Exhibit 10.4
SECOND AMENDMENT
to
LOAN AGREEMENT
This SECOND AMENDMENT to LOAN AGREEMENT (this Amendment) has
been entered into by and between INSITUFORM TECHNOLOGIES, INC. as
Borrower and NATIONSBANK, N.A. as Lender.
Recitals:
A. Borrower and Lender are parties to that certain Loan
Agreement effective as of August 20, 1997; as amended by
Amendment No. One thereto effective as of August 30, 1997
(collectively the "Original Loan Agreement").
B. Borrower has requested that Lender extend the Maturity Date
under the Original Loan Agreement and effect certain other
amendments thereto, and Lender has agreed to do so on the
terms and conditions contained herein.
Amendment
Therefore, in consideration of the mutual agreements herein and
other sufficient consideration, the receipt of which is hereby
acknowledged, Borrower and Lenders hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise
defined herein have the meanings given them in the Original Loan
Agreement. All references to the Agreement or the Loan Agreement
in the Original Loan Agreement and in this Amendment, and in the
other Loan Documents, shall be deemed to be references to the
Original Loan Agreement as it is amended hereby and as it may be
further amended, restated, extended, renewed, replaced, or
otherwise modified from time to time. Each reference in the Loan
Agreement to "the Agreement", "hereunder", "hereof", "herein", or
words of like import, shall be read as referring to the Loan
Agreement as amended by this Amendment.
2. Conditions to Effectiveness of Amendment. This Amendment
shall be effective as of September 15, 1998 (the "Amendment
Effective Date"), provided that Borrower has executed and
delivered to Lender an Amendment and Attachment to Note in the
form of Exhibit A hereto.
3. Amendments.
3.1. The first sentence of Section 6.1 of the Original Loan
Agreement is replaced with the following:
"Borrower shall repay the Revolving Loan and all unpaid
accrued interest thereon on September 1, 2001."
3.2. The number "$5,000,000" in clause (i) Section 3.2 of the
Original Loan Agreement is replaced with the words
"$10,000,000 in Dollar Equivalent Amount" and the following
sentence is added at the end of Section 3.2 of the Original
Loan Agreement: "If as of the last day of any fiscal quarter
of Borrower the Dollar Equivalent Amount of the Letter of
Credit Exposure exceeds $10,000,000 or the Dollar Equivalent
Amount of the sum of the Letter of Credit Exposure plus the
Revolving Loan exceeds the amount of the Revolving
Commitment, Borrower shall either (i) provide cash collateral
satisfactory to Lender, and/or (ii) if the Revolving Loan is
not then zero, make a principal payment thereon, sufficient
in the aggregate to cover the amount Letter of Credit
Exposure equal to such excess."
3.3. The following sentence is added at the beginning of
Section 17.1 of the Original Loan Agreement:
"Borrower covenants and agrees that, until Final Payment (and
after any reinstatement as contemplated in Section 8.4), the
provisions of Sections 17.2 through 17.5 shall apply."
3.4. The last sentence of Section 12.1 of the Original Loan
Agreement is amended to read as follows:
"In the case of any conflict between such agreement and this
Agreement, this Agreement shall be controlling; .and any
definition of Event of Default or Default contained in such
agreement shall be deemed superseded by the definitions of
Event of Default and Default herein; and any requirement in
such agreement to grant a security interest shall be subject
to the prohibitions in Section 16.3 hereof and in Sectin 10.5 of
the Note Purchase Agreement."
3.5. The definition of Fixed Charges in Section 17.1 of the
Original Loan Agreement is amended to read as follows:
'Fixed Charges' means, for any period of calculation, the sum
of (i) interest expense, (ii) the sum of all scheduled
principal payments on any long-term Indebtedness of Borrower
(including the Revolving Loan and other current maturities of
long term Indebtedness), (iii) federal, state and local
income tax expense, (iv) scheduled payments on Capital
Leases, and (v) dividends paid, all as accrued in such
period."
3.6. Section 17.3 is amended to read as follows:
"17.3 Minimum Tangible Net Worth. Borrower's Tangible Net
Worth as of the end of each fiscal quarter of Borrower ended
after the Effective Date shall not be less than $50,000,000
plus (i) the sum of (a) 50% of net income (but not any net
loss) for each fiscal quarter ended after the Effective Date
and (b) the amount of the net proceeds received in cash by
Borrower in each fiscal quarter of Borrower ended after the
Effective Date from the issuance of equity securities (other
than in connection with any employee benefit plan or
compensatory arrangement), minus (ii) the amount expended by
Borrower in each fiscal quarter of Borrower ended after the
Effective Date to repurchase its outstanding stock to the
extent such expenditure does not cause the amount of all such
expenditures after the Effective Date to exceed $15,000,000."
3.7. The following definitions are added in Exhibit 2.1 to
the Original Loan Agreement:
"Determination Date Exchange Rate -- (i) in the case of any
Letter of Credit whose face amount is denominated in an
Offshore Currency, the Spot Rate of Exchange as of the date
two Business Days preceding the date such Letter of Credit is
to be issued, (ii) in the case of a drawing under a Letter of
Credit whose face amount is denominated in an Offshore
Currency, the Spot Rate of Exchange as of the date of such
drawing, and (iii) in any other case in which the value in
Dollars of an Offshore Currency must be determined hereunder
as of any date, the Spot Rate of Exchange two Business Days
preceding such date, or if such Spot Rate of Exchange cannot
be determined by Lender, the rate of exchange of such
Offshore Currency into Dollars as reported in the most recent
edition of the Wall Street Journal.
Dollar Equivalent Amount -- (i) with respect to any amount
denominated in Dollars, such amount, or (ii) with respect to
any amount denominated in an Offshore Currency, the
equivalent amount in Dollars based on the applicable
Determination Date Exchange Rate as determined by Lender.
Offshore Currency-any currency other than Dollars.
Spot Rate of Exchange -- the spot exchange rate determined by
Lender in accordance with its usual procedures for the
purchase by Lender of Dollars with such Offshore Currency at
approximately 10:00 A.M. in Charlotte, North Carolina, on the
applicable Business Day for determining such rate as provided
herein."
4. Representations and Warranties of Borrower. Borrower
represents and warrants to Lender as of the date hereof that (i)
this Amendment has been duly authorized by all requisite corporate
action, (ii) since the date Borrower last delivered to Lender
copies of Borrower's Certificate of Incorporation and Bylaws,
Borrower's Certificate of Incorporation and Bylaws have not been
amended, restated or otherwise modified (except for such
amendments delivered to Lender contemporaneously herewith), (iii)
no consents are necessary from any third Person for Borrower's
execution, delivery or performance of this Amendment which have
not been obtained, (iv) this Amendment constitutes the legal,
valid and binding obligation of Borrower enforceable against
Borrower in accordance with its terms except as the enforcement
thereof may be limited by bankruptcy, insolvency or other laws
related to creditors rights generally or by the application of
equity principles, (v) except as set forth in the Disclosure
Schedule attached to the Loan Agreement, as supplemented by the
disclosure schedules heretofore delivered by Borrower to Lender
with its Compliance Certificates and the disclosure schedule
attached to this Amendment as Exhibit B, the representations and
warranties in the Loan Agreement were true and correct when made
and are true and correct in all material respects as of the date
hereof, and (vi) there exists no Default or Event of Default under
the Loan Agreement.
5. Effect of Amendment. The execution, delivery and
effectiveness of this Amendment shall not operate as a waiver of
any right, power or remedy of Lender under the Loan Agreement or
any of the other Loan Documents, nor constitute a waiver of any
provision of the Loan Agreement, any of the other Loan Documents
or any existing Default or Event of Default.
6. Reaffirmation. Borrower hereby acknowledges and confirms that
(a) the Loan Agreement and other Loan Documents remain in full
force and effect, (b) Borrower has no defenses to its obligations
under the Loan Agreement and the other Loan Documents, and (c)
Borrower has no claim against Lender arising from or in connection
with the Loan Agreement or the other Loan Documents.
7. Governing Law. This Amendment has been executed and delivered
in St. Louis, Missouri, and shall be governed by and construed
under the laws of the State of Missouri without giving effect to
choice or conflicts of law principles thereunder.
8. Section Titles. The section titles in this Amendment are for
convenience of reference only and shall not be construed so as to
modify any provisions of this Amendment.
9. Counterparts; Facsimile Transmissions. This Amendment may be
executed in one or more counterparts and on separate counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Signatures
to this Amendment may be given by facsimile or other electronic
transmission, and such signatures shall be fully binding on the
party sending the same.
10. Incorporation By Reference. Lender and Borrower hereby agree
that all of the terms of the Loan Documents are incorporated in
and made a part of this Amendment by this reference.
11. Statutory Notice. The following notice is given pursuant to
Section 432.045 of the Missouri Revised Statutes; nothing
contained in such notice will be deemed to limit or modify the
terms of the Loan Documents or this Amendment:
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT
OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING
PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE.
TO PROTECT YOU (BORROWER(S)) AND US (LENDER(S)) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS
THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN
US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.
Borrower and Lender hereby affirm that there is no unwritten oral
credit agreement between Borrower and Lender with respect to the
subject matter of this amendment.
IN WITNESS WHEREOF, this Amendment has been duly executed as
of the Amendment Effective Date.
INSITUFORM TECHNOLOGIES, INC. NATIONSBANK, N.A.
by its Senior Vice President by its Vice President
Name: s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: s/
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EXHIBIT A
Form of Amendment and Attachment to Note
AMENDMENT AND ATTACHMENT TO NOTE
This is an amendment to the Revolving Note (the Note) from
Insituform Technologies, Inc. (Borrower) to NationsBank, N.A.
(Lender) dated August 20, 1997, in the original principal amount
of $20,000,000 and shall be attached thereto, but the failure to
so attach this amendment shall not invalidate this amendment or
the Note.
The date upon which the outstanding principal amount of the Note
and all unpaid interest accrued thereon is fully due and payable
is extended to September 1, 2001.
Executed and effective as of September 15, 1998
INSITUFORM TECHNOLOGIES, INC.
by its
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Name:
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EXHIBIT B
Supplemental Disclosure Schedule
As of September 15, 1998, the following changes to Subsidiaries
should be made to item 13.18 of the Disclosure Schedule:
1. The name "Insituform Central, Inc." has been changed to
"Insituform Technologies USA, Inc."
2. The equity owner of Insituform France S.A. set forth under
said item should be changed from Insituform Technologies, Inc. to
INA Acquisition Corp.
3. The equity owner of Insituform West, Inc. set forth under
said item should be changed from INA Acquisition Corp. to
Insituform Technologies, Inc.
4. INA Acquisition Corp. has acquired 80% of the equity of Video
Injection S.A.R.L., organized in France.
Effective December 31, 1998, the following Subsidiaries should be
deleted from item 3.18 of the Disclosure Schedule:
Jurisdiction
Name of Subsidiary of Organization
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E-Midsouth, Inc. Florida
Insituform Gulf South, Inc. Delaware
Insituform Mid-America, Inc. Delaware
Insituform Midwest, Inc. Delaware
Insituform Missouri, Inc. Delaware
Insituform of New England, Inc. Massachusetts
Insituform North, Inc. Delaware
Insituform de Puerto Rico, Inc. Delaware
Insituform Rockies, Inc. Delaware
Insituform Southeast, Inc. Florida
Insituform Texark, Inc. Delaware
Insituform Licensees B.V., Inc. Delaware
Insituform Plains, Inc. Delaware
Insituform Mar-Tech Limited Alberta
JOINDER TO UNLIMITED GUARANTY
AND CONTRIBUTION AGREEMENT
This Joinder to Unlimited Guaranty and Contribution Agreement
(this "Joinder") is executed by Insituform Southwest, Inc.
(Joining Guarantor), a Delaware corporation.
Recitals
A. NationsBank, N.A. (Lender) has made available to Insituform
Technologies, Inc. a revolving credit facility under a Loan
Agreement dated effective August 20, 1997 (as the same may
hereafter be renewed, extended, amended, restated, replaced
or otherwise modified from time to time, the Loan Agreement),
and the Loan Documents defined therein, including an
Unlimited Guaranty of the full and prompt payment of all of
the Loan Obligations and all costs of collection thereof (the
Guaranty) and a Contribution Agreement among the parties to
the Guaranty (the Contribution Agreement).
B. The Loan Agreement requires that certain Subsidiaries, as
defined in the Loan Agreement, who were not original parties
to the Guaranty must execute and deliver to Lender a joinder
to the Guaranty satisfactory to Lender. Lender and Joining
Guarantor also deem it advisable for Joining Guarantor to
join in the Contribution Agreement.
C. Joining Guarantor acknowledges that it is a Subsidiary that
is obligated under the terms of the Loan Agreement to execute
such a joinder and that its failure to do so as required
under the terms of the Loan Agreement would constitute an
Event of Default under the Loan Agreement.
Agreement
Therefore, Joining Guarantor acknowledges and agrees as follows:
1. Defined Terms. Capitalized terms used and not otherwise
defined in this Joinder have the meanings defined in the Guaranty
or the Contribution Agreement, as applicable.
2. Joinder to Guaranty. By execution of this Joinder, Joining
Guarantor guaranties to Beneficiary, jointly and severally with
the other Guarantors and as provided in the Guaranty, the full and
prompt payment and performance of the Loan Obligations (whenever
arising, including those existing on the date hereof) and all
costs of collection thereof, including reasonable attorneys' fees
and expenses (whether or not there is litigation), court costs and
all costs in connection with any proceedings under the United
States Bankruptcy Code (collectively, as defined in the Guaranty,
the Guarantied Obligations). Joining Guarantor further agrees and
acknowledges that by execution of this Joinder, Joining Guarantor
is obligated as a Guarantor under the Guaranty to the same extent
as if Joining Guarantor had executed the Guaranty itself, that
there is no limit on the Guarantied Obligations, that the guaranty
by Joining Guarantor is a continuing, absolute and unconditional
guaranty of payment and performance and not merely of collection,
that Joining Guarantor's liability with respect to the Guarantied
Obligations is primary, not secondary. and that, upon the
occurrence of any Event of Default and at any time thereafter,
Beneficiary may proceed directly against any Guarantor without
first proceeding against Borrower, any other Person liable for the
payment or performance of the Guarantied Obligations, or any
Collateral or other security for the Guarantied Obligations. All
of the terms of the Guaranty are incorporated herein by this
reference. Joining Guarantor acknowledges that it has received a
copy of the Guaranty, has had the opportunity to discuss it with
counsel, and has read and fully understands its provisions.
3. Joinder to Contribution Agreement. Also by execution of this
Joinder, Joining Guarantor agrees and acknowledges that Joining
Guarantor has become a party to the Contribution Agreement and is
obligated thereunder as a Contributor to the same extent as if
Joining Guarantor had executed the Contribution Agreement itself.
4. Representations and Warranties. Joining Guarantor hereby
makes the same representations and warranties to Beneficiary as
were made by each other Guarantor in the Guaranty, but as of the
date hereof.
This Joinder is executed and effective as of March 31, 1998.
Insituform Southwest, Inc.
By its Vice President
s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Accepted: ▇▇▇▇▇▇▇▇▇, Inc.
NationsBank, N.A. Insituform Central, Inc.
Insituform Mid-America, Inc.
Insituform Missouri, Inc.
s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇, V.P. INA Acquisition Corp.
------------------------- Insituform Gulf South Inc.
Printed Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Insituform Midwest, Inc.
Insituform of New England, Inc.
Insituform North, Inc.
Insituform Plains, Inc.
Insituform Southeast, Inc.
Insituform Texark, Inc.
Insituform Rockies, Inc.
Insituform West, Inc.
NuPipe, Inc.
United Pipeline Systems USA, Inc.
By: s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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