presented separately herein, have been audited by Deloitte & Touche, independent auditors, as indicated in their report with respect thereto and is included herein in reliance upon their authority as experts in accounting and auditing. LEGAL MATTERS Certain legal matters with respect to the Convertible Preferred Stock, the Debentures exchangeable therefor and the Common Stock issuable upon conversion of the Convertible Preferred Stock or the Debentures will be passed on for the Company by Jacobs Persinger & Parker, New York, New York. Certain legal matters with respect to the Depositary Receipts will be passed on for the Depositary by Peabody & Arnold, counsel to the Depositary. Marshall A. Jacobs, a director of the Company, is of counsel to the firm of Jacobs Persinger & Parker and owns 1,401 shares of the Common Stock of the Company. Certain legal matters with respect to the Convertible Preferred Stock, the Debentures exchangeable therefor and the Common Stock issuable upon conversion of the Convertible Preferred Stock or the Debentures will be passed on for the Underwriter by Cahill Gordon & Reindel (a partnership including a professional corporation), New York, New York. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Perini Corporation: We have audited the accompanying consolidated balance sheets of PERINI CORPORATION (a Massachusetts corporation) and subsidiaries as of December 31, 1993 and 1992, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended December 31, 1993. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Perini Corporation and subsidiaries as of December 31, 1993 and 1992, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1993, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN & CO. Boston, Massachusetts February 11, 1994 PERINI CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS
--------------------------------------------- MARCH 31, DECEMBER 31, In thousands except per share data 1994 1993 1992 ------- ------- ------- (UNAUDITED) CURRENT ASSETS: Cash, including cash equivalents of $55, $20,354 and $52,749 (Note 1) ............................ $ 1,282 $ 35,871 $ 79,563 Accounts and notes receivable, including retainage of $45,365, $45,084 and $48,748 ................. 109,579 123,009 123,189 Unbilled work ..................................... 14,952 14,924 8,878 Construction joint ventures (Notes 1 and 2) ....... 61,697 61,156 29,654 Real estate inventory ............................. 8,300 11,666 7,225 Deferred income taxes (Notes 1 and 5) ............. 7,702 7,702 -- Other current assets .............................. 6,024 3,274 3,505 ------- ------- ------- Total current assets ............................ $209,536 $257,602 $252,014 ------- ------- ------- REAL ESTATE DEVELOPMENT INVESTMENTS: Land held for sale or development (including land development costs) at the lower of cost or market (Note 1) ........................................ $ 47,736 $ 48,011 $ 46,943 Investments in and advances to real estate joint ventures (Notes 1, 2 and 11) ............................. 142,357 138,095 127,104 Real estate properties used in operations, less accumulated depreciation of $3,440, $3,638 and $3,181 .......................................... 9,890 12,678 16,235 Other ............................................. -- -- 636 ------- ------- ------- Total real estate development investments ....... $199,983 $198,784 $190,918 ------- ------- ------- PROPERTY AND EQUIPMENT, at cost: Land .............................................. $ 1,451 $ 1,451 $ 1,307 Buildings and improvements ........................ 15,690 15,566 15,455 Construction equipment ............................ 16,680 16,440 40,388 Other equipment ................................... 11,733 11,625 11,624 ------- ------- ------- $ 45,554 $ 45,082 $ 68,774 Less -- Accumulated depreciation (Note 1) ......... 29,274 28,986 44,233 ------- ------- ------- Total property and equipment, net ............... $ 16,280 $ 16,096 $ 24,541 ------- ------- ------- OTHER ASSETS: Other investments ................................. $ 2,056 $ 2,188 $ 1,473 Goodwill (Note 1) ................................. 1,692 1,708 1,750 ------- ------- ------- Total other assets .............................. $ 3,748 $ 3,896 $ 3,223 ------- ------- ------- $429,547 $476,378 $470,696 ------- ------- ------- ------- ------- ------- The accompanying notes are an integral part of these financial statements.
PERINI CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS -- CONTINUED LIABILITIES AND STOCKHOLDERS' EQUITY
--------------------------------------------- MARCH 31, DECEMBER 31, In thousands except per share data 1994 1993 1992 ------- ------- ------- (UNAUDITED) CURRENT LIABILITIES: Notes Payable -- Bank ............................. $ 4,000 $ -- $ -- Current maturities of long-term debt (Note 4) ..... 5,194 7,617 10,776 Accounts payable, including retainage of $39,347, $45,508 and $34,168 ............................. 107,012 136,231 134,750 Deferred contract revenue ......................... 27,092 25,867 25,768 Accrued expenses .................................. 39,628 47,827 49,170 Accrued income taxes (Notes 1 and 5) .............. 435 3,183 522 ------- ------- ------- Total current liabilities ......................... $183,361 $220,725 $220,986 ------- ------- ------- DEFERRED INCOME TAXES AND OTHER LIABILITIES (Notes 1 and 5) ................................................ $ 35,246 $ 38,794 $ 30,830 ------- ------- ------- LONG-TERM DEBT, less current maturities included above (Note 4): Real estate development ........................... $ 7,696 $ 11,382 $ 17,661 Other ............................................. 68,473 70,984 68,094 ------- ------- ------- Total long-term debt ............................ $ 76,169 $ 82,366 $ 85,755 ------- ------- ------- MINORITY INTEREST (Note 1) ............................ $ 3,367 $ 3,350 $ 11,360 ------- ------- ------- CONTINGENCIES AND COMMITMENTS (Note 11) STOCKHOLDERS' EQUITY (Notes 1, 7, 8, 9 and 10): Preferred stock, $1 par value -- Authorized -- 1,000,000 shares Issued and outstanding -- 100,000 shares ($25,000 aggregate liquidation preference) .... $ 100 $ 100 $ 100 Common stock, $1 par value -- Authorized -- 7,500,000 shares Issued -- 4,985,160 shares ...................... 4,985 4,985 4,985 Paid-in surplus ................................... 59,875 59,875 60,019 Retained earnings ................................. 83,855 83,594 82,554 Cumulative translation adjustment ................. -- (4,696) ESOT related obligations .......................... (6,982) (6,982) (7,888) ------- ------- ------- $141,833 $141,572 $135,074 Less -- Common stock in treasury, at cost -- 654,353, 654,353 and 835,036 shares ............. 10,429 10,429 13,309 ------- ------- ------- Total stockholders' equity ...................... $131,404 $131,143 $121,765 ------- ------- ------- $429,547 $476,378 $470,696 ------- ------- ------- ------- ------- -------
The accompanying notes are an integral part of these financial statements. PERINI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------- THREE MONTHS In thousands, except per ENDED MARCH 31, YEAR ENDED DECEMBER 31, share data 1994 1993 1993 1992 1991 --------- --------- --------- --------- ------- (UNAUDITED) REVENUES (Notes 2 and 14) .. $ 174,391 $ 258,043 $1,100,116 $1,070,852 $991,908 --------- --------- --------- --------- ------- COSTS AND EXPENSES (Notes 2 and 10): Cost of operations ....... $ 161,615 $ 247,038 $1,047,330 $1,048,663 $931,054 General, administrative and selling expenses ... 9,810 9,027 44,212 41,328 48,530 --------- --------- --------- --------- ------- $ 171,425 $ 256,065 $1,091,542 $1,089,991 $979,584 --------- --------- --------- --------- ------- INCOME (LOSS) FROM OPERATIONS (Note 14) ....... $ 2,966 $ 1,978 $ 8,574 $ (19,139) $ 12,324 Other income (expense), net (Note 6) ............... (420) 5,055 5,207 436 1,136 Interest expense, net of capitalized amounts (Notes 1, 3 and 4) ..... (1,247) (1,188) (5,655) (7,651) (9,022) --------- --------- --------- --------- ------- INCOME (LOSS) BEFORE INCOME TAXES ...................... $ 1,299 $ 5,845 $ 8,126 $ (26,354) $ 4,438 (Provision) credit for income taxes (Notes 1 and 5) ........ (507) (5,100) (4,961) 9,370 (1,260) --------- --------- --------- --------- ------- NET INCOME (LOSS) .......... $ 792 $ 745 $ 3,165 $ (16,984) $ 3,178 --------- --------- --------- --------- ------- --------- --------- --------- --------- ------- EARNINGS (LOSS) PER COMMON SHARES (Note 1) ............... $ .06 $ .05 $ .24 $ (4.69) $ .27 --------- --------- --------- --------- ------- --------- --------- --------- --------- -------
The accompanying notes are an integral part of these financial statements. PERINI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
---------------------------------------------------------------------------------------------------- CUMULATIVE ESOT PREFERRED COMMON PAID-IN RETAINED TRANSLATION RELATED TREASURY In thousands, except STOCK STOCK SURPLUS EARNINGS ADJUSTMENT OBLIGATION STOCK per share data --------- ------ ------- -------- ---------- ---------- -------- Balance -- December 31, 1990 ......... $100 $4,985 $60,635 $100,610 $(3,080) $ (9,528) $ (17,040) Net Income ......... -- -- -- 3,178 -- -- -- Preferred stock-cash dividends declared ($21.25 per share*) ...... -- -- -- (2,125) -- -- -- Restricted stock awarded .......... -- -- (8) -- -- -- 80 Translation adjustment ....... -- -- -- -- 45 -- -- Payments related to ESOT notes ....... -- -- -- -- -- 792 -- ------------------------------------------------------------------------------------------------------ Balance -- December 31, 1991 ......... $100 $4,985 $60,627 $101,663 $(3,035) $ (8,736) $(16,960) Net Income (Loss) .. -- -- -- (16,984) -- -- -- Preferred stock -- cash dividends declared ($21.25 per share*) .. -- -- -- (2,125) -- -- -- Treasury stock issued in partial payment of incentive compensation ..... -- -- (606) -- -- -- 3,642 Restricted stock awarded .......... -- -- (2) -- -- -- 9 Translation adjustment ....... -- -- -- -- (1,661) -- -- Payments related to ESOT notes ....... -- -- -- -- -- 848 -- ------------------------------------------------------------------------------------------------------ Balance -- December 31, 1992 ......... $100 $4,985 $60,019 $ 82,554 $(4,696) $ (7,888) $(13,309) Net Income ........ -- -- -- 3,165 -- -- -- Preferred stock -- cash dividends declared ($21.25 per share*) .. -- -- -- (2,125) -- -- -- Treasury stock issued in partial payment of incentive compensation ..... -- -- (143) -- -- -- 2,872 Restricted stock awarded .......... -- -- (1) -- -- -- 8 Related to sale of Majestic ......... -- -- -- -- 4,696 -- -- Payments related to ESOT notes ....... -- -- -- -- -- 906 -- ------------------------------------------------------------------------------------------------------ Balance -- December 31, 1993 ......... $100 $4,985 $59,875 $ 83,594 $-- $(6,982) $(10,429) Net Income ......... -- -- -- 792 -- -- -- Preferred stock -- cash dividends declared ($5.31 per share**) . -- -- -- (531) -- -- -- ------------------------------------------------------------------------------------------------------ Balance -- March 31, 1994 (Unaudited) . $100 $4,985 $59,875 $ 83,855 $-- $ (6,982) $(10,429) ------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------ - --------- *Equivalent to $2.125 per depositary share (see Note 7). **Equivalent to $.53125 per depositary share (see Note 7).
The accompanying notes are an integral part of these financial statements. PERINI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
------------------------------------------------------------------------- THREE MONTHS ENDED MARCH 31, YEAR ENDED DECEMBER 31, In thousands 1994 1993 1993 1992 1991 -------- -------- -------- -------- -------- (UNAUDITED) CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) ................ $ 792 $ 745 $ 3,165 $(16,984) $ 3,178 Adjustments to reconcile net income (loss) to net cash from operating activities -- Depreciation and amortization .. 663 656 3,515 6,297 7,190 Non-current deferred taxes and other liabilities ................ (3,548) 14,495 11,239 (13,236) 3,406 Distributions greater (less) than earnings of joint ventures and affiliates ...... 4,443 (2,719) (2,821) 9,412 (2,291) Writedown of certain real estate properties ....................... -- -- -- 31,368 2,800 (Gain) on sale of Monenco ...... -- -- -- (1,976) -- (Gain) on sale of Majestic (Notes 1 and 6) .................. -- (4,600) (4,631) -- -- (Gain) loss on sale of fixed assets ........................... -- -- (299) (570) (94) Minority interest, net ......... 17 (16) (78) 2,001 1,292 Cash provided from (used by) changes in components of working capital other than cash, notes payable and current maturities of long- term debt .................... (28,428) (27,994) (19,653) 35,819 29,549 Real estate development investments other than joint ventures ......................... 6,749 1,761 10,908 6,253 18,322 Other non-cash items, net ...... (1,028) (2,101) (2,922) (2,972) 7,501 -------- -------- -------- -------- -------- NET CASH FROM OPERATING ACTIVITIES ....................... $(20,340) $(19,773) $ (1,577) $ 55,412 $ 70,853 -------- -------- -------- -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of property and equipment .................... $ 42 $ 153 $ 1,344 $ 1,890 $ 1,815 Cash distributions of capital from unconsolidated joint ventures 698 1,155 4,977 3,413 4,469 Acquisition of property and equipment ........................ (772) (2,106) (4,387) (4,044) (6,614) Improvements to land held for sale or development .............. (130) (2,190) (4,227) (4,341) (8,307) Improvements to and acquisitions of real estate properties used in operations ................ (24) -- (614) (6,310) (894) Capital contributions to unconsolidated joint ventures .... (6,333) (6,359) (24,579) (8,425) (8,503) Advances to real estate joint ventures, net .................... (2,579) (2,830) (16,031) (12,091) (33,991) Proceeds from sale of Monenco shares ........................... -- -- -- 14,180 -- Proceeds from sale of Majestic, net of subsidiary's cash ......... -- 4,432 4,377 -- -- Investments in other activities -- -- -- (3) 1,127 -------- -------- -------- -------- -------- NET CASH USED BY INVESTING ACTIVITIES ....................... $ (9,098) $ (7,745) $(39,140) $(15,731) $(50,898) -------- -------- -------- -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from long-term debt ... $ 1,362 $ 507 $ 8,014 $ 9,571 $ 4,563 Repayment of long-term debt .... (9,982) (3,015) (11,600) (17,590) (18,661) Cash dividends paid ............ (531) (531) (2,125) (2,125) (2,125) Treasury stock issued .......... -- -- 2,736 3,043 72 Borrowings (repayment) of notes payable to banks ................. 4,000 -- -- -- (8,000) -------- -------- -------- -------- -------- NET CASH USED BY FINANCING ACTIVITIES ....................... $ (5,151) $ (3,039) $ (2,975) $ (7,101) $(24,151) -------- -------- -------- -------- -------- EFFECT OF EXCHANGE RATE CHANGES ON CASH ............................. $ -- $ -- $ -- $ (831) $ 18 -------- -------- -------- -------- -------- NET INCREASE (DECREASE) IN CASH .. $(34,589) $(30,557) $(43,692) $ 31,749 $ (4,178) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR ................ 35,871 79,563 79,563 47,814 51,992 -------- -------- -------- -------- -------- CASH AND CASH EQUIVALENTS AT END OF YEAR (PERIOD) ................. $ 1,282 $ 49,006 $ 35,871 $ 79,563 $ 47,814 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- SUPPLEMENTAL DISCLOSURES OF CASH PAID FOR: Interest, net of amounts capitalized ...................... $ 1,563 $ 1,652 $ 5,947 $ 10,995 $ 7,953 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Income tax payments (refunds) .. $ 2,626 $ 404 $ 843 $ (2,603) $(10,446) -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- The accompanying notes are an integral part of these financial statements.
PERINI CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED (INCLUDING DATA APPLICABLE TO UNAUDITED PERIODS) PERINI CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (INCLUDING DATA APPLICABLE TO UNAUDITED PERIODS) (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (A) PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Perini Corporation, its subsidiaries and certain majority-owned real estate joint ventures (the "Company"). All subsidiaries are wholly-owned except Majestic Contractors Limited ("Majestic"), which was approximately 74%-owned and Perland Environmental Technologies, Inc., which is approximately 90%-owned. All significant intercompany transactions and balances have been eliminated in consolidation. Non-consolidated joint venture interests are accounted for on the equity method with the Company's share of revenues and costs in these interests included in "Revenues" and "Cost of Operations," respectively, in the accompanying consolidated statements of operations. In January, 1993, the Company sold its 74%-ownership in Majestic, its Canadian pipeline construction subsidiary, for $31.7 million which resulted in an after tax gain of approximately $1.0 million. Effective July 1, 1993, the Company acquired Gust K. Newberg Construction Co.'s ("Newberg") interest in certain construction projects and related equipment. The purchase price for the acquisition was (i) approximately $3 million in cash for the equipment paid by a third party leasing company, which in turn simultaneously entered into an operating lease agreement with the Company for the use of said equipment, (ii) the greater of $1 million or 25% of the aggregate pretax earnings during the period from April 1, 1993 through December 31, 1994, net of payments accruing to Newberg as described in (iii) below, and (iii) 50% of the aggregate of net profits earned from each project from April 1, 1993 through December 31, 1994 and, with regard to one project through December 31, 1995. This acquisition is being accounted for as a purchase. If this acquisition had been consummated as of January 1, 1992, the 1992 and 1993 pro forma results would have been, respectively, Revenues of $1,164,444,000 and $1,134,264,000 and Net Income (Loss) of $(14,935,000) ($ (4.18) per common share) and $3,724,000 ($.37 per common share). (B) TRANSLATION OF FOREIGN CURRENCIES The accounts of the Canadian subsidiary were translated in accordance with Statement of Financial Accounting Standards (SFAS) No. 52, under which translation adjustments are accumulated directly as a separate component of stockholders' equity. Gains and losses on foreign currency transactions are included in results of operations during the period in which they arise. (C) METHOD OF ACCOUNTING FOR CONTRACTS Profits from construction contracts and construction joint ventures are generally recognized by applying percentages of completion for each year to the total estimated profits for the respective contracts. The percentages of completion are determined by relating the actual cost of the work performed to date to the current estimated total cost of the respective contracts. When the estimate on a contract indicates a loss, the Company's policy is to record the entire loss. The cumulative effect of revisions in estimates of total cost or revenue during the course of the work is reflected in the accounting period in which the facts which caused the revision became known. An amount equal to the costs attributable to unapproved change orders and claims is included in the total estimated revenue when realization is probable. Profit from claims is recorded in the year such claims are resolved. In accordance with normal practice in the construction industry, the Company includes in current assets and current liabilities amounts related to construction contracts realizable and payable over a period in excess of one year. Unbilled work represents the excess of contract costs and profits recognized to date on the percentage of completion accounting method over billings to date on certain contracts. Deferred contract revenue represents the excess of billings to date over the amount of contract costs and profits recognized to date on the percentage of completion accounting method on the remaining contracts. (D) METHODS OF ACCOUNTING FOR REAL ESTATE OPERATIONS All real estate sales are recorded in accordance with SFAS. No. 66. Gross profit is not recognized in full unless the collection of the sale price is reasonably assured and the Company is not obliged to perform significant activities after the sale. Unless both conditions exist, recognition of all or a part of gross profit is deferred. The gross profit recognized on sales of real estate is determined by relating the estimated total land, land development and construction costs of each development area to the estimated total sales value of the property in the development. If the estimated total costs exceed the estimated total sales value, a provision is made to reduce the carrying value of the development by the amount of this excess. These provisions (or writedowns to net realizable value) amounted to $31.4 million in 1992 and $2.8 million in 1991. Certain interest expense incurred by the Company is capitalized as part of the costs of property being developed or constructed. Interest capitalized was $.2 million in 1993 and 1992, and $2.2 million in 1991. Real estate taxes applicable to property being developed or constructed are generally capitalized as part of "Real Estate Properties Under Construction" or "Land Development Costs." (E) DEPRECIABLE PROPERTY AND EQUIPMENT Land, buildings and improvements, construction and computer-related equipment and other equipment are recorded at cost. Depreciation is provided primarily using accelerated methods for construction and computer-related equipment and the straight-line method for the remaining depreciable property. (F) GOODWILL Goodwill represents the excess of the costs of subsidiaries acquired over the fair value of their net assets as of the dates of acquisition. These amounts are being amortized on a straight-line basis over 40 years. (G) INCOME TAXES Effective January 1, 1993, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes," the adoption of which did not result in a material impact on the accompanying financial statements (see Note 5). It is the policy of the Company to accrue appropriate U.S. and foreign income taxes on earnings of foreign subsidiaries which are intended to be remitted to the Company. (H) EARNINGS PER COMMON SHARE Computations of earnings per common share amounts are based on the weighted average number of common shares outstanding during the respective periods. During the three-year period ended December 31, 1993 and the three-month periods ended March 31, 1994 and 1993, earnings per common share reflect the effect of preferred dividends accrued during the year. Common stock equivalents related to additional shares of common stock issuable upon exercise of stock options (see Note 9) have not been included since their effect would be immaterial or antidilutive. Earnings per common share on a fully diluted basis are not presented because the effect of conversion of the Company's depositary convertible exchangeable preferred shares into common stock is antidilutive. (I) CASH AND CASH EQUIVALENTS Cash equivalents include short-term, highly liquid investments with original maturities of three months or less. (J) RECLASSIFICATIONS Certain prior year amounts have been reclassified to be consistent with the current year classifications. (K) INTERIM CONSOLIDATED FINANCIAL STATEMENTS The consolidated balance sheet as of March 31, 1994, the consolidated statements of operations and cash flows for the three months ended March 31, 1994 and 1993, and the consolidated statement of stockholders' equity for the three months ended March 31, 1994 are unaudited but, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments) necessary to present fairly the results for these interim periods. (2) JOINT VENTURES The Company, in the normal conduct of its business, has entered into certain partnership arrangements, referred to as "joint ventures," for construction and real estate development projects. Each of the joint venture participants is usually committed to supply a predetermined percentage of capital, as required, and to share in a predetermined percentage of the income or loss of the project. Summary financial information (in thousands) for construction and real estate joint ventures accounted for on the equity method for the three years ended December 31, 1993 follows: CONSTRUCTION JOINT VENTURES
----------------------------------------- Financial position at December 31, 1993 1992 1991 ------- ------- ------- Current assets .................................. $241,905 $216,568 $177,388 Property and equipment, net ..................... 17,228 18,203 10,434 Current liabilities ............................. (151,181) (155,026) (103,785) ------- ------- ------- Net assets ...................................... $107,952 $ 79,745 $ 84,037 ------- ------- ------- ------- ------- ------- Operations for the year ended December 31, 1993 1992 1991 ------- ------- ------- Revenue ......................................... $626,327 $487,758 $419,772 Cost of operations .............................. 574,383 445,494 381,508 ------- ------- ------- Pretax income ................................... $ 51,944 $ 42,264 $ 38,264 ------- ------- ------- ------- ------- ------- Company's share of joint ventures 1993 1992 1991 ------- ------- ------- Revenue ......................................... $293,547 $254,265 $207,458 Cost of operations .............................. 272,137 231,564 184,996 ------- ------- ------- Pretax income ................................... $ 21,410 $ 22,701 $ 22,462 ------- ------- ------- ------- ------- ------- Investment ...................................... $ 61,156 $ 29,654 $ 29,958 ------- ------- ------- ------- ------- ------- REAL ESTATE JOINT VENTURES ----------------------------------------- Financial position at December 31, 1993 1992 1991 ------- ------- ------- Property held for sale or development ........... $ 35,855 $ 17,902 $ 50,822 Investment properties, net ...................... 191,606 243,477 239,089 Other assets .................................... 61,060 59,688 51,664 Long-term debt .................................. (103,090) (151,538) (168,937) Other liabilities ............................... (256,999) (229,865) (205,326) ------- ------- ------- Net assets (liabilities) ........................ $(71,568) $ (60,336) $ (32,688) ------- ------- ------- ------- ------- ------- Operations for the year ended December 31, 1993 1992 1991 ------- ------- ------- Revenue ......................................... $ 83,710 $ 64,776 $ 59,501 Cost of operations .............................. 101,623 95,823 89,938 ------- ------- ------- Pretax income (loss) ............................ $ (17,913) $ (31,047) $ (30,437) ------- ------- ------- Company's share of joint ventures Revenue ......................................... $ 43,590 $ 27,118 $ 38,223 Cost of operations .............................. 50,339 46,423 42,523 ------- ------- ------- Pre-tax income (loss) ........................... $ (6,749) $ (19,305) $ (4,300) ------- ------- ------- ------- ------- ------- Investment ...................................... $ (27,768) $ (23,542) $ (4,889) ------- ------- ------- ------- ------- -------
(3) NOTES PAYABLE TO BANKS The Company maintains unsecured short-term lines of credit totaling $18 million at December 31, 1993 and March 31, 1994. In support of these credit lines, the Company generally has agreed to pay fees which approximate 1/4 of 1% of the amount of the lines. Information relative to the Company's short- term debt activity under such lines in 1993 and 1992 follows (in thousands): -------------------- MARCH 31, DECEMBER 31, 1994 1993 1992 ------ ------ ------ Borrowings during the period: Average ...................... $ 7,941 $ 8,451 $ 3,980 Maximum ...................... $15,000 $18,000 $17,000 At end of period ............. $ 4,000 $ -- $-- Weighted average interest rates: During the period ............ 6.1% 6.2% 6.4% At end of period ............. 6.3% -- -- In addition, effective March 31, 1994, the Company obtained a $15 million collateralized short-term credit facility available for the balance of 1994. At March 31, 1994, no amounts were borrowed under this facility. This facility will terminate upon the completion of the offering covered by this Prospectus. (4) LONG-TERM DEBT Long-term debt of the Company consisted of the following (in thousands):
----------------------------------- MARCH 31, DECEMBER 31, 1994 1993 1992 ------ ------ ------ REAL ESTATE DEVELOPMENT: Industrial revenue bonds, primarily at 65% of prime, payable in semi-annual installments .............. $ 1,683 $ 1,683 $ 5,340 Mortgages on real estate, at rates ranging from 4 7/8% to 10.82%, payable in installments ......... 8,570 16,027 19,732 Other indebtedness ................................. -- -- 687 ------ ------ ------ Total .............................................. $10,253 $17,710 $25,759 Less -- current maturities ......................... 2,557 6,328 8,098 ------ ------ ------ Net real estate development long-term debt ..... $ 7,696 $11,382 $17,661 ------ ------ ------ ------ ------ ------ OTHER: Revolving credit loans at an average rate of 5.8% in 1993 and 5% in 1992 .............................. $58,000 $60,000 $53,125 ESOT Notes at 8.24%, payable in semi-annual installments (Note 7) ............................ 5,825 6,238 7,014 Industrial revenue bonds at various rates, payable in installments to 2005 ............................ 4,000 4,000 5,254 Other indebtedness ................................. 3,285 2,035 5,379 ------ ------ ------ Total .............................................. $71,110 $72,273 $70,772 Less -- current maturities ......................... 2,637 1,289 2,678 ------ ------ ------ Net other long-term debt ....................... $68,473 $70,984 $68,094 ------ ------ ------ ------ ------ ------
Payments required under these obligations amount to approximately $7,617 in 1994, $5,359 in 1995, $62,666 in 1996, $2,656 in 1997, $3,601 in 1998 and $8,084 for the years 1999 and beyond. The Company's revolving credit agreement, as amended, with a group of major banks provides for, among other things, the Company to borrow up to an aggregate of $70 million, with a $15 million maximum of such amount also being available for letters of credit. The Company may choose from three interest rate alternatives including a prime-based rate, as well as other interest rate options based on LIBOR (London inter-bank offered rate) or participating bank certificate of deposit rates. Borrowings and repayments may be made at any time through April 30, 1996, at which time all outstanding loans under the agreement must be paid or otherwise refinanced. The Company must pay a commitment fee of 1/2 of 1% annually on the unused portion of the commitment. The revolving credit agreement, as well as certain other loan agreements, provides for, among other things, maintaining specified working capital and tangible net worth levels and, additionally, imposes limitations on indebtedness and future investment in real estate development projects. PERINI CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED (INCLUDING DATA APPLICABLE TO UNAUDITED PERIODS) (5) INCOME TAXES Effective January 1, 1993, the Company adopted SFAS No. 109 on accounting for income taxes. This standard determines deferred income taxes based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities, given the provisions of enacted tax laws. Prior to the implementation of this statement, the Company accounted for income taxes under Accounting Principles Board Opinion No. 11. The impact of adopting SFAS No. 109 was not material, and accordingly, there is no cumulative effect of a change in accounting method presented in the statement of operations for the year ended December 31, 1993. Prior year financial statements have not been restated to apply the provisions of SFAS No. 109. The (provision) credit for income taxes is comprised of the following (in thousands):
-------------------------------------------------- FEDERAL FOREIGN STATE TOTAL --------- --------- -------- -------- 1993 Current ........................................... $ (2,824) $ -- $ (430) $ (3,254) Deferred .......................................... (1,808) -- 101 (1,707) ----------- ----------- ---------- ----------- $ (4,632) $ -- $ (329) $ (4,961) ----------- ----------- ---------- ----------- ----------- ----------- ---------- ----------- 1992 Current ........................................... $ -- $ (5,486) $ (325) $ (5,811) Deferred .......................................... 13,236 814 1,131 15,181 ----------- ----------- ---------- ----------- $13,236 $ (4,672) $ 806 $ 9,370 ----------- ----------- ---------- ----------- ----------- ----------- ---------- ----------- 1991 Current ........................................... $ 5,964 $ (2,497) $ (200) $ 3,267 Deferred .......................................... (5,325) 742 56 (4,527) ----------- ----------- ---------- ----------- $ 639 $ (1,755) $ (144) $ (1,260) ----------- ----------- ---------- ----------- ----------- ----------- ---------- -----------
The domestic and foreign components of income (loss) before income taxes are as follows (in thousands):
------------------------------------- U.S. FOREIGN TOTAL --------- -------- -------- 1993 .................................................... $ 8,126 $ -- $ 8,126 1992 .................................................... $ (42,238) $15,884 $(26,354) 1991 .................................................... $ 328 $ 4,110 $ 4,438
The table below reconciles the difference between the statutory federal income tax rate and the effective rate provided in the statements of operations.
--------------------------------------------------- MARCH 31, DECEMBER 31, 1994 1993 1993 1992 1991 ---- ---- ---- ---- ---- Statutory federal income tax rate ...................... 34% 34% 34% (34)% 34% Foreign taxes .......................................... -- -- -- (1) 3 State income taxes, net of federal tax benefit ......... 5 1 2 (1) -- Reversal of tax valuation reserves no longer required .. -- -- -- -- (10) Sale of Canadian subsidiary ............................ -- 52 24 -- -- Other .................................................. -- -- 1 -- 1 ------- ------- ------- -------- ------- 39% 87% 61% (36)% 28% ------- ------- ------- -------- ------- ------- ------- ------- -------- -------
The following is a summary of the significant components of the Company's deferred tax assets and liabilities as of December 31, 1993 (in thousands): ---------------------------------- DEFERRED DEFERRED TAX ASSETS TAX LIABILITIES ------------- ----------------- Provision for estimated losses .......................... $ 9,684 $ -- Contract losses ......................................... 2,841 -- Joint ventures -- construction .......................... -- 6,996 Joint ventures -- real estate ........................... -- 18,078 Timing of expense recognition ........................... 5,012 -- Capitalized carrying charges ............................ -- 2,301 Net operating loss carryforwards ........................ 916 -- Alternative minimum tax credit carryforwards ............ 3,567 -- General business tax credit carryforwards ............... 4,038 -- Foreign tax credit carryforwards ........................ 1,352 -- Other, net .............................................. 422 -- ------- ------- $27,832 $27,375 Valuation allowance for deferred tax assets ............. (2,251) -- ------- ------- Total ................................................... $25,581 $27,375 ------- ------- ------- -------
The valuation allowance for deferred tax assets is principally attributable to the net operating loss carryforwards of Perland Environmental Technologies, Inc. and foreign tax credit carryforwards resulting from the 1993 sale of the Company's Canadian subsidiary. Any portion of the valuation allowance attributable to these deferred tax assets for which benefits are subsequently recognized will be applied to reduce income tax expense. At December 31, 1993, the Company has unused tax credits and net operating loss carryforwards for income tax reporting purposes which expire as follows (in thousands):
-------------------------------------------------------------- UNUSED INVESTMENT FOREIGN NET OPERATING LOSS TAX CREDITS TAX CREDITS CARRYFORWARDS -------------------- -------------- --------------------- 1994-1998 ........................... $ 32 $1,352 $ -- 1999-2002 ........................... 935 -- -- 2003-2006 ........................... 3,071 -- 2,700 ------ ------ ------ $4,038 $1,352 $2,700 ------ ------ ------ ------ ------ ------
Approximately $2.7 million of the net operating loss carryforwards can only be used against the taxable income of the corporation in which the loss was recorded for tax and financial reporting purposes. (6) OTHER INCOME (EXPENSE), NET Other income (expense) items are as follows (in thousands):
---------------------------------------------------------------- MARCH 31, DECEMBER 31, 1994 1993 1993 1992 1991 ------- -------- ------- ------------ ------- Interest and dividend income ........... $-- $ -- $ 624 $ 1,783 $1,016 Minority interest (Note 1) ............. 32 71 167 (3,039) (76) Gain on sale of Majestic (Note 1) ...... -- 4,600 4,631 -- -- Gain on sale of investment in Monenco .. -- -- -- 1,976 -- Miscellaneous income (expense), net .... (452) 384 (215) (284) 196 ------- -------- ------- -------- ------- $(420) $5,055 $5,207 $ 436 $1,136 ------- -------- ------- -------- ------- ------- -------- ------- -------- -------
(7) CAPITALIZATION In July 1989, the Company sold 262,774 shares of its $1 par value common stock, previously held in treasury, to its Employee Stock Ownership Trust ("ESOT") for $9,000,000. The ESOT borrowed the funds via a placement of 8.24% Senior Unsecured Notes ("Notes") guaranteed by the Company. The Notes are payable in 20 equal semi-annual installments of principal and interest commencing in January 1990. The Company's annual contribution to the ESOT, plus any dividends accumulated on the Company's common stock held by the ESOT, will be used to repay the Notes. Since the Notes are guaranteed by the Company, they are included in "Long-Term Debt" with an offsetting reduction in "Stockholders" Equity'' in the accompanying consolidated balance sheets. The amount included in "Long-Term Debt" will be reduced and "Stockholders" Equity'' reinstated as the Notes are paid by the ESOT. In June 1987, net proceeds of approximately $23,631,000 were received from the sale of 1,000,000 depositary convertible exchangeable preferred shares (each depositary share representing ownership of 1/10 of a share of $21.25 convertible exchangeable preferred stock, $1 par value) at a price of $25 per depositary share. Annual dividends are $2.125 per depositary share and are cumulative. Generally, the liquidation preference value is $25 per depositary share plus any accumulated and unpaid dividends. The $21.25 Preferred Stock is convertible at the option of the holder, at any time, into common stock of the Company at a conversion price of $37.75 per share of common stock. The $21.25 Preferred Stock is redeemable at the option of the Company at any time after June 15, 1990, in whole or in part, at declining premiums until June 1997 and thereafter at $25 per share plus any unpaid dividends. The $21.25 Preferred Stock is also exchangeable at the option of the Company, in whole but not in part, on any dividend payment date into 8 1/2% convertible subordinated debentures due in 2012 at a rate equivalent to $25 principal amount of debentures for each depositary share. (8) SERIES A JUNIOR PARTICIPATING PREFERRED STOCK Under the terms of the Company's Shareholder Rights Plan, as amended, the Board of Directors of the Company declared a distribution on September 23, 1988 of one preferred stock purchase right (a "Right") for each outstanding share of common stock. Under certain circumstances, each Right will entitle the holder thereof to purchase from the Company one one-hundredth of a share (a "Unit") of Series A Junior Participating Cumulative Preferred Stock, $1 par value (the "Preferred Stock"), at an exercise price of $100 per Unit, subject to adjustment. The Rights will not be exercisable or transferable apart from the common stock until the occurrence of certain events viewed to be an attempt by a person or group to gain control of the Company (a "triggering event"). The Rights will not have any voting rights or be entitled to dividends. Upon the occurrence of a triggering event, each Right will be entitled to that number of Units of Preferred Stock of the Company having a market value of two times the exercise price of the Right. If the Company is acquired in a merger or 50% or more of its assets or earning power is sold, each Right will be entitled to receive common stock of the acquiring company having a market value of two times the exercise price of the Right. Rights held by such a person or group causing a triggering event may be null and void. The Rights are redeemable at $.02 per Right by the Board of Directors at any time prior to the occurrence of a triggering event and will expire on September 23, 1998. (9) STOCK OPTIONS At March 31, 1994, December 31, 1993 and 1992, 481,610 shares of the Company's authorized but unissued common stock were reserved for issuance to employees under its 1982 Stock Option Plan. Options are granted at fair market value on the date of grant and generally become exercisable in two equal annual installments on the second and third anniversary of the date of grant and expire eight years from the date of grant. The options granted in 1992 become exercisable on March 31, 2001 if the Company achieves a certain profit target in the year 2000, may become exercisable earlier if certain interim profit targets are achieved, and, to the extent not exercised, expire 10 years from the date of grant. A summary of stock option activity related to the Company's stock option plan is as follows: -------------------------------------- NUMBER OF NUMBER OF OPTION PRICE SHARES SHARES PER SHARE EXERCISABLE --------- ------------- ----------- Outstanding at December 31, 1991 ... 216,925 $11.06-$33.06 71,025 Granted .......................... 252,000 $16.44 Canceled ......................... (30,100) $11.06-$33.06 Outstanding at December 31, 1992 ... 438,825 $11.06-$33.06 91,075 Granted .......................... -- -- Canceled ......................... (4,400) $11.06-$33.06 Outstanding at December 31, 1993 ... 434,425 $11.06-$33.06 143,000 Granted .......................... 20,000 $13.00 Canceled ......................... (12,700) $11.06-$33.06 Outstanding at March 31, 1994 ...... 441,725 $11.06-$33.06 132,950 When options are exercised, the proceeds are credited to stockholders' equity. In addition, the income tax savings attributable to nonqualified options exercised is credited to paid-in surplus. (10) EMPLOYEE BENEFIT PLANS The Company and its U.S. subsidiaries have a defined benefit plan which covers its executive, professional, administrative and clerical employees, subject to certain specified service requirements. The plan is noncontributory and benefits are based on an employee's years of service and "final average earnings", as defined. The plan provides reduced benefits for early retirement and takes into account offsets for social security benefits. All employees are vested after 5 years of service. Net pension cost for 1993, 1992 and 1991 follows (in thousands):
---------------------------------------- 1993 1992 1991 ---------- ----------- ----------- Service cost -- benefits earned during the period ......... $1,000 $ 896 $ 949 Interest cost on projected benefit obligation ............. 2,862 2,314 2,456 Return on plan assets: Actual .................................................. (4,002) (1,220) (5,143) Deferred ................................................ 1,309 (1,043) 2,895 Other ..................................................... 19 19 18 ---------- ----------- ----------- Net pension cost .......................................... $1,188 $ 966 $1,175 ---------- ----------- ----------- ---------- ----------- ----------- Actuarial assumptions used: Discount rate ........................................... 7 1/2%* 8 1/2% 8 1/2% Rate of increase in compensation ........................ 5 1/2%* 6 1/2% 6 1/2% Long-term rate of return on assets ...................... 8%* 9% 9% - -------------- *Rates were changed effective December 31, 1993 and resulted in a net increase of $3.1 million in the projected benefit obligation referred to below.
The Company's plan has assets in excess of accumulated benefit obligation. Plan assets generally include equity and fixed income funds. The status of the Company's employee pension benefit plan is summarized below (in thousands):
------------------------ DECEMBER 31, 1993 1992 ----------- ----------- Assets available for benefits: Funded plan assets at fair value ................................... $32,795 $30,305 Accrued pension expense ............................................ 3,780 2,592 ----------- ----------- Total assets ......................................................... $36,575 $32,897 ----------- ----------- Actuarial present value of benefit obligations: Accumulated benefit obligations, including vested benefits of $31,837 and $26,790 .................................. $32,463 $27,243 Effect of future salary increases .................................. 6,468 6,229 ----------- ----------- Projected benefit obligations ........................................ $38,931 $33,472 ----------- ----------- Assets available less than projected benefits ........................ $ 2,356 $ 575 ----------- ----------- ----------- ----------- Consisting of: Unamortized net liability existing at date of adopting SFAS No. 87 ..................................................... $ 41 $ 47 Unrecognized net loss .............................................. 2,260 460 Unrecognized prior service cost .................................... 55 68 ----------- ----------- $ 2,356 $ 575 ----------- ----------- ----------- -----------
The Company's policy is generally to fund currently the costs accrued under the pension plan and the Section 401(k) plan described below. The Company also has noncontributory Section 401(k) and employee stock ownership plans (ESOP) which cover its executive, professional, administrative and clerical employees, subject to certain specified service requirements. Under the terms of the Section 401(k) plan, the provision is based on a specified percentage of profits, subject to certain limitations. Contributions to the related employee stock ownership trust (ESOT) are determined by the Board of Directors and may be paid in cash or shares of company common stock. In addition, the Company has an incentive compensation plan for key employees which is generally based on achieving certain levels of profit within their respective business units. The aggregate amounts provided under these employee benefit plans were $9.1 million in 1993, $10.8 million in 1992 and $12.7 million in 1991. The Company also contributes to various multiemployer union retirement plans under collective bargaining agreements, which provide retirement benefits for substantially all of its union employees. The aggregate amounts provided in accordance with the requirements of these plans were $5.2 million in 1993, $11.2 million in 1992 and $8.5 million in 1991. The Multiemployer Pension Plan Amendments Act of 1980 defines certain employer obligations under multiemployer plans. Information regarding union retirement plans is not available from plan administrators to enable the Company to determine its share of unfunded vested liabilities. (11) CONTINGENCIES AND COMMITMENTS At December 31, 1993, the Company has guaranteed approximately $1.7 million of debt incurred by various joint ventures in addition to the guarantees referred to below. In connection with a real estate development joint venture, the Company's wholly-owned real estate subsidiary has guaranteed the payment of interest on both mortgage and bond financing covering a project with loans totaling $62 million; has issued a secured letter of credit to collateralize $4.5 million of these borrowings; has guaranteed amortization payments up to $10.4 million on these borrowings; and has guaranteed a master lease under a sale operating lease-back transaction under which management believes the subsidiary's additional funding obligation on a 10% present value basis will not exceed $2.6 million. The Company has also guaranteed $5.0 million of the subsidiary's $10.4 million amortization guaranty and any obligation under the master lease during the next five years. As part of the sale operating lease-back transaction, the joint venture, in which the Company's real estate subsidiary is a 46% general partner, agreed to obtain a financial commitment on behalf of the lessor to replace at least $43 million of long-term financing by July 1, 1993. To satisfy this obligation, the partnership successfully extended existing financing to July 1, 1998. To complete the extension, the partnership had to advance funds sufficient to reduce the financing from $46.5 million to $40.5 million. In addition, as part of the obligations of the extension, the partnership will have to further amortize the debt from its current $40.5 million to $33 million over the next five years. If by January 1, 1998, the joint venture has not received a further extension or new commitment for financing on the property for at least $33 million, the lessor will have the right under the lease to require the joint venture to purchase the property for a stipulated amount significantly in excess of the debt. In 1993, the joint venture also extended $29 million of the $62 million financing mentioned above through October 1, 1998. This extension required a $.6 million up front paydown and also requires the joint venture to amortize up to $13 million of the principal over the next five years. Under certain conditions, the amortization could be as low as $9 million. It is expected that some but not all of the amortization requirements will be generated by the project's operations. In a separate agreement related to this same property, the 20% co-general partner has indicated it does not have nor does it expect to have the financial resources to fund its share of capital calls. Therefore, the Company's wholly-owned real estate subsidiary agreed to lend this 20% co- general partner on an as-needed basis, its share of any capital calls which the partner cannot meet. In return, the Company's subsidiary receives a priority return from the partnership on those funds it advances for its partner and penalty fees in the form of rights to certain other distributions due the borrowing partner from the partnership. The severity of the penalty fees increases in each succeeding year for the next several years. During 1993, the subsidiary advanced $1.7 million under this agreement, primarily to meet the principal payment obligations of the loan extensions described above. In connection with a second real estate development joint venture, the Company's wholly-owned real estate subsidiary has guaranteed the payment of interest on mortgage financing with a total bank loan value currently estimated at $48 million; has guaranteed $10 million of loan principal; has posted a letter of credit for $1.6 million as its part of credit support required to extend the maturity of the $48 million loan to May, 1995, which letter of credit is guaranteed by both the Company and its subsidiary; and has guaranteed leases which aggregate $2 million on a present value basis as discounted at 10%. In connection with a third real estate development joint venture, the Company's wholly-owned real estate subsidiary has guaranteed 50% of the outstanding loan, up to a maximum of $12.5 million of principal of the loan, of which $5.6 million represents the subsidiary's share of the amount outstanding at December 31, 1993. Included in the loan agreements related to the above joint ventures, among other things, are provisions that, under certain circumstances, could limit the subsidiary's ability to transfer funds to the Company. In the opinion of management, these provisions should not affect the operations of the Company or the subsidiary. On July 30, 1993, the U.S. District Court (D.C.), in a preliminary opinion, upheld terminations for default on two adjacent contracts for subway construction between Mergentime-Perini, under two joint ventures, and the Washington Metropolitan Area Transit Authority ("WMATA") and found the Mergentime Corporation, Perini Corporation and the Insurance Company of North America, the surety, jointly and severally liable to WMATA for damages in the amount of $16.5 million, consisting primarily of excess reprocurement costs to complete the projects. Many issues were left partially or completely unresolved by the opinion, including substantial joint venture claims against WMATA. Any such amounts awarded to the joint ventures could serve to offset the above damages awarded. The ultimate financial impact, if any, of this judgement is not yet determinable, and therefore, no impact is reflected in the 1993 financial statements. Contingent liabilities also include liability of contractors for performance and completion of both company and joint venture construction contracts. In addition, the Company is a defendant in various lawsuits (see "Business -- Legal Proceedings" included elsewhere in this Prospectus). In the opinion of management, the resolution of these matters will not have a material effect on the accompanying financial statements. PERINI CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED (INCLUDING DATA APPLICABLE TO UNAUDITED PERIODS) (12) RELATED PARTY TRANSACTIONS During 1984, the Company transferred certain of its income producing real estate properties and real estate joint venture interests to a new company, Perini Investment Properties, Inc. (PIP) and distributed the common stock of PIP to the company's shareholders on a share-for-share basis. In 1992 PIP changed its name to Pacific Gateway Properties, Inc. (PGP), reflecting that company's new West Coast focus and minimal ongoing interdependence with Perini Corporation. Hereafter, PIP will be referred to as PGP. Initially, a majority of PGP's directors were also directors of the Company and, the two companies also had the same initial controlling stockholder group. Currently, the two companies have only one common director. Pursuant to a Service Agreement with PGP, which was terminated effective June 30, 1991, the Company provided certain management, operational, accounting, tax and other administrative services to PGP for a fee based on a formula that included an annual base fee and property acquisition fees plus reimbursement for certain expenses. Fees and expenses under this agreement amounted to $182,000 in 1991. PGP is a partner in certain of the real estate joint ventures discussed in Note 2 and in the first real estate development joint venture referred to in Note 11. (13) UNAUDITED QUARTERLY FINANCIAL DATA The following table sets forth unaudited quarterly financial data for the years ended December 31, 1993 and 1992 (in thousands except per share amounts):
-------------------------------------------------- 1993 BY QUARTER 1ST 2ND 3RD 4TH -------- -------- -------- -------- Revenues ........................................ $258,043 $348,004 $274,795 $219,274 Net income ...................................... $ 745 $ 965 $ 679 $ 776 Earnings per common share ....................... $ .05 $ .10 $ .04 $ .05 -------------------------------------------------- 1992 BY QUARTER 1ST 2ND 3RD 4TH -------- -------- -------- ---------- Revenues ........................................ $246,126 $238,059 $289,602 $ 297,065 Net income (loss) ............................... $ 1,510 $ 960 $ 2,701 $ (22,155) Earnings (loss) per common share ................ $ .25 $ .10 $ .53 $ (5.47)
(14) BUSINESS SEGMENTS AND FOREIGN OPERATIONS The Company is currently engaged in the construction and real estate development businesses. The following tables set forth certain business and geographic segment information relating to the Company's operations for the three years ended December 31, 1993 (in thousands): BUSINESS SEGMENTS
------------------------------------------ REVENUES 1993 1992 1991 ---------- -------------- ------------ Construction ....................................... $1,030,341 $1,023,274 $919,641 Real Estate ........................................ 69,775 47,578 72,267 ---------- -------------- ------------ $1,100,116 $1,070,852 $991,908 ---------- -------------- ------------ ---------- -------------- ------------ ------------------------------------------ INCOME (LOSS) FROM OPERATIONS 1993 1992 1991 ---------- -------------- ------------ Construction ....................................... $ 15,164 $ 34,387 $ 24,938 Real Estate ........................................ 240 (47,206) (7,239) Corporate .......................................... (6,830) (6,320) (5,375) ---------- -------------- ------------ $ 8,574 $ (19,139) $ 12,324 ---------- -------------- ------------ ---------- -------------- ------------ ------------------------------------------ ASSETS 1993 1992 1991 ---------- -------------- ------------ Construction ....................................... $ 219,604 $ 214,089 $198,971 Real Estate ........................................ 218,715 204,713 252,870 ---------- -------------- ------------ $ 476,378 $ 470,696 $498,574 ---------- -------------- ------------ ---------- -------------- ------------ ------------------------------------------ CAPITAL EXPENDITURES 1993 1992 1991 ---------- -------------- ------------ Construction ....................................... $ 4,387 $ 4,042 $ 6,599 Real Estate ........................................ 23,590 29,131 44,207 ---------- -------------- ------------ $ 27,977 $ 33,173 $ 50,806 ---------- -------------- ------------ ---------- -------------- ------------ ------------------------------------------ DEPRECIATION 1993 1992 1991 ---------- -------------- ------------ Construction ....................................... $ 2,552 $ 5,489 $ 6,342 Real Estate ........................................ 963 808 848 ---------- -------------- ------------ $ 3,515 $ 6,297 $ 7,190 ---------- -------------- ------------ ---------- -------------- ------------ GEOGRAPHIC SEGMENTS ------------------------------------------ REVENUES 1993 1992 1991 ---------- -------------- ------------ United States ...................................... $1,064,380 $ 909,358 $859,398 Canada ............................................. -- 107,709 109,764 Other Foreign ...................................... 35,736 53,785 22,746 ---------- -------------- ------------ $1,100,116 $1,070,852 $991,908 ---------- -------------- ------------ ---------- -------------- ------------ ------------------------------------------ INCOME (LOSS) FROM OPERATIONS 1993 1992 1991 ---------- -------------- ------------ United States ...................................... $ 17,249 $ (28,994) $ 13,478 Canada ............................................. -- 12,812 4,218 Other Foreign ...................................... (1,845) 3,363 3 Corporate .......................................... (6,830) (6,320) (5,375) ---------- -------------- ------------ $ 8,574 $ (19,139) $ 12,324 ---------- -------------- ------------ ---------- -------------- ------------ ------------------------------------------ ASSETS 1993 1992 1991 ---------- -------------- ------------ United States ...................................... $ 433,488 $ 365,997 $408,797 Canada ............................................. -- 46,089 40,895 Other Foreign ...................................... 4,831 6,716 2,149 Corporate* ..................................... 38,059 51,894 46,733 ---------- -------------- ------------ $ 476,378 $ 470,696 $498,574 ---------- -------------- ------------ ---------- -------------- ------------ - ------------ *In all years, corporate assets consist principally of cash, cash equivalents, marketable securities and other investments available for general corporate purposes. Contracts with various federal, state, local and foreign governmental agencies represented approximately 54% of construction revenues in 1993, 57% in 1992 and 56% in 1991.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Perini Corporation: We have audited the accompanying statement of construction revenues and costs of Newberg/Perini (a division of Perini Corporation and a former component of Gust K. Newberg Construction Co.) for the year ended December 31, 1992. This statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this statement based on our audit. We did not audit the financial statements of EBASCO/Newberg, a joint venture, for which Newberg/Perini's share of construction revenues constitutes 15% of total revenues. Those statements were audited by other auditors whose report has been furnished to us and our opinion, insofar as it relates to the amounts included for that entity, is based solely on the report of the other auditors. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement presentation. We believe that our audit and the report of other auditors provide a reasonable basis for our opinion. The accompanying statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in Note 1 and is not intended to be a complete presentation of the results of operations of Newberg/Perini. In our opinion, based on our audit and the report of other auditors, the statement referred to above presents fairly, in all material respects, the construction revenues and costs of Newberg/Perini for the year ended December 31, 1992, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN & CO. August 16, 1993 Boston, Massachusetts REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Perini Corporation: We have audited the accompanying statements of construction revenues and costs of Newberg/Perini (a division of Perini Corporation and a former component of Gust K. Newberg Construction Co.) for the years ended December 31, 1991 and 1990. These statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these statements based on our audit. We did not audit the financial statements of EBASCO/Newberg, a joint venture, for the year ended December 31, 1991 for which Newberg/Perini's share of construction revenues constitutes 31% of the total revenues in 1991. Those statements were audited by other auditors whose report has been furnished to us and our opinion, insofar as it relates to the amounts included for that entity, is based solely on the report of the other auditors. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement presentation. We believe that our audits and the report of other auditors provide a reasonable basis for our opinion. The accompanying statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in Note 1 and are not intended to be a complete presentation of the results of operations of Newberg/Perini. In our opinion, based on our audits and the report of other auditors, the statements referred to above present fairly, in all material respects, the construction revenues and costs of Newberg/Perini for the years ended December 31, 1991 and 1990, in conformity with generally accepted accounting principles. ALEXANDER X. KUHN & CO. August 16, 1993 Oakbrook Terrace, IL INDEPENDENT AUDITORS' REPORT MEMBERS OF THE JOINT VENTURE Ebasco/Newberg, A Joint Venture Tullahoma, Tennessee We have audited the balance sheets of Ebasco/Newberg, a Joint Venture, as of December 31, 1992 and 1991, and the related statements of operations, venturers' equity (deficit) and cash flows for the years then ended (not presented separately herein). These financial statements are the responsibility of the Joint Venture's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements, referred to above, present fairly, in all material respects, the financial position of Ebasco/Newberg, a Joint Venture, at December 31, 1992 and 1991, and the results of its operations and cash flows for the years then ended, in conformity with generally accepted accounting principles. DELOITTE & TOUCHE January 21, 1993 Nashville, Tennessee NEWBERG/PERINI STATEMENTS OF CONSTRUCTION REVENUES AND COSTS FOR THE YEARS ENDED DECEMBER 31, 1992, 1991 AND 1990
----------------------------------------------- 1992 1991 1990 ------------ ------------ ----------- CONSTRUCTION REVENUES .......................... $187,183,556 $109,981,708 $10,025,483 CONSTRUCTION COSTS ............................. 174,066,719 103,316,505 9,301,700 ------------ ------------ ----------- GROSS PROFIT ................................... $ 13,116,837 $ 6,665,203 $ 723,783 ------------ ------------ ----------- ------------ ------------ -----------
The accompanying notes are an integral part of these statements. NEWBERG/PERINI NOTES TO STATEMENTS OF REVENUES AND COSTS FOR THE YEARS ENDED DECEMBER 31, 1992, 1991 AND 1990 (1) ORGANIZATION AND STATEMENT PRESENTATION As described further in Note 2, on July 1, 1993, Gust K. Newberg Construction Co. (Newberg) sold its interest related to certain construction contracts and certain construction equipment to Perini Corporation (Perini) and a third party leasing company. Perini formed a new division, Newberg/Perini, to complete the construction projects acquired, to enter into an operating lease agreement for the use of the equipment and to pursue new work in the areas of heavy construction in the Midwest and power plant construction and maintenance nationwide. Pursuant to the acquisition, these statements have been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission. These statements represent the construction revenues and costs of the acquired construction projects as reported as a component of Newberg prior to the acquisition. (2) ACQUISITION Effective July 1, 1993, Perini acquired Newberg's interest in eleven joint ventures (the "Joint Ventures") and one contract (the "Contract") relating to certain construction projects and certain construction equipment. The purchase price for the acquisition was (i) approximately $3 million in cash for the equipment paid by a third party leasing company, which in turn simultaneously entered into an operating lease agreement with the Registrant for the use of said equipment, (ii) the greater of $1 million or 25% of the aggregate pretax earnings during the period from April 1, 1993 through December 31, 1994, net of payments accruing to Newberg as described in (iii) below and (iii) 50% of the aggregate of net profits earned by each Joint Venture interest and under the Contract from April 1, 1993 through December 31, 1994 and, with regard to one Joint Venture interest, through December 31, 1995. (3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Joint venture interests are accounted for on the equity method. The company's share of revenues and costs in these interests is included in "Construction Revenues and Costs", respectively, in the accompanying Statements of Construction Revenues and Costs. Profits from construction contracts and construction joint ventures are generally recognized by applying percentages of completion for each year to the total estimated profits for the respective contracts. The percentages of completion are determined by relating the actual cost of the work performed to date to the current estimated total cost of the respective contracts. When the estimate on a contract indicates a loss, the company's policy is to record the entire loss. Income from claims is recorded in the year such claims are resolved. PERINI CORPORATION AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
--------------------------------------------------------------------------- SIX MONTHS YEAR ENDED YEAR ENDED ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, JUNE 30, 1993 DECEMBER 31, 1993 1993 PRO FORMA 1993 PERINI NEWBERG ADJUSTMENTS PRO FORMA ------ ------- ----------- --------- (UNAUDITED) Revenues from Operations Construction ........... $1,030,341 $69,275 $(35,127) $1,064,489 Real Estate ............ 69,775 -- -- 69,775 --------- ------ ------- --------- $1,100,116 $69,275 $(35,127) $1,134,264 --------- ------ ------- --------- Costs and Expenses Cost of Operations ..... $1,047,330 $63,464 $(31,732) $1,079,062 General, Administrative and Selling Expenses . 44,212 -- 1,500 45,712 --------- ------ ------- --------- $1,091,542 $63,464 $(30,232) $1,124,774 --------- ------ ------- --------- Income from Operations ... $ 8,574 $ 5,811 $ (4,895) $ 9,490 Other Income, Net ...... 5,207 -- -- 5,207 Interest Expense ....... (5,655) -- -- (5,655) --------- ------ ------- --------- Income (Loss) Before Income Taxes ............. $ 8,126 $ 5,811 $ (4,895) $ 9,042 Provision for Income Taxes .......................... (4,961) -- (357) (5,318) --------- ------ ------- --------- Net Income ............... $ 3,165 $ 5,811 $ (5,252) $ 3,724 --------- ------ ------- --------- --------- ------ ------- --------- Earnings Per Common Share $ .24 $ .37 --------- --------- --------- ---------
See notes to pro forma condensed consolidated statement of operations. PERINI CORPORATION AND SUBSIDIARIES NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS Effective July 1, 1993, the Registrant acquired Newberg's interest in eleven joint ventures (the "Joint Ventures") and one contract (the "Contract") relating to certain construction projects and certain construction equipment. The purchase price for the acquisition was (i) approximately $3 million in cash for the equipment paid by a third party leasing company, which in turn simultaneously entered into an operating lease agreement with the Registrant for the use of said equipment, (ii) the greater of $1 million or 25% of the aggregate pretax earnings of Perini/Newberg, a new division of the Registrant primarily responsible for completing the projects, during the period from April 1, 1993 through December 31, 1994, net of payments accruing to Newberg as described in (iii) below and (iii) 50% of the aggregate of net profits earned by each Joint Venture and under the Contract from April 1, 1993 through December 31, 1994 and, with regard to one Joint Venture, through December 31, 1995. NOTE A: PRO FORMA ADJUSTMENTS TO CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS The pro forma statement of operations combines the revenues and costs of Newberg/Perini for the six months ended June 30, 1993 (preacquisition) with the consolidated results of operations of Perini Corporation and subsidiaries for the year ended December 31, 1993. The pro forma adjustment to revenues and costs from construction operations represents Newberg's approximate 50% share in accordance with the terms of the Asset Purchase Agreement. The pro forma adjustments to general, administrative and selling expenses represent management's estimate of a normalized annual level of such expense ($2.8 million) and amortization of the $1 million assigned to the non- competition agreement which is being amortized over its five-year term on a straight-line basis. The pro forma adjustment to the provision for income taxes was calculated by applying the Registrant's 1993 statutory federal and state income tax rate of 39% to income before income taxes to the pro forma adjusted Newberg results. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. Except for the Registration Fee and the NASD Filing Fee, the following table sets forth estimates of expenses of issuance other than underwriting discounts and commissions: Registration Fee.......................................... $ 9,914 NASD Filing Fee........................................... 3,375 Listing Fee............................................... 17,500 Accounting Fees.......................................... Depositary's Fees and Expenses........................... Transfer Agent's Fees and Expenses....................... Trustee's Fees and Expenses.............................. Printing Costs........................................... Engraving Costs.......................................... Legal Fees and Expenses.................................. Blue Sky Fees and Expenses............................... Miscellaneous............................................ ------ Total.................................................. $ ------ ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Restated Articles of Organization, as amended, of Perini Corporation (the "Registrant") provide for the elimination of liability of directors to the Registrant or its stockholders for monetary damages for negligent acts or omissions to the extent permitted by Section 13 of the Business Corporation Law of the Commonwealth of Massachusetts. Section 67 of the Business Corporation Law of the Commonwealth of Massachusetts gives corporations the power to indemnify directors, officers, employees and other agents and persons under certain circumstances. The By-laws of the Registrant provide for indemnification of officers, directors and certain other corporate representatives for all expenses incurred by them in defense of any proceeding or lawsuit in which they are successful on the merits. In such a situation, the right to receive indemnification is mandatory and does not require an affirmative determination by the Board of Directors. The By-laws also authorize indemnification of officers, directors and certain other corporate representatives for expenses and liabilities in cases other than those in which they are successful on the merits, subject to specified conditions. No indemnification shall be provided with respect to any matter as to which an officer, director or corporate representative shall have been adjudicated not to have acted in good faith and in the reasonable belief that his action was in the best interest of the Registrant, or, with respect to a criminal matter, that he had reasonable cause to believe that his conduct was unlawful. No indemnification shall be provided for any director or officer or corporate representative with respect to a proceeding by or in the right of the Registrant in which he is adjudicated to be liable to the Registrant. The By-laws provide that if a proceeding is compromised or settled in a manner which imposes a liability or obligation upon a director or officer or corporate representative, no indemnification shall be provided to him with respect to (i) a proceeding by or in the right of the Registrant unless the Board of Directors determines in its discretion that indemnification is appropriate under the circumstances, and (ii) any other type of proceeding if it is determined by the Board of Directors that said director or officer or corporate representative in ineligible to be indemnified under the By-laws of the Registrant. The By-laws provide that any indemnification other than mandatory indemnification shall be authorized in each case as determined by the Board of Directors, which may act on the indemnification request notwithstanding that one or more of its members are parties to the proceeding or otherwise have an interest in such indemnification. The By-laws also authorize the Registrant to purchase and maintain insurance on behalf of officers and directors against liabilities incurred by them in their capacities as such, whether or not the Registrant would have been able to indemnify them for such liabilities. In January 1987, the Registrant established the Perini Corporation Indemnity Trust to assure that independent fiduciaries will administer the indemnification obligations of the Registrant to its directors, officers, employees and agents pursuant to the laws of Massachusetts, its Restated Articles of Organization, as amended, By-laws, and indemnity contracts or agreements. State Street Bank & Trust Company is the trustee. The Perini Corporation Indemnity Trust currently has assets of nominal value but these could be increased at any time. The By-laws of the Registrant authorized the Registrant to enter into specific agreements with its officers and directors to indemnify them to the full extent permitted by law. In December 1986, the Board of Directors approved and the Registrant entered into indemnification agreements with each of its directors and certain of its officers. These indemnification agreements were ratified by stockholders at the 1987 Annual Meeting. The Registrant has a one-year insurance policy, effective July 1, 1993, with National Union Fire Insurance Company insuring directors and officers against certain liabilities that may incur, including liabilities under the Security Act of 1933, as amended. This policy contains standard reimbursement provisions to an aggregate limit of $15 million and a corporate retention of $200,000 for expenses reimbursable to the directors and/or officers of the Registrant. The policy contains various reporting requirements and exclusions. The Registrant also has a one-year insurance policy, effective July 1, 1993, with the Fidelity and Casualty Company of New York, insuring directors and officers against certain liabilities in the amount of $5 million excess over the primary coverage. ITEM 16. EXHIBITS. The list of Exhibits appears on page E-1 of this Registration Statement. ITEM 17. UNDERTAKINGS. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Act"), may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in t he Act and is, therefore, unenforceable. In the event that claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. The Company hereby undertakes that (1) for purposes of determining any liability under the Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424 (b)(1) or (4) or 497(h) under the Act shall be deemed to be part of this Registration Statement as of the time it was declared effective and (2) for purposes of determining any liability under the Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-2 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Framingham, Commonwealth of Massachusetts, on the 27th day of May, 1994. PERINI CORPORATION By: DAVID B. PERINI --------------------- DAVID B. PERINI Chairman, President and Chief Executive Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints David B. Perini, James M. Markert and Robert E. Higgins, and each of them, acting singly, his true and lawful attorneys-in- fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments, including any post-effective amendments, to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated:
SIGNATURE TITLE DATE --------- ----- ---- Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) DAVID B. PERINI - ------------------------------ DAVID B. PERINI May 27, 1994 Senior Vice President -- Finance and Administration and Director (Principal Financial Officer) JAMES M. MARKERT - ------------------------------ JAMES M. MARKERT May 27, 1994 Vice President and Controller (Principal Accounting Officer) BARRY R. BLAKE - ------------------------------ BARRY R. BLAKE May 27, 1994 Director RICHARD J. BOUSHKA - ------------------------------ RICHARD J. BOUSHKA May 27, 1994 Director MARSHALL M. CRISER - ------------------------------ MARSHALL M. CRISER May 27, 1994 Director THOMAS E. DAILEY - ------------------------------ THOMAS E. DAILEY May 27, 1994 Director ALBERT A. DORMAN - ------------------------------ ALBERT A. DORMAN May 27, 1994 Director ARTHUR J. FOX, JR. - ------------------------------ ARTHUR J. FOX, JR. May 27, 1994 Director - ------------------------------ NANCY HAWTHORNE Director MARSHALL A. JACOBS - ------------------------------ MARSHALL A. JACOBS May 27, 1994 Director ROBERT M. JENNEY - ------------------------------ ROBERT M. JENNEY May 27, 1994 Director JOHN J. MCHALE - ------------------------------ JOHN J. MCHALE May 27, 1994 Director JANE E. NEWMAN - ------------------------------ JANE E. NEWMAN May 27, 1994 Director BART W. PERINI - ------------------------------ BART W. PERINI May 27, 1994 Director JOSEPH R. PERINI - ------------------------------ JOSEPH R. PERINI May 27, 1994
EXHIBIT INDEX
1 Form of Underwriting Agreement 4(a) Certificate of Vote of Directors Establishing a Series of a Class of Stock determining the relative rights and preferences of the $ Convertible Exchangeable Junior Preferred Stock 4(b) Form of Deposit Agreement, including form of Depositary Receipt 4(c) Form of Indenture with respect to the % Convertible Subordinated Debentures Due , 2019, including form of Debenture 4(d) Shareholder Rights Agreement, as amended, and Certificate of Vote of Directors adopting a Shareholders Rights Plan providing for the issuance of a Series A Junior Participating cumulative Preferred Stock purchase rights as a dividend to all shareholders of record on October 6, 1988 (incorporated by reference to Current Report on Form 8-K (Date of earliest reportable event: May 17, 1990)) 5(a) Opinion of Jacobs Persinger & Parker as to legality* 5(b) Opinion of Peabody & Arnold as to legality* 5(a) Opinion of Jacobs Persinger & Parker as to legality* 7 Opinion of Goodwin, Proctor & Hoar as to liquidation preference* 10(a) Restricted Stock Plan for Outside Directors 10(b) 1982 Stock Option and Long Term Performance Incentive Plan, as amended (incorporated by reference to Exhibit A to the Registrant's Proxy Statement dated April 15, 1992) 10(c) Perini Corporation Amended and Restated General Incentive Compensation Plan (incorporated by reference to Exhibit 10.2 to the Registrant's Form 10-K for the year ended December 31, 1991) 10(d) Perini Corporation Amended and Restated construction Business Unit Incentive Compensation Plan (incorporated by reference to Exhibit 10.3 to the Registrant's Form 10-K for the year ended December 31, 1991) 10(e) $70,000,000 Credit Agreement dated as of May 10, 1993 among Registrant and Morgan Guaranty Trust Company of New York, Bank of America National Trust & Savings Association, Shawmut Bank, N.A., Fleet Bank of Massachusetts, N.A. and Baybank Boston, N.A., as amended by Amendment No. 1 dated as of December 30, 1993, Amendment No. 2 dated as of February 11, 1994, Amendment No. 3 dated as of March 8, 1994 and Amendment No. 4 dated as of May 3, 1994 10(f) $15,000,000 Credit Agreement dated as of March 9, 1994 among Registrant and Morgan Guaranty Trust Company of New York, Bank of America National Trust & Savings Association, Shawmut Bank, N.A., Fleet Bank of Massachusetts, N.A. and Baybank Boston, N.A., as amended by Amendment No. 1 dated as of May 3, 1994 12 Statement re Computation of Ratios 23(a) Consent of Jacobs Persinger & Parker (see Exhibit 5(a))* 23(b) Consent of Peabody & Arnold (see Exhibit 5(b))* 23(c) Consent of Goodwin, Proctor & Hoar (see Exhibit 7)* 23(d) Consent of Arthur Andersen & Co. 23(e) Consent of Alexander X. Kuhn & Co. 23(f) Consent of Deloitte & Touche 24 Power of Attorney (see page II-4) 25 Statement of Eligibility and Qualification on Form T-1 of State Street Bank & Trust Co.* - --------- *To be filed by amendment.
EX-1 2 UNDERWRITING AGREEMENT EXHIBIT 1 UNDERWRITING AGREEMENT Perini Corporation 100,000 Shares $ Cumulative Convertible Exchangeable Junior Preferred Stock (1,000,000 Depositary Shares) June , 1994 J.P. MORGAN SECURITIES INC. 60 Wall Street New York, New York 10260 Ladies/Gentlemen: Perini Corporation, a Delaware corporation (the "Company"), proposes to issue and sell to J.P. Morgan Securities Inc. (the "Underwriter") 100,000 shares (the "Firm Securities") of its $ Cumulative Convertible Exchangeable Junior Preferred Stock (the "Convertible Preferred Stock") and, for the sole purpose of covering over-allotments in connection with the sale of the Firm Securities, at the option of the Underwriter, up to an additional 15,000 shares (the "Option Securities") of its Convertible Preferred Stock. The Firm Securities and any Option Securities purchased by the Underwriter are herein referred to as the "Securities." Simultaneously with the issuance of the Securities, the Underwriter will deposit the Securities pursuant to a Deposit Agreement dated as of June , 1994 (the "Deposit Agreement") among the Company, ________ (the "Depositary") and the holders from time to time of the depositary receipts evidencing the Depositary Convertible Exchangeable Preferred Shares (the "Depositary Shares") issued at such time to represent the Securities so deposited. Each Depositary Share will represent one-tenth share of Convertible Preferred Stock. The terms of the Convertible Preferred Stock are contained in the Certificate of Vote of Directors Establishing a Series of a Class of Stock (the "Certificate"), a form of which is attached as an exhibit to the Registration Statement (as defined below). The Convertible Preferred Stock will be convertible from and after the date of issuance at the holder's option into shares of the Company's common stock, par value $1.00 per share (the "Common Stock"), at an initial conversion rate of shares of Common Stock per share of Convertible Preferred Stock (or shares per Depositary Share), subject to adjustment in certain circumstances. On or after June 15, 1996 the Convertible Preferred Stock is exchangeable at the option of the Company into the Company's % Convertible Subordinated Debentures due 2019 (the "Exchange Debentures"). The Company has prepared and filed with the Securities and Exchange Commission (the "Commission") in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the "Securities Act"), a registration statement on Form S-2 (File No. 33- ), including a prospectus, relating to the Securities and the Depositary Shares. The registration statement as amended at the time when it shall become effective, or, if post-effective amendments are filed with respect thereto, as amended by such post-effective amendments at the time of their effectiveness, including in each case information incorporated by reference therein (the "Incorporated Documents") and information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A under the Securities Act, is hereinafter referred to as the "Registration Statement"; the prospectus constituting a part of the Registration Statement in the form first used to confirm sales of Securities is hereinafter referred to as the "Prospectus," except that if any revised prospectus shall be provided to the Underwriter by the Company which differs from the Prospectus (whether or not any such revised prospectus is required to be filed by the Company pursuant to Rule 424(b) under the Securities Act), the term "Prospectus" shall refer to each such revised prospectus from and after the time it is first provided to the Underwriter for such use. 1. The Company hereby agrees to issue and sell the Firm Securities to the Underwriter as hereinafter provided, and the Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees to purchase from the Company all of the Firm Securities at a price equal to $ per share, plus accrued dividends, if any, from June , 1994 to the date of payment and delivery (the "Purchase Price"). In addition, the Company agrees to issue and sell the Option Securities to the Underwriter as hereinafter provided, and the Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, shall have the option to purchase from the Company up to 15,000 Option Securities at the Purchase Price, for the sole purpose of covering over-allotments (if any) in the sale of Firm Securities by the Underwriter. The Underwriter may exercise the option to purchase the Option Securities at any time (but not more than once) by written notice to the Company, provided that the closing of the sale of the Option Securities shall take place no later than July , 1994. Such notice shall set forth the aggregate principal amount of Option Securities as to which the option is being exercised and the date and time when the Option Securities are to be delivered and paid for, which may be the same date and time as the Closing Date (as hereinafter defined) but shall not be earlier than the Closing Date or later than the tenth full Business Day (as hereinafter defined) after the date of such notice. Any such notice shall be given at least two Business Days prior to the date and time of delivery specified therein. 2. The Company understands that the Underwriter intends (i) to make a public offering of the Depositary Shares as soon after the Registration Statement and this Agreement have become effective as in the judgment of the Underwriter is advisable and (ii) initially to offer the Depositary Shares upon the terms set forth in the Prospectus. The Company confirms that the Underwriter and any dealer were authorized to distribute any preliminary prospectus and are authorized to distribute the Prospectus and any amendments or supplements to it. 3. Payment for the Securities shall be made to the Company or to its order by certified or official bank check or checks payable in New York Clearing House or other next day funds at the office of Cahill Gordon & Reindel, 80 Pine Street, New York, New York at 10:00 A.M., New York City time, in the case of the Firm Securities, on June , 1994, or at such other time on the same or such other date, not later than the fifth Business Day thereafter, as the Underwriter and the Company may agree upon in writing or, in the case of the Option Securities on the date and time specified by the Underwriter in the written notice of its election to purchase such Option Securities. The time and date of such payment for the Firm Securities are referred to herein as the "Closing Date" and the time and date for such payment for the Option Securities, if other than the Closing Date, are herein referred to as the "Additional Closing Date." As used herein, the term "Business Day" means any day other than a day on which banks are permitted or required to be closed in New York City. Payment for the Securities to be purchased on the Closing Date or the Additional Closing Date, as the case may be, shall be made against delivery to the Underwriter of Securities registered in the name of the Underwriter (or its designee), the delivery by the Underwriter to the Depositary of certificates representing such registered Securities and the delivery by the Depositary to the Underwriter of depositary receipts evidencing the Depositary Shares representing the Securities. The Depositary Shares shall be registered in such names and in such amounts as the Underwriter shall request in writing not later than two full Business Days prior to the Closing Date or the Additional Closing Date, as the case may be and will be made available for inspection and packaging by the Underwriter in New York, New York not later than 10:00 A.M., New York City time, on the Business Day prior to the Closing Date or the Additional Closing Date, as the case may be. 4. The Company represents and warrants to the Underwriter that: (a) no order preventing or suspending the use of any preliminary prospectus has been issued by the Commission, and each preliminary prospectus filed as part of the Registration Statement, as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information relating to the Underwriter furnished to the Company in writing by the Underwriter expressly for use therein; (b) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been instituted or, to the knowledge of the Company, threatened by the Commission; and the Registration Statement and the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) comply, or will comply, as the case may be, in all material respects with the Securities Act and do not, and will not, as of the applicable effective date of the Registration Statement and any amendment thereto and as of the date of the Prospectus and any amendment or supplement thereto, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, and the Prospectus, as amended or supplemented at the Closing Date and the Additional Closing Date, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary or required to be stated therein or to make the statements therein, in the light of the circumstances under which they were made, not misleading; except that the foregoing representations and warranties shall not apply to statements or omissions in the Registration Statement or the Prospectus made (i) in reliance upon and in conformity with information relating to the Underwriter furnished to the Company in writing by the Underwriter expressly for use therein or (ii) in the Statement of Eligibility and Qualification of the Trustee under the Trust Indenture Act of 1939 ("TIA") on Form T-1 (the "Form T-1"); (c) the Company meets all conditions and requirements for the use of a Form S-2 Registration Statement ("Form S-2") under the Securities Act; (d) the Incorporated Documents, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and any further documents so filed and incorporated by reference in the Registration Statement, when such documents are filed by the Company with the Commission, will conform in all material respects to the requirements of the Exchange Act, and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (e) Arthur Andersen & Co. who are reporting upon the audited consolidated financial statements of the Company and its subsidiaries (the "Subsidiaries") and the related schedules included in the Registration Statement for the years ended December 31, 1991, 1992 and 1993, are independent public accountants as required by the Securities Act, Alexander K. Kuhn & Co. who are reporting on the audited statements of construction revenues and costs of Newberg/Perini, a division of the Company, incorporated by reference into the Registration Statement for the year ended December 31, 1991 are independent public accountants as required by the Securities Act and Deloitte & Touche who are reporting on the audited balance sheets and related statements of operations, ventures' equity (deficit) and cash flows for Ebasco/Newberg, a joint venture, incorporated by reference into the Registration Statement for the years ended December 31, 1992 and 1991 are independent public accountants as required by the Securities Act; (f) the financial statements referred to in (e) above, as well as the unaudited interim financial information relating to the Company included or incorporated by reference in the Registration Statement, present fairly the consolidated financial position of the Company and its Subsidiaries taken as a whole as of the dates and periods indicated and the consolidated results of operations and consolidated cash flows of the Company and its Subsidiaries taken as a whole for the periods specified in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved, except as disclosed in the Registration Statement (subject in the case of interim statements to normal year-end adjustments); (g) the Company and its Subsidiaries are conducting and intend to conduct their businesses so as to comply in all material respects with applicable federal, state and local government statutes and regulations, except where such failure to comply would not have a material adverse effect on the business, prospects, operations or condition, financial or otherwise, of the Company and its Subsidiaries taken as a whole (a "Material Adverse Effect"); and except as set forth in the Registration Statement, neither the Company nor any of its Subsidiaries is charged with, or to the Company's knowledge, is under investigation with respect to, any material violation of any of such statutes or regulations or is the subject of any pending or, to its knowledge, threatened proceeding by any regulatory authority relating to any such violation, except where such violation or proceeding would not have a Material Adverse Effect; (h) except as set forth in the Registration Statement and except for transfer restrictions imposed by operation of local law the compliance with which, singly or in the aggregate, would not have a Material Adverse Effect, the Company owns, beneficially and of record, free and clear of any mortgage, pledge, security interest, lien, claim or other encumbrance or restriction on transferability or voting, directly or indirectly through a Subsidiary, all of the outstanding equity securities listed on Annex A hereto of each of the Subsidiaries listed thereon, which constitute all of the subsidiaries of the Company; except as set forth in the Registration Statement or in Annex A, all of the outstanding capital stock of the Subsidiaries has been duly and validly authorized and issued and is fully paid and non-assessable; and except as set forth in the Registration Statement or in Annex A, there are no outstanding (a) securities or obligations of the Company convertible into or exchangeable for any shares of capital stock of the Company or any Subsidiary, (b) rights, warrants or options to acquire or purchase from the Company any shares of capital stock of the Company or any Subsidiary or any such convertible or exchangeable securities or obligations, or (c) obligations or understandings of the Company to issue or sell any shares of capital stock of the Company or any Subsidiary, any such convertible or exchangeable securities or obligations, or any such warrants, rights or obligations; (i) the statistical and market-related data included in the Registration Statement are based on or derived from sources which the Company believes to be reliable and accurate; (j) except as stated in the Registration Statement, the Company knows of no outstanding claims for services, either in the nature of a finder's fee or origination fee, with respect to the transactions contemplated hereby; (k) since the date of the latest consolidated financial statements included or incorporated by reference in the Registration Statement, except as disclosed or contemplated in the Registration Statement, there has not been (A) any change in the Company's issued capital stock, warrants or options except pursuant to the terms of the instruments governing the same or pursuant to the exercise of such options or warrants, or the issuance of certain options, or (B) any material adverse change in the management, business, prospects, operations or condition, financial or otherwise, of the Company and the Subsidiaries taken as a whole (a "Material Adverse Change," and any event or state of facts which could result in a Material Adverse Change is herein referred to as a "Prospective Material Adverse Change"); (l) since the respective dates as of which information is given in the Registration Statement, except as disclosed or contemplated therein, (i) there have been no transactions entered into by the Company or any of its Subsidiaries, other than those in the ordinary course of business, which are material to the Company and its Subsidiaries taken as a whole, and (ii) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock; (m) each of the Company and the Subsidiaries has been duly organized under the laws of its jurisdiction of incorporation; each of the Company and the Subsidiaries is a validly existing corporation in good standing under the laws of its jurisdiction of organization and has full corporate power and authority to own its properties and conduct its business as described in the Registration Statement and is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions where the ownership of its property or the conduct of its business requires such qualification, except where the failure so to qualify or be in good standing would not have a Material Adverse Effect; (n) each of this Agreement and the Deposit Agreement has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery by the other parties thereto, constitutes the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors' rights generally and (ii) equitable principles of general applicability whether applied by a court of law or equity; (o) the sale and issuance of the Securities have been duly authorized by the Company and, issued by the Company and delivered to and paid for by the Underwriter in accordance with the terms of this Agreement and the Deposit Agreement, the Securities and Depositary Shares will be validly issued, the Securities will be fully paid and non-assessable and the Securities and Depositary Shares will not be subject to any preemptive rights or other similar rights to purchase the Securities pursuant to (i) the Company's Restated Articles of Organization, (ii) the Certificate, (iii) Massachusetts Business Corporation Law or (iv) contracts to which the Company is a party; (p) the indenture governing the Exchange Debentures (the "Indenture") has been duly authorized by the Company and qualified under the TIA, and, when executed and delivered by the Company and the trustee thereunder (the "Trustee"), the Indenture will constitute a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors' rights generally and (ii) equitable principles of general applicability whether applied by a court of law or equity; and the Exchange Debentures and the Indenture conform in all material respects to the descriptions thereof in the Registration Statement; (q) the shares of Common Stock issuable upon conversion of the Securities (or the Exchange Debentures, as the case may be) have been duly authorized for issuance upon such conversion and duly reserved for such issuance and, when issued upon such conversion in accordance with the terms of the Certificate (or Indenture, as the case may be), will be validly issued and will be fully paid and non-assessable, and the issuance of such shares of Common Stock is not subject to any preemptive or similar rights; (r) the Exchange Debentures have been duly authorized by the Company and, when duly executed, authenticated and issued in accordance with the terms of the Certificate and the Indenture, will be validly issued and represent binding obligations of the Company, enforceable against the Company in accordance with their terms, except (i) bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors' rights generally and (ii) equitable principles of general applicability whether applied by a court of law or equity; (s) the execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement and the Deposit Agreement, including without limitation the issuance and delivery of shares of Common Stock upon conversion of the Securities (or the Exchange Debentures, as the case may be), and the consummation by the Company of the transactions contemplated hereby and thereby (i) have been duly authorized by all necessary corporate action on the part of the Company, (ii) do not and will not result in any violation of the Restated Articles of Organization or the Amended and Restated By-laws of the Company and (iii) do not and will not conflict with, or result in a breach or violation of any of the terms or provisions of, or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or give rise to any right to accelerate the maturity or require the prepayment of any indebtedness or the purchase of any capital stock under, or result in the creation or imposition of any lien, charge or encumbrance upon any material property or assets of the Company or any Subsidiary of the Company under, (A) any indenture, mortgage, loan agreement, note, lease, partnership agreement or other agreement or instrument to which the Company or any such Subsidiary is a party or by which any of them may be bound or to which any of their properties may be subject (except for such conflicts, breaches, violations, defaults, accelerations, prepayments, liens, charges or encumbrances that would not have a Material Adverse Effect), (B) any existing applicable law, rule or regulation (other than the securities or Blue Sky laws of the various states of the United States of America and except for such laws, rules or regulations that would not have a Material Adverse Effect) or (C) any judgment, order or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over the Company or any such Subsidiary or any of their respective properties (except for such judgments, orders or decrees that would not have a Material Adverse Effect); (t) no authorization, approval, consent or license of, or filing with, any government, governmental instrumentality or court, domestic or foreign (other than as may be required under the Securities Act or the securities or Blue Sky laws of the various states of the United States of America), is required for the valid authorization, issuance, sale and delivery of the Securities or the Depositary Shares, or the issuance and delivery of shares of Common Stock upon conversion of Securities (or Exchange Debentures, as the case may be), or the performance by the Company of its obligations under this Agreement or the Deposit Agreement; (u) the Company (i) is not in violation of its Restated Articles of Organization or Amended and Restated By-Laws and (ii) is not and with the giving of notice or lapse of time or both would not be in violation of, or in default under, any obligation, agreement, covenant or condition contained in any indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it may be bound or to which any of its properties may be subject, except for such violations or defaults that would not have a Material Adverse Effect; (v) except as described in the Registration Statement, there is no action, suit or proceeding before or by any government, governmental instrumentality or court, now pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries that is reasonably likely to have a Material Adverse Effect or that is reasonably likely to have a material adverse effect on the consummation of the transactions contemplated in this Agreement or the Deposit Agreement. The aggregate of all pending legal or governmental proceedings known to the Company to which the Company or any of its Subsidiaries is a party or that affect any of their properties that are not described in the Registration Statement, including ordinary routine litigation incidental to their respective businesses, is not reasonably likely to have a Material Adverse Effect; (w) there are no contracts or documents that are required to be described or referred to in the Registration Statement, or to be filed as exhibits to the Registration Statement, that are not described, filed or referred to as required; (x) the Company and each of its Subsidiaries have good and marketable title to all properties and assets described in the Registration Statement as owned by them, free and clear of all liens, charges, encumbrances or restrictions, except (i) as described or reflected in the Registration Statement or (ii) for such liens, charges, encumbrances or restrictions which would not have a Material Adverse Effect. All of the leases and subleases material to the business of the Company and its Subsidiaries taken as a whole are, assuming the due authorization, execution and delivery by the parties thereto other than the Company, in full force and effect with respect to the Company, with such exceptions as would not have a Material Adverse Effect, and neither the Company nor any of its Subsidiaries has received any notice of any material claim that has been asserted by anyone adverse to the rights of the Company or any of its Subsidiaries under any of the leases or subleases mentioned above, or affecting or questioning the rights of such entity to the continued possession of the leased or subleased premises under any such lease or sublease, which claim would have a Material Adverse Effect; (y) each of the Company and its Subsidiaries owns, possesses or has obtained all material licenses, permits, certificates, consents, orders, approvals and other authorizations from, and has made all material declarations and filings with, all federal, state, local and other governmental authorities (including foreign regulatory agencies), all self-regulatory organizations and all courts and other tribunals, domestic or foreign, necessary to own or lease, as the case may be, and to operate its properties and to carry on its business as conducted as of the date hereof, except in each case where the failure to obtain licenses, permits, certificates, consents, orders, approvals and other authorizations, or to make all declarations and filings, would not have a Material Adverse Effect, and none of the Company or any of its Subsidiaries has received any notice of any proceeding relating to revocation or modification of any such license, permit, certificate, consent, order, approval or other authorization, except as described in the Registration Statement and except, in each case, where such revocation or modification would not have a Material Adverse Effect; and the Company and each of its Subsidiaries are in material compliance with all laws and regulations relating to the conduct of their respective businesses as conducted as of the date hereof, except where noncompliance with such laws or regulations would not have a Material Adverse Effect; (z) there are no labor disputes with the employees of the Company or any of its Subsidiaries which are likely to have a Material Adverse Effect; (aa) the Company and its Subsidiaries are in material compliance with all applicable existing federal, state, local and foreign laws and regulations relating to protection of human health or the environment or imposing liability or standards of conduct concerning any Hazardous Material (as hereinafter defined) ("Environmental Laws"), except, in each case, where noncompliance, singly or in the aggregate, would not have a Material Adverse Effect. The term "Hazardous Material" means (i) any "hazardous substance" as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, (ii) any "hazardous waste" as defined by the Resource Conservation and Recovery Act, as amended, (iii) any petroleum or petroleum product, (iv) any polychlorinated biphenyl, and (v) any pollutant or contaminant or hazardous, dangerous, or toxic chemical, material, waste or substance regulated under or within the meaning of any other Environmental Law; (bb) there are no legal or governmental proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries under any Environmental Law that, singly or in the aggregate, could reasonably be expected to result in a Material Adverse Effect; (cc) the Company has not taken and has agreed not to take, directly or indirectly, any action designed to, or that might be reasonably expected to, cause or result in stabilization or manipulation of the price of the Securities, the Depositary Shares or the Common Stock, and the Company has not distributed and has agreed not to distribute any offering material in connection with the offering and sale of the Securities and the Depositary Shares other than the preliminary prospectus filed with the Commission, or the Prospectus or other material permitted by the Securities Act; (dd) the Depositary Shares and the authorized capital stock of the Company, including the Securities, conform in all material respects to the descriptions thereof contained in the Registration Statement; (ee) all of the outstanding shares of capital stock of the Company have been duly authorized and are validly issued, fully paid and non-assessable and are not subject to any preemptive or similar rights; and (ff) the Common Stock is listed on the American Stock Exchange and no proceedings to suspend, terminate or withdraw such listing are pending, or, to the knowledge of the Company, threatened. 5. The Company covenants and agrees with the Underwriter as follows: (a) to use its best efforts to cause the Registration Statement to become effective (if the Registration Statement shall not have been declared effective prior to the execution hereof) at the earliest possible time and, if applicable, to file the Prospectus with the Commission with the time periods specified by Rule 424(b) and Rule 430A under the Securities Act; (b) to deliver, at the expense of the Company, to the Underwriter four signed copies of the Registration Statement (as originally filed) and each amendment thereto, in each case including exhibits, and, during the period mentioned in paragraph (e) below, to the Underwriter and dealers as many copies of the Prospectus (including all amendments and supplements thereto) as the Underwriter may reasonably request; (c) a reasonable time before filing any amendment or supplement to the Registration Statement or the Prospectus, to furnish to the Underwriter a copy of the proposed amendment or supplement for review and not to file any such proposed amendment or supplement to which the Underwriter reasonably objects within a reasonable time after receiving the copy; (d) to advise the Underwriter promptly, and to confirm such advice in writing, (i) when the Registration Statement shall become effective, (ii) when any amendment to the Registration Statement shall have become effective, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statements or the initiation or threatening of any proceeding for that purpose and (v) of the receipt by the Company of any notification with respect to any suspension of the qualification of the Securities for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and to use its reasonable best efforts to prevent the issuance of any such stop order or notification and, if issued, to obtain as soon as possible the withdrawal thereof; (e) if, during such period of time after the first date of the public offering of the Securities as a prospectus relating to the Securities is required by law to be delivered in connection with sales by the Underwriter or any dealer, any event shall occur as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Prospectus to comply with law, forthwith to prepare and furnish, at the expense of the Company, to the Underwriter and dealers (whose names and addresses the Underwriter will furnish to the Company), such amendments or supplements to the Prospectus as may be necessary so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law; (f) (i) to use its best efforts to qualify the Securities, the Depositary Shares (and the Common Stock) for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Underwriter shall reasonably request and to continue such qualification in effect so long as reasonably required for distribution of the Securities and (ii) to pay all fees and expenses (including fees and disbursements of counsel for the Underwriter) reasonably incurred in connection with such qualification under the laws of such jurisdictions as the Underwriter may designate; provided that the Company shall not be required to qualify the Securities in any jurisdiction where, as a result of such qualification, the Company would be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; (g) to make generally available to its security holders and to the Underwriter as soon as practicable an earnings statement covering a period of at least twelve months beginning after the effective date of the Registration Statement, which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder; provided, that in no event shall the Company be required to provide such statement prior to ninety days following the end of such twelve month period; (h) so long as the Securities are outstanding, until five years after the Closing Date, to furnish to the Underwriter copies of all reports or other communications (financial or other) furnished to holders of the Securities, and copies of any reports and financial statements furnished to or filed with Commission or any national securities exchange; (i) for a period of 90 days following the date of the Prospectus, without the prior written consent of the Underwriter, not to offer, sell, offer to sell or grant any option for the sale of or otherwise dispose of any shares of Convertible Preferred Stock or Common Stock or any securities which are convertible into or exchangeable or exercisable for any such shares (other than pursuant to this Agreement); provided, that, without such prior written consent, the Company may (i) issue and sell shares of Common Stock upon conversion of the Convertible Preferred Stock or the Company's outstanding $21.25 Convertible Exchangeable Preferred Stock; and (ii) issue stock or grant options under the Company's existing employee benefit plans; (j) to pay all costs and expenses incident to the performance of its obligations hereunder, including without limiting the generality of the foregoing, all costs and expenses (i) incident to the preparation, issuance, execution and delivery of the Securities and the Depositary Shares (including any expenses of the Depositary), (ii) incident to the preparation, printing and filing of the Registration Statement, the Prospectus and any preliminary prospectus (including in each case all exhibits, amendments and supplements thereto), (iii) incurred in connection with the registration or qualification and determination of eligibility for investment of the Securities and the Depositary Shares under the laws of such jurisdictions as the Underwriter may reasonably designate (including reasonable fees of counsel for the Underwriter and their disbursements related to such registration or qualification), (iv) in connection with the listing of the shares of Common Stock issuable upon conversion of the Securities on the American Stock Exchange, (v) related to any filing with, and review by, the National Association of Securities Dealers, Inc., (vi) in connection with the printing (including word processing and duplication costs) and delivery of this Agreement, the Deposit Agreement, all other agreements relating to underwriting and syndication arrangements, the Blue Sky Survey, any legal investment survey and the furnishing to the Underwriter and dealers of copies of the Registration Statement and the Prospectus, including mailing and shipping, as herein provided, and (vii) payable to rating agencies in connection with the rating of the Securities and the Depositary Shares; (k) to use its best efforts to maintain the listing of the Common Stock on the American Stock Exchange or other national securities exchange registered under the Securities Exchange Act of 1934, as amended, and advise the Underwriter promptly if such listing is suspended, terminated or withdrawn by such exchange; and (l) to use the net proceeds of the offering of Securities as set forth in the Registration Statement under the caption "Use of Proceeds." 6. The obligation of the Underwriter hereunder to purchase the Firm Securities is subject to the performance by the Company of its obligations hereunder and to the following additional conditions: (a) The Registration Statement shall have become effective (or if a post-effective amendment is required to be filed under the Securities Act, such post-effective amendment shall have become effective) not later than 5:00 P.M., New York City time, on the date hereof; and no stop order suspending the effectiveness of the Registration Statement shall be in effect, and no proceedings for such purpose shall be pending before or threatened by the Commission; and any requests for additional information by the Commission shall have been complied with to the reasonable satisfaction of the Underwriter. (b) The representations and warranties of the Company contained herein shall be true and correct on and as of the Closing Date as if made on and as of the Closing Date, and the Company shall have complied with all agreements and all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date. (c) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date, there shall not have occurred any downgrading, nor shall any notice have been given of (i) any intended or potential downgrading or (ii) any review or possible change that does not indicate an improvement, in the rating accorded any securities of the Company by any "nationally recognized statistical rating organization", as such term is defined for purposes of Rule 436(g)(2) under the Securities Act. (d) Since the respective dates as of which information is given in the Registration Statement there shall not have been any Material Adverse Change or any development involving a Prospective Material Adverse Change, otherwise than as set forth or contemplated in the Registration Statement, the effect of which in the judgment of the Underwriter makes it impracticable or inadvisable to proceed with the offering or the delivery of the Securities and the Depositary Shares on the terms and in the manner contemplated in the Registration Statement. (e) The Underwriter shall have received on and as of the Closing Date a certificate of an executive officer of the Company reasonably satisfactory to the Underwriter to the effect set forth in subsections (a) through (c) of this Section 6 and to the further effect that since the respective dates as of which information is given in the Registration Statement there has not occurred any Material Adverse Change or any development involving a Prospective Material Adverse Change, otherwise than as set forth in the Registration Statement. (f) The Underwriter shall have received on the Closing Date a signed opinion of Jacobs Persinger & Parker, special counsel for the Company, dated the Closing Date, substantially to the effect that: (i) each of the Company and the Subsidiaries has been duly organized and is a validly existing corporation in good standing under the laws of its jurisdiction of incorporation and has full corporate power and authority to own its properties and to conduct its business as described in the Registration Statement and is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions where the ownership of its property or the conduct of its business requires such qualification, except where the failure so to qualify or be in good standing would not have a Material Adverse Effect; (ii) the sale and issuance of the Securities and the Depositary Shares have been duly authorized by the Company, and the Securities, when issued by the Company and delivered to and paid for by the Underwriter in accordance with the terms of this Agreement and the Deposit Agreement, will be fully paid and nonassessable and are not subject to any preemptive rights or other similar rights to purchase the Securities pursuant to (A) the Company's Restated Articles of Organization, (B) the Certificate, (C) Delaware General Corporation Law, or (D) contracts to which the Company is a party; (iii) the issuance of the shares of Common Stock issuable upon conversion of the Securities (or the Exchange Debentures as the case may be) has been duly authorized by requisite corporate action on the part of the Company and such shares have been duly reserved for such issuance, and such shares, when issued and delivered upon such conversion in accordance with the terms of the Certificate (or the Indenture, as the case may be), will be validly issued, fully paid and non-assessable and will be free of preemptive rights or other similar rights; (iv) the Indenture has been duly authorized by the Company and qualified under the TIA and, upon execution and delivery by the Trustee (assuming due authorization, execution and delivery thereof by the Trustee), will be a valid and binding agreement of the Company, enforceable against it in accordance with its terms, except that enforcement thereof may be limited by (1) bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors' rights generally and (2) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity); (v) the Exchange Debentures have been duly authorized by the Company and, when duly executed, authenticated and issued in accordance with the terms of the Certificate and the Indenture, will be validly issued and represent binding obligations of the Company enforceable against the Company in accordance with their terms, except (i) bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors' rights generally and (ii) equitable principles of general applicability whether applied by a court of law or equity; (vi) each of this Agreement and the Deposit Agreement has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery by the other parties thereto, constitutes the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforceability thereof may be limited by (A) bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors' rights generally and (B) equitable principles of general applicability whether applied by a court of law or equity; (vii) the execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement and the Deposit Agreement, including without limitation the issuance and delivery of shares of Common Stock upon conversion of the Securities (or the Exchange Debentures, as the case may be), and the consummation by the Company of the transactions contemplated hereby and thereby, (A) have been duly authorized by all necessary corporate action on the part of the Company, (B) do not and will not result in any violation of the Restated Articles of Organization or the Amended and Restated By-laws of the Company and (C) do not and will not conflict with, or result in a breach or violation of any of the terms or provisions of, or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or give rise to any right to accelerate the maturity or require the prepayment of any indebtedness or the purchase of any capital stock under, or result in the creation or imposition of any lien, charge or encumbrance upon any material property or assets of the Company or any Subsidiary of the Company under, (1) to the knowledge of such counsel after due inquiry and investigation, any indenture, mortgage, loan agreement, note, lease, partnership agreement or other agreement or instrument to which the Company or any such Subsidiary is a party or by which any of them may be bound or to which any of their properties may be subject (except for such conflicts, breaches, violations, defaults, accelerations, prepayments, liens, charges or encumbrances that would not have a Material Adverse Effect), (2) any existing applicable law, rule or regulation (other than the securities or Blue Sky laws of the various states of the United States of America and except for such laws, rules or regulations that would not have a Material Adverse Effect) or (3) to the knowledge of such counsel after due inquiry and investigation, any judgment, order or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over the Company or any such Subsidiary or any of their respective properties (except for such judgments, orders or decrees that would not have a Material Adverse Effect); (viii) such counsel does not know of any action, suit or proceeding before or by any government, governmental instrumentality or court now pending or threatened against or affecting the Company, the Subsidiaries or any of their respective properties that is required to be described in the Registration Statement or the Prospectus and is not so described or of any contract or other document that is required to be described in the Registration Statement or the Prospectus, or to be filed as an exhibit to the Registration Statement, that is not described or filed, as required; (ix) the Depositary Shares and the authorized capital stock of the Company, including the Securities, conform as to legal matters in all material respects to the descriptions thereof contained in the Registration Statement; and (x) the Registration Statement and the Prospectus (except for the financial statements, schedules and other financial and statistical data included in the Registration Statement and the Prospectus, as to which counsel need not opine) comply as to form in all material respects with the requirements of the Securities Act. Such counsel shall also state that it has been advised by the Commission that the Registration Statement became effective under the Securities Act; that any required filings of the Prospectus pursuant to Rule 424(b) have been made in the manner and within the time period required by Rule 424(b); and that no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted, are pending or, to such counsel's knowledge, are contemplated under the Securities Act. Such counsel shall also state that no facts have come to such counsel's attention which would lead such counsel to believe that the Registration Statement, at the time it became effective, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; or that the Prospectus, as of its date and as of the Closing Date, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (such counsel need not express an opinion with respect to the financial statements, schedules and other financial and statistical data included in or excluded from the Registration Statement and the Prospectus). In rendering any such opinion, such counsel may rely, as to matters of fact, to the extent such counsel deems proper, on certificates of responsible officers or representatives of the Company and its Subsidiaries and public officials and such counsel may rely on the opinion of Robert E. Higgins, General Counsel to the Company, with respect to the interpretation and application of the laws of the state of Massachusetts. (g) On the effective date of the Registration Statement (and the effective date of any post-effective amendment thereto) and also on the Closing Date, Arthur Andersen & Co. shall have furnished to the Underwriter letters, dated the respective dates of delivery thereof, in form and substance reasonably satisfactory to the Underwriter, containing statements and information of the type customarily included in accountants' "comfort letters" with respect to certain financial information relating to the Company contained or incorporated by reference in the Registration Statement. (h) The Underwriter shall have received on the Closing Date an opinion of Cahill Gordon & Reindel, counsel for the Underwriter, with respect to the validity of the Securities and the Depositary Shares, the Registration Statement and other related matters as the Underwriter may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters. (i) The Underwriter shall have received on and as of the Closing Date a certificate of the chief financial officer of the Company to the effect that neither the Company nor any of its Subsidiaries is in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it may be bound or to which any of its properties may be subject and which default may have a Material Adverse Effect. (j) The Underwriter shall have received on or prior to the Closing Date a fully executed copy of the Deposit Agreement, in form and substance satisfactory to the Underwriter and an opinion of counsel to the Depositary to the effect that: the Deposit Agreement has been duly authorized, executed and delivered by the Depositary and constitutes a legal, valid and binding obligation of the Depositary enforceable against the Depositary in accordance with its terms except as the same may be limited by (A) bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors' rights generally and (B) equitable principles of general applicability whether applied by a court of law or equity. The Depositary Shares, when issued under the Deposit Agreement in accordance with its provisions, will be legally issued and entitle the holders thereof to the rights specified in the receipts representing such Depositary Shares and in the Deposit Agreement. (k) On or prior to the Closing Date the Company shall have furnished to the Underwriter such further certificates and documents as the Underwriter shall reasonably request. The obligation of the Underwriter to purchase Option Securities hereunder is subject to satisfaction of the conditions set forth in paragraphs (a) through (k) above on and as of the Additional Closing Date, except that the certificates, opinions and other documents called for above shall be dated the Additional Closing Date. 7. The Company agrees to indemnify and hold harmless the Underwriter, its officers and directors, and each person, if any, who controls the Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), from and against any and all losses, claims, damages and liabilities (including, without limitation, the reasonable legal fees and other expenses actually incurred in connection with any suit, action or proceeding or any claim asserted) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities are caused by any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to the Underwriter furnished to the Company in writing by the Underwriter expressly for use therein; provided that the foregoing indemnity with respect to any preliminary prospectus shall not inure to the benefit of the Underwriter (or to the benefit of any person controlling the Underwriter) from whom the person asserting any such losses, claims, damages or liabilities purchased Securities if such untrue statement or omission or alleged untrue statement or omission made in such preliminary prospectus is eliminated or remedied in the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) and, if required by law, a copy of the Prospectus (as so amended or supplemented) shall not have been furnished to such person at or prior to the written confirmation of the sale of such Securities to such person. The Underwriter agrees to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to the Underwriter, but only with reference to information relating to the Underwriter furnished to the Company in writing by the Underwriter expressly for use in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any preliminary prospectus. For purposes of this Section 7, the only written information furnished by the Underwriter to the Company expressly for use in the Registration Statement or the Prospectus is the information in the last paragraph on the cover page of the Prospectus and, under the caption "Underwriting" in the Prospectus, the following: the second paragraph and the seventh paragraph. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such person (the "Indemnified Person") shall promptly notify the person against whom such indemnity may be sought (the "Indemnifying Person") in writing, and the Indemnifying Person, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others the Indemnifying Person may designate in such proceeding and shall pay the reasonable fees and expenses actually incurred by such counsel related to such proceeding. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary, (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person or (iii) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representations of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm for the Underwriter and such control persons of the Underwriter shall be designated in writing by J.P. Morgan Securities Inc. and any such separate firm for the Company, its directors, its officers and such control persons of the Company shall be designated in writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested an Indemnifying Person to reimburse the Indemnified Person for reasonable fees and expenses actually incurred by counsel as contemplated by the third sentence of this paragraph, the Indemnifying Person agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement; provided, however, that the Indemnifying Person shall not be liable for any settlement effected without its consent pursuant to this sentence if the Indemnifying Party is contesting, in good faith, the request for reimbursement. No Indemnifying Person shall, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding. If the indemnification provided for in the first and second paragraphs of this Section 7 is unavailable to an Indemnified Person in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriter on the other hand from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriter on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriter on the other shall be deemed to be in the same respective proportions as the net proceeds from the offering (before deducting expenses) received by the Company and the total underwriting discounts and commissions received by the Underwriter, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate public offering price of the Securities. The relative fault of the Company on the one hand and the Underwriter on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriter and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriter agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any reasonable legal or other expenses actually incurred by such Indemnified Person in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall the Underwriter be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that the Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The indemnity and contribution agreements contained in this Section 7 are in addition to any liability which the Indemnifying Persons may otherwise have to the Indemnified Persons referred to above. The indemnity and contribution agreements contained in this Section 7 and the representations and warranties of the Company as set forth in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of the Underwriter or any person controlling the Underwriter or by or on behalf of the Company, its officers or directors or any other person controlling the Company and (iii) acceptance of and payment for any of the Securities and the Depositary Shares. 8. Notwithstanding anything herein contained, this Agreement (or the obligation of the Underwriter with respect to the Option Securities) may be terminated in the absolute discretion of the Underwriter, by notice given to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (or, in the case of the Option Securities, prior to the Additional Closing Date) (i) trading generally shall have been suspended or materially limited on or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, Inc., the Chicago Board Option Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any securities of the Company shall have been suspended or materially limited on any exchange or in any over-the-counter market, (iii) a general moratorium on commercial banking activities in New York shall have been declared by either Federal or New York State authorities or (iv) there shall have occurred an outbreak of hostilities or an escalation of hostilities or any change in financial markets or any calamity or crisis that, in the judgment of the Underwriter, is material and adverse and which, in the judgment of the Underwriter, makes it impracticable or inadvisable to market the Securities and the Depositary Shares on the terms and in the manner contemplated in the Prospectus. 9. If this Agreement shall be terminated by the Underwriter because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company agrees to reimburse the Underwriter for all out-of-pocket expenses (including the fees and expenses of their counsel) reasonably incurred by the Underwriter in connection with this Agreement or the offering contemplated hereunder. 10. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriter shall be given to J.P. Morgan Securities Inc., 60 Wall Street, New York, New York 10260 (facsimile number (212) 648-5705); Attention: Syndicate Department. Notices to the Company shall be given to it at 73 Mt. Wayte Avenue, Framingham, Massachusetts 01701; Attention: James M. Markert (facsimile (508) 628-2960). 11. This Agreement shall each inure to the benefit of and be binding upon the Underwriter and the Company and any controlling person referred to herein and their respective successors, heirs and legal representatives. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriter and the Company and their respective successors, heirs and legal representatives and the controlling persons and officers and directors referred to in Section 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. No purchaser of Securities from the Underwriter shall be deemed to be a successor by reason merely of such purchase. 12. This Agreement may be signed in counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PROVISIONS THEREOF. If the foregoing is in accordance with your understanding, please sign and return four counterparts hereof. Very truly yours, PERINI CORPORATION By:________________________ Name: Title: Accepted: June , 1994 J.P. MORGAN SECURITIES INC. By:_____________________________ Name: Title: ANNEX A Subsidiaries Percentage Subsidiary Name Owned EX-4 3 INSTRUMENTS DEFINING RIGHTS OF SECURITY HOLDERS EXHIBIT 4(a) CERTIFICATE OF VOTE OF DIRECTORS ESTABLISHING A SERIES OF A CLASS OF STOCK General Laws Chapter 156B, Section 26 We, James M. Markert, Vice President, and Robert E. Higgins, Clerk, of Perini Corporation (the "Corporation"), located at 73 Mt. Wayte Avenue, Framingham, Massachusetts 01701, do hereby certify that at a meeting of the directors of the Corporation held on May 19, 1994 the following vote establishing and designating a series of a class of stock and determining the relative rights and preferences thereof was duly adopted. VOTED, pursuant to the authority expressly granted to and vested in the Board of Directors of the Corporation by the provisions of the Restated Articles of Organization, as amended (the "Restated Articles"), this Board of Directors hereby authorizes the issuance of a series of preferred stock, par value $1.00 per share, of the Corporation which shall consist of up to 115,000 shares, and this Board of Directors hereby fixes the relative rights and preferences of the shares of such series (in addition to the powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, set forth in the Restated Articles which are applicable to such preferred stock), all as provided in Exhibit A annexed hereto and made a part hereof. IN WITNESS WHEREOF, each of the undersigned have hereunto set their hand as of the day of 1994. _______________________ James M. Markert _______________________ Robert E. Higgins EXHIBIT A TO CERTIFICATE OF VOTE OF DIRECTORS (1) Designation. The series of the Preferred Stock created herein shall consist of One Hundred Fifteen Thousand (115,000) shares and shall be designated the "$ Convertible Exchangeable Junior Preferred Stock." Said series is hereinafter called the "Convertible Preferred Stock." The term "Preferred Stock" or "preferred stock" as used herein shall mean the Preferred Stock authorized by the Restated Articles of Organization, as amended, of the Corporation and shall include the Convertible Preferred Stock and the $21.25 Convertible Exchangeable Preferred Stock. (2) Dividends. The holders of the Convertible Preferred Stock shall be entitled to receive cash dividends when and as declared by the Board of Directors out of funds legally available for such purposes, at the annual rate of per share, and no more, payable quarterly in arrears on the 15th day of September, December, March and June of each year (unless any such day is a non-business day, in which event the next business day shall be the payment date), commencing on September 15, 1994. Dividends on the Convertible Preferred Stock shall begin to accrue and shall be cumulative from the date of original issue of such shares (the "Issue Date") and shall be payable to the holders of record on the record date fixed with respect to such payment. The date on which the Corporation initially issues any share of Convertible Preferred Stock shall be its date of issue regardless of the number of times transfer of such shares is made on the stock records of the Corporation and regardless of the number of certificates which may be issued to evidence such share. Accumulated but undeclared dividends will not bear interest. When dividends are not paid in full upon any series of preferred stock ranking senior as to dividends to the Convertible Preferred Stock, then no dividend shall be paid or declared and set apart for payment on the Convertible Preferred Stock unless and until all accrued and unpaid dividends with respect to such other stock shall have been paid or declared and funds therefor set apart for payment. When dividends are not paid in full upon the Convertible Preferred Stock and upon any other stock ranking on a parity as to dividends with the Convertible Preferred Stock, all dividends declared upon shares of Convertible Preferred Stock and any other stock ranking on a parity as to dividends with the Convertible Preferred Stock shall be declared pro rata based on the ratio that accrued and unpaid dividends on each series of stock bears to each other. Dividends payable on September 15, 1994 and on the date of any redemption of the Convertible Preferred Stock not occurring on a regular dividend payment date shall be calculated on the basis of the actual number of days elapsed (including the date of redemption) over a 360-day year. Except as set forth above, in no event (so long as any Convertible Preferred Stock shall remain outstanding) shall any cash dividends whatsoever be declared or paid upon, nor shall any cash distribution be made upon, the Common Stock, or any other stock of the Corporation ranking junior to or on a parity with the Convertible Preferred Stock as to dividends, unless full cumulative dividends on all outstanding shares of Convertible Preferred Stock for all dividend payment periods terminating on or prior to the date of the payment of such dividends shall have been paid or declared and funds therefor set apart for such payment. (3) Voting Rights. The holders of Convertible Preferred Stock shall not, by virtue of their ownership thereof, be entitled to vote upon any matter except as provided by this Clause (3) or as required by law. Whenever the holders of the Convertible Preferred Stock shall be entitled to exercise voting rights, each holder of record thereof shall have one vote for each share so held. If an amount equal to six (6) quarterly dividends payable on the Convertible Preferred Stock shall have accumulated and be unpaid, the number of directors of the Corporation will be increased by two (2) and the holders of outstanding Convertible Preferred Stock together with the holders of any outstanding series of Preferred Stock ranking on a parity with the Convertible Preferred Stock as to dividends or liquidation rights and as to which the equivalent of six (6) quarterly dividends is in arrears (but only if the holders of the shares of such other series would otherwise have a right to elect directors as a result of a dividend arrearage), voting as a single class without regard to series, will be entitled to elect such additional two (2) directors at a special meeting called for that purpose as hereinafter provided, or at any annual meeting of stockholders. When such voting rights shall have vested in the holders of the Convertible Preferred Stock, a special meeting to elect such directors may be called by the Chief Executive Officer or Chairman of the Corporation or by the holders of 25% or more of the shares of Preferred Stock of all series affected, in the manner provided in the Corporation's By-laws, or by law if no such provision is in effect. Whenever all dividends in default have been paid or declared and funds therefor set apart for payment, the number of directors of the Corporation shall be reduced by two (2) and such additional directors elected pursuant to this Clause (3) shall forthwith cease to be directors and the contingent voting rights provided herein for the election of two (2) directors shall cease, subject always to the same provisions for the vesting of such contingent voting rights of the holders of the Convertible Preferred Stock to elect two (2) directors in the case of future dividend defaults. In addition, without the vote of the holders of at least two-thirds (2/3) of the number of shares of Convertible Preferred Stock then outstanding, (i) voting together as a class with the holders of any other outstanding shares of preferred stock ranking on parity with the Convertible Preferred Stock as to dividends and liquidation, the Corporation shall not create any class of stock ranking prior to the Convertible Preferred Stock with respect to dividends or to the distribution of assets in liquidation, or (ii) voting separately as a class, amend, alter or repeal any of the preferences or rights of the holders of the Convertible Preferred Stock so as to adversely affect such preferences and rights. The Corporation may create any class of stock ranking on a parity with the Convertible Preferred Stock with respect to dividends or to the distribution of assets in liquidation without the vote of the Convertible Preferred Stock. (4) (A) Optional Redemption. The shares of Convertible Preferred Stock will not be redeemable by the Corporation prior to , 1997. Thereafter, the Convertible Preferred Stock is redeemable at the option of the Corporation, in whole or in part, at the following redemption prices per share, if redeemed during the 12-month period beginning , in each of the years indicated: Redemption Redemption Year Price per Share Year Price per Share 1997 2001 1998 2002 1999 2003 2000 and on or after , 2004 at the redemption price of Two Hundred Fifty Dollars ($250) per share, plus, in each case, accumulated and unpaid dividends to the date of redemption. If full cumulative dividends on the Convertible Preferred Stock have not been paid, no shares of Convertible Preferred Stock may be redeemed and the Corporation may not acquire any shares of the Convertible Preferred Stock unless (i) the holders of two-thirds (2/3) of the shares of the Convertible Preferred stock shall have consented thereto, or (ii) the Corporation acquires any shares of the Convertible Preferred Stock pursuant to a purchase or exchange offer made on the same terms to all holders of the Convertible Preferred Stock. There is no mandatory redemption or sinking fund obligation with respect to the Convertible Preferred stock. (B) Selection for Redemption. If less than all of the outstanding shares of the Convertible Preferred Stock are to be redeemed, the Corporation will select the shares to be redeemed pro rata or by lot or in such manner as the Corporation shall deem appropriate or fair, provided that only whole shares shall be selected for redemption. (C) Redemption Procedure. Notices of any redemption shall be mailed (i) not less than thirty (30) nor more than sixty (60) days prior to the date fixed for redemption to the holders of shares of the Convertible Preferred Stock to be redeemed at their respective addresses as the same appear upon the books of the Corporation; provided, however, that no defect in the mailing of such notice to a holder shall affect its sufficiency with respect to other holders. Payment of the redemption price of the shares redeemed shall be made at such place or places of redemption as shall be determined by the Board of Directors of the Corporation and shall be specified in the notice of redemption and shall be made against the surrender for cancellation of the certificates for the shares redeemed. Any shares of Convertible Preferred Stock so noticed for redemption may be converted into shares of Common Stock, as hereinafter provided, at any time prior to the close of business on the date of redemption. If notice of redemption shall have been mailed as hereinbefore provided and if on or before the redemption date specified in such notice all funds necessary for such redemption shall have been set aside by the Corporation so as to be available for the benefit of the holders of the shares so called for redemption, then from and after the date fixed for redemption the shares of Convertible Preferred Stock so called for redemption, notwithstanding that any certificate therefor shall not have been surrendered or cancelled, shall no longer be deemed outstanding, dividends thereon shall cease to accrue and all rights of the holders with respect to such shares shall forthwith on the date of redemption cease and terminate (at the close of business on the redemption date with respect to the conversion rights provided for in Clause (6)), except only the right of the holders thereof to receive upon surrender of certificates therefor the amount payable upon redemption thereof, but without interest. (5) (A) Optional Exchange. In addition to the optional redemption rights of the Corporation as set forth in Clause (4) above, at the option of the Corporation the Convertible Preferred Stock shall be exchangeable in whole but not in part on any dividend payment date beginning , 1996 for the Corporation's % Convertible Subordinated Debentures Due 2019 (the "Debentures") to be issued substantially in the form set forth in the form of Indenture governing such Debentures. No such exchange shall be made unless all dividends accrued and payable on the Convertible Preferred Stock to the date of the exchange have been paid or declared and sufficient funds set aside for their payment. Upon election by the Corporation to exchange the Convertible Preferred Stock, each share of Convertible Preferred Stock will be entitled to receive $250 principal amount of Debentures for each share of Convertible Preferred Stock held by them at the time of exchange. At such time, the rights of the holders of the Convertible Preferred Stock as stockholders of the Corporation shall cease (except the right to receive Debentures and accrued and unpaid dividends to the date of exchange), and the person or persons entitled to receive the Debentures issuable upon such exchange shall be treated for all purposes as the registered holder or holders of such Debentures. The Convertible Preferred Stock will be convertible into Common Stock up to the close of business on the date of exchange. (B) Notice of Exchange. Notice of any exchange of the Convertible Preferred Stock shall be mailed not less than thirty (30) and not more than sixty (60) days prior to the date of exchange to each holder of Convertible Preferred Stock, at such holder's address as it appears on the books of the Corporation, specifying the effective date of the exchange and the place where certificates for shares of the Convertible Preferred Stock are to be surrendered for Debentures and stating that dividends on shares of the Convertible Preferred Stock will cease to accrue on and after the date of exchange; provided, however, that no defect in the mailing of such notice shall affect the validity of the proceedings for the exchange of any shares of the Convertible Preferred Stock. (C) Indenture; Opinion of Counsel. Prior to giving notice of intention to exchange pursuant to Clause (5)(B) above, the Corporation and a bank or trust company selected by the Corporation shall execute and deliver the Indenture substantially in the form approved by the Board of Directors at the time of original issuance of the Convertible Preferred Stock with such changes as may be required by law, stock exchange rule or usage or that do not adversely affect the interests of the holders of the Debentures. A copy of the Indenture may be inspected by the holders of any shares of Convertible Preferred Stock at the offices of the Corporation during normal business hours. The Corporation will not give notice of its intention to exchange pursuant to Clause (5)(B) above unless it shall file at the office or agency of the Corporation maintained for the exchange of Convertible Preferred Stock an opinion of counsel (who may be an employee of the Corporation) that the Indenture has been duly authorized, executed and delivered by the Corporation, has been duly qualified under the Trust Indenture Act of 1939 (or that such qualification is not necessary) and constitutes a valid and binding instrument enforceable against the Corporation in accordance with its terms (subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles, and subject to such other qualifications as are then contained in opinions of counsel experienced in such matters); and to the effect that the Debentures have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered in exchange for the shares of Convertible Preferred Stock, will constitute valid and binding obligations of the Corporation entitled to the benefits of the Indenture (subject as aforesaid); and that the exchange of Debentures for the Convertible Preferred Stock will not violate the laws of the state of incorporation of the Corporation; and that neither the execution and delivery of the Indenture or the Debentures nor compliance with the terms, conditions or provisions of such instruments will result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument, known to such counsel, to which the Corporation or any of its subsidiaries is a party or by which it or any of them is bound, or any decree, judgment, order, rule or regulation, known to counsel, of any court or governmental agency or body having jurisdiction over the Corporation and such subsidiaries or any of their properties; and that the Debentures have been duly registered for such exchange with the Securities and Exchange Commission under a registration statement that has become effective under the Securities Act of 1933 (the "Act") or that the exchange of the Debentures for the shares of Convertible Preferred Stock is exempt from registration under the Act and the Debentures, when issued, will be as freely tradeable as the Convertible Preferred Stock. (D) Exchange Procedure. If on the date fixed for exchange, the Corporation has taken all action required to authorize the issuance of the Debentures in exchange for the Convertible Preferred Stock, then, notwithstanding that the certificates for such shares have not been surrendered for cancellation, from and after the date fixed for exchange the shares of Convertible Preferred Stock shall no longer be deemed outstanding, dividends thereon shall cease to accrue and all rights of the holders with respect to such shares shall terminate (as of the close of business on the date fixed for exchange with respect to the conversion rights provided for in Clause (6)), except only the right to receive dividends accrued and unpaid as of the date of exchange and, upon surrender of certificates therefor, the right to receive the Debentures, and the person or persons entitled to receive the Debentures issuable upon exchange shall be treated for all purposes as the registered holder or holders of such Debentures. Upon due surrender of a certificate representing shares of Convertible Preferred Stock, the holder thereof shall receive the principal amount of Debentures to which such holder is thereby entitled. Any shares of Convertible Preferred Stock so noticed for exchange may be converted into shares of Common Stock, as hereinafter provided, at any time prior to the close of business on the date fixed for exchange. (6) Conversion Rights. (A) Conversion Provisions. At any time subsequent to the Issue Date, the holders of any one or more shares of the Convertible Preferred Stock may, at their option, convert such share or shares, on the terms and conditions set forth in this Clause (6), into fully paid and non-assessable shares of Common Stock except that, with respect to any shares of Convertible Preferred Stock called for redemption or exchange, the conversion right shall terminate at the close of business on the date of redemption or exchange, unless default is made in the payment of the redemption or exchange price. Each share of the Convertible Preferred Stock shall be convertible into shares of Common Stock (equivalent to a conversion price of $ per share); provided, however, that the number of shares of Common Stock issuable on conversion of each share of the Convertible Preferred Stock (the "conversion rate") shall be subject to adjustment in accordance with the provisions hereinafter set forth in this Clause (6). (B) Adjustment for Change in Capital Stock. If the Corporation (i) pays a dividend or makes a distribution on its Common Stock in shares of its Common Stock; (ii) subdivides its outstanding shares of Common Stock into a greater number of shares; (iii) combines its outstanding shares of Common Stock into a smaller number of shares; (iv) makes a distribution on its Common Stock in shares of its capital stock other than Common Stock; or (v) issues by reclassification of its Common Stock any shares of its capital stock; then the conversion privilege and the conversion price in effect immediately before such action shall be adjusted so that the holder of the Convertible Preferred Stock thereafter converted may receive the number of shares of capital stock of the Corporation which he would have owned immediately following such action if he had converted the Convertible Preferred Stock immediately before the record date (or, if no record date, the effective date) for such action. The adjustment shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, combination or reclassification. If after an adjustment a holder of the Convertible Preferred Stock upon conversion of it may receive shares of two or more classes of capital stock of the Corporation, the Corporation shall determine the allocation of the adjusted conversion price between the classes of capital stock. After such allocation, the conversion privilege and conversion price of each class of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock contained in this Clause (6). (C) Adjustment for Rights Issue. If the Corporation distributes any rights or warrants to the holders of its Common Stock entitling them for a period expiring within sixty (60) days after the record date mentioned below to purchase shares of Common Stock at a price per share less than the current market price per share on that record date, the conversion price shall be adjusted in accordance with the formula: 0 + N x P ----- C1 = C x M --------- 0 + N where C1 = the adjusted conversion price. C = the current conversion price. 0 = the number of shares of Common Stock outstanding on the record date. N = the number of additional shares of Common Stock offered. P = the offering price per share of the additional shares. M = the current market price per share of Common Stock on the record date. The adjustment shall become effective immediately after the record date for the determination of stockholders entitled to receive the rights or warrants. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued or to the extent that such rights and warrants are not so exercised prior to the expiration thereof, the conversion price shall again be adjusted to be the conversion price which would then be in effect if such record date had not been fixed. (D) Adjustment For Other Distributions. If the Corporation distributes to the holders of its Common Stock any of its assets or debt securities or any rights or warrants to purchase securities of the Corporation, the conversion price shall be adjusted in accordance with the formula: C1 = C x M - F ----- M where C1 = the adjusted conversion price. C = the current conversion price. M = the current market price per share of Common Stock on the record date mentioned below. F = the fair market value on the record date of the assets, securities, rights or warrants applicable to one share of Common Stock. The Corporation shall determine the fair market value. The adjustment shall become effective immediately after the record date for the determination of stockholders entitled to receive the distribution. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the conversion price shall again be adjusted to the conversion price which would then be in effect if such record date had not been fixed. This Subclause (D) does not apply to cash dividends or cash distributions paid out of earnings or surplus as shown on the books of the Corporation. Also, this Subclause (D) does not apply to rights or warrants referred to in Subclause (C) above. (E) Adjustment for Reorganization. In case of any consolidation or merger of the Corporation into another corporation, or in the case of any merger of another corporation into the Corporation (other than a merger with a corporation in which merger the Corporation is the continuing corporation and which does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock), or in case of any sale, lease or transfer to another corporation of all or substantially all of the assets of the Corporation, the holder of each share of the Convertible Preferred Stock then outstanding shall have the right thereafter, subject to the terms and conditions of this Clause (6), to convert such share only into the kind and amount of shares of stock and other securities and property receivable upon such consolidation, merger, sale, lease or transfer by a holder of the number of shares of Common Stock into which such share of Convertible Preferred Stock might have been converted immediately prior to such consolidation, merger, sale, lease or transfer; and effective provision shall be made in the Articles of Organization or Charter of the resulting or surviving corporation or otherwise so that the provisions set forth in this Clause (6) shall thereafter be applicable, as nearly as practicable, to any such other shares of stock and other securities and property deliverable upon conversion of the Convertible Preferred Stock remaining outstanding or other convertible exchangeable preferred stock received by the holders in place thereof; and any such resulting or surviving corporation shall expressly assume the obligation to deliver, upon the exercise of the conversion privilege, such shares, securities or property as the holders of the Convertible Preferred Stock remaining outstanding, or other convertible preferred stock received by the holders in place thereof, may be entitled to, and to make provisions for the protection of the conversion right as herein provided. In case securities or property other than shares of Common Stock shall be issuable or deliverable upon conversion as aforesaid, then all reference in this Subclause (E) shall be deemed to apply, so far as appropriate and as nearly as practicable, to such other securities or property. The provisions of this Subclause (E) shall similarly apply to successive reorganizations, consolidations, mergers, leases, sales or transfers. (F) Current Market Price. For the purpose of any computation under this Clause (6), the current market price per share of Common Stock at any date shall be deemed to be the average of the daily closing prices for any thirty (30) consecutive business days selected by the Corporation commencing not more than forty-five (45) business days before the date in question. The closing price for each day shall be the last reported sale price for Common Stock on the principal national securities exchange on which the Common Stock may be listed or, if such stock is not then so listed, the closing price of the Common Stock as shown by the National Association of Securities Dealers, Inc. National Market or, if no such closing price is available, at the average of the representative last bid and asked prices of such Common Stock in the over-the-counter market, as shown by the National Association of Securities Dealers, Inc. Automated Quotation System Level I (or comparable system) or in the absence of any of the foregoing, the fair market value as determined by the Board of Directors (whose determination shall be conclusive). (G) Fractional Shares. No fractional shares of Common Stock shall be issued on any conversion, but in lieu thereof the Corporation shall pay in cash an amount equal to the current market value of such fractional interest computed on the basis of the closing price as determined in accordance with the provisions of Subclause (F) above, on the last trading day prior to the date upon which conversion is deemed to have been effected. Any determination that the Corporation or the Board of Directors makes regarding fractional shares is conclusive. (H) When No Adjustment Required. No adjustment need be made for any transaction referred to in Subclause (B), (C) or (D) above if the holders of the Convertible Preferred Stock are to participate in the transaction on a basis and with notice that the Board of Directors determines to be fair and appropriate in light of the basis and notice on which holders of Common Stock participate in the transaction. Notwithstanding the provisions of Subclauses (B), (C), (D) and (E) above, no adjustment of the conversion price shall be required unless such adjustment would require an increase or decrease of at least 1% in the conversion price, but in such case any adjustment that would otherwise be required then to be made shall be carried forward and shall be made at the time of and together with the next subsequent adjustment. All calculations under this Clause (6) shall be made and rounded to the nearest one-hundredth of a share or the nearest cent, as the case may be. No payment or adjustment on account of dividends accumulated or in arrears upon shares of the Convertible Preferred Stock, any other series of Preferred Stock, or Common Stock, shall be made in connection with any conversion, except as may otherwise be provided at the discretion of the Board of Directors and except as provided hereinafter. Shares of Convertible Preferred Stock surrendered for conversion during the period between the date fixed as the record date for the payment of a dividend and the date fixed as the dividend payment date must be accompanied by payment to the Corporation of an amount equal to the dividend payable on such shares on the dividend payment date, provided, however, that if the Corporation fixes a date for redemption or for exchange of such shares of Convertible Preferred Stock which is after such record date for the payment of dividends and before such dividend payment date, then shares of Convertible Preferred Stock surrendered for conversion after such record date and before such dividend payment date need not be accompanied by payment to the Corporation of an amount equal to the dividend on such shares payable on such dividend payment date. No adjustment need be made for sales of Common Stock pursuant to a plan for reinvestment of dividends or interest and no adjustment need be made for a change in the par value of the Common Stock. No adjustment need be made in connection with the issuance of shares of Common Stock upon conversion of the Convertible Preferred Stock or the Corporation's $21.25 Convertible Exchangeable Preferred Stock, $1.00 par value, or the issuance of (including issuance of awards, rights and options to purchase) shares of Common Stock to employees or other eligible persons of the Corporation under plans duly adopted by the stockholders of the Corporation. The Board of Directors shall have the power to resolve any ambiguity or correct any error in this Clause (6) and its action in so doing, as evidenced by a Board resolution, shall be final and conclusive. The certificate of any independent firm of public accountants of recognized standing selected by the Board of Directors shall be satisfactory evidence of the correctness of any computation made in this Clause (6). (I) Notice of Adjustment. Whenever there is an adjustment requiring a change in the conversion rate, the Corporation shall file with the transfer agent, or transfer agents, for the Convertible Preferred Stock a statement signed by the Secretary of the Corporation, describing specifically the event giving rise to such adjustment and stating the adjustment which shall be made to the conversion rate. The statement so filed shall be open to inspection by any holder of record of shares of the Convertible Preferred Stock. The Corporation shall at the time of filing any such statement mail notice to the same effect to holders of shares of the Convertible Preferred Stock at their addresses appearing on the books of the Corporation or supplied by them to the Corporation for the purpose of notice. In addition, the Corporation shall include a notice of the conversion rate with each dividend payment on the Convertible Preferred Stock or otherwise give notice thereof promptly after the due date for each such dividend, whenever there has been a change in the conversion rate since the last previous dividend due date. (J) Conversion Procedure. Upon surrender to the Corporation at the office of the transfer agent, or transfer agents, for the Convertible Preferred Stock, or at such other place or places, if any, as the Board of Directors of the Corporation may determine, of certificates, duly endorsed to the Corporation or in blank, for shares of Convertible Preferred Stock to be converted, together with appropriate evidence of the payment of any transfer or similar tax, if required, and instructions in writing to the Corporation to convert such shares and specifying the name and address of the person, corporation, firm or other entity to whom such shares are to be issued, the Corporation will issue (i) the number of full shares of Common Stock issuable on conversion thereof as of the time of such surrender and as promptly as practicable thereafter will deliver certificates for such shares of Common Stock, and (ii) cash for any remaining fraction of a share, as provided in Subclause (G) above. The Corporation shall pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of Common Stock upon conversion; provided, however, that the holder shall pay any such tax which is due because such shares are to be issued in a name other than that of such holder. The Corporation shall at all times after the Issue Date reserve for issuance upon conversion of the Convertible Preferred Stock a sufficient number of full shares of Common Stock for the conversion of each outstanding share of Convertible Preferred Stock at the current conversion rate. (K) Notice of Certain Transactions. If (i) the Corporation takes any action that would require an adjustment in the conversion rate pursuant to Subclauses (B), (C), (D) and (E) of this Clause (6); or (ii) there is a voluntary or involuntary liquidation, dissolution or winding up of the Corporation; the Corporation shall provide notice in the manner set forth in Subclause (I) of this Clause (6) of such action, stating therein the proposed record date for a distribution or the effective date of a reclassification, consolidation, merger, lease, transfer, liquidation, dissolution or winding up, at least fifteen (15) days in advance of such date. Failure to mail the notice or any defect therein shall not affect the validity of the transaction. (L) Reduction of Conversion Price Below Par Value of Common Stock. Before taking any action which would cause an adjustment reducing the conversion price below the then par value (if any) of the Common Stock deliverable upon conversion of the Convertible Preferred Stock, the Corporation will take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and non-assessable shares of Common Stock at such adjusted conversion price. (M) Decrease in Conversion Price. The Corporation may at any time decrease the conversion price by any amount for any period of time if the period is at least 20 days and if the decrease is irrevocable during the period. Whenever the conversion price is decreased, the Corporation shall give the holders of the Convertible Preferred Stock notice of the decrease at least 15 days prior to the date the decreased conversion price takes effect, in the manner set forth in Subclause (I) above, which notice shall state the decreased conversion price and the period it will be in effect. A decrease in the conversion price pursuant to this Subclause (M) shall not otherwise change or adjust the conversion price otherwise in effect for purposes of this Clause (6). (7) Liquidation Rights. In the event of an involuntary liquidation, dissolution or winding up of the Corporation, the holders of the shares of the Convertible Preferred Stock are entitled to receive out of the assets of the Corporation available for distribution to stockholders, before any distribution of assets is made to holders of Common Stock or any other stock ranking junior to the Convertible Preferred Stock as to liquidation, liquidating distributions in the amount of $25 per share plus accumulated and unpaid dividends. In the event of a voluntary liquidation, dissolution or winding up of the Corporation, the holders of shares of the Convertible Preferred Stock are entitled to receive out of the assets of the Corporation available for distribution to the stockholders, subject to the rights of any series of Preferred Stock ranking senior to the Convertible Preferred Stock as to liquidation, but before any distribution of assets is made to holders of Common Stock or any other stock ranking junior to the Convertible Preferred Stock as to liquidation, liquidation distributions in the amount set forth in Clause 4(A) above as per the then applicable redemption price, plus accumulated and unpaid dividends. If upon voluntary or involuntary liquidation, dissolution or winding up of the Corporation, amounts payable with respect to the Convertible Preferred Stock or any other outstanding shares of preferred stock of the Corporation ranking as to any such distribution on a parity with the Convertible Preferred Stock are not paid in full, the holders of the Convertible Preferred Stock and of such other shares of stock shall share ratably in any such distribution of assets of the Corporation in proportion to the full respective preferential amounts to which they are entitled. After payment of the full amount of liquidating distributions to which they are entitled, the holders of shares of Convertible Preferred Stock shall not be entitled to any further participation in any distribution of assets by the Corporation. Neither the consolidation of nor merging of the Corporation with or into any other corporation or corporations, nor the lease or transfer of all or substantially all of the assets of the Corporation, shall be deemed to be a liquidation, dissolution or a winding up of the Corporation within the meaning of any of the provisions of this Clause (7). (8) Status of Shares Redeemed, Exchanged or Converted. All shares of Convertible Preferred Stock redeemed, exchanged or converted pursuant to Clause (4), (5) or (6) hereof and all shares of the Convertible Preferred Stock otherwise reacquired by the Corporation and subsequently cancelled shall be restored to the status of authorized and unissued preferred stock undesignated as to series subject to reissuance by the Board of Directors. (9) Subdivision of Shares. The Board of Directors may at any time subdivide the shares of Convertible Preferred Stock as of an effective date fixed by the Board of Directors. Except as otherwise provided by law, notice of the proposed subdivision and the effective date shall be mailed to each holder of record of Convertible Preferred Stock not less than fifteen (15) days before the effective date. The dividend rate, conversion rate and liquidation rights in effect immediately prior to the close of business on the effective date of such subdivision shall be proportionately reduced as of the close of business on the effective date of such division. (10) "Common Stock" Defined. Whenever reference is herein made to "Common Stock," "Common Stock" shall mean any stock of any class of the Corporation which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation and which is not subject to redemption by the Corporation. However, Common Stock issuable upon conversion of the Convertible Preferred Stock shall include only shares of the class designated as Common Stock as of the original date of issuance of shares of the Convertible Preferred Stock, or shares of the Corporation of any class or classes resulting from any reclassification or reclassifications thereof and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation and which are not subject to redemption by the Corporation; provided that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from such reclassification bears to the total number of shares of all classes resulting from all such reclassifications. (11) No Preemptive Rights. The holders of the Convertible Preferred Stock shall not have any preemptive rights. EX-4 4 INSTRUMENTS DEFINING RIGHTS OF SECURITY HOLDERS EXHIBIT 4(b) PERINI CORPORATION, STATE STREET BANK & TRUST COMPANY As Depositary and ALL HOLDERS OF DEPOSITARY RECEIPTS DEPOSIT AGREEMENT Dated as of July , 1994 TABLE OF CONTENTS Page Parties Recitals DEPOSIT AGREEMENT ARTICLE I Definitions SECTION 1.01 "Articles of Organization" SECTION 1.02 "Authorizing Resolutions" SECTION 1.03 "Common Stock" SECTION 1.04 "Company" SECTION 1.05 "Convertible Subordinated Debentures" SECTION 1.06 "Deposit Agreement" SECTION 1.07 "Depositary" SECTION 1.08 "Depositary's Agent" SECTION 1.09 "Depositary Shares" SECTION 1.10 "Receipt" SECTION 1.11 "Record holder" SECTION 1.12 "Registrar" SECTION 1.13 "Securities Act of 1933" SECTION 1.14 "Shareholder Services Office" SECTION 1.15 "Stock" ARTICLE II Form of Receipts; Deposit of Stock; Execution and Delivery; Transfer, Surrender, Redemption, Conversion and Exchange of Receipts SECTION 2.01 Form and Transferability of Receipts SECTION 2.02 Deposit of Stock; Execution and Delivery of Receipts in Respect Thereof SECTION 2.03 Redemption of Stock SECTION 2.04 Transfer of Receipts SECTION 2.05 Combinations and Split-Ups of Receipts SECTION 2.06 Surrender of Receipts and Withdrawal of Stock SECTION 2.07 Conversion of Stock into Common stock SECTION 2.08 Exchange of Stock for Convertible Subordinated Debentures at the Company's Option SECTION 2.09 Limitations on Execution and Delivery; Transfer, Surrender and Exchange of Receipts SECTION 2.10 Lost Receipts, etc. SECTION 2.11 Cancellation and Destruction of Surrendered Receipts ARTICLE III Certain Obligations of Holders of Receipts and the Company SECTION 3.01 Filing Proofs, Certificates and Other Information SECTION 3.02 Payment of Taxes or Other Governmental Charges SECTION 3.03 Representations and Warranties as to Stock SECTION 3.04 Representations and warranties as to Debentures SECTION 3.05 Covenants and Warranties as to Common Stock TABLE OF CONTENTS - continued Page ARTICLE IV The Deposited Securities; Notices SECTION 4.01 Cash Distributions SECTION 4.02 Distributions other than Cash SECTION 4.03 Subscription Rights, Preferences or Privileges SECTION 4.04 Notice of Dividends; Fixing of Record Date for Receipt Holders SECTION 4.05 Voting Rights SECTION 4.06 Changes Affecting Deposited Securities and Reclassifications, Recapitalizations, etc. SECTION 4.07 Reports SECTION 4.08 List of Receipt Holders ARTICLE V The Depositary and The Company SECTION 5.01 Maintenance of Offices, Agencies, Transfer Books by the Depositary; Registrar SECTION 5.02 Prevention or Delay in Performance by the Depositary, the Depositary's Agent or the Company SECTION 5.03 Obligations of the Depositary, the Depositary's Agents and the Company SECTION 5.04 Resignation and Removal of the Depositary; Appointment of Successor Depositary SECTION 5.05 Corporate Notices and Reports SECTION 5.06 Deposit of Stock by the Company SECTION 5.07 Indemnification by the Company SECTION 5.08 Charges and Expenses ARTICLE VI Amendment and Termination SECTION 6.01 Amendment SECTION 6.02 Termination ARTICLE VII Miscellaneous SECTION 7.01 Counterparts SECTION 7.02 Exclusive Benefit of Parties SECTION 7.03 Invalidity of Provisions SECTION 7.04 Notices SECTION 7.05 Depositary's Agents SECTION 7.06 Holders of Receipts are Parties SECTION 7.07 Governing Law SECTION 7.08 Headings Testimonium Signatures Exhibit A DEPOSIT AGREEMENT DEPOSIT AGREEMENT, dated as of July , 1994, among Perini Corporation, a corporation duly organized and existing under the laws of the Commonwealth of Massachusetts, State Street Bank & Trust Company, a national banking association duly organized and existing under the laws of the United States of America, as Depositary, with its principal shareholder services office at , and all holders from time to time of Depositary Receipts issued hereunder. W I T N E S S E T H: WHEREAS, it is desired to provide, as hereinafter set forth in this Deposit Agreement, for the deposit of shares of $ Convertible Exchangeable Junior Preferred Stock, par value $1.00 per share, of Perini Corporation, with the Depositary for the purposes set forth in this Deposit Agreement and for the issuance hereunder of Depositary Receipts evidencing $ Depositary Convertible Exchangeable Junior Preferred Shares, in respect of the $ Convertible Exchangeable Junior Preferred Stock so deposited; and WHEREAS, such Depositary Receipts are to be substantially in the form of Exhibit A annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement; NOW, THEREFORE, in consideration of the above premises, it is agreed by and among the parties hereto as follows: ARTICLE I Definitions The following definitions shall for all purposes, unless otherwise clearly indicated, apply to the respective terms used in this Deposit Agreement and the Depositary Receipts: SECTION 1.01. The term "Articles of Organization" shall mean the Restated Articles of Organization, as amended from time to time, of the Company. SECTION 1.02. The term "Authorizing Resolutions" shall mean the resolutions adopted by the Board of Directors of the Company establishing and setting forth the rights, preferences and privileges of the Stock. SECTION 1.03. The term "Common Stock" shall mean any stock of any class of the Company which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company and which is not subject to redemption by the Company. However, subject to the provisions of the Authorizing Resolutions, shares issuable on conversion of the Stock shall include only shares of the class designated as Common Stock of the Company at the date of this Deposit Agreement or shares of any class or classes resulting from any reclassification or reclassifications thereof and which have no preference in respect of dividends or amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company and which are not subject to redemption by the Company; provided that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications. SECTION 1.04. The term "Company" shall mean Perini Corporation, a corporation organized and existing under the laws of the Commonwealth of Massachusetts and having its principal office at 73 Mt. Wayte Avenue, Framingham, Massachusetts 01701, and its successors. SECTION 1.05. The term "Convertible Subordinated Debentures" shall mean the Company's % Convertible Subordinated Debentures Due 2019 which may be issued pursuant to an Indenture between the Company and a trustee, in exchange for the Stock pursuant to the terms of the Stock. SECTION 1.06. The term "Deposit Agreement" shall mean this agreement, as the same may be amended or supplemented from time to time. SECTION 1.07. The term "Depositary" shall mean State Street Bank & Trust Company, a national banking association organized and existing under the laws of the United States of America, with its principal shareholder services office at , and any successor as depositary hereunder. SECTION 1.08. The term "Depositary's Agent" shall mean an agent appointed by the Depositary as provided, and for the purposes specified in Section 7.05. SECTION 1.09. The term "Depositary Shares" shall mean the $ Depositary Convertible Exchangeable Junior Preferred Shares, evidenced by the Depositary Receipts issued hereunder and representing the interests in the Stock deposited with the Depositary hereunder. Each Depositary Share shall present one-tenth (1/10th) of a share of Stock and the same proportionate interest in any and all other property received by the Depositary in respect of such shares of Stock and at the time held under this Deposit Agreement. SECTION 1.10. The term "Receipt" shall mean one or more of the Depositary Receipts issued hereunder and evidencing the Depositary Shares. SECTION 1.11. The term "record holder" as applied to a Receipt shall mean the person in whose name a Receipt is registered on the books of the Depositary maintained for such purposes. SECTION 1.12. The term "Registrar" shall mean any bank or trust company which shall be appointed to register Depositary Receipts as herein provided. SECTION 1.13. The term "Securities Act of 1933" shall mean the Act of May 27, 1933 (15 U.S. Code Secs. 77a-77aa), as from time to time amended. SECTION 1.14. The term "shareholder services office" when used with respect to the Depositary, shall mean the principal office of the Depositary in Dorchester, Massachusetts, at which at any particular time its shareholder services business shall be administered. SECTION 1.15. The term "Stock" shall mean shares of the Company's $ Convertible Exchangeable Junior Preferred Stock, par value $1.00 per share, issued concurrently herewith. ARTICLE II Form of Receipts; Deposit of Stock; Execution and Delivery; Transfer, Surrender, Redemption, Conversion and Exchange of Receipts SECTION 2.01. Form and Transferability of Receipts. Receipts shall be engraved or printed or lithographed on steel-engraved borders and shall be substantially in the form set forth in Exhibit A annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. Receipts shall be executed by the Depositary by the manual signature of a duly authorized officer of the Depositary, provided that such signature may be a facsimile if a Registrar for the Receipts (other than the Depositary) shall have been appointed and such Receipts are countersigned by manual signature of a duly authorized officer of the Registrar. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose, unless it shall have been executed manually by the Depositary, or if a Registrar for the Receipts (other than the Depositary) shall have been appointed, by facsimile by the Depositary, by the signature of a duly authorized officer and, if executed by facsimile signature of the Depositary, shall have been countersigned manually by such Registrar by the signature of a duly authorized officer. Receipts executed as provided in this Section may be issued notwithstanding that any authorized officer of the Depositary signing such Receipts shall have ceased to hold office at the time of issuance of such Receipts. The Depositary shall record on its books each Receipt so signed and delivered as hereinafter provided. Receipts shall be in denominations of any number of Depositary Shares. All Receipts shall be dated the date of their execution. Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Deposit Agreement as may be required by the Depositary or required to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange upon which the Stock, the Receipts or the Depositary Shares may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject by reason of the date of issuance of the Stock or otherwise. Title to a Receipt (and to the Depositary Shares evidenced thereby) which is properly endorsed or accompanied by a properly executed instrument of transfer shall be transferable by delivery with the same effect as in the case of a negotiable instrument; provided, however, that until a Receipt shall be transferred on the books of the Depositary as provided in Section 2.04, the Depositary may, notwithstanding any notice to the contrary, treat the record holder thereof at such time as the absolute owner thereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in this Deposit Agreement and for all other purposes. SECTION 2.02. Deposit of Stock; Execution and Delivery of Receipts in Respect Thereof. Subject to the terms and conditions of this Deposit Agreement, any holder of Stock may deposit such Stock under this Deposit Agreement by delivery to the Depositary of a certificate or certificates for the Stock to be deposited, properly endorsed or accompanied, if required by law, by a duly executed instrument of transfer or endorsement, in form satisfactory to the Depositary, together with all such certifications as may be required by the Depositary in accordance with the provisions of this Deposit Agreement, and together with a written order directing the Depositary to execute and deliver to, or upon the written order of, the person or persons stated in such order a Receipt or Receipts for the number of Depositary Shares representing such deposited Stock. If required by the Depositary, Stock presented for deposit at any time, whether or not the register of stockholders of the Company is closed, shall also be accompanied by an agreement or assignment, or other instrument satisfactory to the Depositary, which will provide for the prompt transfer to the Depositary or its nominee of any dividend or right to subscribe for additional Stock or to receive other property which any person in whose name the Stock is or has been recorded may thereafter receive upon or in respect of such deposited Stock, or in lieu thereof such agreement of indemnity or other agreement as shall be satisfactory to the Depositary. Subject to the terms and conditions of this Deposit Agreement, Stock may also be deposited hereunder in connection with the delivery of Receipts to represent distributions under Section 4.02 and upon exercise of the rights to subscribe referred to in Section 4.03. Upon each delivery to the Depositary of a certificate or certificates for Stock to be deposited hereunder, together with the other documents above specified, the Depositary shall, as soon as transfer and recordation can be accomplished, present such certificate or certificates to the Company for transfer and recordation in the name of the Depositary or its nominees of the Stock being deposited. Deposited Stock shall be held by the Depositary, at its shareholder services office, or at such other place or places as the Depositary shall determine. Upon receipt by the Depositary of a certificate or certificates for Stock deposited in accordance with the provisions of this Section, together with the other documents required as above specified, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall execute and deliver to or upon the order of the person or persons named in the written order referred to in the first paragraph of this Section, delivered to the Depositary or to the Depositary's Agent, a Receipt or Receipts for the number of Depositary Shares representing the Stock so deposited and registered in such name or names as may be requested by such person or persons. The Depositary shall execute and deliver such Receipts at its shareholder services office and at such other offices, if any, as it may designate. Delivery at any other offices shall be at the risk and expense of the person requesting such delivery. However, in each case, such delivery will be made only upon payment to the Depositary of the fee of the Depositary for the execution and delivery of such Receipt or Receipts, as provided in Section 5.08, and of all taxes and governmental charges and fees payable in connection with such deposit and the transfer of the deposited Stock. SECTION 2.03. Redemption of Stock. Whenever the Company shall elect to redeem shares of the Stock, it shall give the Depositary not less than 30 nor more than 60 days' notice of the date of such proposed redemption of Stock and of the number of shares held by the Depositary to be so redeemed and the redemption price for the Stock to be redeemed (which shall include full cumulative dividends thereon to the redemption date). On the date of such redemption, provided that the Company shall then have paid in full to the Depositary the redemption price of the Stock to be redeemed, the Depositary shall redeem the number of Depositary Shares representing such Stock. The Depositary shall mail notice of such redemption and the proposed simultaneous redemption of the number of Depositary Shares representing the Stock to be redeemed, first class mail postage prepaid, not less than 30 nor more than 60 days prior to the date fixed for redemption of such Stock and Depositary Shares ("redemption date"), to the holders of record on the record date for such redemption (determined pursuant to Section 4.4) of the Receipts evidencing the Depositary Shares to be so redeemed, at the addresses of such holders as the same appear on the records of the Depositary; but neither failure to mail any such notice to one or more such holders nor any defect in any notice shall affect the sufficiency of the proceedings for redemption as to other holders. Each such notice shall state the record date for the purposes of such redemption; the redemption date; the number of Depositary Shares to be redeemed; if less than all the Depositary Shares held by such holder are to be redeemed, the number of such Depositary Shares held by such holder to be so redeemed; the redemption price; the place or places where Receipts evidencing Depositary Shares are to be surrendered for payment of the redemption price; and that dividends in respect of the Stock represented by the Depositary Shares so to be redeemed will cease to accrue and that conversion rights in respect thereof will terminate at the close of business on such redemption date. In case less than all the outstanding Depositary Shares are to be redeemed, the Depositary Shares to be redeemed shall be selected pro rata of by lot or in such manner as the Company shall deem appropriate and fair. Notice having been mailed by the Depositary as aforesaid, from and after the redemption date (unless the Company shall have failed to redeem the shares of Stock to be redeemed by it as set forth in the Company's notice provided for in the preceding paragraph), all dividends in respect of the shares of Stock so called for redemption shall cease to accrue, the conversion rights in respect thereof will terminate, the Depositary Shares being redeemed from such proceeds shall be deemed no longer to be outstanding, all rights of the holders of Receipts evidencing such Depositary Shares (except the right to receive the redemption price) shall, to the extent of such Depositary Shares, cease and terminate and, upon surrender in accordance with said notice of the Receipts evidencing any such Depositary Shares (properly endorsed or assigned for transfer, if the Depositary shall so require), such Depositary Shares shall be redeemed by the Depositary at the redemption price per Depositary Share equal to one-tenth (1/10) (as such fraction may from time to time be adjusted, in certain events, so as to equal at all times the fraction of an interest represented by one Depositary Share in one share of Stock) of the redemption price per share paid in respect of the shares of Stock plus all money and other property, if any, represented by such Depositary Shares, including all amounts paid by the Company in respect of dividends which on the redemption date have accrued on the shares of Stock to be so redeemed and have not theretofore been paid. The foregoing shall further be subject to the terms and conditions of the Authorizing Resolutions. If less than all of the Depositary Shares evidenced by a Receipt are called for redemption, the Depositary will deliver to the holder of such Receipt upon its surrender to the Depositary, together with the redemption payment, a new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and not called for redemption. SECTION 2.04. Transfer of Receipts. Subject to the terms and conditions of this Deposit Agreement, the Depositary shall make transfer on its books from time to time of Receipts upon any surrender thereof by the holder in person or by duly authorized attorney, properly endorsed or accompanied by a properly executed instrument of transfer, and duly stamped as may be required by law. Thereupon the Depositary shall execute a new Receipt or Receipts and deliver the same to or upon the order of the person entitled thereto representing the same aggregate number of Depositary Shares as those evidenced by the Receipt or Receipts surrendered. SECTION 2.05. Combination and Split-ups of Receipts. Upon surrender of a Receipt or Receipts at the Depositary's shareholder services office or at such other office as it may designate for the purpose of effecting a split-up or combination of such Receipt or Receipts, and subject to the terms and conditions of this Deposit Agreement, the Depositary shall execute and deliver a new Receipt or Receipts in authorized denominations requested, evidencing the same aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered. SECTION 2.06. Surrender of Receipts and Withdrawal of Stock. Any holder of a Receipt or Receipts representing any number of whole shares of Stock may withdraw the Stock and all money and other property, if any, represented thereby by surrendering such Receipt or Receipts at the Depositary's shareholder services office or at such other office as the Depositary may designate for such withdrawals (unless the Depositary Shares represented thereby shall have been theretofore called for redemption or exchange). Thereafter, without unreasonable delay, the Depositary shall deliver to such holder, or to the person or persons designated by such holder as hereinafter provided, the number of whole shares of Stock and all money and other property, if any, represented by the Receipt or Receipts so surrendered for withdrawal. If the Receipt or Receipts delivered by the holder to the Depositary in connection with such withdrawal shall evidence a number of Depositary Shares in excess of the number of Depositary Shares representing the number of whole shares of Stock to be so withdrawn, the Depositary shall at the same time, in addition to such number of whole shares of Stock and such money and other property, if any, to be so withdrawn, deliver to such holder, or (subject to Section 2.04) upon his order, a new Receipt evidencing such excess number of Depositary Shares. Delivery of the Stock and money and other property being withdrawn may be made by the delivery of such certificates, documents of title and other instruments as the Depositary may deem appropriate, which, if required by law, shall be properly endorsed or accompanied by proper instruments of transfer. If the Stock and the money and other property being withdrawn are to be delivered to a person or persons other than the record holder of the Receipt or Receipts being surrendered for withdrawal of Stock, such holder shall execute and deliver to the Depositary a written order (accompanied by a signature guarantee) so directing the Depositary and the Depositary may require that the Receipt or Receipts surrendered by such holder for withdrawal of such shares of Stock be properly endorsed in blank or accompanied by a properly executed instrument of transfer in blank. Delivery of the Stock and the money and other property, if any, represented by Receipts surrendered for withdrawal shall be made by the Depositary at its shareholder services office, except that, at the request, risk and expense of the holder surrendering such Receipt or Receipts and for the account of the holder thereof, such delivery may be made at such other place as may be designated by such holder. SECTION 2.07. Conversion of Stock into Common Stock. (a) Receipts may be surrendered with instructions to the Depositary as conversion agent to convert such number of whole shares of underlying Stock represented thereby (subject to the provisions of subparagraph (g) below) as the holder wishes to convert into Common Stock of the Company at the conversion rate specified in the Authorizing Resolutions with respect to each share of Stock, as such conversion rate may be adjusted from time to time as provided in the Authorizing Resolutions. Subject to the terms and conditions of this Deposit Agreement and the Authorizing Resolutions, a holder of a Receipt or Receipts representing at least one whole share of Stock may surrender such Receipt or Receipts at the Depositary's shareholder services office or at such office as it may designate for such purpose, together with a completed and executed notice of conversion in the form included in the Receipt, thereby instructing the Depositary, as conversion agent, to convert the number of whole shares of underlying Stock specified in such notice into shares of Common Stock. Each holder surrendering Receipts for conversion during the period between a record date for payment of dividends and a dividend payment date (except for Receipts representing Stock called for redemption or exchange with a redemption or exchange date during such period) must accompany such Receipts with a check made payable to the Company in an amount equal to the dividend thereon which such holder is to receive on the dividend payment date. (b) Upon receipt of such Receipt or Receipts and the notice of conversion instructing the Depositary as conversion agent to convert, the Depositary shall (x) give written notice to the Company, or its authorized agent, of the number of whole shares of Common Stock and the amount of cash, if any, as provided in subparagraph (g) below, relating to such holder's conversion, and (y) deliver to the Company or its authorized agent the notice of conversion, together with certificates for the Stock represented by the Receipts surrendered with the notice of conversion and any accompanying check as provided above. As promptly as is practicable after the receipt of such conversion notice, certificates and any such accompanying check from the Depositary, the Company shall furnish or cause to be furnished to the Depositary a certificate or certificates representing such number of whole shares of Common Stock, and such cash, if any, as is referred to above and the Depositary shall deliver to such holder (i) a certificate or certificates representing whole shares of Common Stock into which the Stock represented by Receipts has been converted, (ii) a Receipt evidencing the number of Depositary Shares, if any, to which the holder is entitled and (iii) any money or other property to which the holder is entitled. (c) Upon any such conversion of the Stock underlying the Depositary Shares, no allowance, adjustment or payment shall be made with respect to dividends upon such Stock or shares of Common Stock issued upon the conversion thereof, except as the Company may otherwise determine in accordance with the Authorizing Resolutions. (d) Stock converted into Common Stock shall be cancelled. (e) If any Depositary Shares shall be called for redemption or exchange, the Stock underlying such shares may be converted into Common Stock as provided in this Section until and including, but not after (unless the Company shall default in payment due upon the redemption or exchange of the underlying Stock), the close of business on the redemption or exchange date. (f) Delivery of Common Stock and other property may be made by the delivery of certificates and other proper documents of title, which, if required by law, shall be properly endorsed or accompanied by proper instruments of transfer. Such delivery shall be made as hereinafter provided, without unreasonable delay, at the risk and expense of any holder surrendering Receipts, and for the account of such holder, to such place designated by such holder. (g) No fractional shares of Common Stock shall be issuable upon conversion of Stock underlying the Depositary Shares. If, except for the provisions of this paragraph, any holder of Receipts surrendered to the Depositary with instructions for conversion of the underlying Stock would be entitled to a fractional share of Common Stock, the Company shall deliver to the Depositary for delivery to such holder, in accordance with paragraph (b) above, an equivalent amount in cash for such fractional share based upon the current market value of the Common Stock computed as set forth in the Authorizing Resolutions. In addition, no fractional shares of Stock may be converted and, in the event Receipts are surrendered together with a conversion notice requesting the conversion of other than a whole number of shares of underlying Stock, the holder shall receive a Receipt evidencing the number of Depositary Shares not converted. SECTION 2.08. Exchange of Stock for Convertible Subordinated Debentures at the Company's Option. The Stock is exchangeable in whole at the option of the Company for Convertible Subordinated Debentures in accordance with the terms of the Stock. Whenever the Company shall elect to exchange the shares of Stock for Convertible Subordinated Debentures it shall give the Depositary not less than 30 nor more than 60 days notice of the date of such proposed exchange of Stock (which shall be a dividend payment date for the Stock). On the date of such exchange, provided that the Company shall then have issued the Convertible Subordinated Debentures for the Stock to be exchanged and shall have paid in full the final dividend on the Stock in immediately available funds to the Depositary, the Depositary shall exchange the Receipts for the Convertible Subordinated Debentures issued in such exchange, the final dividend paid on the Stock and such other money or property, if any, to which the holders of Receipts are then entitled. The Depositary shall mail notice of such exchange and the proposed simultaneous exchange of the Depositary Shares representing the Stock to be exchanged, first class mail postage prepaid, not less than 30 and not more than 60 days prior to the date fixed for exchange of such Stock and Depositary Shares (the "exchange date"), to the holders of record on the record date for such exchange (determined pursuant to Section 4.04) of the Receipts evidencing the Depositary Shares to be so exchanged, at the addresses of such holders as the same appear on the records of the Depositary; but neither failure to mail any such notice to one or more such holders nor any defect in any notice shall affect the sufficiency of the proceedings for exchange. Each such notice shall state the record date for the purposes of such exchange; the exchange date; the principal amount of the Convertible Subordinated Debentures to be exchanged for each Depositary Share; the place or places where Receipts evidencing Depositary Shares are to be surrendered for exchange; and that dividends in respect of the Stock represented by the Depositary Shares to be exchanged will cease to accrue and that the conversion rights in respect thereof will terminate at the close of business on such exchange date. Notice having been mailed by the Depositary as aforesaid, from and after the exchange date (unless the Company shall have failed to issue the Convertible Subordinated Debentures in exchange for the Stock as set forth in the Company's notice provided for in the preceding paragraph), all dividends in respect of the shares of Stock so called for exchange shall cease to accrue, the conversion rights in respect thereof will terminate, the Depositary Shares being exchanged shall be deemed no longer to be outstanding, all rights of the holders of Receipts evidencing such Depositary Shares (except the right to receive the Convertible Subordinated Debentures and the payment of the final dividend on the Stock in immediately available funds and to receive any other money or property to which such holder was entitled upon such exchange) shall, to the extent of such Depositary Shares, cease and terminate and, upon surrender in accordance with said notice of the Receipts evidencing any such Depositary Shares (properly endorsed or assigned for transfer, if the Depositary shall so require), such Depositary Shares shall be exchanged for such Convertible Subordinated Debentures at an exchange rate per Depositary Share equal to one-tenth (1/10) (as such fraction may from time to time be adjusted, in certain events, so as to equal at all times the fraction of an interest represented by one Depositary Share in one share of Stock) of the exchange rate per share in respect of the shares of Stock plus all money and other property, if any, represented by such Depositary Shares, including all amounts paid by the Company in respect of dividends which on the exchange date have accrued on the shares of Stock to be so exchanged and have not theretofore been paid. The foregoing shall further be subject to the terms and conditions of the Authorizing Resolutions. SECTION 2.09. Limitations on Execution and Delivery; Transfer, Surrender and Exchange of Receipts. As a condition precedent to the execution and delivery, transfer, split-up, combination, surrender or exchange of any Receipt or the conversion or exchange of the Stock for Common Stock or Convertible Subordinated Debentures, respectively, the Depositary, or any of the Depositary's Agents, or the Company may require payment of a sum sufficient for reimbursement of any tax or other governmental charge with respect thereto (including any such tax or charge with respect to Stock being deposited or withdrawn or with respect to the Common Stock upon conversion or the Convertible Subordinated Debentures upon exchange), may require the production of proof satisfactory to it as to the identity and genuineness of any signature and may also require compliance with such regulations, if any, as the Depositary may establish consistent with the provisions of this Deposit Agreement. The deposit of Stock may be refused, the delivery of Receipts against Stock may be suspended or the transfer of Receipts may be refused, or the transfer, surrender or exchange of outstanding Receipts or the conversion or exchange of the Stock for Common Stock or Convertible Subordinated Debentures, respectively, may be suspended during any period when the register of stockholders of the Company is closed, or if any such action is deemed necessary or advisable by the Depositary, any of the Depositary's Agents or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of this Deposit Agreement. Without limitation of the foregoing, the Depositary shall not knowingly accept for deposit under this Deposit Agreement, or for distribution to holders of Receipts, any Stock or other securities required to be registered under the Securities Act of 1933, unless a registration statement under such Act is in effect as to such securities. SECTION 2.10. Lost Receipts, etc. In case any Receipt shall be mutilated or be destroyed or lost or stolen, the Depositary in its discretion may execute and deliver a Receipt of like form and tenor in exchange and substitution for such mutilated Receipt, or in lieu of and in substitution for such destroyed, lost or stolen Receipt, upon the holder thereof filing with the Depositary evidence satisfactory to the Depositary of such destruction or loss or theft of such Receipt and the authenticity thereof and of his ownership thereof and furnishing the Depositary with reasonable indemnification satisfactory to it. SECTION 2.11. Cancellation and Destruction of Surrendered Receipts. All Receipts surrendered to the Depositary or any Depositary's Agent shall be cancelled by the Depositary. Except as prohibited by applicable law or regulations, the Depositary is authorized to destroy Receipts so cancelled. ARTICLE III Certain Obligations of Holders of Receipts and the Company SECTION 3.01. Filing Proofs, Certificates and Other Information. Any person presenting Stock for deposit or any holder of a Receipt may be required from time to time to file such proof of residence or other matters or other information, to execute such certificates and to make such representations and warranties as the Depositary or the Company may reasonably deem necessary or proper. The Depositary or the Company may withhold the delivery or delay the transfer, redemption or exchange of any Receipt or the withdrawal of the Stock represented by the Depositary Shares evidenced by any Receipt or the Convertible Subordinated Debentures exchanged for such Stock pursuant to Section 2.08 or the distribution of any dividend or other distribution or the sale of any rights or of the proceeds thereof or the exercise of any conversion right as specified in Section 2.07 until such proof or other information is filed or such certificates are executed or such representations and warranties are made. SECTION 3.02. Payment of Taxes or Other Governmental Charges. If any tax or other governmental charge shall become payable by or on behalf of the Depositary with respect to any Receipt evidencing Depositary Shares or with respect to the Depositary Shares evidenced by such Receipt or with respect to the Stock (or any fractional interest therein) represented by such Depositary Shares or the Convertible Subordinated Debentures exchanged for such Stock pursuant to Section 2.08 or with respect to the exercise of any conversion right as referred to in Section 2.07, such tax (including transfer taxes, if any) or governmental charge shall be payable by the holder of such Receipt, except as provided in Section 5.08. Transfer of any Receipt or any withdrawal of Stock or exchange of Stock for Convertible Subordinated Debentures and all money or other property, if any, represented by Depositary Shares evidenced by such Receipt may be refused until such payment is made, and any dividends, interest payments or other distributions may be withheld, and such conversion right may be refused, or any part or all of the Stock or such Convertible Subordinated Debentures or other property represented by the Depositary Shares evidenced by such Receipt and not theretofore sold may be sold for the account of the holder thereof (after attempting by reasonable means to notify such holder prior to such sale), and such dividends or other distributions or the proceeds of any such sale may be applied to payment of any such tax or other governmental charge, the holder of such Receipt remaining liable for any deficiency. SECTION 3.03 Representations and Warranties as to Stock. Every person depositing Stock under this Deposit Agreement shall be deemed thereby to represent and warrant that such Stock and each certificate therefor are valid and that the person making such deposit is duly authorized to do so and has, or the person on whose behalf such deposit is made has, good and marketable title to such Stock, free and clear of any liens, claims or encumbrances. The Company hereby further represents and warrants that the Stock, when issued, will be duly and validly issued, fully paid and non-assessable. Such representations and warranties shall survive the deposit of the Stock and the issuance of Receipts. SECTION 3.04. Representations and Warranties as to Debentures. The Company represents and warrants that if it shall elect to exchange in whole the Stock for its Convertible Subordinated Debentures, (i) such Convertible Subordinated Debentures, when issued, will be valid and binding obligations of the Company entitled to the benefits of the Indenture related to such Convertible Subordinated Debentures, and (ii) such Indenture will constitute a valid and binding instrument in accordance with its terms except as the same may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting the enforcement of creditors' rights and by general equitable principles. SECTION 3.05. Covenant and Warranties as to Common Stock. The Company covenants that it will keep a sufficient number of authorized and unissued shares of Common Stock to meet conversion requirements in respect of the Stock and Convertible Subordinated Debentures and that it will give written notice to the Depositary of any adjustments in the conversion rate of Stock into Common Stock as set forth in the Authorizing Resolutions. The Company represents and warrants that upon such conversion the Common Stock will be validly issued, fully paid and nonassessable. Such covenant, representations and warranties shall survive the deposit of the Stock and the issuance of Receipts and the issuance of the Common Stock upon conversion. ARTICLE IV The Deposited Securities; Notices SECTION 4.01. Cash Distributions. Whenever the Depositary shall receive any cash dividend or other cash distribution on the Stock, the Depositary shall, subject to Section 3.02, distribute to record holders of Receipts on the record date fixed pursuant to Section 4.04 such amounts of such sums as are, as nearly as possible, in proportion to the respective number of Depositary Shares held by such holders; provided, however, that in case the Company or the Depositary shall be required to withhold and does withhold from any cash dividend or other cash distribution in respect of the Stock an amount on account of any taxes, the amount made available for distribution or distributed in respect of Depositary Shares shall be reduced accordingly. The Depositary shall distribute or make available for distribution, as the case may be, only such amount, however, as can be distributed without attributing to any owner of Depositary Shares a fraction of one cent and any balance not so distributable shall be held by the Depositary (without liability for interest thereon) and shall be added to and treated as part of the next sum received by the Depositary for distribution to record holders of Receipts then outstanding. SECTION 4.02. Distributions other than Cash. Whenever the Depositary shall receive any distribution other than cash upon the Stock, including without limitation any distribution of Convertible Subordinated Debentures in exchange for Stock pursuant to Section 2.08, the Depositary shall, subject to Section 3.02, distribute on the record date fixed pursuant to Section 4.04 such amounts of the Convertible Subordinated Debentures, other securities or property received by it as are, as nearly as practicable, in proportion to the number of Depositary Shares evidenced by the Receipts held by such holders, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution. If in the opinion of the Depositary such distribution cannot be made proportionately among the record holders of Receipts entitled thereto, or if for any other reason (including any requirement that the Company or the Depositary withhold an amount on account of any taxes) the Depositary deems, after consultation with the Company, such distribution not to be feasible, the Depositary may, with the approval of the Company, adopt such method as it deems equitable and practicable for the purpose of effecting such distribution, including the sale (at public or private sale) of the Convertible Subordinated Debentures, other securities or property thus received, or any part thereof, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall, subject to Section 3.02, be distributed or made available for distribution, as the case may be, by the Depositary to the holders of Receipts entitled thereto as provided by Section 4.01 in the case of a distribution received in cash. SECTION 4.03. Subscription Rights, Preferences or Privileges. Whenever the Company shall offer or cause to be offered to the holders of the Stock in whose names such securities are recorded on the books of the Company any rights, preferences or privileges to subscribe for or to purchase any securities or any rights, preferences or privileges of any other nature, such rights, preferences or privileges shall in each instance be made available by the Depositary to the record holders of Receipts in such manner as the Depositary may determine, either by the issue to the record holders of Receipts entitled thereto of warrants representing such rights, preferences or privileges or by such other method as may be approved by the Depositary in its discretion with the approval of the Company; provided, however, that (a) if at the time of issue or offer of any such rights, preferences or privileges the Depositary determines that it is not lawful or (after consultation with the Company) not feasible to make such rights, preferences or privileges available to the holders of Receipts by the issue of warrants or otherwise, or (b) if and to the extent so instructed by holders of Receipts who do not desire to exercise such rights, preferences or privileges, then the Depositary, in its discretion (with the approval of the Company, in any case where the Depositary has determined that it is not feasible to make such rights, preferences or privileges available), may, if applicable laws or the terms of such rights, preferences or privileges permit such transfer, sell such rights, preferences or privileges at public or private sale, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall be distributed by the Depositary to the record holders of Receipts entitled thereto as provided by Section 4.01 in the case of a distribution received in cash. If registration under the Securities Act of 1933 of the securities to which any rights, preferences or privileges relate is required in order for holders of Receipts to be offered or sold the securities to which such rights, preferences or privileges relate, the Company agrees with the Depositary that it will promptly file a registration statement pursuant to such Act with respect to such rights, preferences or privileges and securities and use its best efforts and take all steps available to it to cause such registration statement to become effective sufficiently in advance of the expiration of such rights, preferences or privileges to enable such holders to exercise such rights, preferences or privileges. In no event shall the Depositary make available to the holders of Receipts any right, preference or privilege to subscribe for or to purchase any securities unless and until such a registration statement shall have become effective, or unless the offering and sale of such securities to the holders of such Receipts are exempt from registration under the provisions of such Act. If any other action under the laws of any jurisdiction or any governmental or administrative authorization, consent or permit is required in order for such rights, preferences or privileges to be made available to holders of Receipts, the Company agrees with the Depositary that the Company will use its best efforts to take such action or obtain such authorization, consent or permit sufficiently in advance of the expiration of such rights, preferences or privileges to enable such holders of Receipts to exercise such rights, preferences or privileges. SECTION 4.04. Notice of Dividends, Fixing of Record Date for Receipt Holders. Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or if rights, preferences or privileges shall at any time be offered, with respect to the Stock, or whenever the Depositary shall receive notice of (a) any meeting at which holders of Stock are entitled to vote or of which holders of Stock are entitled to notice, or (b) any election on the part of the Company to redeem any shares of Stock or to exchange shares of Stock for Convertible Subordinated Debentures, the Depositary shall, in each such instance, fix a record date (which shall be the record date fixed by the Company with respect to the Stock) for the determination of the holders of Receipts who shall be entitled to receive such dividend, distribution, rights, preferences or privileges or the net proceeds of the sale thereof, or to give instructions for the exercise of voting rights at any such meeting or who shall be entitled to notice of such meeting, or whose Depositary Shares are to be redeemed or exchanged. SECTION 4.05. Voting Rights. Upon receipt of notice of any meeting at which the holders of Stock are entitled to vote, the Depositary shall, as soon as practicable thereafter, mail to the record holders of Receipts a notice which shall contain (a) such information as is contained in such notice of meeting, and (b) a statement that the holders of Receipts at the close of business on a specified record date determined pursuant to Section 4.04 will be entitled, subject to any applicable provisions of law and of the Articles of Organization of the Company or the Authorizing Resolutions relating to the Stock, to instruct the Depositary as to the exercise of the voting rights pertaining to the amount of Stock represented by their respective Depositary Shares, and a brief statement as to the manner in which such instructions may be given. Upon the written request of a holder of a Receipt on such record date, the Depositary shall endeavor insofar as practicable to vote or cause to be voted the amount of Stock represented by Depositary Shares evidenced by such Receipt in accordance with the instructions set forth in such request. The Company hereby agrees to take all action which may be deemed necessary by the Depositary in order to enable the Depositary to vote such Stock or cause such Stock to be voted. In the absence of specific instructions from the holder of a Receipt, the Depositary will abstain from voting to the extent of the Stock represented by the Depositary Shares evidenced by such Receipt. SECTION 4.06. Changes Affecting Deposited Securities and Reclassifications, Recapitalizations, etc. Upon any change in par or stated value, split-up, consolidation or any other reclassification of the Stock, or upon any recapitalization, reorganization, merger, amalgamation or consolidation or lease or transfer of all or substantially all of the Company's assets, the Depositary may in its discretion with the approval of, and shall upon the instructions of, the Company, in such manner as the Depositary may deem equitable (a) make such adjustments in (i) the fraction of an interest represented by one Depositary Share in one share of Stock, (ii) the ratio of the redemption price per Depositary Share to the redemption price of a share of Stock, and (iii) the exchange ratio for the exchange of Depositary Shares for Convertible Subordinated Debentures upon the exchange of shares of Stock for such Convertible Subordinated Debentures, in each case as may be necessary to fully reflect the effects of such change in par or stated value, split-up, consolidation or other reorganization, merger, amalgamation or such consolidation or lease or transfer, and (b) treat any securities which shall be received by the Depositary in exchange for or upon conversion of or in respect of the Stock as new deposited securities under this Deposit Agreement, and Receipts then outstanding shall thenceforth represent the new deposited securities so received in exchange for or upon conversion or in respect of such Stock. In any such case the Depositary may in its discretion, with the approval of the Company execute and deliver additional Receipts, or may call for the surrender of all outstanding Receipts to be exchanged for new Receipts specifically describing such new deposited securities. Anything to the contrary herein notwithstanding, holders of Receipts shall have the right from and after the effective date of any such change of par or stated value, split-up, consolidation or other reclassification of the Stock or any such recapitalization, reorganization, merger, amalgamation or consolidation or lease or transfer of substantially all of the assets of the Company to surrender such Receipts to the Depositary with instructions to convert, exchange or surrender the Stock represented thereby only into or for, as the case may be, the kind and amount of shares of stock or other securities or property or cash into which the Stock represented by such Receipts might have been converted or for which such Stock might have been exchanged or surrendered immediately prior to the effective date or record date of such transaction. The Company shall cause any such surviving corporation (if other than the Company) expressly to assume the obligations of the Company hereunder. SECTION 4.07. Reports. The Depositary shall make available to holders of Receipts, upon request of such holders, reports and communications received from the Company which are both (a) received by the Depositary as the holder of the Stock and (b) made generally available to the holders of such Stock by the Company. SECTION 4.08. List of Receipt Holders. Promptly upon request from time to time by the Company, the Depositary shall furnish to it a list, as of a recent date, of the names, addresses and holdings of Depositary Shares by all persons in whose names Receipts are registered on the books of the Depositary. ARTICLE V The Depositary and The Company SECTION 5.01. Maintenance of Offices, Agencies, Transfer Books by the Depositary; Registrar. Until termination of this Deposit Agreement in accordance with its terms, the Depositary shall maintain at its shareholder services office and such other place as may be required by law, regulation or stock exchange rule, facilities for the execution and delivery, transfer, surrender and exchange of Receipts, and at the offices of the Depositary's Agents, if any, facilities for the delivery, transfer, surrender and exchange of Receipts, all in accordance with the provisions of this Deposit Agreement. The Depositary shall keep books at its shareholder services office for the transfer of Receipts which books at all reasonable times shall be open for inspection by the record holders of Receipts, provided that such inspection shall be for a proper purpose reasonably related to such person's interest as an owner of Depositary Shares evidenced by the Receipts. The Depositary may close the books, at any time or from time to time, when deemed expedient by it in connection with the performance of its duties hereunder. If the Receipts or the Depositary Shares evidenced thereby or the Stock represented by such Depositary Shares shall be listed on the American Stock Exchange or any other national securities exchange, the Depositary may, with the approval of the Company, appoint a Registrar for registry of such Receipts or Depositary Shares in accordance with any requirements of such exchange. Such Registrar (which may be the Depositary if so permitted by the requirements of such exchange) may be removed and a substitute Registrar appointed by the Depositary upon the request or with the approval of the Company. If the Receipts or such Depositary Shares or such Stock are listed on one or more other stock exchanges, the Depositary will, at the request of the Company, arrange such facilities for the delivery, transfer, surrender and exchange of such Receipts, such Depositary Shares, or such Stock as may be required by law or applicable stock exchange regulation. SECTION 5.02 Prevention or Delay in Performance by the Depositary, the Depositary's Agent or the Company. Neither the Depositary nor any Depositary's Agent nor the Company shall incur any liability to any holder of any Receipt if, by reason of any provision of any present or future law, or regulation thereunder, of the United States of America or of any other governmental authority, or, in the case of the Depositary or the Depositary's Agent, by reason of any provision, present or future, of the Articles of Organization of the Company or the Authorizing Resolutions relating to the Stock or by reason of any act of God or war or other circumstances beyond control of the relevant party, the Depositary, any Depositary's Agent or the Company shall be prevented or forbidden from doing or performing any act or thing which by the terms of this Deposit Agreement provide shall be done or performed; nor shall the Depositary, any Depositary's Agent or the Company incur any liability to any holder of a Receipt by reason of any non-performance or delay caused as aforesaid, in performance of any act or thing which by the terms of this Deposit Agreement provide shall or may be done or performed, or by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement. SECTION 5.03. Obligations of the Depositary, the Depositary's Agents and the Company. Neither the Depositary nor any Depositary's Agent nor the Company assumes any obligation or shall be subject to any liability under this Deposit Agreement to holders of Receipts other than that each of them agrees to use its best judgment and good faith in the performance of such duties as are specifically set forth in this Deposit Agreement. Neither the Depositary nor any Depositary's Agent nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of the Stock, Depositary Shares or the Receipts, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required. Neither the Depositary nor any Depositary's Agent nor the Company shall be liable for any action or failure to act by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Stock for deposit, any holder of a Receipt or any other person believed by it in good faith to be competent to give such advice or information. The Depositary, any Depositary's Agent and the Company may each rely and shall each be protected in acting upon any written notice, request, direction or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Depositary shall not be responsible for any failure to carry out any instructions to vote any of the shares of Stock or for the manner or effect of any such vote made, so long as any such action or failure to act is in good faith. The Depositary will indemnify the Company against any liability which may arise out of acts performed or omitted by the Depositary or its agents due to its or their negligence or bad faith. The Depositary and the Depositary's Agents may own and deal in any class of securities of the Company and its affiliates and Receipts. The Depositary may also be a depositary of the Company for any purpose, may loan money to the Company and its affiliates, may act as trustee, transfer agent or registrar of any of the securities of the Company and its affiliates and may engage in any other business with or for the Company and its affiliates. The Company agrees with the Depositary to register the Stock and Depositary Shares evidenced by Receipts to be initially issued upon the deposit of the Stock under the Securities Act of 1933 and, if required by applicable law, to register promptly and maintain the registration of Depositary Shares evidenced by Receipts under the Securities Exchange Act of 1934. SECTION 5.04. Resignation and Removal of the Depositary; Appointment of Successor Depositary. The Depositary may at any time resign as Depositary hereunder by written notice of its election to do so delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided. The Depositary may at any time be removed by the Company by written notice of such removal delivered to the Depositary, such removal becoming effective upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided. In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall within 60 days after the delivery of the notice of resignation or removal, as the case may be, appoint a successor depositary, which shall be a bank or trust company having its principal office in the United States of America and having a combined capital and surplus of at least $50,000,000. Every successor depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor and for all purposes shall be the Depositary under this Deposit Agreement, and such predecessor, upon payment of all sums due it and on the written request of the Company, shall execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all right, title and interest in the Stock and the money or property held hereunder by it as Depositary to such successor, and shall deliver to such successor a list of the record holders of all outstanding Receipts. Any successor depositary shall promptly mail notice of its appointment to the record holders of Receipts. Any corporation into or with which the Depositary may be merged or consolidated shall be the successor of such Depositary without the execution or filing of any document or any further act. Such successor depositary may authenticate the Receipts in the name of the predecessor depositary or in the name of the successor depositary. SECTION 5.05. Corporate Notices and Reports. The Company agrees that it will deliver to the Depositary, and the Depositary will, promptly after receipt thereof, transmit to the record holders of Receipts, in each case at the addresses recorded in the Depositary's books, copies of all notices and reports (including, without limitation, financial statements) required by law, by the rules of any national securities exchange upon which the Stock, the Depositary Shares or the Receipts are listed or by the Company's Articles of Organization and the Authorizing Resolutions to be furnished by the Company to holders of the Stock. Such transmission will be at the Company's expense and the Company will provide the Depositary with such number of copies of such documents as the Depositary may reasonably request. In addition, the Depositary will transmit to the holders of Receipts (at the Company's expense) such other documents as may be requested by the Company. SECTION 5.06. Deposit of Stock by the Company. The Company agrees with the Depositary that neither the Company nor any company controlled by the Company will at any time deposit any Stock, if such Stock is required to be registered under the provisions of the Securities Act of 1933 and no registration statement is in effect as to such Stock. SECTION 5.07. Indemnification by the Company. The Company agrees to indemnify the Depositary, any Depositary's Agent and any Registrar against any liability arising out of acts performed or omitted in accordance with the provisions of this Deposit Agreement, as the same may be amended, modified or supplemented from time to time, and the Receipts (a) by the Depositary, any Registrar or any of their respective agents (including any Depositary's Agent), except for liability arising out of negligence or bad faith on the part of any such person or persons, or (b) by the Company or any of its agents. SECTION 5.08. Charges and Expenses. No charges and expenses of the Depositary or any Depositary's Agent hereunder, or those of any Registrar, shall be payable by any person other than the Company, except for fees for the deposit of Stock subsequent to the initial deposit hereunder, or any surrender of Receipts for withdrawal of shares of Stock represented by the Depositary Shares evidenced thereby (other than the initial withdrawal of any shares of Stock following the initial deposit of such shares hereunder), for which the person making such a deposit will be charged $ per 100 Depositary Shares or portion thereof delivered to or upon his order or surrendered for such withdrawal, any taxes and other governmental charges and as set forth in the next succeeding sentence, provided that the Company shall pay any charges or expenses of the Depositary in connection with any withdrawal of Stock upon its conversion or exchange, as provided in the Authorizing Resolutions. If, at the election of a holder of Stock or Receipts, any delivery or communication from the Depositary to such holder is by telegram or telex or if the Depositary incurs charges or expenses for which it is not otherwise liable hereunder at the election of such holder, such holder will be liable for such charges and expenses. All other charges and expenses of the Depositary and any Depositary's Agent hereunder and of any Registrar (including, in each case, fees and expenses of counsel) incident to the performance of their respective obligations hereunder will be paid upon consultation and agreement between the Depositary and the Company as to the amount and nature of such charges and expenses. The Depositary shall present its statement for charges and expenses to the Company once every month or at such other intervals as the Company and the Depositary may agree. ARTICLE VI Amendment and Termination SECTION 6.01. Amendment. The form of the Receipts and any provisions of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary in any respect which they may deem necessary or desirable. Any amendment which shall impose any fees, taxes or charges (other than fees and charges provided for herein), or which shall otherwise prejudice any substantial existing rights of holders of Receipts, shall not become effective as to outstanding Receipts until the expiration of 90 days after notice of such amendment shall have been given to the record holders of outstanding Receipts. Every holder of an outstanding Receipt at the time any such amendment so becomes effective shall be deemed, by continuing to hold such Receipt, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the holder of any Receipt to surrender the Receipt evidencing such Depositary Shares with instructions to the Depositary to convert such shares into Common Stock or to deliver to the holder the Stock and all money and other property, if any, represented thereby, including any Convertible Subordinated Debentures, and receive therefor the Stock and other property represented thereby or to convert the number of whole shares of underlying Stock into Common Stock, except in order to comply with mandatory provisions of applicable law. SECTION 6.02. Termination. Whenever so directed by the Company, the Depositary will terminate this Deposit Agreement by mailing notice of such termination to the record holders of all Receipts then outstanding at least 30 days prior to the date fixed in such notices for such termination. The Depositary may likewise terminate this Deposit Agreement if at any time 60 days shall have expired after the Depositary shall have delivered to the Company a written notice of its election to resign and a successor depositary shall have not been appointed and accepted its appointment as provided in Section 5.04. If any Receipts shall remain outstanding after the date of termination of this Deposit Agreement, the Depositary thereafter shall discontinue the transfer of Receipts, shall suspend the distribution of dividends to the holders thereof, and shall not give any further notices (other than notice of such termination) or perform any further acts under this Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to the Stock, shall sell rights, preferences or privileges as provided in this Deposit Agreement and shall continue to deliver Stock and any money and other property represented by Receipts upon surrender thereof by the holders. At any time after the expiration of two years from the date of termination, the Depositary may sell the Stock or Convertible Subordinated Debentures then held hereunder at public or private sale, at such place or places and upon such terms as it deems proper and may thereafter hold the net proceeds of any such sale, together with any money and other property held by it hereunder, without liability for interest, for the benefit, pro rata in accordance with their holdings, of the holders of Receipts which have not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under this Deposit Agreement, except to account for such net proceeds and money, cash and other property. Within 60 days after the first anniversary date of such sale, the Depositary shall pay to the Company any such net proceeds which shall not have been claimed by holders of Receipts surrendering their Receipts therefor. After making such payment to the Company, the Depositary shall be discharged from all obligations under this Deposit Agreement and the remaining Receipt holders shall look to the Company for such proceeds relating to such Receipts. Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary, any Depositary's Agent and any Registrar under Sections 5.07 and 5.08 hereof. ARTICLE VII Miscellaneous SECTION 7.01. Counterparts. This Deposit Agreement may be executed in any number of counterparts and by each of the parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument. Copies of this Deposit Agreement shall be filed with the Depositary and the Depositary's Agents and shall be open to inspection during business hours at the Depositary's shareholder services office and the respective offices of the Depositary's Agents, if any, by any holder of a Receipt. SECTION 7.02. Exclusive Benefit of Parties. This Deposit Agreement is for the exclusive benefit of the parties hereto, and their respective successors hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other person whatsoever. SECTION 7.03. Invalidity of Provisions. In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby. SECTION 7.04. Notices. Any and all notices to be given to the Company hereunder or under the Depositary Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail or by telegram or telex confirmed by letter, addressed to the Company at 73 Mt. Wayte Avenue, Framingham, Massachusetts 01701, Attention: Secretary, or any other place to which the Company may have transferred its principal executive office. Any and all notices to be given to the Depositary hereunder or under the Depositary Receipts, shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail or by telegram or telex confirmed by letter, addressed to the Depositary at its shareholder services office. Any and all notices to be given to any record holder of a Receipt hereunder or under the Depositary Receipts shall be deemed to have been duly given if personally delivered or sent by mail or by telegram or telex confirmed by letter, addressed to such record holder at the address of such record holder as it appears on the books of the Depositary, or, if such holder shall have filed with the Depositary a written request that notices intended for such holder be mailed to some other address, at the address designated in such request. Delivery of a notice sent by mail or by telegram or telex shall be deemed to be effected at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a telegram or telex message) is deposited, postage prepaid, in a post-office letter box. The Depositary or the Company may, however, act upon any telegram or telex message received by it from the other or from any holder of a Receipt, notwithstanding that such telegram or telex message shall not subsequently be confirmed by letter as aforesaid. SECTION 7.05. Depositary's Agents. The Depositary may from time to time appoint Depositary's Agents to act in any respect for the Depositary for the purposes of this Deposit Agreement and may at any time appoint additional Depositary's Agents and vary or terminate the appointment of such Depositary's Agents. The Depositary will notify the Company of any such action. SECTION 7.06. Holders of Receipts are Parties. The holders of Receipts from time to time shall be deemed to be parties to this Deposit Agreement and shall be bound by all of the terms and conditions hereof and of the Receipts by acceptance thereof. SECTION 7.07. Governing Law. This Deposit Agreement and the Receipts and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts. SECTION 7.08. Headings. The headings of articles and sections in this Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto have been inserted for convenience only and are not to be regarded as part of this Agreement or to have any bearing upon the meaning or interpretation of any provision contained herein or in the Receipts. IN WITNESS WHEREOF, Perini Corporation and State Street Bank & Trust Company of Boston have duly executed this Agreement as of the day and year first above set forth and all holders of Receipts shall be acceptance by them of Receipts issued in accordance with the terms hereof. PERINI CORPORATION By: __________________________ Attest: ____________________________ Name: ___________________ Secretary Title: ___________________ STATE STREET BANK & TRUST COMPANY By: _____________________ Attest: ____________________________ Name: ___________________ Secretary Title: ___________________ EXHIBIT A DEPOSITARY RECEIPT FOR $ DEPOSITARY CONVERTIBLE EXCHANGEABLE JUNIOR PREFERRED SHARES REPRESENTING $ CONVERTIBLE EXCHANGEABLE JUNIOR PREFERRED STOCK (par value $1.00 per share) OF PERINI CORPORATION (Incorporated under the Laws of Massachusetts) No. FBU CUSIP $ Depositary Convertible Exchangeable Junior Preferred Shares (Each such share representing one-tenth of one share of $ Convertible Exchangeable Junior Preferred Stock, par value $1.00 per share) 1. State Street Bank & Trust Co., a national banking association duly organized and existing under the laws of the United States of America, as depositary (the "Depositary"), hereby certifies that is the registered owner of $ Depositary Convertible Exchangeable Junior Preferred Shares ("Depositary Shares"), each Depositary Share representing one-tenth (1/10) of one share of $ Convertible Exchangeable Junior Preferred Stock ("Stock") of Perini Corporation, incorporated under the laws of the Commonwealth of Massachusetts (the "Company"). Each such Depositary Share represents one-tenth (1/10) share of Stock at the date hereof deposited at the shareholder services office of the Depositary. The rights, preferences and limitations of the Stock are set forth in the Company's Restated Articles of Organization, as amended, and the resolutions adopted by the Board of Directors of the Company establishing the Stock (the "Authorizing Resolutions"), copies of which are on file at the Depositary's shareholder services office. 2. The Deposit Agreement. The Depositary Receipts ("Receipts"), of which this Receipt is one, are made available upon the terms and conditions set forth in the Deposit Agreement dated as of July , 1994 (the "Deposit Agreement"), among the Company, the Depositary and all holders from time to time of Receipts. The Deposit Agreement (copies of which are on file at the Depositary's shareholder services office) sets forth the rights of holders of the Receipts and the rights and duties of the Depositary in respect of the Stock deposited and any and all property and cash from time to time held thereunder. The statements made on the face and the reverse of this Receipt are summaries of certain provisions of the Deposit Agreement and are subject to the detailed provisions thereof, to which reference is hereby made. Unless otherwise expressly provided herein, all defined terms used herein shall have the meanings described thereto in the Deposit Agreement. 3. Redemption at the Company's Option. Whenever the Company shall elect to redeem shares of the Stock, it shall give the Depositary not less than 30 and not more than 60 days notice of the date of such proposed redemption of stock and of the number of shares held by the Depositary to be so redeemed and the redemption price for the Stock to be redeemed (which shall include full cumulative dividends thereon to the redemption date). The Depositary shall mail notice of such redemption and the proposed simultaneous redemption of corresponding numbers of Depositary Shares from the proceeds of such redemption of Stock not less than 30 and not more than 60 days prior to the date fixed for redemption of such Stock and Depositary Shares to the holders of record of Receipts on the record date for such f the Depositary Shares to be so redeemed. In case less than all the outstanding Depositary Shares are to be so redeemed, the Depositary Shares to be so redeemed shall be selected pro rata or by lot or in such manner as the Company shall deem appropriate and fair. If less than all of the Depositary Shares represented by this Receipt are called for redemption, the Depositary will deliver to the holder of this Receipt upon its surrender to the Depositary, together with the redemption payment, a new Receipt representing the Depositary Shares not called for redemption. Notice having been mailed as aforesaid, from and after the date set for redemption (unless the Company shall have failed to redeem the shares of Stock to be redeemed as set forth in the notice of redemption), all dividends in respect of the shares of Stock so called for redemption shall cease to accrue, the conversion rights in respect of the Stock shall terminate, the Depositary Shares called for redemption shall be deemed no longer to be outstanding, and all rights of holders of Receipts with respect to such called Depositary Shares (except the right to receive the redemption price) shall, to the extent of such Depositary Shares, cease and terminate and, upon surrender in accordance with said notice of the Receipts evidencing such Depositary Shares (properly endorsed or assigned for transfer, if the Depositary shall so require), such Depositary Shares shall be redeemed by the Depositary at the redemption price therefor specified in said notice, plus all money and other property, if any, represented by such Depositary Shares, including all amounts paid by the Company in respect of dividends which on the redemption date have accrued on the shares of Stock to be so redeemed and have not theretofore been paid. The foregoing shall be subject to the terms and conditions of the Authorizing Resolutions. 4. Surrender of Receipts and Withdrawals of Stock. Upon surrender of this Receipt to the Depositary at its shareholder services office or at such other offices as it may designate, and subject to the provisions of the Deposit Agreement (unless the Depositary Shares evidenced hereby have been theretofore called for redemption or exchange), the holder hereof is entitled to withdraw, and to obtain delivery, to or upon the order of such holder, of the Stock and all money and other property, if any, at the time represented hereby; provided, however, that the holder hereof is not entitled to withdraw less than a whole share of Stock and therefore, this Receipt alone or in the aggregate with other Receipts, must evidence at least a whole share of Stock; and provided further, that in the event this Receipt shall evidence a number of Depositary Shares in excess of the number of Depositary Shares representing the number of whole shares of Stock to be so withdrawn, the Depositary shall, in addition to such number of whole shares of Stock and the money and other property, if any, to be so withdrawn, deliver, to or upon the order of such holder, a new Receipt evidencing such excess number of Depositary Shares. 5. Conversion of Stock. Receipts may be surrendered at the place or places specified in Paragraph 4 hereof with instructions to the Depositary, as conversion agent, to convert any specified number of whole shares of Stock represented by Depositary Shares evidenced hereby into Common Stock of the Company at the conversion rate specified in the Authorizing Resolutions, as such conversion rate may be adjusted from time to time by the Company as provided in the Authorizing Resolutions. Upon conversion of such whole shares of Stock, no allowance, adjustment or payment shall be made with respect to dividends on such Stock or Common Stock and no fractional share of Common Stock shall be issued except as the Company may otherwise determine in accordance with the Authorizing Resolutions; however, a cash payment will be made by the Company in lieu thereof on the basis of the then current market value of such fractional share, as provided in the Authorizing Resolutions. Each holder surrendering Receipts for conversion during the period between a record date for payment of dividends and a dividend payment date (except for Receipts representing Stock called for redemption or exchange with a redemption or exchange date during such period) must accompany such Receipts with a check made payable to the Company in an amount equal to the dividend thereon which such holder is to receive on the dividend payment date. 6. Exchange of Stock for Convertible Subordinated Debentures at the Company's Option. The Stock is exchangeable in whole, but not in part, at the option of the Company for the % Convertible Subordinated Debentures Due 2019 of the Company (the "Convertible Subordinated Debentures") in accordance with the terms of the Stock. Whenever the Company shall elect to exchange the shares of the Stock for Convertible Subordinated Debentures, it shall give the Depositary not less than 30 nor more than 60 days notice of the date of such proposed exchange of Stock. On the date of such exchange, provided that the Company shall then have issued the Convertible Subordinated Debentures for the Stock to be exchanged, the Depositary shall exchange the Depositary Shares representing the Stock for the proposed Convertible Subordinated Debentures issued in such exchange. The Depositary shall mail notice of such exchange and of the proposed simultaneous exchange of the Depositary Shares representing the Stock to be exchanged, not less than 30 nor more than 60 days prior to the date fixed for exchange of such Stock and Depositary Shares, to all holders of record on the record date for such exchange (determined as provided in Paragraph 17 below) of the Receipts evidencing the Depositary Shares at the addresses of such holders as the same appear on the records of the Depositary, but the failure to mail any such notice to a holder shall not affect the sufficiency of the proceedings for exchange. Each such notice shall state the record date for the purposes of such exchange; the exchange date; the principal amount of the Convertible Subordinated Debentures to be exchanged for each Depositary Share; the place or places where such Receipts are to be surrendered for exchange; and that dividends in respect of the Depositary Shares to be exchanged will cease to accrue and the conversion rights in respect thereof will terminate at the close of business on such exchange date. Notice having been mailed by the Depositary as aforesaid, from and after the exchange date (unless the Company shall have failed to exchange the shares of Stock to be exchanged by it as set forth in the Company's notice provided for in the preceding paragraph), all dividends in respect of the Depositary Shares of Stock shall cease to accrue, the conversion rights in respect thereof shall terminate, the Depositary Shares being exchanged shall no longer be deemed to be outstanding, all rights of the holders of Receipts with respect to such Depositary Shares (except the right to receive Convertible Subordinated Debentures) shall, to the extent of such Depositary Shares, cease and terminate, and, upon surrender in accordance with said notice of the Receipts evidencing any such Depositary Shares (properly endorsed or assigned for transfer, if the Depositary shall so require), said Depositary Shares shall be exchanged by the Depositary for the Convertible Subordinated Debentures at an exchange rate per share equal to one-tenth (1/10) (as such fraction may from time to time be adjusted, in certain events, so as to equal at all times the fraction of an interest represented by one Depositary Share in one share of Stock) of the exchange rate per share in respect of the shares of Stock plus all money and other property, if any, represented by such Depositary Shares, including all amounts paid by the Company in respect of dividends which on the exchange date have accrued on the shares of Stock to be so exchanged and have not theretofore been paid. The foregoing shall be further subject to the terms and conditions of the Authorizing Resolutions. 7. Transfers, Split-ups, Combinations. This Receipt is transferable on the books of the Depositary upon surrender of this Receipt to the Depositary, properly endorsed or accompanied by a properly executed instrument of transfer, and upon such transfer the Depositary shall sign and deliver a Receipt to or upon the order of the person entitled thereto, as provided in the Deposit Agreement. This Receipt may be split into other Receipts or combined with other Receipts into one Receipt, representing the same aggregate number of Depositary Shares as the Receipt or Receipts surrendered. 8. Conditions to Signing and Delivery, Transfer, Exchange, etc. of Receipts. Prior to the execution and delivery, transfer, split-up, combination, surrender or exchange of this Receipt or the conversion or exchange of the Stock for Common Stock or Convertible Subordinated Debentures, respectively, the Depositary, or any of the Depositary's Agents or the Company, may require payment of a sum sufficient for payment (or, in the event that the Depositary or the Company shall have made such payment, the reimbursement to it) of any tax or other governmental charge with respect thereto (including any such tax or charge with respect to Stock being deposited or withdrawn), may require proof satisfactory to it as to the indemnity and genuineness of any signature and may also require compliance with such regulations, if any, as it may establish pursuant to the Deposit Agreement. Any person presenting Stock for deposit, or any holder of this Receipt, may be required to file any information and to execute such certificates as the Depositary or the Company may reasonably deem necessary or proper. 9. Suspension of Delivery, Transfer, etc. The deposit of Stock, the delivery of this Receipt against Stock, the transfer, surrender or exchange of this Receipt or the exercise of any conversion or exchange right may be suspended (a) during any period when the register of stockholders of the Company is closed, or (b) if any such action is deemed necessary or advisable by the Depositary, any of the Depositary's Agents or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of the Deposit Agreement. 10. Payment of Taxes or Other Governmental Charges. If any tax or other governmental charge shall become payable by or on behalf of the Depositary with respect to this Receipt or with respect to the Depositary Shares evidenced hereby or with respect to the Stock (or any fractional interest therein (represented by such Depositary Shares or the Convertible Subordinated Debentures exchanged for such Stock, or with respect to the exercise of any conversion or exchange of the Stock into Common Stock or Convertible Subordinated Debentures, respectively, such tax (including transfer taxes, if any) or governmental charge shall be payable by the holder hereof. Transfer of this Receipt, any withdrawal of Stock evidenced by this Receipt or any conversion or exchange of the Stock underlying this Receipt into Common Stock or Convertible Subordinated Debentures, respectively, may be refused until such payment is made, and any dividends, interest payments or other distributions may be withheld, or any part of all of the Stock represented by the Depositary Shares not evidenced by this Receipt and not theretofore sold may be sold for the account of the holder hereof, and such dividends, interest payments or other distributions or the proceeds of any such sale may be applied to payment of any such tax or other governmental charge, the holder of this Receipt remaining liable for any deficiency. 11. Warranties by Depositor. Every person depositing Stock under the Deposit Agreement shall be deemed thereby to represent and warrant that such Stock and each certificate therefor are valid, that such person making such deposit, or the person on whose behalf such deposit is made, has good and marketable title to such Stock, free and clear of any liens, claims or encumbrances, and that the person making such deposit is duly authorized to do so. 12. Amendment. The form of the Receipts and any provisions of the Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary in any respect which they may deem necessary or desirable. Any amendment which imposes any fees, taxes or charges (other than fees and charges provided for in the Deposit Agreement), or which shall otherwise prejudice any substantial existing right of holders of Receipts, shall not become effective as to outstanding Receipts until the expiration of 90 days after notice of such amendment shall have been given to the record holders of outstanding Receipts. The holder of this Receipt at the time any such amendment so becomes effective shall be deemed, by continuing to hold this Receipt, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the holder of this Receipt to surrender this Receipt to the Depositary with instructions to convert such shares into Common Stock or to deliver to the holder the Stock and all money and other property, if any, represented hereby, including any Convertible Subordinated Debentures, and receive therefor the Stock and other property represented hereby or to convert the number of whole shares of underlying Stock into Common Stock, except in order to comply with mandatory provisions of applicable law. 13. Charges of Depositary. The Depositary will charge the party to whom Receipts for Depositary Shares are delivered against deposits of Stock $ for each 100 Depositary Shares or fraction thereof so delivered (other than the initial deposit of such shares by J.P. Morgan Securities Inc. under the Deposit Agreement) and for withdrawal of shares of Stock represented by Receipts for Depositary Shares (other than the initial withdrawal of any shares of Stock following the initial deposit of such shares by J.P. Morgan Securities Inc). The Company will pay all other charges of the Depositary, except for taxes and other governmental charges, and such telegram, telex and delivery charges as are expressly provided in the Deposit Agreement to be at the expense of persons depositing Stock or holders of Receipts. 14. Title to Receipts. it is a condition of this Receipt, and every successive holder hereof by accepting or holding the same consents and agrees, that title to this Receipt (and to the Depositary Shares evidenced hereby), when properly endorsed or accompanied by a properly executed instrument of transfer, is transferable by delivery with the same effect as in the case of a negotiable instrument; provided, however, that until this Receipt shall be transferred on the books of the Depositary, the Depositary may, notwithstanding any notice to the contrary, treat the record holder hereof at such time as the absolute owner hereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in the Deposit Agreement, and for all other purposes. 15. Dividends and Distributions. Whenever the Depositary receives any cash dividend or other cash distribution on the Stock, the Depositary will, subject to the provisions of the Deposit Agreement, make such distribution to the holders of Receipts as nearly as practicable in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such holders; provided, however, that the amount distributed will be reduced by any amounts required to be withheld by the Company or the Depositary on account of any taxes. Other distributions received on the Stock may be distributed to such holders of Receipts as provided in the Deposit Agreement. 16. Subscription Rights, Preferences or Privileges. If the Company shall at any time offer to the record holders of the Stock any rights, preferences or privileges to subscribe for or to purchase any securities or any rights, preferences or privileges of any other nature, such rights, preferences or privileges shall in each such instance, subject to the provisions of the Deposit Agreement, be made available by the Depositary to the record holders of Receipts in such manner as the Depositary may determine, either by the issue to the record holders of Receipts entitled thereto of warrants representing such rights, preferences or privileges or by such other method as may be approved by the Depositary in its discretion with the approval of the Company provided, however, that (a) if at the time of issue or offer of any such rights, preferences or privileges the Depositary determines that it is not lawful or (after consultation with the Company) not feasible to make such rights, preferences or privileges available to holders of Receipts by the issue of warrants or otherwise, or (b) if and to the extent so instructed by holders of Receipts who do not desire to exercise such rights, preferences or privileges, then the Depositary, in its discretion (with the approval of the Company, in any case where the Depositary has determined that it is not feasible to make such rights, preferences or privileges available) may, if applicable laws or the terms of such rights, preferences or privileges permit such transfer, sell such rights, preferences or privileges at public or private sale, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall, subject to the provisions of Paragraph 10 hereof, be distributed by the Depositary to the record holders of Receipts entitled thereto as in the case of a distribution received in cash. If any other action (including the registration under the Securities Act of 1933 of the securities to which any rights, preferences or privileges relate) under the laws of any jurisdiction or any governmental or administrative authorization, consent or permit is required in order for such rights, preferences or privileges to be made available to holders of Receipts, the Company will use its best efforts to take such action to obtain such registration, authorization, consent or permit sufficiently in advance of the expiration of such rights, preferences or privileges, to enable holders of Receipts to exercise such rights, preferences or privileges. In no event shall the Depositary make available to the holders of Receipts any right, preference or privilege to subscribe for or to purchase any securities unless or until the relevant registration statement shall have become effective, or unless the offering and sale of such securities to such holders are exempt from registration under the provisions of such Act. 17. Fixing of Record Date. Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or if rights, preferences or privileges shall at any time be offered, with respect to the Stock, or whenever the Depositary shall receive notice of (a) any meeting at which holders of Stock are entitled to vote or of which holders of Stock are entitled to notice, or (b) any election on the part of the Company to redeem any shares of Stock or to exchange shares of Stock for Convertible Subordinated Debentures, the Depositary shall in each such instance fix a record date (which shall be the same date as the record date fixed by the Company with respect to the Stock) for the determination of the holders of Receipts who shall be entitled to receive such dividend, distribution, rights, preferences or privileges or the net proceeds of the sale thereof, or to give instructions for the exercise of voting rights at any such meeting, or who shall be entitled to notice of such meeting, or whose Depositary Shares are to be redeemed or exchanged. 18. Voting Rights. Upon receipt of notice of any meeting at which the holders of Stock are entitled to vote, the Depositary shall, as soon as practicable thereafter, mail to the record holders of Receipts a notice which shall contain (a) such information as is contained in such notice of meeting, and (b) a statement that the holders of Receipts at the close of business on a specified record date will be entitled, subject to any applicable provisions of law and of the Articles of Organization of the Company or the Authorizing Resolutions, to instruct the Depositary as to the exercise of the voting rights pertaining to the amount of Stock represented by the Depositary Shares evidenced by their respective Receipts, and a brief statement as to the manner in which such instructions may be given. Upon the written request of a holder of a Receipt on such record date, the Depositary shall endeavor insofar as practicable to vote or cause to be voted the amount of Stock represented by such Receipt in accordance with the instructions set forth in such request. In the absence of specific instructions from the holder of a Receipt, the Depositary will abstain from voting to the extent of the Stock represented by the Depositary Shares evidenced by such Receipt. 19. Changes Affecting Deposited Securities. Upon any change in par or stated value, split-up, consolidation or any other reclassification of the Stock, or upon any recapitalization, reorganization, merger, amalgamation or consolidation or lease or transfer of all or substantially all of the Company's assets, the Depositary may in its discretion with the approval of, and shall upon the instructions of, the Company, in such manner as the Depositary may deem equitable, (a) make such adjustments in (i) the fraction of an interest represented by one Depositary Share in one share of Stock, (ii) the ratio of the redemption price per Depositary Share to the redemption price of a share of Stock, and (iii) the exchange ratio for the exchange of Depositary Shares for Convertible Subordinated Debentures upon the exchange of shares of Stock for such Convertible Subordinated Debentures, in each case as may be necessary to fully reflect the effects of such change in par or stated value, split-up, consolidation or other reorganization, merger, amalgamation or such consolidation or lease or transfer, and (b) treat any securities which shall be received by the Depositary in exchange for or in conversion of or in respect of the Stock as new deposited securities under the Deposit Agreement, and Receipts then outstanding shall thenceforth represent the new deposited securities so received in exchange for or in conversion of or in respect of such Stock. In any such case the Depositary may in its discretion, with the approval of the Company, execute and deliver additional Receipts, or may call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing such new deposited securities. None of the provisions of this Paragraph 19 shall apply to an exchange pursuant to Paragraph 6 hereof. 20. Reports; Inspection of Transfer Books. The Depositary will make available to holders of Receipts, upon request of such holders, any reports and communications received from the Company which are both (a) received by the Depositary as the holder of the Stock and (b) made generally available to the holders of such Stock by the Company. The Depositary will also send to record holders of Receipts copies of such notices, reports and other financial statements to the extent provided in the Deposit Agreement when furnished by the Company. The Depositary will keep books for the transfer of Receipts, which at all reasonable times will be open for inspection by the revord holders of Receipts; provided, however, that such inspection shall be for a proper purpose reasonably related to such person's interest as an owner of Depositary Shares evidenced by the Receipts. 21. Liability of the Depositary, the Depositary's Agents or the Company. Neither the Depositary nor any Depositary's Agent nor the Company shall incur any liability to any holder of any Receipt if, by reason of any provision of any present or future law or regulation of any governmental authority, or, in the case of the Depositary or the Depositary's Agents, by reason of any provision, present or future, of the Articles of Organization of the Company or the Authorizing Resolutions, or by reason of any act of God or war or other circumstance beyond the control of the relevant party, the Depositary, any Depositary's Agent or the Company shall be prevented or forbidden from doing or performing any act or thing which by the terms of the Deposit Agreement provide shall be done or performed; nor shall the Depositary, any Depositary's Agent or the Company incur any liability to any holder of a Receipt by reason of any non-performance or delay, caused as aforesaid, in performance of any act or thing which by the terms of the Deposit Agreement provide shall or may be done or performed, or by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement. 22. Obligations of the Depositary, the Depositary's Agents and the Company. Neither the Depositary nor any Depositary's Agent nor the Company assumes any obligation or shall be subject to any liability under the Deposit Agreement to holders of Receipts other than that each of them agrees to use its best judgment and good faith in the performance of such duties as are specifically set forth in the Deposit Agreement. Neither the Depositary nor any Depositary's Agent nor the Company will be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of the Stock, Depositary Shares or the Receipts, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required. Neither the Depositary nor any Depositary's Agent nor the Company will be liable for any action or failure to act by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Stock for deposit, any holder of a Receipt or any other person believed by it in good faith to be competent to give such advice or information. The Depositary will not be responsible for any failure to carry out any instructions to vote any of the shares of Stock or for the manner or effect of any such vote made, as long as any such action or failure to act is in good faith. The Company will indemnify the Depositary and any Depositary's Agent against any liability arising out of acts performed or omitted in connection with the Deposit Agreement or the Receipts, as the same may be amended, modified or supplemented from time to time (a) by the Depositary or any Registrar, or any of their respective agents (including Depositary's Agent), except to the extent that liability results from negligence or bad faith, or (b) by the Company or any of its agents. The Depositary will indemnify the Company against any liability which may arise out of acts performed or omitted by the Depositary or its Agents due to negligence or bad faith. The Depositary and the Depositary's Agents may own and deal in any class of securities of the Company or its affiliates and in Receipts. The Depositary may also be a depositary of the Company for any purpose, may loan money to the Company and its affiliates, may act as trustee, transfer agent or registrar of any of the securities of the Company or its affiliates and may engage in any other business with or for the Company and its affiliates. 23. Resignation and Removal of Depositary. The Depositary may at any time (a) resign by written notice of its election to do so delivered to the Company, such resignation to take effect upon the appointment of a successor Depositary and its acceptance of such appointment, or (b) be removed by the Company effective upon the appointment of a successor depositary and its acceptance of such appointment, all as provided in the Deposit Agreement. 24. Termination of Deposit Agreement. Whenever so directed by the Company, the Depositary will terminate the Deposit Agreement by mailing notice of such termination to the record holders of all Receipts outstanding at least 30 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate the Deposit Agreement if at any time 60 days shall have expired after the Depositary shall have delivered to the Company a written notice of its election to resign and a successor Depositary shall not have been appointed and accepted its appointment. If any Receipts remain outstanding after the date of termination, the Depositary thereafter shall discontinue all functions and be discharged from all obligations as provided in the Deposit Agreement, except as specifically provided therein. At any time after the expiration of two years from the date of termination, the Depositary may sell the Stock or Convertible Subordinated Debentures then held by it at public or private sale, at such place or places and upon such terms as it deems proper and may thereafter hold the net proceeds of any such sale, together with any other cash then held by it, without liability for interest, for the pro rata benefit of the holders of Receipts which have not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement, except to account for such net proceeds and other cash. Within 60 days after the first anniversary date of such sale, the Depositary shall pay to the Company any such net proceeds which shall not have been claimed by holders of Receipts surrendering their Receipts therefor. After making such payment to the Company, the Depositary shall be discharged from all obligations under the Deposit Agreement and the remaining Receipt holders shall look to the Company for any such proceeds relating to such Receipts. Upon the termination of the Deposit Agreement, the Company shall be discharged from all obligations thereunder except for its obligations to the Depositary, any Depositary's Agent and any Registrar with respect to indemnification, charges and expenses. 25. Governing Law. The Deposit Agreement and this Receipt and all rights thereunder and hereunder and provisions thereof and hereof shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts. This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory for any purpose unless this Receipt shall have been executed manually by the Depositary or, if a Registrar for the Receipts (other than the Depositary) shall have been appointed, by the facsimile signature of a duly authorized officer of the Depositary and, if so executed, shall have been countersigned manually by a duly authorized officer of the Registrar. Dated: STATE STREET BANK & TRUST CO. By: ___________________________ Authorized Signature [Form of Notice of Conversion] The undersigned holder of this Receipt for $ Depositary Convertible Exchangeable Junior Preferred Shares (the "Depositary Shares") hereby irrevocably exercises the option to convert whole shares of the underlying $ Convertible Exchangeable Junior Preferred Stock (the "Stock") represented by this Receipt into shares of Common Stock (and any other applicable securities or property) of Perini Corporation in accordance with the terms and conditions of the Stock including the Authorizing Resolutions in respect thereof and further as provided in the Deposit Agreement dated as of July , 1994 among Perini Corporation, State Street Bank & Trust Company, as Depositary, and the holders from time to time of Receipts, referred to in this Receipt, and directs that the securities deliverable upon the conversion be registered in the name of and delivered, together with a check in payment for any fractional share and any other property, to the undersigned unless a different name has been indicated below. If securities are to be registered in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. If the number of shares of Stock indicated above is less than the number of shares of such Stock on deposit in respect of this Receipt, the undersigned directs that the Depositary issue to the undersigned, unless a different name is indicated below, a new Receipt evidencing the balance of the Depositary Shares not surrendered with instructions for conversion of the underlying Stock. Dated _________________________ Name __________________________ (Please Print Name and Address) Signature _______________________________ Address _______________________________ NOTE: The above signature should correspond exactly with the name on the face of this Receipt or with the name of assignee appearing in assignment form below. If shares are to be registered in the name of a person other than the holder, please print such person's name and address below: Name ____________________________________ Address _________________________________ [Form of Assignment] FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto of the Depositary Convertible Exchangeable Junior Preferred Shares represented by the within Receipt and all rights and interests represented thereby, and hereby irrevocably constitutes and appoints attorney, to transfer the same on the books of the within named Depositary, with full power of substitution in the premises. Dated: _______________________ Signature: __________________________________ NOTE: The above signature should correspond exactly with the name on the face of this Receipt. EX-4 5 INDENTURE EXHIBIT 4(c) PERINI CORPORATION AND STATE STREET BANK & TRUST CO., Trustee, ___________________ INDENTURE Dated as of , ___________________ $ % Convertible Subordinated Debentures Due 2019 CROSS-REFERENCE SHEET TIA Section Indenture Section 310(a)(1) 7.10 (a)(2) 7.10 (a)(3) N.A. (a)(4) N.A. (b) 7.08; 7.10; 12.02 (c) N.A. 311(a) 7.11 (b) 7.11 (c) N.A. 312(a) 2.05 (b) 12.03 (c) 12.03 313(a) 7.06 (b)(1) N.A. (b)(2) 7.06 (c) 12.02 (d) 7.06 314(a) 4.02; 12.02 (b) N.A. (c)(1) 12.04 (c)(2) 12.04 (c)(3) N.A. (d) N.A. (e) 12.05 (f) N.A. 315(a) 7.01(b) (b) 7.05; 12.02 (c) 7.01(a) (d) 7.01(c) (e) 6.11 316(a)(last sentence) 2.09 (a)(1)(A) 6.05 (a)(1)(B) 6.04 (a)(2) N.A. (b) 6.07 317(a)(1) 6.08 (a)(2) 6.09 (b) 2.04 318(a) 12.01 _______________________ N.A. means not applicable. NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture. TABLE OF CONTENTS Page ARTICLE 1 Definitions and Incorporation by Reference SECTION 1.01 Definitions 1.02 Other Definitions 1.03 Incorporation by Reference of Trust Indenture Act 1.04 Rules of Construction ARTICLE 2 The Securities SECTION 2.01 Form and Dating 2.02 Execution and Authentication 2.03 Registrar, Paying Agent and Conversion Agent 2.04 Paying Agent to Hold Money in Trust 2.05 Securityholder Lists 2.06 Transfer and Exchange 2.07 Replacement Securities 2.08 Outstanding Securities 2.09 Treasury Securities 2.10 Temporary Securities 2.11 Cancellation 2.12 Defaulted Interest ARTICLE 3 Redemption SECTION 3.01 Notices to Trustee 3.02 Selection of Securities to Be Redeemed 3.03 Notice of Redemption 3.04 Effect of Notice of Redemption 3.05 Deposit of Redemption Price 3.06 Securities Redeemed in Part ARTICLE 4 Covenants SECTION 4.01 Payment of Securities 4.02 SEC Reports 4.03 Certificate as to Defaults ARTICLE 5 Successors SECTION 5.01 When Corporation May Merge, etc. ARTICLE 6 Defaults and Remedies SECTION 6.01 Events of Default 6.02 Acceleration 6.03 Other Remedies 6.04 Waiver of Past Defaults 6.05 Control by Majority 6.06 Limitation on Suits 6.07 Rights of Holders to Receive Payment 6.08 Collection Suit by Trustee 6.09 Trustee May File Proofs of Claim 6.10 Priorities 6.11 Undertaking for Costs ARTICLE 7 Trustee SECTION 7.01 Duties of Trustee 7.02 Rights of Trustee 7.03 Individual Rights of Trustee, etc. 7.04 Trustee's Disclaimer 7.05 Notice of Defaults 7.06 Reports by Trustee to Holders 7.07 Compensation and Indemnity 7.08 Replacement of Trustee 7.09 Successor Trustee by Merger, etc. 7.10 Eligibility; Disqualification 7.11 Preferential Collection of Claims Against Corporations ARTICLE 8 Discharge of Indenture SECTION 8.01 Termination of Company's Obligations 8.02 Application of Trust Money 8.03 Repayment to Corporation 8.04 Reinstatement ARTICLE 9 Amendments, Supplements and Waivers SECTION 9.01 Without Consent of Holders 9.02 With Consent of Holders 9.03 Compliance with Trust Indenture Act 9.04 Revocation and Effect of Consents 9.05 Notation on or Exchange of Securities 9.06 Trustee Protected ARTICLE 10 Conversion SECTION 10.01 Conversion Privilege 10.02 Conversion Procedure 10.03 Fractional Shares 10.04 Taxes on Conversion 10.05 Corporation to Provide Stock 10.06 Adjustment for Change in Capital Stock 10.07 Adjustment for Rights Issue 10.08 Adjustment for Other Distributions 10.09 Current Market Price 10.10 When Adjustment May Be Deferred 10.11 When No Adjustment Required 10.12 Notice of Adjustment 10.13 Voluntary Reduction 10.14 Notice of Certain Transactions 10.15 Reduction of Conversion Price Below Par Value of Common Stock 10.16 Reorganization of Corporation 10.17 Corporation Determination Final 10.18 Trustee's Disclaimer ARTICLE 11 Subordination SECTION 11.01 Agreement to Subordinate 11.02 Certain Definitions 11.03 Liquidation; Dissolution; Bankruptcy 11.04 Default on Senior Debt 11.05 Acceleration of Securities 11.06 When Distribution Must Be Paid Over 11.07 Notice by Corporation 11.08 Subrogation 11.09 Relative Rights 11.10 Subordination May Not Be Impaired by Corporation 11.11 Distribution or Notice to Representative 11.12 Rights of Trustee and Paying Agent 11.13 Officers' Certificate 11.14 Trustee Owes No Fiduciary Duty to Holders of Senior Debt ARTICLE 12 Miscellaneous SECTION 12.01 Trust Indenture Act Controls 12.02 Notices 12.03 Communication by Holders with Other Holders 12.04 Certificate and Opinion as to Conditions Precedent 12.05 Statements Required in Certificate or Opinion 12.06 Rules by Trustee, Paying Agent, Registrar 12.07 Legal Holidays 12.08 No Recourse Against Others 12.09 Duplicate Originals 12.10 Variable Provisions 12.11 Governing Law Signatures Exhibit A-Form of Security INDENTURE dated as of , , between PERINI CORPORATION, a Massachusetts corporation (the "Corporation"), and STATE STREET BANK & TRUST CO., [a national banking association organized and existing under the laws of the United States of America,] as trustee (the "Trustee"). Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Corporation's % Convertible Subordinated Debentures Due 2019 ("Securities"): ARTICLE 1 Definitions and Incorporation by Reference SECTION 1.1 Definitions. "Affiliate" means any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Corporation. "Agent" means any Registrar, Paying Agent, Conversion Agent or co-registrar. "Board of Directors" means the Board of Directors of the Corporation or the Executive Committee of the Board. "Corporation" means the party named as such in this Indenture until a successor replaces it and after that means the successor. "Default" means any event that is, or after notice or passage of time or both would be, an Event of Default. "Holder" or "Securityholder" means a person in whose name a Security is registered on the Registrar's books. "Indenture" means this Indenture as amended from time to time. "Officers' Certificate" means a certificate signed by two Officers, one of whom must be the President, the Treasurer or a Vice President of the Corporation. "Opinion of Counsel" means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Corporation or the Trustee. ["$ Preferred Stock"] "$21.25 Preferred Stock" means the $21.25 Convertible Exchangeable Preferred Stock, par value $1.00 per share, of the Corporation. "principal" of a debt security means the principal of the security plus the premium, if any, on the security. "SEC" means the Securities and Exchange Commission. "Securities" means the Securities described above issued under this Indenture. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. {sections} 77aaa-77bbbb) as in effect on the date of this Indenture. "Trustee" means the party named as such above until a successor replaces it and after that means the successor. "Trust Officer" means any officer of the Trustee assigned by the Trustee to administer its corporate trust matters. SECTION 1.2 Other Definitions. Defined in Term Section "Bankruptcy Law" 6.01 "Common Stock" 10.01 "Conversion Agent" 2.03 "Custodian" 6.01 "Event of Default" 6.01 "Legal Holiday" 12.07 "Officer" 12.10 "Paying Agent" 2.03 "Quoted Price" 12.10 "Registrar" 2.03 "Representative" 11.02 "Senior Debt" 11.02 "U.S. Government Obligations" 8.01 SECTION 1.3 Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "indenture securities" means the Securities. "indenture security holder" means a Securityholder. "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Trustee. "obligor" on the indenture securities means the Corporation. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings assigned to them. SECTION 1.4 Rules of Construction. Unless the context otherwise requires, (1) a term has the meaning assigned to it, (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles, (3) "or" is not exclusive, (4) words in the singular include the plural, and in the plural include the singular, and (5) provisions apply to successive events and transactions. ARTICLE 2 The Securities SECTION 2.1 Form and Dating. The Securities will be substantially in the form of Exhibit A, which is part of this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Security will be dated the date of its authentication. SECTION 2.2 Execution and Authentication. Two Officers will sign the Securities for the Corporation by manual or facsimile signature. The Corporation's seal will be impressed, affixed, imprinted or reproduced on the Securities. If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security will nevertheless be valid. A Security will not be valid until authenticated by the manual signature of the Trustee. The signature will be conclusive evidence that the Security has been authenticated under this Indenture. The Trustee will authenticate Securities for original issue on a written order of the Corporation signed by two Officers up to the total principal amount stated in paragraph 4 of Exhibit A. The total principal amount of Securities outstanding at any time may not exceed that amount except as provided in Section 2.07 (Replacement Securities). The Trustee may appoint an authenticating agent acceptable to the Corporation to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such Agent. An authenticating agent has the same rights as an Agent to deal with the Corporation or an Affiliate. SECTION 2.3 Registrar, Paying Agent and Conversion Agent. The Corporation shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange ("Registrar"), an office or agency where Securities may be presented for payment ("Paying Agent") and an office where Securities may be presented for conversion ("Conversion Agent"). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Corporation may appoint one or more co-registrars, one or more additional paying agents and one or more additional conversion agents. The term "Paying Agent" includes any additional paying agent, and the term "Conversion Agent" includes any additional conversion agent. If the Corporation fails to maintain a Registrar, Paying Agent or Conversion Agent, the Trustee will act as such. SECTION 2.4 Paying Agent to Hold Money in Trust. The Corporation will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Securityholders or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Securities and will notify the Trustee of any default by the Corporation in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. If the Corporation acts as Paying Agent, it will segregate and hold as a separate trust fund all money held by it as Paying Agent. The Corporation at any time may require a Paying Agent to pay all money held by it to the Trustee. On payment over to the Trustee, the Paying Agent will have no further liability for the money. SECTION 2.5 Securityholder Lists. The Trustee will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the Registrar, the Corporation will furnish to the Trustee on or before each interest payment date and at such other times as the Trustee may request in writing a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders. SECTION 2.6 Transfer and Exchange. Where Securities are presented to the Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal principal amount of Securities of other denominations, the Registrar will register the transfer or make the exchange as requested. To permit registrations of transfers and exchanges, the Trustee will authenticate Securities at the Registrar's request. The Corporation may charge for its reasonable expenses incurred in connection with any registration of transfer or exchange but not for any exchange pursuant to Section 2.10 (Temporary Securities), 3.06 (Securities Redeemed in Part), 9.05 (Notation on or Exchange of Securities) or 10.02 (Conversion Procedure). SECTION 2.7 Replacement Securities. If the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Corporation will issue and the Trustee will authenticate a replacement Security. If required by the Trustee or the Corporation, the Holder must furnish an indemnity bond, sufficient in the judgment of both the Trustee and the Corporation, to protect the Corporation, the Trustee, any Agent or any authenticating agent from any loss that any of them may suffer if a Security is replaced. The Corporation may charge for its reasonable expenses incurred in replacing a Security. Every replacement Security is an additional obligation of the Company. SECTION 2.8 Outstanding Securities. The Securities outstanding at any time are all Securities authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation and those described in this Section as not outstanding. If a Security is replaced pursuant to the foregoing Section, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser. If Securities are considered paid under Section 4.01 (Payment of Securities), they cease to be outstanding and Interest on them ceases to accrue. A Security does not cease to be outstanding because the Corporation or an Affiliate holds the Security. SECTION 2.9 Treasury Securities. In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or an Affiliate shall be disregarded, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so disregarded. SECTION 2.10 Temporary Securities. Until definitive Securities are ready for delivery, the Corporation may prepare and the Trustee will authenticate temporary Securities. Temporary Securities will be substantially in the form of definitive Securities but may have variations that the Corporation considers appropriate for temporary Securities. Without unreasonable delay, the Corporation will prepare and the Trustee will authenticate definitive Securities in exchange for temporary Securities. SECTION 2.11 Cancellation. The Corporation at any time may deliver Securities to the Trustee for cancellation. The Registrar, Paying Agent and Conversion Agent will forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee will cancel all Securities surrendered for registration of transfer, exchange, payment, conversion or cancellation and will dispose of cancelled Securities as the Corporation directs. The Corporation may not issue new Securities to replace Securities it has paid or delivered to the Trustee for cancellation or that any Securityholder has converted pursuant to this Indenture. SECTION 2.12 Defaulted Interest. If the Corporation defaults in a payment of interest on any Securities, it will pay the defaulted interest in any lawful manner. It may pay the defaulted interest, plus any interest payable on the defaulted interest, to the persons who are Securityholders on a subsequent special record date. The Corporation will fix the special record date and payment date. At least 15 days before the record date, the Corporation will mail to Securityholders a notice that states the record date, the payment date, and the amount of defaulted interest to be paid. ARTICLE 3 Redemption SECTION 3.1 Notices to Trustee. If the Corporation wants to redeem Securities pursuant to paragraph 5 (Optional Redemption) of the Securities, it will notify the Trustee in writing of the redemption date and the principal amount of Securities to be redeemed. If the Corporation wants to reduce the principal amount of Securities to be redeemed pursuant to paragraph 6 (Mandatory Redemption) of the Securities, it will notify the Trustee in writing of the amount of the reduction and the basis for it. If the Corporation wants to credit against any such redemption Securities it has not previously delivered to the Trustee for cancellation, it must deliver the Securities with the notice. The Corporation will give the notice provided for in this Section at least 50 days before the redemption date. SECTION 3.2 Selection of Securities to Be Redeemed. If less than all the Securities are to be redeemed, the Trustee will select the Securities to be redeemed pro rata or by lot or in such manner as it shall deem appropriate or fair. The Trustee will make the selection from outstanding Securities not previously called for redemption. The Trustee may select for redemption portions of the principal of Securities that have a denomination larger than $25. Securities and portions of them it selects will be in amounts of $25 or an integral multiple of $25. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. SECTION 3.3 Notice of Redemption. At least 30 days but not more than 60 days before a redemption date, the Corporation will mail a notice of redemption to each Holder whose Securities are to be redeemed. The notice will identify the Securities to be redeemed and will state (1) the redemption date, (2) the redemption price, (3) the then applicable conversion price, (4) the name and address of the Paying Agent and the Conversion Agent, (5) that Securities called for redemption may be converted at any time before the close of business on the redemption date, (6) that Holders who want to convert the Securities must satisfy the requirements in paragraph 8 of the Securities, (7) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price, and (8) that interest on Securities called for redemption ceases to accrue on and after the redemption date. At the Corporation's written request, the Trustee will give the notice of redemption in the Corporation's name and at its expense. SECTION 3.4 Effect of Notice of Redemption. Once notice of redemption is mailed, Securities called for redemption become due and payable on the redemption date and at the redemption price stated in the notice. SECTION 3.5 Deposit of Redemption Price. At least one business day before the redemption date, the Corporation will deposit with the Paying Agent money sufficient to pay the redemption price of and accrued interest on all Securities to be redeemed on the redemption date. The Paying Agent will return to the Corporation any money not required for that purpose because of conversion of Securities. SECTION 3.6 Securities Redeemed in Part. On surrender of a Security that is redeemed in part, the Trustee will authenticate for the Holder a new Security equal in principal amount to the unredeemed portion of the Security surrendered. ARTICLE 4 Covenants SECTION 4.1 Payment of Securities. The Corporation will pay the principal of and interest on the Securities on the dates and in the manner provided in the Securities. Principal and interest will be considered paid on the date due if the Paying Agent holds on that date money in immediately available funds sufficient to pay all principal and interest then due. The Corporation will pay interest on overdue principal at the rate borne by the Securities, and it will pay interest on overdue installments of interest at the same rate to the extent lawful. SECTION 4.2 SEC Reports. The Corporation will file with the Trustee within 15 days after it files them with the SEC copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) that the Corporation is required to file with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. The Corporation also will comply with the other provisions of TIA {section} 314(a). SECTION 4.3 Certificate as to Defaults. The Corporation will deliver to the Trustee within 120 days after the end of each fiscal year of the Corporation an Officers' Certificate stating whether or not the signers know of any Default that occurred during the fiscal year. If they do know of such a default, the certificate will describe the Default and its status. The certificate need not comply with Section 12.05. See Section 12.10. ARTICLE 5 Successors SECTION 5.1 When Corporation May Merge, etc. The Corporation will not consolidate with or merge into, or transfer or lease all or substantially all of its assets to, any other entity unless (1) the other entity assumes by supplemental indenture all the obligations of the Corporation under the Securities and this Indenture, except that it need not assume the obligations of the Corporation as to conversion of Securities if pursuant to Section 10.15 (Reorganization of Corporation) the Corporation or another person enters into a supplemental indenture obligating it to deliver securities, cash or other assets on conversion of Securities, (2) immediately after the transaction no Default exists, and (3) the Corporation delivers to the Trustee an Officer's Certificate and an Opinion of Counsel each stating that such consolidation, merger or transfer and such supplemental indenture comply with this Indenture. The surviving transferee or lessee entity will be the successor Corporation, and the obligations of the predecessor Corporation in the case of a transfer or lease will be terminated. ARTICLE 6 Defaults and Remedies SECTION 6.1 Events of Default. An "Event of Default" occurs if (1) the Corporation defaults in the payment of interest on any Security when the interest becomes due and payable and the default continues for 30 days, (2) the Corporation defaults in the payment of the principal of any Security when the principal becomes due and payable at maturity, upon redemption or otherwise, (3) the Corporation fails to comply with any of its other agreements in the Securities or this Indenture and the Default continues for the period and after the notice specified below in this Section, (4) the Corporation pursuant to or within the meaning of any Bankruptcy Law, (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for any substantial part of its property, or (D) makes a general assignment for the benefit of its creditors or (5) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for relief against the Corporation in an involuntary case, (B) appoints a Custodian of the Corporation or for any substantial part of its property or (C) orders the winding up or liquidation of the Corporation, and the order or decree remains unstayed and in effect for 60 days. The term "Bankruptcy Law" means Title 11, United States Code or any similar Federal or State law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. A Default under clause (3) is not an Event of Default until the Trustee or the Holders of at least 25% in principal amount of the Securities notify the Corporation of the default and the Corporation does not cure the default within 60 days after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default." SECTION 6.2 Acceleration. If an Event of Default occurs and is continuing, the Trustee by notice to the Corporation or the Holders of at least 25% in principal amount of the Securities by notice to the Corporation and the Trustee may declare the principal of and accrued interest on all the Securities to be due and payable. Upon a declaration the principal and interest will be due and payable immediately. The Holders of a majority in principal amount of the Securities by notice to the Trustee may rescind an acceleration and its consequences if all existing Events of Default have been cured or waived (except nonpayment of principal or interest that has become due solely because of the acceleration) and if the rescission would not conflict with any judgment or decree. SECTION 6.3 Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing on an Event of Default will not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All available remedies are cumulative to the extent permitted by law. SECTION 6.4 Waiver of Past Defaults. The Holders of a majority in principal amount of the Securities by notice to the Trustee may waive an existing Default and its consequences except a default in the payment of the principal or interest on any Securities or a Default under Article 10. SECTION 6.5 Control by Majority. The Holders of a majority in principal amount of the Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, is unduly prejudicial to the rights of other Securityholders or would involve the Trustee in personal liability. SECTION 6.6 Limitation on Suits. A Securityholder may pursue a remedy with respect to this Indenture or the Securities only if (1) the Holder gives to the Trustee notice of a continuing Event of Default, (2) the Holders of at least 25% in principal amount of the Securities make a request to the Trustee to pursue the remedy, (3) such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense, (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity, and (5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the outstanding Securities. A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over the other Securityholder. SECTION 6.7 Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of principal of and interest on the Security on or after the respective due dates expressed in the Security, or to bring suit for the enforcement of any such payment on or after such respective dates, will not be impaired or affected without the consent of the Holder. Notwithstanding any other provision of this Indenture, the right of any holder of a Security to bring suit for the enforcement of the right to convert the Security will not be impaired or affected without the consent of the Holder. SECTION 6.8 Collection Suit by Trustee. If an Event of Default specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Corporation for the whole amount of principal and interest remaining unpaid. SECTION 6.9 Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Securityholders allowed in any judicial proceedings relative to the Corporation, its creditors or its property. SECTION 6.10 Priorities. If the Trustee collects any money pursuant to this Article, it will pay out the money in the following order: First: to the Trustee for amounts due under Section 7.07 (Compensation and Indemnity). Second: to holders of Senior Debt to the extent required by Article 11. Third: to Securityholders for amounts due and unpaid on the Securities for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and interest, respectively. Fourth: to the Corporation. The Trustee may fix a record date and payment date for any payment to Securityholders pursuant to this Section. SECTION 6.11 Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 (Rights of Holders to Receive Payment) or a suit by Holders of more than 10% in principal amount of the Securities. ARTICLE 7 Trustee SECTION 7.1 Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee will exercise its rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. (b) Except during the continuance of an Event of Default, (1) the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, on certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee will examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that (1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01, (2) the Trustee will not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts, and (3) the Trustee will not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 (Control by Majority). (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section. (e) The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee will not be liable for interest on any money received by it except as the Trustee may agree with the Corporation. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. SECTION 7.2 Rights of Trustee. (a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on an Officers' Certificate or Opinion. (c) The Trustee may act through agents and will not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers. SECTION 7.3 Individual Rights of Trustee, etc. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Corporation or an Affiliate with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. However, the Trustee must comply with Sections 7.10 (Eligibility; Disqualification) and 7.11 (Preferential Collection of Claims Against Corporations). SECTION 7.4 Trustee's Disclaimer. The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, it will not be accountable for the Corporation's use of the proceeds from the Securities, and it will not be responsible for any statement in the Securities other than its certificate of authentication. SECTION 7.5 Notice of Defaults. If a Default occurs and is continuing and if it is known to the Trustee, the Trustee will mail to Securityholders a notice of the Default within 90 days after it occurs. Except in the case of a Default in payment on any Security, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of such Securityholders. Except for the Events of Default listed in Section 6.01(1) and (2), the Trustee shall not be deemed to have knowledge of a Default until it has been notified thereof in writing. SECTION 7.6 Reports by Trustee to Holders. Within 60 days after the reporting date stated in Section 12.10, the Trustee will mail to each Securityholder a brief report dated as of such reporting date that complies with TIA {section} 313(a). The Trustee also will comply with TIA {section} 313(b)(2). A copy of each report at the time of its mailing to Securityholders will be filed with the SEC and each stock exchange on which the Securities are listed. The Corporation will notify the Trustee in writing when the Securities are listed on any stock exchange. SECTION 7.7 Compensation and Indemnity. The Corporation will pay to the Trustee from time to time reasonable compensation for its services. The Corporation will reimburse the Trustee on request for all reasonable out-of-pocket expenses incurred by it. Such expenses will include the reasonable compensation and expenses of the Trustee's agents and counsel. The Corporation will indemnify the Trustee against any loss, liability or expense (including attorney's fees) incurred by it in connection with the acceptance or administration of this Indenture and its duties under it. The Trustee will notify the Corporation promptly of any claim for which it may seek indemnity. The Corporation will defend the claim and the Trustee will cooperate in the defense. The Trustee may have separate counsel and the Corporation will pay the reasonable fees and expenses of such counsel. The Corporation need not pay for any settlement made without its consent. The Corporation need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee through negligence or bad faith. To secure the Corporation's payment obligations in this Section, the Trustee will have a lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal of and interest on particular Securities. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(4) or (5) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. SECTION 7.8 Replacement of Trustee. A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only on the successor Trustee's acceptance of appointment as provided in this Section. The Trustee may resign by so notifying the Corporation. The Holders of a majority in principal amount of the Securities may remove the Trustee by so notifying the removed Trustee and the Corporation. The Corporation may remove the Trustee if (1) the Trustee fails to comply with Section 7.10 (Eligibility; Disqualification), (2) the Trustee is adjudged a bankrupt or an insolvent, (3) a receiver or other public officer takes charge of the Trustee or its property or (4) the Trustee otherwise becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of trustee for any reason, the Corporation shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the Securities may appoint a successor Trustee to replace the successor Trustee appointed by the Corporation. A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Corporation. Immediately after that, the retiring Trustee will transfer all property held by it as Trustee, the resignation or removal of the retiring Trustee will then become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture. A successor Trustee will mail notice of its succession to each Holder of the Securities. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Corporation or the Holders of at least 10% in principal amount of the Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with Section 7.10 (Eligibility, Disqualification), any Securityholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. SECTION 7.9 Successor Trustee by Merger, etc. If the Trustee consolidates with, merges or converts into or transfers all or substantially all its corporate trust assets to another corporation, the successor corporation without any further act will be the successor Trustee. SECTION 7.10 Eligibility; Disqualification. This Indenture will always have a Trustee that satisfies the requirements of TIA {section} 310(a)(1). Such Trustee must have a combined capital and surplus of at least $25,000,000 as set forth in its most recent published annual report of condition. Such Trustee will comply with TIA {section} 310(b), including the optional provision permitted by the second sentence of TIA {section} 310(b)(9). SECTION 7.11 Preferential Collection of Claims Against Corporations. The Trustee is subject to TIA {section} 311(a), excluding any creditor relationship listed in TIA {section} 311(b). A Trustee who has resigned or been removed is subject to TIA {section} 311(a) to the extent indicated. ARTICLE 8 Discharge of Indenture SECTION 8.1 Termination of Company's Obligations. The Company may terminate all its obligations under this Indenture effective on the 91st day following the Company's irrevocable deposit in trust with the Trustee of money or U.S. Government Obligations sufficient to pay principal and interest on the Securities to their maturity or, if arrangements satisfactory to the Trustee for the giving of notice for redemption have been made, to their redemption date, if the following conditions are satisfied: (1) Article 11 permits such deposit and termination. (2) If the Securities are listed on a stock exchange, the Trustee has received an Opinion of Counsel that such deposit and termination would not cause the Securities to be delisted. (3) The Trustee has received an Opinion of Counsel that Securityholders will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and termination, accompanied by a ruling to that effect of the Internal Revenue Service. (4) The Trustee has received an Opinion of Counsel that such deposit will not result in the creating of an investment company under the Investment Company Act of 1940. (5) No Default or Event of Default under Section 6.01(4) or 6.01(5) exists at any time from the date of the deposit until such 91st day. (6) The Trustee has received an Officers' Certificate and Opinion complying with Section 12.04 relating to such termination. However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 7.07, 7.08 and 8.03, and in Article 10, will survive until the securities are no longer outstanding. After that, the obligations in Sections 7.07 and 8.03 will survive. After a deposit, the Trustee on request will acknowledge in writing the discharge of the Company's obligations under this Indenture except for those surviving obligations specified above. In order to have money available on a payment date to pay principal or interest on the Securities, the U.S. Government Obligations must be payable as to principal or interest on or before such payment date in such amounts as will provide the necessary money. U.S. Government Obligations may not be callable at the issuer's option. "U.S. Government Obligations" means direct obligations of the United States of America for the payment of which the full faith and credit of the United States of America is pledged. SECTION 8.2 Application of Trust Money. The Trustee will hold in trust money or U.S. Government Obligations deposited with it pursuant to Section 8.01. It will apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Securities. Money and obligations so held in trust are not subject to Article 11 or to the claim of the Trustee under Section 7.07. SECTION 8.3 Repayment to Corporation. The Trustee and the Paying Agent will promptly pay or deliver to the Corporation on request any excess money or securities held by them at any time. The Trustee and the Paying Agent will pay to the Corporation on request any money held by them for the payment of principal or interest that remains unclaimed for two years. Securityholders entitled to the money must look to the Corporation for payment as general creditors unless an applicable abandoned property law designates another person. SECTION 8.4 Reinstatement. If the Trustee is unable to apply any money or U.S. Government Obligations in accordance with Section 8.01 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Corporation's obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01 until such time as the Trustee is permitted to apply all such money or U.S. Government Obligations in accordance with Section 8.01; provided, however, principal of any Securities because of the reinstatement of their obligations, the Corporation shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee. ARTICLE 9 Amendments, Supplements and Waivers SECTION 9.1 Without Consent of Holders. The Corporation and the Trustee may amend this Indenture or the Securities without the consent of any Securityholder (1) to cure any ambiguity, defect or inconsistency, (2) to comply with Section 5.01 (When Corporation May Merge, etc.), (3) to provide for uncertificated Securities in addition to certificated Securities or (4) to make any change that does not adversely affect the rights of any Securityholder. SECTION 9.2 With Consent of Holders. The Corporation and the Trustee may amend this Indenture or the Securities with the written consent of the Holders of at least 66-2/3% in principal amount of the Securities. However, without the consent of each Securityholder affected, an amendment under this Section may not (1) reduce the amount of Securities whose Holders must consent to an amendment, (2) reduce the rate of or change the time for payment of interest on any Security, (3) reduce the principal or extend the maturity of any Security at final maturity or upon any mandatory redemption, (4) make any Security payable in money other than that stated in the Security, (5) make any change that adversely affects the right to convert any Security, (6) make any change in Section 6.04 (Waiver of Past Defaults), 6.07 (Rights of Holders to Receive Payment) or this sentence or (7) make any change in Article 11 that adversely affects the rights of any Securityholders. An amendment under this Section may not make any change that adversely affects the rights under Article 11 of any holder of an issue of Senior Debt unless the holders of the issue pursuant to its terms consent to the change. After an amendment under this Section becomes effective, the Company will mail to Securityholders a notice briefly describing the amendment. SECTION 9.3 Compliance with Trust Indenture Act. Every amendment to this Indenture or the Securities will be set forth in a supplemental indenture that complies with the TIA as then in effect. SECTION 9.4 Revocation and Effect of Consents. Until an amendment or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent Holder of that Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective. An amendment or waiver becomes effective in accordance with its terms and thereafter binds every Securityholder. SECTION 9.5 Notation on or Exchange of Securities. The Trustee may place an appropriate notation about an amendment or waiver on any Security thereafter authenticated. The Corporation in exchange for all Securities may issue and the Trustee will authenticate new Securities that reflect the amendment or waiver. SECTION 9.6 Trustee Protected. The Trustee need not sign any supplemental indenture that adversely affects its rights. ARTICLE 10 Conversion SECTION 10.1 Conversion Privilege. A Holder of a Security may convert it into Common Stock at any time during the period stated in paragraph 8 of the Securities. The number of shares issuable upon conversion of a Security is determined as follows: Divide the principal amount to be converted by the conversion price in effect on the conversion date. Round the result to the nearest 1/100th of a share. The initial conversion price is stated in paragraph 8 of the Securities. The conversion price is subject to adjustment. A Holder may convert a portion of a Security if the portion is $25 or a whole multiple of $25. Provisions of this Indenture that apply to conversion of all of a Security also apply to conversion of a portion of it. "Common Stock" means Common Stock of the Corporation as it exists on the date of this Indenture as originally signed. SECTION 10.2 Conversion Procedure. To convert a Security a Holder must satisfy the requirements in paragraph 8 of the Securities. The date on which the Holder satisfies all those requirements is the conversion date. As soon as practical, the Corporation will deliver through the Conversion Agent a certificate for the number of full shares of Common Stock issuable upon the conversion and a check for any fractional share. The person in whose name the certificate is registered will be treated as a stockholder of record on and after the conversion date. No payment or adjustment will be made for accrued interest on a converted Security. If a Holder converts more than one Security at the same time, the number of full shares issuable upon the conversion will be based on the total principal amount of the Securities converted. On surrender of a Security that is converted in part, the Trustee will authenticate for the Holder a new Security equal in principal amount to the unconverted portion of the Security surrendered. If the last day on which a Security may be converted is a Legal Holiday in a place where a Conversion Agent is located, the Security may be surrendered to that Conversion Agent on the next succeeding day that is not a Legal Holiday. SECTION 10.3 Fractional Shares. The Corporation will not issue a fractional share of Common Stock on conversion of a Security. Instead the Corporation will deliver its check for the current market value of the fractional share. The current market value of a fraction of a share is determined as follows: Multiply the current market price of a full share by the fraction. Round the result to the nearest cent. The current market price of a share of Common Stock is the Quoted Price of the Common Stock on the last trading day before the conversion date. In the absence of such a quotation, the Board of Directors will determine, in good faith evidenced by a resolution, the current market price on the basis of such quotations as it considers appropriate. SECTION 10.4 Taxes on Conversion. If a Holder of a Security converts it, the Corporation shall pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of Common Stock on the conversion. However, the Holder shall pay any such tax which is due because the shares are issued in a name other than the Holder's name. SECTION 10.5 Corporation to Provide Stock. The Corporation will reserve out of its authorized but unissued Common Stock or its Common Stock held in treasury enough shares of Common Stock to permit the conversion of the Securities. All shares of Common Stock which may be issued on conversion of the Securities will be fully paid and non-assessable. The Corporation will endeavor to comply with all securities laws regulating the offer and delivery of shares of Common Stock on conversion of Securities and will endeavor to list such shares on each national securities exchange on which the Common Stock is listed. SECTION 10.6 Adjustment for Change in Capital Stock. If the Corporation (1) pays a dividend or makes a distribution on its Common Stock in shares of its Common Stock, (2) subdivides its outstanding shares of Common Stock into a greater number of shares, (3) combines its outstanding shares of Common Stock into a smaller number of shares, (4) makes a distribution on its Common Stock in shares of its capital stock other than Common Stock,or (5) issues by reclassification of its Common Stock any shares of its capital stock, then the conversion privilege and the conversion price in effect immediately before such action will be adjusted so that the Holder of a Security thereafter converted may receive the number of shares of capital stock of the Corporation which the Holder would have owned immediately following such action if the Holder had converted the Security immediately before the record date (or, if no record date, the effective date) for such action. The adjustment will become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, combination or reclassification. If after an adjustment a Holder of a Security upon conversion of it may receive shares of two or more classes of capital stock of the Corporation, the Corporation shall determine the allocation of the adjusted conversion price between the classes of capital stock. After such allocation, the conversion privilege and the conversion price of each class of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock contained in this Article. SECTION 10.7 Adjustment for Rights Issue. If the Corporation distributes any rights or warrants to all holders of its Common Stock entitling them for a period expiring within 60 days after the record date mentioned below to purchase shares of Common Stock at a price per share less than the current market price per share on that record date, the conversion price shall be adjusted in accordance with the following formula: O + N x P ----- C1 = C x M --------------- O + N where C1 = the adjusted conversion price. C = the current conversion price. O = the number of shares of Common Stock outstanding on the record date. N = the number of additional shares of Common Stock offered. P = the offering price per share of the additional shares. M = the current market price per share of Common Stock on the record date. The adjustment will become effective immediately after the record date for the determination of stockholders entitled to receive the rights or warrants. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued or to the extent that such rights and warrants are not so exercised prior to the expiration thereof, the conversation price shall again be adjusted to be the conversion price which would then be in effect if such record date had not been fixed. SECTION 10.8 Adjustment for Other Distributions. If the Corporation distributes to the holders of its Common Stock any of its assets or debt securities or any rights or warrants to purchase securities of the Corporation, the conversion price will be adjusted in accordance with the formula: M - F ----- C1 = C x M where C1 = the adjusted conversion price. C = the current conversion price. M = the current market price per share of Common Stock on the record date mentioned below. F = the fair market value on the record date of the assets, securities, rights or warrants applicable to one share of Common Stock. The Corporation will determine the fair market value. The adjustment will become effective immediately after the record date for the determination of stockholders entitled to receive the distribution. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the conversion price shall again be adjusted to be the conversion price which would then be in effect if such record date had not been fixed. This Section does not apply to cash dividends or cash distributions paid out of earnings or surplus as shown on the books of the Corporation. Also, this Section does not apply to rights or warrants referred to in the foregoing Section. SECTION 10.9 Current Market Price. In the foregoing two Sections the current market price per share of Common Stock on any date is the average of the Quoted Prices of the Common Stock, each day, for 30 consecutive trading days commencing 45 trading days before the date in question. In the absence of one or more such quotations, the Board of Directors will determine, in good faith evidenced by a resolution, the current market price on the basis of such quotations as it considers appropriate. SECTION 10.10 When Adjustment May Be Deferred. No adjustment in the conversion price need be made unless the adjustment would require an increase or decrease of at least 1% in the conversion price; but in such case any adjustment that would otherwise be required then to be made shall be carried forward and shall be made at the time of and together with the next subsequent adjustment. All calculations under this Article will be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. SECTION 10.11 When No Adjustment Required. No adjustment need be made for a transaction referred to in Section 10.06, 10.07 or 10.08 if Securityholders are to participate in the transaction on a basis and with notice that the Board of Directors determines to be fair and appropriate in light of the basis and notice on which holders of Common Stock participate in the transaction. No adjustment on account of dividends accumulated or in arrears upon shares of Common Stock, shall be made in connection with any conversion, except as may otherwise be provided at the discretion of the Board of Directors, in good faith evidenced by a resolution. No adjustment need be made for rights to purchase Common Stock pursuant to a Corporation plan for reinvestment of dividends or interest. No adjustment need be made in connection with the issuance of shares of Common Stock upon conversion of the Securities. No adjustment need be made for a change in the par value or no par value of the Common Stock. To the extent the Securities become convertible into cash, no adjustment need be made thereafter as to the cash. Interest will not accrue on the cash. The Board of Directors shall have the power to resolve any ambiguity or correct any error in this Section 10.11 and its action in so doing, in good faith evidenced by a Board resolution, shall be final and conclusive. SECTION 10.12 Notice of Adjustment. Whenever the conversion price is adjusted, the Corporation will promptly mail to Securityholders a notice of the adjustment. The Corporation will file with the Trustee a certificate from the Corporation's independent public accountants briefly stating the facts requiring the adjustment and the manner of computing it. The certificate will be conclusive evidence that the adjustment is correct. The certificate so filed shall be open to inspection by any holder of record of a Security. SECTION 10.13 Voluntary Reduction. The Corporation may at any time reduce the conversion price by any amount for any period of time if the period is at least 20 days and if the reduction is irrevocable during the period. Whenever the conversion price is reduced, the Corporation will mail to Securityholders a notice of the reduction. The Corporation will mail the notice at least 15 days before the date the reduced conversion price takes effect. The notice will state the reduced conversion price and the period it will be in effect. A reduction of the conversion price does not change or adjust the conversion price otherwise in effect for purposes of Sections 10.06 through 10.08. SECTION 10.14 Notice of Certain Transactions. If (1) the Corporation takes any action that would require an adjustment in the conversion price pursuant to Section 10.06, 10.07 or 10.08 and if the Corporation does not let Securityholders participate pursuant to Section 10.11, (2) the Corporation takes any action that would require a supplemental indenture pursuant to Section 10.15 or (3) there is a voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the Corporation shall mail to Securityholders a notice stating the proposed record date for a dividend or distribution or the proposed effective date of a subdivision, combination, reclassification, consolidation, merger, transfer, lease, liquidation or dissolution. The Corporation shall mail the notice at least 15 days before such date. Failure to mail the notice or any defect in it shall not affect the validity of the transaction. SECTION 10.15 Reduction of Conversion Price Below Par Value of Common Stock. Before taking any action which would cause an adjustment reducing the conversion price below the then par value (if any) of the Common Stock deliverable upon conversion of a Security, the Corporation will take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and non-assessable shares of Common Stock at such adjusted conversion price. SECTION 10.16 Reorganization of Corporation. If the Corporation is a party to a transaction subject to Section 5.01 or a merger which reclassifies or changes its outstanding Common Stock, the person obligated to deliver securities, cash or other assets on conversion of Securities will enter into a supplemental indenture. If the issuer of securities deliverable on conversion of Securities is an affiliate of the surviving, transferee or lessee corporation, that issuer will join in the supplemental indenture. The supplemental indenture will provide that the Holder of a Security may convert it into the kind and amount of securities, cash or other assets which the Holder would have owned immediately after the consolidation, merger, transfer or lease if the Holder had converted the Security immediately before the effective date of the transaction. The supplemental indenture will provide for adjustments which will be as nearly equivalent as may be practical to the adjustments provided for in this Article. The successor Corporation will mail to Securityholders a notice briefly describing the supplemental indenture. SECTION 10.17 Corporation Determination Final. Any determination that the Corporation or the Board of Directors must make pursuant to Section 10.03, 10.06, 10.08, 10.09 or 10.11 is conclusive. SECTION 10.18 Trustee's Disclaimer. The Trustee has no duty to determine when an adjustment under this Article should be made, how it should be made or what it should be. The Trustee has no duty to determine whether any provisions of a supplemental indenture under Section 10.15 are correct. The Trustee makes no representation as to the validity or value of any securities or assets issued on conversion of Securities. The Corporation is solely responsible for performing the duties and responsibilities contained in this Article, and the Trustee will not be responsible for the Corporation's failure to comply with this Article. Each Conversion Agent other than the Corporation will have the same protection under this Section as the Trustee. ARTICLE 11 Subordination SECTION 11.1 Agreement to Subordinate. The Corporation agrees, and each Securityholder by accepting a Security agrees, that the indebtedness evidenced by the Securities is subordinated in right of payment, to the extent and in the manner provided in this Article, to the prior payment in full of all Senior Debt, and that the subordination is for the benefit of the holders of Senior Debt. SECTION 11.2 Certain Definitions. "Representative" means the indenture trustee or other trustee, agent or representative for an issue or class of Senior Debt. "Senior Debt" means (a) the principal of, premium, if any, and accrued and unpaid interest on (1) indebtedness of the Corporation for money borrowed, whether outstanding on the date of this Indenture or created, incurred or assumed after that date, (2) guaranties by the Corporation of indebtedness for money borrowed by any other person, whether outstanding on the date of this Indenture or created, incurred or assumed after that date, (3) indebtedness evidenced by notes, debentures, bonds or other instruments of indebtedness for the payment of which the Corporation is responsible or liable, by guaranty, or otherwise, whether outstanding on the date of this Indenture or created, incurred, or assumed after that date (other than any debentures issued in exchange for shares of the $21.25 Preferred Stock, which debentures shall be pari passu with these securities), and (4) obligations of the Corporation under any agreement to lease, or lease of any real or personal property, whether outstanding on the date of this Indenture or created, incurred or assumed after that date, (b) any other indebtedness, liability or obligation, contingent or otherwise, of the Corporation and any guaranty, endorsement or other contingent obligation in respect thereof, whether outstanding on the date of this Indenture or created, incurred or assumed after that date, and (c) modifications, renewals, extensions and refundings of any such indebtedness, liabilities or obligations, unless, in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such indebtedness, liabilities or obligations, or such modification, renewal, extension or refunding, or the obligations of the Corporation pursuant to such guaranty, are not superior in right of payment to the Securities. Senior Debt will not include any obligation of the Corporation to any other corporation a majority of the outstanding voting stock of which is owned by the Corporation. Senior Debt may be further defined in Section 12.10. These Securities shall be pari passu with any debentures issued in exchange for the $21.25 Preferred Stock. A distribution may consist of cash, securities or other property. SECTION 11.3 Liquidation; Dissolution; Bankruptcy. On any distribution to creditors of the Corporation in a liquidation or dissolution of the Corporation or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Corporation or its property, (1) holders of Senior Debt will be entitled to receive payment in full in cash of the principal of and interest (including interest accruing after the commencement of any such proceeding) to the date of payment on the Senior Debt before Securityholders will be entitled to receive any payment of principal of or interest on Securities, and (2) until the Senior Debt is paid in full in cash, any distribution to which Securityholders would be entitled but for this Article will be made to holders of Senior Debt as their interests may appear, except that Securityholders may receive securities that are subordinated to Senior Debt to at least the same extent as the Securities. Upon any distribution of assets of the Corporation referred to in this Section, the Trustee and the Securityholders shall be entitled to rely upon any order or decree of a court of competent jurisdiction in which such bankruptcy, reorganization, insolvency, receivership, assignment for the benefit of creditors, marshalling of assets or similar proceedings are pending for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Debt, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section, and the Trustee and the Securityholders shall be entitled to rely upon a certificate of the liquidating trustee or agent or other person making any distribution to the Trustee or to the Securityholders for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Debt, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section. If the Trustee determines, in good faith, that further evidence is required with respect to the right of any person, as a holder of Senior Debt, to participate in any payment or distribution pursuant to this Section, the Trustee may request such person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Senior Debt held by such person, as to the extent to which such person is entitled to participate in such payment or distribution, and as to other facts pertinent to the rights of such person under this Section, and if such evidence is not furnished, the Trustee may defer any payment to such person pending judicial determination as to the right of such person to receive such payment. SECTION 11.4 Default on Senior Debt. The Corporation may not pay principal of or interest on the Securities and may not acquire any Securities for cash or property other than capital stock of the Corporation if (1) a default on Senior Debt occurs, and (2) the default is the subject of judicial proceedings or the Corporation receives a notice of the default from a person who may give it pursuant to Section 11.12. The Corporation may resume payments on the Securities and may acquire them when (a) the default is cured or waived or (b) 120 days pass after the notice is given if the default is not the subject of judicial proceedings, if this Article otherwise permits the payment or acquisition at that time. Nothing in this Section shall apply to claims of, or payments to, the Trustee pursuant to Section 7.07. SECTION 11.5 Acceleration of Securities. If payment of the Securities is accelerated because of an Event of Default, the Corporation will promptly notify holders of Senior Debt of the acceleration. The Corporation may pay the Securities when 120 days pass after the acceleration occurs if this Article permits the payment at that time. SECTION 11.6 When Distribution Must Be Paid Over. If a distribution is made to Securityholders that because of this Article should not have been made to them, the Securityholders who receive the distribution will hold it in trust for holders of Senior Debt and pay it over to them as their interests may appear. SECTION 11.7 Notice by Corporation. The Corporation will promptly notify the Trustee and the Paying Agent of any facts known to the Corporation that would cause a payment of principal of or interest on the Securities to violate this Article. SECTION 11.8 Subrogation. After all Senior Debt is paid in full and until the Securities are paid in full, Securityholders will be subrogated to the rights of holders of Senior Debt to receive distributions applicable to Senior Debt to the extent that distribution otherwise payable to the Securityholders have been applied to the payment of Senior Debt. A distribution made under this Article to holders of Senior Debt which otherwise would have been made to Securityholders is not, as between the Corporation and Securityholders, a payment by the Corporation on Senior Debt. SECTION 11.9 Relative Rights. This Article defines the relative rights of Securityholders and holders of Senior Debt. Nothing in this Indenture will (1) impair, as between the Corporation and Securityholders, the obligation of the Corporation, which is absolute and unconditional, to pay principal of and interest on the Securities in accordance with their terms, (2) affect the relative rights of Securityholders and creditors of the Corporation other than holders of Senior Debt or (3) prevent the Trustee or any Securityholder from exercising its available remedies upon a Default, subject to the rights of holders of Senior Debt to receive distributions otherwise payable to Securityholders. If the Corporation fails because of this Article to pay principal of or interest on a Security on the due date, the failure is still a Default. SECTION 11.10 Subordination May Not Be Impaired by Corporation. No right of any holder of Senior Debt to enforce the subordination of the indebtedness evidenced by the Securities will be impaired by any act or failure to act by the Corporation or by its failure to comply with this Indenture. SECTION 11.11 Distribution or Notice to Representative. Whenever a distribution is to be made or a notice given to holders of Senior Debt, the distribution may be made and the notice given to their Representative. SECTION 11.12 Rights of Trustee and Paying Agent. The Trustee or Paying Agent may continue to make payments on the Securities until it receives written notice of facts that would cause a payment of principal of or interest on the Securities to violate this Article. Only the Corporation, a Representative or a holder of an issue of Senior Debt that has no Representative may give the notice. The Trustee in its individual or any other capacity may hold Senior Debt with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. SECTION 11.13 Officers' Certificate. If there occurs an event referred to in Section 11.04, the Corporation shall as soon as practicable give to the Trustee an Officers' Certificate (on which the Trustee may conclusively rely) identifying all holders of Senior Debt and the principal amount of Senior Debt then outstanding held by each such holder and stating the reasons why such Officers' Certificate is being delivered to the Trustee. SECTION 11.14 Trustee Owes No Fiduciary Duty to Holders of Senior Debt. With respect to the holders of Senior Debt, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article 11, and no implied covenants or obligations with respect to the holders of Senior Debt shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Debt and the Trustee shall not be liable to any holder of Senior Debt if it shall mistakenly pay over or deliver to Holders of Securities, the Corporation or any other person monies or assets to which any holder of Senior Debt shall be entitled by virtue of this Article 11 or otherwise. ARTICLE 12 Miscellaneous SECTION 12.1 Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with another provision that is required to be included in this Indenture by the TIA, the required provision will control. SECTION 12.2 Notices. Any notice or communication by the Corporation or the Trustee to the other is duly given if in writing and delivered in person or mailed by registered first-class mail or next-day air courier or by telecopy to the other's address or telecopy number in Section 12.10. The Corporation or the Trustee by notice to the other may designate additional or different addresses or telecopy numbers for subsequent notices or communications. Any notice or communication delivered to a Securityholder will be delivered to the Securityholder at the Securityholder's address as it appears on the registration books of the Registrar. Failure to deliver a notice or communication to a Securityholder or any defect in it will not affect its sufficiency with respect to other Securityholders. All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; one business day after being timely delivered to a next-day air courier; and when receipt is acknowledged by the addressee, if telecopied. If a notice or communication is delivered in the manner provided above, it is duly given, whether or not the addressee receives it. If the Corporation delivers a notice or communication to Securityholders, it will delivers a copy to the Trustee and each Agent at the same time. The Corporation will also comply with TIA {section} 313(c)(2) and (3). SECTION 12.3 Communication by Holders with Other Holders. Securityholders may communicate pursuant to TIA {section} 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Corporation, the Trustee, the Registrar and anyone else will have the protection of TIA {section} 312(c). SECTION 12.4 Certificate and Opinion as to Conditions Precedent. On any request or application by the Corporation to the Trustee to take any action under this Indenture, the Corporation shall furnish to the Trustee (1) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, and (2) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with. SECTION 12.5 Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include (1) a statement that the person making such certificate or opinion has read such covenant or condition, (2) a brief statement as to the nature and scope of the examination or investigation on which the statements or opinions contained in such certificate or opinion are based, (3) a statement that, in the opinion of such person, the person has made such examination or investigation as is necessary to enable the person to express an informed opinion as to whether such covenant or condition has been complied with and (4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. SECTION 12.6 Rules by Trustee, Paying Agent, Registrar. The Trustee may make reasonable rules for action by or a meeting of Securityholders. The Paying Agent or Registrar may make reasonable rules and set reasonable requirements for its functions. SECTION 12.7 Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday, a legal holiday or a day on which banking institutions are not required to be open. If a payment date is a Legal Holiday at a place of payment, payment shall be made at that place on the next succeeding day that is not a Legal Holiday, and no interest will accrue for the intervening period. SECTION 12.8 No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Corporation will not have any liability for any obligation of the Corporation under the Securities or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. All liability described in the Securities of any director, officer, employee or stockholder, as such, of the Corporation is waived and released. SECTION 12.9 Duplicate Originals. The parties may sign any number of copies of this Indenture. One signed copy is enough to prove this Indenture. SECTION 12.10 Variable Provisions. "Officer" means the Chairman, the President, any Vice-President, the Treasurer, the Secretary, any Assistant Treasurer or any Assistant Secretary of the Corporation. "Quoted Price" of the Common Stock means the last reported sales price of the Common Stock on the principal national securities exchange on which the Common Stock may be listed or, if such stock is not then so listed, the closing price of the Common Stock as shown by the National Association of Securities Dealers, Inc. National Market or, if no such closing price is available, at the average of the representative last bid and asked prices of such Common Stock in the over-the-counter market, as shown by the National Association of Securities Dealers, Inc. Automated Quotation System Level I (or comparable system), or in the absence of any of the foregoing, the fair market value as determined by the Board of Directors in good faith, evidenced by a resolution (whose determination shall be conclusive). The Corporation initially appoints the Trustee Paying Agent, Registrar and Conversion Agent. The first certificate pursuant to Section 4.03 will be for the fiscal year ending on The reporting date for Section 7.06 is May 15 of each year. The first reporting date is May 15, Senior Debt does not include (1) (2) The Securities are not senior in right of payment to the foregoing debt securities of the Company. The Company's address is: 73 Mt. Wayte Avenue Framingham, Massachusetts 01701-9160 Telecopy Number: The Trustee's address is: State Street Bank & Trust Co. Attn: Corporate Trust Division Telecopy Number: SECTION 12.11 Governing Law. The laws of the Commonwealth of Massachusetts shall govern this Indenture and the Securities. SIGNATURES PERINI CORPORATION By ------------------------------ STATE STREET BANK & TRUST CO, AS TRUSTEE By ------------------------------ EXHIBIT A (Face of Security) No. $ PERINI CORPORATION promises to pay to , or registered assigns, the principal sum of Dollars on June 15, 2019. % Convertible Subordinated Debenture Due June 15, 2019 Interest Payment Dates: March 15, June 15, September 15, December 15 Record Dates: March 1, June 1, September 1, December 1 Dated: Authenticated: State Street Bank & Trust Co., as Trustee By By -------------------------- -------------------------- Authorized Signatory OR By -------------------------- -------------------------- , as Authenticating Agent By -------------------------- Authorized Officer (SEAL) (Back of Security) % Convertible Subordinated Debenture Due June 15, 2019 1. Interest. Perini Corporation ("Corporation"), a Massachusetts corporation, promises to pay interest on the principal amount of this Security at the rate per annum shown above. The Corporation will pay interest quarterly on March 15, June 15, September 15 and December 15 of each year. Interest on the Securities will accrue from the most recent date to which interest has been paid, or, if no interest has been paid, from . Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. Method of Payment. The Corporation will pay interest on the Securities (except defaulted interest) to the persons who are registered holders of Securities at the close of business on the record date immediately preceding an interest payment date even though Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Corporation will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Corporation may pay principal and interest by check payable in such money. It may mail an interest check to a holder's registered address. 3. Paying Agent, Registrar, Conversion Agent. Initially, The First National Bank of Boston ("Trustee") will act as Paying Agent, Registrar and Conversion Agent. The Corporation may change any Paying Agent, Registrar, Conversion Agent or co-registrar without notice. The Corporation may act in any such capacity. 4. Indenture. The Corporation issued the Securities under an Indenture dated as of , ("Indenture"), between the Corporation and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code {sections} 77aaa-77bbb) as in effect on the date of the Indenture. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and the Act for a statement of such terms. The Securities are unsecured subordinated obligations of the Corporation limited to $ in total principal amount. 5. Optional Redemption. The Securities will not be redeemable by the Company prior to June 15, 1997. Thereafter, the Securities are redeemable on at least 30 and not more than 60 days' notice at the option of the Corporation, in whole or in part, at any time and from time to time, at the following redemption prices (expressed in percentages of principal amount), if redeemed during the 12-month period beginning June 15 in each of the years indicated: Year Percentage Year Percentage 2000 1997 2001 1998 2002 1999 2003 and on or after June 15, 2004, at 100% of the principal amount, plus, in each case, interest accrued to the redemption date. On and after the redemption date, interest ceases to accrue on Debentures or portions of them called for redemption. 6. Mandatory Sinking Fund Redemption. The Corporation will redeem 5% of the aggregate principal amount of the Securities outstanding on June 15, 200 , and on each succeeding June 15 thereafter, to and including June 15, 2019, at a redemption price of 100% of principal amount, plus accrued interest to the redemption date. The Corporation may reduce the principal amount of Securities to be redeemed pursuant to this paragraph 6 by subtracting 100% of the principal amount (excluding premium) of any Securities that the Corporation has delivered to the Trustee for cancellation or that the Corporation has redeemed or acquired other than pursuant to this paragraph 6, or that have been converted into Common Stock. The Corporation may so subtract the same Security only once. 7. Notice of Redemption. Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption rate to each holder of Securities to be redeemed at his registered address. Securities in denominations larger than $25 may be redeemed in part but only in whole multiples of $25. On and after the redemption date interest ceases to accrue on Securities or portions of them called for redemption. 8. Conversion. A holder of a Security may convert such Security into Common Stock of the Corporation at any time before the close of business on June 15, 2019. If a Security is called for redemption, the holder may convert such Security at any time before the close of business on the redemption date. The initial conversion price is $ per share, subject to adjustment in certain events. To determine the number of shares issuable upon conversion of a Security, divide the principal amount to be converted by the conversion price in effect on the conversion date. On conversion no payment or adjustment for interest will be made. Securities surrendered for conversion between a record date for payment of interest and the interest payment date (except Securities called for redemption during such period) must be accompanied by payment of the interest on the Securities, if any, that the holder is to receive on the interest payment date; provided that if the Corporation defaults on the payment of the interest, the funds will be returned to the payor thereof. The Corporation will deliver a check for any fractional share. To convert a Security a holder must (1) complete and sign the conversion notice on the back of the Security, (2) surrender the Security to a Conversion Agent, (3) furnish appropriate endorsements and transfer documents if required by the Registrar or Conversion Agent, (4) pay any transfer or similar tax if required, and (5) if applicable, pay the interest described in the previous paragraph. A holder may convert a portion of a Security if the portion is $25 or a whole multiple of $25. The conversion price is subject to adjustment on the occurrence of certain events, including the issuance of stock of the Corporation as a dividend or distribution on the Common Stock, subdivisions and combinations of the Common Stock, certain reclassifications of the Common Stock, the issuance to holders of Common Stock of certain rights or warrants entitling them to subscribe for Common Stock at less then the then current market price (as defined) and the distribution to the holders of Common Stock of shares of capital stock other than Common Stock, debt securities of the Corporation or any rights or warrants to purchase securities of the Corporation (excluding cash dividends or distributions from current or retained earnings and rights to purchase Common Stock pursuant to a Company plan for reinvestment of dividends or interest). No adjustment in the conversion price will be required unless cumulative adjustments would require a change of at least 1% in the price then in effect, but any adjustment that would otherwise be required to be made shall be carried forward and taken into account in any subsequent adjustment. No adjustment need be made if Securityholders may participate in the transaction that would have resulted in an adjustment absent such participation. The Corporation from time to time may voluntarily reduce the conversion price by any amount for a period of time if the period is at least 20 days and if the decrease is irrevocable during the period. If the Corporation is a party to a consolidation or merger or a transfer or lease of all or substantially all of its assets, the right to convert a Security into Common Stock may be changed into a right to convert it into securities, cash or other assets of the Corporation or another. 9. Subordination. The Securities are subordinated to Senior Debt, which is any Debt of the Corporation except subordinated Debt specified in the Indenture and Debt that by its terms is not senior in right of payment to the Securities. A Debt is any indebtedness for borrowed money or any guarantee of such indebtedness. To the extent provided in the Indenture, Senior Debt must be paid before the Securities may be paid. The Corporation agrees, and each Securityholder by accepting a Security agrees, to the subordination and authorizes the Trustee to give it effect. 10. Denominations, Transfer, Exchange. The Securities are in registered form without coupons in denominations of $25 and whole multiples of $25. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Registrar may require a holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not exchange or register the transfer of any Security or portion of a Security selected for redemption. Also, it need not exchange or register the transfer of any Securities for a period of 15 days before a selection of Securities to be redeemed. 11. Persons Deemed Owners. The registered holder of a Security may be treated as its owner for all purposes. 12. Amendments and Waivers. Subject to certain exceptions, the Indenture or the Securities may be amended with the consent of the holders of at least 66-2/3% in principal amount of the Securities, and any existing default may be waived with the consent of the holders of a majority in principal amount of the Securities. Without the consent of any Securityholder, the Indenture or the Securities may be amended to cure any ambiguity, defect or inconsistency, to provide for assumption of Corporation obligations to Securityholders or to make any change that does not adversely affect the rights of any Securityholder. 13. Satisfaction and Discharge of Indenture. The Corporation will be discharged from the Indenture on the 91st day after it deposits with the Trustee funds or U.S. Government Obligations sufficient to pay at maturity or on redemption all Securities not previously delivered to the Trustee for cancellation, including principal and accrued interest and all other sums then payable by the Corporation under the Indenture, and complies with certain other conditions specified in the Indenture. 14. Defaults and Remedies. An Event of Default is default for 30 days in payment of interest on the Securities, default in payment of principal on them, failure by the Corporation for 60 days after notice to it to comply with any of its other agreements in the Indenture or the Securities, and certain events of bankruptcy or insolvency. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the Securities may declare all the Securities to be due and payable immediately. Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in their interests. The Corporation must file with the Trustee annually a certificate of two officers of the Corporation stating whether the signers know of any default under the Indenture that occurred during the previous fiscal year. 15. Trustee Dealings with Corporation. The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Corporation or its Affiliates, and may otherwise deal with the Corporation or its Affiliates, as if it were not Trustee. 16. No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Corporation will not have any liability for any obligations of the Corporation under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 17. Authentication. This Security will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 18. Abbreviations. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with right of survivorship and not as tenants in common), CUST (=Custodian), and UGMA (=Uniform Gifts to Minors Act). ASSIGNMENT FORM To assign this Security, fill in the form below: I or we assign and transfer this Security to - ------------------------------------------------------------------------------- (Insert assignee's soc. sec. or tax I.D. no.) - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ (Print or type assignee's name, address and zip code) and irrevocably appoint ------------------------------------------------------- agent to transfer this Security on the books of the Corporation. The agent may substitute another to act for him/her. Date: Your signature: ------------------- ---------------------------------- ---------------------------------- (Sign exactly as your name appears on the other side of this Security) CONVERSION NOTICE To convert this Security into Common Stock of the Corporation, check the box: [ ] To convert only part of this Security, state the amount: $ ------------------ If you want the stock certificate made out in another person's name, fill in the form below: ------------------------------------------------- (Insert other person's soc. sec. or tax I.D. no.) - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ (Print or type other person's name, address and zip code) Date: Your signature: ---------------- ---------------------------------------- (Sign exactly as your name appears on the other side of this Security) EX-10 6 MATERIAL CONTRACTS EXHIBIT 10(a) 1988 PERINI CORPORATION RESTRICTED STOCK PLAN FOR OUTSIDE DIRECTORS 1. Purpose: The purpose of the 1988 Perini Corporation Restricted Stock Plan for Outside Directors is to provide an additional incentive to attract and retain qualified individuals to serve as directors of Perini Corporation and to provide a demonstrable linkage between director and shareholder interests. 2. Definitions: (a) Award: An award of common stock of Perini Corporation, par value $1.00 per share, pursuant to Section 6 hereof. (b) Board: The Board of Directors of Perini Corporation. (c) Committee: The committee appointed pursuant to Section 5 hereof by the Board. (d) Common Stock: The common stock of Perini Corporation, par value $1.00 per share. (e) Corporation: Perini Corporation. (f) Disability: Any physical or mental condition which consists of a disability within the meaning of Section 105(d)(4) of the Internal Revenue Code of 1986, as amended. (g) Outside Director: Any director of the Corporation who is not also employed by the Corporation in a capacity other than as a director. (h) Participant: An Outside Director to whom an Award is made. An Outside Director shall cease to be a Participant when all shares of Common Stock under all Awards made to the Participant have been forfeited and returned to the Corporation or are no longer subject to the restrictions of Section 9 hereof. (i) Plan: The 1988 Perini Corporation Restricted Stock Plan for Outside Directors. (j) Resignation or Removal: Cessation of service as an Outside Director other than by reason of death or Disability. 3. Effective Date and Term of Plan: The Plan shall become effective upon (i) its adoption by the shareholders of the Corporation; and (ii) receipt of a "no-action letter" or its equivalent from the Securities and Exchange Commission to the effect that participation in the Plan will not disqualify any Outside Director as a "Disinterested Director" under Rule 16(b)-3. If the Plan is not so adopted by shareholders of the Corporation or the "no-action letter" is not received, the Plan and all Awards theretofore made shall be null and void and all shares of Common Stock theretofore awarded, together with all dividends, securities and other property received with respect to such shares of Common Stock (other than regular cash dividends), shall be returned to the Corporation without payment by the Corporation of consideration therefor, whether or not the Participant had theretofore died, incurred a Disability or ceased to be a director. The Plan shall remain in effect until the later of the time when (a) the restrictions on all shares of Common Stock awarded have lapsed or been released; or (b) no further Awards may be made. No Awards shall be made after May 19, 1998. 4. Awards: The date of an Award shall be the date on which an Outside Director becomes eligible to participate in the Plan. Each Outside Director on the date of adoption of the Plan by the shareholders (the "Initial Award Date") shall receive an initial Award and subsequent Awards on the third, sixth and ninth anniversary dates of the Initial Award Date. The amount of each Award shall be for that number of shares of Common Stock of the Corporation which shall have a market value on the Award date equal to the annual director's retainer fee paid by the Corporation to its Outside Directors at such date (exclusive of any per meeting fees or expense reimbursements). Directors becoming eligible after the date of adoption of the Plan shall also receive initial Awards on becoming eligible and subsequent Awards on the same date as all other Outside Directors. The number of shares in the Initial Award of Outside Directors becoming eligible after the Initial Award Date shall be a product of the number of shares awarded to each director on the Initial Award Date, multiplied by a fraction whose numerator is the period of time remaining in the three-year restricted period applicable to shares awarded on the most recent Award date to Outside Directors (generally measured in days) and whose denominator is the three-year restricted period (1,095 days), eliminating any fraction less than 1/2 share and rounding to a full share any fraction greater than or equal to 1/2. 5. Administration: The Plan shall be administered by a Committee appointed by the Board of Directors. The Committee shall consist of not less than three members of the Board. The Committee shall have full power and authority: (a) to determine the restrictions and, to the extent provided in Section 9 hereof, release shares of Common Stock from restrictions applicable to shares awarded under the Plan; (b) to determine all questions of fact that may arise under the Plan; (c) to interpret the provisions of the Plan or any Award or agreement thereunder; and (d) to promulgate such rules and regulations, and take such other action, as it deems necessary and advisable for the proper administration and implementation of the Plan. Any determination, interpretation, promulgation or other act of the Committee shall be conclusively binding upon all persons. Notwithstanding the foregoing, no individual or committee has discretion with respect to the amount or terms of Awards to Outside Directors under the Plan. 6. Stock Subject to the Plan: Subject to Section 13 hereof, the maximum number of shares of Common Stock that may be awarded under the Plan shall be 30,000. Shares of Common Stock awarded under the Plan shall be shares reacquired by the Corporation and held in its Treasury. Shares of Common Stock awarded under the Plan that are thereafter forfeited by the Participant and returned to the Corporation shall again be available for Award. 7. Eligibility: Awards will be made to persons who are Outside Directors. Each Outside Director becomes eligible to receive an Award on the date he first becomes a director of the Corporation or, if he was serving as such prior to adoption of the Plan, on the date the Plan is adopted by the shareholders. 8. No Payment for Shares of Common Stock: The shares of Common Stock awarded under the Plan shall be issued to the Participant pursuant to Section 11 hereof without any consideration or payment from the Participant. 9. Restrictions and Releases: All shares of Common Stock awarded to Participants hereunder shall be subject to the following: (a) The Participant may not sell, assign, transfer, pledge or otherwise encumber the shares of Common Stock subject to the Award for a period of 3 years from the date of the Award. No purported transfer of the shares of Common Stock, whether voluntary or involuntary, by operation of law or otherwise, shall vest the transferee with any interest or right in such shares of Common Stock whatsoever, but immediately upon any attempt to transfer such shares of Common Stock, such shares of Common Stock, together with all dividends, securities and other property received with respect to such shares of Common Stock (other than regular cash dividends), shall be immediately returned to the Corporation without payment by the Corporation or consideration therefor, and the transfer shall be of no force and effect. (b) If the Participant ceases to be an Outside Director by reason of death or Disability during the period any shares of Common Stock awarded to the Participant are subject to the restrictions of Section 9(a) hereof, then such restrictions shall be released upon such cessation. No transfer, by will or the laws of descent and distribution, of the shares of Common Stock with respect to when the restrictions are released by reason of the Participant's death shall be effective to bind the Corporation unless the Committee shall have been furnished with (i) written notice thereof and with a copy of the will and/or such other evidence as the Committee may deem necessary to establish the validity of the transfer; and (ii) an agreement by the transferee to comply with all the terms and conditions of the Award that were or would have been applicable to the Participant and to be bound by the acknowledgment made by the Participant in connection with the Award Agreement (as hereinafter defined). (c) (i) The Committee, in its sole discretion, may release all or part of any shares of Common Stock awarded hereunder from the restrictions of Section 9(a) hereof in the event the Corporation merges, consolidates, combines, liquidates, dissolves or undergoes any similar corporate change or in the event of a spin-off, split-up or split-off with respect to the Common Stock of the Corporation. The effective date of such release shall be as of the effective date (or, if a record date is fixed, the record date) of any such merger, consolidation, combination, liquidation, dissolution or similar corporate change or spin-off, split-up or split-off. (ii) In the event that: (1) any person other than the Corporation shall after the adoption of the Plan acquire more than 20% of the Common Stock of the Corporation through a tender offer, exchange offer or otherwise; or (2) a change in the "control" of the Corporation occurs, as such term is defined in Rule 405 under the Securities Act of 1933; or (3) there shall be a sale of all or substantially all of the assets of the Corporation; or (4) the Committee reasonably believes that an event described in (1), (2) or (3) above may occur; then the Committee, in its sole discretion, may release all or part of any shares of Common Stock awarded hereunder from the restrictions of Section 9(a) hereof. (d) If a Participant ceases to be an Outside Director during the period any shares of Common Stock awarded to the Participant are subject to the restrictions of Section 9(a) by reason of Resignation or Removal, the shares of Common Stock so restricted, together with all dividends, securities and other property received with respect to such shares of Common Stock (other than regular cash dividends), shall be forfeited and returned to the Corporation, without payment by the Corporation of consideration therefor, within 30 days after his cessation as a director, provided that the Committee, in its sole discretion, may release all or a portion of such shares of Common Stock from such restrictions. (e) At the time of an Award, the Committee may impose such additional restrictions on the shares of Common Stock awarded as it, in its sole discretion, deems appropriate. 10. Award Agreement: Each Award shall be evidenced by a written agreement (the Award Agreement) executed by the Participant and the Corporation, which shall contain such restrictions, terms and conditions as may be required by the Plan and the Committee. 11. Issuance of Certificates: (a) With respect to the shares of Common Stock awarded under the Plan, the Corporation shall cause to be issued stock certificates, registered in the name of the Participant, evidencing the shares of Common Stock awarded by the Award Agreement reasonably promptly after the receipt by the Corporation of (i) the Award Agreement executed by the Participant as provided in Section 10 hereof; and (ii) a stock power endorsed by the Participant in blank with respect to the shares of Common Stock awarded by the Award Agreement. (b) All certificates evidencing shares of Common Stock issued under the Plan shall bear the following legends: (i) "The transferability of this certificate and the shares of stock represented hereby are subject to the restrictions, terms and conditions (including forfeiture and restrictions against transfer) contained in the 1988 Perini Corporation Restricted Stock Plan for Outside Directors and an Award Agreement entered into between the registered owner of such shares and Perini Corporation. A copy of the Plan and the Award Agreement is on file in the office of the Secretary of Perini Corporation, 73 Mt. Wayte Avenue, Framingham, Massachusetts 01701." (ii) "The shares evidenced by this certificate may not be transferred or disposed of unless (1) a registration statement under the Securities Act of 1933, as amended, is then in effect with respect thereto and such sale is made pursuant to such registration statement; or (2) a written opinion from counsel to the Corporation is obtained to the effect that such transfer or disposition will not violate the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder." The legend set forth in Section 11(b)(i) shall not be removed from the certificates evidencing such shares of Common Stock until the lapse or release of the restrictions imposed pursuant to Section 9 on such shares of Common Stock. (c) The Participant shall not be deemed for any purpose to be, or have any rights as, a shareholder of the Corporation with respect to any shares of Common Stock awarded, except to the extent a stock certificate is issued therefor and then only from the date such certificate is issued. No adjustment shall be made for dividends or distributions or other rights for which the record date is prior to the date such stock certificate is issued. 12. Depositary: Each certificate issued pursuant to Section 11 with respect to shares of Common Stock awarded thereunder, together with the stock powers relating to such shares of Common Stock, shall be deposited by the Corporation with a depositary agent designated by the Corporation (which may be the Corporation). The Corporation shall cause such depositary agent to execute a depositary agreement evidencing the certificates held by it which are registered in the name of the Participant. Reasonably promptly after the lapse or release of the restrictions imposed pursuant to Section 9 on any such shares of Common Stock, the Corporation shall cause to be issued certificates evidencing the shares of Common Stock with respect to which the restrictions have lapsed or been released, free of the legend provided in Section 11(b)(i), and shall cause such certificates to be delivered to the participant (or his legal representative, beneficiary or heir). 13. Changes in Capitalization and Deposit of Securities and Property: In the event of any change in the number of shares of outstanding Common Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or similar corporate change or in the event of a spin-off, split-up or split-off, the maximum aggregate number of shares that may be awarded under the Plan and the class of shares that may be awarded under the Plan shall be appropriately adjusted by the Committee. Unless the Committee otherwise determines, any securities and other property (excluding regular dividends paid in cash) received by an Outside Director as a result of any such change or otherwise with respect to shares of Common Stock still subject to the restrictions of Section 9 will be subject to such restrictions, and shall be promptly deposited with the depositary agent designated by the Corporation to be held in accordance with Section 11 hereof. 14. Outside Director's Right: No Outside Director or other person shall have any claims or right to receive an Award hereunder. The Plan is not a contract of service, and the terms of service or other relationship of any Outside Director shall not be affected in any way by the Plan or related instruments except as specifically provided in the Plan or such related instruments. The establishment of the Plan and making of Awards pursuant thereto shall not be construed as conferring any legal rights upon any Outside Director for continuation of service or other relationship or as interfering with or limiting the right of the Corporation to terminate his service or other relationship, at any time, for any reason, for or without cause, and without regard to the effect that such termination might have upon him as a Participant. 15. Amendment or Termination: The Board of directors may amend, suspend or terminate the Plan or any portion thereof at any time, provided that: (a) no amendment shall be made, without the approval, in accordance with applicable law, by the shareholders of the Corporation at a meeting of the Corporation's shareholders, that would materially modify the eligibility requirements for Participants, increase the maximum number of shares of Common Stock that may be awarded under the Plan, or materially increase benefits accruing to Participants; (b) no amendment, suspension or termination shall be made or effected that would adversely affect any right of a Participant with respect to an Award made to him without the written consent of the Participant, unless such amendment, suspension or termination is required by applicable law. 16. Expenses: The expenses of the Plan shall be paid by the Corporation. 17. Withholding Tax: The Participant or any other person receiving shares of Common Stock under the Plan shall be required to pay to the Corporation, as the case may be, the amount of any taxes the Corporation is required by law to withhold with respect to any Award or with respect to the lapse or release of any restrictions on shares of Common Stock subject to an Award. Such payment shall be due on the date the Corporation is required by law to withhold such taxes. On the request of a Participant, the Corporation may subtract and retain a number of shares equal in value to such amount prior to issuance of unrestricted share certificates in lieu of payment of such amount in cash. In the event that such payment is not made when due, the Corporation shall have the right (a) to sell with 10 days' notice, or such longer notice as may be required by applicable law, a sufficient number of shares of Common Stock issued in connection with any Award to the Participant in order to cover all or part of the amount required to be withheld; (b) to deduct, to the extent permitted by law, from any payment of any kind otherwise due to such person from the Corporation all or part of the amount required to be withheld; or (c) to pursue any other remedy at law or in equity. 18. Failure to Comply: In addition to the remedies of the Corporation elsewhere provided for herein, failure by the Participant to comply with any of the terms and conditions of the Plan or the Award Agreement executed by the Participant pursuant to Section 10, unless such failure is remedied by the Participant within 10 days after having been notified of such failure by the Committee, shall be grounds for the cancellation of the Award, in whole or in part, as the Committee, in its sole discretion, determines. Upon such cancellation, the shares of the Common Stock relating to that portion of the Award cancelled, together with all dividends, securities and other property received with respect to such shares of Common Stock (other than regular cash dividends), shall be forfeited by the Participant and immediately returned to the Corporation without payment by the Corporation of consideration therefor. 19. Other Terms and Conditions: Notwithstanding anything herein to the contrary, the Corporation shall not be obligated by Sections 11 or 12 to cause to be issued or delivered any certificates evidencing shares of Common Stock awarded unless and until the Corporation is advised by its counsel that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authority and the requirements of the American Stock Exchange and any other exchange upon which the Common Stock may be traded. The Company shall in no event be obligated to register any securities pursuant to the Securities Act of 1933 (as now in effect or as hereafter amended) or to take any other affirmative action in order to cause the issuance and delivery of such certificates to comply with any such law, regulation or requirement. The Committee may require, as a condition of the issuance and delivery of such certificates and in order to ensure compliance with such laws, regulations and requirements, that the Participant make such covenants, agreements and representations as the Committee, in its sole discretion, deems necessary or desirable. 20. Governing Law: All Awards shall be made and accepted in the Commonwealth of Massachusetts or in such other states as the Committee, in its sole discretion, may from time to time determine. The laws of the Commonwealth of Massachusetts shall control the interpretation and performance of the terms of the Plan. EX-10 7 MATERIAL CONTRACTS EXHIBIT 10(e) [CONFORMED COPY] $70,000,000 CREDIT AGREEMENT dated as of May 10, 1993 among Perini Corporation The Banks Listed Herein and Morgan Guaranty Trust Company of New York, as Agent TABLE OF CONTENTS 1 Page ARTICLE I DEFINITIONS SECTION 1.01 Definitions.......................... 1 1.02 Accounting Terms and Determinations.. 14 ARTICLE II THE CREDITS SECTION 2.01 Commitments to Lend.................. 15 2.02 Method of Borrowing.................. 15 2.03 Notes................................ 17 2.04 Maturity of Loans.................... 17 2.05 Interest Rates....................... 17 2.06 Commitment Fees...................... 21 2.07 Participation Fee.................... 21 2.08 Agency Fee........................... 21 2.09 Optional Termination or Reduction of Commitments........... 21 2.10 Mandatory Termination or Reduction of Commitments........... 21 2.11 Optional Prepayments................. 23 2.12 General Provisions as to Payments........................ 24 2.13 Funding Losses....................... 25 2.14 Computation of Interest and Fees..... 25 2.15 Maximum Interest Rate................ 25 2.16 Letters of Credit.................... 26 [FN] - --------------------- The Table of Contents is not a part of this Agreement. ARTICLE III CONDITIONS SECTION 3.01 Effectiveness........................ 31 3.02 Credit Events........................ 32 ARTICLE IV REPRESENTATIONS AND WARRANTIES SECTION 4.01 Corporate Existence and Power....... 33 4.02 Corporate and Governmental Authorization; No Contravention... 33 4.03 Binding Effect...................... 34 4.04 Financial Information............... 34 4.05 Litigation.......................... 34 4.06 Compliance with ERISA............... 34 4.07 Environmental Matters............... 35 4.08 Taxes............................... 35 4.09 Subsidiaries........................ 35 4.10 Not an Investment Company........... 36 4.11 No Burdensome Restrictions.......... 36 4.12 Full Disclosure..................... 36 ARTICLE V COVENANTS SECTION 5.01 Information......................... 37 5.02 Payment of Obligations.............. 39 5.03 Maintenance of Property; Insurance.. 39 5.04 Conduct of Business and Maintenance of Existence.......... 40 5.05 Compliance with Laws................ 40 5.06 Inspection of Property, Books and Records................. 40 5.07 Current Ratio....................... 40 5.08 Debt................................ 41 5.09 Minimum Consolidated Tangible Net Worth......................... 41 5.10 Interest Coverage................... 41 5.11 Negative Pledge..................... 42 5.12 Consolidations, Mergers and Sales of Assets................... 42 5.13 Use of Proceeds..................... 43 5.14 Restricted Payments................. 43 5.15 Real Estate Investments............. 43 5.16 Other Investments................... 44 5.17 Aetna Letters of Credit............. 44 ARTICLE VI DEFAULTS SECTION 6.01 Events of Default................... 45 6.02 Cash Cover.......................... 47 6.03 Notice of Default................... 48 ARTICLE VII THE AGENT SECTION 7.01 Appointment and Authorization....... 48 7.02 Agent and Affiliates................ 48 7.03 Action by Agent..................... 48 7.04 Consultation with Experts........... 48 7.05 Liability of Agent.................. 49 7.06 Indemnification..................... 49 7.07 Credit Decision..................... 49 7.08 Successor Agent..................... 49 ARTICLE VIII CHANGE IN CIRCUMSTANCES SECTION 8.01 Basis for Determining Interest Rate Inadequate or Unfair.......... 50 8.02 Illegality........................... 51 8.03 Increased Cost and Reduced Return.... 51 8.04 Base Rate Loans Substituted for Affected Fixed Rate Loans...... 53 ARTICLE IX MISCELLANEOUS SECTION 9.01 Notices.............................. 54 9.02 No Waivers........................... 54 9.03 Expenses; Documentary Taxes; Indemnification.................... 54 9.04 Sharing of Set-Offs.................. 55 9.05 Amendments and Waivers............... 56 9.06 Successors and Assigns............... 56 9.07 Collateral........................... 58 9.08 Governing Law; Submission to Jurisdiction....................... 58 9.09 Counterparts; Integration............ 58 9.10 WAIVER OF JURY TRIAL................. 58 Schedule I - Existing Debt Schedule II - Proposed Guarantees Schedule III - Aetna Letters of Credit Schedule IV - Existing Liens Exhibit A - Note Exhibit B-1 - Opinion of General Counsel of the Borrower Exhibit B-2 - Opinion of New York Counsel for the Borrower Exhibit C - Opinion of Special Counsel for the Agent Exhibit D - Subsidiary Guaranty Agreement Exhibit E - Assignment and Assumption Agreement CREDIT AGREEMENT AGREEMENT dated as of May 10, 1993 among PERINI CORPORATION, the BANKS listed on the signature pages hereof and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent. ARTICLE I DEFINITIONS SECTION 1.01. Definitions. The following terms, as used herein, have the following meanings: "Adjusted CD Rate" has the meaning set forth in Section 2.05(b). "Adjusted London Interbank Offered Rate" has the meaning set forth in Section 2.05(c). "Administrative Questionnaire" means, with respect to each Bank, the administrative questionnaire in the form submitted to such Bank by the Agent and submitted to the Agent (with a copy to the Borrower) duly completed by such Bank. "Aetna Letters of Credit" means the letters of credit listed in Schedule III. "Agent" means Morgan Guaranty Trust Company of New York in its capacity as agent for the Banks under the Financing Documents, and its successors in such capacity. "Applicable Lending Office" means, with respect to any Bank, (i) in the case of its Domestic Loans, its Domestic Lending Office and (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office. "Assessment Rate" has the meaning set forth in Section 2.05(b). "Assignee" has the meaning set forth in Section 9.06(c). "Available LC Amount" means at any time an amount equal to the lesser of (x) $15,000,000 or (y) the excess, if any, of (i) the aggregate amount of the Commitments over (ii) the aggregate outstanding principal amount of the Loans plus the aggregate amount available for drawing under the Aetna Letters of Credit at such time. "Bank" means each bank listed on the signature pages hereof, each Assignee which becomes a Bank pursuant to Section 9.06(c), and their respective successors. "Base Rate" means, for any day, a rate per annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus Federal Funds Rate for such day. "Base Rate Loan" means a Loan to be made by a Bank as a Base Rate Loan pursuant to the applicable Notice of Borrowing or Article VIII. "Benefit Arrangement" means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of the ERISA Group. "Borrower" means Perini Corporation, a Massachusetts corporation, and its successors. "Borrower's 1992 Form 10-K" means the Borrower's annual report on Form 10-K for 1992, as filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. "Borrowing" means a borrowing under this Agreement consisting of Loans made to the Borrower at the same time by the Banks pursuant to Article II. A Borrowing is a "Domestic Borrowing" if such Loans are Domestic Loans or a "Euro-Dollar Borrowing" if such Loans are Euro-Dollar Loans. A Domestic Borrowing is a "CD Borrowing" if such Domestic Loans are CD Loans or a "Base Rate Borrowing" if such Domestic Loans are Base Rate Loans. "CD Base Rate" has the meaning set forth in Section 2.05(b). "CD Loan" means a Loan to be made by a Bank as a CD Loan pursuant to the applicable Notice of Borrowing. "CD Margin" has the meaning set forth in Section 2.05(b). "CD Reference Banks" means Bank of America National Trust & Savings Association and Morgan Guaranty Trust Company of New York. "Commitment" means, with respect to each Bank, the amount set forth opposite the name of such Bank on the signature pages hereof, as such amount may be reduced from time to time pursuant to Sections 2.09 and 2.10. "Consolidated Capital Base" means, at any date, the Consolidated Tangible Net Worth of the Borrower at such date plus 75% of the principal amount of any Special Subordinated Debt outstanding at such date. "Consolidated Current Assets" means at any date the consolidated current assets of the Borrower and its Consolidated Subsidiaries excluding costs related to Claims, all determined as of such date. For purposes of this definition, "Claims" mean the amount (to the extent reflected in determining such consolidated current assets) of disputed or unapproved change orders in regards to scope and/or price that, in Perini project management's opinion (and approved by Perini senior management), will not be resolved in the normal course of business (i.e. through the change order process and without resort to litigation or arbitration) and which have not been previously reflected in the consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of March 31, 1993. "Consolidated Current Liabilities" means at any date the consolidated current liabilities of the Borrower and its Consolidated Subsidiaries, determined as of such date. "Consolidated Earnings Before Interest and Taxes" means for any period Consolidated Net Income for such period (x) less (i) the Borrower's equity share of income (or plus the Borrower's equity share of loss) of unconsolidated joint ventures for such period and (ii) capitalized real estate taxes for such period, to the extent not permitted to be capitalized in accordance with generally accepted accounting principles as in effect on the date hereof, and (y) plus (i) cash distributions of earnings from unconsolidated joint ventures for such period and (ii) the aggregate amount deducted in determining such Consolidated Net Income in respect of Consolidated Interest Charges and income taxes. "Consolidated Interest Charges" means for any period the aggregate interest expense of the Borrower and its Consolidated Subsidiaries for such period including, without limitation, (i) the portion of any obligation under capital leases allocable to interest expense in accordance with generally accepted accounting principles, (ii) the portion of any debt discount that shall be amortized in such period and (iii) any interest accrued during such period which is capitalized in accordance with generally accepted accounting principles, and without any reduction on account of interest income. "Consolidated Net Income" means for any period the consolidated net income (or loss) of the Borrower and its Consolidated Subsidiaries for such period. "Consolidated Subsidiary" of any Person means at any date any Subsidiary of such Person or other entity the accounts of which would be consolidated with those of such Person in its consolidated financial statements if such statements were prepared as of such date. "Consolidated Tangible Net Worth" of any Person means at any date the consolidated stockholders' equity of such Person and its Consolidated Subsidiaries less their consolidated Intangible Assets, all determined as of such date. For purposes of this definition "Intangible Assets" means the amount (to the extent reflected in determining such consolidated stockholders' equity) of (i) all write-ups (other than write-ups resulting from foreign currency translations and write-ups of assets of a going concern business made within twelve months after the acquisition of such business) subsequent to December 31, 1992 in the book value of any asset owned by the Borrower or a Consolidated Subsidiary and (ii) all unamortized debt discount and expense, capitalized real estate taxes (to the extent not permitted to be capitalized in accordance with generally accepted accounting principles as in effect on the date hereof), goodwill, patents, trademarks, service marks, trade names, copyrights, organization or developmental (other than real estate developmental) expenses and other intangible items. "Credit Event" means the making of a Loan or the issuance of a Letter of Credit or the extension of an Evergreen Letter of Credit. "Debt" of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (iv) all obligations of such Person as lessee which are capitalized in accordance with generally accepted accounting principles, (v) all Debt secured by a Lien on any asset of such Person, whether or not such Debt is otherwise an obligation of such Person, and (vi) all Debt of others Guaranteed by such Person; provided that advances to the Borrower or a Subsidiary by a joint venture out of the Borrower's or such Subsidiary's share of the undistributed earnings of such joint venture shall not constitute Debt. "Default" means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default. "Domestic Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in New York City or Massachusetts are authorized by law to close. "Domestic Lending Office" means, as to each Bank, its office located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Domestic Lending Office) or such other office as such Bank may hereafter designate as its Domestic Lending Office by notice to the Borrower and the Agent; provided that any Bank may so designate separate Domestic Lending Offices for its Base Rate Loans, on the one hand, and its CD Loans, on the other hand, in which case all references herein to the Domestic Lending Office of such Bank shall be deemed to refer to either or both of such offices, as the context may require. "Domestic Loans" means CD Loans or Base Rate Loans or both. "Domestic Reserve Percentage" has the meaning set forth in Section 2.05(b). "Effective Date" means the date this Agreement becomes effective in accordance with Section 3.01. "Environmental Laws" means any and all federal state, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions, permits, concessions, grants, franchises, licenses, agreements and other governmental restrictions relating to the environment, the effect of the environment on human health or to emissions, discharges or releases of pollutants, contaminants, Hazardous Substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, Hazardous Substances or wastes or the clean-up or other remediation thereof. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute. "ERISA Group" means the Borrower, any Subsidiary and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower or any Subsidiary, are treated as a single employer under Section 414 of the Internal Revenue Code. "Euro-Dollar Business Day" means any Domestic Business Day on which commercial banks are open for international business (including dealings in dollar deposits) in London. "Euro-Dollar Lending Office" means, as to each Bank, its office, branch or affiliate located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Euro-Dollar Lending Office) or such other office, branch or affiliate of such Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower and the Agent. "Euro-Dollar Loan" means a Loan to be made by a Bank as a Euro-Dollar Loan pursuant to the applicable Notice of Borrowing. "Euro-Dollar Margin" has the meaning set forth in Section 2.05(c). "Euro-Dollar Reference Banks" means the principal London offices of Bank of America National Trust & Savings Association and Morgan Guaranty Trust Company of New York. "Euro-Dollar Reserve Percentage" has the meaning set forth in Section 2.05(c). "Event of Default" has the meaning set forth in Section 6.01. "Evergreen Letter of Credit" has the meaning set forth in Section 2.16(b). "Exempt Group" means (i) any employee benefit plan of the Borrower or any Subsidiary, (ii) any entity or Person holding shares of common stock of Borrower organized, appointed or established by the Borrower or any Subsidiary for or pursuant to the terms of any such plan or (iii) The Perini Memorial Foundation, Inc., The Joseph Perini Memorial Foundation, or any of the various trusts established under the wills of Lewis R. Perini, Senior, Joseph R. Perini, Senior or Charles B. Perini, Senior. "Federal Funds Rate" means, for any day, the rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Domestic Business Day next succeeding such day, provided that (i) if such day is not a Domestic Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Domestic Business Day as so published on the next succeeding Domestic Business Day, and (ii) if no such rate is so published on such next succeeding Domestic Business Day, the Federal Funds Rate for such day shall be the average rate quoted to Morgan Guaranty Trust Company of New York on such day on such transactions as determined by the Agent. "Financial Letter of Credit" means any Letter of Credit which constitutes a financial standby letter of credit within the meaning of Appendix A to Regulation H of the Board of Governors of the Federal Reserve System or other applicable capital adequacy guidelines promulgated by bank regulatory authorities (including without limitation workmen's compensation letters of credit). "Financing Documents" means this Agreement, the Subsidiary Guaranty Agreement and the Notes. "Fixed Rate Borrowing" means a CD Borrowing or a Euro-Dollar Borrowing. "Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or both. "Guarantee" by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for the purpose of assuring in any other manner the holder of such Debt of the payment thereof or to protect such holder against loss in respect thereof (in whole or in part), provided that the term Guarantee shall not include endorsements for collection or deposit or bid and performance bonds and guarantees in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning. "Hazardous Substances" means any toxic, radioactive, caustic or otherwise hazardous substance, including petroleum, its derivatives, by-products and other hydrocarbons, or any substance having any constituent elements displaying any of the foregoing characteristics. "Indemnitee" has the meaning set forth in Section 9.03(b). "Interest Period" means: (1) with respect to each Euro-Dollar Borrowing, the period commencing on the date of such Borrowing and ending one, two, three or six months thereafter, as the Borrower may elect in the applicable Notice of Borrowing; provided that: (a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Euro-Dollar Business Day; (b) any Interest Period which begins on the last Euro-Dollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Euro-Dollar Business Day of a calendar month; and (c) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date; (2) with respect to each CD Borrowing, the period commencing on the date of such Borrowing and ending 30, 60 or 90 days thereafter, as the Borrower may elect in the applicable Notice of Borrowing; provided that: (a) any Interest Period (other than an Interest Period determined pursuant to clause (b) below) which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day; and (b) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date; and (3) with respect to each Base Rate Borrowing, the period commencing on the date of such Borrowing and ending 30 days thereafter; provided that: (a) any Interest Period (other than an Interest Period determined pursuant to clause (b) below) which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day; and (b) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date. "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended, or any successor statute. "Investment" means any investment in any Person, whether by means of share purchase, capital contribution, loan, Guarantee, time deposit or otherwise. "LC Bank" means BayBank Boston, N.A. "LC Exposure" means, at any time and for any Bank, an amount equal to such Bank's Percentage of the aggregate amount of Letter of Credit Liabilities in respect of all Letters of Credit at such time. "Letter of Credit" has the meaning set forth in Section 2.16(a). "Letter of Credit Liabilities" means, at any time and in respect of any Letter of Credit, the sum, without duplication, of (i) the amount available for drawing under such Letter of Credit plus (ii) the aggregate unpaid amount of all Reimbursement Obligations in respect of previous drawings made under such Letter of Credit. "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind, or any other type of preferential arrangement that has the practical effect of creating a security interest, in respect of such asset. For the purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset. "Loan" means a Domestic Loan or a Euro-Dollar Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or both. "Loan Commitment" means for any Bank at any time an amount equal to the excess, if any, of such Bank's Commitment at such time over such Bank's LC Exposure at such time. "London Interbank Offered Rate" has the meaning set forth in Section 2.05(c). "Material Plan" means at any time a Plan or Plans having aggregate Unfunded Liabilities in excess of $10,000,000. "Material Subsidiary" means at any time a Subsidiary which as of such time meets the definition of a "significant subsidiary" contained as of the date hereof in Regulation S-X of the Securities and Exchange Commission. "Modified Parent Company Debt" means at any date the Debt of the Borrower (other than Debt payable to a Wholly-Owned Consolidated Subsidiary), determined on an unconsolidated basis as of such date, less 75% of the principal amount of any Special Subordinated Debt outstanding on such date. "Multiemployer Plan" means at any time an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions, including for these purposes any Person which ceased to be a member of the ERISA Group during such five year period. "Notes" means promissory notes of the Borrower, substantially in the form of Exhibit A hereto, evidencing the obligation of the Borrower to repay the Loans, and "Note" means any one of such promissory notes issued hereunder. "Notice of Borrowing" has the meaning set forth in Section 2.02. "Notice Time" has the meaning set forth in Section 2.16(b). "Obligor" means each of the Borrower and the Subsidiary Guarantors, and "Obligors" means all of the foregoing. "Parent" means, with respect to any Bank, any Person controlling such Bank. "Participant" has the meaning set forth in Section 9.06(b). "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. "Percentage" means, with respect to each Bank, the percentage that such Bank's Commitment constitutes of the aggregate amount of the Commitments. "Performance Letter of Credit" means a Letter of Credit which constitutes a performance standby letter of credit within the meaning of Appendix A to Regulation H of the Board of Governors of the Federal Reserve system or other applicable capital adequacy guidelines promulgated by bank regulatory authorities. "Perini Building Company" means Perini Building Company, Inc., an Arizona corporation. "Perini International" means Perini International Corporation, a Massachusetts corporation. "Perini Land and Development" means Perini Land and Development Company, a Delaware corporation. "Person" means an individual, a corporation, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. "Plan" means at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code and either (i) is maintained, or contributed to, by any member of the ERISA Group for employees of any member of the ERISA Group or (ii) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of the ERISA Group for employees of any Person which was at such time a member of the ERISA Group. "Prime Rate" means the rate of interest publicly announced by Morgan Guaranty Trust Company of New York in New York City from time to time as its Prime Rate. "Prior Agreement" means the Credit Agreement dated as of October 31, 1986, amended and restated as of March 1, 1989, among the Borrower, the banks listed therein and Morgan Guaranty Trust Company of New York, as agent for such banks, as amended to the Effective Date. "Real Estate Investment" means (i) the acquisition, construction or improvement of any real property, other than real property used by the Borrower or a Consolidated Subsidiary in the conduct of its construction business or (ii) any Investment in any Person (including Perini Land and Development or another Consolidated Subsidiary, but without duplication of any Real Estate Investment made by such Person with the proceeds of such Investment) engaged in real estate investment or development or whose principal assets consist of real property; provided that the Guarantees contemplated by Section 5.08(b)(ii) and (iii) shall not constitute Real Estate Investments. "R. E. Dailey & Co." means R. E. Dailey & Co., a Michigan corporation. "Reference Banks" means the CD Reference Banks or the Euro-Dollar Reference Banks, as the context may require, and "Reference Bank" means any one of such Reference Banks. "Refunding Borrowing" means a Borrowing which, after application of the proceeds thereof, results in no net increase in the outstanding principal amount of Loans made by any Bank. "Regulation U" means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time. "Reimbursement Obligations" means at any date the obligations of the Borrower then outstanding under Section 2.16 to reimburse any Bank for the amount paid by such Bank in respect of a drawing under a Letter of Credit. "Required Banks" means at any time Banks having at least 60% of the aggregate amount of the Commitments or, if the Commitments shall have been terminated, holding Notes evidencing at least 60% of the aggregate unpaid principal amount of the Loans. "Restricted Payment" means (i) any dividend or other distribution on any shares of the Borrower's capital stock (except dividends payable solely in shares of its capital stock) or (ii) any payment on account of the purchase, redemption, retirement or acquisition of (a) any shares of the Borrower's capital stock or (b) any option, warrant or other right to acquire shares of the Borrower's capital stock; provided that none of the following shall constitute Restricted Payments: (i) the declaration and payment of dividends on preferred stock of the Borrower in an aggregate amount with respect to any four consecutive fiscal quarters not exceeding $2,125,000, (ii) the exchange of Special Subordinated Debt for the Borrower's $21.25 Convertible Exchangeable Preferred Shares, or (iii) the redemption, for an aggregate redemption price not exceeding $200,000, of the "Rights" issued pursuant to the Shareholder Rights Agreement dated as of September 23, 1988, as amended, between the Borrower and The First National Bank of Boston, as Rights Agent or (iv) cash payments in the ordinary course of business in full or partial settlement of employee stock options or similar incentive compensation arrangements. "Special Subordinated Debt" means the 8 1/2% Convertible Subordinated Debentures due 2012 of the Borrower issuable in exchange for the Borrower's $21.25 Convertible Exchangeable Preferred Shares in accordance with the terms of the Certificate of Vote of Directors Establishing a Series of a Class of Stock fixing the relative rights and preferences of such Shares as originally filed with the Secretary of the Commonwealth of Massachusetts. "Subsidiary" of any Person means any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person. "Subsidiary Guarantor" means each of Perini Building Company, Perini International, Perini Land and Development, R. E. Dailey & Co. and each other Subsidiary of the Borrower which becomes a party to the Subsidiary Guaranty Agreement pursuant to Section 3.01 thereof, and their respective successors. "Subsidiary Guaranty Agreement" means the Subsidiary Guaranty Agreement in substantially the form of Exhibit D among the Borrower, the Subsidiary Guarantors party thereto and the Agent, as executed and delivered pursuant to Section 3.01(b) and as the same may be amended from time to time in accordance with the terms thereof. "Temporary Cash Investment" means investment of cash balances in United States Government securities or other short-term money market investments. "Termination Date" means April 30, 1996 (or if such date is not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day). "Unfunded Liabilities" means, with respect to any Plan at any time, the amount (if any) by which (i) the value of all benefit liabilities under such Plan, determined on a plan termination basis using the assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market value of all Plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions), all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the ERISA Group to the PBGC or any other Person under Title IV of ERISA. "Usage" means, at any date, the sum of the aggregate outstanding principal amount of the Loans at such date plus the aggregate amount of Letter of Credit Liabilities at such date with respect to all Letters of Credit. "Wholly-Owned Consolidated Subsidiary" means any Consolidated Subsidiary of the Borrower all of the shares of capital stock or other ownership interests of which (except directors' qualifying shares) are at the time directly or indirectly owned by the Borrower. SECTION 1.02. Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with generally accepted accounting principles as in effect from time to time, applied on a basis consistent (except for changes concurred in by the Borrower's independent public accountants) with the most recent audited consolidated financial statements of the Borrower and its Consolidated Subsidiaries delivered to the Banks. ARTICLE II THE CREDITS SECTION 2.01. Commitments to Lend. From time to time prior to the Termination Date, each Bank severally agrees, on the terms and conditions set forth in this Agreement, to lend to the Borrower from time to time amounts not to exceed in the aggregate at any one time outstanding the amount of its Loan Commitment. Each Borrowing under this Section shall be in an aggregate principal amount of $2,000,000 or any larger multiple of $1,000,000 (except that any such Borrowing may be in the aggregate amount of the unused Loan Commitments) and shall be made from the several Banks ratably in proportion to their respective Commitments. Within the foregoing limits, the Borrower may borrow under this Section, repay, or to the extent permitted by Section 2.11, prepay Loans and reborrow at any time prior to the Termination Date under this Section. SECTION 2.02. Method of Borrowing. (a) The Borrower shall give the Agent notice (a "Notice of Borrowing") not later than 10:00 A.M. (New York City time) at least one Domestic Business Day before each Base Rate Borrowing, at least two Domestic Business Days before each CD Borrowing and at least three Euro-Dollar Business Days before each Euro-Dollar Borrowing, specifying: (i) the date of such Borrowing, which shall be a Domestic Business Day in the case of a Domestic Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing, (ii) the aggregate amount of such Borrowing, (iii) whether the Loans comprising such Borrowing are to be CD Loans, Base Rate Loans or Euro-Dollar Loans, and (iv) in the case of a Fixed Rate Borrowing, the duration of the Interest Period applicable thereto, subject to the provisions of the definition of Interest Period. (b) Upon receipt of a Notice of Borrowing, the Agent shall promptly notify each Bank of the contents thereof and of such Bank's ratable share of such Borrowing and such Notice of Borrowing shall not thereafter be revocable by the Borrower. (c) Not later than 11:00 A.M. (New York City time) on the date of each Borrowing, each Bank shall (except as provided in subsection (d) of this Section) make available its ratable share of such Borrowing, in Federal or other funds immediately available in New York City, to the Agent at its address referred to in Section 9.01. Unless the Agent determines that any applicable condition specified in Article III has not been satisfied, the Agent will make the funds so received from the Banks available to the Borrower at the Agent's aforesaid address. (d) If any Bank makes a new Loan hereunder on a day on which the Borrower is to repay all or any part of an outstanding Loan from such Bank, such Bank shall apply the proceeds of its new Loan to make such repayment and only an amount equal to the difference (if any) between the amount being borrowed and the amount being repaid shall be made available by such Bank to the Agent as provided in subsection (c) of this Section, or remitted by the Borrower to the Agent as provided in Section 2.12, as the case may be. (e) Unless the Agent shall have received notice from a Bank prior to the date of any Borrowing that such Bank will not make available to the Agent such Bank's share of such Borrowing, the Agent may assume that such Bank has made such share available to the Agent on the date of such Borrowing in accordance with subsections (c) and (d) of this Section 2.02 and the Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Bank shall not have so made such share available to the Agent, such Bank and the Borrower severally agree to repay to the Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Agent, at (i) in the case of the Borrower, a rate per annum equal to the higher of the Federal Funds Rate and the interest rate applicable thereto pursuant to Section 2.05 and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Bank's Loan included in such Borrowing for purposes of this Agreement. SECTION 2.03. Notes. (a) The Loans of each Bank shall be evidenced by a single Note payable to the order of such Bank for the account of its Applicable Lending Office. (b) Each Bank may, by notice to the Borrower and the Agent, request that its Loans of a particular type be evidenced by a separate Note in an amount equal to the aggregate unpaid principal amount of such Loans. Each such Note shall be in substantially the form of Exhibit A hereto with appropriate modifications to reflect the fact that it evidences solely Loans of the relevant type. Each reference in this Agreement to the "Note" of such Bank shall be deemed to refer to and include any or all of such Notes, as the context may require. (c) Upon receipt of each Bank's Note pursuant to Section 3.01(c), the Agent shall forward such Note to such Bank. Each Bank shall record the date, amount, type and maturity of each Loan made by it and the date and amount of each payment of principal made by the Borrower with respect thereto, and may, if such Bank so elects in connection with any transfer or enforcement of its Note, endorse on the schedule forming a part thereof appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding; provided that the failure of any Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the Borrower so to endorse its Note and to attach to and make a part of its Note a continuation of any such schedule as and when required. SECTION 2.04. Maturity of Loans. Each Loan included in any Borrowing shall mature, and the principal amount thereof shall be due and payable, on the last day of the Interest Period applicable to such Borrowing. SECTION 2.05. Interest Rates. (a) Each Base Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made until it becomes due, at a rate per annum equal to the sum of 1% plus the Base Rate for such day. Such interest shall be payable for each Interest Period on the last day thereof. Any overdue principal of or interest on any Base Rate Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 2% plus the rate otherwise applicable to Base Rate Loans for such day. (b) Each CD Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the sum of the CD Margin plus the applicable Adjusted CD Rate; provided that if any CD Loan or any portion thereof shall, as a result of clause (2)(b) of the definition of Interest Period, have an Interest Period of less than 30 days, such portion shall bear interest during such Interest Period at the rate applicable to Base Rate Loans during such period. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than 90 days, at intervals of 90 days after the first day thereof. Any overdue principal of or interest on any CD Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 2% plus the higher of (i) the sum of the CD Margin plus the Adjusted CD Rate applicable to such Loan and (ii) the rate applicable to Base Rate Loans for such day. "CD Margin" means 2.375%. The "Adjusted CD Rate" applicable to any Interest Period means a rate per annum determined pursuant to the following formula: [ CDBR ]* ACDR = [ ---------- ] + AR [ 1.00 - DRP ] ACDR = Adjusted CD Rate CDBR = CD Base Rate DRP = Domestic Reserve Percentage AR = Assessment Rate __________ * The amount in brackets being rounded upward, if necessary, to the next higher 1/100 of 1% The "CD Base Rate" applicable to any Interest Period is the rate of interest determined by the Agent to be the average (rounded upward, if necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum bid at 10:00 A.M. (New York City time) (or as soon thereafter as practicable) on the first day of such Interest Period by two or more New York certificate of deposit dealers of recognized standing for the purchase at face value from each CD Reference Bank of its certificates of deposit in an amount comparable to the principal amount of the CD Loan of such CD Reference Bank to which such Interest Period applies and having a maturity comparable to such Interest Period. "Domestic Reserve Percentage" means for any day that percentage (expressed as a decimal) which is in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including without limitation any basic, supplemental or emergency reserves) for a member bank of the Federal Reserve System in New York City with deposits exceeding five billion dollars in respect of new non-personal time deposits in dollars in New York City having a maturity comparable to the related Interest Period and in an amount of $100,000 or more. The Adjusted CD Rate shall be adjusted automatically on and as of the effective date of any change in the Domestic Reserve Percentage. "Assessment Rate" means for any day the annual assessment rate in effect on such date which is payable by a member of the Bank Insurance Fund classified as adequately capitalized and within supervisory subgroup "A" (or a comparable successor assessment risk classification) within the meaning of C.F.R. X 3227.3(d) (or any successor provision) to the Federal Deposit Insurance Corporation (or any successor) for such Corporation's (or such successor's) insuring time deposits at offices of such institution in the United States. The Adjusted CD Rate shall be adjusted automatically on and as of the effective date of any change in the Assessment Rate. (c) Each Euro-Dollar Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin plus the applicable Adjusted London Interbank Offered Rate. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than three months, at intervals of three months after the first day thereof. "Euro-Dollar Margin" means 2.25%. The "Adjusted London Interbank Offered Rate" applicable to any Interest Period means a rate per annum equal to the quotient obtained (rounded upward, if necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage. The "London Interbank Offered Rate" applicable to any Interest Period means the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the respective rates per annum at which deposits in dollars are offered to each of the Euro-Dollar Reference Banks in the London interbank market at approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the first day of such Interest Period in an amount approximately equal to the principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference Bank to which such Interest Period is to apply and for a period of time comparable to such Interest Period. "Euro-Dollar Reserve Percentage" means for any day that percentage (expressed as a decimal) which is in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement for a member bank of the Federal Reserve System in New York City with deposits exceeding five billion dollars in respect of "Eurocurrency liabilities" (or in respect of any other category of liabilities which includes deposits by reference to which the interest rate on Euro-Dollar Loans is determined or any category of extensions of credit or other assets which includes loans by a non-United States office of any Bank to United States residents). The Adjusted London Interbank Offered Rate shall be adjusted automatically on and as of the effective date of any change in the Euro-Dollar Reserve Percentage. (d) Any overdue principal of or interest on any Euro-Dollar Loan shall bear interest, payable on demand, for each day from and including the date payment thereof was due to but excluding the date of actual payment, at a rate per annum equal to the sum of 2% plus the higher of (i) the sum of the Euro-Dollar Margin plus the Adjusted London Interbank Offered Rate applicable to such Loan and (ii) the Euro-Dollar Margin plus the quotient obtained (rounded upward, if necessary, to the next higher 1/100 of 1%) by dividing (x) the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the respective rates per annum at which one day (or, if such amount due remains unpaid more than three Euro-Dollar Business Days, then for such other period of time not longer than three months as the Agent may elect) deposits in dollars in an amount approximately equal to such overdue payment due to each of the Euro-Dollar Reference Banks are offered to such Euro-Dollar Reference Bank in the London interbank market for the applicable period determined as provided above by (y) 1.00 minus the Euro-Dollar Reserve Percentage (or, if the circumstances described in clause (a) or (b) of Section 8.01 shall exist, at a rate per annum equal to the sum of 2% plus the rate applicable to Base Rate Loans for such day). (e) The Agent shall determine each interest rate applicable to the Loans hereunder. The Agent shall give prompt notice to the Borrower and the Banks of each rate of interest so determined, and its determination thereof shall be conclusive in the absence of manifest error. (f) Each Reference Bank agrees to use its best efforts to furnish quotations to the Agent as contemplated hereby. If any Reference Bank does not furnish a timely quotation, the Agent shall determine the relevant interest rate on the basis of the quotation or quotations furnished by the remaining Reference Bank or Banks or, if none of such quotations is available on a timely basis, the provisions of Section 8.01 shall apply. SECTION 2.06. Commitment Fees. The Borrower shall pay to the Agent for the account of each Bank a commitment fee at the rate of 1/2 of 1% per annum on the daily average unused portion of such Bank's Commitment. Such commitment fees shall accrue from and including the Effective Date to but excluding the Termination Date. Such commitment fees shall be payable on the last day of each fiscal quarter of the Borrower prior to the Termination Date and on the Termination Date. SECTION 2.07. Participation Fee. The Borrower shall pay to the Agent for the account of each Bank on the Effective Date a participation fee in an amount equal to 1/4 of 1% of such Bank's Commitment. SECTION 2.08. Agency Fee. The Borrower shall pay to the Agent as compensation for its services hereunder agency fees payable in the amounts and at the times heretofore agreed between the Borrower and the Agent. SECTION 2.09. Optional Termination or Reduction of Commitments. The Borrower may, upon at least three Domestic Business Days' notice to the Agent, terminate at any time, or proportionately reduce from time to time by an aggregate amount of $5,000,000 or any larger multiple of $1,000,000, the unused portions of the Commitments. If the Commitments are terminated in their entirety, all accrued commitment fees shall be payable on the effective date of such termination. SECTION 2.10. Mandatory Termination or Reduction of Commitments. (a) The Commitments shall terminate on the Termination Date, and any Loans then outstanding (together with accrued interest thereon) shall be due and payable on such date. (b) On the first Euro-Dollar Business Day of each April prior to the Termination Date, the Commitments of all Banks shall be automatically and ratably reduced by an aggregate amount equal to: (i) if Net Proceeds of all sales and other dispositions of interests in real estate Deemed Received during the most recently ended fiscal year of the Borrower are greater than the First Threshold for such fiscal year, 50% of the amount by which such Net Proceeds Deemed Received during such fiscal year exceed the First Threshold for such fiscal year (or, if such Net Proceeds Deemed Received during such fiscal year are greater than the Second Threshold for such fiscal year, 50% of the amount by which the Second Threshold for such fiscal year exceeds the First Threshold for such fiscal year) (ii) plus, if such Net Proceeds Deemed Received during the most recently ended fiscal year of the Borrower are greater than the Second Threshold for such fiscal year, 100% of the amount by which such Net Proceeds Deemed Received during such fiscal year exceed the Second Threshold for such fiscal year, provided that no reduction in the Commitments pursuant to this subsection (b) shall reduce the aggregate amount of the Commitments to less than $40,000,000. The "Net Proceeds" of any sale or other disposition of any interest in real property means the gross cash proceeds (plus the fair market value of the gross non-cash proceeds, if any) of such sale or other disposition received by the seller thereof, (i) less estimated income taxes incurred by the seller of such interest, if any, as a result of such sale or other disposition (or, if as a result of such sale or other disposition, it is estimated that income taxes payable by such seller shall be reduced, plus the estimated amount of such reduction), (ii) less estimated cash transaction costs and other taxes incurred in connection with such sales or other dispositions and (iii) less the principal amount of Debt of the seller required by its terms to be repaid upon such sale or upon distribution of the proceeds of such sale (and prepayment penalty, if any), provided that if the partners or equity owners of such seller, rather than such seller, are required to pay income taxes on such seller's income, the portion of the Net Proceeds of such sale or other disposition that is Deemed Received will be reduced by the estimated income taxes incurred by the Borrower and its Subsidiaries, if any, as a result of such sale or other disposition (or, if as a result of such sale or other disposition, it is estimated that income taxes payable by the Borrower and its Subsidiaries shall be reduced, the Net Proceeds of such sale or other disposition Deemed Received will be increased by the estimated amount of such reduction). Net Proceeds will be "Deemed Received" at the earlier of: (x) the time received by the Borrower or any of its Subsidiaries and (y) the time received by a corporation, a general or limited partnership or a joint venture (other than a Subsidiary of the Borrower) in which the Borrower or any of its Subsidiaries directly or indirectly has any equity interest, if the Borrower or any Subsidiary may compel or cause such Person to distribute such Net Proceeds, to the extent the Borrower and its Subsidiaries would be entitled to such Net Proceeds on distribution thereof (reduced as described in the proviso to the definition of Net Proceeds). Amounts paid or held in escrow shall not be "Deemed Received" until released from escrow. If, pursuant to the express terms of any sale or other disposition, the seller may be required to repay in cash a portion of the consideration paid in such sale or other disposition, the amount "Deemed Received" at the time of such sale or other disposition will be reduced by the maximum amount the seller may be required so to repay and such amount (less any repayment actually made by such seller) shall be "Deemed Received" at the earlier of: (i) when such seller may no longer be required so to repay such amount pursuant to the terms of such sale or other disposition and (ii) one year after such sale or other disposition. The "First Threshold" and the "Second Threshold" for each fiscal year of the Borrower are $15,000,000 and $25,000,000, respectively. (c) On each day on which any Commitment is reduced pursuant to this Section, the Borrower shall repay such principal amount (together with accrued interest thereon) of each Bank's outstanding Loans, if any, as may be necessary so that after such repayment, the aggregate unpaid principal amount of such Bank's Loans does not exceed the amount of such Bank's Loan Commitment after giving effect to such reduction; provided that if this subsection (c) would otherwise require prepayment of any Fixed Rate Loan prior to the last day of the applicable Interest Period, such prepayment shall be deferred to such last day unless the Required Banks otherwise direct by notice to the Borrower. SECTION 2.11. Optional Prepayments. (a) The Borrower may, upon at least one Domestic Business Day's notice to the Agent, prepay any Base Rate Borrowing in whole at any time, or from time to time in part in amounts aggregating $2,000,000 or any larger multiple of $1,000,000, by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment. Each such optional prepayment shall be applied to prepay ratably the Base Rate Loans of the several Banks included in such Borrowing. (b) Except as provided in Sections 2.10(c) and 8.02, the Borrower may not prepay all or any portion of the principal amount of any Fixed Rate Loan prior to the maturity thereof. (c) Upon receipt of a notice of prepayment pursuant to this Section, the Agent shall promptly notify each Bank of the contents thereof and of such Bank's ratable share of such prepayment and such notice shall not thereafter be revocable by the Borrower. SECTION 2.12. General Provisions as to Payments. (a) The Borrower shall make each payment of principal of, and interest on, the Loans and of fees hereunder, not later than 11:00 A.M. (New York City time) on the date when due, in Federal or other funds immediately available in New York City, to the Agent at its address referred to in Section 9.01. The Agent will promptly distribute to each Bank its ratable share of each such payment received by the Agent for the account of the Banks. Whenever any payment of principal of, or interest on, the Domestic Loans or of fees shall be due on a day which is not a Domestic Business Day, the date for payment thereof shall be extended to the next succeeding Domestic Business Day. Whenever any payment of principal of, or interest on, the Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case the date for payment thereof shall be the next preceding Euro-Dollar Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time. (b) Unless the Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Banks hereunder that the Borrower will not make such payment in full, the Agent may assume that the Borrower has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank. If and to the extent that the Borrower shall not have so made such payment, each Bank shall repay to the Agent forthwith on demand such amount distributed to such Bank together with interest thereon, for each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to the Agent, at the Federal Funds Rate. SECTION 2.13. Funding Losses. If the Borrower makes any payment of principal with respect to any Fixed Rate Loan (pursuant to Section 2.10(c), Article VI or VIII or otherwise) on any day other than the last day of the Interest Period applicable thereto, or the last day of an applicable period fixed pursuant to Section 2.05(d), or if the Borrower fails to borrow any Fixed Rate Loans after notice has been given to any Bank in accordance with Section 2.02(b), the Borrower shall reimburse each Bank on demand for any resulting loss or expense incurred by it (or by any existing or prospective Participant in the related Loan), including (without limitation) any loss incurred in obtaining, liquidating or employing deposits from third parties, but excluding loss of margin for the period after any such payment or failure to borrow, provided that such Bank shall have delivered to the Borrower a certificate as to the amount of such loss or expense, which certificate shall be conclusive in the absence of manifest error. SECTION 2.14. Computation of Interest and Fees. Interest based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and paid for the actual number of days elapsed (including the first day but excluding the last day). All other interest and all fees shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day). SECTION 2.15. Maximum Interest Rate. (a) Nothing contained in this Agreement or the Notes shall require the Borrower to pay interest at a rate exceeding the maximum rate permitted by applicable law. Neither this Section nor Section 9.08 is intended to limit the rate of interest payable for the account of any Bank to the maximum rate permitted by the laws of the State of New York if a higher rate is permitted with respect to such Bank by supervening provisions of U.S. federal law. (b) If the amount of interest payable for the account of any Bank on any interest payment date in respect of the immediately preceding interest computation period, computed pursuant to Section 2.05, would exceed the maximum amount permitted by applicable law to be charged by such Bank, the amount of interest payable for its account on such interest payment date shall be automatically reduced to such maximum permissible amount. (c) If the amount of interest payable for the account of any Bank in respect of any interest computation period is reduced pursuant to clause (b) of this Section and the amount of interest payable for its account in respect of any subsequent interest computation period, computed pursuant to Section 2.05, would be less than the maximum amount permitted by applicable law to be charged by such Bank, then the amount of interest payable for its account in respect of such subsequent interest computation period shall be automatically increased to such maximum permissible amount; provided that at no time shall the aggregate amount by which interest paid for the account of any Bank has been increased pursuant to this clause (c) exceed the aggregate amount by which interest paid for its account has theretofore been reduced pursuant to clause (b) of this Section. SECTION 2.16. Letters of Credit. (a) Subject to the terms and conditions hereof, the LC Bank agrees to issue letters of credit hereunder from time to time before the Termination Date upon the request of the Borrower (such letters of credit issued, the "Letters of Credit"); provided that, immediately after each such Letter of Credit is issued, the aggregate amount of the Letter of Credit Liabilities for all Letters of Credit shall not exceed the Available LC Amount. Upon the date of issuance by the LC Bank of a Letter of Credit in accordance with this Section 2.16, the LC Bank shall be deemed, without further action by any party hereto, to have sold to each Bank, and each Bank shall be deemed, without further action by any party hereto, to have purchased from the LC Bank, a participation in such Letter of Credit and the related Letter of Credit Liabilities in proportion to its Percentage. (b) The Borrower shall give the LC Bank at least three Domestic Business Days' prior notice (effective upon receipt) specifying the date each Letter of Credit is to be issued, and describing the proposed terms of such Letter of Credit and the nature of the transactions proposed to be supported thereby. Upon receipt of such notice the LC Bank shall promptly notify the Agent, and the Agent shall promptly notify each Bank of the contents thereof and of the amount of such Bank's participation in such proposed Letter of Credit. The issuance by the LC Bank of any Letter of Credit shall, in addition to the conditions precedent set forth in Article III (the satisfaction of which the LC Bank shall have no duty to ascertain), be subject to the conditions precedent that such Letter of Credit shall be satisfactory to the LC Bank and that the Borrower shall have executed and delivered such other instruments and agreements relating to such Letter of Credit as the LC Bank shall have reasonably requested. It is understood that any such Letter of Credit may include an evergreen or renewal option, pursuant to which the expiry date will be automatically extended unless notice of non-renewal is given by the LC Bank (provided that such Letter of Credit has an absolute expiry date not later than the Termination Date and provided further that the LC Bank shall deliver notice of non-renewal at the time such notice is required to be given (for any such Letter of Credit, the "Notice Time") unless requested not to by the Borrower, which request will be treated in the same manner as a request for issuance of a new Letter of Credit on the same terms (any such Letter of Credit, an "Evergreen Letter of Credit"). No Letter of Credit shall have a term extending beyond the Termination Date. (c) The Borrower shall pay to the Agent a letter of credit fee at a rate equal to (i) 1.00% per annum on the aggregate amount available for drawings under each Performance Letter of Credit issued from time to time and (ii) 2.25% per annum on the aggregate amount available for drawings under each Financial Letter of Credit issued from time to time, any such fee to be payable for the account of the Banks ratably in proportion to their Percentages. Such fee shall be payable in arrears on the last day of each fiscal quarter of the Borrower for so long as such Letter of Credit is outstanding and on the date of termination thereof. The Borrower shall pay to the LC Bank additional fees and expenses in the amounts and at the times as agreed between the Borrower and the LC Bank. (d) Upon receipt from the beneficiary of any Letter of Credit of any demand for payment or other drawing under such Letter of Credit, the LC Bank shall notify the Agent and the Agent shall promptly notify the Borrower and each other Bank as to the amount to be paid as a result of such demand or drawing and the respective payment date. The responsibility of the LC Bank to the Borrower and each Bank shall be only to determine that the documents (including each demand for payment or other drawing) delivered under each Letter of Credit issued by it in connection with such presentment shall be in conformity in all material respects with such Letter of Credit. The LC Bank shall endeavor to exercise the same care in the issuance and administration of the Letters of Credit as it does with respect to letters of credit in which no participations are granted, it being understood that in the absence of any gross negligence or willful misconduct by the LC Bank, each Bank severally agrees that it shall be unconditionally and irrevocably liable without regard to the occurrence of any Event of Default or any condition precedent whatsoever, pro rata to the extent of such Bank's Percentage, to reimburse the LC Bank on demand for the amount of each payment made by the LC Bank under each Letter of Credit issued by the LC Bank to the extent such amount is not reimbursed by the Borrower pursuant to clause (e) below together with interest on such amount for each day from the date of the LC Bank's demand for such payment (or, if such demand is made after 11:00 A.M. (New York City time) on such date, from the next succeeding Domestic Business Day) to the date of payment by such Bank of such amount at a rate of interest per annum equal to the Federal Funds Rate for such day. (e) The Borrower shall be irrevocably and unconditionally obligated forthwith to reimburse the LC Bank for any amounts paid by the LC Bank upon any drawing under any Letter of Credit, without presentment, demand, protest or other formalities of any kind; provided that neither the Borrower nor any Bank shall hereby be precluded from asserting any claim for direct (but not consequential) damages suffered by the Borrower or such Bank to the extent, but only to the extent, caused by (i) the willful misconduct or gross negligence of the LC Bank in determining whether a request presented under any Letter of Credit complied with the terms of such Letter of Credit or (ii) such Bank's failure to pay under any Letter of Credit after the presentation to it of a request strictly complying with the terms and conditions of the Letter of Credit. All such amounts paid by the LC Bank and remaining unpaid by the Borrower shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 2% plus the rate applicable to Base Rate Loans for such day. The LC Bank will pay to each Bank ratably in accordance with its Percentage all amounts received from the Borrower for application in payment, in whole or in part, of the Reimbursement Obligation in respect of any Letter of Credit, but only to the extent such Bank has made payment to the LC Bank in respect of such Letter of Credit pursuant to Section 2.16(d). (f) If after the date hereof, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall impose, modify or deem applicable any tax, reserve, special deposit or similar requirement against or with respect to or measured by reference to Letters of Credit issued or to be issued hereunder or participations therein, and the result shall be to increase the cost to any Bank of issuing or maintaining any Letter of Credit or any participation therein, or reduce any amount receivable by any Bank hereunder in respect of any Letter of Credit (which increase in cost, or reduction in amount receivable, shall be the result of such Bank's reasonable allocation of the aggregate of such increases or reductions resulting from such event), then, upon demand by such Bank (which demand shall not be unreasonably delayed, provided that a demand within six months of the accrual of such increased cost or reduction in amount receivable will not be deemed to be unreasonably delayed), the Borrower agrees to pay to such Bank, from time to time as specified by such Bank, such additional amounts as shall be sufficient to compensate such Bank for such increased costs or reductions in amount incurred by such Bank. A certificate of such Bank submitted by such Bank to the Borrower shall be conclusive as to the amount thereof in the absence of manifest error. (g) The Borrower's obligations under this Section 2.16 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower may have or have had against the LC Bank, any Bank or any beneficiary of a Letter of Credit. The Borrower further agrees with the LC Bank and the Banks that the LC Bank and the Banks shall not be responsible for, and the Borrower's Reimbursement Obligation in respect of any Letter of Credit shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even if such documents should in fact prove to be in any or all respects invalid, fraudulent or forged, or any dispute between or among the Borrower, any of its Subsidiaries, the beneficiary of any Letter of Credit or any financing institution or other party to whom any Letter of Credit may be transferred or any claims or defenses whatsoever of the Borrower or any of its Subsidiaries against the beneficiary of any Letter of Credit or any such transferee. The LC Bank shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit issued, extended or renewed by it. The Borrower agrees that any action taken or omitted by the LC Bank or any Bank under or in connection with each Letter of Credit and the related drafts and documents, if done in good faith and without gross negligence, shall be binding upon the Borrower and shall not put the LC Bank or any Bank under any liability to the Borrower. (h) To the extent not inconsistent with clause (g) above, the LC Bank shall be entitled to rely, and shall be fully protected in relying upon, any Letter of Credit, draft, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel, independent accountants and other experts selected by the LC Bank. The LC Bank shall be fully justified in failing or refusing to take any action under this Agreement unless it shall first have received such advice or concurrence of the Required Banks as it reasonably deems appropriate or it shall first be indemnified to its reasonable satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Notwithstanding any other provision of this Section 2.16, the LC Bank shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement in accordance with a request of the Required Banks, and such request and any action taken or failure to act pursuant thereto shall be binding upon the Banks and all future holders of participations in any Letters of Credit. (i) The Borrower hereby indemnifies and holds harmless each Bank and the Agent from and against any and all claims and damages, losses, liabilities, costs or expenses which such Bank or the Agent may incur (or which may be claimed against such Bank or the Agent by any Person whatsoever) by reason of or in connection with the execution and delivery or transfer of or payment or failure to pay under any Letter of Credit, including, without limitation, any claims, damages, losses, liabilities, costs or expenses which the LC Bank may incur by reason of or in connection with the failure of any other Bank to fulfill or comply with its obligations to the LC Bank hereunder (but nothing herein contained shall affect any rights the Borrower may have against such defaulting Bank); provided that the Borrower shall not be required to indemnify any Bank or the Agent for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by (i) the willful misconduct or gross negligence of the LC Bank in determining whether a request presented under any Letter of Credit complied with the terms of such Letter of Credit or (ii) the LC Bank's failure to pay under any Letter of Credit after the presentation to it of a request strictly complying with the terms and conditions of the Letter of Credit. Nothing in this Section 2.16(i) is intended to limit the obligations of the Borrower under any other provision of this Agreement. (j) Each Bank shall, ratably in accordance with its Percentage, indemnify the LC Bank, its affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Borrower) against any cost, expense (including reasonable counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such indemnitees' gross negligence or willful misconduct or the LC Bank's failure to pay under any Letter of Credit after the presentation to it of a request strictly complying with the terms and conditions of the Letter of Credit) that such indemnitees may suffer or incur in connection with this Section 2.16 or any action taken or omitted by such indemnitees hereunder. (k) In its capacity as a Bank the LC Bank shall have the same rights and obligations as any other Bank. ARTICLE III CONDITIONS SECTION 3.01. Effectiveness. This Agreement shall become effective on the date that each of the following conditions shall have been satisfied (or waived in accordance with Section 9.05): (a) receipt by the Agent of counterparts of this Agreement signed by each of the parties hereto (or, in the case of any party as to which an executed counterpart shall not have been received, receipt by the Agent in form satisfactory to it of telegraphic, telex or other written confirmation from such party of execution of a counterpart hereof by such party); (b) receipt by the Agent of counterparts of the Subsidiary Guaranty Agreement, duly executed by each of the Obligors listed on the signature pages thereof; (c) receipt by the Agent of a duly executed Note for the account of each Bank dated on or before the Effective Date complying with the provisions of Section 2.03; (d) receipt by the Agent of (i) an opinion of the General Counsel of the Borrower and (ii) an opinion of Jacobs Persinger & Parker, counsel for the Borrower, substantially in the form of Exhibits B-1 and B-2 hereto and covering such additional matters relating to the transactions contemplated hereby as the Required Banks may reasonably request; (e) receipt by the Agent of an opinion of Davis Polk & Wardwell, special counsel for the Agent, substantially in the form of Exhibit C hereto and covering such additional matters relating to the transactions contemplated hereby as the Required Banks may reasonably request; (f) the fact that all loans outstanding under the Prior Agreement shall have been, or shall simultaneously with the effectiveness hereof be, repaid in full, together with all accrued interest and accrued fees under the Prior Agreement; and (g) receipt by the Agent of all documents it may reasonably request relating to the existence of the Obligors, the corporate authority for and the validity of the Financing Documents and any other matters relevant hereto, all in form and substance satisfactory to the Agent; Provided that this Agreement shall not become effective or be binding on any party hereto unless all of the foregoing conditions are satisfied not later than May 20, 1993. The Agent shall promptly notify the Borrower and the Banks of the Effective Date, and such notice shall be conclusive and binding on all parties hereto. The Borrower and each of the Banks which is a party to the Prior Agreement, comprising the "Required Banks" as defined in the Prior Agreement, hereby agree that (i) the commitments of the banks under the Prior Agreement shall terminate simultaneously with the effectiveness of this Agreement without the notice required under Section 2.09 of the Prior Agreement and (ii) the Borrower may prepay any Prime Borrowing as defined in the Prior Agreement on the Effective Date hereof without prior notice. On the Effective Date hereof the Borrower may make an initial Base Rate Borrowing under this Agreement by giving the Agent a Notice of Borrowing not later than 12:00 P.M. (New York City time) on the Effective Date. SECTION 3.02. Credit Events. The obligation of any Bank to make a Loan on the occasion of any Borrowing and of the LC Bank to issue a Letter of Credit (or to permit the extension of an Evergreen Letter of Credit) on the occasion of a request therefor by the Borrower is subject to the satisfaction of the following conditions: (a) receipt (i) by the Agent of a Notice of Borrowing as required by Section 2.02, in the case of a Borrowing or (ii) by the LC Bank of notice as required by Section 2.16, in the case of a Letter of Credit or, in the case of an extension of an Evergreen Letter of Credit, of a request for extension prior to the Notice Time thereof; (b) the fact that, after giving effect to such Credit Event, the Usage plus the aggregate amount available for drawing under the Aetna Letters of Credit shall not exceed the aggregate amount of the Commitments; (c) the fact that, immediately after such Credit Event, no Default shall have occurred and be continuing; and (d) the fact that the representations and warranties of the Borrower contained in this Agreement (except, in the case of a Refunding Borrowing, the representation and warranty set forth in Section 4.04(b) as to any material adverse change which has theretofore been disclosed in writing by the Borrower to the Banks) shall be true on and as of the date of such Credit Event. Each Credit Event shall be deemed to be a representation and warranty by the Borrower on the date of such Credit Event as to the facts specified in clauses (b), (c) and (d) of this Section. ARTICLE IV REPRESENTATIONS AND WARRANTIES The Borrower represents and warrants that: SECTION 4.01. Corporate Existence and Power. The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of Massachusetts, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. SECTION 4.02. Corporate and Governmental Authorization; No Contravention. The execution, delivery and performance by each Obligor of the Financing Documents to which it is a party are within its corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of such Obligor or of any agreement, judgment, injunction, order, decree or other instrument binding upon such Obligor or any of its Subsidiaries or result in the creation or imposition of any Lien on any asset of such Obligor or any of its Subsidiaries. SECTION 4.03. Binding Effect. This Agreement constitutes a valid and binding agreement of the Borrower and the Notes, when executed and delivered in accordance with this Agreement, will constitute valid and binding obligations of the Borrower in each case enforceable in accordance with their respective terms. The Subsidiary Guaranty Agreement, when executed and delivered in accordance with this Agreement, will constitute a valid and binding agreement of each Obligor enforceable against each Obligor in accordance with its terms. SECTION 4.04. Financial Information. (a) The consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of December 31, 1992 and the related consolidated statements of income, stockholders' equity and cash flows for the fiscal year then ended, reported on by Arthur Andersen & Co. and set forth in the Borrower's 1992 Form 10-K, a copy of which has been delivered to each of the Banks, fairly present, in conformity with generally accepted accounting principles, the consolidated financial position of the Borrower and its Consolidated Subsidiaries as of such date and their consolidated results of operations and cash flows for such fiscal year. (b) Since December 31, 1992 there has been no material adverse change in the business, financial position, results of operations or prospects of the Borrower and its Consolidated Subsidiaries, considered as a whole. SECTION 4.05. Litigation. Except as disclosed in the Borrower's 1992 Form 10-K, there is no action, suit or proceeding pending against, or to the knowledge of the Borrower threatened against or affecting, the Borrower or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business, consolidated financial position or consolidated results of operations of the Borrower and its Consolidated Subsidiaries or which in any manner draws into question the validity of any Financing Document. SECTION 4.06. Compliance with ERISA. Each member of the ERISA Group has fulfilled its obligations under the minimum funding standards of ERISA and the Internal Revenue Code with respect to each Plan and is in compliance in all material respects with the presently applicable provisions of ERISA and the Internal Revenue Code with respect to each Plan. No member of the ERISA Group has (i) sought a waiver of the minimum funding standard under Section 412 of the Internal Revenue Code in respect of any Plan, (ii) failed to make any contribution or payment to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement, which has resulted or could result in the imposition of a Lien or the posting of a bond or other security under ERISA or the Internal Revenue Code or (iii) incurred any liability to the PBGC or any other Person under Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA. SECTION 4.07. Environmental Matters. In the ordinary course of its business, the Borrower conducts periodic reviews of the effect of Environmental Laws on the business, operations and properties of the Borrower and its Subsidiaries and compliance therewith. The Borrower and its Subsidiaries also attempt, whenever possible, to negotiate specific provisions in contracts for construction services that allocate to the contracting governmental agency or private owner, the entire risk and responsibility for Hazardous Substances encountered during the course of construction. On the basis of such reviews and contract provisions and procedures, the Borrower has reasonably concluded that the costs and associated liabilities of compliance with Environmental Laws are unlikely to have a material adverse effect on the business, financial condition, results of operations or prospects of the Borrower and its Consolidated Subsidiaries, considered as a whole. SECTION 4.08. Taxes. United States Federal income tax returns of the Borrower and its Subsidiaries have been examined and closed through the fiscal year ended December 31, 1986. The Borrower and its Subsidiaries have filed all United States Federal income tax returns and all other material tax returns which are required to be filed by them and have paid all taxes due pursuant to such returns or pursuant to any assessment received by the Borrower or any Subsidiary. The charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of taxes or other governmental charges are, in the opinion of the Borrower, adequate. SECTION 4.09. Subsidiaries. Each of the Borrower's corporate Subsidiaries is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. SECTION 4.10. Not an Investment Company. The Borrower is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended. SECTION 4.11. No Burdensome Restrictions. No contract, lease, agreement or other instrument to which the Borrower or any of its Subsidiaries is a party or by which any of its property is bound or affected, no charge, corporate restriction, judgment, decree or order and no provision of applicable law or governmental regulation has or is reasonably expected to materially and adversely affect the business, operations or financial condition of the Borrower and its Consolidated Subsidiaries, taken as a whole, or the ability of the Borrower to perform its obligations under this Agreement. SECTION 4.12. Full Disclosure. All information heretofore furnished by the Borrower to the Agent or any Bank for purposes of or in connection with this Agreement or any transaction contemplated hereby is, and all such information hereafter furnished by the Borrower to the Agent or any Bank will be, true and accurate in all material respects (or in the case of projections and similar information based on reasonable estimates) on the date as of which such information is stated or certified. The Borrower has disclosed to the Banks in writing any and all facts which materially and adversely affect or may reasonably be expected to materially and adversely affect (to the extent the Borrower can now reasonably foresee), the business, operations or financial condition of the Borrower and its Consolidated Subsidiaries, taken as a whole, or the ability of the Borrower to perform its obligations under this Agreement. ARTICLE V COVENANTS The Borrower agrees that, so long as any Bank has any Commitment hereunder or any amount payable under any Note remains unpaid or any Letter of Credit remains outstanding or any Reimbursement Obligation with respect thereto remains unpaid: SECTION 5.01. Information. The Borrower will deliver to each of the Banks: (a) as soon as available and in any event within 90 days after the end of each fiscal year of the Borrower, consolidated and consolidating balance sheets of the Borrower and its Consolidated Subsidiaries as of the end of such fiscal year and the related consolidated and consolidating statements of income, stockholders' equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on in a manner acceptable to the Securities and Exchange Commission by Arthur Andersen & Co. or other independent public accountants of nationally recognized standing; (b) as soon as available and in any event within 45 days after the end of each of the first three quarters of each fiscal year of the Borrower, a consolidated condensed balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such quarter and the related consolidated condensed statements of income and cash flows for such quarter and for the portion of the Borrower's fiscal year ended at the end of such quarter, setting forth in each case in comparative form the figures for the corresponding quarter and the corresponding portion of the Borrower's previous fiscal year, all certified (subject to normal year-end adjustments) as to fairness of presentation, generally accepted accounting principles and consistency by the chief financial officer or the chief accounting officer of the Borrower; (c) simultaneously with the delivery of each set of financial statements referred to in clauses (a) and (b) above, a certificate of the chief financial officer or the chief accounting officer of the Borrower (i) setting forth in reasonable detail the calculations required to establish whether the Borrower was in compliance with the requirements of Sections 5.07 to 5.10, inclusive, 5.12, 5.14 and 5.15 on the date of such financial statements and (ii) stating whether there exists on the date of such certificate any Default and, if any Default then exists, setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto; (d) simultaneously with the delivery of each set of financial statements referred to in clause (a) above, a statement of the firm of independent public accountants which reported on such statements (i) whether anything has come to their attention to cause them to believe that there existed on the date of such statements any Default and (ii) confirming the calculations set forth in the officer's certificate delivered simultaneously therewith pursuant to clause (c) above; (e) simultaneously with the delivery of each set of financial statements set forth above, a schedule, dated as of the date of such financial statements, listing each construction contract which provides for aggregate total payments in excess of $2,500,000 and with respect to which the Borrower or a Consolidated Subsidiary of the Borrower is a party or participates through a joint venture, and setting forth as of the date of such schedule for each such contract the Borrower's original estimate of revenue and profit, the Borrower's current estimate of revenue and profit, cumulative realized and estimated remaining revenue and profit, and the percentage of completion and anticipated completion date of each such contract, certified as to consistency, accuracy and reasonableness of estimates by the chief financial officer or the chief accounting officer of the Borrower; (f) forthwith upon the occurrence of any Default, a certificate of the chief financial officer or the chief accounting officer of the Borrower setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto; (g) promptly upon the mailing thereof to the shareholders of the Borrower generally, copies of all financial statements, reports and proxy statements so mailed; (h) promptly upon the filing thereof, copies of all registration statements (other than the exhibits thereto and any registration statements on Form S-8 or its equivalent) and annual, quarterly or monthly reports which the Borrower shall have filed with the Securities and Exchange Commission; (i) if and when any member of the ERISA Group (i) gives or is required to give notice to the PBGC of any "reportable event" (as defined in Section 4043 of ERISA) with respect to any Plan which might constitute grounds for a termination of such Plan under Title IV of ERISA, or knows that the plan administrator of any Plan has given or is required to give notice of any such reportable event, a copy of the notice of such reportable event given or required to be given to the PBGC; (ii) receives notice of complete or partial withdrawal liability under Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is insolvent or has been terminated, a copy of such notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent to terminate, impose liability (other than for premiums under Section 407 of ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies for a waiver of the minimum funding standard under Section 412 of the Internal Revenue Code, a copy of such application; (v) gives notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and other information filed with the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any payment or contribution to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement or makes any amendment to any Plan or Benefit Arrangement which has resulted or could result in the imposition of a Lien or the posting of a bond or other security, a certificate of the chief financial officer or the chief accounting officer of the Borrower setting forth details as to such occurrence and action, if any, which the Borrower or applicable member of the ERISA Group is required or proposes to take; and (j) from time to time such additional information regarding the financial position or business of the Borrower and its Subsidiaries as the Agent, at the request of any Bank, may reasonably request. SECTION 5.02. Payment of Obligations. The Borrower will pay and discharge, and will cause each Subsidiary to pay and discharge, at or before maturity, all their respective material obligations and liabilities, including, without limitation, tax liabilities, except where the same may be contested in good faith by appropriate proceedings, and will maintain, and will cause each Subsidiary to maintain, in accordance with generally accepted accounting principles, appropriate reserves for the accrual of any of the same. SECTION 5.03. Maintenance of Property; Insurance. The Borrower will keep, and will cause each Subsidiary to keep, all property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted; will maintain, and will cause each Subsidiary to maintain (either in the name of the Borrower or in such Subsidiary's own name) with financially sound and reputable insurance companies, insurance on all their property in at least such amounts and against at least such risks as are usually insured against in the same general area by companies of established repute engaged in the same or a similar business; and will furnish to the Banks, upon written request from the Agent, full information as to the insurance carried. SECTION 5.04. Conduct of Business and Maintenance of Existence. The Borrower will continue, and will cause each Subsidiary Guarantor to continue, to engage in business of the same general type as now conducted by the Borrower and its Subsidiaries, and will preserve, renew and keep in full force and effect, and will cause each Subsidiary Guarantor to preserve, renew and keep in full force and effect their respective corporate existence and their respective rights, privileges and franchises necessary or desirable in the normal conduct of business. SECTION 5.05. Compliance with Laws. The Borrower will comply, and cause each Subsidiary to comply, in all material respects with all applicable laws, ordinances, rules, regulations, and requirements of governmental authorities (including, without limitation, Environmental Laws and ERISA and the rules and regulations thereunder) except where the necessity of compliance therewith is contested in good faith by appropriate proceedings. SECTION 5.06. Inspection of Property, Books and Records. The Borrower will keep, and will cause each Subsidiary to keep, proper books of record and account in which full, true and correct entries in conformity with generally accepted accounting principles shall be made of all dealings and transactions in relation to its business and activities; and will permit, and will cause each Subsidiary to permit, representatives of any Bank at such Bank's expense (subject to Section 9.03(a)(ii)) to visit and inspect any of their respective properties, to examine and make abstracts from any of their respective books and records and to discuss their respective affairs, finances and accounts with their respective officers, employees and independent public accountants, all at such reasonable times and as often as may reasonably be desired. SECTION 5.07. Current Ratio. Consolidated Current Assets will at no time be less than 100% of Consolidated Current Liabilities. SECTION 5.08. Debt. (a) Modified Parent Company Debt will at no time (i) at or prior to December 31, 1993, exceed 75% of Consolidated Capital Base, (ii) after December 31, 1993 and at or prior to December 31, 1994, exceed 70% of Consolidated Capital Base and (iii) after December 31, 1994, exceed 65% of Consolidated Capital Base. (b) The Borrower will not permit any Subsidiary to incur or suffer to exist any Debt other than (i) Debt of Perini Land and Development outstanding at December 31, 1992, as described in Schedule I, (ii) Debt of Perini Land and Development in the form of Guarantees issued subsequent to December 31, 1992 in an aggregate amount not exceeding $14,000,000, as described in Schedule II, (iii) Debt of Perini Land and Development in the form of Guarantees, in addition to the Guarantees permitted by clause (ii) above, issued subsequent to December 31, 1992 in an aggregate amount not exceeding $5,000,000, (iv) Debt of Perini International Corporation in an aggregate amount not exceeding $5,000,000, (v) Debt payable to the Borrower or a Wholly-Owned Consolidated Subsidiary and (vi) any refinancing, extension, renewal or refunding of the Debt referred to in clauses (i) through (v) above, provided that such Debt is not increased. SECTION 5.09. Minimum Consolidated Tangible Net Worth. Consolidated Tangible Net Worth of the Borrower will at no time be less than the Minimum Compliance Level, determined as set forth below. The "Minimum Compliance Level" is an amount equal to $100,000,000 subject to increase (but in no case subject to decrease) from time to time as follows: (i) at the end of each fiscal year commencing after December 31, 1992 for which Consolidated Net Income is a positive number, the Minimum Compliance Level shall be increased effective at the last day of such fiscal year by an amount equal to 50% of such Consolidated Net Income; and (ii) on the date of each issuance by the Borrower subsequent to December 31, 1992 of any capital stock or other equity interest, the Minimum Compliance Level shall be increased by an amount equal to 75% of the amount of the net proceeds received by the Borrower on account of such issuance. SECTION 5.10. Interest Coverage. One-fourth of Consolidated Earnings Before Interest and Taxes for each period of four consecutive fiscal quarters ending on or before December 31, 1993 shall not be less than 175% of Consolidated Interest Charges for the last of such four fiscal quarters. One-fourth of Consolidated Earnings Before Interest and Taxes for each period of four consecutive fiscal quarters ending thereafter shall not be less than 200% of Consolidated Interest Charges for the last of such four fiscal quarters. SECTION 5.11. Negative Pledge. Neither the Borrower nor any Consolidated Subsidiary of the Borrower will create, assume or suffer to exist any Lien on any asset (including, without limitation, capital stock of Subsidiaries) now owned or hereafter acquired by it, except: (a) Liens existing on the date of this Agreement securing Debt outstanding on the date of this Agreement as described in Schedule IV; (b) any Lien existing on any asset of any corporation at the time such corporation becomes a Consolidated Subsidiary of the Borrower and not created in contemplation of such event; (c) any Lien on any asset securing Debt incurred or assumed for the purpose of financing all or any part of the cost of acquiring such asset, provided that such Lien attaches to such asset concurrently with or within 90 days after the acquisition thereof and such Lien secures only such Debt; (d) any Lien on any asset of any corporation existing at the time such corporation is merged or consolidated with or into the Borrower or a Consolidated Subsidiary of the Borrower and not created in contemplation of such event; (e) any Lien existing on any asset prior to the acquisition thereof by the Borrower or a Consolidated Subsidiary of the Borrower and not created in contemplation of such acquisition; (f) any Lien arising out of the refinancing, extension, renewal or refunding of any Debt secured by any Lien permitted by any of the foregoing clauses of this Section, provided that such Debt is not increased and is not secured by any additional assets; and (g) Liens incidental to conduct of its business or the ownership of its assets which (i) do not secure Debt and (ii) do not in the aggregate materially detract from the value of its assets or materially impair the use thereof in the operation of its business. SECTION 5.12. Consolidations, Mergers and Sales of Assets. The Borrower will not (i) consolidate or merge with or into any other Person or sell, lease or otherwise transfer all or any substantial part of its assets to any other Person or (ii) permit any Material Subsidiary (other than a Subsidiary Guarantor) to consolidate or merge with or into, or transfer all or any substantial part of its assets to, any Person other than the Borrower or a Wholly-Owned Consolidated Subsidiary; provided that the Borrower or a Material Subsidiary other than Perini Land and Development may sell or otherwise transfer assets if Aggregate Asset Sale Proceeds after such sale less Aggregate Reinvested Proceeds does not at any time exceed $15,000,000. "Aggregate Asset Sale Proceeds" means the sum of the proceeds of each sale in a single transaction or series of related transactions by the Borrower or any Subsidiary, on or after the Effective Date, of fixed assets yielding proceeds in excess of 5% of the Consolidated Tangible Net Worth of the Borrower. "Aggregate Reinvested Proceeds" means the amount of Aggregate Asset Sale Proceeds used to purchase fixed assets for use in the same general business presently conducted by the Borrower or the Subsidiary that realized such proceeds, as the case may be, provided such proceeds are so used within 18 months of receipt thereof. The Borrower will not permit any Subsidiary Guarantor to consolidate or merge with or into, or transfer all or any substantial part of its assets to, any Person; provided that the foregoing shall not prohibit any Subsidiary Guarantor from selling, leasing or otherwise transferring assets in the ordinary course of its business. SECTION 5.13. Use of Proceeds. The proceeds of the Loans made under this Agreement will be used by the Borrower for general corporate purposes. None of such proceeds will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any "margin stock" within the meaning of Regulation U. SECTION 5.14. Restricted Payments. The aggregate amount of all dividends which constitute Restricted Payments declared and other Restricted Payments made during any period of four consecutive fiscal quarters will not exceed an amount equal to 50% of the excess, if any, of (x) Consolidated Net Income for such period over (y) the aggregate amount of preferred stock dividends not constituting Restricted Payments paid during such period. The Borrower will not declare any dividend payable more than 120 days after the date of declaration thereof. SECTION 5.15. Real Estate Investments. The Borrower will not, and will not permit any Consolidated Subsidiary to, make any Real Estate Investment if, after giving effect thereto, the aggregate amount of Real Estate Investments made by the Borrower and its Consolidated Subsidiaries during any fiscal year set forth below shall exceed the applicable amount set forth below plus, in the case of any such fiscal year ending after December 31, 1993, 25% of the amount, if any, by which the aggregate Real Estate Investments made by the Borrower and its Consolidated Subsidiaries in the preceding fiscal year were less than the applicable limitation specified for such fiscal year in this Section. Year Ending December 31 Amount 1993 $18,000,000 1994 $ 8,000,000 1995 and thereafter $ 4,000,000 SECTION 5.16. Other Investments. Neither the Borrower nor any Consolidated Subsidiary will make or acquire any Investment in any Person other than: (a) Real Estate Investments permitted by Section 5.15; (b) Investments in Subsidiaries or joint ventures principally engaged in the construction business; (c) Temporary Cash Investments; and (d) any Investment not otherwise permitted by the foregoing clauses of this Section if, immediately after such Investment is made or acquired, the aggregate net book value of all Investments permitted by this clause (d) does not exceed 5% of Consolidated Tangible Net Worth; provided that no Real Estate Investment may be made pursuant to clause (b), (c) or (d) above. SECTION 5.17. Aetna Letters of Credit. Within 60 days after the Effective Date, the Borrower will cause all Aetna Letters of Credit to be terminated. ARTICLE VI DEFAULTS SECTION 6.01. Events of Default. If one or more of the following events ("Events of Default") shall have occurred and be continuing: (a) the Borrower shall fail to pay when due any principal of any Loan, any fees or any other amount payable hereunder; (b) the Borrower shall fail to pay when due or within five Business Days thereof any interest on any Loan; (c) the Borrower shall fail to observe or perform any covenant contained in Sections 5.07 to 5.17, inclusive or in Section 3.01 of the Subsidiary Guaranty Agreement; (d) the Borrower shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those covered by clause (a), (b) or (c) above) for 10 days after written notice thereof has been given to the Borrower by the Agent at the request of any Bank; (e) any representation, warranty, certification or statement made by the Borrower in this Agreement or in any certificate, financial statement or other document delivered pursuant to this Agreement shall prove to have been incorrect in any material respect when made (or deemed made); (f) the Borrower shall fail to make any payment in respect of any Debt (other than the Notes) when due or within any applicable grace period; (g) any Subsidiary shall fail to make any payment in respect of any Debt the aggregate principal amount of which is $250,000 or more when due or within any applicable grace period; (h) any event or condition shall occur which results in the acceleration of the maturity of any Debt of the Borrower or any Subsidiary or enables (or, with the giving of notice or lapse of time or both, would enable) the holder of such Debt or any Person acting on such holder's behalf to accelerate the maturity thereof; (i) the Borrower or any Subsidiary shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing; (j) an involuntary case or other proceeding shall be commenced against the Borrower or any Subsidiary seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 days; or an order for relief shall be entered against the Borrower or any Subsidiary under the federal bankruptcy laws as now or hereafter in effect; (k) any member of the ERISA Group shall fail to pay when due an amount or amounts aggregating in excess of $5,000,000 which it shall have become liable to pay to the PBGC or any other Person under Title IV of ERISA; or notice of intent to terminate a Material Plan shall be filed under Title IV of ERISA by any member of the ERISA Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to administer any Material Plan; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Material Plan must be terminated; or there shall occur a complete or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which could cause one or more members of the ERISA Group to incur a current payment obligation in excess of $5,000,000; (l) a judgment or order for the payment of money in excess of $5,000,000 shall be rendered against the Borrower or any Subsidiary and such judgment or order shall continue unsatisfied, unstayed and unbonded for a period of 10 days; or (m) any of the following: (i) any person or group or persons (within the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as amended) (other than the Exempt Group) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under said Act) of 25% or more of the outstanding shares of common stock of the Borrower; (ii) fewer than two of the following people shall be members of the Board of Directors of the Borrower: David Perini, Joseph Perini and Bart Perini; or (iii) the Borrower shall cease to own 100% of the capital stock of any Subsidiary Guarantor; then, and in every such event, the Agent shall (i) if requested by Banks having more than 50% in aggregate amount of the Commitments, by notice to the Borrower terminate the Commitments and they shall thereupon terminate, and (ii) if requested by Banks holding Notes evidencing more than 50% in aggregate principal amount of the Loans, by notice to the Borrower declare the Notes (together with accrued interest thereon) to be, and the Notes shall thereupon become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Obligors; provided that in the case of any of the Events of Default specified in clause (i) or (j) above with respect to any Obligor, without any notice to the Borrower or any other act by the Agent or the Banks, the Commitments shall thereupon terminate and the Notes (together with accrued interest thereon) shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Obligors. SECTION 6.02. Cash Cover. The Borrower hereby agrees, in addition to the provisions of Section 6.01 hereof, that upon the occurrence and during the continuance of any Event of Default, it shall, if requested by the Agent upon instruction from Banks having more than 50% in aggregate amount of the Commitments, pay (and, in the case of any of the Events of Default specified in clause (i) or (j) above with respect to any Obligor, forthwith, without any demand or the taking of any other action by the Agent or any Bank, it shall pay) to the Agent an amount in immediately available funds equal to the then aggregate Letter of Credit Liabilities for all Letters of Credit to be held as security therefor for the benefit of all Banks. SECTION 6.03. Notice of Default. The Agent shall give notice to the Borrower under Section 6.01(d) promptly upon being requested to do so by any Bank and shall thereupon notify all the Banks thereof. ARTICLE VII THE AGENT SECTION 7.01. Appointment and Authorization. Each Bank irrevocably appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Financing Documents as are delegated to the Agent by the terms thereof, together with all such powers as are reasonably incidental thereto. SECTION 7.02. Agent and Affiliates. Morgan Guaranty Trust Company of New York shall have the same rights and powers under the Financing Documents as any other Bank and may exercise or refrain from exercising the same as though it were not the Agent, and Morgan Guaranty Trust Company of New York and its affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Subsidiary or affiliate of the Borrower as if it were not the Agent hereunder. SECTION 7.03. Action by Agent. The obligations of the Agent under the Financing Documents are only those expressly set forth herein. Without limiting the generality of the foregoing, the Agent shall not be required to take any action with respect to any Default, except as expressly provided in Article VI. SECTION 7.04. Consultation with Experts. The Agent may consult with legal counsel (who may be counsel for an Obligor), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts. SECTION 7.05. Liability of Agent. Neither the Agent nor any of its affiliates nor any of their respective directors, officers, agents or employees shall be liable for any action taken or not taken by it in connection herewith (i) with the consent or at the request of the Required Banks or (ii) in the absence of its own gross negligence or willful misconduct. Neither the Agent nor any of its affiliates nor any of their respective directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into or verify (i) any statement, warranty or representation made in connection with the Financing Documents or any borrowing hereunder; (ii) the performance or observance of any of the covenants or agreements of the Borrower; (iii) the satisfaction of any condition specified in Article III, except receipt of items required to be delivered to the Agent; or (iv) the validity, effectiveness or genuineness of any Financing Document or any other instrument or writing furnished in connection herewith. The Agent shall not incur any liability by acting in reliance upon any notice, consent, certificate, statement, or other writing (which may be a bank wire, telex or similar writing) believed by it to be genuine or to be signed by the proper party or parties. SECTION 7.06. Indemnification. Each Bank shall, ratably in accordance with its Commitment, indemnify the Agent, its affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Borrower) against any cost, expense (including reasonable counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such indemnitees' gross negligence or willful misconduct) that such indemnitees may suffer or incur in connection with this Agreement or any action taken or omitted by such indemnitees hereunder. SECTION 7.07. Credit Decision. Each Bank acknowledges that it has, independently and without reliance upon the Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Bank also acknowledges that it will, independently and without reliance upon the Agent or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under this Agreement. SECTION 7.08. Successor Agent. The Agent may resign at any time by giving notice thereof to the Banks and the Borrower. Upon any such resignation, the Required Banks shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by the Required Banks, and shall have accepted such appointment, within 30 days after the retiring Agent gives notice of resignation, then the retiring Agent may, on behalf of the Banks, appoint a successor Agent, which shall be a commercial bank organized or licensed under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $150,000,000. Upon the acceptance of its appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder. After any retiring Agent's resignation hereunder as Agent, the provisions of this Article shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent. ARTICLE VIII CHANGE IN CIRCUMSTANCES SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If on or prior to the first day of any Interest Period for any Fixed Rate Borrowing: (a) the Agent is advised by the Reference Banks that deposits in dollars (in the applicable amounts) are not being offered to the Reference Banks in the relevant market for such Interest Period, or (b) Banks having 50% or more of the aggregate amount of the Commitments advise the Agent that the Adjusted CD Rate or the Adjusted London Interbank Offered Rate, as the case may be, as determined by the Agent will not adequately and fairly reflect the cost to such Banks of funding their CD Loans or Euro-Dollar Loans, as the case may be, for such Interest Period, the Agent shall forthwith give notice thereof to the Borrower and the Banks, whereupon until the Agent notifies the Borrower that the circumstances giving rise to such suspension no longer exist, the obligations of the Banks to make CD Loans or Euro-Dollar Loans, as the case may be, shall be suspended. Unless the Borrower notifies the Agent at least two Domestic Business Days before the date of any Fixed Rate Borrowing for which a Notice of Borrowing has previously been given that it elects not to borrow on such date, such Borrowing shall instead be made as a Base Rate Borrowing. SECTION 8.02. Illegality. If, after the date of this Agreement, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank (or its Euro-Dollar Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall make it unlawful or impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and such Bank shall so notify the Agent, the Agent shall forthwith give notice thereof to the other Banks and the Borrower, whereupon until such Bank notifies the Borrower and the Agent that the circumstances giving rise to such suspension no longer exist, the obligation of such Bank to make Euro-Dollar Loans shall be suspended. Before giving any notice to the Agent pursuant to this Section, such Bank shall designate a different Euro-Dollar Lending Office if such designation will avoid the need for giving such notice and will not, in the judgment of such Bank, be otherwise disadvantageous to such Bank. If such Bank shall determine that it may not lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans to maturity and shall so specify in such notice, the Borrower shall immediately prepay in full the then outstanding principal amount of each such Euro-Dollar Loan, together with accrued interest thereon. Concurrently with prepaying each such Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in an equal principal amount from such Bank (on which interest and principal shall be payable contemporaneously with the related Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base Rate Loan. SECTION 8.03. Increased Cost and Reduced Return. (a) If after the date hereof, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank (or its Applicable Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency: (i) shall subject any Bank (or its Applicable Lending Office) to any tax, duty or other charge with respect to its Fixed Rate Loans, its Note or its obligation to make Fixed Rate Loans, or shall change the basis of taxation of payments to any Bank (or its Applicable Lending Office) of the principal of or interest on its Fixed Rate Loans or any other amounts due under this Agreement in respect of its Fixed Rate Loans or its obligation to make Fixed Rate Loans (except for changes in the rate of tax on the overall net income of such Bank or its Applicable Lending Office imposed by the jurisdiction in which such Bank's principal executive office or Applicable Lending Office is located); or (ii) shall impose, modify or deem applicable any reserve (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System, but excluding (A) with respect to any CD Loan any such requirement included in an applicable Domestic Reserve Percentage and (B) with respect to any Euro-Dollar Loan any such requirement included in an applicable Euro-Dollar Reserve Percentage), special deposit, insurance assessment (excluding, with respect to any CD Loan, any such requirement reflected in an applicable Assessment Rate) or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Bank (or its Applicable Lending Office) or shall impose on any Bank (or its Applicable Lending Office) or on the United States market for certificates of deposit or the London interbank market any other condition affecting its Fixed Rate Loans, its Note or its obligation to make Fixed Rate Loans; and the result of any of the foregoing is to increase the cost to such Bank (or its Applicable Lending Office) of making or maintaining any Fixed Rate Loan, or to reduce the amount of any sum received or receivable by such Bank (or its Applicable Lending Office) under this Agreement or under its Note with respect thereto, by an amount deemed by such Bank to be material, then, within 15 days after demand by such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank for such increased cost or reduction. (b) If any Bank shall have determined that, after the date hereof, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change in any such law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on capital of such Bank (or its Parent) as a consequence of such Bank's obligations hereunder to a level below that which such Bank (or its Parent) could have achieved but for such adoption, change, request or directive (taking into consideration its policies with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time, within 15 days after demand by such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank (or its Parent) for such reduction. (c) Each Bank will promptly notify the Borrower and the Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Bank to compensation pursuant to this Section and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank claiming compensation under this Section and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, such Bank may use any reasonable averaging and attribution methods. SECTION 8.04. Base Rate Loans Substituted for Affected Fixed Rate Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation under Section 8.03(a) and the Borrower shall, by at least five Euro-Dollar Business Days' prior notice to such Bank through the Agent, have elected that the provisions of this Section shall apply to such Bank, then, unless and until such Bank notifies the Borrower that the circumstances giving rise to such suspension or demand for compensation no longer exist: (a) all Loans which would otherwise be made by such Bank as CD Loans or Euro-Dollar Loans, as the case may be, shall be made instead as Base Rate Loans (on which interest and principal shall be payable contemporaneously with the related Fixed Rate Loans of the other Banks), and (b) after each of its CD Loans or Euro-Dollar Loans, as the case may be, has been repaid, all payments of principal which would otherwise be applied to repay such Fixed Rate Loans shall be applied to repay its Base Rate Loans instead. ARTICLE IX MISCELLANEOUS SECTION 9.01. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including bank wire, telex, facsimile transmission or similar writing) and shall be given to such party: (x) in the case of the Borrower or the Agent, at its address or telex or facsimile number set forth on the signature pages hereof, (y) in the case of any Bank, at its address or telex or facsimile number set forth in its Administrative Questionnaire or (z) in the case of any party, such other address or telex or facsimile number as such party may hereafter specify for the purpose by notice to the Agent and the Borrower. Each such notice, request or other communication shall be effective (i) if given by telex, when such telex is transmitted to the telex number specified in this Section and the appropriate answerback is received, (ii) if given by facsimile transmission, when such facsimile is transmitted to the facsimile number specified in this Section and receipt of such facsimile is confirmed, either orally or in writing, by the party receiving such transmission, (iii) if given by certified mail, 72 hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iv) if given by any other means, when delivered at the address specified in this Section; provided that notices to the Agent under Article II or Article VIII shall not be effective until received. SECTION 9.02. No Waivers. No failure or delay by the Agent or any Bank in exercising any right, power or privilege under any Financing Document shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies therein provided shall be cumulative and not exclusive of any rights or remedies provided by law. SECTION 9.03. Expenses; Documentary Taxes; Indemnification. (a) The Borrower shall pay (i) all out-of-pocket expenses of the Agent, including fees and disbursements of special counsel for the Agent, in connection with the preparation of the Financing Documents, any waiver or consent under any Financing Document, or any amendment of any Financing Document or any Default or alleged Default and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by the Agent and each Bank, including fees and disbursements of counsel, in connection with such Event of Default and collection, bankruptcy, insolvency and other enforcement proceedings resulting therefrom. The Borrower shall indemnify each Bank against any transfer taxes, documentary taxes, assessments or charges made by any governmental authority by reason of the execution and delivery of any Financing Document. (b) The Borrower agrees to indemnify the Agent and each Bank, their respective affiliates and the respective directors, officers, agents and employees of the foregoing (each an "Indemnitee") and hold each Indemnitee harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel, which may be incurred by any Indemnitee in connection with any investigative, administrative or judicial proceeding (whether or not such Indemnitee shall be designated a party thereto) brought or threatened relating to or arising out of this Agreement or any actual or proposed use of proceeds of Loans hereunder; provided that no Indemnitee shall have the right to be indemnified hereunder for such Indemnitee's own gross negligence or willful misconduct as determined by a court of competent jurisdiction. SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if it shall, by exercising any right of set-off or counterclaim or otherwise, receive payment of a proportion of the aggregate amount due with respect to any Loan or Reimbursement Obligation owed to it which is greater than the proportion received by any other Bank in respect of the aggregate amount due with respect to any Loan or Reimbursement Obligation owed to such other Bank, the Bank receiving such proportionately greater payment shall purchase such participations in the Loans and Reimbursement Obligations owed to the other Banks, and such other adjustments shall be made, as may be required so that all such payments with respect to the Loans and Reimbursement Obligations owed to the Banks shall be shared by the Banks pro rata; provided that nothing in this Section shall impair the right of any Bank to exercise any right of set-off or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of the Borrower other than its indebtedness hereunder. The Borrower agrees, to the fullest extent it may effectively do so under applicable law, that any holder of a participation in a Loan or Reimbursement Obligation, whether or not acquired pursuant to the foregoing arrangements, may exercise rights of set-off or counterclaim and other rights with respect to such participation as fully as if such holder of a participation were a direct creditor of the Borrower in the amount of such participation. SECTION 9.05. Amendments and Waivers. Any provision of this Agreement or the Notes may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrower and the Required Banks (and, if the rights or duties of the Agent or the LC Bank are affected thereby, by it); provided that no such amendment or waiver shall, unless signed by all the Banks, (i) increase or decrease the Commitment of any Bank (except for a ratable decrease in the Commitments of all Banks) or subject any Bank to any additional obligation, (ii) reduce the principal of or rate of interest on any Loan or any fees hereunder, (iii) postpone the date fixed for any payment of principal of or interest on any Loan, Reimbursement Obligation or any fees hereunder or for termination of any Commitment, (iv) amend or waive any of the provisions of Article VIII or (v) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Notes, or the number of Banks, which shall be required for the Banks or any of them to take any action under this Section or any other provision of the Financing Documents. SECTION 9.06. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Borrower may not assign or otherwise transfer any of its rights under this Agreement without the prior written consent of all Banks. (b) Any Bank may at any time grant to one or more banks or other institutions (each a "Participant") participating interests in its Commitment or any or all of its Loans. In the event of any such grant by a Bank of a participating interest to a Participant, whether or not upon notice to the Borrower and the Agent, such Bank shall remain responsible for the performance of its obligations hereunder, and the Borrower and the Agent shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement. Any agreement pursuant to which any Bank may grant such a participating interest shall provide that such Bank shall retain the sole right and responsibility to enforce the obligations of the Borrower hereunder including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement; provided that such participation agreement may provide that such Bank will not agree to any modification, amendment or waiver of this Agreement described in clause (i), (ii) or (iii) of Section 9.05 without the consent of the Participant. The Borrower agrees that each Participant shall, to the extent provided in its participation agreement, be entitled to the benefits of Article VIII with respect to its participating interest. An assignment or other transfer which is not permitted by subsection (c) or (d) below shall be given effect for purposes of this Agreement only to the extent of a participating interest granted in accordance with this subsection (b). (c) Any Bank may at any time assign to one or more banks or other institutions (each an "Assignee") all, or a proportionate part of all, of its rights and obligations under this Agreement and the Notes, and such Assignee shall assume such rights and obligations, pursuant to an Assignment and Assumption Agreement in substantially the form of Exhibit E hereto executed by such Assignee and such transferor Bank, with (and subject to) the subscribed consent of the Borrower (which shall not be unreasonably withheld), the LC Bank and the Agent; provided that if an Assignee is an affiliate of such transferor Bank, no such consent shall be required. Upon execution and delivery of such instrument and payment by such Assignee to such transferor Bank of an amount equal to the purchase price agreed between such transferor Bank and such Assignee, such Assignee shall be a Bank party to this Agreement and shall have all the rights and obligations of a Bank with a Commitment as set forth in such instrument of assumption, and the transferor Bank shall be released from its obligations hereunder to a corresponding extent, and no further consent or action by any party shall be required. Upon the consummation of any assignment pursuant to this subsection (c), the transferor Bank, the Agent and the Borrower shall make appropriate arrangements so that, if required, a new Note is issued to the Assignee. In connection with any such assignment, the transferor Bank shall pay to the Agent an administrative fee for processing such assignment in the amount of $2,500. (d) Any Bank may at any time assign all or any portion of its rights under this Agreement and its Note to a Federal Reserve Bank. No such assignment shall release the transferor Bank from its obligations hereunder. (e) No Assignee, Participant or other transferee of any Bank's rights shall be entitled to receive any greater payment under Section 8.03 than such Bank would have been entitled to receive with respect to the rights transferred, unless such transfer is made with the Borrower's prior written consent or by reason of the provisions of Section 8.02 or 8.03 requiring such Bank to designate a different Applicable Lending Office under certain circumstances or at a time when the circumstances giving rise to such greater payment did not exist. SECTION 9.07. Collateral. Each of the Banks represents to the Agent and each of the other Banks that it in good faith is not relying upon any "margin stock" (as defined in Regulation U) as collateral in the extension or maintenance of the credit provided for in this Agreement. SECTION 9.08. Governing Law; Submission to Jurisdiction. This Agreement and each Note shall be construed in accordance with and governed by the law of the State of New York. The Borrower hereby submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Borrower irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. SECTION 9.09. Counterparts; Integration. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof. SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. PERINI CORPORATION By /s/ James M. Markert ------------------------- Title: Sr. Vice President By /s/ Susan C. Mellace ------------------------- Title: Treasurer 73 Mount Wayte Avenue Framingham, MA 01701 Facsimile number: (508) 628-2960 Commitments $15,000,000 MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Caroline R. Shapiro --------------------------- Title: Vice President Morgan Guaranty Trust Company of New York 60 Wall Street New York, New York 10260 Telex number: 177615 MGT UT Facsimile number: (212) 648-5018 $15,000,000 BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION By /s/ Richard J. Cerf ----------------------------- Title: Vice President Bank of America National Trust & Savings Association 555 California Street, 41st Floor San Francisco, CA 94104 Facsimile number: (415) 622-4585 $15,000,000 SHAWMUT BANK, N.A. By /s/ Robert Lord ----------------------------- Title: Vice President Shawmut Bank, N.A. One Federal Street Boston, MA 02211 Facsimile number: (617) 292-2619 $15,000,000 FLEET BANK OF MASSACHUSETTS, N.A. By /s/ Jeffery Bauer ----------------------------- Title: Vice President Fleet Bank of Massachusetts, N.A. 75 State Street MA BO F04H Boston, MA 02109-1810 Facsimile number: (617) 346-1833 $10,000,000 BAYBANK BOSTON, N.A., as Bank and as LC Bank By /s/ Timothy M. Laurion ------------------------------ Title: Vice President BayBank Boston, N.A. 175 Federal Street, 10th Floor Boston, MA 02110 Facsimile number: (617) 556-6594 Total Commitments $70,000,000 =========== MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent By /s/ Caroline R. Shapiro ------------------------------ Title: Vice President 60 Wall Street New York, New York 10260 Attn: Robert Bottamedi Telex number: 177615 MGT UT Facsimile number: (212) 648-5023 SCHEDULE I DEBT OF PERINI LAND AND DEVELOPMENT ("PL&D") OUTSTANDING AT DECEMBER 31, 1992 ($000'S) Loans: Metrocentre - Barnett $ 3,109 Metrocentre - Boose & Gluckstern 200 Insurance 687 Perini Central (VNB) 708 Capital Plaza (Pioneer Dvlpt.) 811 Sabino Springs (Nickerson) 433 Sabino Springs (Svgs. of America/Tibor Title) 255 Sabino Springs (B of A) 3,330 Southwest Villages 2,195 Marlboro (IDB) 3,145 RWCC (Minn. Mutual) 4,953 Raynham Exec. Bldg. (Durfee Attleboro) 1,200 Raynham Exec. Bldg. (BayBank S/E) 1,188 Easton (Dedham Svgs.) 195 Easton Ind. Park (Citicorp) 3,350 TOTAL $25,759 PL&D Guarantees: SCA (lease guarantees) $ 2,339 Glenco/Squaw (guarantee) (B of A loan) 10,000 Lake Ridge (B of A loan) 4,594 Rincon II Comm loan 3,500 Rincon T.I. Loan (Sumitomo) 774 Oaks at Buckhead (Citicorp loan) 9,849 $31,056 Letters of Credit: (as Credit Support) Rincon Center I (B of A) $ 3,500 II (B of A) 2,750 Squaw Creek (Bay Bank) 2,200 $ 8,450 TOTAL $65,265 SCHEDULE II POTENTIAL PL&D GUARANTEES OF JOINT VENTURE OBLIGATIONS ($000) Squaw Creek PL&D subject to possible future increase in $ 2,000 letter of credit support under Bank of America Loan. Rincon Center PL&D may be required to undertake additional $ 8,000 guarantees under Citicorp loan in forthcoming negotiations. Guarantees would not exceed forecast loan amortization over 1993-1998. Oaks at Buckhead PL&D has guaranteed up to $4 million of $ 4,000 individual mortgages for condominium purchases if Citicorp initiates them and if certain repayment milestones of the mortgages are not met (Agreement signed in 1993 - not included in 12/31/92 PL&D funded debt). Total $14,000 SCHEDULE III AETNA LETTERS OF CREDIT 1. Letter of Credit No. SB02500/2 issued by BayBank in favor of Aetna Life and Casualty Co. 2. Letter of Credit No. S-865466 issued by Morgan Guaranty Trust Company of New York in favor of Aetna Life and Casualty Co. 3. Letter of Credit No. 108808 issued by Bank of America National Trust & Savings Association in favor of Aetna Casualty & Surety Company. SCHEDULE IV EXISTING LIENS (All Amounts in Thousands) IRB 1978 1,254 Framingham H.O. Bldg IRB 1985 4,000 Framingham H.O. Bldg Rincon (CA) 6,250 FL Land Sasson Land 1,020 PBC West Office Bldg 939 Total 13,463 EXHIBIT A NOTE New York, New York , 19 For value received, Perini Corporation, a Massachusetts corporation (the "Borrower"), promises to pay to the order of (the "Bank"), for the account of its Applicable Lending Office, the unpaid principal amount of each Loan made by the Bank to the Borrower pursuant to the Credit Agreement referred to below on the last day of the Interest Period relating to such Loan. The Borrower promises to pay interest on the unpaid principal amount of each such Loan on the dates and at the rate or rates provided for in the Credit Agreement. All such payments of principal and interest shall be made in lawful money of the United States in Federal or other immediately available funds at the office of Morgan Guaranty Trust Company of New York, 60 Wall Street, New York, New York. All Loans made by the Bank, the respective types and maturities thereof and all repayments of the principal thereof shall be recorded by the Bank and, if the Bank so elects in connection with any transfer or enforcement of this note, appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding may be endorsed by the Bank on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof; provided that the failure of the Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Credit Agreement. This note is one of the Notes referred to in the Credit Agreement dated as of May 10, 1993 among the Borrower, the banks listed on the signature pages thereof, and Morgan Guaranty Trust Company of New York, as Agent (as the same may be amended from time to time, the "Credit Agreement"). Terms defined in the Credit Agreement are used herein with the same meanings. Reference is made to the Credit Agreement for provisions for the prepayment hereof and the acceleration of the maturity hereof. Payment of principal and interest on this Note is unconditionally guaranteed, subject to the limitations contained in the Subsidiary Guaranty Agreement, by the Subsidiary Guarantors pursuant to the Subsidiary Guaranty Agreement. PERINI CORPORATION By________________________ Title: By________________________ Title: Note (cont'd) LOANS AND PAYMENTS OF PRINCIPAL __________________________________________________________________ Amount of Amount of Type of Principal Maturity Notation Date Loan Loan Repaid Date Made By __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ EXHIBIT B-1 OPINION OF GENERAL COUNSEL OF THE BORROWER [Effective Date] To the Banks and the Agent Referred to Below c/o Morgan Guaranty Trust Company of New York, as Agent 60 Wall Street New York, New York 10260 Dear Sirs: I am General Counsel of Perini Corporation (the "Borrower") and have acted as such in connection with the Credit Agreement (the "Credit Agreement") dated as of May 10, 1993 among the Borrower, the banks listed on the signature pages thereof, and Morgan Guaranty Trust Company of New York, as Agent. Terms defined in the Credit Agreement are used herein as therein defined. This opinion is being rendered to you pursuant to Section 3.01(d) of the Credit Agreement. I have examined originals or copies, certified or otherwise identified to my satisfaction, of the Financing Documents and of such other documents, corporate records, certificates of public officials and officers of the Borrower and its Subsidiaries and other instruments and have conducted such other investigations of fact and law as I have deemed necessary or advisable for purposes of this opinion. Upon the basis of the foregoing, I am of the opinion that: 1. The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of the Commonwealth of Massachusetts, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. 2. The execution, delivery and performance by each Obligor of the Financing Documents to which it is a party are within its corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of such Obligor or of any agreement, judgment, injunction, order, decree or other instrument binding upon such Obligor or any of its Subsidiaries or result in the creation or imposition of any Lien on any asset of such Obligor or any of its Subsidiaries. 3. The choice of New York law to govern the Credit Agreement, the Notes and the Subsidiary Guaranty Agreement is a valid and effective choice of law under the laws of the State of Massachusetts. 4. Except as set forth in the Borrower's 1992 Form 10-K, there is no action, suit or proceeding pending against, or to the best of my knowledge threatened against or affecting, the Borrower or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business, consolidated financial position or consolidated results of operations of the Borrower and its Consolidated Subsidiaries, considered as a whole or which in any manner draws into question the validity of any Financing Document. 5. Each of the Borrower's Material Subsidiaries is a corporation validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. Very truly yours, EXHIBIT B-2 OPINION OF NEW YORK COUNSEL FOR THE BORROWER [Effective Date] To the Banks and the Agent Referred to Below c/o Morgan Guaranty Trust Company of New York, as Agent 60 Wall Street New York, New York 10260 Dear Sirs: We have acted as counsel for Perini Corporation (the "Borrower") in connection with the Credit Agreement (the "Credit Agreement") dated as of May 10, 1993 among the Borrower, the banks listed on the signature pages thereof, and Morgan Guaranty Trust Company of New York, as Agent. Terms defined in the Credit Agreement are used herein as therein defined. This opinion is being rendered to you pursuant to Section 3.01(d) of the Credit Agreement. We have examined originals or copies, certified or otherwise identified to our satisfaction, of the Financing Documents and of such other documents, corporate records, certificates of public officials and officers of the Borrower and its Subsidiaries and other instruments and have conducted such other investigations of fact and law as we have deemed necessary or advisable for purposes of this opinion. Upon the basis of the foregoing, we are of the opinion that: 1. The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of the Commonwealth of Massachusetts, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. 2. The execution, delivery and performance by each Obligor of the Financing Documents to which it is a party are within its corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of such Obligor or of any agreement, judgment, injunction, order, decree or other instrument binding upon such Obligor or any of its Subsidiaries or result in the creation or imposition of any Lien on any asset of such Obligor or any of its Subsidiaries. 3. The Credit Agreement constitutes a valid and binding agreement of the Borrower and the Notes constitute valid and binding obligations of the Borrower in each case enforceable in accordance with their respective terms. The Subsidiary Guaranty Agreement constitutes a valid and binding agreement of each Obligor enforceable against each Obligor in accordance with its terms. 4. Except as set forth in the Borrower's 1992 Form 10-K, there is no action, suit or proceeding pending against, or to the best of our knowledge threatened against or affecting, the Borrower or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business, consolidated financial position or consolidated results of operations of the Borrower and its Consolidated Subsidiaries, considered as a whole or which in any manner draws into question the validity of any Financing Document. 5. Each of the Borrower's Material Subsidiaries is a corporation validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. The opinion expressed in Paragraph 3 above is subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors' rights generally and subject to general principles of equity applicable to any enforceability or the granting of the remedy of specific performance now and hereafter in effect. The members of this firm are not members of the Bar of any state other than the State of New York. In giving the foregoing opinion we have relied, without independent investigation, as to all matters governed by the laws of Massachusetts, upon the opinion of Robert E. Higgins, General Counsel of the Borrower, dated May __, 1993, a copy of which has been delivered to you. Very truly yours, EXHIBIT C OPINION OF DAVIS POLK & WARDWELL, SPECIAL COUNSEL FOR THE AGENT [Effective Date] To the Banks and the Agent Referred to Below c/o Morgan Guaranty Trust Company of New York, as Agent 60 Wall Street New York, New York 10260 Dear Sirs: We have participated in the preparation of the Credit Agreement (the "Credit Agreement") dated as of May 10, 1993 among Perini Corporation, a Massachusetts corporation (the "Borrower"), the banks listed on the signature pages thereof (the "Banks") and Morgan Guaranty Trust Company of New York, as Agent (the "Agent"), and have acted as special counsel for the Agent for the purpose of rendering this opinion pursuant to Section 3.01(e) of the Credit Agreement. Terms defined in the Credit Agreement are used herein as therein defined except that, for purposes of this opinion, "Obligors" means the Borrower, Perini Land and Development, Perini International, Perini Building Company and R. E. Dailey & Co. We have examined originals or copies, certified or otherwise identified to our satisfaction, of the Financing Documents and of such other documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as we have deemed necessary or advisable for purposes of this opinion. Upon the basis of the foregoing, we are of the opinion that: 1. The execution, delivery and performance by the Borrower of the Credit Agreement and the Notes are within the Borrower's corporate powers and have been duly authorized by all necessary corporate action. 2. The Credit Agreement constitutes a valid and binding agreement of the Borrower and the Notes constitute valid and binding obligations of the Borrower. 3. Assuming that the execution, delivery and performance by each Obligor other than the Borrower of the Subsidiary Guaranty Agreement are within such Obligor's corporate powers and have been duly authorized by all necessary corporate action then the Subsidiary Guaranty Agreement constitutes a valid and binding agreement of each Obligor. We are members of the Bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York, the federal laws of the United States of America and the General Corporation Law of the State of Delaware. Insofar as the foregoing opinion involves matters governed by the laws of Massachusetts, we have relied, without independent investigation, upon the opinion of , General Counsel of the Borrower, dated May , 1993, a copy of which has been delivered to you. In giving the foregoing opinion, we express no opinion as to the effect (if any) of any law of any jurisdiction (except the State of New York) in which any Bank is located which limits the rate of interest that such Bank may charge or collect. We express no opinion as to the applicability (and, if applicable, the effect) of Section 548 of the United States Bankruptcy Code or any comparable provision of state law to the questions addressed above or the conclusions expressed with respect thereto. This opinion is rendered solely to you in connection with the above matter. This opinion may not be relied upon by you for any other purpose or relied upon by or furnished to any other person without our prior written consent. Very truly yours, EXHIBIT D SUBSIDIARY GUARANTY AGREEMENT dated as of May 10, 1993 among Perini Corporation The Subsidiary Guarantors Referred to Herein and Morgan Guaranty Trust Company of New York, as Agent TABLE OF CONTENTS* Page ARTICLE I DEFINITIONS 1.01 Definitions................................ 2 ARTICLE II GUARANTIES 2.01 The Guaranties............................. 2 2.02 Guaranties Unconditional................... 3 2.03 Limit of Liability......................... 4 2.04 Discharge; Reinstatement in Certain Circumstances..................... 4 2.05 Waiver..................................... 4 2.06 Subrogation and Contribution .............. 4 2.07 Stay of Acceleration....................... 4 ARTICLE III COVENANT OF THE BORROWER 3.01 Additional Subsidiary Guarantors........... 5 ARTICLE IV MISCELLANEOUS 4.01 Notices.................................... 5 4.02 No Waiver.................................. 5 4.03 Amendments and Waivers..................... 6 4.04 Governing Law; Submission to Jurisdiction; Waiver of a Jury Trial............................... 6 4.05 Successors and Assigns..................... 6 4.06 Counterparts; Effectiveness................ 6 [FN] - ------------------ *The Table of Contents is not a part of this Agreement. SUBSIDIARY GUARANTY AGREEMENT AGREEMENT dated as of May 10, 1993 among Perini Corporation, a Massachusetts corporation (the "Borrower"), each of the Subsidiary Guarantors listed on the signature pages hereof under the caption "Subsidiary Guarantors" and each Person that shall, at any time after the date hereof, become a "Subsidiary Guarantor" hereunder (collectively, the "Subsidiary Guarantors") and Morgan Guaranty Trust Company of New York, as Agent. WHEREAS, the Borrower has entered into a Credit Agreement (as the same may be amended from time to time, the "Credit Agreement") dated as of May 10, 1993 among the Borrower, the banks listed on the signature pages thereof, and Morgan Guaranty Trust Company of New York, as Agent, pursuant to which the Borrower is entitled, subject to certain conditions, to borrow up to $70,000,000; WHEREAS, the Credit Agreement provides, among other things, that one condition to its effectiveness is the execution and delivery by the Borrower and the Subsidiary Guarantors (the "Obligors") of a subsidiary guaranty substantially in the form of this Subsidiary Guaranty; and WHEREAS, in conjunction with the transactions contemplated by the Credit Agreement and in consideration of the financial and other support that the Borrower has provided, and such financial and other support as the Borrower may in the future provide, to the Subsidiary Guarantors, and in order to induce the Banks and the Agent to enter into the Credit Agreement and to make Loans and issue Letters of Credit thereunder, the Subsidiary Guarantors are willing to guaranty the obligations of the Borrower under the Credit Agreement and the Notes; NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS SECTION 1.01. Definitions. Terms defined in the Credit Agreement and not otherwise defined herein are used herein as therein defined. In addition the following term, as used herein, has the following meaning: "Guarantied Obligations" means (i) all obligations of the Borrower in respect of principal of and interest on the Loans and the Notes, (ii) all Reimbursement Obligations (including interest thereon) and other obligations of the Borrower in respect of Letters of Credit, (iii) all other amounts payable by the Borrower under the Credit Agreement or the Notes and (iv) all renewals or extensions of the foregoing, in each case whether now outstanding or hereafter arising. The Guarantied Obligations shall include, without limitation, any interest, costs, fees and expenses which accrue on or with respect to any of the foregoing, whether before or after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of any one or more than one of the Borrower and the Subsidiary Guarantors, and any such interest, costs, fees and expenses that would have accrued thereon or with respect thereto but for the commencement of such case, proceeding or other action. ARTICLE II GUARANTIES SECTION 2.01. The Guaranties. Subject to Section 2.03, the Subsidiary Guarantors hereby jointly, severally, unconditionally and irrevocably guaranty to the Banks and the Agent and to each of them, the due and punctual payment of all Guarantied Obligations as and when the same shall become due and payable, whether at maturity, by declaration or otherwise, according to the terms thereof. In case of failure by the Borrower punctually to pay the indebtedness guarantied hereby, the Subsidiary Guarantors, subject to Section 2.03, hereby jointly, severally and unconditionally agree to cause such payment to be made punctually as and when the same shall become due and payable, whether at maturity or by declaration or otherwise, and as if such payment were made by the Borrower. SECTION 2.02. Guaranties Unconditional. The obligations of each Subsidiary Guarantor under this Article II shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by: (a) any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of any other Obligor under any Financing Document, by operation of law or otherwise; (b) any modification or amendment of or supplement to any other Financing Document; (c) any modification, amendment, waiver, release, non-perfection or invalidity of any direct or indirect security, or of any guaranty or other liability of any third party, for any obligation of any other Obligor under any Financing Document; (d) any change in the corporate existence, structure or ownership of any other Obligor, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting any other Obligor or its assets or any resulting release or discharge of any obligation of any other Obligor contained in any Financing Document; (e) the existence of any claim, set-off or other rights which any Subsidiary Guarantor may have at any time against any other Obligor, the Agent, the LC Bank, any Bank or any other Person, whether or not arising in connection with the Financing Documents; provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim; (f) any invalidity or unenforceability relating to or against any other Obligor for any reason of any Financing Document, or any provision of applicable law or regulation purporting to prohibit the payment by any other Obligor of the principal of or interest on any Note or any Reimbursement Obligation or any other amount payable by any other Obligor under any Financing Document; or (g) any other act or omission to act or delay of any kind by any other Obligor, the Agent, the LC Bank, any Bank or any other Person or any other circumstance whatsoever that might, but for the provisions of this paragraph, constitute a legal or equitable discharge of the obligations of any Subsidiary Guarantor under this Article II. SECTION 2.03. Limit of Liability. Each Subsidiary Guarantor shall be liable under this Agreement only for amounts aggregating up to the largest amount that would not render its obligations hereunder subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable provisions of any applicable state law. SECTION 2.04. Discharge; Reinstatement in Certain Circumstances. Each Subsidiary Guarantor's obligations under this Article II shall remain in full force and effect until the Commitments are terminated and the Letter of Credit Liabilities are reduced to zero, and the principal of and interest on the Notes and all Reimbursement Obligations and all other amounts payable by the Borrower under the Financing Documents shall have been paid in full. If at any time any payment of the principal of or interest on any Note or any Reimbursement Obligation or any other amount payable by the Borrower under any Financing Document is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of any other Obligor or otherwise, each Subsidiary Guarantor's obligations under this Article II with respect to such payment shall be reinstated at such time as though such payment had become due but had not been made at such time. SECTION 2.05. Waiver. Each Subsidiary Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against any other Obligor or any other Person. SECTION 2.06. Subrogation and Contribution. Each Subsidiary Guarantor irrevocably waives any and all rights to which it may be entitled, by operation of law or otherwise, upon making any payment hereunder (i) to be subrogated to the rights of the payee against the Borrower with respect to such payment or otherwise to be reimbursed, indemnified or exonerated by any other Obligor in respect thereof or (ii) to receive any payment, in the nature of contribution or for any other reason, from any other Obligor with respect to such payment. SECTION 2.07. Stay of Acceleration. If acceleration of the time for payment of any amount payable by the Borrower under the Financing Documents is stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all such amounts otherwise subject to acceleration under the terms of the Financing Documents shall nonetheless be payable by each Subsidiary Guarantor hereunder forthwith on demand by the Agent made at the request of the Required Banks. ARTICLE III COVENANT OF THE BORROWER SECTION 3.01. Additional Subsidiary Guarantors. The Borrower agrees, within 10 days of each request therefor by the Required Banks, to cause any Subsidiary which is not at the time a Subsidiary Guarantor hereunder to become a Subsidiary Guarantor hereunder. ARTICLE IV MISCELLANEOUS SECTION 4.01. Notices. Unless otherwise specified herein, all notices, requests and other communications to any party hereunder shall be in writing (including bank wire, telex, facsimile transmission or similar writing) and shall be given to such party at its address or telex or facsimile number set forth on the signature pages hereof (or, in the case of any Subsidiary Guarantor as to which no such address or telex or facsimile number is so set forth, to it at the address or telex or facsimile number of the Borrower set forth on the signature pages hereof) or such other address or telex or facsimile number as such party may hereafter specify for the purpose by notice to the Agent. Each such notice, request or other communication shall be effective (i) if given by telex, when such telex is transmitted to the telex number specified in or pursuant to this Section 4.01 and the appropriate answerback is received, (ii) if given by facsimile transmission, when such facsimile is transmitted to the facsimile transmission number specified in or pursuant to this Section 4.01 and telephonic confirmation of receipt thereof is received, (iii) if given by mail, 72 hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iv) if given by any other means, when delivered at the address specified in this Section 4.01. SECTION 4.02. No Waiver. No failure or delay by the Agent or any Bank in exercising any right, power or privilege under this Agreement or any other Financing Document shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein and therein provided shall be cumulative and not exclusive of any rights or remedies provided by law. SECTION 4.03. Amendments and Waivers. Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and is signed by the Borrower, each Subsidiary Guarantor and the Agent with the prior written consent of the Required Banks under the Credit Agreement. SECTION 4.04. Governing Law; Submission to Jurisdiction; Waiver of a Jury Trial. This Agreement shall be construed in accordance with and governed by the law of the State of New York. Each of the Subsidiary Guarantors hereby agrees to be bound by each provision of the Credit Agreement which purports to bind all Obligors, including Sections 9.08 and 9.10, to the same extent as if it were a signatory party thereto. SECTION 4.05. Successors and Assigns. This Agreement is for the benefit of the Banks and the Agent and their respective successors and assigns and in the event of an assignment of the Loans, the Reimbursement Obligations, the Notes or other amounts payable under the Financing Documents, the rights hereunder, to the extent applicable to the indebtedness so assigned, shall be transferred with such indebtedness. All the provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. SECTION 4.06. Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, and all of which taken together shall constitute a single instrument, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when the Agent shall have received a counterpart hereof signed by the Borrower and one or more of the Subsidiary Guarantors and when the Credit Agreement shall become effective in accordance with its terms. Thereafter, upon execution and delivery of a counterpart of this Agreement on behalf of any other Subsidiary Guarantor, this Agreement shall become effective with respect to such Subsidiary Guarantor as of the date of such delivery. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date first above written. PERINI CORPORATION By /s/ James M. Markert -------------------------- Title: Sr. Vice President By /s/ Susan C. Mellace -------------------------- Title: Treasurer 73 Mount Wayte Avenue Framingham, MA 01701 Telex Number: (508) 628-2960 SUBSIDIARY GUARANTORS PERINI BUILDING COMPANY, INC. By /s/ Barry R. Blake --------------------------- Title: Vice President, Controller By /s/ Kenneth A. Isaacs --------------------------- Title: Sr. Vice President 73 Mount Wayte Avenue Framingham, MA 01701 Facsimile number: (508) 628-2960 PERINI INTERNATIONAL CORPORATION By /s/ Joseph A. Haley --------------------------- Title: President By /s/ James M. Markert --------------------------- Title: Treasurer 73 Mount Wayte Avenue Framingham, MA 01701 Facsimile number: (508) 628-2960 PERINI LAND AND DEVELOPMENT COMPANY By /s/ John H. Schwarz ----------------------------- Title: Chief Executive Officer By /s/ Bart W. Perini Title: President and Chief Operating Officer 73 Mount Wayte Avenue Framingham, MA 01701 Facsimile number: (508) 628-2960 R. E. DAILEY & CO. By /s/ Victor E. Cestar ----------------------------- Title: President and Chief Operating Officer By /s/ Patrick D. Monea ----------------------------- Title: Sr. Vice President, Finance and Secretary 2000 Town Center, Suite 1600 Southfield, MI 40875 Facsimile number: (313) 352-6280 MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent By /s/ Caroline R. Shapiro ----------------------------- Title: Vice President EXHIBIT E ASSIGNMENT AND ASSUMPTION AGREEMENT AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the "Assignor"), [ASSIGNEE] (the "Assignee"), PERINI CORPORATION (the "Borrower"), , as LC Bank (the "LC Bank") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). W I T N E S S E T H WHEREAS, this Assignment and Assumption Agreement (the "Agreement") relates to the Credit Agreement dated as of May 10, 1993 among the Borrower, the Assignor and the other Banks party thereto and the Agent (the "Credit Agreement"); WHEREAS, as provided under the Credit Agreement, the Assignor has a Commitment to make Loans to the Borrower and to participate in Letters of Credit issued for the benefit of the Borrower and its Subsidiaries, in an amount equal to $ ; WHEREAS, Loans made to the Borrower by the Assignor under the Credit Agreement are outstanding on the date hereof, and participations by the Assignor in Letters of Credit issued by the LC Bank for the benefit of the Borrower and its Subsidiaries under the Credit Agreement are outstanding on the date hereof, in the amounts of $ and $ , respectively; and WHEREAS, the Assignor proposes to assign to the Assignee all of the rights of the Assignor under the Credit Agreement in respect of a portion of its Commitment in an amount equal to $__________, together with a corresponding portion of its outstanding Loans and its participations in outstanding Letters of Credit (the "Assigned Amount") and the Assignee proposes to accept assignment of such rights and assume the corresponding obligations from the Assignor on such terms; NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the parties hereto agree as follows: SECTION 1. Definitions. All capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Credit Agreement. SECTION 2. Assignment. The Assignor hereby assigns and sells to the Assignee all of the rights of the Assignor under the Credit Agreement to the extent of the Assigned Amount, and the Assignee hereby accepts such assignment from the Assignor and assumes all of the obligations of the Assignor under the Credit Agreement to the extent of the Assigned Amount. Upon the execution and delivery hereof by the Assignor, the Assignee, the Agent and the LC Bank and the payment of the amounts specified in Section 3 required to be paid on the date hereof (i) the Assignee shall, as of the date hereof, succeed to the rights and be obligated to perform the obligations of a Bank under the Credit Agreement with a Commitment in an amount equal to the Assigned Amount, holding Loans and participations in Letters of Credit in amounts corresponding to the Assigned Amount, and (ii) the Commitment, Loans and Letter of Credit participations of the Assignor shall, as of the date hereof, be reduced by like amounts and the Assignor released from its obligations under the Credit Agreement to the extent such obligations have been assumed by the Assignee. The assignment provided for herein shall be without recourse to the Assignor. SECTION 3. Payments. As consideration for the assignment and sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the date hereof in Federal funds the amount heretofore agreed between them. It is understood that commitment and other fees and Letter of Credit commissions accrued under the Credit Agreement to the date hereof are for the account of the Assignor and such fees and commissions accruing from and including the date hereof are for the account of the Assignee. Each of the Assignor and the Assignee hereby agrees that if it receives any amount under the Credit Agreement which is for the account of the other party hereto, it shall receive the same for the account of such other party to the extent of such other party's interest therein and shall promptly pay the same to such other party. SECTION 4. Consent of the Borrower, the Agent and the LC Bank. This Agreement is conditioned upon the consent of the Borrower, the LC Bank and the Agent pursuant to Section 9.06(c) of the Credit Agreement. The execution of this Agreement by the Borrower, the LC Bank and the Agent is evidence of such consent. Pursuant to Section 9.06(c) the Borrower agrees to execute and deliver a Note payable to the order of the Assignee to evidence the assignment and assumption provided for herein. SECTION 5. Non-Reliance on Assignor. The Assignor makes no representation or warranty in connection with, and shall have no responsibility with respect to, the solvency, financial condition, or statements of the Borrower or any Subsidiary Guarantor, or the validity and enforceability of the obligations of the Borrower or any Subsidiary Guarantor in respect of the Financing Documents. The Assignee acknowledges that it has, independently and without reliance on the Assignor, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and will continue to be responsible for making its own independent appraisal of the business, affairs and financial condition of the Borrower and the Subsidiary Guarantors. SECTION 6. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. SECTION 7. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written. [ASSIGNOR] By_________________________ Title: [ASSIGNEE] By__________________________ Title: PERINI CORPORATION By__________________________ Title: By__________________________ Title: [LC BANK] BY ________________________ Title: MORGAN GUARANTY TRUST COMPANY OF NEW YORK By__________________________ Title: [CONFORMED COPY] AMENDMENT NO. 1 TO CREDIT AGREEMENT AMENDMENT dated as of December 30, 1993 among PERINI CORPORATION (the "Borrower"), the BANKS listed on the signature pages hereof (the "Banks") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). W I T N E S S E T H : WHEREAS, the parties hereto have heretofore entered into a Credit Agreement dated as of May 10, 1993 (the "Agreement"); and WHEREAS, the parties hereto desire to amend the Agreement to provide for certain changes to the covenant contained in Section 5.15 of the Agreement; NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. Definitions; References. Unless otherwise specifically defined herein, each term used herein which is defined in the Agreement shall have the meaning assigned to such term in the Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Agreement shall from and after the date hereof refer to the Agreement as amended hereby. SECTION 2. Amendment of Section 5.15 of the Agreement. Section 5.15 of the Agreement is amended to read as follows: The Borrower will not, and will not permit any Consolidated Subsidiary to, make any Real Estate Investment if, after giving effect thereto, the cumulative amount of Net Real Estate Investments made (i) at any time during the period beginning January 1, 1993 and ending December 31, 1994 shall exceed $26,000,000 or (ii) at any time during the fiscal year ending December 31, 1995 and any fiscal year thereafter shall exceed $4,000,000 plus 25% of the amount, if any, by which the Net Real Estate Investments made during the preceding period were less than the applicable limitation specified above for such period; provided that for any 90 days in any period specified above, other than the last day of such period, the Net Real Estate Investments made during such period may exceed by not more than $2,000,000 the applicable limitation specified above for such period. For purposes of this Section, the cumulative amount of "Net Real Estate Investments" made during any period, as measured at any date during such period, is the aggregate amount of Real Estate Investments made by the Borrower and its Consolidated Subsidiaries from and including the first day of such period to and including such date, less the sum of all cash or cash equivalent payments received by the Borrower or one of its Consolidated Subsidiaries, as the case may be, in respect of Real Estate Investments from and including the first day of such period to and including such date, including the receipt of shares in a real estate investment trust if (i) such shares are listed on a national security exchange and are at the time permitted to be freely transferred by the Borrower or one of its Consolidated Subsidiaries, as the case may be, or (ii) such shares have been used by the Borrower or one of its Consolidated Subsidiaries, as the case may be, to make a required contribution to any Plan necessary to satisfy its obligation under the minimum funding standards of ERISA and the Internal Revenue Code with respect to such Plan, but only to the extent such obligation is reduced by such contribution; provided that such contribution does not violate the applicable provisions of ERISA or the Internal Revenue Code. SECTION 3. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York. SECTION 4. Counterparts; Effectiveness. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Amendment shall become effective as of the date hereof when the Agent shall have received duly executed counterparts hereof signed by the Borrower and the Required Banks (or, in the case of any party as to which an executed counterpart shall not have been received, the Agent shall have received telegraphic, telex or other written confirmation from such party of execution of a counterpart hereof by such party). IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. PERINI CORPORATION By /s/ James M. Markert --------------------------- Name: James M. Markert Title: Senior Vice President By /s/ Susan C. Mellace --------------------------- Name: Susan C. Mellace Title: Treasurer MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Caroline R. Shapiro --------------------------- Name: Caroline R. Shapiro Title: Vice President BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION By /s/ Richard Bryson -------------------------- Name: Richard Bryson Title: Vice President SHAWMUT BANK, N.A. By /s/ Robert J. Lord -------------------------- Name: Robert J. Lord Title: Vice President FLEET BANK OF MASSACHUSETTS, N.A. By /s/ Jeffrey Bauer -------------------------- Name: Jeffrey Bauer Title: Vice President BAYBANK BOSTON, N.A., as Bank and LC Bank By /s/ Timothy M. Laurion -------------------------- Name: Timothy M. Laurion Title: Vice President CONFORMED COPY AMENDMENT NO. 2 TO CREDIT AGREEMENT AMENDMENT dated as of February 11, 1994 among PERINI CORPORATION (the "Borrower"), the BANKS listed on the signature pages hereof (the "Banks") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). W I T N E S S E T H : WHEREAS, the parties hereto have heretofore entered into a Credit Agreement dated as of May 10, 1993 (as heretofore amended, the "Agreement"); and WHEREAS, the parties hereto desire to waive compliance by the Borrower with Section 5.08(a) of the Agreement for a limited period of time; NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. Definitions; References. Unless otherwise specifically defined herein, each term used herein which is defined in the Agreement shall have the meaning assigned to such term in the Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Agreement shall from and after the date hereof refer to the Agreement as amended hereby. SECTION 2. Limited Waiver. The Banks hereby waive compliance by the Borrower with the requirements of Section 5.08(a) of the Agreement during the period from and including the date hereof to but not including March 31, 1994. SECTION 3. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York. SECTION 4. Counterparts; Effectiveness. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Amendment shall become effective as of the date hereof when the Agent shall have received duly executed counterparts hereof signed by the Borrower and the Required Banks (or, in the case of any party as to which an executed counterpart shall not have been received, the Agent shall have received telegraphic, telex or other written confirmation from such party of execution of a counterpart hereof by such party). SECTION 5. No Other Waivers. Other than as specifically provided herein, this Amendment shall not operate as a waiver of any right, remedy, power or privilege of the Banks under any Financing Document or of any other term or condition of any Financing Document. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. PERINI CORPORATION By /s/ James M. Markert ---------------------------- Name: James M. Markert Title: Senior Vice President By /s/ Susan C. Mellace ---------------------------- Name: Susan C. Mellace Title: Treasurer MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Caroline Shapiro ---------------------------- Name: Caroline Shapiro Title: Vice President BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION By /s/ Richard J. Cerf Name: Richard J. Cerf Title: Vice President SHAWMUT BANK, N.A. By /s/ Amy M. Tsokanis ---------------------------- Name: Amy M. Tsokanis Title: Vice President FLEET BANK OF MASSACHUSETTS, N.A. By /s/ Jeffrey F. Bauer ---------------------------- Name: Jeffrey F. Bauer Title: Vice President BAYBANK BOSTON, N.A., as Bank and LC Bank By /s/ Timothy M. Laurion ---------------------------- Name: Timothy M. Laurion Title: Vice President CONFORMED COPY AMENDMENT NO. 3 TO CREDIT AGREEMENT AMENDMENT dated as of March 8, 1994 among PERINI CORPORATION (the "Borrower"), the BANKS listed on the signature pages hereof (the "Banks") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). W I T N E S S E T H : WHEREAS, the parties hereto have heretofore entered into a Credit Agreement dated as of May 10, 1993 (the "Agreement"); and WHEREAS, the parties hereto desire to amend the Agreement to modify certain covenants and permit the Borrower to enter into a proposed credit agreement to be dated as of March 9, 1994 and to create Liens on certain of its assets and those of its Subsidiaries to secure its obligations thereunder. NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. Definitions; References. Unless otherwise specifically defined herein, each term used herein which is defined in the Agreement shall have the meaning assigned to such term in the Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Agreement shall from and after the date hereof refer to the Agreement as amended hereby. SECTION 2. Amendment of Section 1.01 of the Agreement. (a) Section 1.01 of the Agreement is hereby amended by adding the following: "Collateral Documents" means the security agreements, pledge agreements, deeds of trust, subsidiary guarantees and all other supplemental or additional security agreements, pledge agreements, mortgages or similar instruments to be executed by the Borrower and certain of its Subsidiaries to secure payments of all amounts to be due under the Liquidity Facility and the Collateral Documents. (b) Section 1.01 of the Agreement is hereby amended by adding the following: "Liquidity Facility" means the credit agreement, with commitments not exceeding $15,000,000, proposed to be entered into as of March 9, 1994 among the Borrower, certain banks and Morgan Guaranty Trust Company of New York. (c) The definition of "Modified Parent Company Debt" in Section 1.01 of the Agreement is hereby amended by adding at the end of the parenthetical therein "and Debt resulting from the Liquidity Facility." SECTION 3. Interest Coverage. Section 5.10 of the Agreement is hereby amended by deleting "December 31, 1993" and substituting "March 31, 1995" therefor. SECTION 4. Negative Pledge. Section 5.11 of the Agreement is hereby amended by deleting "and" from the end of subsection (f), deleting the "." at the end of subsection (g) and substituting therefor "; and" and adding the following: (h) Liens on the property of the Borrower or its Subsidiaries as described in the Collateral Schedule attached hereto. SECTION 5. Debt. (a) Section 5.08(a) of the Agreement is hereby amended as follows: (a) At the end of each fiscal quarter prior to March 31, 1995, Modified Parent Company Debt shall not exceed 75% of Consolidated Capital Base and at the end of each fiscal quarter ending on or after March 31, 1995, Modified Parent Debt shall not exceed 65% of Consolidated Capital Base. (b) Section 5.08(b) of the Agreement is hereby amended by deleting "and" at the end of clause (v) and substituting therefor ";" and deleting clause (vi) and substituting the following: (vi) Debt of certain of the Subsidiaries in the form of Guarantees of the Borrower's obligations under the Liquidity Facility and (vii) any refinancing, extension, renewal or refunding of the Debt referred to in clauses (i) through (vi) above, provided that such Debt is not increased. SECTION 6. Successors and Assigns Section 9.06(c) of the Agreement is hereby amended by adding after "Notes" the following: (provided that it at the same time assigns the same ratable portion of its rights and obligations under the Liquidity Facility and the notes related thereto) SECTION 7. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York. SECTION 8. Rights Otherwise Unaffected. This Amendment is limited to the matters expressly set forth herein. Except to the extent specifically amended hereby, all terms of the Agreement shall remain in full force and effect. SECTION 9. Counterparts; Effectiveness. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Amendment shall become effective as of the date hereof when the Agent shall have received duly executed counterparts hereof signed by the Borrower and the Required Banks (or, in the case of any party as to which an executed counterpart shall not have been received, the Agent shall have received telegraphic, telex or other written confirmation from such party of execution of a counterpart hereof by such party). IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. PERINI CORPORATION By /s/ James M. Markert ---------------------------- Title: Senior Vice President MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Caroline R. Shapiro ---------------------------- Title: Vice President BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION By /s/ Richard J. Cerf ---------------------------- Title: Vice President SHAWMUT BANK, N.A. By /s/ Robert Lord ---------------------------- Title: Vice President FLEET BANK OF MASSACHUSETTS, N.A. By /s/ Jeffrey F. Bauer ---------------------------- Title: Vice President BAYBANK BOSTON, N.A. as Bank and as LC Bank By /s/ Timothy M. Laurion ---------------------------- Title: Vice President SCHEDULE 1 COLLATERAL SCHEDULE I. Borrower Security Agreement dated as of March 9, 1994 between the Borrower and the Agent All of the following property of the Borrower, whether now owned or existing or hereafter acquired or arising and regardless of where located: (1) all right, title and interest of the Borrower in, and to receive, all amounts payable at any time and from time to time by or on behalf of Tutor-Salibi-Perini JV ("TSP"), a joint venture formed by Borrower and Tutor-Salibi Corporation on or about August 5, 1985, up to an aggregate amount equal to the amount of the Borrower's interest in the aggregate payments received by TSP in respect of its claims against the California State Department of Highways for cost overruns associated with the construction of the Redwood Bypass in Humbolt and Del Norte Counties, California; (2) all right, title and interest of the Borrower in, and to receive, all amounts payable at any time and from time to time by or on behalf of Kiewit/Perini ("K/P"), two joint ventures formed by Borrower and Kiewit Eastern Company on February 18, 1988 and on May 12, 1988, up to an aggregate amount equal to the amount of the Borrower's interest in the aggregate payments received by K/P in respect of each of its two claims against the Pennsylvania Department of Transportation for cost overruns associated with the construction of two sections of the interstate highway located in suburban Philadelphia, Pennsylvania; (3) the Collateral Account, all cash deposited therein from time to time, the Liquid Investments made pursuant to Section 5(c) and other monies and property of any kind of the Borrower, to the extent that such other monies and property are Proceeds of the Collateral, in the possession or under the control of the Agent; (4) all books and records (including, without limitation, computer programs, printouts and other computer materials and records) of the Borrower pertaining to any of the Collateral; and (5) all Proceeds of all or any of the Collateral. II. Borrower Pledge Agreement dated as of March 9, 1994 between the Borrower and the Agent The Pledged Instruments, and all of the Borrower's rights and privileges with respect to the Pledged Instruments as described in Schedule 1 attached thereto, and all income and profits thereon, and all interest, dividends and other payments and distributions with respect thereto, and all proceeds of the foregoing. Schedule 1 to the Borrower Pledge Agreement lists: 1. Note dated as of March 7, 1994, issued by Perini Land and Development in favor of the Borrower. 2. Note dated as of March 7, 1994, issued by One Hundred Thirty-Eight Joint Venture in the amount of $9,969,000, payable to Perini Land and Development and assigned by Perini Land and Development to the Borrower on or about March 7, 1994. 3. Note dated as of March 7, 1994, issued by Glenco-Perini-HCV Partners in the amount of $19,626,444, payable to Perini Resorts and assigned by Perini Resorts to Perini Land and Development on or about March 7, 1994 and assigned by Perini Land and Development to the Borrower on or about March 7, 1994. III. Subsidiary Security Agreement dated as of March 9, 1994 among the Subsidiary Guarantors and the Agent All of the property of such Subsidiary Guarantor, whether now owned or existing or hereafter acquired or arising and regardless of where located listed on Schedule 1 hereto opposite its name. SCHEDULE 1 To Subsidiary Security Agreement lists: Paramount Development Associates, Inc. ("Paramount"): 1. All right, title and interest of Paramount in and to the Option Agreement dated on or about March 21, 1991 between Paramount and New England Development Company for the sale of 53 acres of real property located in Marlborough, Massachusetts; 2. All right, title and interest of Paramount in and to I-10 Industrial Park Developers, a joint venture formed by Paramount and Mardian Development Company on or about June 14, 1976, including but not limited to the proceeds of the sale of Airport Commerce Center; 3. All books and records (including, without limitation, credit files, computer programs, printouts and other computer materials and records) of Paramount pertaining to any of its Collateral; 4. The Subsidiary Collateral Account, all cash deposited therein from time to time, the Liquid Investments made pursuant to Section 5(c) and other monies and property of any kind of Paramount, to the extent that such other monies and property are Proceeds of the Collateral, in the possession or under the control of the Agent; and 5. All Proceeds of all or any of the Collateral described above. Perini Land and Development Company ("PL&D"): 1. All right, title and interest of PL&D in, and to receive, all amounts payable at any time and from time to time by or on behalf of the Oaks at Buckhead, a joint venture formed by PL&D and R.S. Atlanta, Inc. on or about August 31, 1990, up to an aggregate amount of $1,200,000; 2. All books and records (including, without limitation, credit files, computer programs, printouts and other computer materials and records) of PL&D pertaining to any of its Collateral; 3. The Subsidiary Collateral Account, all cash deposited therein from time to time, the Liquid Investments made pursuant to Section 5(c) and other monies and property of any kind of PL&D, to the extent that such other monies and property are Proceeds of the collateral, in the possession or under the control of the Agent; and 4. All Proceeds of all or any of the Collateral described above. IV. Deeds of Trust by PL&D to the Agent The first Deed of Trust covers the following property of PL&D: Land. The parcel or parcels of land located in Maricopa County, Arizona, more particularly described in Exhibit A (the "Land"). Improvements. All buildings, structures, facilities and other improvements of every kind and description now or hereafter located on the Land, including all parking areas, roads, driveways, walks, fences, walls and berms; all estate, right, title and interest of the Grantor in, to, under or derived from: all recreation, drainage and lighting facilities and other site improvements; all water, sanitary and storm sewer, drainage, electricity, steam, gas, telephone, telecommunications and other utility equipment and facilities; all plumbing, lighting, heating, ventilating, air-conditioning, refrigerating, incinerating, compacting, fire protection and sprinkler, surveillance and security, vacuum cleaning, public address and communications equipment and systems; all kitchen and laundry appliances; all screens, awnings, floor coverings, partitions, elevators, escalators, motors, electrical, computer and other wiring, machinery, pipes, fittings and racking and shelving; and all other items of fixtures, equipment and personal property of every kind and description, in each case now or hereafter located on the Land or affixed (actually or constructively) to the Improvements which by the nature of their location thereon or affixation thereto are real property under applicable law; and including all materials intended for the construction, reconstruction, repair, replacement, alteration, addition or improvement of or to such buildings, equipment, fixtures, structures and improvements, all of which materials shall be deemed to be part of the Trust Property immediately upon delivery thereof on the Land and to be part of the improvements immediately upon their incorporation therein (the foregoing being collectively called the "Improvements"). Equipment. All estate, right, title and interest of the Grantor in, to, under or derived from: all fixtures, chattels and articles of personal property owned or leased by the Grantor or in which the Grantor has or shall acquire an interest, wherever situated, and now or hereafter located on or in the Land or the Improvements, whether or not affixed thereto (actually or constructively) and which are not real property under applicable law, of every kind and nature whatsoever owned or leased by the Grantor, or in which the Grantor has or shall have an interest, now or hereinafter located upon the Land, or appurtenances thereto, or usable in connection with the present or future operation or occupancy of the Land or the Improvements, and including any of the foregoing that is temporarily removed from the Land or Improvements to be repaired and later reinstalled thereon or therein (the foregoing being collectively called the "Equipment"; and the Land with the Improvements thereon and the Equipment therein being collectively called the "Property"). If the Lien of this Deed of Trust is subject to a security interest covering any Property described in this GRANTING CLAUSE III, then all of the right, title and interest of the Grantor in and to any and all such Property is hereby assigned to the Beneficiary, together with the benefits of all deposits and payments now or hereafter made thereon by or on behalf of the Grantor. Appurtenant Rights. All estate, right, title and interest of the Grantor in, to, under or derived from all tenements, hereditaments and appurtenances now or hereafter relating to the Property; the streets, roads, sidewalks and alleys abutting the Property; all strips and gores within or adjoining the Land; all land in the bed of any body of water adjacent to the Land; all land adjoining the Land created by artificial means or by accretion; all air space and rights to use air space above the Land; all development or similar rights now or hereafter appurtenant to the Land; all rights of ingress and egress now or hereafter appertaining to the Property; all easements and rights of way now or hereafter appertaining to the Property; and all royalties and other rights now or hereafter appertaining to the use and enjoyment of the Property, including alley, party walls, support, drainage, crop, timber, agricultural, horticultural, oil, gas and other mineral, water stock, riparian and other water rights. Agreements. All estate, right, title and interest of the Grantor in, to, under or derived from: all Insurance Policies (including all unearned premiums and dividends thereunder), all guarantees and warranties relating to the Property, all supply and service contracts for water, sanitary and storm sewer, drainage, electricity, steam, gas, telephone and other utilities now or hereafter relating to the Property, and all other contract rights now or hereafter relating to the use or operation of the Property (the foregoing being collectively called the "Agreements"). Leases. All estate, right, title and interest of the Grantor in, to, under or derived from all Leases now or hereafter in effect, whether or not of record, for the use or occupancy of all or any part of the Property. Rents, Issues and Profits. All estate, right, title and interest of the Grantor in, to, under or derived from: all rents, royalties, issues, profits, receipts, revenue, income and other benefits now or hereafter accruing with respect to the Property, including all rents and other sums now or hereafter payable pursuant to the Leases; all other sums now or hereafter payable with respect to the use, occupancy, management, operation or control of the Property; and all other claims, rights and remedies now or hereafter belonging or accruing with respect to the Property, including fixed, additional and percentage rents, occupancy charges, security deposits, parking, maintenance, common area, tax, insurance, utility and service charges and contributions (whether collected under the Leases or otherwise), proceeds of sale of electricity, gas, heating, air-conditioning and other utilities and services (whether collected under the Leases or otherwise), and deficiency rents and liquidated damages following default or cancellation (the foregoing rents and other sums described in this Granting Clause being collectively called the "Rents"), all of which the Grantor hereby irrevocably directs be paid to the Beneficiary, subject to the license granted to the Grantor pursuant to Section 5.07(b), to be held, applied and disbursed as provided in this Deed of Trust. Permits. All estate, right, title and interest of the Grantor in, to, under or derived from all licenses, authorizations, certificates, variances, consents, approvals and other permits now or hereafter pertaining to the ownership, management or operation of the Property (the foregoing being collectively called the "Permits"). Proceeds and Awards. All estate, right, title and interest of the Grantor in, to, under or derived from all proceeds of any Transfer, financing, refinancing or conversion into cash or liquidated claims, whether voluntary or involuntary, of any of the Trust Property, including all Insurance Proceeds, Awards and title insurance proceeds under any title insurance policy now or hereafter held by the Grantor, and all rights, dividends and other claims of any kind whatsoever (including damage, secured, unsecured, priority and bankruptcy claims) now or hereafter relating to any of the Trust Property, all of which the Grantor hereby irrevocably directs be paid to the Beneficiary to the extent provided hereunder, to be held, applied and disbursed as provided in this Deed of Trust. Books and Records. All books and records of the Grantor now or hereafter pertaining to the ownership, management or operation of the Property. Other Intangible Property. All estate, right, title and interest of the Grantor in, to, under or derived from all intangible property, to the extent not described in the foregoing Granting Clauses, now or hereafter necessary to operate the Property as a going concern. Additional Property. All greater, additional or other estate, right, title and interest of the Grantor in, to, under or derived from the Trust Property now or hereafter acquired by the Grantor, including all right, title and interest of the Grantor in, to, under or derived from all extensions, improvements, betterments, renewals, substitutions and replacements of, and additions and appurtenances to, any of the Trust Property hereafter acquired by or released to the Grantor or constructed or located on, or affixed to, the Property, in each case, immediately upon such acquisition, release, construction, location or affixation; all estate, right, title and interest of the Grantor in, to, under or derived from any other property and rights which are, by the provisions of the Collateral Documents, required to be subjected to the Lien hereof; all estate, right, title and interest of the Grantor in, to, under or derived from any other property and rights which are necessary to maintain the Property and the Grantor's business or operations conducted therein as a going concern, in each case, to the fullest extent permitted by law, without any further conveyance, mortgage, assignment or other act by the Grantor; and all estate, right, title and interest of the Grantor in, to, under or derived from all other property and rights which are by any instrument or otherwise subjected to the Lien hereof by the Grantor together with all estate, right, title and interest of the Grantor and anyone claiming by, through or under the Grantor in, to, under or derived from the Trust Property and all rights and appurtenances relating thereto, to the Beneficiary, forever. EXHIBIT Aas Description of the Land Lots 1 to 15, inclusive, Block 9, NEAHR'S ADDITION TO THE CITY OF PHOENIX, according to the plat of record in the office of the County Recorder of Maricopa County, Arizona, in Book 2 of Maps, page 61. The second Deed of Trust granting clauses are identical with respect to the following property: EXHIBIT A Description of the Land Lots 1 thru 6; 9 thru 16; 18; 20 thru 30; 32; and 36 thru 42 of SABINO ESTATES, per map recorded in Book 45, Page 7 of Maps and Plats, in the office of the Pima County Recorder, Pima County, Arizona. CONFORMED COPY AMENDMENT NO. 4 TO CREDIT AGREEMENT AMENDMENT dated as of May 3, 1994 among PERINI CORPORATION (the "Borrower"), the BANKS listed on the signature pages hereof (the "Banks") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). W I T N E S S E T H : WHEREAS, the parties hereto have heretofore entered into a Credit Agreement dated as of May 10, 1993 (the "Agreement"); and WHEREAS, the parties hereto desire to amend the Agreement to allow the Borrower to pay dividends on certain convertible preferred stock. NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. Definitions; References. Unless otherwise specifically defined herein, each term used herein which is defined in the Agreement shall have the meaning assigned to such term in the Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Agreement shall from and after the date hereof refer to the Agreement as amended hereby. SECTION 2. Amendment of Section 1.01 of the Agreement. The definition of "Restricted Payment" is hereby amended by deleting the figure "$2,125,000" appearing in clause (i) of the proviso thereto and substituting therefor the figure "$5,125,000". SECTION 3. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York. SECTION 4. Rights Otherwise Unaffected. This Amendment is limited to the matters expressly set forth herein. Except to the extent specifically amended hereby, all terms of the Agreement shall remain in full force and effect. SECTION 5. Counterparts; Effectiveness. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Amendment shall become effective as of the date hereof when the Agent shall have received duly executed counterparts hereof signed by the Borrower and the Required Banks (or, in the case of any party as to which an executed counterpart shall not have been received, the Agent shall have received telegraphic, telex or other written confirmation from such party of execution of a counterpart hereof by such party). IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. PERINI CORPORATION By /s/ James M. Markert ---------------------------- Title: Senior Vice President MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Caroline R. Shapiro ---------------------------- Title: Vice President BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION By /s/ Richard J. Cerf ---------------------------- Title: Vice President SHAWMUT BANK, N.A. By /s/ Robert J. Lord ---------------------------- Title: Director FLEET BANK OF MASSACHUSETTS, N.A. By /s/ Jeffrey Bauer ---------------------------- Title: Vice President BAYBANK BOSTON, N.A. as Bank and as LC Bank By /s/ Timothy M. Laurion ---------------------------- Title: Vice President EX-10 8 MATERIAL CONTRACTS EXHIBIT 10(f) CONFORMED COPY [EXHIBITS D, E, F, G, H-1 AND H-2 CONFORMED AS EXECUTED] $15,000,000 CREDIT AGREEMENT dated as of March 9, 1994 among Perini Corporation The Banks Listed Herein and Morgan Guaranty Trust Company of New York, as Agent TABLE OF CONTENTS (1) Page ARTICLE I DEFINITIONS SECTION 1.01 Definitions.......................... 1 1.02 Accounting Terms and Determinations.. 13 ARTICLE II THE CREDITS SECTION 2.01 Commitments to Lend.................. 13 2.02 Method of Borrowing.................. 14 2.03 Notes................................ 15 2.04 Maturity of Loans.................... 15 2.05 Interest Rates....................... 15 2.06 Commitment Fees...................... 16 2.07 Participation Fee.................... 16 2.08 Agency Fee........................... 16 2.09 Optional Termination or Reduction of Commitments........................ 16 2.10 Mandatory Termination or Reduction of Commitments........................ 17 2.11 Prepayments.......................... 18 2.12 General Provisions as to Payments.... 18 2.13 Computation of Interest and Fees..... 19 2.14 Maximum Interest Rate................ 19 ARTICLE III CONDITIONS SECTION 3.01 Effectiveness........................ 20 3.02 Conditions to each Borrowing......... 22 [FN] - ------------ The Table of Contents is not a prat of this Agreement. ARTICLE IV REPRESENTATIONS AND WARRANTIES SECTION 4.01 Corporate Existence and Power....... 22 4.02 Corporate and Governmental Authorization; No Contravention... 23 4.03 Binding Effect; Liens of Collateral Documents.............. 23 4.04 Financial Information............... 23 4.05 Litigation.......................... 24 4.06 Compliance with ERISA............... 24 4.07 Environmental Matters............... 25 4.08 Taxes............................... 26 4.09 Subsidiaries........................ 26 4.10 Not an Investment Company........... 27 4.11 No Burdensome Restrictions.......... 27 4.12 Full Disclosure..................... 27 4.13 Ownership of Properties; Liens...... 27 ARTICLE V COVENANTS SECTION 5.01 Information......................... 28 5.02 Payment of Obligations.............. 31 5.03 Maintenance of Property; Insurance.. 31 5.04 Conduct of Business and Maintenance of Existence.......... 31 5.05 Compliance with Laws................ 32 5.06 Inspection of Property, Books and Records........................... 32 5.07 Current Ratio....................... 32 5.08 Debt................................ 32 5.09 Minimum Consolidated Tangible Net Worth......................... 33 5.10 Interest Coverage................... 33 5.11 Negative Pledge..................... 33 5.12 Consolidations, Mergers and Sales of Assets................... 34 5.13 Use of Proceeds..................... 35 5.14 Restricted Payments................. 35 5.15 Real Estate Investments............. 35 5.16 Other Investments................... 36 5.17 Further Assurances.................. 37 ARTICLE VI DEFAULTS SECTION 6.01 Events of Default................... 37 6.02 Notice of Default................... 40 ARTICLE VII THE AGENT SECTION 7.01 Appointment and Authorization....... 41 7.02 Agent and Affiliates................ 41 7.03 Action by Agent..................... 41 7.04 Consultation with Experts........... 41 7.05 Liability of Agent.................. 41 7.06 Indemnification..................... 42 7.07 Credit Decision..................... 42 7.08 Successor Agent..................... 42 7.09 Collateral Documents................ 43 ARTICLE VIII CHANGE IN CIRCUMSTANCES SECTION 8.01 Reduced Return...................... 43 ARTICLE IX MISCELLANEOUS SECTION 9.01 Notices.............................. 44 9.02 No Waivers........................... 44 9.03 Expenses; Documentary Taxes; Indemnification.................... 45 9.04 Sharing of Setoffs................... 46 9.05 Amendments and Waivers............... 46 9.06 Successors and Assigns............... 46 9.07 Collateral........................... 48 9.08 Governing Law; Submission to Jurisdiction....................... 48 9.09 Counterparts; Integration............ 48 9.10 WAIVER OF JURY TRIAL................. 48 Schedule I - Existing Debt Schedule II - Proposed Guarantees Schedule III - Existing Liens Schedule IV - Mortgaged Facilities Exhibit A - Note Exhibit B-1 - Opinion of General Counsel of the Borrower Exhibit B-2 - Opinion of New York Counsel for the Borrower Exhibit C-1 - Opinion of Special New York Counsel for the Agent Exhibit C-2 - Opinion of Special Arizona Counsel for the Agent Exhibit D - Borrower Security Agreement Exhibit E - Borrower Pledge Agreement Exhibit F - Subsidiary Guarantee Agreement Exhibit G - Subsidiary Security Agreement Exhibit H-1 - Deed of Trust Exhibit H-2 - Deed of Trust Exhibit I - Assignment and Assumption Agreement CREDIT AGREEMENT AGREEMENT dated as of March 9, 1994 among PERINI CORPORATION, the BANKS listed on the signature pages hereof and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent. ARTICLE I DEFINITIONS SECTION 1.01. Definitions. The following terms, as used herein, have the following meanings: "Administrative Questionnaire" means, with respect to each Bank, the administrative questionnaire in the form submitted to such Bank by the Agent and submitted to the Agent (with a copy to the Borrower) duly completed by such Bank. "Agent" means Morgan Guaranty Trust Company of New York in its capacity as agent for the Banks under the Financing Documents, and its successors in such capacity. "Assignee" has the meaning set forth in Section 9.06(c). "Bank" means each bank listed on the signature pages hereof, each Assignee which becomes a Bank pursuant to Section 9.06(c), and their respective successors. "Base Rate" means, for any day, a rate per annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal Funds Rate for such day. "Benefit Arrangement" means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of the ERISA Group. "Borrower" means Perini Corporation, a Massachusetts corporation, and its successors. "Borrower's 1992 Form 10-K" means the Borrower's annual report on Form 10-K for 1992, as filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. "Borrower Pledge Agreement" means the Borrower Pledge Agreement in substantially the form of Exhibit E between the Borrower and the Agent as executed and delivered pursuant to Section 3.01(c) as the same may be amended from time to time as permitted herein and in accordance with the terms thereof. "Borrower Security Agreement" means the Borrower Security Agreement in substantially the form of Exhibit D between the Borrower and the Agent, as executed and delivered pursuant to Section 3.01(c) and as the same may be amended from time to time as permitted herein and in accordance with the terms thereof. "Borrowing" means a borrowing under this Agreement consisting of Loans made to the Borrower at the same time by the Banks pursuant to Article II. "Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in New York City or Massachusetts are authorized by law to close. "Casualty Event" means (i) any destruction of or damage to property through one or more related events for which the Borrower or any of its Subsidiaries may be entitled to insurance proceeds or restitution payments or (ii) any condemnation of property, or any transfer or other disposition of property in lieu of condemnation, for which the Borrower or any of its Subsidiaries may be entitled to a condemnation award or other compensation. "Casualty Proceeds" means, with respect to any Casualty Event, all insurance proceeds (except proceeds of business interruption insurance), restitution payments, condemnation awards and other compensation received by the Borrower or any of its Subsidiaries (or, in the case of a Casualty Event relating to a Mortgaged Facility, by the Agent in accordance with the Collateral Documents) in respect thereof. "CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time and any rules or regulations promulgated thereunder. "Collateral" means all property, real and personal, tangible and intangible, with respect to which Liens are created or are purported to be created pursuant to the Collateral Documents. "Collateral Documents" means the Borrower Security Agreement, the Borrower Pledge Agreement, the Subsidiary Security Agreement, the Subsidiary Guarantee Agreement, the Deeds of Trust and all other supplemental or additional security agreements, pledge agreements, mortgages or similar instruments delivered pursuant hereto or thereto. "Commitment" means, with respect to each Bank, the amount set forth opposite the name of such Bank on the signature pages hereof, as such amount may be reduced from time to time pursuant to Sections 2.09 and 2.10. "Consolidated Capital Base" means, at any date, the Consolidated Tangible Net Worth of the Borrower at such date plus 75% of the principal amount of any Special Subordinated Debt outstanding at such date. "Consolidated Current Assets" means at any date the consolidated current assets of the Borrower and its Consolidated Subsidiaries excluding costs related to Claims, all determined as of such date. For purposes of this definition, "Claims" mean the amount (to the extent reflected in determining such consolidated current assets) of disputed or unapproved change orders in regards to scope and/or price that, in Perini project management's opinion (and approved by Perini senior management), will not be resolved in the normal course of business (i.e. through the change order process and without resort to litigation or arbitration) and which have not been previously reflected in the consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of March 31, 1993. "Consolidated Current Liabilities" means at any date the consolidated current liabilities of the Borrower and its Consolidated Subsidiaries, determined as of such date. "Consolidated Earnings Before Interest and Taxes" means for any period Consolidated Net Income for such period (x) less (i) the Borrower's equity share of income (or plus the Borrower's equity share of loss) of unconsolidated joint ventures for such period and (ii) capitalized real estate taxes for such period, to the extent not permitted to be capitalized in accordance with generally accepted accounting principles as in effect on the date hereof, and (y) plus (i) cash distributions of earnings from unconsolidated joint ventures for such period and (ii) the aggregate amount deducted in determining such Consolidated Net Income in respect of Consolidated Interest Charges and income taxes. "Consolidated Interest Charges" means for any period the aggregate interest expense of the Borrower and its Consolidated Subsidiaries for such period including, without limitation, (i) the portion of any obligation under capital leases allocable to interest expense in accordance with generally accepted accounting principles, (ii) the portion of any debt discount that shall be amortized in such period and (iii) any interest accrued during such period which is capitalized in accordance with generally accepted accounting principles, and without any reduction on account of interest income. "Consolidated Net Income" means for any period the consolidated net income (or loss) of the Borrower and its Consolidated Subsidiaries for such period. "Consolidated Subsidiary" of any Person means at any date any Subsidiary of such Person or other entity the accounts of which would be consolidated with those of such Person in its consolidated financial statements if such statements were prepared as of such date. "Consolidated Tangible Net Worth" of any Person means at any date the consolidated stockholders' equity of such Person and its Consolidated Subsidiaries less their consolidated Intangible Assets, all determined as of such date. For purposes of this definition "Intangible Assets" means the amount (to the extent reflected in determining such consolidated stockholders' equity) of (i) all write-ups (other than write-ups resulting from foreign currency translations and write-ups of assets of a going concern business made within twelve months after the acquisition of such business) subsequent to December 31, 1992 in the book value of any asset owned by the Borrower or a Consolidated Subsidiary and (ii) all unamortized debt discount and expense, capitalized real estate taxes (to the extent not permitted to be capitalized in accordance with generally accepted accounting principles as in effect on the date hereof), goodwill, patents, trademarks, service marks, trade names, copyrights, organization or developmental (other than real estate developmental) expenses and other intangible items. "Debt" of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (iv) all obligations of such Person as lessee which are capitalized in accordance with generally accepted accounting principles, (v) all Debt secured by a Lien on any asset of such Person, whether or not such Debt is otherwise an obligation of such Person, and (vi) all Debt of others Guaranteed by such Person; provided that advances to the Borrower or a Subsidiary by a joint venture out of the Borrower's or such Subsidiary's share of the undistributed earnings of such joint venture shall not constitute Debt. "Deeds of Trust" means the Deed of Trust, Assignment of Leases and Rents, Security Agreement and Financing Statement dated as of March 9, 1994 for each of the Mortgaged Facilities, each substantially in the form of Exhibits H-1 and H-2 hereto. "Default" means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default. "Effective Date" means the date this Agreement becomes effective in accordance with Section 3.01. "Environmental Laws" means any and all federal state, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions, permits, concessions, grants, franchises, licenses, agreements and other governmental restrictions relating to the environment, the effect of the environment on human health or to emissions, discharges or releases of pollutants, contaminants, Hazardous Substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, Hazardous Substances or wastes or the clean-up or other remediation thereof. "Environmental Liabilities" means any and all liabilities of or relating to the Borrower or any of its Subsidiaries (including any entity which is, in whole or in part, a predecessor of the Borrower or any of its Subsidiaries), whether vested or unvested, contingent or fixed, actual or potential, known or unknown, which arise under or relate to matters covered by Environmental Laws. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute. "ERISA Group" means the Borrower, any Subsidiary and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower or any Subsidiary, are treated as a single employer under Section 414 of the Internal Revenue Code. "Event of Default" has the meaning set forth in Section 6.01. "Exempt Group" means (i) any employee benefit plan of the Borrower or any Subsidiary, (ii) any entity or Person holding shares of common stock of Borrower organized, appointed or established by the Borrower or any Subsidiary for or pursuant to the terms of any such plan or (iii) The Perini Memorial Foundation, Inc., The Joseph Perini Memorial Foundation, or any of the various trusts established under the wills of Lewis R. Perini, Senior, Joseph R. Perini, Senior or Charles B. Perini, Senior. "Federal Funds Rate" means, for any day, the rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (i) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate quoted to Morgan Guaranty Trust Company of New York on such day on such transactions as determined by the Agent. "Financing Documents" means this Agreement, the Subsidiary Guarantee Agreement, the Notes and the Collateral Documents. "Guarantee" by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for the purpose of assuring in any other manner the holder of such Debt of the payment thereof or to protect such holder against loss in respect thereof (in whole or in part), provided that the term Guarantee shall not include endorsements for collection or deposit or bid and performance bonds and guarantees in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning. "Hazardous Substances" means any toxic, radioactive, caustic or otherwise hazardous substance, including petroleum, its derivatives, by-products and other hydrocarbons, or any substance having any constituent elements displaying any of the foregoing characteristics. "Indemnitee" has the meaning set forth in Section 9.03(b). "Interest Period" means, with respect to each Borrowing, the period commencing on the date of such Borrowing and ending 30 days thereafter; provided that: (a) any Interest Period (other than an Interest Period determined pursuant to clause (b) below) which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day; and (b) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date. "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended, or any successor statute. "Investment" means any investment in any Person, whether by means of share purchase, capital contribution, loan, Guarantee, time deposit or otherwise. "Lending Office" means, as to each Bank, its office located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Lending Office) or such other office as such Bank may hereafter designate as its Lending Office by notice to the Borrower and the Agent. "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind, or any other type of preferential arrangement that has the practical effect of creating a security interest, in respect of such asset. For the purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset. "Loan" means a Loan to be made by a Bank pursuant to Section 2.02. "Material Plan" means at any time a Plan or Plans having aggregate Unfunded Liabilities in excess of $10,000,000. "Material Subsidiary" means at any time a Subsidiary which as of such time meets the definition of a "significant subsidiary" contained as of the date hereof in Regulation S-X of the Securities and Exchange Commission. "Modified Parent Company Debt" means at any date the Debt of the Borrower (other than Debt payable to any Wholly-Owned Consolidated Subsidiary or Debt payable pursuant to this Agreement), determined on an unconsolidated basis as of such date, less 75% of the principal amount of any Special Subordinated Debt outstanding on such date. "Mortgaged Facilities" means the properties described on Schedule IV. "Multiemployer Plan" means at any time an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions, including for these purposes any Person which ceased to be a member of the ERISA Group during such five year period. "Notes" means promissory notes of the Borrower, substantially in the form of Exhibit A hereto, evidencing the obligation of the Borrower to repay the Loans, and "Note" means any one of such promissory notes issued hereunder. "Notice of Borrowing" has the meaning set forth in Section 2.02. "Notice Time" has the meaning set forth in Section 2.16(b). "Obligor" means each of the Borrower and the Subsidiary Guarantors, and "Obligors" means all of the foregoing. "Paramount Development Associates" means Paramount Development Associates, a Massachusetts corporation. "Parent" means, with respect to any Bank, any Person controlling such Bank. "Participant" has the meaning set forth in Section 9.06(b). "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. "Percentage" means, with respect to each Bank, the percentage that such Bank's Commitment constitutes of the aggregate amount of the Commitments. "Perini Building Company" means Perini Building Company, Inc., an Arizona corporation. "Perini International" means Perini International Corporation, a Massachusetts corporation. "Perini Land and Development" means Perini Land and Development Company, a Delaware corporation. "Permitted Encumbrances" means, with respect to any real property owned or leased by the Borrower or any of its Subsidiaries: (a) Liens for taxes, assessments or other governmental charges not yet due or which are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Borrower or such Subsidiary, as the case may be, in accordance with generally accepted accounting principles; (b) carriers', warehousemen's, mechanics', materialmens', repairmens' or other like Liens arising by operation of law in the ordinary course of business so long as (A) the underlying obligations are not overdue for a period of more than 60 days or (B) such Liens are being contested in good faith and by appropriate proceedings and adequate reserves with respect thereto are maintained on the books of the Borrower or such Subsidiary, as the case may be, in accordance with generally accepted accounting principles; and (c) other Liens or title defects (including matters which an accurate survey might disclose) which (x) do not secure Debt; (y) do not materially detract from the value of such real property or materially impair the use thereof by the Borrower or such Subsidiary in the operation of its business; and (z) are set forth in the title reports referred to in Section 3.01(h) hereof. "Permitted Liens" means the Liens permitted to exist under Section 5.11. "Person" means an individual, a corporation, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. "Plan" means at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code and either (i) is maintained, or contributed to, by any member of the ERISA Group for employees of any member of the ERISA Group or (ii) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of the ERISA Group for employees of any Person which was at such time a member of the ERISA Group. "Prime Rate" means the rate of interest publicly announced by Morgan Guaranty Trust Company of New York in New York City from time to time as its Prime Rate. "Primary Credit Facility" means the credit agreement dated as of May 10, 1993 among the Borrower, Morgan Guaranty Trust Company of New York, as Agent, and the banks listed on the signature pages therein. "Real Estate Investment" means (i) the acquisition, construction or improvement of any real property, other than real property used by the Borrower or a Consolidated Subsidiary in the conduct of its construction business or (ii) any Investment in any Person (including Perini Land and Development or another Consolidated Subsidiary, but without duplication of any Real Estate Investment made by such Person with the proceeds of such Investment) engaged in real estate investment or development or whose principal assets consist of real property; provided that the Guarantees contemplated by Section 5.08(b)(ii) and (iii) shall not constitute Real Estate Investments. "R. E. Dailey & Co." means R. E. Dailey & Co., a Michigan corporation. "Refunding Borrowing" means a Borrowing which, after application of the proceeds thereof, results in no net increase in the outstanding principal amount of Loans made by any Bank. "Regulated Activity" means any generation, treatment, storage, recycling, transportation or Release of any Hazardous Substance. "Regulation U" means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time. "Release" means any discharge, emission or release, including a Release as defined in CERCLA at 42 U.S.C. {Sec. Mark} 9601(22). The term "Released" has a corresponding meaning. "Required Banks" means at any time Banks having at least 60% of the aggregate amount of the Commitments or, if the Commitments shall have been terminated, holding Notes evidencing at least 60% of the aggregate unpaid principal amount of the Loans. "Restricted Payment" means (i) any dividend or other distribution on any shares of the Borrower's capital stock (except dividends payable solely in shares of its capital stock) or (ii) any payment on account of the purchase, redemption, retirement or acquisition of (a) any shares of the Borrower's capital stock or (b) any option, warrant or other right to acquire shares of the Borrower's capital stock; provided that none of the following shall constitute Restricted Payments: (i) the declaration and payment of dividends on preferred stock of the Borrower in an aggregate amount with respect to any four consecutive fiscal quarters not exceeding $2,125,000, (ii) the exchange of Special Subordinated Debt for the Borrower's $21.25 Convertible Exchangeable Preferred Shares, or (iii) the redemption, for an aggregate redemption price not exceeding $200,000, of the "Rights" issued pursuant to the Shareholder Rights Agreement dated as of September 23, 1988, as amended, between the Borrower and The First National Bank of Boston, as Rights Agent or (iv) cash payments in the ordinary course of business in full or partial settlement of employee stock options or similar incentive compensation arrangements. "Special Subordinated Debt" means the 8 1/2% Convertible Subordinated Debentures due 2012 of the Borrower issuable in exchange for the Borrower's $21.25 Convertible Exchangeable Preferred Shares in accordance with the terms of the Certificate of Vote of Directors Establishing a Series of a Class of Stock fixing the relative rights and preferences of such Shares as originally filed with the Secretary of the Commonwealth of Massachusetts. "Subsidiary" of any Person means any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person. "Subsidiary Guarantor" means each of Perini Building Company, Perini International, Perini Land and Development, R. E. Dailey & Co., Paramount Development Associates and each other Subsidiary of the Borrower which becomes a party to the Subsidiary Guarantee Agreement pursuant to Section 3.01 thereof, and their respective successors. "Subsidiary Guarantee Agreement" means the Subsidiary Guarantee Agreement in substantially the form of Exhibit F among the Borrower, the Subsidiary Guarantors party thereto and the Agent, as executed and delivered pursuant to Section 3.01(b) and as the same may be amended from time to time as permitted herein and in accordance with the terms thereof. "Subsidiary Security Agreement" means the Subsidiary Security Agreement in substantially the form of Exhibit G among the Borrower, the Subsidiary Guarantors party thereto and the Agent, as executed and delivered pursuant to Section 3.01(c) and as the same may be amended from time to time as permitted herein and in accordance with the terms thereof. "Temporary Cash Investment" means investment of cash balances in United States Government securities or other short-term money market investments. "Termination Date" means December 31, 1994 (or if such date is not a Business Day, the next preceding Business Day). "Unfunded Liabilities" means, with respect to any Plan at any time, the amount (if any) by which (i) the value of all benefit liabilities under such Plan, determined on a plan termination basis using the assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market value of all Plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions), all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the ERISA Group to the PBGC or any other Person under Title IV of ERISA. "Wholly-Owned Consolidated Subsidiary" means any Consolidated Subsidiary of the Borrower all of the shares of capital stock or other ownership interests of which (except directors' qualifying shares) are at the time directly or indirectly owned by the Borrower. SECTION 1.02. Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with generally accepted accounting principles as in effect from time to time, applied on a basis consistent (except for changes concurred in by the Borrower's independent public accountants) with the most recent audited consolidated financial statements of the Borrower and its Consolidated Subsidiaries delivered to the Banks. ARTICLE II THE CREDITS SECTION 2.01. Commitments to Lend. From time to time prior to the Termination Date, each Bank severally agrees, on the terms and conditions set forth in this Agreement, to lend to the Borrower from time to time amounts not to exceed in the aggregate at any one time outstanding the amount of its Commitment. Each Borrowing under this Section shall be in an aggregate principal amount of $1,000,000 or any larger multiple of $500,000 (except that any such Borrowing may be in the aggregate amount of the unused Commitments) and shall be made from the several Banks ratably in proportion to their respective Commitments. Within the foregoing limits, the Borrower may borrow under this Section, repay, or to the extent permitted by Section 2.11, prepay Loans and reborrow at any time prior to the Termination Date under this Section. SECTION 2.02. Method of Borrowing. (a) The Borrower shall give the Agent notice (a "Notice of Borrowing") not later than 10:00 A.M. (New York City) on the date of each Borrowing specifying the date (which shall be a Business Day) and the aggregate principal amount of such Borrowing. (b) Upon receipt of a Notice of Borrowing, the Agent shall promptly notify each Bank of the contents thereof and of such Bank's ratable share of such Borrowing and such Notice of Borrowing shall not thereafter be revocable by the Borrower. (c) Not later than 11:00 A.M. (New York City time) on the date of each Borrowing, each Bank shall (except as provided in subsection (d) of this Section) make available its ratable share of such Borrowing, in Federal or other funds immediately available in New York City, to the Agent at its address referred to in Section 9.01. Unless the Agent determines that any applicable condition specified in Article III has not been satisfied, the Agent will make the funds so received from the Banks available to the Borrower at the Agent's aforesaid address. (d) If any Bank makes a new Loan hereunder on a day on which the Borrower is to repay all or any part of an outstanding Loan from such Bank, such Bank shall apply the proceeds of its new Loan to make such repayment and only an amount equal to the difference (if any) between the amount being borrowed and the amount being repaid shall be made available by such Bank to the Agent as provided in subsection (c) of this Section, or remitted by the Borrower to the Agent as provided in Section 2.12, as the case may be. (e) Unless the Agent shall have received notice from a Bank prior to the date of any Borrowing that such Bank will not make available to the Agent such Bank's share of such Borrowing, the Agent may assume that such Bank has made such share available to the Agent on the date of such Borrowing in accordance with subsections (c) and (d) of this Section 2.02 and the Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Bank shall not have so made such share available to the Agent, such Bank and the Borrower severally agree to repay to the Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Agent, at (i) in the case of the Borrower, a rate per annum equal to the higher of the Federal Funds Rate and the interest rate applicable thereto pursuant to Section 2.05 and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Bank's Loan included in such Borrowing for purposes of this Agreement. SECTION 2.03. Notes. (a) The Loans of each Bank shall be evidenced by a single Note payable to the order of such Bank for the account of its Lending Office. (b) Upon receipt of each Bank's Note pursuant to Section 3.01(c), the Agent shall forward such Note to such Bank. Each Bank shall record the date, amount and maturity of each Loan made by it and the date and amount of each payment of principal made by the Borrower with respect thereto, and may, if such Bank so elects in connection with any transfer or enforcement of its Note, endorse on the schedule forming a part thereof appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding; provided that the failure of any Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the Borrower so to endorse its Note and to attach to and make a part of its Note a continuation of any such schedule as and when required. SECTION 2.04. Maturity of Loans. Each Loan included in any Borrowing shall mature, and the principal amount thereof shall be due and payable, on the last day of the Interest Period applicable to such Borrowing. SECTION 2.05. Interest Rates. (a) Each Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made until it becomes due, at a rate per annum equal to (i) the sum of 1.5% plus the Base Rate for such day, if such day falls on or before September 30, 1994 and the aggregate principal amount of all Loans outstanding on such day (after giving effect to any Loans borrowed or repaid on such day) is $7,500,000 or less; (ii) the sum of 2% plus the Base Rate for such day, if such day falls on or before September 30, 1994 and the aggregate principal amount of all Loans outstanding on such day (after giving effect to any Loans borrowed or repaid on such day) is more than $7,500,000,; or (iii) the sum of 3% plus the Base Rate for such day, if such day falls after September 30, 1994. Such interest shall be payable for each Interest Period on the last day thereof. Any overdue principal of or interest on any Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 2% plus the rate otherwise applicable to Loans for such day. (b) The Agent shall determine each interest rate applicable to the Loans hereunder. The Agent shall give prompt notice to the Borrower and the Banks of each rate of interest so determined, and its determination thereof shall be conclusive in the absence of manifest error. SECTION 2.06. Commitment Fees. The Borrower shall pay to the Agent for the account of each Bank a commitment fee at the rate of 1/2 of 1% per annum on the daily average unused portion of such Bank's Commitment. Such commitment fees shall accrue from and including the Effective Date to but excluding the Termination Date. Such commitment fees shall be payable on the last day of each fiscal quarter of the Borrower prior to the Termination Date and on the Termination Date. SECTION 2.07. Participation Fee. The Borrower shall pay to the Agent for the account of each Bank on the Effective Date a participation fee in an amount equal to .75% of such Bank's Commitment. SECTION 2.08. Agency Fee. The Borrower shall pay to the Agent as compensation for its services hereunder and under the Collateral Documents agency fees payable in the amounts and at the times heretofore agreed between the Borrower and the Agent. The Borrower shall also pay to the Agent for its own account on the Effective Date an arrangement fee in the amount previously agreed between the Borrower and the Agent. SECTION 2.09. Optional Termination or Reduction of Commitments. The Borrower may, upon at least three Business Days' notice to the Agent, terminate at any time, or proportionately permanently reduce from time to time by an aggregate amount of $2,500,000 or any larger multiple of $1,000,000, the unused portions of the Commitments. If the Commitments are terminated in their entirety, all accrued commitment fees shall be payable on the effective date of such termination. SECTION 2.10. Mandatory Termination or Reduction of Commitments. (a) The Commitments shall terminate on the Termination Date, and any Loans then outstanding (together with accrued interest thereon) shall be due and payable on such date. (b) The Commitments of all Banks shall be permanently, automatically and ratably reduced: (i) immediately upon receipt by the Borrower, any Subsidiary Guarantor or the Agent of the proceeds from the collection, sale or other disposition (except a Casualty Event) of any item of Collateral (other than any distribution from Kiewit/Perini) by an amount equal to 100% of such proceeds net of all out-of-pocket costs, fees, commissions and other expenses reasonably incurred in respect of such collection, sale or disposition and any taxes paid or payable (as estimated by a financial officer of the Borrower in good faith) in respect thereof; (ii) immediately upon receipt by the Borrower, any Subsidiary Guarantor or the Agent of Casualty Proceeds in respect of any item of Collateral, (i) if the Borrower or such Subsidiary Guarantor elects to restore, repair or replace such Collateral, the amount of such Casualty Proceeds which, in the aggregate, exceed the actual cost of completing the restoration, repair or replacement of such property, by an amount equal to 100% of such excess or (ii) if the Borrower or such Subsidiary Guarantor elects not to restore, repair or replace such Collateral, by an amount equal to 100% of such Casualty Proceeds; and (iii) immediately upon receipt by the Borrower or any Subsidiary of the proceeds from any issuance of debt excluding Special Subordinated Debt or equity securities, including any preferred stock, by an amount equal to 100% of such proceeds net of all costs, fees, commissions and other expenses attributable to such issuance. (c) On each day on which any Commitment is reduced pursuant to subsection (a) or (b) of this Section, the Borrower shall repay such principal amount (together with accrued interest thereon) of each Bank's outstanding Loans, if any, as may be necessary so that after such repayment, the aggregate unpaid principal amount of such Bank's Loans does not exceed the amount of such Bank's Commitment after giving effect to such reduction. SECTION 2.11. Prepayments. (a) Optional. The Borrower may, upon at least one Business Day's notice to the Agent, prepay any Borrowing in whole at any time, or from time to time in part in amounts aggregating $1,000,000 or any larger multiple of $500,000, by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment. Each such optional prepayment shall be applied to prepay ratably the Loans of the several Banks included in such Borrowing. (b) Mandatory. In addition to mandatory prepayments pursuant to Section 2.10(c), if at any time the aggregate principal amount of the loans outstanding to the Borrower referred to in Section 3.02(b) hereof are less than the amounts specified in such subsection, the Borrower shall simultaneously, at such time, prepay all Borrowings outstanding hereunder. (c) Notice of Prepayment. Upon receipt of a notice of prepayment pursuant to this Section, the Agent shall promptly notify each Bank of the contents thereof and of such Bank's ratable share of such prepayment and such notice shall not thereafter be revocable by the Borrower. SECTION 2.12. General Provisions as to Payments. (a) The Borrower shall make each payment of principal of, and interest on, the Loans and of fees hereunder, not later than 11:00 A.M. (New York City time) on the date when due, in Federal or other funds immediately available in New York City, to the Agent at its address referred to in Section 9.01. The Agent will promptly distribute to each Bank its ratable share of each such payment received by the Agent for the account of the Banks. Whenever any payment of principal of, or interest on, the Loans or of fees shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time. (b) Unless the Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Banks hereunder that the Borrower will not make such payment in full, the Agent may assume that the Borrower has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank. If and to the extent that the Borrower shall not have so made such payment, each Bank shall repay to the Agent forthwith on demand such amount distributed to such Bank together with interest thereon, for each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to the Agent, at the Federal Funds Rate. SECTION 2.13. Computation of Interest and Fees. Interest based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and paid for the actual number of days elapsed (including the first day but excluding the last day). Interest based on the Federal Funds Rate and fees shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day). SECTION 2.14. Maximum Interest Rate. (a) Nothing contained in this Agreement or the Notes shall require the Borrower to pay interest at a rate exceeding the maximum rate permitted by applicable law. Neither this Section nor Section 9.08 is intended to limit the rate of interest payable for the account of any Bank to the maximum rate permitted by the laws of the State of New York if a higher rate is permitted with respect to such Bank by supervening provisions of U.S. federal law. (b) If the amount of interest payable for the account of any Bank on any interest payment date in respect of the immediately preceding interest computation period, computed pursuant to Section 2.05, would exceed the maximum amount permitted by applicable law to be charged by such Bank, the amount of interest payable for its account on such interest payment date shall be automatically reduced to such maximum permissible amount. (c) If the amount of interest payable for the account of any Bank in respect of any interest computation period is reduced pursuant to clause (b) of this Section and the amount of interest payable for its account in respect of any subsequent interest computation period, computed pursuant to Section 2.05, would be less than the maximum amount permitted by applicable law to be charged by such Bank, then the amount of interest payable for its account in respect of such subsequent interest computation period shall be automatically increased to such maximum permissible amount; provided that at no time shall the aggregate amount by which interest paid for the account of any Bank has been increased pursuant to this clause (c) exceed the aggregate amount by which interest paid for its account has theretofore been reduced pursuant to clause (b) of this Section. ARTICLE III CONDITIONS SECTION 3.01. Effectiveness. This Agreement shall become effective on the date that each of the following conditions shall have been satisfied (or waived in accordance with Section 9.05): (a) receipt by the Agent of counterparts of this Agreement signed by each of the parties hereto (or, in the case of any party as to which an executed counterpart shall not have been received, receipt by the Agent in form satisfactory to it of telegraphic, telex or other written confirmation from such party of execution of a counterpart hereof by such party); (b) receipt by the Agent of counterparts of the Subsidiary Guarantee Agreement, duly executed by each of the Obligors listed on the signature pages thereof; (c) receipt by the Agent of counterparts of the Borrower Security Agreement, the Borrower Pledge Agreement, the Subsidiary Security Agreement, the Deeds of Trust and all other documents and certificates to be delivered pursuant thereto on the Effective Date (including appropriately completed and duly executed Uniform Commercial Code financing statements required thereby) duly executed by each of the Obligors listed on the signature pages thereof; (d) evidence satisfactory to the Agent that arrangements satisfactory to it shall have been made for recording the Deeds of Trust and filing the Uniform Commercial Code financing statements referred to in paragraph (c) above on or promptly after the Effective Date; (e) receipt by the Agent of all Pledged Instruments; (f) copies of file search reports from the Uniform Commercial Code filing officer in each jurisdiction (i) in which any Mortgaged Facility is located or (ii) in which the chief executive office of the Borrower and each Subsidiary Guarantor is located, setting forth the results of Uniform Commercial Code file searches conducted in the name of the Borrower and each Subsidiary Guarantor, as the case may be; (g) evidence satisfactory to the Agent of the insurance coverage required by Section 5.03; (h) with respect to each of the Mortgaged Facilities, title reports with respect thereto issued by a title insurance company reasonably acceptable to the Agent and dated no more than 45 days prior to the Effective Date showing no Liens except Permitted Encumbrances with respect thereto; (i) receipt by the Agent of a duly executed Note for the account of each Bank dated on or before the Effective Date complying with the provisions of Section 2.03; (j) receipt by the Agent of (i) an opinion of the General Counsel of the Borrower and (ii) an opinion of Jacobs Persinger & Parker, New York counsel for the Borrower, substantially in the forms of Exhibits B-1 and B-2, respectively, and covering such additional matters relating to the transactions contemplated hereby as the Required Banks may reasonably request; (k) receipt by the Agent of (i) an opinion of Davis Polk & Wardwell, special New York counsel for the Agent, and (ii) an opinion of Meyer Hendricks Victor Osborn & Maledon, special Arizona counsel for the Agent, substantially in the forms of Exhibits C-1 and C-2, respectively, hereto and covering such additional matters relating to the transactions contemplated hereby as the Required Banks may reasonably request; and (l) receipt by the Agent of all documents it may reasonably request relating to the existence of the Obligors, the corporate authority for and the validity of the Financing Documents and any other matters relevant hereto, all in form and substance satisfactory to the Agent; provided that this Agreement shall not become effective or be binding on any party hereto unless all of the foregoing conditions are satisfied not later than March 31, 1994. The Agent shall promptly notify the Borrower and the Banks of the Effective Date, and such notice shall be conclusive and binding on all parties hereto. SECTION 3.02. Conditions to Each Borrowing. The obligation of any Bank to make a Loan on the occasion of any Borrowing is subject to the satisfaction of the following conditions: (a) receipt by the Agent of a Notice of Borrowing as required by Section 2.02; (b) the fact that, after giving effect to such Borrowing and the application of the proceeds thereof, the aggregate principal amounts of the loans outstanding to the Borrower plus the aggregate face amount of letters of credit issued for the account of the Borrower are (i) $70,000,000 under the Primary Credit Facility, (ii) $5,000,000 under the advised line from Comerica, (iii) $10,000,000 under the advised line from Hong Kong & Shanghai Bank and (iv) $3,000,000 under the advised line from State Street Bank; (c) the fact that, immediately after such Borrowing, no Default shall have occurred and be continuing; and (d) the fact that the representations and warranties of each Obligor contained in each Financing Document to which it is a party (except, in the case of a Refunding Borrowing, the representation and warranty set forth in Section 4.04(b) hereof as to any material adverse change which has theretofore been disclosed in writing by the Borrower to the Banks) shall be true on and as of the date of such Borrowing. Each Borrowing shall be deemed to be a representation and warranty by the Borrower on the date of such Borrowing as to the facts specified in clauses (b), (c) and (d) of this Section. ARTICLE IV REPRESENTATIONS AND WARRANTIES The Borrower represents and warrants that: SECTION 4.01. Corporate Existence and Power. The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of Massachusetts, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. SECTION 4.02. Corporate and Governmental Authorization; No Contravention. The execution, delivery and performance by each Obligor of the Financing Documents to which it is a party are within its corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of such Obligor or of any agreement, judgment, injunction, order, decree or other instrument binding upon such Obligor or any of its Subsidiaries or result in the creation or imposition of any Lien, except Liens created by the Collateral Documents, on any asset of such Obligor or any of its Subsidiaries. SECTION 4.03. Binding Effect; Liens of Collateral Documents. This Agreement constitutes a valid and binding agreement of the Borrower and the Notes, when executed and delivered in accordance with this Agreement, will constitute valid and binding obligations of the Borrower in each case enforceable in accordance with their respective terms. The Subsidiary Guarantee Agreement and each Collateral Document, when executed and delivered in accordance with this Agreement, will constitute a valid and binding agreement of each Obligor party thereto enforceable against each such Obligor in accordance with its terms. The Collateral Documents create valid security interests in, and first mortgage Liens on, the Collateral purported to be covered thereby, which security interests and mortgage Liens are and will remain perfected security interests and duly recorded mortgage Liens, prior to all other Liens except Liens permitted by the Collateral Documents. SECTION 4.04. Financial Information. (a) The consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of December 31, 1992 and the related consolidated statements of income, stockholders' equity and cash flows for the fiscal year then ended, reported on by Arthur Andersen & Co. and set forth in the Borrower's 1992 Form 10-K, a copy of which has been delivered to each of the Banks, fairly present, in conformity with generally accepted accounting principles, the consolidated financial position of the Borrower and its Consolidated Subsidiaries as of such date and their consolidated results of operations and cash flows for such fiscal year. (b) The unaudited consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of September 30, 1993 and the related unaudited consolidated statements of income, stockholders' equity and cash flows for the nine months then ended, set forth in the Borrower's quarterly report for the fiscal quarter ended September 30, 1993 as filed with the Securities and Exchange Commission on Form 10-Q, a copy of which has been delivered to each of the Banks, fairly present, in conformity with generally accepted accounting principles applied on a basis consistent with the financial statements referred to in subsection (a) of this Section, the consolidated financial position of the Borrower and its Consolidated Subsidiaries as of such date and their consolidated results of operations and cash flows for such nine month period (subject to normal year-end adjustments). (c) Since September 30, 1993 there has been no material adverse change in the business, financial position, results of operations or prospects of the Borrower and its Consolidated Subsidiaries, considered as a whole. SECTION 4.05. Litigation. Except as disclosed in the Borrower's 1992 Form 10-K and the Form 10-Q referred to in Section 4.04(b) above, there is no action, suit or proceeding pending against, or to the knowledge of the Borrower threatened against or affecting, the Borrower or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business, consolidated financial position or consolidated results of operations of the Borrower and its Consolidated Subsidiaries or which in any manner draws into question the validity of any Financing Document. SECTION 4.06. Compliance with ERISA. Each member of the ERISA Group has fulfilled its obligations under the minimum funding standards of ERISA and the Internal Revenue Code with respect to each Plan and is in compliance in all material respects with the presently applicable provisions of ERISA and the Internal Revenue Code with respect to each Plan. No member of the ERISA Group has (i) sought a waiver of the minimum funding standard under Section 412 of the Internal Revenue Code in respect of any Plan, (ii) failed to make any contribution or payment to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement, which has resulted or could result in the imposition of a Lien or the posting of a bond or other security under ERISA or the Internal Revenue Code or (iii) incurred any liability to the PBGC or any other Person under Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA. SECTION 4.07. Environmental Matters. (a) In the ordinary course of its business, the Borrower conducts periodic reviews of the effect of Environmental Laws on the business, operations and properties of the Borrower and its Subsidiaries and compliance therewith. The Borrower and its Subsidiaries also attempt, whenever possible, to negotiate specific provisions in contracts for construction services that allocate to the contracting governmental agency or private owner, the entire risk and responsibility for Hazardous Substances encountered during the course of construction. On the basis of such reviews and contract provisions and procedures, the Borrower has reasonably concluded that the costs and associated liabilities of compliance with Environmental Laws are unlikely to have a material adverse effect on the business, financial condition, results of operations or prospects of the Borrower and its Consolidated Subsidiaries, considered as a whole. (b) Without limiting the foregoing, as of the Effective Date: (i) no notice, notification, demand, request for information, citation, summons, complaint or order has been issued, no complaint has been filed, no penalty has been assessed and no investigation or review is pending or, to the knowledge of the Obligors, threatened by any governmental or other entity with respect to any (A) alleged violation by the Borrower or any of its Subsidiaries of any Environmental Law involving any Mortgaged Facility, (B) alleged failure by the Borrower or any of its Subsidiaries to have any environmental permit, certificate, license, approval, registration or authorization required in connection with the conduct of its business at any Mortgaged Facility, (C) Regulated Activity conducted at any Mortgaged Facility or (D) Release of Hazardous Substances at or in connection with any Mortgaged Facility; (ii) other than generation of Hazardous Substances in compliance with all applicable Environmental Laws, no Regulated Activity has occurred at or on any Mortgaged Facility; (iii) no polychlorinated biphenyls, radioactive material, urea formaldehyde, lead, asbestos, asbestos-containing material or underground storage tank (active or abandoned) is or has been present at any Mortgaged Facility; (iv) no Hazardous Substance has been Released (and no written notification of such Release has been filed) or is present (whether or not in a reportable or threshold planning quantity) at, on or under any Mortgaged Facility; (v) no Mortgaged Facility is listed or, to the knowledge of the Obligors, proposed for listing, on the National Priorities List promulgated pursuant to CERCLA, on CERCLIS (as defined in CERCLA) or on any similar federal, state or foreign list of sites requiring investigation on clean-up; and (vi) there are no Liens under Environmental Laws on any Mortgaged Facility, no government actions have been taken or are in process which could subject any Mortgaged Property to such Liens and neither the Borrower nor any of its Subsidiaries would be required to place any notice or restriction relating to Hazardous Substances in any deed to any Mortgaged Facility. (c) No environmental investigation, study, audit, test, review or other analysis has been conducted of which the Obligors have knowledge in relation to any Mortgaged Facility which has not been delivered to the Banks. SECTION 4.08. Taxes. United States Federal income tax returns of the Borrower and its Subsidiaries have been examined and closed through the fiscal year ended December 31, 1986. The Borrower and its Subsidiaries have filed all United States Federal income tax returns and all other material tax returns which are required to be filed by them and have paid all taxes due pursuant to such returns or pursuant to any assessment received by the Borrower or any Subsidiary. The charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of taxes or other governmental charges are, in the opinion of the Borrower, adequate. SECTION 4.09. Subsidiaries. Each of the Borrower's corporate Subsidiaries is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. SECTION 4.10. Not an Investment Company. The Borrower is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended. SECTION 4.11. No Burdensome Restrictions. No contract, lease, agreement or other instrument to which the Borrower or any of its Subsidiaries is a party or by which any of its property is bound or affected, no charge, corporate restriction, judgment, decree or order and no provision of applicable law or governmental regulation has or is reasonably expected to materially and adversely affect the business, operations or financial condition of the Borrower and its Consolidated Subsidiaries, taken as a whole, or the ability of the Borrower to perform its obligations under this Agreement. SECTION 4.12. Full Disclosure. All information heretofore furnished by the Borrower to the Agent or any Bank for purposes of or in connection with this Agreement or any transaction contemplated hereby is, and all such information hereafter furnished by the Borrower to the Agent or any Bank will be, true and accurate in all material respects (or in the case of projections and similar information based on reasonable estimates) on the date as of which such information is stated or certified. The Borrower has disclosed to the Banks in writing any and all facts which materially and adversely affect or may reasonably be expected to materially and adversely affect (to the extent the Borrower can now reasonably foresee), the business, operations or financial condition of the Borrower and its Consolidated Subsidiaries, taken as a whole, or the ability of the Borrower to perform its obligations under this Agreement. SECTION 4.13. Ownership of Property; Liens. The Borrower and its Subsidiaries have good and marketable title to and are in lawful possession of, or have valid leasehold interests in, or have the right to use pursuant to valid and enforceable agreements or arrangements, all of their respective properties and other assets (real or personal, tangible, intangible or mixed), except where the failure to have or possess the same with respect to such properties or other assets could not, in the aggregate, have a material adverse effect on the business, financial condition, results of operations or prospects of the Borrower and its Consolidated Subsidiaries, considered as a whole. None of such properties or other assets is subject to any Lien except Permitted Liens. ARTICLE V COVENANTS The Borrower agrees that, so long as any Bank has any Commitment hereunder or any amount payable under any Note remains unpaid: SECTION 5.01. Information. The Borrower will deliver to each of the Banks: (a) as soon as available and in any event within 90 days after the end of each fiscal year of the Borrower, consolidated and consolidating balance sheets of the Borrower and its Consolidated Subsidiaries as of the end of such fiscal year and the related consolidated and consolidating statements of income, stockholders' equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on in a manner acceptable to the Securities and Exchange Commission by Arthur Andersen & Co. or other independent public accountants of nationally recognized standing; (b) as soon as available and in any event within 45 days after the end of each of the first three quarters of each fiscal year of the Borrower, a consolidated condensed balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such quarter and the related consolidated condensed statements of income and cash flows for such quarter and for the portion of the Borrower's fiscal year ended at the end of such quarter, setting forth in each case in comparative form the figures for the corresponding quarter and the corresponding portion of the Borrower's previous fiscal year, all certified (subject to normal year-end adjustments) as to fairness of presentation, generally accepted accounting principles and consistency by the chief financial officer or the chief accounting officer of the Borrower; (c) simultaneously with the delivery of each set of financial statements referred to in clauses (a) and (b) above, a certificate of the chief financial officer or the chief accounting officer of the Borrower (i) setting forth in reasonable detail the calculations required to establish whether the Borrower was in compliance with the requirements of Sections 5.07 to 5.10, inclusive, 5.12, 5.14 and 5.15 on the date of such financial statements and (ii) stating whether there exists on the date of such certificate any Default and, if any Default then exists, setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto; (d) simultaneously with the delivery of each set of financial statements referred to in clause (a) above, a statement of the firm of independent public accountants which reported on such statements (i) whether anything has come to their attention to cause them to believe that there existed on the date of such statements any Default and (ii) confirming the calculations set forth in the officer's certificate delivered simultaneously therewith pursuant to clause (c) above; (e) simultaneously with the delivery of each set of financial statements set forth above, a schedule, dated as of the date of such financial statements, listing each construction contract which provides for aggregate total payments in excess of $2,500,000 and with respect to which the Borrower or a Consolidated Subsidiary of the Borrower is a party or participates through a joint venture, and setting forth as of the date of such schedule for each such contract the Borrower's original estimate of revenue and profit, the Borrower's current estimate of revenue and profit, cumulative realized and estimated remaining revenue and profit, and the percentage of completion and anticipated completion date of each such contract, certified as to consistency, accuracy and reasonableness of estimates by the chief financial officer or the chief accounting officer of the Borrower; (f) forthwith upon the occurrence of any Default, a certificate of the chief financial officer or the chief accounting officer of the Borrower setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto; (g) promptly upon the mailing thereof to the shareholders of the Borrower generally, copies of all financial statements, reports and proxy statements so mailed; (h) promptly upon the filing thereof, copies of all registration statements (other than the exhibits thereto and any registration statements on Form S-8 or its equivalent) and annual, quarterly or monthly reports which the Borrower shall have filed with the Securities and Exchange Commission; (i) if and when any member of the ERISA Group (i) gives or is required to give notice to the PBGC of any "reportable event" (as defined in Section 4043 of ERISA) with respect to any Plan which might constitute grounds for a termination of such Plan under Title IV of ERISA, or knows that the plan administrator of any Plan has given or is required to give notice of any such reportable event, a copy of the notice of such reportable event given or required to be given to the PBGC; (ii) receives notice of complete or partial withdrawal liability under Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is insolvent or has been terminated, a copy of such notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent to terminate, impose liability (other than for premiums under Section 407 of ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies for a waiver of the minimum funding standard under Section 412 of the Internal Revenue Code, a copy of such application; (v) gives notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and other information filed with the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any payment or contribution to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement or makes any amendment to any Plan or Benefit Arrangement which has resulted or could result in the imposition of a Lien or the posting of a bond or other security, a certificate of the chief financial officer or the chief accounting officer of the Borrower setting forth details as to such occurrence and action, if any, which the Borrower or applicable member of the ERISA Group is required or proposes to take; (j) prompt notice of the receipt of any complaint, order, citation, notice or other written communication from any Person with respect to (i) the existence or alleged existence of a violation of any applicable Environmental Law at or on, or of any Environmental Liability arising with respect to, any Mortgaged Facility, (ii) any Release on any Mortgaged Facility or any part thereof in a quantity that is reportable under any applicable Environmental Law, and (iii) any pending or threatened proceeding for the termination, suspension or non-renewal of any permit required under any applicable Environmental Law with respect to any Mortgaged Facility; (k) if a Casualty Event occurs on or after the Closing Date and at any time after such occurrence a financial officer of the Borrower reasonably expects that the Borrower or any of its Subsidiaries is or may be entitled to any Casualty Proceeds in respect thereof which will exceed the expected cost of any restoration, repair or replacement of the property affected thereby (whether as a result of a determination not to restore repair or replace or otherwise), prompt notice of such expectation with respect to such Casualty Event; and (l) from time to time such additional information regarding the financial position or business of the Borrower and its Subsidiaries as the Agent, at the request of any Bank, may reasonably request. SECTION 5.02. Payment of Obligations. The Borrower will pay and discharge, and will cause each Subsidiary to pay and discharge, at or before maturity, all their respective material obligations and liabilities, including, without limitation, tax liabilities, except where the same may be contested in good faith by appropriate proceedings, and will maintain, and will cause each Subsidiary to maintain, in accordance with generally accepted accounting principles, appropriate reserves for the accrual of any of the same. SECTION 5.03. Maintenance of Property; Insurance. The Borrower will keep, and will cause each Subsidiary to keep, all property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted; will maintain, and will cause each Subsidiary to maintain (either in the name of the Borrower or in such Subsidiary's own name) with financially sound and reputable insurance companies, insurance on all their property in at least such amounts and against at least such risks as are usually insured against in the same general area by companies of established repute engaged in the same or a similar business; and will furnish to the Banks, upon written request from the Agent, full information as to the insurance carried. SECTION 5.04. Conduct of Business and Maintenance of Existence. The Borrower will continue, and will cause each Subsidiary Guarantor to continue, to engage in business of the same general type as now conducted by the Borrower and its Subsidiaries, and will preserve, renew and keep in full force and effect, and will cause each Subsidiary Guarantor to preserve, renew and keep in full force and effect their respective corporate existence and their respective rights, privileges and franchises necessary or desirable in the normal conduct of business. SECTION 5.05. Compliance with Laws. The Borrower will comply, and cause each Subsidiary to comply, in all material respects with all applicable laws, ordinances, rules, regulations, and requirements of governmental authorities (including, without limitation, Environmental Laws and ERISA and the rules and regulations thereunder) except where the necessity of compliance therewith is contested in good faith by appropriate proceedings. SECTION 5.06. Inspection of Property, Books and Records. The Borrower will keep, and will cause each Subsidiary to keep, proper books of record and account in which full, true and correct entries in conformity with generally accepted accounting principles shall be made of all dealings and transactions in relation to its business and activities; and will permit, and will cause each Subsidiary to permit, representatives of any Bank at such Bank's expense (subject to Section 9.03(a)(ii)) to visit and inspect any of their respective properties, to examine and make abstracts from any of their respective books and records and to discuss their respective affairs, finances and accounts with their respective officers, employees and independent public accountants, all at such reasonable times and as often as may reasonably be desired. SECTION 5.07. Current Ratio. Consolidated Current Assets will at no time be less than 100% of Consolidated Current Liabilities. SECTION 5.08. Debt. (a) At the end of each fiscal quarter ending prior to March 31, 1995, Modified Parent Company Debt shall not exceed 75% of Consolidated Capital Base and at the end of each fiscal quarter ending on or after March 31, 1995, Modified Parent Debt shall not exceed 65% of Consolidated Capital Base. (b) The Borrower will not permit any Subsidiary to incur or suffer to exist any Debt other than (i) Debt of Perini Land and Development outstanding at December 31, 1992, as described in Schedule I, (ii) Debt of Perini Land and Development in the form of Guarantees issued subsequent to December 31, 1992 in an aggregate amount not exceeding $14,000,000, as described in Schedule II, (iii) Debt of Perini Land and Development in the form of Guarantees, in addition to the Guarantees permitted by clause (ii) above, issued subsequent to December 31, 1992 in an aggregate amount not exceeding $5,000,000, (iv) Debt of Perini International Corporation in an aggregate amount not exceeding $5,000,000, (v) Debt payable to the Borrower or a Wholly-Owned Consolidated Subsidiary, (vi) Debt of any Subsidiary Guarantor under the Subsidiary Guarantee Agreement and (vii) any refinancing, extension, renewal or refunding of the Debt referred to in clauses (i) through (vi) above, provided that such Debt is not increased. SECTION 5.09. Minimum Consolidated Tangible Net Worth. Consolidated Tangible Net Worth of the Borrower will at no time be less than the Minimum Compliance Level, determined as set forth below. The "Minimum Compliance Level" is an amount equal to $100,000,000 subject to increase (but in no case subject to decrease) from time to time as follows: (i) at the end of each fiscal year commencing after December 31, 1992 for which Consolidated Net Income is a positive number, the Minimum Compliance Level shall be increased effective at the last day of such fiscal year by an amount equal to 50% of such Consolidated Net Income; and (ii) on the date of each issuance by the Borrower subsequent to December 31, 1992 of any capital stock or other equity interest, the Minimum Compliance Level shall be increased by an amount equal to 75% of the amount of the net proceeds received by the Borrower on account of such issuance. SECTION 5.10. Interest Coverage. One-fourth of Consolidated Earnings Before Interest and Taxes for each period of four consecutive fiscal quarters ending on or before March 31, 1995 shall not be less than 175% of Consolidated Interest Charges for the last of such four fiscal quarters. One-fourth of Consolidated Earnings Before Interest and Taxes for each period of four consecutive fiscal quarters ending thereafter shall not be less than 200% of Consolidated Interest Charges for the last of such four fiscal quarters. SECTION 5.11. Negative Pledge. Neither the Borrower nor any Consolidated Subsidiary of the Borrower will create, assume or suffer to exist any Lien on any asset (including, without limitation, capital stock of Subsidiaries) now owned or hereafter acquired by it, except: (a) Liens existing on the date of this Agreement securing Debt outstanding on the date of this Agreement as described in Schedule III; (b) any Lien existing on any asset of any corporation at the time such corporation becomes a Consolidated Subsidiary of the Borrower and not created in contemplation of such event; (c) any Lien on any asset securing Debt incurred or assumed for the purpose of financing all or any part of the cost of acquiring such asset, provided that such Lien attaches to such asset concurrently with or within 90 days after the acquisition thereof and such Lien secures only such Debt; (d) any Lien on any asset of any corporation existing at the time such corporation is merged or consolidated with or into the Borrower or a Consolidated Subsidiary of the Borrower and not created in contemplation of such event; (e) any Lien existing on any asset prior to the acquisition thereof by the Borrower or a Consolidated Subsidiary of the Borrower and not created in contemplation of such acquisition; (f) any Lien arising out of the refinancing, extension, renewal or refunding of any Debt secured by any Lien permitted by any of the foregoing clauses of this Section, provided that such Debt is not increased and is not secured by any additional assets; (g) Liens incidental to conduct of its business or the ownership of its assets which (i) do not secure Debt and (ii) do not in the aggregate materially detract from the value of its assets or materially impair the use thereof in the operation of its business; (h) Permitted Encumbrances; and (i) Liens created by the Collateral Documents. SECTION 5.12. Consolidations, Mergers and Sales of Assets. (a) The Borrower will not (i) consolidate or merge with or into any other Person or sell, lease or otherwise transfer all or any substantial part of its assets to any other Person or (ii) permit any Material Subsidiary (other than a Subsidiary Guarantor) to consolidate or merge with or into, or transfer all or any substantial part of its assets to, any Person other than the Borrower or a Wholly-Owned Consolidated Subsidiary; provided that the Borrower or a Material Subsidiary other than Perini Land and Development may sell or otherwise transfer assets if Aggregate Asset Sale Proceeds after such sale less Aggregate Reinvested Proceeds does not at any time exceed $15,000,000. "Aggregate Asset Sale Proceeds" means the sum of the proceeds of each sale in a single transaction or series of related transactions by the Borrower or any Subsidiary, on or after the Effective Date, of fixed assets yielding proceeds in excess of 5% of the Consolidated Tangible Net Worth of the Borrower. "Aggregate Reinvested Proceeds" means the amount of Aggregate Asset Sale Proceeds used to purchase fixed assets for use in the same general business presently conducted by the Borrower or the Subsidiary that realized such proceeds, as the case may be, provided such proceeds are so used within 18 months of receipt thereof. The Borrower will not permit any Subsidiary Guarantor to consolidate or merge with or into, or transfer all or any substantial part of its assets to, any Person; provided that the foregoing shall not prohibit any Subsidiary Guarantor from selling, leasing or otherwise transferring assets in the ordinary course of its business. (b) The Borrower will not, and will not permit any of its Subsidiaries to, sell, lease or otherwise dispose of any item of Collateral unless the consideration therefor (i) is at least equal to the fair market value of such asset (as determined in good faith by a financial officer of the Borrower or, if such value exceeds $5,000,000, by the board of directors of the Borrower or a duly constituted committee thereof) and (ii) shall consist of cash payable at closing. SECTION 5.13. Use of Proceeds. The proceeds of the Loans made under this Agreement will be used by the Borrower for general corporate purposes. None of such proceeds will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any "margin stock" within the meaning of Regulation U. SECTION 5.14. Restricted Payments. The aggregate amount of all dividends which constitute Restricted Payments declared and other Restricted Payments made during any period of four consecutive fiscal quarters will not exceed an amount equal to 50% of the excess, if any, of (x) Consolidated Net Income for such period over (y) the aggregate amount of preferred stock dividends not constituting Restricted Payments paid during such period. The Borrower will not declare any dividend payable more than 120 days after the date of declaration thereof. SECTION 5.15. Real Estate Investments. The Borrower will not, and will not permit any Consolidated Subsidiary to, make any Real Estate Investment if, after giving effect thereto, the cumulative amount of Net Real Estate Investments made (i) at any time during the period beginning January 1, 1993 and ending December 31, 1994 shall exceed $26,000,000 or (ii) at any time during the fiscal year ending December 31, 1995 and any fiscal year thereafter shall exceed $4,000,000 plus 25% of the amount, if any, by which the Net Real Estate Investments made during the preceding period were less than the applicable limitation specified above for such period; provided that for any 90 days in any period specified above, other than the last day of such period, the Net Real Estate Investments made during such period may exceed by not more than $2,000,000 the applicable limitation specified above for such period. For purposes of this Section, the cumulative amount of "Net Real Estate Investments" made during any period, as measured at any date during such period, is the aggregate amount of Real Estate Investments made by the Borrower and its Consolidated Subsidiaries from and including the first day of such period to and including such date, less the sum of all cash or cash equivalent payments received by the Borrower or one of its Consolidated Subsidiaries, as the case may be, in respect of Real Estate Investments from and including the first day of such period to and including such date, including the receipt of shares in a real estate investment trust if (i) such shares are listed on a national security exchange and are at the time permitted to be freely transferred by the Borrower or one of its Consolidated Subsidiaries, as the case may be, or (ii) such shares have been used by the Borrower or one of its Consolidated Subsidiaries, as the case may be, to make a required contribution to any Plan necessary to satisfy its obligation under the minimum funding standards of ERISA and the Internal Revenue Code with respect to such Plan, but only to the extent such obligation is reduced by such contribution; provided that such contribution does not violate the applicable provisions of ERISA or the Internal Revenue Code. SECTION 5.16. Other Investments. Neither the Borrower nor any Consolidated Subsidiary will make or acquire any Investment in any Person other than: (a) Real Estate Investments permitted by Section 5.15; (b) Investments in Subsidiaries or joint ventures principally engaged in the construction business; (c) Temporary Cash Investments; and (d) any Investment not otherwise permitted by the foregoing clauses of this Section if, immediately after such Investment is made or acquired, the aggregate net book value of all Investments permitted by this clause (d) does not exceed 5% of Consolidated Tangible Net Worth; provided that no Real Estate Investment may be made pursuant to clause (b), (c) or (d) above. SECTION 5.17. Further Assurances. (a) The Borrower will, and will cause each of its Subsidiaries to, at its sole cost and expense, do, execute, acknowledge and deliver all such further acts, deeds, conveyances, mortgages, assignments, notices of assignment, transfers and assurances as the Agent shall from time to time request, which may be necessary or desirable in the reasonable judgment of the Agent from time to time to assure, perfect, convey, assign, transfer and confirm unto the Agent the property and rights conveyed or assigned pursuant to the Collateral Documents, or which the Borrower or such Subsidiaries may be or may hereafter become bound to convey or assign to the Agent or which may facilitate the performance of the terms of the Collateral Documents or the filing, registering or recording of the Collateral Documents. (b) All costs and expenses in connection with the security interests and Liens created by the Collateral Documents, including reasonable legal fees and other reasonable costs and expenses in connection with the granting, perfecting and maintenance of such security interests and Liens, the preparation, execution, delivery, recordation or filing of documents and any other acts in connection with the grant of such security interests and Liens as the Agent may reasonably request, shall be paid by the Borrower promptly when due. ARTICLE VI DEFAULTS SECTION 6.01. Events of Default. If one or more of the following events ("Events of Default") shall have occurred and be continuing: (a) the Borrower shall fail to pay when due any principal of any Loan, any fees or any other amount payable hereunder; (b) the Borrower shall fail to pay when due or within five Business Days thereof any interest on any Loan; (c) the Borrower shall fail to observe or perform any covenant contained in Sections 5.07 to 5.17, inclusive or in Section 3.01 of the Subsidiary Guarantee Agreement; (d) any Obligor shall fail to observe or perform any covenant or agreement contained in any Financing Document (other than those covered by clause (a), (b) or (c) above) for 10 days after written notice thereof has been given to such Obligor by the Agent at the request of any Bank; (e) any representation, warranty, certification or statement made by any Obligor in any Financing Document or in any certificate, financial statement or other document delivered pursuant thereto shall prove to have been incorrect in any material respect when made (or deemed made); (f) the Borrower shall fail to make any payment in respect of any Debt (other than the Notes) when due or within any applicable grace period; (g) any Subsidiary shall fail to make any payment in respect of any Debt the aggregate principal amount of which is $250,000 or more when due or within any applicable grace period; (h) any event or condition shall occur which results in the acceleration of the maturity of any Debt of the Borrower or any Subsidiary or enables (or, with the giving of notice or lapse of time or both, would enable) the holder of such Debt or any Person acting on such holder's behalf to accelerate the maturity thereof; (i) the Borrower or any Subsidiary shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing; (j) an involuntary case or other proceeding shall be commenced against the Borrower or any Subsidiary seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 days; or an order for relief shall be entered against the Borrower or any Subsidiary under the federal bankruptcy laws as now or hereafter in effect; (k) any member of the ERISA Group shall fail to pay when due an amount or amounts aggregating in excess of $5,000,000 which it shall have become liable to pay to the PBGC or any other Person under Title IV of ERISA; or notice of intent to terminate a Material Plan shall be filed under Title IV of ERISA by any member of the ERISA Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to administer any Material Plan; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Material Plan must be terminated; or there shall occur a complete or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which could cause one or more members of the ERISA Group to incur a current payment obligation in excess of $5,000,000; (l) a judgment or order for the payment of money in excess of $5,000,000 shall be rendered against the Borrower or any Subsidiary and such judgment or order shall continue unsatisfied, unstayed and unbonded for a period of 10 days; (m) any of the following: (i) any person or group or persons (within the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as amended) (other than the Exempt Group) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under said Act) of 25% or more of the outstanding shares of common stock of the Borrower; (ii) fewer than two of the following people shall be members of the Board of Directors of the Borrower: David Perini, Joseph Perini and Bart Perini; or (iii) the Borrower shall cease to own 100% of the capital stock of any Subsidiary Guarantor; or (n) any Financing Document shall cease to be in full force and effect or shall be declared null and void, or the validity or enforceability thereof shall be contested by any Obligor, or the Agent on behalf of the Banks shall at any time fail to have a valid and perfected Lien on all of the Collateral purported to be subject to such Lien, subject to no prior or equal Lien except Liens permitted by the Collateral Documents, or any Obligor shall so assert in writing; then, and in every such event, the Agent shall (i) if requested by Banks having more than 50% in aggregate amount of the Commitments, by notice to the Borrower terminate the Commitments and they shall thereupon terminate, and (ii) if requested by Banks holding Notes evidencing more than 50% in aggregate principal amount of the Loans, by notice to the Borrower declare the Notes (together with accrued interest thereon) to be, and the Notes shall thereupon become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Obligors; provided that in the case of any of the Events of Default specified in clause (i) or (j) above with respect to any Obligor, without any notice to the Borrower or any other act by the Agent or the Banks, the Commitments shall thereupon terminate and the Notes (together with accrued interest thereon) shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Obligors. SECTION 6.02. Notice of Default. The Agent shall give notice to the Borrower under Section 6.01(d) promptly upon being requested to do so by any Bank and shall thereupon notify all the Banks thereof. ARTICLE VII THE AGENT SECTION 7.01. Appointment and Authorization. Each Bank irrevocably appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Financing Documents as are delegated to the Agent by the terms thereof, together with all such powers as are reasonably incidental thereto. SECTION 7.02. Agent and Affiliates. Morgan Guaranty Trust Company of New York shall have the same rights and powers under the Financing Documents as any other Bank and may exercise or refrain from exercising the same as though it were not the Agent, and Morgan Guaranty Trust Company of New York and its affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Subsidiary or affiliate of the Borrower as if it were not the Agent hereunder. SECTION 7.03. Action by Agent. The obligations of the Agent under the Financing Documents are only those expressly set forth herein. Without limiting the generality of the foregoing, the Agent shall not be required to take any action with respect to any Default, except as expressly provided in Article VI. SECTION 7.04. Consultation with Experts. The Agent may consult with legal counsel (who may be counsel for an Obligor), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts. SECTION 7.05. Liability of Agent. Neither the Agent nor any of its affiliates nor any of their respective directors, officers, agents or employees shall be liable for any action taken or not taken by it in connection herewith (i) with the consent or at the request of the Required Banks or (ii) in the absence of its own gross negligence or willful misconduct. Neither the Agent nor any of its affiliates nor any of their respective directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into or verify (i) any statement, warranty or representation made in connection with the Financing Documents or any borrowing hereunder; (ii) the performance or observance of any of the covenants or agreements of the Borrower; (iii) the satisfaction of any condition specified in Article III, except receipt of items required to be delivered to the Agent; or (iv) the validity, effectiveness or genuineness of any Financing Document or any other instrument or writing furnished in connection herewith. The Agent shall not incur any liability by acting in reliance upon any notice, consent, certificate, statement, or other writing (which may be a bank wire, telex or similar writing) believed by it to be genuine or to be signed by the proper party or parties. SECTION 7.06. Indemnification. Each Bank shall, ratably in accordance with its Commitment, indemnify the Agent, its affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Borrower) against any cost, expense (including reasonable counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such indemnitees' gross negligence or willful misconduct) that such indemnitees may suffer or incur in connection with this Agreement or any action taken or omitted by such indemnitees hereunder. SECTION 7.07. Credit Decision. Each Bank acknowledges that it has, independently and without reliance upon the Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Bank also acknowledges that it will, independently and without reliance upon the Agent or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under this Agreement. SECTION 7.08. Successor Agent. The Agent may resign at any time by giving notice thereof to the Banks and the Borrower. Upon any such resignation, the Required Banks shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by the Required Banks, and shall have accepted such appointment, within 30 days after the retiring Agent gives notice of resignation, then the retiring Agent may, on behalf of the Banks, appoint a successor Agent, which shall be a commercial bank organized or licensed under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $150,000,000. Upon the acceptance of its appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder. After any retiring Agent's resignation hereunder as Agent, the provisions of this Article shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent. SECTION 7.09. Collateral Documents. (a) As to any matters not expressly provided for in the Collateral Documents (including the timing and methods of realization upon the Collateral), the Agent shall act or refrain from acting in accordance with written instructions from the Required Banks or, in the absence of such instructions, in accordance with its discretion; provided that the Agent shall not be obligated to take any action if the Agent believes that such action is or may be contrary to any applicable law or might cause the Agent to incur any loss or liability for which it has not been indemnified to its satisfaction. (b) The Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the security interests in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part under the Collateral Documents. The Agent shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of the Collateral Documents by any Obligor. ARTICLE VIII CHANGE IN CIRCUMSTANCES SECTION 8.01. Reduced Return. If any Bank shall have determined that, after the date hereof, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change in any such law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on capital of such Bank (or its Parent) as a consequence of such Bank's obligations hereunder to a level below that which such Bank (or its Parent) could have achieved but for such adoption, change, request or directive (taking into consideration its policies with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time, within 15 days after demand by such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank (or its Parent) for such reduction. A certificate of any Bank claiming compensation under this Section and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, such Bank may use any reasonable averaging and attribution methods. ARTICLE IX MISCELLANEOUS SECTION 9.01. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including bank wire, telex, facsimile transmission or similar writing) and shall be given to such party: (x) in the case of the Borrower or the Agent, at its address or telex or facsimile number set forth on the signature pages hereof, (y) in the case of any Bank, at its address or telex or facsimile number set forth in its Administrative Questionnaire or (z) in the case of any party, such other address or telex or facsimile number as such party may hereafter specify for the purpose by notice to the Agent and the Borrower. Each such notice, request or other communication shall be effective (i) if given by telex, when such telex is transmitted to the telex number specified in this Section and the appropriate answerback is received, (ii) if given by facsimile transmission, when such facsimile is transmitted to the facsimile number specified in this Section and receipt of such facsimile is confirmed, either orally or in writing, by the party receiving such transmission, (iii) if given by certified mail, 72 hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iv) if given by any other means, when delivered at the address specified in this Section; provided that notices to the Agent under Article II shall not be effective until received. SECTION 9.02. No Waivers. No failure or delay by the Agent or any Bank in exercising any right, power or privilege under any Financing Document shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies therein provided shall be cumulative and not exclusive of any rights or remedies provided by law. SECTION 9.03. Expenses; Documentary Taxes; Indemnification. (a) The Borrower shall pay (i) all out-of-pocket expenses of the Agent, including fees and disbursements of special counsel for the Agent, in connection with the preparation of the Financing Documents, any waiver or consent under any Financing Document, or any amendment of any Financing Document or any Default or alleged Default and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by the Agent and each Bank, including fees and disbursements of counsel, in connection with such Event of Default and collection, bankruptcy, insolvency and other enforcement proceedings resulting therefrom. The Borrower shall indemnify each Bank against any transfer taxes, documentary taxes, assessments or charges made by any governmental authority by reason of the execution and delivery of any Financing Document. (b) The Borrower agrees to indemnify the Agent and each Bank, their respective affiliates and the respective directors, officers, agents and employees of the foregoing (each an "Indemnitee") and hold each Indemnitee harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel, which may be incurred by any Indemnitee in connection with any investigative, administrative or judicial proceeding (whether or not such Indemnitee shall be designated a party thereto) brought or threatened relating to or arising out of any Financing Document or any actual or proposed use of proceeds of Loans hereunder; provided that no Indemnitee shall have the right to be indemnified hereunder for such Indemnitee's own gross negligence or willful misconduct as determined by a court of competent jurisdiction. (c) The Borrower agrees to indemnify each Indemnitee and hold each Indemnitee harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind (including without limitation reasonable expenses of investigation by engineers, environmental consultants and similar technical personnel and reasonable fees and disbursements of counsel) of any Indemnitee arising out of, in respect of or in connection with any and all Environmental Liabilities. Without limiting the generality of the foregoing, the Borrower hereby waives all rights for contribution or any other rights of recovery with respect to liabilities, losses, damages, costs or expenses arising under or related to Environmental Laws that it might have by statute or otherwise against any Indemnitee. SECTION 9.04. Sharing of Setoffs. Each Bank agrees that if it shall, by exercising any right of setoff or counterclaim or otherwise, receive payment of a proportion of the aggregate amount due with respect to any Loan owed to it which is greater than the proportion received by any other Bank in respect of the aggregate amount due with respect to any Loan owed to such other Bank, the Bank receiving such proportionately greater payment shall purchase such participations in the Loans owed to the other Banks, and such other adjustments shall be made, as may be required so that all such payments with respect to the Loans owed to the Banks shall be shared by the Banks pro rata; provided that nothing in this Section shall impair the right of any Bank to exercise any right of setoff or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of the Borrower other than its indebtedness hereunder. The Borrower agrees, to the fullest extent it may effectively do so under applicable law, that any holder of a participation in a Loan, whether or not acquired pursuant to the foregoing arrangements, may exercise rights of setoff or counterclaim and other rights with respect to such participation as fully as if such holder of a participation were a direct creditor of the Borrower in the amount of such participation. SECTION 9.05. Amendments and Waivers. Any provision of this Agreement or the Notes may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrower and the Required Banks (and, if the rights or duties of the Agent are affected thereby, by it); provided that no such amendment or waiver shall, unless signed by all the Banks, (i) increase or decrease the Commitment of any Bank (except for a ratable decrease in the Commitments of all Banks) or subject any Bank to any additional obligation, (ii) reduce the principal of or rate of interest on any Loan or any fees hereunder, (iii) postpone the date fixed for any payment of principal of or interest on any Loan or any fees hereunder or for termination of any Commitment, (iv) amend or waive any of the provisions of Article VIII, (v) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Notes, or the number of Banks, which shall be required for the Banks or any of them to take any action under this Section or any other provision of the Financing Documents or (vi) release any Collateral otherwise than as provided in the relevant Collateral Document. SECTION 9.06. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Borrower may not assign or otherwise transfer any of its rights under this Agreement without the prior written consent of all Banks. (b) Any Bank may at any time grant to one or more banks or other institutions (each a "Participant") participating interests in its Commitment or any or all of its Loans. In the event of any such grant by a Bank of a participating interest to a Participant, whether or not upon notice to the Borrower and the Agent, such Bank shall remain responsible for the performance of its obligations hereunder, and the Borrower and the Agent shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement. Any agreement pursuant to which any Bank may grant such a participating interest shall provide that such Bank shall retain the sole right and responsibility to enforce the obligations of the Borrower hereunder including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement; provided that such participation agreement may provide that such Bank will not agree to any modification, amendment or waiver of this Agreement described in clause (i), (ii) or (iii) of Section 9.05 without the consent of the Participant. The Borrower agrees that each Participant shall, to the extent provided in its participation agreement, be entitled to the benefits of Article VIII with respect to its participating interest. An assignment or other transfer which is not permitted by subsection (c) or (d) below shall be given effect for purposes of this Agreement only to the extent of a participating interest granted in accordance with this subsection (b). (c) Any Bank may at any time assign to one or more banks or other institutions (each an "Assignee") all, or a proportionate part of all, of its rights and obligations under this Agreement and the Notes (provided that it at the same time assigns the same ratable portion of its rights and obligations under the Primary Credit Facility and the notes related thereto), and such Assignee shall assume such rights and obligations, pursuant to an Assignment and Assumption Agreement in substantially the form of Exhibit I hereto executed by such Assignee and such transferor Bank, with (and subject to) the subscribed consent of the Borrower (which shall not be unreasonably withheld) and the Agent; provided that if an Assignee is an affiliate of such transferor Bank, no such consent shall be required. Upon execution and delivery of such instrument and payment by such Assignee to such transferor Bank of an amount equal to the purchase price agreed between such transferor Bank and such Assignee, such Assignee shall be a Bank party to this Agreement and shall have all the rights and obligations of a Bank with a Commitment as set forth in such instrument of assumption, and the transferor Bank shall be released from its obligations hereunder to a corresponding extent, and no further consent or action by any party shall be required. Upon the consummation of any assignment pursuant to this subsection (c), the transferor Bank, the Agent and the Borrower shall make appropriate arrangements so that, if required, a new Note is issued to the Assignee. In connection with any such assignment, the transferor Bank shall pay to the Agent an administrative fee for processing such assignment in the amount of $2,500. (d) Any Bank may at any time assign all or any portion of its rights under this Agreement and its Note to a Federal Reserve Bank. No such assignment shall release the transferor Bank from its obligations hereunder. SECTION 9.07. Collateral. Each of the Banks represents to the Agent and each of the other Banks that it in good faith is not relying upon any "margin stock" (as defined in Regulation U) as collateral in the extension or maintenance of the credit provided for in this Agreement. SECTION 9.08. Governing Law; Submission to Jurisdiction. This Agreement and each Note shall be construed in accordance with and governed by the law of the State of New York. The Borrower hereby submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Borrower irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. SECTION 9.09. Counterparts; Integration. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof. SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. PERINI CORPORATION By /s/ James M. Markert ---------------------------- Title: Senior Vice President By /s/ Susan C. Mellace ---------------------------- Title: Treasurer 73 Mount Wayte Avenue Framingham, MA 01701 Facsimile number: (508) 628-2960 Commitments $ 3,214,285.72 MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Robert Bottamedi ------------------------- Title: Vice President Morgan Guaranty Trust Company of New York 60 Wall Street New York, New York 10260 Telex number: 177615 MGT UT Facsimile number: (212) 648-5018 $ 3,214,285.71 BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION By /s/ Richard J. Cerf ------------------------- Title: Vice President $ 3,214,285.72 SHAWMUT BANK, N.A. By /s/ Robert Lord ---------------------------- Title: Vice President $ 3,214,285.71 FLEET BANK OF MASSACHUSETTS, N.A. By /s/ Jeffrey F. Bauer ---------------------------- Title: Vice President $ 2,142,857.14 BAYBANK BOSTON, N.A. By /s/ Timothy M. Laurion ---------------------------- Title: Vice President __________________ Total Commitments $15,000,000.00 MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent By /s/ Robert Bottamedi ---------------------------- Title: Vice President 60 Wall Street New York, New York 10260 Attn: Robert Bottamedi Telex number: 177615 MGT UT Facsimile number: (212) 648-5023 SCHEDULE I DEBT OF PERINI LAND AND DEVELOPMENT ("PL&D") OUTSTANDING AT DECEMBER 31, 1992 ($000'S) Loans: Metrocentre - Barnett 3,109 Metrocentre - Boose & Gluckstern 200 Insurance 687 Perini Central (VNB) 708 Capital Plaza (Pioneer Dvlpt.) 811 Sabino Springs (Nickerson) 433 Sabino Springs (Svgs. of America/Tibor Title) 255 Sabino Springs (B of A) 3,330 Southwest Villages 2,195 Marlboro (IDB) 3,145 RWCC (Minn. Mutual) 4,953 Raynham Exec. Bldg. (Durfee Attleboro) 1,200 Raynham Exec. Bldg. (BayBank S/E) 1,188 Easton (Dedham Svgs.) 195 Easton Ind. Park (Citicorp) 3,350 TOTAL $ 25,759 PL&D Guarantees: SCA (lease guarantees) $ 2,339 Glenco/Squaw (guarantee) (B of A loan) 10,000 Lake Ridge (B of A loan) 4,594 Rincon II Comm loan 3,500 Rincon T.I. Loan (Sumitomo) 774 Oaks at Buckhead (Citicorp loan) 9,849 $ 31,056 Letters of Credit: (as Credit Support) Rincon Center I (B of A) $ 3,500 II (B of A) 2,750 Squaw Creek (Bay Bank) 2,200 $ 8,450 TOTAL $ 65,265 SCHEDULE II POTENTIAL PL&D GUARANTEES OF JOINT VENTURE OBLIGATIONS ($000) Squaw Creek PL&D subject to possible future increase in $ 2,000 letter of credit support under Bank of America Loan. Rincon Center PL&D may be required to undertake additional $ 8,000 guarantees under Citicorp loan in forthcoming negotiations. Guarantees would not exceed forecast loan amortization over 1993-1998. Oaks at Buckhead PL&D has guaranteed up to $4 million of $ 4,000 individual mortgages for condominium purchases if Citicorp initiates them and if certain repayment milestones of the mortgages are not met (Agreement signed in 1993 - not included in 12/31/92 PL&D funded debt). _______ Total $14,000 SCHEDULE III EXISTING LIENS (All Amounts in Thousands) IRB 1978 1,254 Framingham H.O. Bldg IRB 1985 4,000 Framingham H.O. Bldg Rincon (CA) 6,250 FL Land Sasson Land 1,020 PBC West Office Bldg 939 Total 13,463 SCHEDULE IV MORTGAGED FACILITIES Facility Record Owner Sabino Springs Title Guaranty Agency of Arizona, Tucson, Arizona as Trustee under Trust No. T-1208 Capitol Plaza Perini Land and Development Corp. Phoenix, Arizona NOTE New York, New York , 1994 For value received, Perini Corporation, a Massachusetts corporation (the "Borrower"), promises to pay to the order of (the "Bank"), for the account of its Applicable Lending Office, the unpaid principal amount of each Loan made by the Bank to the Borrower pursuant to the Credit Agreement referred to below on the last day of the Interest Period relating to such Loan. The Borrower promises to pay interest on the unpaid principal amount of each such Loan on the dates and at the rate or rates provided for in the Credit Agreement. All such payments of principal and interest shall be made in lawful money of the United States in Federal or other immediately available funds at the office of Morgan Guaranty Trust Company of New York, 60 Wall Street, New York, New York. All Loans made by the Bank, the maturities thereof and all repayments of the principal thereof shall be recorded by the Bank and, if the Bank so elects in connection with any transfer or enforcement of this note, appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding may be endorsed by the Bank on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof; provided that the failure of the Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Credit Agreement. This note is one of the Notes referred to in the Credit Agreement dated as of March 9, 1994 among the Borrower, the banks listed on the signature pages thereof, and Morgan Guaranty Trust Company of New York, as Agent (as the same may be amended from time to time, the "Credit Agreement"). Terms defined in the Credit Agreement are used herein with the same meanings. Reference is made to the Credit Agreement for provisions for the prepayment hereof and the acceleration of the maturity hereof. Payment of principal and interest on this Note is unconditionally guaranteed, subject to the limitations contained in the Subsidiary Guarantee Agreement, by the Subsidiary Guarantors pursuant to the Subsidiary Guarantee Agreement. PERINI CORPORATION By________________________ Title: By________________________ Title: LOANS AND PAYMENTS OF PRINCIPAL __________________________________________________________________ Amount of Amount of Principal Maturity Notation Date Loan Repaid Date Made By __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ EXHIBIT B-1 OPINION OF GENERAL COUNSEL OF THE BORROWER March __, 1994 To the Banks and the Agent Referred to Below c/o Morgan Guaranty Trust Company of New York, as Agent 60 Wall Street New York, New York 10260 Dear Sirs: I am General Counsel of Perini Corporation (the "Borrower") and have acted as such in connection with the Credit Agreement (the "Credit Agreement") dated as of March 9, 1994 among the Borrower, the banks listed on the signature pages thereof, and Morgan Guaranty Trust Company of New York, as Agent. Terms defined in the Credit Agreement are used herein as therein defined. This opinion is being rendered to you pursuant to Section 3.01(j) of the Credit Agreement. I have examined originals or copies, certified or otherwise identified to my satisfaction, of the Financing Documents and of such other documents, corporate records, certificates of public officials and officers of the Borrower and its Subsidiaries and other instruments and have conducted such other investigations of fact and law as I have deemed necessary or advisable for purposes of this opinion. I call your attention to the fact that Financing Documents provide that they are to be governed by and construed in accordance with the internal laws of the State of New York and I understand that you are relying on the advice of Jacobs Persinger & Parker with respect to all matters involving New York law. For purposes of rendering the opinions expressed below, I have assumed that the Financing Documents provide that they are to be governed by and construed in accordance with the internal laws of the Commonwealth of Massachusetts. Otherwise, the opinions below are limited to matters governed by the internal laws of the Commonwealth of Massachusetts, the General Corporation Law of the State of Delaware and the federal laws of the United States. Upon the basis of the foregoing, I am of the opinion that: 1. The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of the Commonwealth of Massachusetts, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. 2. The execution, delivery and performance by each Obligor of the Financing Documents to which it is a party are within its corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of such Obligor or of any agreement, judgment, injunction, order, decree or other instrument binding upon such Obligor or any of its Subsidiaries or result in the creation or imposition of any Lien on any asset of such Obligor or any of its Subsidiaries, except as otherwise set forth below. 3. The choice of New York law to govern each Financing Document is a valid and effective choice of law under the laws of the Commonwealth of Massachusetts. 4. Except as set forth in the Borrower's 1992 Form 10-K and its Form 10-Q for the quarter ended September 30, 1993, there is no action, suit or proceeding pending against, or to the best of my knowledge threatened against or affecting, the Borrower or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business, consolidated financial position or consolidated results of operations of the Borrower and its Consolidated Subsidiaries, considered as a whole, or which in any manner draws into question the validity of any Financing Document. 5. Each of the Borrower's Material Subsidiaries is a corporation validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. 6. The Security Documents (other than the Deeds of Trust) create valid security interests, for the benefit of the Agent and the Banks, in all collateral to the extent that Article 9 of the UCC is applicable thereto (the "Security Interests"). 7. UCC financing statements and amendments thereto (collectively, the "Massachusetts Financing Statements") have been filed in the filing offices listed in Schedule 6 to the Perfection Certificates (the "Massachusetts Filing Jurisdictions"), which are all of the Massachusetts offices in which filings are required to perfect the Security Interests, to the extent the Security Interests may be perfected by filing under Article 9 of the Massachusetts UCC, and no further filing or recording of any document or instrument or other action will be required so to perfect the Security Interests, except that (i) continuation statements with respect to each Financing Statement must be filed within the respective time periods set forth on Schedule 7 to the Perfection Certificates; (ii) additional filings may be necessary if any Obligor changes its name, identity or corporate structure or the jurisdiction in which its places of business, its chief executive office or the Collateral are located; and (iii) I express no opinion on the perfection of, or need for further filing or recording to perfect, the Security Interests in goods now or hereafter located in any jurisdiction other than the Filing Jurisdictions. 8. The UCC File Search Reports listed on the attached Exhibit A, identify, as of the date of such reports, no UCC financing statements which name any Obligor as debtor or seller and cover any of the Collateral, other than the Financing Statements, and the financing statements with respect to Permitted Liens annexed as Schedule 5(A) to the Perfection Certificate. Under Article 9 of the Massachusetts UCC, all of the Obligors, other than Perini Building Company, Inc. and R. E. Dailey & Co., Inc., are required to file financing statements in the offices of the Secretary of State of the Commonwealth of Massachusetts and the Framingham Town Clerk. There are no other filings of the Massachusetts Financing Statements required by the laws of the Commonwealth of Massachusetts to perfect the Security Interests in the Collateral described therein. 9. There are no notices of the filing of any federal tax lien (filed pursuant to Section 6323 of the Internal Revenue Code) or any lien of the Pension Benefit Guaranty Corporation (filed pursuant to Section 4068 of ERISA) covering any of the Collateral listed in the available records in the UCC filing offices in States of the Obligors' chief executive offices, which are the only offices having files which must be searched in order to fully determine the existence of notices of the filing of federal tax liens (filed pursuant to Section 6323 of the Internal Revenue Code) and liens of the Pension Benefit Guaranty Corporation (filed pursuant to Section 4068 of ERISA) on the Collateral. 10. The Security Interests validly secure the payment of all future Loans made by the Banks to the Borrower, whether or not at the time such Loans are made an Event of Default or other event not within the control of the Banks has relieved or may relieve the Banks from their obligations to make such Loans, the Security Interests have the same priority (relative to other security interests arising under Article 9 of the UCC) with respect to such future Loans as they do with respect to Loans made on the date hereof. I call your attention to the fact that the opinions expressed herein do not purport to cover, and I express no opinion with respect to, the application of Section 548 of the Bankruptcy Code or any comparable provision of state law. In addition, I express no opinion as to whether a subsidiary may guarantee or otherwise become liable for, or pledge, its assets to secure indebtedness incurred by its parent except to the extent such subsidiary may be determined to have benefitted from the incurrence of such indebtedness by its parent, or as to whether such benefit may be measured other than by the extent to which the proceeds of the indebtedness by the parent are directly or indirectly made available to such subsidiary for its corporate purposes. The foregoing is solely for your benefit and may not be relied upon by any person other than you or your counsel in rendering their opinion with respect to this transaction. Very truly yours, EXHIBIT B-2 OPINION OF NEW YORK COUNSEL FOR THE BORROWER March 9, 1994 To the Banks and the Agent Referred to Below c/o Morgan Guaranty Trust Company of New York, as Agent 60 Wall Street New York, New York 10260 Dear Sirs: We have acted as counsel for Perini Corporation (the "Borrower") in connection with the Credit Agreement (the "Credit Agreement") dated as of March 9, 1994 among the Borrower, the banks listed on the signature pages thereof, and Morgan Guaranty Trust Company of New York, as Agent. Terms defined in the Credit Agreement are used herein as therein defined, unless otherwise defined herein. This opinion is being rendered to you pursuant to Section 3.01(j) of the Credit Agreement. We have examined originals or copies, certified or otherwise identified to our satisfaction, of the Financing Documents and of such other documents, corporate records, certificates of public officials and officers of the Borrower and its Subsidiaries and other instruments and have conducted such other investigations of fact and law as we have deemed necessary or advisable for purposes of this opinion. The opinions expressed below are limited to matters governed by the internal laws of the State of New York, the General Corporation Law of the State of Delaware and the federal laws of the United States. When a matter is stated as being "known to us" or "to the best of our knowledge", we have not conducted an independent investigation into such matter and are intending to advise you only that in the course of our representation of the Borrower nothing has come to our attention that leads us to believe, and we do not believe, that the matter is other than as stated herein. Upon the basis of the foregoing, and subject to the further qualifications hereinafter set forth, we are of the opinion that: 1. The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of the Commonwealth of Massachusetts, and has all corporate powers and, to the best of our knowledge, all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. 2. The execution, delivery and performance by each Obligor of the Financing Documents to which it is a party are within its corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of such Obligor or of any agreement, judgment, injunction, order, decree or other instrument known to us and binding upon such Obligor or any of its Subsidiaries or result in the creation or imposition of any Lien on any asset of such Obligor or any of its Subsidiaries, except as otherwise set forth below. 3. The Credit Agreement constitutes a valid and binding agreement of the Borrower and the Notes constitute valid and binding obligations of the Borrower in each case enforceable in accordance with their respective terms. Each Collateral Document (other than the Deeds of Trust) constitute valid and binding agreements of each Obligor party thereto enforceable against each such Obligor in accordance with its terms. 4. To the best of our knowledge, except as set forth in the Borrower's 1992 Form 10-K and its Form 10-Q for the quarter ended September 30, 1993, there is no action, suit or proceeding pending against, or affecting, the Borrower or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business, consolidated financial position or consolidated results of operations of the Borrower and its Consolidated Subsidiaries, considered as a whole or which in any manner draws into question the validity of any Financing Document. 5. Each of the Borrower's Material Subsidiaries is a corporation validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate powers and, to best of our knowledge, all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. 6. The Collateral Documents (which, for the purposes hereof, are limited to the Borrower Security Agreement, the Borrower Pledge Agreement, the Subsidiary Guarantee and the Subsidiary Security Agreement) create valid security interests, for the benefit of the Agent and the Banks, in all of each Obligor's right, title and interest in all Collateral (the "Security Interests"). 7. The Security Interests validly secure the payment of all future Loans made by the Banks to the Borrower, whether or not at the time such Loans are made an Event of Default or other event not within the control of the Banks has relieved or may relieve the Banks from their obligations to make such Loans. Insofar as the priority thereof is governed by Article 9 of the UCC (as hereinafter defined), the Security Interests have the same priority (relative to other security interests arising under Article 9 of the UCC) with respect to such future Loans as they do with respect to Loans made on the date hereof. The opinion expressed in Paragraph 3 above is subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors' rights generally and subject to general principles of equity applicable to any enforceability or the granting of the remedy of specific performance now and hereafter in effect. The opinions expressed in Paragraphs 6 and 7 above are limited to Article 9 of the Uniform Commercial Code as in effect in the State of New York (the "UCC") and therefore do not address (i) laws of jurisdictions other than New York and of New York except for Article 9 of the UCC and (ii) collateral of a type not subject to Article 9 of the UCC. Further, except to the extent of the discussion of relative priorities set forth in Paragraph 7 above, we express no opinions concerning the perfection or priority of any lien, whether or not provided for in any Financing Document. In addition, we express no opinion as to whether a subsidiary may guarantee or otherwise become liable for, or pledge its assets to secure, indebtedness incurred by its parent except to the extent such subsidiary may be determined to have benefitted from the incurrence of such indebtedness by its parent, or as to whether such benefit may be measured other than by the extent to which the proceeds of the indebtedness by the parent are directly or indirectly made available to such subsidiary for its corporate purposes. The members of this firm are not members of the Bar of any state other than the State of New York. In giving the foregoing opinion we have relied, without independent investigation, as to all matters governed by the laws of Massachusetts, upon the opinion of Robert E. Higgins, General Counsel of the Borrower, dated March __, 1994, a copy of which has been delivered to you. Very truly yours, EXHIBIT C-1 OPINION OF DAVIS POLK & WARDWELL, SPECIAL COUNSEL FOR THE AGENT March __, 1994 To the Banks and the Agent Referred to Below c/o Morgan Guaranty Trust Company of New York, as Agent 60 Wall Street New York, New York 10260 Dear Sirs: We have participated in the preparation of the Credit Agreement (the "Credit Agreement") dated as of March 9, 1994 among Perini Corporation, a Massachusetts corporation (the "Borrower"), the banks listed on the signature pages thereof (the "Banks") and Morgan Guaranty Trust Company of New York, as Agent (the "Agent"), and have acted as special counsel for the Agent for the purpose of rendering this opinion pursuant to Section 3.01(k) of the Credit Agreement. Terms defined in the Credit Agreement are used herein as therein defined except that, for purposes of this opinion, "Obligors" means the Borrower, Perini Land and Development, Perini International, Perini Building Company, R. E. Dailey & Co and Paramount Development Associates. We have examined originals or copies, certified or otherwise identified to our satisfaction, of the Financing Documents and of such other documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as we have deemed necessary or advisable for purposes of this opinion. Upon the basis of the foregoing, we are of the opinion that: 1. The execution, delivery and performance by the Borrower of the Credit Agreement and the Notes are within the Borrower's corporate powers and have been duly authorized by all necessary corporate action. 2. Each of the Credit Agreement, the Borrower Security Agreement and the Borrower Pledge Agreement constitutes a valid and binding agreement of the Borrower and the Notes constitute valid and binding obligations of the Borrower. 3. Assuming that the execution, delivery and performance by each Obligor other than the Borrower of the Subsidiary Guarantee Agreement and the Subsidiary Security Agreement are within such Obligor's corporate powers and have been duly authorized by all necessary corporate action, then the Subsidiary Guarantee Agreement and the Subsidiary Security Agreement constitute valid and binding agreements of each Obligor. We are members of the Bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York, the federal laws of the United States of America and the General Corporation Law of the State of Delaware. Insofar as the foregoing opinion involves matters governed by the laws of Massachusetts, we have relied, without independent investigation, upon the opinion, of Robert E. Higgins, General Counsel of the Borrower, dated March 31, 1994, a copy of which has been delivered to you and our opinion is subject to the qualifications included therein. In giving the foregoing opinion, we express no opinion as to the effect (if any) of any law of any jurisdiction (except the State of New York) in which any Bank is located which limits the rate of interest that such Bank may charge or collect. We express no opinion as to the applicability (and, if applicable, the effect) of Section 548 of the United States Bankruptcy Code or any comparable provision of state law to the questions addressed above or the conclusions expressed with respect thereto. In addition, we express no opinion as to the rights, title or interest of any Person in or to any properties or assets in which any security interest are or are purported to be granted pursuant to any of the agreements referred to above or the creation, perfection or priority of any such security interest. This opinion is rendered solely to you in connection with the above matter. This opinion may not be relied upon by you for any other purpose or relied upon by or furnished to any other person without our prior written consent. Very truly yours, EXHIBIT C-2 [Letterhead of Local Counsel] March 9, 1994 To the Secured Parties Referred to in the Deed of Trust described in Schedule A hereto c/o Morgan Guaranty Trust Company of New York 60 Wall Street New York, New York 10260 Ladies and Gentlemen: We have (i) acted as special counsel in the State of Arizona (the "State") to the Agent (as defined below) in connection with the transactions contemplated by the Credit Agreement (the "Credit Agreement") dated as of March 9, 1994 among Perini Corporation, a Massachusetts corporation (the "Borrower"), each Bank which is a party thereto (the "Banks"), Morgan Guaranty Trust Company of New York, as Agent, and the Subsidiary Guarantee Agreement (the "Subsidiary Guarantee Agreement") dated as of March 9, 1994 among Perini Land and Development Company ("Grantor"), the Subsidiary Guarantors (as listed on the signature pages thereof) and Morgan Guaranty Trust Company of New York as Agent, and the Borrower (ii) assisted in the preparation of the Deeds of Trust (as defined below), and (iii) reviewed the form of Financing Statements (as defined below), and have been requested to render this opinion pursuant to Section 3.01(j) of the Credit Agreement. Capitalized terms used but not defined herein have the meanings assigned to them in the Credit Agreement. We have examined a February 28, 1994 draft of the Credit Agreement, the deeds of trust described in Schedule A hereto (the "Deeds of Trust"), a February 21, 1994 draft of the Subsidiary Guarantee Agreement dated as of March 4, 1994, a February 21, 1994 draft of the Subsidiary Security Agreement dated as of March 4, 1994 between the Subsidiary Guarantors and the Agent (the "Subsidiary Security Agreement"), and the form of financing statements described in Schedule B hereto (the "Financing Statements"; and together with the Credit Agreement, the Subsidiary Guarantee Agreement, the Deeds of Trust, and the Subsidiary Security Agreement, the "Financing Documents"). The terms "Trust Property", "Secured Parties" and "Secured Obligations" have the meanings assigned to them in the Deed of Trust. In rendering this opinion, we have assumed, without independent investigation or verification: (a) The authenticity of all documents submitted to us as originals, the conformity to authentic original documents of all documents submitted to us as certified, conformed or photostatic copies, the genuineness, accuracy, authenticity, and completeness of all signatures on all documents submitted to us as executed and the legal capacity of all natural persons executing all documents submitted to us as executed. (b) That the Grantor is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, has been duly qualified as a foreign corporation for the transaction of business, is in good standing in the State, and has all requisite corporate power and all material governmental licenses, authorizations, consents and approvals necessary to own and operate the Trust Property. (c) That the execution, delivery and performance by the Grantor of the Deeds of Trust (i) are within its corporate powers; (ii) have been duly authorized by all necessary corporate action; (iii) do not require any authorization, approval or consent of, or filings or registrations with any persons or entities not a party to the Deeds of Trust; (iv) do not require any authorization, approval or consent of any governmental or regulatory authority or agency outside of the States except for authorizations, consents, approvals that have already been obtained or filings that have already been made and that remain in effect; (iv) do not contravene any provision of its certificate of incorporation or by-laws; and (v) do not contravene or constitute a breach of or default under any applicable provision of the laws of any jurisdiction other than the State and the federal laws of the United States or any applicable regulation thereunder or under any agreement, judgment, injunction, order, decree or other instrument binding upon it. (d) That the Financing Documents have been duly authorized, executed and delivered by all parties thereto and that all Financing Documents to which the Agent is a party are enforceable against the Agent. (e) That the Financing Documents other than the Deeds of Trust constitute legal, valid and binding obligations of the Grantor under the laws of the State of New York. (f) That the Grantor owns the Trust Property. (g) That in exercising its rights and remedies under the Financing Documents, the Agent will act in a commercially reasonable manner as determined by applicable law. As to all questions of fact material to this opinion, we have relied without independent investigation or verification upon the representations and warranties of the Grantor and the other parties contained in the Financing Documents. Upon the basis of the foregoing, and except as qualified hereafter, we are of the opinion that, under applicable law in effect on the date of this opinion: 1. None of the execution, delivery and performance of the Deeds of Trust by the Grantor (i) contravene or constitute a breach of or default under any applicable provision of the laws of the State or any applicable regulation thereunder; (ii) require any authorization, approval or consent of, or filings or registrations with any State regulatory authority or agency; or (iii) create any Lien upon any revenues or assets of the Grantor located in the State, other than the Liens created under the Financing Documents. For the purposes of rendering the opinion expressed in clause (ii) in the foregoing sentence, we have assumed that no authorization, approval or consent of, or filings or registrations with any governmental or regulatory authority or agency within the State is required regarding the Grantor's compliance with any Legal Requirement with respect to its performance in connection with the Deeds of Trust, other than recordings and filings in public offices necessary to secure the Grantor's payment obligations under the Deeds of Trust and such other authorizations, approvals and consents that have already been obtained and that remain in effect. 2. The Deeds of Trust constitute legal, valid and binding obligations of the Grantor, enforceable in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent conveyance or other similar laws relating to the enforcement of creditors' rights generally, and general equitable principles. 3. None of the Agent or the other Secured Parties is required to pay any tax or be qualified to do business or file any designation for service of process or file any reports in the State or comply with any statutory or regulatory rule or requirement applicable only to financial institutions chartered or qualified to do business in the State, solely by reason of its execution and delivery or acceptance of the Deeds of Trust or the other Financing Documents or solely by reason of its participation in any of the transactions under or contemplated by the Financing Documents, the making and receipt of payments pursuant thereto and the exercise of any right or remedy under or with respect to the Deeds of Trust, and the validity and enforceability of the Deeds of Trust and the other Financing Documents will not be affected by any failure to so qualify or file. 4. The Deeds of Trust, upon the attachment of an appropriate legal description and the recording and filing described in the following sentence, create valid deed of trust Liens upon such of the Trust Property described therein as constitutes real property under the law of the State (the "Real Property") and valid security interests in such of the other Trust Property described therein (the "UCC Property") as is subject to the provisions of Article 9 of the Arizona Uniform Commercial Code (the "Local UCC") and in which a security interest can be perfected by filing, in each case in favor of the Agent for the ratable benefit of the Secured Parties and securing the Secured Obligations. The recording of the Deeds of Trust in the office designated in Schedule A hereto and the filing of the Financing Statements in the offices designated in Schedule B hereto are the only filings, recordings and registrations in Arizona necessary to perfect, publish notice of and preserve the Lien of and security interest in the Trust Property created by the Deeds of Trust, except that (i) continuation statements relating to the Financing Statements must be filed within six years, and (ii) additional filings may be necessary with respect to the UCC Property if the Borrower changes its name, identity or corporate structure or the jurisdiction in which its places of business in the State or the UCC Property are located. 6. No taxes or other charges, including, without limitation, intangible or documentary stamp taxes, mortgage or recording taxes, transfer taxes or similar charges, are payable by the Agent or other Secured Parties to the State or to any jurisdiction therein solely on account of the execution or delivery of the Deeds of Trust or the other Financing Documents, the creation of the indebtedness evidenced or secured thereby, the creation of the Liens and security interests thereunder, or the filing, recording or registration of the Deeds of Trust or the Financing Statements, except for nominal filing or recording fees. 7. You have requested an opinion whether under Arizona law the Liens and security interests created by the Deeds of Trust on or in the Trust Property will validly secure all future Credit Events pursuant to the Credit Agreement and whether the priority of any such Liens and security interests will remain the same for Loans made after the Closing Date. (a) Real Property. The Liens and security interests created by the Deeds of Trust in the Real Property will validly secure all future credit Events pursuant to the Credit Agreement, whether or not at the time any such extension of credit is made an Event of Default or other event not within the control of the Banks has relieved or may relieve the Banks from their obligations to make extensions of credit. Arizona Courts have long recognized that a trust deed or mortgage given to secure indebtedness may include advances to be made in the future. Griffith v. State Mutual Building and Loan Association, 46 Ariz. 359, 51 P.2d 246 (1935); Pearl v. Williams, 146 Ariz. 203, 704 P.2d 1348 (App. 1985); La Cholla v. Timm, 173 Ariz. 490, 491, 844 P.2d 657, 658 (App. 1992). In La Cholla, supra, the Arizona Court of Appeals addressed the priority of future advances with respect to intervening encumbrances on the underlying collateral. The court held that the priority of "optional" and "obligatory" future advances are to be treated differently. Although the case did not directly define what constitutes an "obligatory" future advance, it did indicate that the term would include a contractual obligation to advance funds. Id. at 659. The court adopted the general rule that if the creditor's obligation to advance is of record, the obligatory advances will have absolute priority over any intervening liens. Id. Conversely, if the future advance is optional and the creditor has actual notice of the intervening lien at the time the advance is made, the optional advance will lose its priority with respect to the intervening lien regardless of whether the advance was made before the intervening lien attached. Id. Future advances which are obligatory under a Loan existing at the time the underlying security interest is perfected fall squarely within La Cholla, and would thus maintain priority over any subsequently arising liens. Based on the foregoing, it is our opinion that in a properly presented case, an Arizona court should conclude that the priority of liens and security interests created by the Deeds of Trust in the Real Property securing advances made pursuant to Loans made would be the same with respect to any advance pursuant to a Loan made or otherwise outstanding on the Closing Date, except to the extent that any priority may be affected by (i) any security interest, Lien or other encumbrance imposed by law in favor of any government or governmental authority or agency or (ii) a failure by Borrower to satisfy the conditions set forth in Section 3.02 of the Credit Agreement. (b) UCC Property. Under A.R.S. {Sec. Mark} 47-9204.C, obligations secured by a security agreement may include future advances or other value whether or not the advances or value are given pursuant to a commitment. A.R.S. 47-9105.A.2. defines an "advance made pursuant to a commitment" as "an advance which the secured party has bound himself to make, whether or riot his obligations to make such advance is or may be conditioned on an event not within his control, and whether or not an event not within his control has relieved or may relieve him from his obligation." Under A.R.S. {Sec. Mark} 47-9312.F, if future advances are made while a security interest is perfected, the security interest has the same priority with respect to the future advances as it does with respect to the first advance. If a "commitment" is made before or while the security interest is so perfected, the security interest has the same priority with respect to advances made pursuant thereto. In other cases a perfected security interest has priority from the date the advance is made. Our research has disclosed no reported Arizona decision construing either the definition of "future advances" or the validity of interests securing "future advances" within the UCC context. Nor has our research disclosed any reported Arizona decision construing the statutory provisions cited in the preceding two paragraphs. As a result, to interpret the foregoing statutes, we rely solely on the text of each statute. Based on this textual analysis alone, we believe that in a properly presented case a state court or a federal court sitting in Arizona should conclude that (a) the Liens and security interests created by the Deeds of Trust in the UCC Property will validly secure all future Credit Events pursuant to the Credit Agreement, whether or not at the time any such extension of credit is made an Event of Default or other event not within the control of the Banks has relieved or may relieve the Banks from their obligations to make extensions of credit, and (b) the priority of the Liens and security interests created by the Deed of Trust in the UCC Property would be the same with respect to Loans made under the Credit Agreement after the Closing Date as with respect to any such Loans made on the Closing Date, except to the extent that any priority may be affected by any security interest, Lien or other encumbrance imposed by law in favor of any government or governmental authority or agency. 8. You have requested that we advise you whether an Arizona court would give effect to the choice of law provisions in the Credit Agreement, the Subsidiary Security Agreement and Subsidiary Guarantee (collectively, the "New York Law Documents"). An Arizona court should give effect to the choice of law provision in these documents, assuming that (a) the Agent has offices in the State of New York; (b) the Agent and the other Secured Parties do substantial business in the State of New York; (c) the negotiation of the Financing Documents has occurred in New York; and (d) the consummation of the transactions contemplated by the Financing Documents and substantial performance thereof will occur in New York. 9. In connection with the remedies provided in the Deeds of Trust, you have asked for advice regarding the so-called "one action rule" or "single action rule." The following statutes should be considered when a creditor elects alternative remedies within the context of obligations secured by real and personal property: (a) A.R.S. {Sec. Mark} 33-722 regarding limitations on separate actions to enforce debt obligations and to foreclose a mortgage. (b) A.R.S. {Sec. Mark} 33-807.B regarding limitations on proceeding with a trustee's sale and pursuing an action to foreclose a deed of trust simultaneously. (c) A.R.S. {Sec. Mark} 33-814 regarding, among other things, the timely filing of a deficiency action. (d) A.R.S. {Sec. Mark} 47-9501.D regarding a secured party's right to proceed under the Local UCC or under applicable real property law. (e) A.R.S. {Sec. Mark} 12-1566 regarding, among other things, limitations on the liability of guarantors and other persons liable on a debt secured by real property. There is at least one reported Arizona decision that should be considered when evaluating the procedural limitations imposed by one of the foregoing statutes. Section 33-722 provides that if separate actions are brought on a debt and to foreclose a mortgage securing the debt, the creditor bringing the actions must elect which to prosecute and the other must be dismissed. In Mid Kansas Federal Sav. and Loan Ass'n of Wichita v. Dynamic Development Corp., 167 Ariz. 122, 126 N. 2, 804 P.2d 1310, 1314 N. 2 (Ariz. 1991), the Supreme Court of the State of Arizona has held that A.R.S. 33-722 does not apply to a deed of trust unless the deed of trust is judicially foreclosed. As a result, under the authority of Mid Kansas Federal Sav. and Loan Ass'n v. Dynamic Development Corp., a creditor may avoid the procedural restrictions of Section 33-722 by electing not to judicially foreclose a deed of trust. Other reported Arizona decisions regarding the foregoing statutes may affect the election of remedies by the Collateral Agent or other Secured Parties depending on the facts and circumstances that exist at the time of any such election. In connection with the remedies provided in the Deeds of Trust, you have asked for our opinion regarding the effect on the Agent's remedies with respect to the Real Property and the UCC Property as a result of the exercise of certain remedies by the Agent in jurisdictions other than the State. We are aware of no reported Arizona decision providing that the "one action rule" of Arizona prohibits the exercise of any rights or remedies outside the State with respect to the Secured Obligations or limits the Agent's ability to foreclose against, or to exercise any other remedies with respect to, the Real Property or UCC Property, contemporaneously with, or before or after, the exercise of such rights or remedies outside the State. The foregoing opinions are subject to the following: (a) The enforceability opinion expressed in paragraph 2 above is subject to limitation by general principals of equity and applicable law, although such limitations do not in our opinion make the remedies provided for therein inadequate for the practical realization of the benefits of the security intended to be afforded thereby. (b) We express no opinion with respect to any provisions of the Financing Documents that purport to waive any statutory or common law rights of the Grantor, or which purport to appoint the Agent or any other party as an irrevocable attorney-in- fact for any purpose. (c) Our opinions above are further limited by laws, rules, statutes, regulations, and judicial decisions restricting or prohibiting the enforcement of guarantees entered into or liens granted by subsidiary corporations for the benefit of parent corporations, including without limitation restrictions or prohibitions based upon the contention that such guarantees or liens have not been given for a fair or reasonably equivalent consideration, that the subsidiary corporation is, or by executing such guarantee may become, insolvent, and that such guarantees or liens may be voidable by creditors of the subsidiary corporation or by a trustee or receiver of such subsidiary corporation in bankruptcy or similar proceedings pursuant to applicable bankruptcy, fraudulent conveyance or similar laws. (d) We express no opinion as to the availability of any remedies purportedly available under any of the Financing Documents without notice or hearing, or any equitable remedies purportedly available as a matter of right, or any damages provision that purports to fix damages irrespective of the amount of damages actually suffered, or any other remedies purportedly available under the Financing Documents except for remedies specifically provided for by statute. (e) We express no opinion with respect to the title to the real and personal property described in the Financing Documents, the accuracy or sufficiency of any description of collateral, and the priority (other than the opinion expressed in paragraph 6) of any lien or security interest. (f) The opinions set forth above with respect to the Financing Documents relate only to matters as of the date of this opinion, and we express no opinion with respect to any transaction, transfer, conveyance or obligation occurring after the date of this opinion. No opinion is expressed herein with respect to the enforceability of any of the Financing Documents, or with respect to any other matter, under the laws of any jurisdiction other than the State of Arizona and the federal laws of the United States, as the same are in effect as of the date hereof. This opinion is solely for the benefit of the Agent and the other Secured Parties in connection with theFinancing Documents and may not be relied upon by the Agent or the other Secured Parties for any other purpose or relied upon or furnished to any other person or entity without our prior written consent. Very truly yours, MEYER, HENDRICKS, VICTOR, OSBORN & MALEDON, P.A. By: ______________________________ Schedule A Deed of Trust 1. Deed of Trust, Assignment of Leases and Rents, Security Agreement and Financing Statement dated as of March 4, 1994, from the Grantor, as the trustor, for the benefit of the Agent, as the beneficiary, relating to property at Sabino Springs, Pima County, Arizona to be filed for record in Pima County, Arizona. 2. Deed of Trust, Assignment of Leases and Rents, Security Agreement and Financing Statement dated as of March 4, 1994, from the Grantor, as the trustor, for the benefit of the Agent, as the beneficiary, relating to property at Capitol Plaza, Maricopa County, Arizona to be filed for record in Maricopa County, Arizona. Schedule B Financing Statements See attachment 1, 2, and 3, consisting of: 1. Financing Statement on form UCC-1 listing the Grantor as debtor and the Agent as secured party, relating to all of debtor's right, title and interest in and to the land, improvements, equipment, appurtenant rights, agreements leases, rents, issues and profits, permits, proceeds and awards, books and records, other intangible property and additional property, in each case as described in Schedule I attached to the respective UCC-1, to be filed in the County Recorders' offices in Pima County, Arizona. 2. Financing Statement on form UCC-1 listing the Grantor as debtor and the Agent as secured party, relating to all of debtor's right, title and interest in and to the land, improvements, equipment, appurtenant rights, agreements leases, rents, issues and profits, permits, proceeds and awards, books and records, other intangible property and additional property, in each case as described in Schedule I attached to the respective UCC-1, to be filed in the County Recorders' offices in Maricopa County, Arizona. 3. Financing Statement on form UCC-1 listing the Grantor as debtor and the Agent as secured party, relating to all of debtor's right, title and interest in and to the land, improvements, equipment, appurtenant rights, agreements leases, rents, issues and profits, permits, proceeds and awards, books and records, other intangible property and additional property, in each case as described in Schedule I attached to the respective UCC-1, to be filed in the Office of the Secretary of the State of Arizona. [CONFORMED COPY] EXHIBIT D BORROWER SECURITY AGREEMENT AGREEMENT dated as of March 9, 1994 between PERINI CORPORATION (with its successors, the "Borrower") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent. W I T N E S S E T H : WHEREAS, the Borrower, certain banks and Morgan Guaranty Trust Company of New York, as agent for such banks are parties to a Credit Agreement of even date herewith (as the same may be amended from time to time, the "Credit Agreement"); and WHEREAS, in order to induce said banks and Morgan Guaranty Trust Company of New York, as agent for such banks, to enter into the Credit Agreement, the Borrower has agreed to grant a continuing security interest in and to the Collateral (as hereafter defined) to secure its obligations under the Credit Agreement and the Notes issued pursuant thereto; NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: SECTION 1. Definitions Terms defined in the Credit Agreement and not otherwise defined herein have, as used herein, the respective meanings provided for therein. The following additional terms, as used herein, have the following respective meanings: "Collateral" has the meaning set forth in Section 3(a). "Collateral Account" has the meaning set forth in Section 5. "Liquid Investments" has the meaning set forth in Section 5(c). "Perfection Certificate" means a certificate substantially in the form of Exhibit A, completed and supplemented with the schedules and attachments contemplated thereby to the satisfaction of the Agent, and duly executed by the chief executive officer and the chief legal officer of the Borrower. "Permitted Liens" means the Security Interests and the Liens on the Collateral permitted to be created, assumed or exist pursuant to Section 5.11 of the Credit Agreement. "Proceeds" means all proceeds of, and all other profits, products, rents or receipts, in whatever form, arising from the collection, sale, lease, exchange, assignment, licensing or other disposition of, or other realization upon, the Collateral, including without limitation all claims of the Borrower against third parties for loss of, damage to or destruction of, or for proceeds payable under, or unearned premiums with respect to, policies of insurance in respect of, any Collateral, and any condemnation or requisition payments with respect to any Collateral, in each case whether now existing or hereafter arising. "Secured Obligations" means the obligations secured under the Financing Documents including, without limitation, (a) all principal of and interest (including, without limitation, any interest which accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of any Obligor, whether or not allowed or allowable as a claim in any such proceeding) on any loan under, or any note issued pursuant to, the Credit Agreement, (b) all other amounts payable by any Obligor under any Financing Document and (c) any renewals or extensions of any of the foregoing. "Security Interests" means the security interests in the Collateral granted hereunder securing the Secured Obligations. "UCC" means the Uniform Commercial Code as in effect on the date hereof in the State of New York; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the Security Interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, "UCC" means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection. SECTION 2. Representations and Warranties The Borrower represents and warrants as follows: (a) The Borrower has good and marketable title to all of the Collateral, free and clear of any Liens other than the Permitted Liens. (b) The Borrower has not performed any acts which might prevent the Agent from enforcing any of the terms of this Agreement or which would limit the Agent in any such enforcement. Other than financing statements or other similar or equivalent documents or instruments with respect to the Security Interests and Permitted Liens, no financing statement, mortgage, security agreement or similar or equivalent document or instrument covering all or any part of the Collateral is on file or of record in any jurisdiction in which such filing or recording would be effective to perfect a Lien on such Collateral. No Collateral is in the possession of any Person (other than the Borrower) asserting any claim thereto or security interest therein, except that the Agent or its designee may have possession of Collateral as contemplated hereby. (c) Not less than five Domestic Business Days prior to the date of the first Borrowing under the Credit Agreement, the Borrower shall deliver the Perfection Certificate to the Agent. The information set forth therein shall be correct and complete. Not later than 60 days following the date of the first Borrowing, the Borrower shall furnish to the Agent file search reports from each UCC filing office set forth in Schedule 1 to the Perfection Certificate confirming the filing information set forth in such Schedule. (d) The Security Interests constitute valid security interests under the UCC securing the Secured Obligations. When UCC financing statements in the form specified in Exhibit A shall have been filed in the offices specified in the Perfection Certificate, the Security Interests shall constitute perfected security interests in the Collateral to the extent that a security interest therein may be perfected by filing pursuant to the UCC, prior to all other Liens and rights of others therein except for the Permitted Liens. SECTION 3. The Security Interests (a) In order to secure the full and punctual payment of the Secured Obligations in accordance with the terms thereof, and to secure the performance of all of the obligations of the Borrower hereunder and under the Credit Agreement, the Borrower hereby grants to the Agent for the ratable benefit of the Banks a continuing security interest in and to all of the following property of the Borrower, whether now owned or existing or hereafter acquired or arising and regardless of where located (all being collectively referred to as the "Collateral"): (1) all right, title and interest of the Borrower in, and to receive, any amounts payable by Tutor-Saliba-Perini JV ("TSP"), a joint venture formed by Borrower and Tutor-Saliba Corporation on or about August 5, 1985, up to an aggregate amount equal to the amount of the Borrower's interest in the aggregate payments received by TSP in respect of its claims against the California State Department of Highways for cost overruns associated with the construction of the Redwood Bypass in Humbolt and Del Norte Counties, California; (2) all right, title and interest of the Borrower in, and to receive, any amounts payable by Kiewit/Perini ("K/P"), two joint ventures formed by Borrower and Kiewit Eastern Company on February 18, 1988 and on May 12, 1988, up to an aggregate amount equal to the amount of the Borrower's interest in the aggregate payments received by K/P in respect of each of its two claims against Pennsylvania Department of Transportation for cost overruns associated with the construction of two sections of the interstate highway located in suburban Philadelphia, Pennsylvania; (3) the Collateral Account, all cash deposited therein from time to time, the Liquid Investments made pursuant to Section 5(c) and other monies and property of any kind of the Borrower, to the extent that such other monies and property are Proceeds of the Collateral, in the possession or under the control of the Agent; (4) all books and records (including, without limitation, computer programs, printouts and other computer materials and records) of the Borrower pertaining to any of the Collateral; and (5) all Proceeds of all or any of the Collateral. (b) The Security Interests are granted as security only and shall not subject the Agent or any Bank to, or transfer or in any way affect or modify, any obligation or liability of the Borrower with respect to any of the Collateral or any transaction in connection therewith. SECTION 4. Further Assurances; Covenants (a) The Borrower will not change its name, identity or corporate structure in any manner unless it shall have given the Agent prior notice thereof and delivered an opinion of counsel with respect thereto in accordance with Section 4(l). The Borrower will not change the location of (i) its chief executive office or chief place of business or (ii) the locations where it keeps or holds any Collateral or any records relating thereto from the applicable location described in the Perfection Certificate unless it shall have given the Agent prior notice thereof and delivered an opinion of counsel with respect thereto in accordance with Section 4(l). The Borrower shall not in any event change the location of any Collateral if such change would cause the Security Interests in such Collateral to lapse or cease to be perfected. (b) The Borrower will, from time to time, at its expense, execute, deliver, file and record any statement, assignment, instrument, document, agreement or other paper and take any other action, (including, without limitation, any filings of financing or continuation statements under the UCC) that from time to time may be necessary or desirable, or that the Agent may request, in order to create, preserve, perfect, confirm or validate the Security Interests or to enable the Agent and the Banks to obtain the full benefits of this Agreement, or to enable the Agent to exercise and enforce any of its rights, powers and remedies hereunder with respect to any of the Collateral. To the extent permitted by applicable law, the Borrower hereby authorizes the Agent to execute and file financing statements or continuation statements without the Borrower's signature appearing thereon. The Borrower agrees that a carbon, photographic, photostatic or other reproduction of this Agreement or of a financing statement is sufficient as a financing statement. The Borrower shall pay the costs of, or incidental to, any recording or filing of any financing or continuation statements concerning the Collateral. (c) If any Collateral is at any time in the possession or control of any warehouseman, bailee or any of the Borrower's agents or processors, the Borrower shall notify such warehouseman, bailee, agent or processor of the Security Interests created hereby and to hold all such Collateral for the Agent's account subject to the Agent's instructions. (d) The Borrower shall keep full and accurate books and records relating to the Collateral, and stamp or otherwise mark such books and records in such manner as the Required Banks may reasonably require in order to reflect the Security Interests. (e) Without the prior written consent of the Required Banks, the Borrower will not sell, lease, exchange, assign or otherwise dispose of, or grant any option with respect to, any Collateral. (f) The Borrower will, promptly upon request, provide to the Agent all information and evidence it may reasonably request concerning the Collateral to enable the Agent to enforce the provisions of this Agreement. (g) Not more than six months nor less than 30 days prior to (i) each anniversary of the date hereof during the term of the Credit Agreement and (ii) each date on which the Borrower proposes to take any action contemplated by Section 4(a), the Borrower shall, at its cost and expense, cause to be delivered to the Banks an opinion of counsel, satisfactory to the Agent, substantially in the form of Exhibit B-1 to the Credit Agreement to the effect that all financing statements and amendments or supplements thereto, continuation statements and other documents required to be recorded or filed in order to perfect and protect the Security Interests for a period, specified in such opinion, continuing until a date not earlier than eighteen months from the date of such opinion, against all creditors of and purchasers from the Borrower have been filed in each filing office necessary for such purpose and that all filing fees and taxes, if any, payable in connection with such filings have been paid in full. (h) From time to time upon request by the Agent, the Borrower shall, at its cost and expense, cause to be delivered to the Banks an opinion of counsel satisfactory to the Agent as to such matters relating to the transactions contemplated hereby as the Required Banks may reasonably request. SECTION 5. Collateral Account (a) There is hereby established with the Agent a cash collateral account (the "Collateral Account") in the name and under the control of the Agent into which there shall be deposited from time to time the cash proceeds of the Collateral required to be delivered to the Agent pursuant to any provision of this Agreement. Any income received by the Agent with respect to the balance from time to time standing to the credit of the Collateral Account, including any interest or capital gains on Liquid Investments, shall remain, or be deposited, in the Collateral Account. All right, title and interest in and to the cash amounts on deposit from time to time in the Collateral Account together with any Liquid Investments from time to time made pursuant to subsection (c) of this Section shall vest in the Agent, shall constitute part of the Collateral hereunder and shall not constitute payment of the Secured Obligations until applied thereto as hereinafter provided. (b) The Borrower agrees that if the proceeds of any Collateral hereunder shall be received by it, the Borrower shall as promptly as possible deposit such proceeds into the Collateral Account. Until so deposited, all such proceeds shall be held in trust by the Borrower for and as the property of the Agent and the Banks and shall not be commingled with any other funds or property of the Borrower. (c) The balance from time to time standing to the credit of the Collateral Account shall, except upon the occurrence and continuation of an Event of Default, be distributed to the Agent to the extent necessary to pay the principal of and interest on any Loans then due and unpaid and the remainder, if any, to the Borrower upon the order of the Borrower. If immediately available cash on deposit in the Collateral Account is not sufficient to make any distribution referred to in the previous sentence of this Section 5(b), the Agent shall liquidate as promptly as practicable Liquid Investments as required to obtain sufficient cash to make such distribution and, notwithstanding any other provision of this Section 5, such distribution shall not be made until such liquidation has taken place. Upon the occurrence and continuation of an Event of Default, the Agent shall, if so instructed by the Required Banks, apply or cause to be applied (subject to collection) any or all of the balance from time to time standing to the credit of the Collateral Account in the manner specified in Section 9. (d) Amounts on deposit in the Collateral Account shall be invested and re-invested from time to time in such Liquid Investments as the Borrower shall determine, which Liquid Investments shall be held in the name and be under the control of the Agent, provided that, if an Event of Default has occurred and is continuing, the Agent shall, if instructed by the Required Banks, liquidate any such Liquid Securities and apply or cause to be applied the proceeds thereof to the payment of the Secured Obligations in the manner specified in Section 9. For this purpose, "Liquid Investments" means Temporary Cash Investments; provided that (i) each Liquid Investment shall mature within 30 days after it is acquired by the Agent and (ii) in order to provide the Agent, for the benefit of the Banks, with a perfected security interest therein, each Liquid Investment shall be either: (i) evidenced by negotiable certificates or instruments, or if non-negotiable then issued in the name of the Agent, which (together with any appropriate instruments of transfer) are delivered to, and held by, the Agent or an agent thereof (which shall not be the Borrower or any of its Affiliates) in the State of New York; or (ii) in book-entry form and issued by the United States and subject to pledge under applicable state law and Treasury regulations and as to which (in the opinion of counsel to the Agent) appropriate measures shall have been taken for perfection of the Security Interests. SECTION 6. General Authority The Borrower hereby irrevocably appoints the Agent its true and lawful attorney, with full power of substitution, in the name of the Borrower, the Agent, the Banks or otherwise, for the sole use and benefit of the Agent and the Banks, but at the Borrower's expense, to the extent permitted by law to exercise, at any time and from time to time while an Event of Default has occurred and is continuing, all or any of the following powers with respect to all or any of the Collateral: (i) to demand, sue for, collect, receive and give acquittance for any and all monies due or to become due thereon or by virtue thereof, (ii) to settle, compromise, compound, prosecute or defend any action or proceeding with respect thereto, (iii) to sell, transfer, assign or otherwise deal in or with the same or the proceeds or avails thereof, as fully and effectually as if the Agent were the absolute owner thereof, and (iv) to extend the time of payment of any or all thereof and to make any allowance and other adjustments with reference thereto; provided that the Agent shall give the Borrower not less than ten days' prior written notice of the time and place of any sale or other intended disposition of any of the Collateral, except any Collateral which is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market. The Borrower agrees that such notice constitutes "reasonable notification" within the meaning of Section 9-504(3) of the UCC. SECTION 7. Remedies upon Event of Default (a) If any Event of Default has occurred and is continuing, the Agent may exercise on behalf of the Banks all rights of a secured party under the UCC (whether or not in effect in the jurisdiction where such rights are exercised) and, in addition, the Agent may, without being required to give any notice, except as herein provided or as may be required by mandatory provisions of law, (i) withdraw all cash and Liquid Investments in the Collateral Account and apply such cash and Liquid Investments and other cash, if any, then held by it as Collateral as specified in Section 9 and (ii) if there shall be no such cash or Liquid Investments or if such cash and Liquid Investments shall be insufficient to pay all the Secured Obligations in full, sell the Collateral or any part thereof at public or private sale, for cash, upon credit or for future delivery, and at such price or prices as the Agent may deem satisfactory. The Agent or any Bank may be the purchaser of any or all of the Collateral so sold at any public sale (or, if the Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations, at any private sale). The Borrower will execute and deliver such documents and take such other action as the Agent deems necessary or advisable in order that any such sale may be made in compliance with law. Upon any such sale the Agent shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral so sold. Each purchaser at any such sale shall hold the Collateral so sold to it absolutely and free from any claim or right of whatsoever kind, including any equity or right of redemption of the Borrower which may be waived, and the Borrower, to the extent permitted by law, hereby specifically waives all rights of redemption, stay or appraisal which it has or may have under any law now existing or hereafter adopted. The notice (if any) of such sale required by Section 6 shall (1) in case of a public sale, state the time and place fixed for such sale, and (2) in the case of a private sale, state the day after which such sale may be consummated. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Agent may fix in the notice of such sale. At any such sale the Collateral may be sold in one lot as an entirety or in separate parcels, as the Agent may determine. The Agent shall not be obligated to make any such sale pursuant to any such notice. The Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the same may be so adjourned. In case of any sale of all or any part of the Collateral on credit or for future delivery, the Collateral so sold may be retained by the Agent until the selling price is paid by the purchaser thereof, but the Agent shall not incur any liability in case of the failure of such purchaser to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may again be sold upon like notice. The Agent, instead of exercising the power of sale herein conferred upon it, may proceed by a suit or suits at law or in equity to foreclose the Security Interests and sell the Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction. (b) For the purpose of enforcing any and all rights and remedies under this Agreement the Agent may (i) require the Borrower to, and the Borrower agrees that it will, at its expense and upon the request of the Agent, forthwith assemble all or any part of the Collateral as directed by the Agent and make it available at a place designated by the Agent which is, in its opinion, reasonably convenient to the Agent and the Borrower, whether at the premises of the Borrower or otherwise, (ii) to the extent permitted by applicable law, enter, with or without process of law and without breach of the peace, any premise where any of the Collateral is or may be located, and without charge or liability to it seize and remove such Collateral from such premises, (iii) have access to and use the Borrower's books and records relating to the Collateral and (iv) prior to the disposition of the Collateral, store or transfer it without charge in or by means of any storage or transportation facility owned or leased by the Borrower, process, repair or recondition it or otherwise prepare it for disposition in any manner and to the extent the Agent deems appropriate and, in connection with such preparation and disposition, use without charge any trademark, trade name, copyright, patent or technical process used by the Borrower. The Agent may also render any or all of the Collateral unusable at the Borrower's premises and may dispose of such Collateral on such premises without liability for rent or costs. SECTION 8. Limitation on Duty of Agent in Respect of Collateral. Beyond the exercise of reasonable care in the custody thereof, the Agent shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. The Agent shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property, and shall not be liable or responsible for any loss or damage to any of the Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehouseman, carrier, forwarding agency, consignee or other agent or bailee selected by the Agent in good faith. SECTION 9. Application of Proceeds Upon the occurrence and during the continuance of an Event of Default, the proceeds of any sale of, or other realization upon, all or any part of the Collateral and any cash held in the Collateral Account shall be applied by the Agent in the following order of priorities: first, to payment of the expenses of such sale or other realization, including reasonable compensation to agents and counsel for the Agent, and all expenses, liabilities and advances incurred or made by the Agent in connection therewith, and any other unreimbursed expenses for which the Agent or any Bank is to be reimbursed pursuant to Section 9.03 of the Credit Agreement or Section 12 hereof or under any other Collateral Document and unpaid fees owing to the Agent under the Credit Agreement; second, to the ratable payment of unpaid principal of the Secured Obligations; third, to the ratable payment of accrued but unpaid interest on the Secured Obligations in accordance with the provisions of the Credit Agreement; fourth, to the ratable payment of all other Secured Obligations, until all Secured Obligations shall have been paid in full; and finally, to payment to the Borrower or its successors or assigns, or as a court of competent jurisdiction may direct, of any surplus then remaining from such proceeds. The Agent may make distributions hereunder in cash or in kind or, on a ratable basis, in any combination thereof. SECTION 10. Concerning the Agent The provisions of Article VII of the Credit Agreement shall inure to the benefit of the Agent in respect of this Agreement and shall be binding upon the parties to the Credit Agreement in such respect. In furtherance and not in derogation of the rights, privileges and immunities of the Agent therein set forth: (a) The Agent is authorized to take all such action as is provided to be taken by it as Agent hereunder and all other action reasonably incidental thereto. As to any matters not expressly provided for herein (including, without limitation, the timing and methods of realization upon the Collateral) the Agent shall act or refrain from acting in accordance with written instructions from the Required Banks or, in the absence of such instructions, in accordance with its discretion. (b) The Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Security Interests in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder. The Agent shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Agreement by the Borrower. SECTION 11. Appointment of Co-Agents At any time or times, in order to comply with any legal requirement in any jurisdiction, the Agent may appoint another bank or trust company or one or more other persons, either to act as co-agent or co-agents, jointly with the Agent, or to act as separate agent or agents on behalf of the Banks with such power and authority as may be necessary for the effectual operation of the provisions hereof and may be specified in the instrument of appointment (which may, in the discretion of the Agent, include provisions for the protection of such co-agent or separate agent similar to the provisions of Section 10). SECTION 12. Expenses In the event that the Borrower fails to comply with the provisions of the Credit Agreement or this Agreement, such that the value of any Collateral or the validity, perfection, rank or value of any Security Interest is thereby diminished or potentially diminished or put at risk, the Agent if requested by the Required Banks may, but shall not be required to, effect such compliance on behalf of the Borrower, and the Borrower shall reimburse the Agent for the costs thereof on demand. All insurance expenses and all expenses of protecting, storing, warehousing, appraising, insuring, handling, maintaining, and shipping the Collateral, any and all excise, property, sales, and use taxes imposed by any state, federal, or local authority on any of the Collateral, or in respect of periodic appraisals and inspections of the Collateral to the extent the same may be requested by the Required Banks from time to time, or in respect of the sale or other disposition thereof shall be borne and paid by the Borrower; and if the Borrower fails to promptly pay any portion thereof when due, the Agent or any Bank may, at its option, but shall not be required to, pay the same and charge the Borrower's account therefor, and the Borrower agrees to reimburse the Agent or such Bank therefor on demand. All sums so paid or incurred by the Agent or any Bank for any of the foregoing and any and all other sums for which the Borrower may become liable hereunder and all costs and expenses (including attorneys' fees, legal expenses and court costs) reasonably incurred by the Agent or any Bank in enforcing or protecting the Security Interests or any of their rights or remedies under this Agreement, shall, together with interest thereon until paid at the rate applicable to Prime Borrowings, be additional Secured Obligations hereunder. SECTION 13. Termination of Security Interests; Release of Collateral Upon the repayment in full of all Secured Obligations and the termination of the Commitments under the Credit Agreement, the Security Interests shall terminate and all rights to the Collateral shall revert to the Borrower. At any time and from time to time prior to such termination of the Security Interests, the Agent may release any of the Collateral with the prior written consent of the Required Banks. Upon any such termination of the Security Interests or release of Collateral, the Agent will, at the expense of the Borrower, execute and deliver to the Borrower such documents as the Borrower shall reasonably request to evidence the termination of the Security Interests or the release of such Collateral, as the case may be. SECTION 14. Notices All notices, communications and distributions hereunder shall be given in accordance with Section 9.01 of the Credit Agreement. SECTION 15. Waivers, Non-Exclusive Remedies No failure on the part of the Agent to exercise, and no delay in exercising and no course of dealing with respect to, any right under this Agreement shall operate as a waiver thereof; nor shall any single or partial exercise by the Agent of any right under the Credit Agreement or this Agreement preclude any other or further exercise thereof or the exercise of any other right. The rights in this Agreement and the Credit Agreement are cumulative and are not exclusive of any other remedies provided by law. SECTION 16. Successors and Assigns This Agreement is for the benefit of the Agent and the Banks and their successors and assigns, and in the event of an assignment of all or any of the Secured Obligations, the rights hereunder, to the extent applicable to the indebtedness so assigned, may be transferred with such indebtedness. This Agreement shall be binding on the Borrower and its successors and assigns. SECTION 17. Changes in Writing Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, but only in writing signed by the Borrower and the Agent with the consent of the Required Banks. SECTION 18. New York Law This Agreement shall be construed in accordance with and governed by the laws of the State of New York, except as otherwise required by mandatory provisions of law and except to the extent that remedies provided by the laws of any jurisdiction other than New York are governed by the laws of such jurisdiction. SECTION 19. Severability If any provision hereof is invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Agent and the Banks in order to carry out the intentions of the parties hereto as nearly as may be possible; and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. PERINI CORPORATION By /s/ James M. Markert --------------------------- Title: Senior Vice President MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent By /s/ Caroline R. Shapiro --------------------------- Title: Vice President EXHIBIT A To Borrower Security Agreement PERFECTION CERTIFICATE The undersigned, the chief executive officer and chief legal officer of Perini Corporation, a Massachusetts corporation (the "Borrower"), hereby certify with reference to the Security Agreement dated as of March 9, 1994 between the Borrower and Morgan Guaranty Trust Company of New York, as Agent (terms defined therein being used herein as therein defined), to the Agent and each Bank as follows: 1. Names. (a) The exact corporate name of the Borrower as it appears in its certificate of incorporation is as follows: Perini Corporation (b) Set forth below is each other corporate name the Borrower has had since its organization, together with the date of the relevant change: Perini & Cedario January 5, 1918 - December 10, 1919 Perini & Sons December 11, 1919 - July 29, 1931 B. Perini & Sons, Inc. July 30, 1931 - December 2, 1956 (c) Except as set forth below, the Borrower has not changed its identity or corporate structure in any way within the past five years. During 1992, Perini Corporation transferred its building operations (i.e., the Western Building Division and the Eastern Building Division) to Perini Building Company, Inc., an Arizona corporation. In 1993, Perini Corporation acquired substantially all the assets and contracts of Gust K. Newberg Construction Co. of Chicago, IL. Those assets and contracts were used to form the Newberg/Perini Division of Perini Corporation. (d) The following is a list of all other names (including trade names or similar appellations) used by the Borrower or any of its divisions or other business units at any time during the past five years: "PERINI." The Borrower registered three service marks using the single word Perini in different logo formats 2. Current Locations. (a) The chief executive office of the Borrower is located at the following address: Mailing Address County State 73 Mount Wayte Avenue Middlesex Massachusetts Framingham, MA 01701-9610 (b) The following are all the places of business of the Borrower not identified above: Name Mailing Address County State Metropolitan 2 Skyline Drive Westchester New York New York Division Hawthorne Newberg/Perini Division 651 Washington Blvd Cook Illinois Chicago 3. Prior Locations. Set forth below is the information required by subparagraph (a) of paragraph 2 with respect to each location or place of business maintained by the Borrower at any time during the past five years: Metropolitan New York Division 615 Broadway Hastings-on-Hudson, NY 10706 Newberg/Perini Division 2040 North Ashland Avenue Chicago, IL 60614 Western Building Division 75 Broadway San Francisco, CA 94111 Eastern Building Division 73 Mt. Wayte Avenue Framingham, MA 01701 4. File Search Reports. Attached hereto as Schedule 4(A) is a true copy of a file search report from the Uniform Commercial Code filing officer in each jurisdiction identified in paragraph 2 or 3 above with respect to each name set forth in paragraph 1 above. Attached hereto as Schedule 4(B) is a true copy of each financing statement or other filing identified in such file search reports. 5. UCC Filings. A duly signed financing statement on Form UCC-1 in substantially the form of Schedule 5(A) hereto has been duly filed in the Uniform Commercial Code filing office in each jurisdiction identified in paragraph 2(a) hereof. Attached hereto as Schedule 5(B) is a true copy of each such filing duly acknowledged by the filing officer. 6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule setting forth filing information with respect to the filings described in paragraph 5 above. 7. Filing Fees. All filing fees and taxes payable in connection with the filings described in paragraph 6 above have been paid. IN WITNESS WHEREOF, we have hereunto set our hands this day of March, 1994. ____________________________ Title: ____________________________ Title: SCHEDULE 6 to the Borrower Security Agreement SCHEDULE OF FILINGS Debtor Filing Officer File Number Date of Filing* _______________ * Indicate lapse date, if other than fifth anniversary. [CONFORMED COPY] EXHIBIT E BORROWER PLEDGE AGREEMENT AGREEMENT dated as of March 9, 1994 between PERINI CORPORATION (with its successors, the "Borrower") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent. W I T N E S S E T H : WHEREAS, the Borrower, certain banks and Morgan Guaranty Trust Company of New York, as agent for such banks are parties to a Credit Agreement of even date herewith (as the same may be amended from time to time, the "Credit Agreement"); and WHEREAS, in order to induce said banks and Morgan Guaranty Trust Company of New York, as agent for such banks, to enter into the Credit Agreement, the Borrower has agreed to grant a continuing security interest in and to the Collateral (as hereafter defined) to secure its obligations under the Credit Agreement and the Notes issued pursuant thereto; NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: SECTION 1. Definitions. Terms defined in the Credit Agreement and not otherwise defined herein have, as used herein, the respective meanings provided for therein. The following additional terms, as used herein, have the following respective meanings: "Collateral" has the meaning assigned to such term in Section 3(a). "Issuer" means any of Perini Land and Development Company, a Massachusetts corporation, Glenco-Perini-HCV, a California limited partnership, and One Hundred Thirty-Eight Joint Venture, a Georgia general partnership. "Pledged Instruments" means (i) all notes executed by the Issuers as described in Schedule 1 attached hereto and (ii) any instrument required to be pledged to the Agent pursuant to Section 3(b). "Secured Obligations" means the obligations secured under the Financing Documents including, without limitation, (a) all principal of and interest (including, without limitation, any interest which accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of any Obligor, whether or not allowed or allowable as a claim in any such proceeding) on any loan under, or any note issued pursuant to, the Credit Agreement, (b) all other amounts payable by any Obligor under any Financing Document and (c) any renewals or extensions of any of the foregoing. "Security Interests" means the security interests in the Collateral granted hereunder securing the Secured Obligations. Unless otherwise defined herein, or unless the context otherwise requires, all terms used herein which are defined in the New York Uniform Commercial Code as in effect on the date hereof shall have the meanings therein stated. SECTION 2. Representations and Warranties. The Borrower represents and warrants as follows: (a) Title to Pledged Instruments. The Borrower owns all of the Pledged Instruments, free and clear of any Liens other than the Security Interests. The Borrower is not and will not become a party to or otherwise bound by any agreement, other than this Agreement, which restricts in any manner the rights of any present or future holder of any of the Pledged Instruments with respect thereto. (b) Validity, Perfection and Priority of Security Interests. Upon the delivery of the Pledged Instruments to the Agent in accordance with Section 4 hereof, the Agent will have valid and perfected security interests in the Collateral subject to no prior Lien. No registration, recordation or filing with any governmental body, agency or official is required in connection with the execution or delivery of this Agreement or necessary for the validity or enforceability hereof or for the perfection or enforcement of the Security Interests. Neither the Borrower nor any of its Subsidiaries has performed or will perform any acts which might prevent the Agent from enforcing any of the terms and conditions of this Agreement or which would limit the Agent in any such enforcement. (c) UCC Filing Locations. The chief executive office of the Borrower is located at its address set forth on the signature pages of the Credit Agreement. Under the Uniform Commercial Code as in effect in the State in which such office is located, no local filing is required to perfect a security interest in collateral consisting of instruments. SECTION 3. The Security Interests. In order to secure the full and punctual payment of the Secured Obligations in accordance with the terms thereof, and to secure the performance of all the obligations of the Borrower hereunder: (a) The Borrower hereby assigns and pledges to and with the Agent for the benefit of the Banks and grants to the Agent for the benefit of the Banks security interests in the Pledged Instruments, and all of its rights and privileges with respect to the Pledged Instruments as described Schedule 1 attached hereto, and all income and profits thereon, and all interest, dividends and other payments and distributions with respect thereto, and all proceeds of the foregoing (the "Collateral"). (b) In the event that any Issuer at any time issues any substitute note, or owes any other Debt to the Borrower, the Borrower will immediately pledge and deposit with the Agent such note or an instrument evidencing such other Debt as additional security for the Secured Obligations. All such shares, notes and instruments constitute Pledged Securities and are subject to all provisions of this Agreement. (c) The Security Interests are granted as security only and shall not subject the Agent or any Bank to, or transfer or in any way affect or modify, any obligation or liability of the Borrower with respect to any of the Collateral or any transaction in connection therewith. SECTION 4. Delivery of Pledged Instruments. All Pledged Instruments shall be delivered to the Agent by the Borrower pursuant hereto indorsed to the order of the Agent, and accompanied by any required transfer tax stamps, all in form and substance satisfactory to the Agent. SECTION 5. Further Assurances. (a) The Borrower agrees that it will, at its expense and in such manner and form as the Agent may require, execute, deliver, file and record any financing statement, specific assignment or other paper and take any other action that may be necessary or desirable, or that the Agent may request, in order to create, preserve, perfect or validate any Security Interest or to enable the Agent to exercise and enforce its rights hereunder with respect to any of the Collateral. To the extent permitted by applicable law, the Borrower hereby authorizes the Agent to execute and file, in the name of the Borrower or otherwise, Uniform Commercial Code financing statements (which may be carbon, photographic, photostatic or other reproductions of this Agreement or of a financing statement relating to this Agreement) which the Agent in its sole discretion may deem necessary or appropriate to further perfect the Security Interests. (b) The Borrower agrees that it will not change (i) its name, identity or corporate structure in any manner or (ii) the location of its chief executive office unless it shall have given the Agent not less than 30 days' prior notice thereof. SECTION 6. Right to Receive Distributions on Collateral. The Agent shall have the right to receive and, during the continuance of any Default, to retain as Collateral hereunder all dividends, interest and other payments and distributions made upon or with respect to the Collateral and the Borrower shall take all such action as the Agent may deem necessary or appropriate to give effect to such right. All such dividends, interest and other payments and distributions which are received by the Borrower shall be received in trust for the benefit of the Agent and the Banks and, if the Agent so directs during the continuance of a Default, shall be segregated from other funds of the Borrower and shall, forthwith upon demand by the Agent during the continuance of a Default, be paid over to the Agent as Collateral in the same form as received (with any necessary endorsement). After all Defaults have been cured, the Agent's right to retain dividends, interest and other payments and distributions under this Section 6 shall cease and the Agent shall pay over to the Borrower any such Collateral retained by it during the continuance of a Default. SECTION 7. General Authority The Borrower hereby irrevocably appoints the Agent its true and lawful attorney, with full power of substitution, in the name of the Borrower, the Agent, the Banks or otherwise, for the sole use and benefit of the Agent and Banks, but at the expense of the Borrower, to the extent permitted by law to exercise, at any time and from time to time while an Event of Default has occurred and is continuing, all or any of the following powers with respect to all or any of the Collateral: (i) to demand, sue for, collect, receive and give acquittance for any and all monies due or to become due upon or by virtue thereof, (ii) to settle, compromise, compound, prosecute or defend any action or proceeding with respect thereto, (iii) to sell, transfer, assign or otherwise deal in or with the same or the proceeds or avails thereof, as fully and effectually as if the Agent were the absolute owner thereof, and (iv) to extend the time of payment of any or all thereof and to make any allowance and other adjustments with reference thereto; provided that the Agent shall give the Borrower not less than ten days' prior written notice of the time and place of any sale or other intended disposition of any of the Collateral except any Collateral which is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market. The Agent and the Borrower agree that such notice constitutes "reasonable notification" within the meaning of Section 9-504(3) of the Uniform Commercial Code. SECTION 8. Remedies upon Event of Default If any Event of Default shall have occurred and be continuing, the Agent may exercise on behalf of the Banks all the rights of a secured party under the Uniform Commercial Code (whether or not in effect in the jurisdiction where such rights are exercised) and, in addition, the Agent may, without being required to give any notice, except as herein provided or as may be required by mandatory provisions of law, (i) apply the cash, if any, then held by it as Collateral as specified in Section 11 and (ii) if there shall be no such cash or if such cash shall be insufficient to pay all the Secured Obligations in full, sell the Collateral or any part thereof at public or private sale or at any broker's board or on any securities exchange, for cash, upon credit or for future delivery, and at such price or prices as the Agent may deem satisfactory. Any Bank may be the purchaser of any or all of the Collateral so sold at any public sale (or, if the Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations, at any private sale). The Agent is authorized, in connection with any such sale, if it deems it advisable so to do, (i) to restrict the prospective bidders on or purchasers of any of the Pledged Instruments to a limited number of sophisticated investors who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or sale of any of such Pledged Instruments, (ii) to cause to be placed on certificates for any or all of the Pledged Instruments or on any other securities pledged hereunder a legend to the effect that such security has not been registered under the Securities Act of 1933 and may not be disposed of in violation of the provision of said Act, and (iii) to impose such other limitations or conditions in connection with any such sale as the Agent deems necessary or advisable in order to comply with said Act or any other law. The Borrower covenants and agrees that it will execute and deliver such documents and take such other action as the Agent deems necessary or advisable in order that any such sale may be made in compliance with law. Upon any such sale the Agent shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral so sold. Each purchaser at any such sale shall hold the Collateral so sold absolutely and free from any claim or right of whatsoever kind, including any equity or right of redemption of the Borrower which may be waived, and the Borrower, to the extent permitted by law, hereby specifically waives all rights of redemption, stay or appraisal which it has or may have under any law now existing or hereafter adopted. The notice (if any) of such sale required by Section 7 shall (1) in case of a public sale, state the time and place fixed for such sale, (2) in case of sale at a broker's board or on a securities exchange, state the board or exchange at which such sale is to be made and the day on which the Collateral, or the portion thereof so being sold, will first be offered for sale at such board or exchange, and (3) in the case of a private sale, state the day after which such sale may be consummated. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Agent may fix in the notice of such sale. At any such sale the Collateral may be sold in one lot as an entirety or in separate parcels, as the Agent may determine. The Agent shall not be obligated to make any such sale pursuant to any such notice. The Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the same may be so adjourned. In case of any sale of all or any part of the Collateral on credit or for future delivery, the Collateral so sold may be retained by the Agent until the selling price is paid by the purchaser thereof, but the Agent shall not incur any liability in case of the failure of such purchaser to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may again be sold upon like notice. The Agent, instead of exercising the power of sale herein conferred upon it, may proceed by a suit or suits at law or in equity to foreclose the Security Interests and sell the Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction. SECTION 9. Expenses The Borrower agrees that it will forthwith upon demand pay to the Agent: (i) the amount of any taxes which the Agent may have been required to pay by reason of the Security Interests or to free any of the Collateral from any Lien thereon, and (ii) the amount of any and all out-of-pocket expenses, including the fees and disbursements of counsel and of any other experts, which the Agent may incur in connection with (w) the administration or enforcement of this Agreement, including such expenses as are incurred to preserve the value of the Collateral and the validity, perfection, rank and value of any Security Interest, (x) the collection, sale or other disposition of any of the Collateral, (y) the exercise by the Agent of any of the rights conferred upon it hereunder or (z) any Default or Event of Default. Any such amount not paid on demand shall bear interest at the rate applicable to Prime Borrowings plus 2%. SECTION 10. Limitation on Duty of Agent in Respect of Collateral Beyond the exercise of reasonable care in the custody thereof, the Agent shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. The Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property, and shall not be liable or responsible for any loss or damage to any of the Collateral, or for any diminution in the value thereof, by reason of the act or omission of any agent or bailee selected by the Agent in good faith. SECTION 11. Application of Proceeds Upon the occurrence and during the continuance of an Event of Default, the proceeds of any sale of, or other realization upon, all or any part of the Collateral and any cash held shall be applied by the Agent in the following order of priorities: first, to payment of the expenses of such sale or other realization, including reasonable compensation to agents and counsel for the Agent, and all expenses, liabilities and advances incurred or made by the Agent in connection therewith, and any other unreimbursed expenses for which the Agent or any Bank is to be reimbursed pursuant to Section 9.03 of the Credit Agreement or under any other Collateral Document and unpaid fees owing to the Agent under the Credit Agreement; second, to the ratable payment of unpaid principal of the Secured Obligations; third, to the ratable payment of accrued but unpaid interest on the Secured Obligations in accordance with the provisions of the Credit Agreement; fourth, to the ratable payment of all other Secured Obligations, until all Secured Obligations shall have been paid in full; and finally, to payment to the Borrower or its successors or assigns, or as a court of competent jurisdiction may direct, of any surplus then remaining from such proceeds. SECTION 12. Concerning the Agent The provisions of Article VII of the Credit Agreement shall inure to the benefit of the Agent in respect of this Agreement and shall be binding upon the parties to the Credit Agreement in such respect. In furtherance and not in derogation of the rights, privileges and immunities of the Agent therein set forth: (a) The Agent is authorized to take all such action as is provided to be taken by it as Agent hereunder and all other action reasonably incidental thereto. As to any matters not expressly provided for herein (including, without limitation, the timing and methods of realization upon the Collateral) the Agent shall act or refrain from acting in accordance with written instructions from the Required Banks or, in the absence of such instructions, in accordance with its discretion. (b) The Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Security Interests in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder. The Agent shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Agreement by the Borrower. SECTION 13. Appointment of Co-Agents At any time or times, in order to comply with any legal requirement in any jurisdiction, the Agent may appoint another bank or trust company or one or more other persons, either to act as co-agent or co-agents, jointly with the Agent, or to act as separate agent or agents on behalf of the Banks with such power and authority as may be necessary for the effectual operation of the provisions hereof and may be specified in the instrument of appointment (which may, in the discretion of the Agent, include provisions for the protection of such co-agent or separate agent similar to the provisions of Section 12). SECTION 14. Termination of Security Interests; Release of Collateral Upon the repayment in full of all Secured Obligations and the termination of the Commitments under the Credit Agreement, the Security Interests shall terminate and all rights to the Collateral shall revert to the Borrower. At any time and from time to time prior to such termination of the Security Interests, the Agent may release any of the Collateral with the prior written consent of the Required Banks. Upon any such termination of the Security Interests or release of Collateral, the Agent will, at the expense of the Borrower, execute and deliver to the Borrower such documents as the Borrower shall reasonably request to evidence the termination of the Security Interests or the release of such Collateral, as the case may be. SECTION 15. Notices All notices hereunder shall be given in accordance with Section 9.01 of the Credit Agreement. SECTION 16. Waivers, Non-Exclusive Remedies No failure on the part of the Agent to exercise, and no delay in exercising and no course of dealing with respect to, any right under this Agreement shall operate as a waiver thereof; nor shall any single or partial exercise by the Agent of any right under the Credit Agreement or this Agreement preclude any other or further exercise thereof or the exercise of any other right. The rights in this Agreement and the Credit Agreement are cumulative and are not exclusive of any other remedies provided by law. SECTION 17. Successors and Assigns This Agreement is for the benefit of the Agent and the Banks and their successors and assigns, and in the event of an assignment of all or any of the Secured Obligations, the rights hereunder, to the extent applicable to the indebtedness so assigned, may be transferred with such indebtedness. This Agreement shall be binding on the Borrower and its successors and assigns. SECTION 18. Changes in Writing Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, but only in writing signed by the Borrower and the Agent with the consent of the Required Banks. SECTION 19. New York Law This Agreement shall be construed in accordance with and governed by the laws of the State of New York, except as otherwise required by mandatory provisions of law and except to the extent that remedies provided by the laws of any jurisdiction other than New York are governed by the laws of such jurisdiction. SECTION 20. Severability If any provision hereof is invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Agent and the Banks in order to carry out the intentions of the parties hereto as nearly as may be possible; and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. PERINI CORPORATION By /s/ James M. Markert --------------------------- Title: Senior Vice President MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent By /s/ Caroline R. Shapiro --------------------------- Title: Vice President Schedule 1 to the Borrower Pledge Agreement 1. Note dated as of March 7, 1994, issued by Perini Land and Development in favor of the Borrower. 2. Note dated as of March 7, 1994, issued by One Hundred Thirty-Eight Joint Venture in the amount of $9,969,000, payable to Perini Land and Development and assigned by Perini Land and Development to the Borrower on or about March 7, 1994. 3. Note dated as of March 7, 1994, issued by Glenco-Perini-HCV Partners in the amount of $19,626,444, payable to Perini Resorts and assigned by Perini Resorts to Perini Land and Development on or about March 7, 1994 and assigned by Perini Land and Development to the Borrower on or about March 7, 1994. [CONFORMED COPY] EXHIBIT F SUBSIDIARY GUARANTEE AGREEMENT AGREEMENT dated as of March 9, 1994 among Perini Corporation, a Massachusetts corporation (the "Borrower"), each of the Subsidiary Guarantors listed on the signature pages hereof under the caption "Subsidiary Guarantors" and each Person that shall, at any time after the date hereof, become a "Subsidiary Guarantor" hereunder (collectively, the "Subsidiary Guarantors") and Morgan Guaranty Trust Company of New York, as Agent. WHEREAS, the Borrower has entered into a Credit Agreement (as the same may be amended from time to time, the "Credit Agreement") dated as of March 9, 1994 among the Borrower, the banks listed on the signature pages thereof, and Morgan Guaranty Trust Company of New York, as Agent, pursuant to which the Borrower is entitled, subject to certain conditions, to borrow up to $15,000,000; WHEREAS, the Credit Agreement provides, among other things, that one condition to its effectiveness is the execution and delivery by the Borrower and the Subsidiary Guarantors (the "Obligors") of this Subsidiary Guarantee Agreement; and WHEREAS, in conjunction with the transactions contemplated by the Credit Agreement and in consideration of the financial and other support that the Borrower has provided, and such financial and other support as the Borrower may in the future provide, to the Subsidiary Guarantors, and in order to induce the Banks and the Agent to enter into the Credit Agreement and to make Loans thereunder, the Subsidiary Guarantors are willing to guarantee the obligations of the Borrower under the Credit Agreement and the Notes; NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS SECTION 1.01. Definitions. Terms defined in the Credit Agreement and not otherwise defined herein are used herein as therein defined. In addition the following term, as used herein, has the following meaning: "Guaranteed Obligations" means (i) all obligations of the Borrower in respect of principal of and interest on the Loans and the Notes, (ii) all other amounts payable by the Borrower under the Credit Agreement or the Notes and (iii) all renewals or extensions of the foregoing, in each case whether now outstanding or hereafter arising. The Guaranteed Obligations shall include, without limitation, any interest, costs, fees and expenses which accrue on or with respect to any of the foregoing, whether before or after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of any one or more than one of the Borrower and the Subsidiary Guarantors, and any such interest, costs, fees and expenses that would have accrued thereon or with respect thereto but for the commencement of such case, proceeding or other action. ARTICLE II Guarantees SECTION 2.01. The Guarantees. Subject to Section 2.03, the Subsidiary Guarantors hereby jointly, severally, unconditionally and irrevocably guarantee to the Banks and the Agent and to each of them, the due and punctual payment of all Guaranteed Obligations as and when the same shall become due and payable, whether at maturity, by declaration or otherwise, according to the terms thereof. In case of failure by the Borrower punctually to pay the indebtedness guaranteed hereby, the Subsidiary Guarantors, subject to Section 2.03, hereby jointly, severally and unconditionally agree to cause such payment to be made punctually as and when the same shall become due and payable, whether at maturity or by declaration or otherwise, and as if such payment were made by the Borrower. SECTION 2.02. Guarantees Unconditional. The obligations of each Subsidiary Guarantor under this Article II shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by: (a) any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of any other Obligor under any Financing Document, by operation of law or otherwise; (b) any modification or amendment of or supplement to any other Financing Document; (c) any modification, amendment, waiver, release, non-perfection or invalidity of any direct or indirect security, or of any guarantee or other liability of any third party, for any obligation of any other Obligor under any Financing Document; (d) any change in the corporate existence, structure or ownership of any other Obligor, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting any other Obligor or its assets or any resulting release or discharge of any obligation of any other Obligor contained in any Financing Document; (e) the existence of any claim, set-off or other rights which any Subsidiary Guarantor may have at any time against any other Obligor, the Agent, any Bank or any other Person, whether or not arising in connection with the Financing Documents; provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim; (f) any invalidity or unenforceability relating to or against any other Obligor for any reason of any Financing Document, or any provision of applicable law or regulation purporting to prohibit the payment by any other Obligor of the principal of or interest on any Note or any other amount payable by any other Obligor under any Financing Document; or (g) any other act or omission to act or delay of any kind by any other Obligor, the Agent, any Bank or any other Person or any other circumstance whatsoever that might, but for the provisions of this paragraph, constitute a legal or equitable discharge of the obligations of any Subsidiary Guarantor under this Article II. SECTION 2.03. Limit of Liability. Each Subsidiary Guarantor shall be liable under this Agreement only for amounts aggregating up to the largest amount that would not render its obligations hereunder subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable provisions of any applicable state law. SECTION 2.04. Discharge; Reinstatement in Certain Circumstances. Each Subsidiary Guarantor's obligations under this Article II shall remain in full force and effect until the Commitments are terminated and the principal of and interest on the Notes and all other amounts payable by the Borrower under the Financing Documents shall have been paid in full. If at any time any payment of the principal of or interest on any Note or any other amount payable by the Borrower under any Financing Document is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of any other Obligor or otherwise, each Subsidiary Guarantor's obligations under this Article II with respect to such payment shall be reinstated at such time as though such payment had become due but had not been made at such time. SECTION 2.05. Waiver. Each Subsidiary Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against any other Obligor or any other Person. SECTION 2.06. Subrogation and Contribution. Each Subsidiary Guarantor irrevocably waives any and all rights to which it may be entitled, by operation of law or otherwise, upon making any payment hereunder (i) to be subrogated to the rights of the payee against the Borrower with respect to such payment or otherwise to be reimbursed, indemnified or exonerated by any other Obligor in respect thereof or (ii) to receive any payment, in the nature of contribution or for any other reason, from any other Obligor with respect to such payment. SECTION 2.07. Stay of Acceleration. If acceleration of the time for payment of any amount payable by the Borrower under the Financing Documents is stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all such amounts otherwise subject to acceleration under the terms of the Financing Documents shall nonetheless be payable by each Subsidiary Guarantor hereunder forthwith on demand by the Agent made at the request of the Required Banks. ARTICLE III COVENANT OF THE BORROWER SECTION 3.01. Additional Subsidiary Guarantors. The Borrower agrees, within 10 days of each request therefor by the Required Banks, to cause any Subsidiary which is not at the time a Subsidiary Guarantor hereunder to become a Subsidiary Guarantor hereunder. ARTICLE IV MISCELLANEOUS SECTION 4.01. Notices. Unless otherwise specified herein, all notices, requests and other communications to any party hereunder shall be in writing (including bank wire, telex, facsimile transmission or similar writing) and shall be given to such party at its address or telex or facsimile number set forth on the signature pages hereof (or, in the case of any Subsidiary Guarantor as to which no such address or telex or facsimile number is so set forth, to it at the address or telex or facsimile number of the Borrower set forth on the signature pages hereof) or such other address or telex or facsimile number as such party may hereafter specify for the purpose by notice to the Agent. Each such notice, request or other communication shall be effective (i) if given by telex, when such telex is transmitted to the telex number specified in or pursuant to this Section 4.01 and the appropriate answerback is received, (ii) if given by facsimile transmission, when such facsimile is transmitted to the facsimile transmission number specified in or pursuant to this Section 4.01 and telephonic confirmation of receipt thereof is received, (iii) if given by mail, 72 hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iv) if given by any other means, when delivered at the address specified in this Section 4.01. SECTION 4.02. No Waiver. No failure or delay by the Agent or any Bank in exercising any right, power or privilege under this Agreement or any other Financing Document shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein and therein provided shall be cumulative and not exclusive of any rights or remedies provided by law. SECTION 4.03. Amendments and Waivers. Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and is signed by the Borrower, each Subsidiary Guarantor and the Agent with the prior written consent of the Required Banks under the Credit Agreement. SECTION 4.04. Governing Law; Submission to Jurisdiction; Waiver of a Jury Trial. This Agreement shall be construed in accordance with and governed by the law of the State of New York. Each of the Subsidiary Guarantors hereby agrees to be bound by each provision of the Credit Agreement which purports to bind all Obligors, including Sections 9.08 and 9.10, to the same extent as if it were a signatory party thereto. SECTION 4.05. Successors and Assigns. This Agreement is for the benefit of the Banks and the Agent and their respective successors and assigns and in the event of an assignment of the Loans, the Notes or other amounts payable under the Financing Documents, the rights hereunder, to the extent applicable to the indebtedness so assigned, shall be transferred with such indebtedness. All the provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. SECTION 4.06. Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, and all of which taken together shall constitute a single instrument, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when the Agent shall have received a counterpart hereof signed by the Borrower and one or more of the Subsidiary Guarantors and when the Credit Agreement shall become effective in accordance with its terms. Thereafter, upon execution and delivery of a counterpart of this Agreement on behalf of any other Subsidiary Guarantor, this Agreement shall become effective with respect to such Subsidiary Guarantor as of the date of such delivery. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date first above written. PERINI CORPORATION By /s/ James M. Markert ----------------------------- Title: Senior Vice President By /s/ Susan C. Mellace ----------------------------- Title: Treasurer 73 Mount Wayte Avenue Framingham, MA 01701 Telex Number: (508) 628-2960 SUBSIDIARY GUARANTORS PERINI BUILDING COMPANY, INC. By /s/ Robert Band ----------------------------- Title: Vice President 73 Mount Wayte Avenue Framingham, MA 01701 Facsimile number: (508) 628-2960 PERINI INTERNATIONAL CORPORATION By /s/ Donald Paula ----------------------------- Title: Vice President, Controller 73 Mount Wayte Avenue Framingham, MA 01701 Facsimile number: (508) 628-2960 PERINI LAND AND DEVELOPMENT COMPANY By /s/ John H. Schwarz ------------------------------- Title: Chief Executive Officer 73 Mount Wayte Avenue Framingham, MA 01701 Facsimile number: (508) 628-2960 R. E. DAILEY & CO. By /s/ Lawrence C. Dailey ------------------------------- Title: Chairman 2000 Town Center, Suite 1600 Southfield, MI 40875 Facsimile number: (313) 352-6280 PARAMOUNT DEVELOPMENT ASSOCIATES, INC. By /s/ Bart W. Perini ------------------------------- Title: President and Chief Executive Officer 73 Mount Wayte Avenue Framingham, MA 01701 Facsimile number: (508) 628-2960 MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent By /s/ Caroline R. Shapiro -------------------------------- Title: Vice President [CONFORMED COPY] EXHIBIT G SUBSIDIARY SECURITY AGREEMENT AGREEMENT dated as of March 9, 1994 among PERINI LAND AND DEVELOPMENT COMPANY ("PL&D"), PARAMOUNT DEVELOPMENT ASSOCIATES, INC. (collectively with any other Subsidiary Guarantor becoming a party hereto, the "Subsidiary Guarantors") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent. W I T N E S S E T H : WHEREAS, Perini Corporation (the "Borrower"), certain banks and Morgan Guaranty Trust Company of New York, as agent for such banks, are parties to a Credit Agreement of even date herewith (as the same may be amended from time to time, the "Credit Agreement"); WHEREAS, the Subsidiary Guarantors, certain other Subsidiaries of the Borrower, the Borrower and the Agent are parties to a Subsidiary Guarantee Agreement of even date herewith (as may be amended from time to time, the "Subsidiary Guarantee Agreement"); and WHEREAS, each of the Subsidiary Guarantors is a direct or indirect subsidiary of the Borrower; and WHEREAS, in order to induce said banks and the Agent to enter into the Credit Agreement and accept the Subsidiary Guarantee Agreement, each Subsidiary Guarantor has agreed to grant a continuing security interest in and to the Collateral (as hereafter defined) to secure its obligations under the Subsidiary Guarantee Agreement; NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: SECTION 1. Definitions Terms defined in the Credit Agreement and not otherwise defined herein have, as used herein, the respective meanings provided for therein. The following additional terms, as used herein, have the following respective meanings: "Collateral" has the meaning set forth in Section 3(a). "Liquid Investments" has the meaning set forth in Section 5(d). "Perfection Certificate" means, with respect to any Subsidiary Guarantor, a certificate substantially in the form of Exhibits A-1 and A-2, completed and supplemented with the schedules and attachments contemplated thereby to the satisfaction of the Agent, and duly executed by the chief executive officer and the chief legal officer of such Subsidiary Guarantor. "Permitted Liens" means the Security Interests and the Liens on the Collateral permitted to be created, assumed or exist pursuant to Section 5.13 of the Credit Agreement. "Proceeds" means all proceeds of, and all other profits, products, rents or receipts, in whatever form, arising from the collection, sale, lease, exchange, assignment, licensing or other disposition of, or other realization upon, the Collateral, including without limitation all claims of each Subsidiary Guarantor against third parties for loss of, damage to or destruction of, or for proceeds payable under, or unearned premiums with respect to, policies of insurance in respect of, any Collateral, and any condemnation or requisition payments with respect to any Collateral, in each case whether now existing or hereafter arising. "Secured Obligations" means the obligations secured under the Financing Documents including, without limitation, (a) all principal of and interest (including, without limitation, any interest which accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of any Obligor, whether or not allowed or allowable as a claim in any such proceeding) on any loan under, or any note issued pursuant to, the Credit Agreement, (b) all other amounts payable by any Obligor under any Financing Document and (c) any renewals or extensions of any of the foregoing. "Security Interests" means the security interests in the Collateral granted hereunder securing the Secured Obligations. "Subsidiary Collateral Account" has the meaning set forth in Section 5. "UCC" means the Uniform Commercial Code as in effect on the date hereof in the State of New York; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the Security Interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, "UCC" means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection. SECTION 2. Representations and Warranties Each Subsidiary Guarantor represents and warrants as follows: (a) Such Subsidiary Guarantor has good and marketable title to the Collateral set forth opposite its name on Schedule 1 hereto, free and clear of any Liens other than the Permitted Liens. (b) None of the Subsidiary Guarantors has performed any acts which might prevent the Agent from enforcing any of the terms of this Agreement or which would limit the Agent in any such enforcement. Other than financing statements or other similar or equivalent documents or instruments with respect to the Security Interests and Permitted Liens, no financing statement, mortgage, security agreement or similar or equivalent document or instrument covering all or any part of the Collateral is on file or of record in any jurisdiction in which such filing or recording would be effective to perfect a Lien on such Collateral. No Collateral is in the possession of any Person (other than the Subsidiary Guarantors) asserting any claim thereto or security interest therein, except that the Agent or its designee may have possession of Collateral as contemplated hereby. (c) Not less than five Domestic Business Days prior to the date of the first Borrowing under the Credit Agreement, each Subsidiary Guarantor shall deliver a Perfection Certificate to the Agent. The information set forth therein shall be correct and complete. Not later than 60 days following the date of the first Borrowing, each Subsidiary Guarantor shall furnish to the Agent file search reports from each UCC filing office set forth in Schedule 6 to the Perfection Certificates confirming the filing information set forth in such Schedules. (d) The Security Interests constitute valid security interests under the UCC securing the Secured Obligations. When UCC financing statements in the form specified in Exhibits A-1 and A-2 shall have been filed in the offices specified in the Perfection Certificates, the Security Interests shall constitute perfected security interests in the Collateral to the extent that a security interest therein may be perfected by filing pursuant to the UCC, prior to all other Liens and rights of others therein except for the Permitted Liens. SECTION 3. The Security Interests (a) In order to secure the full and punctual payment of the Secured Obligations in accordance with the terms thereof, and to secure the performance of all of the obligations of the Borrower under the Credit Agreement, the obligations of the Subsidiary Guarantors hereunder and under the Subsidiary Guarantee Agreement, each Subsidiary Guarantor hereby grants to the Agent for the ratable benefit of the Banks a continuing security interest in and to all of the property of such Subsidiary Guarantor, whether now owned or existing or hereafter acquired or arising and regardless of where located listed on Schedule 1 hereto opposite its name (all being collectively referred to as the "Collateral"). (b) The Security Interests are granted as security only and shall not subject the Agent or any Bank to, or transfer or in any way affect or modify, any obligation or liability of each Subsidiary Guarantor with respect to any of the Collateral or any transaction in connection therewith. SECTION 4. Further Assurances; Covenants (a) No Subsidiary Guarantor will change its name, identity or corporate structure in any manner unless it shall have given the Agent prior notice thereof and delivered an opinion of counsel with respect thereto in accordance with Section 4(l). No Subsidiary Guarantor will change the location of (i) its chief executive office or chief place of business or (ii) the locations where it keeps or holds any Collateral or any records relating thereto from the applicable location described in the Perfection Certificate unless it shall have given the Agent prior notice thereof and delivered an opinion of counsel with respect thereto in accordance with Section 4(l). No Subsidiary Guarantor shall in any event change the location of any Collateral if such change would cause the Security Interests in such Collateral to lapse or cease to be perfected. (b) Each Subsidiary Guarantor will, from time to time, at its expense, execute, deliver, file and record any statement, assignment, instrument, document, agreement or other paper and take any other action, (including, without limitation, any filings of financing or continuation statements under the UCC) that from time to time may be necessary or desirable, or that the Agent may request, in order to create, preserve, perfect, confirm or validate the Security Interests or to enable the Agent and the Banks to obtain the full benefits of this Agreement, or to enable the Agent to exercise and enforce any of its rights, powers and remedies hereunder with respect to any of the Collateral. To the extent permitted by applicable law, each Subsidiary Guarantor hereby authorizes the Agent to execute and file financing statements or continuation statements without such Subsidiary Guarantor's signature appearing thereon. Each Subsidiary Guarantor agrees that a carbon, photographic, photostatic or other reproduction of this Agreement or of a financing statement is sufficient as a financing statement. Each Subsidiary Guarantor shall pay the costs of, or incidental to, any recording or filing of any financing or continuation statements concerning the Collateral. (c) If any Collateral is at any time in the possession or control of any warehouseman, bailee or any of a Subsidiary Guarantor's agents or processors, such Subsidiary Guarantor shall notify such warehouseman, bailee, agent or processor of the Security Interests created hereby and to hold all such Collateral for the Agent's account subject to the Agent's instructions. (d) Each Subsidiary Guarantor shall keep full and accurate books and records relating to the Collateral, and stamp or otherwise mark such books and records in such manner as the Required Banks may reasonably require in order to reflect the Security Interests. (e) Without the prior written consent of the Required Banks, no Subsidiary Guarantor will sell, lease, exchange, assign or otherwise dispose of, or grant any option with respect to, any Collateral. (f) Each Subsidiary Guarantor will, promptly upon request, provide to the Agent all information and evidence it may reasonably request concerning the Collateral to enable the Agent to enforce the provisions of this Agreement. (g) Not more than six months nor less than 30 days prior to (i) each anniversary of the date hereof during the term of the Credit Agreement and (ii) each date on which any of the Subsidiary Guarantors proposes to take any action contemplated by Section 4(a), such Subsidiary Guarantor shall, at its cost and expense, cause to be delivered to the Banks an opinion of counsel, satisfactory to the Agent, substantially in the form of Exhibit B-1 to the Credit Agreement to the effect that all financing statements and amendments or supplements thereto, continuation statements and other documents required to be recorded or filed in order to perfect and protect the Security Interests for a period, specified in such opinion, continuing until a date not earlier than eighteen months from the date of such opinion, against all creditors of and purchasers from such Subsidiary Guarantor have been filed in each filing office necessary for such purpose and that all filing fees and taxes, if any, payable in connection with such filings have been paid in full. (h) From time to time upon request by the Agent, each Subsidiary Guarantor shall, at its cost and expense, cause to be delivered to the Banks an opinion of counsel satisfactory to the Agent as to such matters relating to the transactions contemplated hereby as the Required Banks may reasonably request. SECTION 5. Collateral Account (a) There is hereby established with the Agent a cash collateral account (the "Subsidiary Collateral Account") in the name and under the control of the Agent into which there shall be deposited from time to time the cash proceeds of the Collateral required to be delivered to the Agent pursuant to any provision of this Agreement. Any income received by the Agent with respect to the balance from time to time standing to the credit of the Subsidiary Collateral Account, including any interest or capital gains on Liquid Investments, shall remain, or be deposited, in the Subsidiary Collateral Account. All right, title and interest in and to the cash amounts on deposit from time to time in the Subsidiary Collateral Account together with any Liquid Investments from time to time made pursuant to subsection (c) of this Section shall vest in the Agent, shall constitute part of the Collateral hereunder and shall not constitute payment of the Secured Obligations until applied thereto as hereinafter provided. (b) Each Subsidiary Guarantor agrees that if the proceeds of any Collateral hereunder shall be received by it, such Subsidiary Guarantor shall as promptly as possible deposit such proceeds into the Subsidiary Collateral Account. Until so deposited, all such proceeds shall be held in trust by such Subsidiary Guarantor for and as the property of the Agent and the Banks and shall not be commingled with any other funds or property of such Subsidiary Guarantor. (c) The balance from time to time standing to the credit of the Subsidiary Collateral Account shall, except upon the occurrence and continuation of an Event of Default, be distributed to the Agent to the extent necessary to pay the principal of and interest on any Loans then due and unpaid and the remainder, if any, to the relevant Subsidiary Guarantor upon the order of such Subsidiary Guarantor. If immediately available cash on deposit in the Subsidiary Collateral Account is not sufficient to make any distribution referred to in the previous sentence of this Section 5(c), the Agent shall liquidate as promptly as practicable Liquid Investments as required to obtain sufficient cash to make such distribution and, notwithstanding any other provision of this Section 5, such distribution shall not be made until such liquidation has taken place. Upon the occurrence and continuation of an Event of Default, the Agent shall, if so instructed by the Required Banks, apply or cause to be applied (subject to collection) any or all of the balance from time to time standing to the credit of the Subsidiary Collateral Account in the manner specified in Section 9. Notwithstanding any of the foregoing, the Collateral Agent shall disburse any Casualty Proceeds to PL&D from time to time upon receipt of a certificate of a financial officer of PL&D prepared in good faith and stating that either (x) the Casualty Proceeds to be so disbursed do not exceed, on a cumulative basis, the amounts theretofore expended by PL&D to restore or replace such Mortgaged Facility or (y) the restoration or replacement of such Mortgaged Facility has been completed, provided that no such certificate shall be required in respect of, and the Agent shall promptly disburse to PL&D upon its receipt of, Casualty Proceeds aggregating $100,000 or less with respect to any Casualty or Condemnation. (d) Amounts on deposit in the Subsidiary Collateral Account shall be invested and re-invested from time to time in such Liquid Investments as the relevant Subsidiary Guarantor shall determine, which Liquid Investments shall be held in the name and be under the control of the Agent, provided that, if an Event of Default has occurred and is continuing, the Agent shall, if instructed by the Required Banks, liquidate any such Liquid Securities and apply or cause to be applied the proceeds thereof to the payment of the Secured Obligations in the manner specified in Section 9. For this purpose, "Liquid Investments" means Temporary Cash Investments; provided that (i) each Liquid Investment shall mature within 30 days after it is acquired by the Agent and (ii) in order to provide the Agent, for the benefit of the Banks, with a perfected security interest therein, each Liquid Investment shall be either: (i) evidenced by negotiable certificates or instruments, or if non-negotiable then issued in the name of the Agent, which (together with any appropriate instruments of transfer) are delivered to, and held by, the Agent or an agent thereof (which shall not be the Borrower or any of its Affiliates) in the State of New York; or (ii) in book-entry form and issued by the United States and subject to pledge under applicable state law and Treasury regulations and as to which (in the opinion of counsel to the Agent) appropriate measures shall have been taken for perfection of the Security Interests. SECTION 6. General Authority Each Subsidiary Guarantor hereby irrevocably appoints the Agent its true and lawful attorney, with full power of substitution, in the name of such Subsidiary Guarantor, the Agent, the Banks or otherwise, for the sole use and benefit of the Agent and the Banks, but at such Subsidiary Guarantor's expense, to the extent permitted by law to exercise, at any time and from time to time while an Event of Default has occurred and is continuing, all or any of the following powers with respect to all or any of the Collateral: (i) to demand, sue for, collect, receive and give acquittance for any and all monies due or to become due thereon or by virtue thereof, (ii) to settle, compromise, compound, prosecute or defend any action or proceeding with respect thereto, (iii) to sell, transfer, assign or otherwise deal in or with the same or the proceeds or avails thereof, as fully and effectually as if the Agent were the absolute owner thereof, and (iv) to extend the time of payment of any or all thereof and to make any allowance and other adjustments with reference thereto; provided that the Agent shall give such Subsidiary Guarantor not less than ten days' prior written notice of the time and place of any sale or other intended disposition of any of the Collateral, except any Collateral which is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market. Each Subsidiary Guarantor agrees that such notice constitutes "reasonable notification" within the meaning of Section 9-504(3) of the UCC. SECTION 7. Remedies upon Event of Default (a) If any Event of Default has occurred and is continuing, the Agent may exercise on behalf of the Banks all rights of a secured party under the UCC (whether or not in effect in the jurisdiction where such rights are exercised) and, in addition, the Agent may, without being required to give any notice, except as herein provided or as may be required by mandatory provisions of law, (i) withdraw all cash and Liquid Investments in the Subsidiary Collateral Account and apply such cash and Liquid Investments and other cash, if any, then held by it as Collateral as specified in Section 9 and (ii) if there shall be no such cash or Liquid Investments or if such cash and Liquid Investments shall be insufficient to pay all the Secured Obligations in full, sell the Collateral or any part thereof at public or private sale, for cash, upon credit or for future delivery, and at such price or prices as the Agent may deem satisfactory. The Agent or any Bank may be the purchaser of any or all of the Collateral so sold at any public sale (or, if the Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations, at any private sale). The relevant Subsidiary Guarantor will execute and deliver such documents and take such other action as the Agent deems necessary or advisable in order that any such sale may be made in compliance with law. Upon any such sale the Agent shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral so sold. Each purchaser at any such sale shall hold the Collateral so sold to it absolutely and free from any claim or right of whatsoever kind, including any equity or right of redemption of the relevant Subsidiary Guarantor which may be waived, and the relevant Subsidiary Guarantor, to the extent permitted by law, hereby specifically waives all rights of redemption, stay or appraisal which it has or may have under any law now existing or hereafter adopted. The notice (if any) of such sale required by Section 6 shall (1) in case of a public sale, state the time and place fixed for such sale, and (2) in the case of a private sale, state the day after which such sale may be consummated. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Agent may fix in the notice of such sale. At any such sale the Collateral may be sold in one lot as an entirety or in separate parcels, as the Agent may determine. The Agent shall not be obligated to make any such sale pursuant to any such notice. The Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the same may be so adjourned. In case of any sale of all or any part of the Collateral on credit or for future delivery, the Collateral so sold may be retained by the Agent until the selling price is paid by the purchaser thereof, but the Agent shall not incur any liability in case of the failure of such purchaser to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may again be sold upon like notice. The Agent, instead of exercising the power of sale herein conferred upon it, may proceed by a suit or suits at law or in equity to foreclose the Security Interests and sell the Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction. (b) For the purpose of enforcing any and all rights and remedies under this Agreement the Agent may (i) require each Subsidiary Guarantor to, and each Subsidiary Guarantor agrees that it will, at its expense and upon the request of the Agent, forthwith assemble all or any part of the Collateral as directed by the Agent and make it available at a place designated by the Agent which is, in its opinion, reasonably convenient to the Agent and such Subsidiary Guarantor, whether at the premises of such Subsidiary Guarantor or otherwise, (ii) to the extent permitted by applicable law, enter, with or without process of law and without breach of the peace, any premise where any of the Collateral is or may be located, and without charge or liability to it seize and remove such Collateral from such premises, (iii) have access to and use such Subsidiary Guarantor's books and records relating to the Collateral and (iv) prior to the disposition of the Collateral, store or transfer it without charge in or by means of any storage or transportation facility owned or leased by such Subsidiary Guarantor, process, repair or recondition it or otherwise prepare it for disposition in any manner and to the extent the Agent deems appropriate and, in connection with such preparation and disposition, use without charge any trademark, trade name, copyright, patent or technical process used by such Subsidiary Guarantor. The Agent may also render any or all of the Collateral unusable at such Subsidiary Guarantor's premises and may dispose of such Collateral on such premises without liability for rent or costs. SECTION 8. Limitation on Duty of Agent in Respect of Collateral. Beyond the exercise of reasonable care in the custody thereof, the Agent shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. The Agent shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property, and shall not be liable or responsible for any loss or damage to any of the Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehouseman, carrier, forwarding agency, consignee or other agent or bailee selected by the Agent in good faith. SECTION 9. Application of Proceeds Upon the occurrence and during the continuance of an Event of Default, the proceeds of any sale of, or other realization upon, all or any part of the Collateral and any cash held in the Subsidiary Collateral Account shall be applied by the Agent in the following order of priorities: first, to payment of the expenses of such sale or other realization, including reasonable compensation to agents and counsel for the Agent, and all expenses, liabilities and advances incurred or made by the Agent in connection therewith, and any other unreimbursed expenses for which the Agent or any Bank is to be reimbursed pursuant to the Subsidiary Guarantee Agreement or Section 9.03 of the Credit Agreement or Section 12 hereof or under any other Collateral Document and unpaid fees owing to the Agent under the Credit Agreement; second, to the ratable payment of unpaid principal of the Secured Obligations; third, to the ratable payment of accrued but unpaid interest on the Secured Obligations in accordance with the provisions of the Credit Agreement; fourth, to the ratable payment of all other Secured Obligations, until all Secured Obligations shall have been paid in full; and finally, to payment to each Subsidiary Guarantor, as appropriate, or its successors or assigns, or as a court of competent jurisdiction may direct, of any surplus then remaining from such proceeds. The Agent may make distributions hereunder in cash or in kind or, on a ratable basis, in any combination thereof. SECTION 10. Concerning the Agent The provisions of Article VII of the Credit Agreement shall inure to the benefit of the Agent in respect of this Agreement and shall be binding upon the parties to the Credit Agreement in such respect. In furtherance and not in derogation of the rights, privileges and immunities of the Agent therein set forth: (A) The Agent is authorized to take all such action as is provided to be taken by it as Agent hereunder and all other action reasonably incidental thereto. As to any matters not expressly provided for herein (including, without limitation, the timing and methods of realization upon the Collateral) the Agent shall act or refrain from acting in accordance with written instructions from the Required Banks or, in the absence of such instructions, in accordance with its discretion. (B) The Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Security Interests in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder. The Agent shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Agreement by any Subsidiary Guarantor. SECTION 11. Appointment of Co-Agents At any time or times, in order to comply with any legal requirement in any jurisdiction, the Agent may appoint another bank or trust company or one or more other persons, either to act as co-agent or co-agents, jointly with the Agent, or to act as separate agent or agents on behalf of the Banks with such power and authority as may be necessary for the effectual operation of the provisions hereof and may be specified in the instrument of appointment (which may, in the discretion of the Agent, include provisions for the protection of such co-agent or separate agent similar to the provisions of Section 10). SECTION 12. Expenses In the event that any Subsidiary Guarantor fails to comply with the provisions of the Subsidiary Guarantee Agreement or this Agreement, such that the value of any Collateral or the validity, perfection, rank or value of any Security Interest is thereby diminished or potentially diminished or put at risk, the Agent if requested by the Required Banks may, but shall not be required to, effect such compliance on behalf of such Subsidiary Guarantor, and the Subsidiary Guarantor shall reimburse the Agent for the costs thereof on demand. All insurance expenses and all expenses of protecting, storing, warehousing, appraising, insuring, handling, maintaining, and shipping the Collateral, any and all excise, property, sales, and use taxes imposed by any state, federal, or local authority on any of the Collateral, or in respect of periodic appraisals and inspections of the Collateral to the extent the same may be requested by the Required Banks from time to time, or in respect of the sale or other disposition thereof shall be borne and paid by the Subsidiary Guarantor; and if such Subsidiary Guarantor fails to promptly pay any portion thereof when due, the Agent or any Bank may, at its option, but shall not be required to, pay the same and charge such Subsidiary Guarantor's account therefor, and each Subsidiary Guarantor agrees to reimburse the Agent or such Bank therefor on demand. All sums so paid or incurred by the Agent or any Bank for any of the foregoing and any and all other sums for which a Subsidiary Guarantor may become liable hereunder and all costs and expenses (including attorneys' fees, legal expenses and court costs) reasonably incurred by the Agent or any Bank in enforcing or protecting the Security Interests or any of their rights or remedies under this Agreement, shall, together with interest thereon until paid at the rate applicable to Prime Borrowings, be additional Secured Obligations hereunder. SECTION 13. Termination of Security Interests; Release of Collateral Upon the repayment in full of all Secured Obligations and the termination of the Commitments under the Credit Agreement, the Security Interests shall terminate and all rights to the Collateral shall revert to each Subsidiary Guarantor, as appropriate. At any time and from time to time prior to such termination of the Security Interests, the Agent may release any of the Collateral with the prior written consent of the Required Banks. Upon any such termination of the Security Interests or release of Collateral, the Agent will, at the expense of the corresponding Subsidiary Guarantor, execute and deliver to such Subsidiary Guarantor such documents as such Subsidiary Guarantor shall reasonably request to evidence the termination of the Security Interests or the release of such Collateral, as the case may be. SECTION 14. Notices All notices, communications and distributions hereunder shall be given in accordance with Section 4.01 of the Subsidiary Guarantee Agreement. SECTION 15. Waivers, Non-Exclusive Remedies No failure on the part of the Agent to exercise, and no delay in exercising and no course of dealing with respect to, any right under this Agreement shall operate as a waiver thereof; nor shall any single or partial exercise by the Agent of any right under the Credit Agreement, the Subsidiary Guarantee Agreement or this Agreement preclude any other or further exercise thereof or the exercise of any other right. The rights in this Agreement, the Credit Agreement and the Subsidiary Guarantee Agreement are cumulative and are not exclusive of any other remedies provided by law. SECTION 16. Successors and Assigns This Agreement is for the benefit of the Agent and the Banks and their successors and assigns, and in the event of an assignment of all or any of the Secured Obligations, the rights hereunder, to the extent applicable to the indebtedness so assigned, may be transferred with such indebtedness. This Agreement shall be binding on each Subsidiary Guarantor and its successors and assigns. SECTION 17. Changes in Writing Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, but only in writing signed by each Subsidiary Guarantor and the Agent with the consent of the Required Banks. SECTION 18. New York Law This Agreement shall be construed in accordance with and governed by the laws of the State of New York, except as otherwise required by mandatory provisions of law and except to the extent that remedies provided by the laws of any jurisdiction other than New York are governed by the laws of such jurisdiction. SECTION 19. Severability If any provision hereof is invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Agent and the Banks in order to carry out the intentions of the parties hereto as nearly as may be possible; and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. PARAMOUNT DEVELOPMENTS ASSOCIATES, INC. By /s/ Bart W. Perini ------------------------------- Title: President and Chief Executive Officer PERINI LAND AND DEVELOPMENT COMPANY By /s/ John H. Schwarz ------------------------------- Title: Chief Executive Officer MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent By /s/ Caroline R. Shapiro ------------------------------- Title: Vice President SCHEDULE 1 To Subsidiary Security Agreement Paramount Development Associates, Inc. ("Paramount"): 1. All right, title and interest of Paramount in and to the Option Agreement dated on or about March 21, 1991 between Paramount and New England Development Company for the sale of 53 acres of real property located in Marlborough, Massachusetts; 2. All right, title and interest of Paramount in and to I-10 Industrial Park Developers, a joint venture formed by Paramount and Mardian Development Company on or about June 14, 1976, including but not limited to all amounts payable to such joint venture and the proceeds of the sale of Airport Commerce Center; 3. All books and records (including, without limitation, credit files, computer programs, printouts and other computer materials and records) of Paramount pertaining to any of its Collateral; 4. The Subsidiary Collateral Account, all cash deposited therein from time to time, the Liquid Investments made pursuant to Section 5(c) and other monies and property of any kind of Paramount, to the extent such other monies and property are Proceeds of the Collateral, in the possession or under the control of the Agent; and 5. All Proceeds of all or any of the Collateral described above. Perini Land and Development Company ("PL&D"): 1. All right, title and interest of PL&D in, and to receive, any amounts payable by the Oaks at Buckhead, a Georgia partnership formed by PL&D and R.S. Atlanta, Inc. on or about August 31, 1990, up to an aggregate amount of $1,200,000; 2. All books and records (including, without limitation, credit files, computer programs, printouts and other computer materials and records) of PL&D pertaining to any of its Collateral; 3. The Subsidiary Collateral Account, all cash deposited therein from time to time, the Liquid Investments made pursuant to Section 5(c) and other monies and property of any kind of PL&D, to the extent such other monies and property are Proceeds of the Collateral, in the possession or under the control of the Agent; and 4. All Proceeds of all or any of the Collateral described above. EXHIBIT A-1 To Subsidiary Security Agreement PERFECTION CERTIFICATE The undersigned, the chief executive officer and chief legal officer of Perini Land and Development Company, a Delaware corporation (the "Subsidiary Guarantor"), hereby certify with reference to the Security Agreement dated as of March 9, 1994 between the Subsidiary Guarantor and Morgan Guaranty Trust Company of New York, as Agent (terms defined therein being used herein as therein defined), to the Agent and each Bank as follows: 1. Names. (a) The exact corporate name of the Subsidiary Guarantor as it appears in its certificate of incorporation is as follows: Perini Land and Development Company (b) Set forth below is each other corporate name the Subsidiary Guarantor has had since its organization, together with the date of the relevant change: (c) Except as set forth below, the Subsidiary Guarantor has not changed its identity or corporate structure in any way within the past five years. [Changes in identity or corporate structure would include mergers, consolidations and acquisitions, as well as any change in the form, nature or jurisdiction of corporate organization. If any such change has occurred, include the information required by paragraphs 1, 2 and 3 of this certificate as to each acquiree or constituent party to a merger or consolidation.] (d) The following is a list of all other names (including trade names or similar appellations) used by the Subsidiary Guarantor or any of its divisions or other business units at any time during the past five years: 2. Current Locations. (a) The chief executive office of the Subsidiary Guarantor is located at the following address: Mailing Address County State 73 Mount Wayte Avenue Middlesex Massachusetts Framingham (b) The following are all the places of business of the Subsidiary Guarantor not identified above: Mailing Name Address County State 3. Prior Locations. Set forth below is the information required by subparagraph (a) of paragraph 2 with respect to each location or place of business maintained by the Subsidiary Guarantor at any time during the past five years: 4. File Search Reports. Attached hereto as Schedule 4(A) is a true copy of a file search report from the Uniform Commercial Code filing officer in each jurisdiction identified in paragraph 2 or 3 above with respect to each name set forth in paragraph 1 above. Attached hereto as Schedule 4(B) is a true copy of each financing statement or other filing identified in such file search reports. 5. UCC Filings. A duly signed financing statement on Form UCC-1 in substantially the form of Schedule 5(A) hereto has been duly filed in the Uniform Commercial Code filing office in each jurisdiction identified in paragraph 2 hereof. Attached hereto as Schedule 5(B) is a true copy of each such filing duly acknowledged by the filing officer. 6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule setting forth filing information with respect to the filings described in paragraph 5 above. 7. Filing Fees. All filing fees and taxes payable in connection with the filings described in paragraph 6 above have been paid. IN WITNESS WHEREOF, we have hereunto set our hands this day of March, 1994. ____________________________ Title: ____________________________ Title: SCHEDULE 6 To Subsidiary Security Agreement Perfection Certificate SCHEDULE OF FILINGS Debtor Filing Officer File Number Date of Filing* [FN] _______________ * Indicate lapse date, if other than fifth anniversary. EXHIBIT A-2 To Subsidiary Security Agreement PERFECTION CERTIFICATE The undersigned, the chief executive officer and chief legal officer of Paramount Development Associates, Inc., a Massachusetts corporation (the "Subsidiary Guarantor"), hereby certify with reference to the Security Agreement dated as of March 9, 1994 between the Subsidiary Guarantor and Morgan Guaranty Trust Company of New York, as Agent (terms defined therein being used herein as therein defined), to the Agent and each Bank as follows: 1. Names. (a) The exact corporate name of the Subsidiary Guarantor as it appears in its certificate of incorporation is as follows: Paramount Development Associates, Inc. (b) Set forth below is each other corporate name the Subsidiary Guarantor has had since its organization, together with the date of the relevant change: (c) Except as set forth below, the Subsidiary Guarantor has not changed its identity or corporate structure in any way within the past five years. [Changes in identity or corporate structure would include mergers, consolidations and acquisitions, as well as any change in the form, nature or jurisdiction of corporate organization. If any such change has occurred, include the information required by paragraphs 1, 2 and 3 of this certificate as to each acquiree or constituent party to a merger or consolidation.] (d) The following is a list of all other names (including trade names or similar appellations) used by the Subsidiary Guarantor or any of its divisions or other business units at any time during the past five years: 2. Current Locations. (a) The chief executive office of the Subsidiary Guarantor is located at the following address: Mailing Address County State 73 Mount Wayte Avenue Middlesex Massachusetts Framingham (b) The following are all the places of business of the Subsidiary Guarantor not identified above: Mailing Name Address County State 3. Prior Locations. Set forth below is the information required by subparagraph (a) of paragraph 2 with respect to each location or place of business maintained by the Subsidiary Guarantor at any time during the past five years: 4. File Search Reports. Attached hereto as Schedule 4(A) is a true copy of a file search report from the Uniform Commercial Code filing officer in each jurisdiction identified in paragraph 2 or 3 above with respect to each name set forth in paragraph 1 above. Attached hereto as Schedule 4(B) is a true copy of each financing statement or other filing identified in such file search reports. 5. UCC Filings. A duly signed financing statement on Form UCC-1 in substantially the form of Schedule 5(A) hereto has been duly filed in the Uniform Commercial Code filing office in each jurisdiction identified in paragraph 2 hereof. Attached hereto as Schedule 5(B) is a true copy of each such filing duly acknowledged by the filing officer. 6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule setting forth filing information with respect to the filings described in paragraph 5 above. 7. Filing Fees. All filing fees and taxes payable in connection with the filings described in paragraph 6 above have been paid. IN WITNESS WHEREOF, we have hereunto set our hands this day of March, 1994. ____________________________ Title: ____________________________ Title: SCHEDULE 6 To Subsidiary Security Agreement Perfection Certificate SCHEDULE OF FILINGS Debtor Filing Officer File Number Date of Filing* [FN] _______________ * Indicate lapse date, if other than fifth anniversary. EXHIBIT I ASSIGNMENT AND ASSUMPTION AGREEMENT AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the "Assignor"), [ASSIGNEE] (the "Assignee"), PERINI CORPORATION (the "Borrower") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). W I T N E S S E T H WHEREAS, this Assignment and Assumption Agreement (the "Agreement") relates to the Credit Agreement dated as of March 9, 1994 among the Borrower, the Assignor and the other Banks party thereto and the Agent (the "Credit Agreement"); WHEREAS, as provided under the Credit Agreement, the Assignor has a Commitment to make Loans to the Borrower in an amount equal to $ ; WHEREAS, Loans made to the Borrower by the Assignor under the Credit Agreement are outstanding on the date hereof in the amount of $ ; and WHEREAS, the Assignor proposes to assign to the Assignee all of the rights of the Assignor under the Credit Agreement in respect of a portion of its Commitment in an amount equal to $__________, together with a corresponding portion of its outstanding Loans (the "Assigned Amount") and the Assignee proposes to accept assignment of such rights and assume the corresponding obligations from the Assignor on such terms; NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the parties hereto agree as follows: SECTION 1. Definitions. All capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Credit Agreement. SECTION 2. Assignment. The Assignor hereby assigns and sells to the Assignee all of the rights of the Assignor under the Credit Agreement to the extent of the Assigned Amount, and the Assignee hereby accepts such assignment from the Assignor and assumes all of the obligations of the Assignor under the Credit Agreement to the extent of the Assigned Amount. Upon the execution and delivery hereof by the Assignor, the Assignee and the Agent, and the payment of the amounts specified in Section 3 required to be paid on the date hereof (i) the Assignee shall, as of the date hereof, succeed to the rights and be obligated to perform the obligations of a Bank under the Credit Agreement with a Commitment in an amount equal to the Assigned Amount, holding Loans in amounts corresponding to the Assigned Amount, and (ii) the Commitment and Loans, of the Assignor shall, as of the date hereof, be reduced by like amounts and the Assignor released from its obligations under the Credit Agreement to the extent such obligations have been assumed by the Assignee. The assignment provided for herein shall be without recourse to the Assignor. SECTION 3. Payments. As consideration for the assignment and sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the date hereof in Federal funds the amount heretofore agreed between them. It is understood that commitment and other fees accrued under the Credit Agreement to the date hereof are for the account of the Assignor and such fees and commissions accruing from and including the date hereof are for the account of the Assignee. Each of the Assignor and the Assignee hereby agrees that if it receives any amount under the Credit Agreement which is for the account of the other party hereto, it shall receive the same for the account of such other party to the extent of such other party's interest therein and shall promptly pay the same to such other party. SECTION 4. Consent of the Borrower and the Agent. This Agreement is conditioned upon the consent of the Borrower and the Agent pursuant to Section 9.06(c) of the Credit Agreement. The execution of this Agreement by the Borrower and the Agent is evidence of such consent. Pursuant to Section 9.06(c) the Borrower agrees to execute and deliver a Note payable to the order of the Assignee to evidence the assignment and assumption provided for herein. SECTION 5. Non-Reliance on Assignor. The Assignor makes no representation or warranty in connection with, and shall have no responsibility with respect to, the solvency, financial condition, or statements of the Borrower or any Subsidiary Guarantor, or the validity and enforceability of the obligations of the Borrower or any Subsidiary Guarantor in respect of the Financing Documents. The Assignee acknowledges that it has, independently and without reliance on the Assignor, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and will continue to be responsible for making its own independent appraisal of the business, affairs and financial condition of the Borrower and the Subsidiary Guarantors. SECTION 6. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. SECTION 7. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written. [ASSIGNOR] By_________________________ Title: [ASSIGNEE] By__________________________ Title: PERINI CORPORATION By__________________________ Title: By__________________________ Title: MORGAN GUARANTY TRUST COMPANY OF NEW YORK By__________________________ Title: CONFORMED COPY AMENDMENT NO. 1 TO CREDIT AGREEMENT AMENDMENT dated as of May 3, 1994 among PERINI CORPORATION (the "Borrower"), the BANKS listed on the signature pages hereof (the "Banks") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). W I T N E S S E T H : WHEREAS, the parties hereto have heretofore entered into a Credit Agreement dated as of March 9, 1994 (the "Agreement"); and WHEREAS, the parties hereto desire to amend the Agreement to allow the Borrower to pay dividends on certain convertible preferred stock. NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. Definitions; References. Unless otherwise specifically defined herein, each term used herein which is defined in the Agreement shall have the meaning assigned to such term in the Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Agreement shall from and after the date hereof refer to the Agreement as amended hereby. SECTION 2. Amendment of Section 1.01 of the Agreement. The definition of "Restricted Payment" is hereby amended by deleting the figure "$2,125,000" appearing in clause (i) of the proviso thereto and substituting therefor the figure "$5,125,000". SECTION 3. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York. SECTION 4. Rights Otherwise Unaffected. This Amendment is limited to the matters expressly set forth herein. Except to the extent specifically amended hereby, all terms of the Agreement shall remain in full force and effect. SECTION 5. Counterparts; Effectiveness. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Amendment shall become effective as of the date hereof when the Agent shall have received duly executed counterparts hereof signed by the Borrower and the Required Banks (or, in the case of any party as to which an executed counterpart shall not have been received, the Agent shall have received telegraphic, telex or other written confirmation from such party of execution of a counterpart hereof by such party). IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. PERINI CORPORATION By /s/ James M. Markert --------------------------- Title: Senior Vice President MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Caroline R. Shapiro --------------------------- Title: Vice President BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION By /s/ Richard J. Cerf --------------------------- Title: Vice President SHAWMUT BANK, N.A. By /s/ Robert J. Lord --------------------------- Title: Director FLEET BANK OF MASSACHUSETTS, N.A. By /s/ Jeffrey Bauer --------------------------- Title: Vice President BAYBANK BOSTON, N.A. By /s/ Timothy M. Laurion --------------------------- Title: Vice President EX-12 9 STATEMENT RE COMPUTATION OF RATIOS EXHIBIT 12 PERINI CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
------------------------------------------------------------------------------------- 3 MONTHS ENDED MARCH 31, YEAR ENDED DECEMBER 31, In thousands except ratio 1994 1993 1992 1991 1990 1989 data ---- ---- ---- ---- ---- ---- Earnings: Income from continuing operations before income 1,299 8,126 (26,354) 4,438 (6,260) 22,552 Add: (a) Fixed charges as calculated below ..... 1,993 9,060 10,819 14,843 10,548 7,980 (b) Amortiziation of previously capitalized interest ............. 276 2,352 759 750 513 1,110 (c) Distributions in excess of earnings of less-than-50%-owned affiliates, net ...... -- -- 12,479 -- 1,317 -- (d) Minority interest in earnings of greater- than-50%-owned affiliates with fixed charges .............. -- -- 4,130 1,068 -- 1,434 Deduct: (a) Interest capitalized during the period .... -- 215 243 2,789 3,319 2,709 (b) Undistributed earnings of less-than-50%-owned affiliates, net ...... 122 5,884 -- 3,144 -- 1,045 (c) Adjustment for minority share of losses in greater- than-50%-owned, unconsolidated affiliates ........... 32 166 156 585 80 199 ----- ----- ----- ----- ----- ----- Earnings, as adjusted ...... 3,414 13,273 1,434 14,581 2,719 29,123 ----- ----- ----- ----- ----- ----- Fixed Charges: Interest on indebtedness, expensed or capitalized .... 1,806 8,425 10,188 14,195 9,948 7,359 Interest portion of rents 151 545 628 645 597 618 Amortization of debt discount and expense ....... 36 90 3 3 3 3 ----- ----- ----- ----- ----- ----- Fixed charges .............. 1,993 9,060 10,819 14,843 10,548 7,980 ----- ----- ----- ----- ----- ----- Preferred Stock Dividend Requirements: Dividends declared ....... 531 2,125 2,125 2,125 2,125 2,125 Divided by 1 minus tax rate ....................... 60% 60% 61% 61% 66% 63% ----- ----- ----- ----- ----- ----- Preferred dividends, pretax equivalent ................. 885 3,542 3,484 3,484 3,220 3,373 ----- ----- ----- ----- ----- ----- Fixed Charges and Preferred Stock Dividend Requirements ............. 2,878 12,602 14,303 18,327 13,768 11,353 ----- ----- ----- ----- ----- ----- Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividend Requirements ............. 1.19x 1.05x .10x .80x .20x 2.57x Fixed Charges and Preferred Dividend Requirements in Excess of Earnings before Fixed Charges ............ -- -- 12,869 3,746 11,049 --
PERINI CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF ADJUSTED EBIT TO INTEREST AND PREFERRED STOCK DIVIDEND REQUIREMENTS
--------------------------------------------------------------------------------- 3 MONTHS ENDED MARCH 31, YEAR ENDED DECEMBER 31, 1994 1993 1992 1991 1990 1989 In thousands except ratio data ---- ---- ---- ---- ---- ---- EBIT: Income before income taxes ... 1,299 8,126 (26,354) 4,438 (6,260) 22,552 Add -- Interest expense ...... 1,247 5,655 7,651 9,022 6,238 3,987 -- Adjustment for provision to reduce carrying value of certain real estate to net realizable value .. -- -- 31,400 2,800 -- -- ---- ----- ----- ----- ---- ----- Adjusted EBIT .................. 2,546 13,781 12,697 16,260 (22) 26,539 ---- ----- ----- ----- ---- ----- Interest: Add -- Interest expense ...... 1,247 5,655 7,651 9,022 6,238 3,987 -- Capitalized interest .. -- 215 243 2,180 3,305 2,709 ---- ----- ----- ----- ---- ----- Interest ....................... 1,247 5,870 7,894 11,202 9,543 6,696 ---- ----- ----- ----- ---- ----- Preferred Stock Dividend Requirements: Dividends declared ........... 531 2,125 2,125 2,125 2,125 2,125 Divided by 1 minus tax rate .. 60% 60% 61% 61% 66% 63% ---- ----- ----- ----- ---- ----- Preferred stock, pretax equivalent ..................... 885 3,542 3,484 3,484 3,220 3,373 ---- ----- ----- ----- ---- ----- Ratio of Adjusted EBIT to Interest and Preferred Dividend Requirement ......... 1.19x 1.46x 1.12x 1.11x -- 2.64x
EX-23 10 CONSENTS OF EXPERTS AND COUNSEL EXHIBIT 23(D) CONSENT OF ARTHUR ANDERSEN & CO. As independent public accountants, we hereby consent to the use of our reports dated February 11, 1994 and August 16, 1993 and to all references to our firm included in or made a part of this Registration Statement. ARTHUR ANDERSEN & CO. May 26, 1994 EX-23 11 CONSENTS OF EXPERTS AND COUNSEL EXHIBIT 23(E) CONSENT OF ALEXANDER X. KUHN & CO. We hereby consent to the use of our report dated August 16, 1993 covering the audited statements of construction revenues and costs of Newberg/Perini for the years ended December 31, 1991 and December 31, 1990, and to all references to our firm included in or made a part of this Registration Statement. ALEXANDER X. KUHN & CO. May 26, 1994 EX-23 12 CONSENTS OF EXPERTS AND COUNSEL EXHIBIT 23(F) INDEPENDENT AUDITORS' CONSENT We consent to the use in this Registration Statement of Perini Corporation on Form S-2 of our report dated January 21, 1993 (relating to the financial statements of Ebasco/Newburg, a Joint Venture, not presented separately herein), appearing in the Prospectus, which is part of this Registration Statement. We also consent to the reference to us under the heading "Experts" in such Prospectus. DELOITTE & TOUCHE Nashville, Tennessee May 26, 1994 -----END PRIVACY-ENHANCED MESSAGE-----