Exhibit 4.13
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INDEMNIFICATION AND
REIMBURSEMENT AGREEMENT
Dated as of July 31, 1995
among
MORRISON KNUDSEN CORPORATION,
an Ohio corporation,
MORRISON KNUDSEN CORPORATION,
a Delaware corporation,
FIDELITY AND DEPOSIT COMPANY OF MARYLAND,
a Maryland corporation,
and
COLONIAL AMERICAN CASUALTY AND SURETY COMPANY,
a Maryland corporation,
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Other Definitional Provisions . . . . . . . . . . . . . . . . . . 7
ARTICLE II
REIMBURSEMENT OBLIGATIONS. . . . . . . . . . . . 8
2.01 Reimbursements. . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.02 Obligations Absolute. . . . . . . . . . . . . . . . . . . . . . . 8
2.03 Computation of Interest.. . . . . . . . . . . . . . . . . . . . . 9
2.04 Payments by the MK Group. . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 9
3.01 Corporate Existence and Power . . . . . . . . . . . . . . . . . . 9
3.02 Corporate Authorization; No Contravention . . . . . . . . . . . . 10
3.03 Governmental Authorization. . . . . . . . . . . . . . . . . . . . 10
3.04 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.05 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.06 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . 11
3.08 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV
AFFIRMATIVE COVENANTS. . . . . . . . . . . . . 12
4.01 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . 12
4.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.03 Preservation of Corporate Existence, Etc. . . . . . . . . . . . . 13
4.04 Payment of Obligations. . . . . . . . . . . . . . . . . . . . . . 13
4.05 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . 13
4.06 Inspection of Property and Books and Records. . . . . . . . . . . 14
4.07 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . 14
4.08 Application of Proceeds . . . . . . . . . . . . . . . . . . . . . 14
4.09 Inventory Levels. . . . . . . . . . . . . . . . . . . . . . . . . 14
4.10 Notice of Borrowing Under $25,000,000 Credit
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.11 Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.12 Withholding Payments. . . . . . . . . . . . . . . . . . . . . . . 15
5.01 Mergers, Consolidations, Purchases and Sales. . . . . . . . . . . 15
5.02 Transactions with Affiliates. . . . . . . . . . . . . . . . . . . 16
5.03 Change in Business. . . . . . . . . . . . . . . . . . . . . . . . 16
5.04 Change in Structure . . . . . . . . . . . . . . . . . . . . . . . 16
5.05 Accounting Changes. . . . . . . . . . . . . . . . . . . . . . . . 16
5.06 Other Contracts . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.07 Operations Relating to Transit Division . . . . . . . . . . . . . 16
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ARTICLE VI
EVENTS OF DEFAULT. . . . . . . . . . . . . . 16
6.01 Event of Default. . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) Non-Payment . . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Representation or Warranty. . . . . . . . . . . . . . . . . . 16
(c) Other Defaults. . . . . . . . . . . . . . . . . . . . . . . . 17
(d) Non-Payment of Other Indebtedness . . . . . . . . . . . . . . 17
(e) Acceleration of Other Indebtedness. . . . . . . . . . . . . . 17
(f) Other Obligations . . . . . . . . . . . . . . . . . . . . . . 17
(g) Bankruptcy or Insolvency. . . . . . . . . . . . . . . . . . . 17
(h) Involuntary Proceedings . . . . . . . . . . . . . . . . . . . 18
(i) Monetary Judgments. . . . . . . . . . . . . . . . . . . . . . 18
(j) Non-Monetary Judgments. . . . . . . . . . . . . . . . . . . . 18
(k) Loss of Licenses. . . . . . . . . . . . . . . . . . . . . . . 18
(l) Change in Control . . . . . . . . . . . . . . . . . . . . . . 19
(m) Warrants. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.02 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.03 Rights Not Exclusive. . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII
MISCELLANEOUS. . . . . . . . . . . . . . . 19
7.01 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . 19
7.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.03 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . . . 20
7.04 Costs, Expenses and Certain Fees. . . . . . . . . . . . . . . . . 20
7.05 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.06 Marshalling; Payments Set Aside . . . . . . . . . . . . . . . . . 21
7.07 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . 22
7.08 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.09 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.10 Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.11 Governing Law and Jurisdiction. . . . . . . . . . . . . . . . . . 22
7.12 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . . . 23
7.13 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 23
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INDEMNIFICATION AND REIMBURSEMENT AGREEMENT
This Indemnification and Reimbursement Agreement is entered into as of
July 31, 1995, among Morrison Knudsen Corporation, an Ohio corporation (the
"MKO"), Morrison Knudsen Corporation, a Delaware corporation (the "MKD"), (MKO
and MKD, collectively, the "MK GROUP"), and Fidelity and Deposit Company of
Maryland, a Maryland corporation, and Colonial American Casualty and Surety
Company, a Maryland corporation (collectively, the "BONDING COMPANY").
PRELIMINARY STATEMENT
The Bonding Company has guaranteed certain obligations of the MK Group
pursuant to a Guaranty Agreement (the "Guaranty") in the form of Exhibit A
attached hereto and has arranged for the Guaranty to be supported by the
NationsBank Letter of Credit (as hereinafter defined).
The Bonding Company is unwilling to provide the Guaranty and the
NationsBank Letter of Credit unless the repayment obligations set forth herein
are the joint and several obligations of the MK Group and the parties hereby
acknowledge that the Bonding Company is extending the Guaranty and the
NationsBank Letter of Credit in reliance on such joint and several obligations.
NOW, THEREFORE, in consideration of the above-recited extension of
credit, and other consideration, the sufficiency of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINED TERMS. In addition to the terms defined elsewhere in this
Agreement, the following terms have the following meanings:
"AFFILIATE" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of
the other Person, whether through the ownership of voting securities, by
contract or otherwise. Without limitation, any director, executive officer
or beneficial
owner of 5% or more of the equity of a Person shall for the purposes of
this Agreement, be deemed to control the other Person.
"AGREEMENT" means this Indemnification and Reimbursement Agreement, as
amended, supplemented or modified from time to time.
"BONDING COMPANY" means, collectively, Fidelity and Deposit Company of
Maryland, a Maryland corporation, and Colonial American Casualty and Surety
Company, a Maryland corporation.
"BONDING COMPANY'S PAYMENT OFFICE" means the address set forth for the
Bonding Company pursuant to Section 7.02.
"BRIDGE LOAN AGREEMENT" has the meaning given to it in the $25,000,000
Credit Agreement.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City or Baltimore are authorized
or required by law to close.
"CAPITAL LEASE OBLIGATIONS" means all monetary obligations of a Person
or any of its Subsidiaries under any leasing or similar arrangement which,
in accordance with GAAP, is classified as a capital lease.
"CHANGE IN CONTROL" shall have occurred if (i) any person or group of
persons (within the meaning of Section 13 or 14 of the Securities Exchange
Act of 1934, as amended) (other than Lenders to the MK Group) shall have
acquired beneficial ownership (within the meaning of Rule 13d promulgated
by the Securities and Exchange Commission under said Act) of 35% or more of
the outstanding shares of common stock of MKD, or (ii) MKO ceases to be a
wholly-owned subsidiary of MKD.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" has the meaning given to it in the Pledge and Security
Agreement dated as of July 31, 1995, between the Bonding Company and MKO.
"COMPLIANCE CERTIFICATE" means a certificate of a Responsible Officer
substantially in the form of Exhibit 4.01(d).
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of any
security issued by such Person or of any
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agreement, undertaking, contract, indenture, mortgage, deed of trust or
other instrument, document or agreement to which such Person is a party or
by which it or any of its property is bound.
"DEFAULT" means any event which, with the giving of notice, the lapse
of time, or both, would constitute an Event of Default.
"DEFAULT RATE" means a rate of interest equal to the Prime Rate plus
two percent (2%) per annum, provided, that to the extent the Default Rate
exceeds the Maximum Lawful Rate, the Default Rate shall be equal to the
Maximum Lawful Rate.
"DOCUMENTS" includes any and all instruments, documents, agreements,
certificates and other writings, however evidenced.
"DOLLARS" and "$" means lawful money of the United States.
"EVENT OF DEFAULT" means any of the events specified in Section 6.01.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies
with similar functions of comparable stature and authority within the
accounting profession), or in such other statements by such other entity as
may be in general use by significant segments of the U.S. accounting
profession, which are applicable to the circumstances as of the date of
determination.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary
or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"GUARANTY" means that certain guaranty agreement dated as of July 31,
1995, among the Bonding Company and Mellon Bank, N.A. as agent for certain
banks and other financial institutions named therein in the form of Exhibit
A attached hereto.
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"INDEMNIFIED LIABILITIES" has the meaning specified in Section 7.05.
"INDEMNIFIED PERSON" has the meaning specified in Section 7.05.
"INSOLVENCY PROCEEDING" means (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors or
other, similar arrangement; in each case (a) and (b), whether under U.S.
Federal, State or foreign law.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, those created by, arising under or evidenced by any conditional
sale or other title retention agreement, the interest of a lessor under a
Capital Lease Obligation, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as
debtor, under the UCC or any comparable law) and any contingent or other
agreement to provide any of the foregoing.
"LIQUIDATION DATE" means the date on which an Obligation that is
contingent becomes a Liquidated Obligation, including any date on which any
payment is made by or on behalf of the Bonding Company under the Guaranty
or the date of any draw under the NationsBank Letter of Credit.
"LIQUIDATED OBLIGATION" means any Obligation that has become
determinable as a sum certain, including any Obligation resulting from any
payment by or on behalf of the Bonding Company under the Guaranty or the
date of any draw under the NationsBank Letter of Credit.
"MATERIAL ADVERSE EFFECT" means a material adverse change in, or a
material adverse effect upon, any of (a) the operations, business,
properties, condition (financial or otherwise) or prospects of the MK Group
taken as a whole, (b) the ability of the MK Group to perform under this
Agreement or any document or agreement relating to this Agreement or (c)
the legality, validity, binding effect or enforceability of this Agreement
or any document or agreement relating to this Agreement.
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"MAXIMUM LAWFUL RATE" means the highest rate of interest permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable under this Agreement.
"METRA CONTRACT" has the meaning given to it in the $25,000,000 Credit
Agreement.
"MKD" means Morrison Knudsen Corporation, a Delaware corporation.
"MKO" means Morrison Knudsen Corporation, an Ohio corporation.
"MORTGAGE" means any deed of trust, mortgage or other document
creating a Lien on real property or any interest in real property.
"MULTI-PARTY AGREEMENT" has the meaning given to it in the $25,000,000
Credit Agreement.
"NATIONSBANK LETTER OF CREDIT" means an irrevocable letter of credit
in the face amount of $25,000,000 dated on or about the date hereof, issued
by NationsBank, N.A. in favor of Mellon Bank, N.A. as agent for certain
banks and other financial institutions.
"NON-METRA TRANSIT EXPENDITURES" means direct costs, indirect costs,
and allocated overhead (allocated 71.1% to the Non-Metra Contracts and
28.9% to the Metra Contract) for the Non-Metra Contracts; PROVIDED,
HOWEVER, that allocated overhead shall not include "401(k) and SERP"
expenses, "Legal and Audit Services", "Professional and Consulting
Services" and Audit Services", "Professional and Consulting Services" and
"Other Outside Services", as those terms are used in the Morrison Knudsen
Corporation 1995 Proposed Overhead Budget, attached hereto as Exhibit B.
"OBLIGATIONS" means all indebtedness, advances, debts, liabilities,
obligations, covenants and duties owing by the MK Group to the Bonding
Company or any other Person required to be reimbursed or indemnified under
this Agreement, of any kind or nature, present or future; provided,
however, that "Obligations" shall not be deemed to include any amount paid
by the Bonding Company pursuant to Section 10.13 of the Guaranty.
"ORDINARY COURSE OF BUSINESS" means, in respect of any transaction
involving the MK Group , the ordinary course of such Person's business,
substantially as conducted by any such Person prior to or as of the Closing
Date, and
5
undertaken by such Person in good faith and not for purposes of evading any
covenant or restriction in this Agreement.
"PERMITTED LIENS" has the meaning given to it in the $25,000,000
Credit Agreement.
"PERSON" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture or Governmental Authority.
"PRIME RATE" means the rate of interest publicly announced by Mellon
Bank, N.A. from time to time as its Prime Rate.
"PROPERTY" means any estate or interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or intangible.
"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of
a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its Property
is subject.
"RESPONSIBLE OFFICER" means, for the MK Group, the Chief Executive
Officer or the President of the MK Group , and with respect to financial
matters, the Chief Financial Officer or the Treasurer of the MK Group.
"REVOLVING CREDIT AGREEMENT" means that certain Credit Agreement dated
as of July 31, 1995, between MKO and Bank of America National Trust and
Savings Association as agent for certain banks and other financial
institutions named therein.
"SUBSIDIARY" of a Person means any corporation, association,
partnership, joint venture or other business entity of which more than 50%
of the voting stock or other equity interests is owned or controlled
directly or indirectly by the Person, or one or more of the Subsidiaries of
the Person, or a combination thereof.
"TRANSIT DIVISION" means MKO's transit division.
"UCC" means the Uniform Commercial Code as in effect in any
jurisdiction.
"UNITED STATES" and "U.S." each means the United States of America.
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"$25,000,000 CREDIT AGREEMENT" means that certain Credit Agreement
dated July 31, 1995 among MKD, MKO and Mellon Bank, N.A. as agent for
certain banks and other financial institutions named therein.
1.02 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified herein or therein, all terms defined
in this Agreement shall have the defined meanings when used in any certificate
or other document made or delivered pursuant hereto.
(b) All accounting terms not expressly defined herein shall be
construed, except where the context otherwise requires, and all financial
computations required under this Agreement shall be made, in accordance with
GAAP.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section, schedule and
exhibit references are to this Agreement unless otherwise specified. The
meaning of defined terms shall be equally applicable to the singular and plural
forms of the defined terms. The term "including" is not limiting and means
"including without limitation".
(d) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"; the words "to"
and "until" each mean "to but excluding," and the word "through" means "to and
including."
(e) References to agreements and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications thereto,
but only to the extent such amendments and other modifications are not
prohibited by the terms of this Agreement or the Guaranty Agreement.
(f) References to statutes or regulations are to be construed as
including all statutory and regulatory provisions consolidating, amending or
replacing the statute or regulation.
(g) The captions and headings of this Agreement Are for convenience
of reference only and shall not affect the construction of this Agreement.
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ARTICLE II
REIMBURSEMENT OBLIGATIONS
2.01 REIMBURSEMENTS. The MK Group, jointly and severally, agrees to
reimburse the Bonding Company for the full amount of any Liquidated Obligation
upon demand, together with interest thereon from the Liquidation Date. Each
Liquidated Obligation shall bear interest at a rate per annum equal to the
Default Rate; PROVIDED, HOWEVER, that at least one day of such interest shall be
payable even if the MK Group reimburses the Bonding Company on the Liquidation
Date in the full amount of such Liquidated Obligation.
2.02 OBLIGATIONS ABSOLUTE. The obligations of the MK Group under this
Agreement to reimburse the Bonding Company in accordance with Section 2.01
hereof shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances, including
the following:
(a) any lack of validity or enforceability of this Agreement, the
NationsBank Letter of Credit, or the Guaranty;
(b) the existence of any claim, set-off, defense or other right that
the MK Group may have at any time against the Bonding Company or any other
Person, whether in connection with this Agreement, the transactions
contemplated hereby or by the $25,000,000 Credit Agreement or other
Documents relating thereto or any unrelated transaction;
(c) any certificate or other document presented under the NationsBank
Letter of Credit or the Guaranty proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(d) any payment by the Bonding Company under the Guaranty or and
drawing under the NationsBank Letter of Credit, notwithstanding the fact
that it may subsequently be determined that those may have been a valid
defense to payment under the Guaranty or the NationsBank Letter of Credit;
(e) any release or amendment or waiver of or consent to departure
from any guarantee for all or any of the obligations of the MK Group in
respect of this Agreement; or
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(f) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any
member of the MK Group.
2.03 COMPUTATION OF INTEREST.
(a) All computations of interest under this Agreement shall be made
on the basis of a 360-day year and actual days elapsed, which results in more
interest being paid than if computed on the basis of a 365-day year. Interest
shall accrue during each period during which interest is computed from the first
day thereof to the last day thereof.
(b) Each determination of an interest rate by the Bonding Company
pursuant to any provision of this Agreement shall be conclusive and binding on
the MK Group in the absence of manifest error. The Bonding Company will, at the
request of MKD or MKO, deliver to MKD or MKO, as the case may be, a statement
showing the quotations used by the Bonding Company in determining any interest
rate.
2.04 PAYMENTS BY THE MK GROUP.
(a) All payments (including prepayments) to be made by the MK Group
on account of reimbursements, interest, and other sums due hereunder shall be
made without set-off or counterclaim and shall be made to the Bonding Company,
at the Bonding Company's Payment Office, in dollars and in immediately available
funds no later than 11:00 a.m. (Baltimore time) on the date when due.
(b) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest, as the case may be.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The MK Group, jointly and severally, represents and warrants to the Bonding
Company that:
3.01 CORPORATE EXISTENCE AND POWER. Each member of the MK Group:
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(a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its business
and to execute, deliver and perform its obligations under this Agreement;
(c) is duly qualified as a foreign corporation, licensed and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification; and
(d) is in compliance with all Requirements of Law;
except, in each case referred to in Section 3.01(c) or Section 3.01(d), to the
extent that the failure to do so could not have a Material Adverse Effect.
3.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution, delivery
and performance by each member of the MK Group of this Agreement have been duly
authorized by all necessary corporate action and do not and will not:
(a) contravene the terms of that Person's certificate of
incorporation, bylaws or other organizational document;
(b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any indenture, agreement, lease, instrument,
Contractual Obligation, injunction, order, decree or undertaking to which such
Person is a party; or
(c) violate any Requirement of Law.
3.03 GOVERNMENTAL AUTHORIZATION. Except for those that have been obtained
as of the date hereof, no approval, consent, exemption, authorization, or other
action by, or notice to, or filing with, any Governmental Authority is necessary
or required in connection with the execution, delivery, performance or
enforcement against the MK Group of the Agreement or any other instrument or
agreement required hereunder to be made by the MK Group.
3.04 BINDING EFFECT. This Agreement constitutes the legal, valid and
binding obligations of the MK Group , to the extent any such Person is a party
thereto, enforceable against such Person in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of
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creditors' rights generally or by equitable principles relating to
enforceability.
3.05 LITIGATION. Except as set forth in SCHEDULE 3.05 hereto, there are
no actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of the MK Group, threatened or contemplated at law, in equity, in
arbitration or before any Governmental Authority, against the MK Group , or any
of their respective properties which:
(a) purport to affect or pertain to this Agreement, or any of the
transactions contemplated hereby or thereby; or
(b) if determined adversely to the MK Group could reasonably be
expected to have a Material Adverse Effect. No injunction, writ, temporary
restraining order or any order of any nature has been issued by any court
or other Governmental Authority purporting to enjoin or restrain the
execution, delivery and performance of this Agreement or any document or
agreement relating to this Agreement, or directing that this transactions
provided for herein or therein not be consummated as herein or therein
provided.
3.06 TITLE TO PROPERTIES. The MK Group has good record and marketable
title in fee simple to or valid leasehold interests in all its property, except
for such defects in title as could not, individually or in the aggregate, have a
Material Adverse Effect. The property of the MK Group constituting Collateral
is free and clear of all Liens or rights of others, except Permitted Liens.
3.07 TAXES. Each member of the MK Group has filed all Federal and other
material tax returns and reports required to be filed and have paid all Federal
and other material taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due
and payable except those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance
with GAAP and no Notice of Lien has been filed or recorded. There is no
proposed tax assessment against the MK Group which would, if the assessment were
made, have a Material Adverse Effect.
3.08 FULL DISCLOSURE. None of the representations or warranties made by
the MK Group in this Agreement or any document or agreement relating to this
Agreement as of the date of such representations and warranties, and none of the
statements contained in each exhibit, report, statement or certificate furnished
by or on behalf of the MK Group in this Agreement or any document or agreement
relating to this Agreement contains any untrue statement of a material fact or
omits any material fact required to be stated therein or necessary to make the
statements
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made therein, in light of the circumstances under which they are made, not
misleading.
ARTICLE IV
AFFIRMATIVE COVENANTS
The MK Group covenants and agrees that, so long as the NationsBank Letter
of Credit and/or the Guaranty is outstanding or other amount due hereunder shall
remain unpaid, unless the Bonding Company waives compliance in writing:
4.01 FINANCIAL STATEMENTS. The MK Group shall deliver to the Bonding
Company in form and detail satisfactory to the Bonding Company:
(a) the financial statements and reports required of the MK Group in
accordance with the terms of the Multi-Party Agreement and the $25,000,000
Credit Agreement; and
(b) promptly, such additional financial and other information as the
Bonding Company may from time to time reasonably request.
4.02 NOTICES. The MK Group shall promptly notify the Bonding Company:
(a) of the occurrence of any Default or Event of Default and of the
occurrence or existence of any event or circumstance that foreseeably will
become a Default or Event of Default;
(b) of any (i) breach or non-performance of, or any default under any
Contractual Obligation of the MK Group which could result in a Material Adverse
Effect; or (ii) dispute, litigation, investigation, proceeding or suspension
which may exist at any time between the MK Group and any Governmental Authority
which could result in a Material Adverse Effect;
(c) of the commencement of, or any material development in, any
litigation or proceeding affecting the MK Group (i) in which the amount of
damages claimed is $20,000,000 (or its equivalent in another currency or
currencies) or more, (ii) in which injunctive or similar relief is sought and
which, if adversely determined, could have a Material Adverse Effect, or (iii)
in which the relief sought is an injunction or other stay of the performance of
this Agreement or any document or agreement relating to this Agreement or the
operations of the MK Group;
(d) upon becoming aware of any Material Adverse Effect subsequent to
the date hereof;
12
Each notice pursuant to this Section shall be accompanied by a written
statement by a Responsible Officer of the MK Group, setting forth details of the
occurrence referred to therein and stating what action the MK Group proposes to
take with respect thereto.
4.03 PRESERVATION OF CORPORATE EXISTENCE, ETC. Subject to the provisions
of Section 5.01, the MK Group shall:
(a) preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its State or jurisdiction of
incorporation;
(b) preserve and maintain in full force and effect all rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business;
(c) use its reasonable efforts, in the ordinary course and consistent
with past practice, to preserve its business organization and preserve the
goodwill and business of the customers, suppliers and others having business
relations with it; and
(d) preserve or renew all of its registered trademarks, trade names
and service marks, the non-preservation of which could have a Material Adverse
Effect.
4.04 PAYMENT OF OBLIGATIONS. The MK Group shall pay and discharge as the
same shall become due and payable, all their respective obligations and
liabilities, including:
(a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by the MK Group;
(b) all lawful claims which, if unpaid, might by law become a Lien
upon its property; and
(c) all Indebtedness as and when due and payable but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
4.05 COMPLIANCE WITH LAWS. The MK Group shall comply in all material
respects with all Requirements of Law of any Governmental Authority having
jurisdiction over it or its business (including the Federal Fair Labor Standards
Act), except such as may be contested in good faith or as to which a bona fide
dispute may exist.
13
4.06 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The MK Group shall
maintain proper books of record and account, in which full, true and correct
entries in conformity with GAAP consistently applied shall be made of all
financial transactions and matters involving the assets and business of the MK
Group. The MK Group will permit representatives of the Bonding Company to visit
and inspect any of their respective properties, to examine their respective
corporate, financial and operating records anti make copies thereof or abstracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective directors, officers, employees and independent public
accountants, all at the expense of the MK Group and at such reasonable times
during normal business hours and as often as may be reasonably desired, upon
reasonable advance notice to the MK Group; PROVIDED, HOWEVER, when an Event of
Default exists the Bonding Company may visit and inspect at the expense of the
MK Group such properties at any time during business hours and without advance
notice.
4.07 FURTHER ASSURANCES. The MK Group shall ensure that all written
information, exhibits and reports furnished to the Bonding Company do not and
will not contain any untrue statement of a material fact and do not and will not
omit to state any material fact or any fact necessary to make the statements
contained therein not misleading in light of the circumstances in which made,
and will promptly disclose to the Bonding Company and correct any defect or
error that may be discovered therein or in any related document or agreement or
in the execution, acknowledgement or recordation thereof.
4.08 APPLICATION OF PROCEEDS.
(a) Except for the payment of fees associated with the NationsBank
Letter of Credit, the proceeds of any borrowings under the $25,000,000 Credit
Agreement shall be applied solely to the payment of Non-Metra Transit
Expenditures incurred from and after July 1, 1995 and shall not be applied to
any other cost, expense or liability of any nature whatsoever;
(b) The proceeds of any receivables from any assets constituting
Collateral shall be applied solely to reduce the indebtedness due under the
$25,000,000 Credit Agreement; and
(c) No less frequently than weekly (commencing on August 4, 1995), the
MK Group shall provide to the Bonding Company a certificate from the chief
financial officer of MKD certifying, to the best of his knowledge, to the
matters specified in (a) and (b) above.
4.09 INVENTORY LEVELS. The MK Group shall maintain not less than
$260,000,000 of Transit Division inventory. The MK Group shall ensure that the
trade payables with respect to the
14
Transit Division shall not remain outstanding in excess of $33,000,000 (other
than trade payables due to Nippon).
4.10 NOTICE OF BORROWING UNDER $25,000,000 CREDIT AGREEMENT. The MK Group
shall provide the Bonding Company with an exact written copy of any Notice of
Borrowing (as defined in the $25,000,000 Credit Agreement) (by telex or
facsimile transmission pursuant to the terms of Section 7.02 hereof) at least
one Business Day in advance of providing such notice to the Agent in accordance
with the terms of the Credit Agreement. The Company shall not authorize a
request for the Agent to transfer funds pursuant to Section 9 of Schedule E to
the T-Co Interim Credit Agreement if there is an Event of Default (as defined in
Credit Agreement), or the occurrence of a Default that with the passage of time
would become an Event of Default.
4.11 GUARANTY. The MK Group expressly acknowledges that, pursuant to
Section 2.1 of the Guaranty, the Bonding Company has the right to terminate the
Guaranty with respect to advances made under the $25,000,000 Credit Agreement
after providing written notice in accordance with the terms of the Guaranty.
4.12 WITHHOLDING PAYMENTS. Concurrent with the payment of any payroll
obligations to employees of the MK Group with respect to Transit Division
operations, the Vice-President and Treasurer of MKD shall certify in writing to
the Bonding Company that all withholding, 401(k), pension, retirement or other
amounts payable to any plan trustee or Governmental Authority with respect to
such payroll have been paid in full to such plan trustee or Governmental
Authority in immediately available funds.
ARTICLE V
NEGATIVE COVENANTS
The MK Group hereby covenants and agrees that, so long as the
NationsBank Letter of Credit and/or the Guaranty is outstanding or any amount
payable hereunder shall remain unpaid, unless the Bonding Company waives
compliance in writing:
5.01 MERGERS, CONSOLIDATIONS, PURCHASES AND SALES. The MK Group shall
not:
(a) be a party to any merger or consolidation;
(b) transfer, convey, lease or otherwise dispose of all or any
Transit Division Assets, except for sales of cars to customers of the Transit
Division in the Ordinary Course of Business.
15
5.02 TRANSACTIONS WITH AFFILIATES. The MK Group shall not enter into any
transaction with any Affiliate of MKO or MKD or of any such Subsidiary except as
contemplated by this Agreement or in the Ordinary Course of Business and
pursuant to the reasonable requirements of the business of the MK Group or such
Affiliate and upon fair and reasonable terms no less favorable to the MK Group
or such Affiliate than would be obtained in a comparable arm's-length
transaction with a Person not an Affiliate of the MK Group.
5.03 CHANGE IN BUSINESS. The MK Group shall not engage in any material
line of business substantially different from those lines of business carried on
by it on the date hereof.
5.04 CHANGE IN STRUCTURE. The MK Group shall not make any changes in its
capital structure (including, without limitation, in the terms of its
outstanding stock) or amend its certificate of incorporation or bylaws if, as a
result, there would be a reasonable likelihood of having a Material Adverse
Change.
5.05 ACCOUNTING CHANGES. The MK Group shall not make any significant
change in accounting treatment and reporting practices, except as required by
GAAP, or change the fiscal year of the MK Group.
5.06 OTHER CONTRACTS. The MK Group shall not enter into any employment
contracts or other arrangements whose terms, including salaries, benefits and
other compensation, are not normal and customary in the industry.
5.07 OPERATIONS RELATING TO TRANSIT DIVISION. (a) The MK Group shall not
enter into any new agreements or make any new commitments with respect to the
Transit Division, except in the Ordinary Course of Business and consistent with
industry practice and (b) disbursements allocated to the Metra Contract shall
not exceed receipts under the Metra Contract plus amounts drawn under the
Revolving Credit Agreement.
ARTICLE VI
EVENTS OF DEFAULT
6.01 EVENT OF DEFAULT. Any of the following events shall constitute an
"Event of Default":
(a) NON-PAYMENT. The MK Group fails to reimburse the Bonding Company
for the full amount of any Liquidation Obligation in accordance with the terms
of this Agreement; or
(b) REPRESENTATION OR WARRANTY. Any representation or warranty by
the MK Group herein, in any related document or
16
agreement, which is contained in any certificate, document or financial or other
statement furnished at any time under this Agreement, or in or related document
or agreement, shall prove to have been incorrect in any material respect on or
as of the date made or deemed made; or
(c) OTHER DEFAULTS. The MK Group fails to perform or observe any
term or covenant contained in this Agreement (other than those covered in clause
(a) or (b) above) or any document or agreement relating to this Agreement for 10
days after written notice thereof has been given to the MK Group by the Bonding
Company; or
(d) NON-PAYMENT OF OTHER INDEBTEDNESS. The MK Group shall default in
the payment when due (or within any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness of or Indebtedness guaranteed by
the MK Group (other than any Indebtedness of any entity of the MK Group to any
other entity of the MK Group) which other Indebtedness shall in the aggregate
exceed $1,000,000; or
(e) ACCELERATION OF OTHER INDEBTEDNESS. Any event or condition shall
occur which results in the acceleration of the maturity of any Indebtedness of
or Indebtedness guaranteed by the MK Group (other than any Indebtedness of any
entity of the MK Group to any other entity of the MK Group) or enables the
holder or holders of such other Indebtedness or any trustee or agent for such
holders (any required notice of default having been given) to accelerate the
maturity of such other Indebtedness, which other Indebtedness shall in the
aggregate exceed $1,000,000; or
(f) OTHER OBLIGATIONS. The MK Group shall default in the payment
when due, whether by acceleration or otherwise, or in the performance or
observance (subject to any applicable grace period) of (i) any obligation or
agreement of the MK Group to or with the Bonding Company, or (ii) any material
obligation or agreement of the MK Group to or with any other Person (other than
(x) any such material obligation or agreement constituting or related to
Indebtedness, (y) trade accounts payable, and (z) any material obligation or
agreement of any entity of the MK Group to any other entity of the MK Group),
except only to the extent that the existence of any such default is being
contested by the MK Group in good faith and by appropriate proceedings and the
MK Group shall have set aside on its books such reserves or other appropriate
provisions therefor as may be required by GAAP; or
(g) BANKRUPTCY OR INSOLVENCY. The MK Group (i) becomes insolvent or
generally fails to pay, or admit in writing its inability to pay, its debts as
they become due, subject to applicable grace periods, if any, whether at stated
maturity or otherwise; (ii) voluntarily ceases to conduct its business in the
ordinary course substantially as it is conducted on the Closing
17
Date; (iii) commences any Insolvency Proceeding or files any petition or answer
in any Insolvency Proceeding; (iv) acquiesces in the appointment of a receiver,
trustee, custodian or liquidator for itself or a substantial portion of its
property, assets or business or effects a plan or other arrangement with its
creditors; (v) admits the material allegations of a petition filed against it in
any Insolvency Proceeding, or (vi) takes any action to effectuate any of the
foregoing; or
(h) INVOLUNTARY PROCEEDINGS. Any involuntary Insolvency Proceeding
is commenced or filed against the MK Group or any writ, judgment, warrant of
attachment, execution or similar process, is issued or levied against a
substantial part of the MK Group's assets and any such proceedings or petition
shall not be dismissed, or such writ, judgment, warrant of attachment, execution
or similar process shall not be released, vacated or fully bonded within 60 days
after commencement, filing or levy; or
(i) MONETARY JUDGMENTS. One or more final judgments, orders or
decrees shall be entered against the MK Group involving in the aggregate a
liability (not fully covered by insurance) of $20,000,000 or more, excluding
those judgments or decrees (i) that shall have been outstanding less than 30
calendar days from the entry thereof, (ii) for and to the extent to which the MK
Group is insured and with respect to which the insurer has assumed
responsibility in writing or for and to the extent to which the MK Group is
otherwise indemnified if the terms of such indemnification and the Person
providing such indemnification are satisfactory to the Bonding Company, or (iii)
that have been stayed pending appeal, provided that no execution or enforcement
is then possible; or
(j) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order or
decree shall be rendered against the MK Group which does or could be expected to
have a Material Adverse Effect, and either (i) enforcement proceedings shall
have been commenced by any Person upon such judgment or order or (ii) there
shall be any period of ten consecutive days during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or otherwise, shall not
be in effect; or
(k) LOSS OF LICENSES. Any Governmental Authority shall revoke or
fail to renew any license, permit or franchise of the MK Group or the MK Group
shall for any reason lose any license, permit or franchise or the MK Group shall
suffer the imposition of any restraining order, escrow, suspension or impound of
funds in connection with any proceeding (judicial or administrative) with
respect to any license, permit or franchise, and any of such could result in a
Material Adverse Effect on the MK Group; or
18
(l) CHANGE IN CONTROL. Any Change in Control shall occur; or
(m) WARRANTS. Pursuant to that certain Securities Purchase Agreement
dated of even date herewith between MKD and Fidelity and Deposit Company of
Maryland (the "Purchase Agreement"), the Company fails to issue the Warrants (as
defined in the Purchase Agreement) to Fidelity and Deposit Company of Maryland
prior to the Closing Date (as defined in the Purchase Agreement).
(n) OTHER EVENTS OF DEFAULT. The occurrence of an "Event of Default"
as defined in any of (i) the Override Agreement dated as of July 31, 1995, among
MKO, MKD and Mellon Bank, N.A. as agent for certain other banks and financial
institutions named therein (ii) the Bridge Loan Agreement (iii) the $25,000,000
Credit Agreement, or (iv) the Revolving Credit Agreement.
6.02 REMEDIES. If any Event of Default occurs, the Bonding Company may
exercise all rights and remedies available to it under this Agreement or
applicable law.
6.03 RIGHTS NOT EXCLUSIVE. The rights provided for in this Agreement are
cumulative and are not exclusive of any other rights, powers, privileges or
remedies provided by law or in equity, or under any other instrument, document
or agreement.
ARTICLE VII
MISCELLANEOUS
7.01 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement or any other document or agreement relating to this Agreement and
no consent with respect to any departure by the MK Group therefrom, shall be
effective unless the same shall be in writing and signed by the Bonding Company
and the MK Group, and then such waiver shall be effective only in the specific
instance and for the specific purpose for which given.
7.02 NOTICES.
(a) All notices, requests and other communications provided for
hereunder shall be in writing (including, unless the context expressly otherwise
provides, telegraphic, telex, facsimile transmission or cable communication) and
mailed, telegraphed, telexed or delivered, (i) if to the MK Group, to its
address specified on the signature pages hereof, (ii) if to the Bonding Company,
to its address specified on the signature pages hereof; or, as to the MK Group
or the Bonding Company, to such
19
other address as shall be designated by such party in a written notice to the
other parties, and as to each other party, at such other address as shall be
designated by such party in a written notice to the MK Group and the Bonding
Company. All notices, requests, and other communications provided for hereunder
shall, if sent by facsimile, telegraphic, or telexed transmission, be confirmed
in writing (other than by facsimile, telegraphic, or telex transmission) sent by
overnight delivery.
(b) All such notices and communications shall, when transmitted by
overnight delivery, telegraphed, telecopied by facsimile, telexed or cabled, be
effective when delivered for overnight delivery or to the telegraph company,
transmitted by telecopier, confirmed by telex answerback or delivered to the
cable company, respectively, or if delivered, upon delivery.
(c) The Bonding Company shall be entitled to rely on the authority of
any Person purporting to be a Person authorized by the MK Group to give such
notice and the Bonding Company shall not have any liability to the MK Group or
other Person on account of any action taken or not taken by the Bonding Company
in reliance upon such telephonic or facsimile notice. The obligation of the MK
Group to repay the Obligations shall not be affected in any way or to any extent
by any failure by the Bonding Company to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Bonding Company of a
confirmation which is at variance with the terms understood by the Bonding
Company to be contained in the telephonic or facsimile notice.
7.03 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay
in exercising, on the part of the Bonding Company, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.
7.04 COSTS, EXPENSES AND CERTAIN FEES. The MK Group, jointly and
severally, agrees:
(a) to pay or reimburse the Bonding Company on demand for all costs
and expenses incurred in connection with the development, preparation, delivery,
administration and execution of, and any amendment, supplement, waiver or
modification to, this Agreement, and any other documents prepared in connection
herewith or therewith (including, without limitation, obtaining and maintaining
the NationsBank Letter of Credit), and the consummation of the transactions
contemplated hereby and thereby, including the reasonable costs and expenses of
counsel to the Bonding Company (and the allocated cost of internal counsel) with
respect thereto;
20
(b) in the event any Bonding Company takes any action in connection
with the enforcement or preservation of any rights under this Agreement or any
document or agreement relating thereto (including, without limitation, any
"workout" or restructuring of this Agreement or any related document or
agreement), to pay or reimburse the Bonding Company on demand for all costs and
expenses incurred by it in connection with the enforcement or preservation of
any rights thereunder, including, without limitation, costs, fees and out-of-
pocket expenses of counsel (and the allocated cost of internal counsel) to the
Bonding Company;
(c) to pay or reimburse the Bonding Company on demand for all
appraisal (including the allocated cost of internal appraisal services), audit,
environmental inspection and review (including the allocated cost of such
internal services), search and filing fees, incurred or sustained by the Bonding
Company in connection with the matters referred to under paragraphs (a) and (b)
above, but, in the case of an appraisal, only to the extent it was reasonable to
obtain such appraisal.
7.05 INDEMNITY. The MK Group shall pay, indemnify, and hold the Bonding
Company and their respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "INDEMNIFIED PERSON") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses or disbursements (including fees and
expenses of counsel and allocated costs of internal counsel) of any kind or
nature whatsoever with respect to the enforcement, performance and
administration of this Agreement, the Guaranty, and the NationsBank Letter of
Credit Documents, or the transactions contemplated herein, and with respect to
any investigation, litigation or proceeding related to this Agreement, the
Guaranty, or the NationsBank Letter of Credit (whether or not any Indemnified
Person is a party thereto) (all the foregoing, collectively, the "INDEMNIFIED
LIABILITIES"); PROVIDED, that the MK Group shall have no obligation hereunder to
any Indemnified Person with respect to Indemnified Liabilities arising from (i)
the gross negligence or willful misconduct of such Indemnified Person or (ii)
legal fees associated with disputes initiated by the Bonding Company solely
between or among the parties to the Guaranty Agreement or the NationsBank Letter
of Credit including, but not limited to, any amounts paid by the Bonding Company
under Section 10.13 of the Guaranty. The agreements in this section shall
survive payment of all other Obligations.
7.06 MARSHALLING; PAYMENTS SET ASIDE. The Bonding Company shall be under
no obligation to marshall any assets in favor of the MK Group or any other
Person or against or in payment of any or all of the Obligations. To the extent
that the MK Group makes a payment or payments to the Bonding Companies, or the
Bonding
21
Companies enforce their Liens, and such payment or payments or the proceeds of
such enforcement or any part thereof are subsequently invalidated, declared to
be fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party in connection with any Insolvency Proceeding, or
otherwise, then to the extent of such recovery the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement had not
occurred.
7.07 SUCCESSORS AND ASSIGNS. 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 MK Group may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Bonding Company.
7.08 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement in any number of separate counterparts, each of which,
when so executed, shall be deemed an original, and all of said counterparts
taken together shall be deemed to constitute but one and the same instrument.
7.09 SEVERABILITY. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality of or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
7.10 TIME. Time is of the essence as to each term or provision of this
Agreement.
7.11 GOVERNING LAW AND JURISDICTION.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF MARYLAND.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY
BE BROUGHT IN THE STATE AND FEDERAL COURTS LOCATED IN BALTIMORE, MARYLAND, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH MEMBER OF THE MK GROUP AND THE
BONDING COMPANY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
JURISDICTION OF THOSE COURTS. EACH MEMBER OF THE MK GROUP, AND THE BONDING
COMPANY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH MEMBER OF THE
MK GROUP AND THE BONDING COMPANY WAIVE PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER
22
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY MARYLAND LAW.
7.12 WAIVER OF JURY TRIAL. EACH MEMBER OF THE MK GROUP AND THE BONDING
COMPANY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
EACH MEMBER OF THE MK GROUP AND THE BONDING COMPANY AGREE THAT ANY SUCH CLAIM OR
CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO
A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF OR
THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
7.13 ENTIRE AGREEMENT. This Agreement embodies the entire Agreement and
understanding among the MK Group and the Bonding Company with respect to the
subject matter hereof and supersedes all prior or contemporaneous agreements and
understandings of such persons, verbal or written, relating to the subject
matter hereof.
7.14 INTERPRETATION. This Agreement is the result of negotiations between
and has been reviewed by counsel to the Bonding Company and the MK Group, and is
the product of all parties hereto. Accordingly, this Agreement shall not be
construed against the Bonding Company merely because of the Bonding Company's
involvement in the preparation of such documents and agreements.
23
IN WITNESS WHEREOF, this Agreement is executed effective as of the
day and year first above written.
BONDING COMPANY:
FIDELITY AND DEPOSIT COMPANY OF MARYLAND
300 Saint Paul Place
Baltimore, Maryland 21202
By: /s/
Name:
Title:
COLONIAL AMERICAN CASUALTY AND SURETY COMPANY
300 Saint Paul Place
Baltimore, Maryland 21202
By: /s/
Name:
Title:
[MORE SIGNATURES ON FOLLOWING PAGE]
MK GROUP:
MORRISON-KNUDSEN CORPORATION,
a Delaware corporation
Morrison Knudsen Plaza
P.O. Box 73
Boise, Idaho 82729
By: /s/ D.L. Brigham
Name: D.L. Brigham
Title: VP & Treasurer
MORRISON-KNUDSEN CORPORATION,
an Ohio corporation
Morrison Knudsen Plaza
P.O. Box 73
Boise, Idaho 82729
By: /s/ D.L. Brigham
Name: D.L. Brigham:
Title: VP & Treasurer: