EXHIBIT 10.3
Draft of March 15, 2005
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INSITUFORM TECHNOLOGIES, INC.
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SECOND AMENDMENT AND WAIVER
TO
NOTE PURCHASE AGREEMENT
Dated as of March 16, 2005
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Re: Note Purchase Agreement dated as of April 24, 2003
and
$65,000,000 Senior Notes, Series 2003-A,
Due April 24, 2013
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SECOND AMENDMENT AND WAIVER
TO
NOTE PURCHASE AGREEMENT
THIS SECOND AMENDMENT AND WAIVER TO NOTE PURCHASE AGREEMENT dated as of
March 16, 2005 (the or this "Second Amendment") is between INSITUFORM
TECHNOLOGIES, INC., a Delaware corporation (the "Company"), and each of the
institutions holding a Note (as hereinafter defined) and party hereto
(collectively, the "Noteholders").
RECITALS:
A. The Company entered into the Note Purchase Agreement dated as of April
24, 2003 (as amended, supplemented or otherwise modified through the date
hereof, the "Note Agreement"), pursuant to which the Company issued its 5.29%
Senior Notes, Series 2003-A, due April 24, 2013 in the original aggregate
principal amount of $65,000,000 (as amended, supplemented or otherwise modified
through the date hereof, the "Notes").
B. The Company and the Noteholders now desire to amend the Note Agreement
and the Notes in the respects, but only in the respects, hereinafter set forth
in order to reflect certain agreements between the Company and the Noteholders.
C. The Company has also advised the Noteholders that the Company has
violated certain terms and conditions set forth in the Note Agreement and more
particularly described herein and requests that the Noteholders waive such
Defaults and Events of Default.
D. Capitalized terms used herein shall have the respective meanings
ascribed thereto in the Note Agreement unless herein defined or the context
shall otherwise require.
E. All requirements of law have been fully complied with and all other
acts and things necessary to make this Second Amendment a valid, legal and
binding instrument according to its terms for the purposes herein expressed have
been done or performed.
NOW, THEREFORE, upon the full and complete satisfaction of the conditions
precedent to the effectiveness of this Second Amendment set forth in Section 4.1
hereof, and in consideration of good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the Company and the Noteholders do
hereby agree as follows:
SECTION 1. WAIVER OF DEFAULTS.
Section 1.1. Waiver of Defaults (Cross-Default). The Company has notified
the Noteholders that the Company has violated the minimum Fixed Charges Coverage
Ratio required to be maintained under Section 10.2 of the note purchase
agreement, under and pursuant to which the 1997 Notes (the "1997 Note
Agreement") were issued, for the fiscal quarter ended December 31, 2004. The
Noteholders hereby waive the Event of Default arising under the Note
Agreement on account of the Company's violation of the financial covenant
described above in the 1997 Note Agreement for the fiscal quarter ended December
31, 2004.
Section 1.2. Waiver of Defaults and Consent (Acquisitions). The Company
has notified the Noteholders that Insituform Technologies Limited, a foreign
Subsidiary of the Company organized in England and Wales ("ITL"), entered into a
joint venture arrangement with Environmental Techniques Limited, a Northern
Ireland company ("ETL"), during the fiscal year ended 2004, pursuant to which
ITL and ETL formed a new company in Northern Ireland called Insituform
Environmental Techniques Limited ("IETL"), in connection with which ITL has
subscribed to purchase 499 shares of the authorized share capital (the
"Subscribed Joint Venture Shares") (comprised of a total of 1000 ordinary
shares) of IETL for an amount equal to (pound)499 (approximately equivalent to
U.S. $1,000). The Noteholders hereby waive compliance with Section 10.12 of the
Note Agreement to the extent necessary to waive any Event of Default arising
under the Note Agreement on account of the Subscribed Joint Venture Shares and
hereby consent to the purchase by ITL of the Subscribed Joint Venture Shares.
Section 1.3. Limited Waivers; Reservation of Rights. The Company
acknowledges and agrees that the waivers granted in this Section 1 are specific
in intent and are valid only for the specific purpose for which they are being
given, are waivers of the events described in Sections 1.1 and 1.2 hereof only,
shall not in any way obligate the Noteholders to agree to any additional waivers
of the provisions of the Note Agreement, including but not limited to Section
10.12, Section 11(c) and Section 11(g), and shall not in any way be deemed to
constitute or operate as a waiver of any Noteholder's right under the Note
Agreement to exercise remedies resulting from (i) existing and/or continuing
Defaults or Events of Default of which such Noteholder is not actually aware or
(ii) other future Defaults or Events of Default, whether or not of a similar
nature and whether or not known to any Noteholder.
SECTION 2. AMENDMENTS TO NOTE AGREEMENT AND THE NOTES.
Section 2.1. Amendment to Interest Rate on the Series 2003-A Notes. Upon
the Effective Date (as defined in Section 4.1 of this Second Amendment), the
rate of interest payable on each outstanding Series 2003-A Note shall be changed
from 6.04% per annum to 6.54% per annum. As used in the Note Agreement and the
Notes "Applicable Rate" shall mean (i) 6.04% for the period commencing October
24, 2004 to but not including the Effective Date and (ii) 6.54% from and after
the Effective Date.
Section 2.2. Amendment to Section 8.4 (Maturity; Surrender; Etc.). Section
8.4 of the Note Agreement shall be and is hereby amended by deleting the
reference to "Section 8" therein and substituting in lieu thereof a reference to
"Section 8 or Section 10.5".
Section 2.3. Amendment to Section 9 (Additional Financial Covenants).
Section 9.8 of the Note Agreement shall be and is hereby amended in its entirety
to read as follows:
"Section 9.8. Additional Covenants. If the Bank Credit
Agreement is amended, replaced or renewed after the Effective Date
in a manner which makes the financial covenants set forth
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therein more restrictive on the Company and its Subsidiaries than
the financial covenants contained in Section 10 of this Agreement or
to add additional financial covenants or to make the existing Bank
Credit Agreement covenants more restrictive than the financial
covenants in the Bank Credit Agreement on the Effective Date, then
such more restrictive financial covenants and any related
definitions (the "Additional Financial Covenants") shall
automatically be deemed to be incorporated into Section 7.2(a) and
Section 10 of this Agreement by reference and Section 11(c) shall be
deemed to be amended to include such Additional Financial Covenants
from the time such Additional Financial Covenants become binding
upon the Company. No amendment or modification of the Additional
Financial Covenants shall result in any change in the covenants
expressly set forth in Section 10 which shall at all times remain in
effect. Promptly but in no event more than 5 Business Days following
the execution of any new Bank Credit Agreement, or any amendment to
the Bank Credit Agreement, the Company shall furnish each holder of
the Notes with a copy of such agreement. In no event shall the
Company or any Subsidiary provide any collateral or other security
to secure Indebtedness under the Bank Credit Agreement."
Section 2.4. Amendment to Section 10.1 (Consolidated Net Worth). Section
10.1 of the Note Agreement shall be and is hereby amended in its entirety to
read as follows:
"Section 10.1. Consolidated Net Worth. The Company will not,
at any time, permit Consolidated Net Worth to be less than the sum
of (i) $260,000,000 plus (ii) 50% of Consolidated Net Income (if
positive) on a cumulative basis for each fiscal quarter ending after
December 31, 2004."
Section 2.5. Amendment to Section 10.2. (Limitation on Consolidated
Indebtedness). Section 10.2 of the Note Agreement shall be and is hereby amended
in its entirety to read as follows:
"Section 10.2. Limitation on Consolidated Indebtedness. The
Company will not at any time permit:
(a) (i) the Consolidated Leverage Ratio to exceed 4.25 to 1.0
for the fiscal quarter ending March 31, 2005, 4.0 for the fiscal
quarters ending June 30, 2005 and September 30, 2005, and 3.0 to 1.0
for each fiscal quarter ending thereafter; and (ii) the ratio of
Consolidated Total Indebtedness to Consolidated Total Capitalization
to exceed 0.45 to 1.0; provided that in connection with any
calculation of Indebtedness for purposes of determining compliance
with this Section 10.2(a), there shall be excluded all Indebtedness
of the Company and its Subsidiaries
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outstanding under any revolving credit agreement between the Company
and a committed bank or banks if, during the 365-day period
immediately preceding the date of any such calculation of
Indebtedness, there shall have been a period of at least 60
consecutive days on each day of which Indebtedness of the Company
and its Subsidiaries outstanding under such revolving credit
agreement is equal to zero by virtue, and solely by virtue, of such
Indebtedness having been paid from general corporate funds of the
Company and not from funds borrowed by the Company or any Subsidiary
pursuant to any other revolving credit agreement for the purpose of
paying such Indebtedness. If there shall not have been such 60
consecutive day period on each day of which such Indebtedness was
equal to zero, then and in such event there shall be included in
such calculation of Indebtedness for purposes of this Section
10.2(a) an amount equal to the average aggregate amount of all
Indebtedness outstanding under such revolving credit agreement
during such preceding 365-day period; and
(b) Priority Debt to exceed $7,500,000 at any time. In
addition from and after the Effective Date, no Priority Debt shall
be incurred except by foreign Subsidiaries of the Company under
agreements for which the Company shall have no liability except
pursuant to an unsecured Guaranty of such Subsidiary obligation."
Section 2.6. Amendment to Section 10.3 (Fixed Charge Coverage Ratio).
Section 10.3 of the Note Agreement shall be and is hereby amended in its
entirety to read as follows:
"Section 10.3. Fixed Charge Coverage Ratio. The Company will
not at any time permit the Fixed Charge Coverage Ratio to be less
than 1.25 to 1.0 for the fiscal quarters ending March 31, 2005 and
June 30, 2005, 1.50 to 1.0 for the fiscal quarter ending September
30, 2005, 1.75 to 1.0 for the fiscal quarter ending December 31,
2005, 2.0 to 1.0 for each of the fiscal quarters ending March 31,
2006 and June 30, 2006, 2.25 to 1.0 for each of the fiscal quarters
ending September 30, 2006 and December 31, 2006, and 2.5 to 1.0 for
each fiscal quarter ending thereafter."
Section 2.7. Amendment to Section 10.5 (Sale of Assets). Section 10.5 of
the Note Agreement shall be and is hereby amended in its entirety to read as
follows:
"Section 10.5. Sale of Assets. The Company will not, and will
not permit any Subsidiary to, sell, lease or otherwise dispose of
any substantial part (as defined below) of the assets of the Company
and its Subsidiaries; provided, however, that the Company or any
Subsidiary may sell, lease or otherwise dispose of assets (including
the sale of Receivables pursuant to Securitization Transactions)
constituting a substantial part of the assets of the
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Company and its Subsidiaries if such assets are sold in an arms
length transaction and, at such time and after giving effect
thereto, no Default or Event of Default shall have occurred and be
continuing and an amount equal to the Net Proceeds received from
such sale, lease or other disposition shall be used within 365 days
of such sale, lease or disposition, in any combination:
(1) to acquire productive assets used or useful in carrying on
the business of the Company and its Subsidiaries and having a value
at least equal to the value of such assets sold, leased or otherwise
disposed of; or
(2) to prepay or retire Senior Indebtedness of the Company
and/or its Subsidiaries; provided that the Company (i) shall offer
to prepay each outstanding Note in a principal amount which equals
the Ratable Portion for such Note, and (ii) any such prepayment of
the Notes shall be made at par, together with accrued interest and
the applicable Make-Whole Amount or other premium to the date of
such prepayment.
Any offer of prepayment of the Notes pursuant to this Section
10.5 shall be given to each holder of the Notes by written notice
which shall be delivered not less than 120 days and not more than
180 days prior to the proposed prepayment date. Each such notice
shall state that it is given pursuant to this Section and that the
offer set forth in such notice must be accepted by such holder in
writing and shall also set forth (i) the prepayment date, (ii) a
description of the circumstances which give rise to the proposed
prepayment, and (iii) a calculation of the Ratable Portion for such
holder's Notes. Each holder of the Notes which desires to have its
Notes prepaid shall notify the Company in writing delivered not more
than 60 days nor less than 30 days prior to the proposed prepayment
date of its acceptance of such offer of prepayment. If any holder of
the Notes (or any other Senior Indebtedness) elects not to accept
such offer of prepayment, then, only for purposes of such
application of an amount equal to such Net Proceeds for the
prepayment of Senior Indebtedness, the Company nevertheless will be
deemed on such particular occasion to have paid Senior Indebtedness
in an amount equal to the Ratable Portion of such Note (or such
other Senior Indebtedness, as the case may be).
As used in this Section 10.5, a sale, lease or other
disposition of assets shall be deemed to be a "substantial part" of
the assets of the Company and its Subsidiaries if the book value of
such assets, when added to the book value of all other assets sold,
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leased or otherwise disposed of by the Company and its Subsidiaries
from the date of this Agreement to and including the date of the
sale, lease or other disposition of such assets exceeds $20,000,000;
provided that there shall be excluded from any determination of a
"substantial part" any (i) sale or disposition of assets in the
ordinary course of business of the Company and its Subsidiaries,
(ii) any transfer of assets from the Company to any Subsidiary or
from any Subsidiary to the Company or another Subsidiary, and (iii)
any Excluded Sale and Leaseback Transaction."
Section 2.8. Amendment to Section 10.9 (Restricted Payments). Section 10.9
of the Note Agreement shall be and is hereby amended in its entirety to read as
follows:
"Section 10.9. Restricted Payments. The Company will not:
(1) declare or pay any dividends, either in cash or property,
on any shares of its capital stock of any class (except dividends or
other distributions payable solely in shares of common stock of the
Company),
(2) directly or indirectly, or through any Subsidiary or
through any Affiliate of the Company, purchase, redeem or retire any
shares of its capital stock of any class or any warrants, rights or
options to purchase or acquire any shares of its capital stock
(other than in exchange for or out of the net cash proceeds to the
Company from the substantially concurrent issue or sale of shares of
common stock of the Company or warrants, rights or options to
purchase or acquire any shares of its common stock), or
(3) make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital
stock."
Section 2.9. Amendment to Section 10.10 (Prepayment and Purchase of
Notes). Section 10.10 of the Note Agreement shall be and is hereby amended in
its entirety to read as follows:
"Section 10.10. Prepayment and Purchase of Notes. So long as
any 1997 Note shall be outstanding, the Company will not make any
optional prepayment of the Series 2003-A Notes pursuant to Section
8.2 or otherwise prepay or purchase any Series 2003-A Notes from any
holder unless concurrently therewith, the Company shall prepay or
purchase, as the case may be, a pro rata principal amount of the
1997 Notes."
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Section 2.10. Amendment to Section 10.11 (Capital Expenditures and
Acquisitions). Section 10.11 of the Note Agreement shall be and is hereby
amended in its entirety to read as follows:
"Section 10.11. Capital Expenditures and Acquisitions. The
Company will not, and will not permit any Subsidiary to, make any
(a) Capital Expenditures or (b) acquisitions of stock or other
equity interests in any Person, or all or substantially all of the
assets of any Person if the aggregate amount of all such Capital
Expenditures and acquisitions made by the Company and its
Subsidiaries would exceed (i) $40,000,000 during the fiscal year
ending December 31, 2005 and (ii) $40,000,000 during the fiscal year
ending December 31, 2006; provided that any calculation of Capital
Expenditures during such periods shall be done net of proceeds
realized by the Company from the routine sale of fixed assets in the
ordinary course of business during such period so long as such sale
of fixed assets comply with the requirements of Section 10.5 hereof
and the proceeds therefrom are applied in the manner described in
10.5(1)."
Section 2.11. Amendment to Section 10.12 (Deletion of Acquisition; New
Covenant). Section 10.12 of the Note Agreement shall be and is hereby amended in
its entirety to read as follows:
"Section 10.12. Bank Credit Agreement.
(a) The Company shall at all times maintain a Bank Credit
Agreement which provides for commitments in favor of the Company of
not less than $25,000,000.
(b) So long as the Company is required to maintain an
Unrestricted Cash Balance under the Bank Credit Agreement, initially
$50,000,000 or its equivalent in any other currency, the Company
will not permit such Unrestricted Cash Balance to be less than the
amount from time to time required under the Bank Credit Agreement."
Section 2.12. Amendment to Section 11 (Events of Default). Section 11(g)
of the Note Agreement shall be and is hereby amended by deleting each reference
therein to "5% of Consolidated Net Worth" and substituting in lieu thereof a
reference to "$5,000,000".
Section 2.13. Amendment to Schedule B (Definitions - Amended Terms). The
definitions of "Applicable Rate", "Bank Credit Agreement", "Capital
Expenditures", "Effective Date", "Make-Whole Amount" and "Rentals" shall be and
are hereby amended in their entirety to read as follows:
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"`Applicable Rate' has the meaning set forth in Section 2.1 of
the Second Amendment."
"`Bank Credit Agreement' shall mean the Amended and Restated
Credit Agreement dated as of March 12, 2004 between the Company and
Bank of America, N.A., as such agreement may be amended, restated,
joined, supplemented, renewed, replaced, refunded or refinanced from
time to time and any successor bank credit facility which
constitutes the primary bank credit facility of the Company."
"`Capital Expenditure' means an expenditure for an asset that
must be depreciated or amortized under GAAP, for goodwill, or for
any asset that under GAAP must be treated as a capital asset,
including payments under Capital Leases. An expenditure for purposes
of this definition includes any deferred or seller financed portion
of the purchase price of an asset and the original capitalized
amount of a Capital Lease. Capital Expenditures shall exclude
expenditures by the Company and its Subsidiaries for equipment
related to its tunnel business which is acquired by the Company or
any Subsidiary in connection with the performance of any
construction contract but only to the extent to which the Company
has received payments under the contract sufficient to cover the
cost of the equipment."
"`Effective Date' has the meaning set forth in Section 4.1 of
the Second Amendment."
"`Make-Whole Amount' shall have the meaning (i) set forth in
Section 8.6 with respect to any Series 2003-A Note and (ii) set
forth in the applicable Supplement with respect to any other Series
of Notes; provided that notwithstanding anything herein to the
contrary, in the calculation of any Make-Whole Amount payable to a
holder of a 2003-A Note pursuant to Section 8, Section 10.5 or
Section 12.1 of this Agreement the rate of interest borne by any
such Series 2003-A Note shall be deemed to be 6.04% per annum."
"`Rentals' means and includes as of the date of any
determination thereof, without duplication, all fixed payments
(including as such all payments which the lessee is obligated to
make to the lessor on termination of the lease or surrender of the
property) payable by the Company or a Subsidiary, as lessee or
sublessee under a lease of real or personal property, but shall be
exclusive of any amounts required to be paid by the Company or a
Subsidiary (whether or not designated as rents or additional rents)
on account of maintenance, repairs, insurance, taxes and similar
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charges. Fixed rents under any so-called "percentage leases" shall
be computed solely on the basis of the minimum rents, if any,
required to be paid by the lessee regardless of sales volume or
gross revenues."
"`Second Amendment' means the Second Amendment and Waiver to
Note Purchase Agreement dated as of March 16, 2005 between the
Company and the holders of Notes, in respect of this Agreement."
Section 2.14. Amendment to Schedule B (Definitions - New Terms). Schedule
B of the Note Agreement shall be and is hereby amended by the addition thereto
of the following new definitions which shall appear in alphabetical order
therein and which shall read as follows:
"`Consolidated Adjusted Net Worth' means as of the date of any
determination thereof, without duplication, the arithmetic sum of:
(a) the amount of the consolidated stockholders' equity of the
Company and its Subsidiaries as reflected in its most recent
quarterly financial statements,
PLUS
(b) Minority Interests and deferred tax liabilities of the Company
and its Subsidiaries up to an amount not exceeding $10,000,000 in
the aggregate;
MINUS
(c) the net book value, after deducting any reserves
applicable thereto, of all items of the following character which
are included in the assets of the Company and its Subsidiaries, to
wit:
(i) the incremental increase in an asset resulting from any
reappraisal, revaluation or write-up of assets (other than any
revaluation or write-up of assets in accordance with GAAP);
(ii) goodwill or the "cost in excess of net assets of
businesses acquired" to the extent and in the amount by which the
net book value thereof exceeds $70,000,000; and
(iii) patents, patent applications, permits, trademarks, trade
names, copyrights, licenses, franchises, experimental expense,
organizational expense, unamortized debt discount and expense, and
such other assets (other than goodwill or the "cost in excess of net
assets of businesses acquired") as are properly
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classified as "intangible assets" in accordance with GAAP to the
extent and in the amount by which the net book value thereof exceeds
$20,000,000;
all determined in accordance with GAAP."
"`Consolidated Total Capitalization' means as of the date of
any determination thereof, without duplication, the sum of (a)
Consolidated Total Indebtedness plus (b) Consolidated Adjusted Net
Worth."
"`Consolidated Total Indebtedness' means as of the date of any
determination thereof, without duplication, all Indebtedness of the
Company and its Subsidiaries after eliminating all offsetting debits
and credits between the Company and its Subsidiaries and all other
items to be eliminated in the course of the preparation of
consolidated financial statements of the Company and its
Subsidiaries in accordance with GAAP."
"`Minority Interest' means, without duplication, any shares of
stock of any class of a Subsidiary (other than directors' qualifying
shares as required by law) that are not owned by the Company and/or
one or more of its Subsidiaries. Minority Interests shall be valued
by valuing Minority Interests constituting preferred stock at the
voluntary or involuntary liquidating value of such preferred stock,
whichever is greater, and by valuing Minority Interests constituting
common stock at the book value of common stock, additional paid-in
capital and retained earnings applicable thereto adjusted, if
necessary, to reflect any changes from the book value of such common
stock required by the foregoing method of valuing Minority Interests
in preferred stock."
"`Ratable Portion' means, with respect to any Note, an amount
equal to the product of (x) the amount equal to the Net Proceeds
being so applied to the prepayment of Senior Indebtedness multiplied
by (y) a fraction the numerator of which is the outstanding
principal amount of such Note and the denominator of which is the
aggregate principal amount of Senior Indebtedness of the Company and
its Subsidiaries."
"`Unrestricted Cash Balance' means as of any date of
determination for the Company and its Subsidiaries on a consolidated
basis, an amount equal to the sum of cash and cash equivalents
(excluding any restricted cash balances or other retainage
deposits), determined in accordance with GAAP."
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Section 2.15. Amendment to Schedule B (Definitions - Omnibus Change).
Schedule B to the Note Agreement shall be and is hereby amended by deleting the
term "Restricted" from each instance of its usage in the following definitions:
"Consolidated Indebtedness", "Consolidated Leverage Ratio", "Consolidated Net
Income", "EBITDA", "Interest Expense", "Priority Debt", "Rentals" and
"Wholly-Owned Restricted Subsidiary".
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Section 3.1. To induce the Noteholders to execute and deliver this Second
Amendment, the Company represents and warrants (which representations shall
survive the execution and delivery of this Second Amendment) to the Noteholders
that:
(a) this Second Amendment has been duly authorized, executed and
delivered by it and this Second Amendment constitutes the legal, valid and
binding obligation, contract and agreement of the Company enforceable
against it in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws or equitable principles relating to or limiting creditors' rights
generally;
(b) the Note Agreement and the Notes, as amended by this Second
Amendment, constitute the legal, valid and binding obligations, contracts
and agreements of the Company enforceable against it in accordance with
their terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable
principles relating to or limiting creditors' rights generally;
(c) the execution, delivery and performance by the Company of this
Second Amendment (i) has been duly authorized by all requisite corporate
action and, if required, shareholder action, (ii) does not require the
consent or approval of any governmental or regulatory body or agency, and
(iii) will not (A) violate (1) any provision of law, statute, rule or
regulation or its certificate of incorporation or bylaws, (2) any order of
any court or any rule, regulation or order of any other agency or
government binding upon it, or (3) any provision of any material
indenture, agreement or other instrument to which it is a party or by
which its properties or assets are or may be bound, or (B) result in a
breach or constitute (alone or with due notice or lapse of time or both) a
default under any indenture, agreement or other instrument referred to in
clause (iii)(A)(3) of this Section 3.1(c), other than any violation,
breach or default which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect;
(d) as of the date hereof and after giving effect to this Second
Amendment, no Default or Event of Default has occurred which is
continuing;
(e) the unaudited financial statements of the Company for the fiscal
year ended December 31, 2004 furnished to you do not, nor does any written
statement furnished by the Company to you in connection with the execution
and delivery of this Second Amendment, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements contained therein not misleading in light
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of the circumstances under which they were made. There is no fact known to
the Company which the Company has not disclosed to you in writing which
could reasonably be expected to have a Material Adverse Effect; and
(f) The Company has not paid any consideration to any holder of
indebtedness of the Company in connection with the transactions
contemplated by this Second Amendment, except for the legal fees of
counsel to the holders of such indebtedness and consideration paid to the
holders of the 1997 Notes which is identical to the consideration to be
paid to the holders of the Notes and consideration paid to Bank of
America, N.A. pursuant to and as set forth in the First Amendment to
Credit Agreement dated as of March 16, 2005 (the "Bank Credit Agreement
Amendment") between the Company and Bank of America, N.A. (in respect of
the Amended and Restated Credit Agreement dated as of March 12, 2004 (the
"Bank Credit Agreement") between the Company and Bank of America, N.A.).
SECTION 4. CONDITIONS TO EFFECTIVENESS OF THIS SECOND AMENDMENT.
Section 4.1. This Second Amendment shall become effective when each of the
following conditions has been satisfied:
(a) executed counterparts of this Second Amendment, duly executed by
the Company and the holders of at least 51% of the outstanding principal
of the Notes, shall have been delivered to the Noteholders;
(b) executed copies of a consent to this Agreement shall have been
duly executed by the Subsidiaries which are parties to the Subsidiary
Guaranties;
(c) the representations and warranties of the Company set forth in
Section 3 hereof shall be true and correct on and with respect to the date
hereof and a certificate of a Responsible Officer certifying the same
shall have been delivered to the Noteholders;
(d) the Fifth Amendment to Note Purchase Agreement dated as of March
16, 2005, in respect of the 1997 Notes, shall have been duly executed and
delivered by the requisite percentage of the noteholders thereunder needed
to approve such amendment and such agreement shall be in form and
substance satisfactory to each Noteholder;
(e) the Company shall have paid a fee to each Noteholder in an
amount equal to .25% of the outstanding principal amount of the Notes held
by such Noteholder;
(f) Thompson Coburn LLP, counsel for the Company, shall have
delivered a legal opinion, dated as of the effective date of this Second
Amendment, in form and substance reasonably satisfactory to the
Noteholders and their special counsel to the effect that this Second
Amendment constitutes the legal, valid and binding obligation of the
Company;
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(g) the Bank Credit Agreement Amendment shall have been duly
executed and delivered by the parties thereto and such agreement shall be
in form and substance satisfactory to each Noteholder executing the Second
Amendment; and
(h) the Company shall have paid the fees, costs, expenses and
disbursements of Chapman and Cutler LLP, special counsel to the
Noteholders, incurred in connection with the consummation of the
transactions contemplated by this Second Amendment.
Upon receipt of all of the foregoing, this Second Amendment shall become
effective. Delivery of this Second Amendment to the Company, duly executed by
the holders of at least 51% of the outstanding principal amount of the Notes,
shall acknowledge satisfaction of the foregoing conditions. The date upon which
this Second Amendment becomes effective is herein referred to as the "Effective
Date." The Company shall give written notice to the Noteholders of the Effective
Date, confirming the date upon which the increased interest rate referred to in
Section 2.1 hereof shall begin to accrue.
SECTION 5. MISCELLANEOUS.
Section 5.1. Automatically, and without any further action on the part of
the Company or any holder of a Note, on the Effective Date, the Notes shall be
deemed to be amended to reflect the change in interest rate set forth in Section
2.1 of this Second Amendment; provided, however, that if any holder of a Note
elects to surrender its Note (an "Existing Note") to the Company for
cancellation and the issuance of a new note reflecting such change in interest
rate (a "New Note"), the Company shall issue a New Note to such holder within 5
business days of receipt of the Existing Note surrendered therefor, such New
Note to be dated the date to which interest has been paid on the Existing Note
surrendered therefor and such New Note shall be payable on the same dates as set
forth in the Existing Note surrendered therefor.
Section 5.2. Release of Claims. In further consideration of each
Noteholder's execution of this Second Amendment, the Company hereby releases
each Noteholder and its respective affiliates, officers, employees, directors,
trustees, agents and attorneys (collectively, the "Releasees") from any and all
claims, demands, liabilities, responsibilities, disputes, causes of action
(whether at law or in equity) and obligations of every nature whatsoever,
whether liquidated or unliquidated, known or unknown, matured or unmatured,
fixed or contingent, that the Company may have against the Releasees which arise
from or relate to any actions which the Releasees may have taken or omitted to
take prior to the date thereof with respect to the Notes, the Note Agreement or
the Subsidiary Guaranty. For purposes of the release contained in this section,
the term "Company" shall mean and include such party's successors and assigns,
including, without limitation, any trustees acting on behalf of such party and
any debtor-in-possession in respect of such party.
Section 5.3. The Company acknowledges and agrees that by agreeing to the
amendments of the Note Agreement set forth herein, the Noteholders shall not be
deemed to have waived any rights as on account of any Default or Event of
Default which may at any time hereafter exist under the Note Agreement, which
rights are hereby expressly reserved by the holders of the Notes.
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Section 5.4. This Second Amendment shall be construed in connection with
and as part of the Note Agreement, and except as modified and expressly amended
by this Second Amendment, all terms, conditions and covenants contained in the
Note Agreement and the Notes are hereby ratified and shall be and remain in full
force and effect.
Section 5.5. Any and all notices, requests, certificates and other
instruments executed and delivered after the execution and delivery of this
Second Amendment may refer to the Note Agreement without making specific
reference to this Second Amendment but nevertheless all such references shall
include this Second Amendment unless the context otherwise requires.
Section 5.6. The descriptive headings of the various Sections or parts of
this Second Amendment are for convenience only and shall not affect the meaning
or construction of any of the provisions hereof.
Section 5.7. This Second Amendment shall be governed by and construed in
accordance with Illinois law.
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The execution hereof by you shall constitute a contract between us for
the uses and purposes hereinabove set forth, and this Second Amendment may
be executed in any number of counterparts, each executed counterpart
constituting an original, but all together only one agreement.
INSITUFORM TECHNOLOGIES, INC.
By /s/ Christian G. Farman
Name: Christian G. Farman
Title: Senior Vice President and CFO
Accepted and agreed to as of the date first written above:
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: CIGNA Investments, Inc. (authorized
agent)
By /s/ Stephen A. Osborn
Name: Stephen A. Osborn
Title: Managing Director
Accepted and agreed to as of the date first written above:
THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY
By /s/ David A. Barras
Name: David A. Barras
Title: Authorized Representative
Accepted and agreed to as of the date first written above:
PRINCIPAL LIFE INSURANCE COMPANY,
an Iowa corporation
By: Principal Global Investors, LLC, a
Delaware limited liability company,
its authorized signatory
By /s/ John C. Heing
---------------------------------
Name: John C. Heing
---------------------------
Title: Counsel
---------------------------
By /s/ Stephen G. Skrivanek
---------------------------------
Name: Stephen G. Skrivanek
---------------------------
Title: Counsel
---------------------------
MELLON BANK, N.A., solely in its capacity
as Custodian for the Aviva Life -
Principal Glob Priv Structured
Settlements IMM ANN (as directed by the
Principal Global Investors, LLC), and
not in its individual capacity (MAC &
CO) - Nominee Name
By /s/ Bernadette T. Rist
Name: Bernadette T. Rist
Title: Authorized Signatory
CALHOUN & CO., as nominee for Comerica
Bank & Trust, National Association,
Trustee to the Trust created by Trust
Agreement dated October 1, 2002
By /s/ Annette Lawson
---------------------------------
Name: Annette Lawson
---------------------------
Title: Attorney-in-fact and Agent
---------------------------
Accepted and agreed to as of the date first written above:
THE SECURITY FINANCIAL LIFE INSURANCE CO.
By /s/ David T. Wallman
Name: David T. Wallman
Title: Senior Vice President & Chief
Actuary