EXHIBIT 5(a)
CREDIT AGREEMENT
By and Among
INSITUFORM TECHNOLOGIES, INC.,
THE LENDERS LISTED HEREIN,
and
SUNTRUST BANK, NASHVILLE, NATIONAL ASSOCIATION
As Agent
$105,000,000 Revolving Credit/Letter of Credit Facility
October 25, 1995
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . -1-
Section 1.01 . . . . . . . . . . . . . . . . . . . . . . . . -1-
ARTICLE II. THE LOAN . . . . . . . . . . . . . . . . . . . . . .-13-
Section 2.01. Revolving Credit Loan Commitment
and Term Loan, Revolving Credit
Termination, Swing Line Loan,
Letter of Credit Facility, Etc. . . . . . .-13-
Section 2.02. Lenders Not Permitted or Required To
Make Loans. . . . . . . . . . . . . . . . .-17-
Section 2.03. Borrowing Procedure under Loans . . . . . .-17-
Section 2.04. Disbursement of Funds . . . . . . . . . . .-18-
Section 2.05. Notes . . . . . . . . . . . . . . . . . . .-19-
Section 2.06. Interest. . . . . . . . . . . . . . . . . .-19-
Section 2.07. (a) Required Prepayment. . . . . . . . . .-20-
(b) Optional Prepayment. . . . . . . . . .-20-
Section 2.08. Participation Agreements. . . . . . . . . .-20-
Section 2.09. Use of Proceeds . . . . . . . . . . . . . .-20-
Section 2.10. Conditions of Lending . . . . . . . . . . .-20-
Section 2.11. Term of Agreement; Reduction of
Maximum Total Amount. . . . . . . . . . . .-20-
Section 2.12. Payments; Debit Authority; Etc. . . . . . .-21-
Section 2.13. Funding Losses. . . . . . . . . . . . . . .-22-
Section 2.14. Apportionment of Payments . . . . . . . . .-22-
Section 2.15. Sharing of Payments, Etc. . . . . . . . . .-22-
Section 2.16. Capital Adequacy. . . . . . . . . . . . . .-23-
Section 2.17. Right of Offset, Etc. . . . . . . . . . . .-23-
Section 2.18. Non-Use Fee . . . . . . . . . . . . . . . .-23-
Section 2.19. Letter of Credit Fees . . . . . . . . . . .-23-
Section 2.20. Other Fees. . . . . . . . . . . . . . . . .-24-
Section 2.21. Substitute Revolving Credit Facility. . . .-24-
Section 2.22. Usury . . . . . . . . . . . . . . . . . . .-24-
Section 2.23. Interest Rate Not Ascertainable, Etc. . . .-25-
Section 2.24. Illegality. . . . . . . . . . . . . . . . .-25-
Section 2.25. Increased Costs . . . . . . . . . . . . . .-25-
ARTICLE III. GUARANTIES . . . . . . . . . . . . . . . . . . . . .-26-
Section 3.01. Guarantors. . . . . . . . . . . . . . . . .-26-
ARTICLE IV. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . .-26-
Section 4.01. Organization and Qualification. . . . . . .-26-
Section 4.02. Corporate Power and Authorization . . . . .-26-
Section 4.03. Binding Obligations . . . . . . . . . . . .-26-
Section 4.04. No Legal Bar or Resultant Lien. . . . . . .-27-
Section 4.05. No Consent. . . . . . . . . . . . . . . . .-27-
Section 4.06. Liabilities and Litigation. . . . . . . . .-27-
Section 4.07. Taxes; Governmental Charges . . . . . . . .-27-
Section 4.08. Title, Etc. . . . . . . . . . . . . . . . .-28-
Section 4.09. No Default. . . . . . . . . . . . . . . . .-28-
Section 4.10. Compliance with Laws, Etc.. . . . . . . . .-28-
Section 4.11. Subsidiaries, Etc.. . . . . . . . . . . . .-28-
Section 4.12. No Material Misstatements . . . . . . . . .-29-
Section 4.13. Use of Proceeds; Purpose of the
Credit. . . . . . . . . . . . . . . . . . .-29-
Section 4.14. Financial Statement . . . . . . . . . . . .-29-
Section 4.15. Investment Company Act. . . . . . . . . . .-29-
Section 4.16. Securities Act, Etc.. . . . . . . . . . . .-29-
Section 4.17. Personal Holding Company;
Subchapter S. . . . . . . . . . . . . . . .-29-
Section 4.18. Solvency. . . . . . . . . . . . . . . . . .-29-
Section 4.19. Filings . . . . . . . . . . . . . . . . . .-29-
ARTICLE V. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . .-30-
Section 5.01. Initial Conditions. . . . . . . . . . . . .-30-
Section 5.02. All Borrowings; Acquisitions. . . . . . . .-31-
Section 5.03. Additional Conditions to Funding. . . . . .-32-
ARTICLE V-A. POST-CLOSING CONDITIONS. . . . . . . . . . . . . . .-33-
Section 5A.01. Post-Closing Conditions and
Agreements . . . . . . . . . . . . . . . . .-33-
ARTICLE VI. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . .-33-
Section 6.01. Financial Statements and Reports. . . . . .-33-
Section 6.02. Certificates of Compliance. . . . . . . . .-34-
Section 6.03. Taxes and Other Liens . . . . . . . . . . .-34-
Section 6.04. Maintenance . . . . . . . . . . . . . . . .-35-
Section 6.05. Further Assurances. . . . . . . . . . . . .-35-
Section 6.06. Performance of Obligations. . . . . . . . .-35-
Section 6.07. Insurance . . . . . . . . . . . . . . . . .-35-
Section 6.08. Accounts and Records. . . . . . . . . . . .-36-
Section 6.09. Right of Inspection . . . . . . . . . . . .-36-
Section 6.10. Notice of Certain Events. . . . . . . . . .-36-
Section 6.11. ERISA Information and Compliance. . . . . .-36-
Section 6.12. Management. . . . . . . . . . . . . . . . .-36-
Section 6.13. Acquired Subsidiaries' Guaranties . . . . .-36-
Section 6.14. Indemnification of Agent and Lenders. . . .-37-
Section 6.15. Notice of Equity Offerings. . . . . . . . .-37-
ARTICLE VII. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . .-37-
Section 7.01. Debts, Guaranties, and Other
Obligations . . . . . . . . . . . . . . . .-38-
Section 7.02. Liens . . . . . . . . . . . . . . . . . . .-38-
Section 7.03. Investments . . . . . . . . . . . . . . . .-39-
Section 7.04. Dividends, Distributions, and
Redemptions; Issuance of Stock. . . . . . .-39-
Section 7.05. Nature and Ownership of Business. . . . . .-39-
Section 7.06. Mergers, Dispositions, Etc. . . . . . . . .-39-
Section 7.07. Transactions With Affiliates. . . . . . . .-40-
Section 7.08. Use of Loan Proceeds. . . . . . . . . . . .-40-
Section 7.09. Disposition of Assets . . . . . . . . . . .-40-
Section 7.10. No Loans. . . . . . . . . . . . . . . . . .-40-
Section 7.11. Prepayments of Other Debts. . . . . . . . .-41-
Section 7.12. Financial Covenants . . . . . . . . . . . .-41-
Section 7.13. Transactions with Guarantors. . . . . . . .-42-
ARTICLE VIIA. SPECIAL AGREEMENT REGARDING INSITUFORM
LININGS PLC AND MIDSOUTH PARTNERS. . . . . . . . .-43-
Section 7A.01. Insituform Linings Plc and Midsouth
Partners. . . . . . . . . . . . . . . . . .-43-
ARTICLE VIII. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . .-43-
Section 8.01. Events of Default . . . . . . . . . . . . .-43-
Section 8.02. Cross-Default . . . . . . . . . . . . . . .-46-
Section 8.03. Remedies. . . . . . . . . . . . . . . . . .-46-
Section 8.04. Right of Set-off. . . . . . . . . . . . . .-47-
ARTICLE IX. THE AGENT. . . . . . . . . . . . . . . . . . . . . .-47-
Section 9.01. Appointment of Agent. . . . . . . . . . . .-47-
Section 9.02. Authorization of Agent with Respect to
the Loan Documents. . . . . . . . . . . . .-47-
Section 9.03. Agent's Duties Limited; No Fiduciary
Duty. . . . . . . . . . . . . . . . . . . .-48-
Section 9.04. No Reliance on the Agent. . . . . . . . . .-48-
Section 9.05. Certain Rights of Agent . . . . . . . . . .-49-
Section 9.06. Reliance by Agent . . . . . . . . . . . . .-49-
Section 9.07. Indemnification of Agent. . . . . . . . . .-49-
Section 9.08. The Agent in its Individual Capacity. . . .-49-
Section 9.09. Holders of Notes. . . . . . . . . . . . . .-50-
Section 9.10. Successor Agent . . . . . . . . . . . . . .-50-
Section 9.11. Notice of Default or Event of Default . . .-50-
Section 9.12. Benefit of Agreement. . . . . . . . . . . .-50-
ARTICLE X. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . .-52-
Section 10.01. Representation and Indemnity Regarding
Hazardous Substances. . . . . . . . . . . .-52-
Section 10.02. Notices . . . . . . . . . . . . . . . . . .-53-
Section 10.03. Deviation from Covenants. . . . . . . . . .-54-
Section 10.04. Invalidity. . . . . . . . . . . . . . . . .-54-
Section 10.05. Survival of Agreements. . . . . . . . . . .-54-
Section 10.06. Successors and Assigns. . . . . . . . . . .-54-
Section 10.07. Renewal, Extension, or Rearrangement. . . .-54-
Section 10.08. Waivers . . . . . . . . . . . . . . . . . .-55-
Section 10.09. Cumulative Rights . . . . . . . . . . . . .-55-
Section 10.10. Nature of Loan Commitment . . . . . . . . .-55-
Section 10.11. Governance; Exhibits. . . . . . . . . . . .-55-
Section 10.12. Titles of Articles, Sections, and
Subsections . . . . . . . . . . . . . . . .-55-
Section 10.13. Time of Essence . . . . . . . . . . . . . .-55-
Section 10.14. Remedies. . . . . . . . . . . . . . . . . .-55-
Section 10.15. Application of Prepayments. . . . . . . . .-55-
Section 10.16. Costs, Expenses, and Taxes. . . . . . . . .-55-
Section 10.17. Governing Law; Construction;
Consent to Forum. . . . . . . . . . . . . .-56-
Section 10.18. Effectiveness . . . . . . . . . . . . . . .-56-
Section 10.19. Severability. . . . . . . . . . . . . . . .-56-
Section 10.20. Counterparts. . . . . . . . . . . . . . . .-57-
Section 10.21. Entire Agreement; No Oral
Representations Limiting Enforcement. . . .-57-
Section 10.22. Amendments, Etc.. . . . . . . . . . . . . .-57-
Section 10.23. Jury Waiver . . . . . . . . . . . . . . . .-57-
SCHEDULES
SCHEDULE 1 Description of Refinanced Indebtedness
SCHEDULE 2 Notifications
SCHEDULE 3 Certain Indebtedness
SCHEDULE 4 Schedule of Certain Net Positive Receivables
Balances at June 30, 1995 to Borrower and
Guaranteeing Subsidiaries by Non-Guaranteeing
Subsidiaries
EXHIBITS
EXHIBIT A Form of Borrowing Request
EXHIBIT B Form of Revolving Credit Note
EXHIBIT C Form of Swing Line Note
EXHIBIT D Form of Master Letter of Credit Demand Note
EXHIBIT E Form of Borrower's Counsel's Opinion Letter
EXHIBIT F Form of Guaranty Agreement
EXHIBIT G Form of Certificate of Compliance
CREDIT AGREEMENT
This Credit Agreement ("Agreement") is executed by INSITUFORM
TECHNOLOGIES, INC., a Delaware corporation ("Borrower"), SUNTRUST
BANK, NASHVILLE, NATIONAL ASSOCIATION, a national banking
association formerly known as Third National Bank in Nashville
("STB"), the other banks and lending institutions listed on the
signature pages hereof (STB and such other banks and lending
institutions are referred to collectively herein as the "Lenders"),
and SUNTRUST BANK, NASHVILLE, NATIONAL ASSOCIATION, in its capacity
as agent for the Lenders and each successive agent for such Lenders
as may be appointed from time to time pursuant to Article IX hereof
(the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrower has requested and the Lenders have
agreed to provide to Borrower a certain credit facility on terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises, and for
other good and valuable consideration, the adequacy and receipt of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS.
Section 1.01. As used in this Agreement, the following terms
shall have the following meanings, unless the context expressly
otherwise requires:
"Adjusted LIBOR Rate" means the LIBOR Rate adjusted to
include the cost, in basis points, of any applicable reserve
requirements of the Board of Governors of the Federal Reserve
System (or any successor), applicable to "Eurocurrency
Liabilities" pursuant to Regulation D or other then-applicable
regulations of the Board of Governors, if any, and any other
applicable reserve or insurance requirements or costs charged
to any of the Lenders, respectively.
"Advance" means any extension of credit made pursuant to
the Loans and/or the Notes. The terms "Advance" and "Loan" (or
the plural forms thereof) are used interchangeably in this
Agreement.
"Affiliate" means a Person (i) which directly or
indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Borrower,
(ii) which beneficially owns or holds 5% or more of any class
of the Voting Stock of the Borrower, or (iii) of which 5% or
more of the Voting Stock (or in the case of a Person which is
not a corporation, 5% or more of the equity interest) is
beneficially owned or held by the Borrower or another
Affiliate.
"Agreement" means this Credit Agreement (including all
schedules and exhibits hereto) as the same may be modified,
amended, or supplemented from time to time.
"Applicable Margin" and "Applicable Margins" means:
(i) From the Closing Date through December 31,
1995, zero for the Base Rate and 1.50% per annum
for the Adjusted LIBOR Rate;
(ii) From January 1, 1996 to the Maturity Date:
(a) If the Borrower's ratio of
Funded Debt to EBITDA is equal to or
greater than 1.5 to 1 and the Borrower's
ratio of Funded Debt to Total
Capitalization is equal to or greater
than 0.65 to 1, .25% per annum for the
Base Rate and 1.75% per annum for the
Adjusted LIBOR Rate;
(b) If the Borrower's ratio of
Funded Debt to EBITDA is equal to or
greater than 1.5 to 1 and the Borrower's
ratio of Funded Debt to Total
Capitalization is less than 0.65 to 1 but
equal to or greater than 0.45 to 1, zero
for the Base Rate and 1.50% per annum for
the Adjusted LIBOR Rate;
(c) If the Borrower's ratio of
Funded Debt to EBITDA is equal to or
greater than 1.5 to 1 and the Borrower's
ratio of Funded Debt to Total
Capitalization is less than 0.45 to 1,
zero for the Base Rate and 1.25% per
annum for the Adjusted LIBOR Rate.
(d) If the Borrower's ratio of
Funded Debt to EBITDA is less than 1.5 to
1, but equal to or greater than 1.0 to 1,
and the Borrower's ratio of Funded Debt
to Total Capitalization is equal to or
greater than 0.65 to 1, zero for the Base
Rate and 1.50% per annum for the Adjusted
LIBOR Rate;
(e) If the Borrower's ratio of
Funded Debt to EBITDA is less than 1.5 to
1 but equal to or greater than 1.0 to 1
and the Borrower's ratio of Funded Debt
to Total Capitalization is less than 0.65
to 1 but equal to or greater than 0.45 to
1, zero for the Base Rate and 1.25% per
annum for the Adjusted LIBOR Rate;
(f) If the Borrower's ratio of
Funded Debt to EBITDA is less than 1.5 to
1 but equal to or greater than 1.0 to 1
and the Borrower's ratio of Funded Debt
to Total Capitalization is less than 0.45
to 1, zero for the Base Rate and 1.00%
per annum for the Adjusted LIBOR Rate.
(g) If the Borrower's ratio of
Funded Debt to EBITDA is less than 1.0 to
1 and the Borrower's ratio of Funded Debt
to Total Capitalization is equal to or
greater than 0.65 to 1, zero for the Base
Rate and 1.25% per annum for the Adjusted
LIBOR Rate.
(h) If the Borrower's ratio of
Funded Debt to EBITDA is less than 1.0 to
1 and the Borrower's ratio of Funded Debt
to Total Capitalization is less than 0.65
to 1 but equal to or greater than 0.45 to
1, zero for the Base Rate and 1.00% per
annum for the Adjusted LIBOR Rate.
(i) If the Borrower's ratio of
Funded Debt to EBITDA is less than 1.0 to
1 and the Borrower's ratio of Funded Debt
to Total Capitalization is less than 0.45
to 1, zero for the Base Rate and 0.75%
per annum for the Adjusted LIBOR Rate.
provided, that for purposes of
determining the Applicable Margins: (i)
the Borrower's ratios of Funded Debt to
EBITDA and Funded Debt to Total
Capitalization will be measured quarterly
at the end of each calendar quarter based
on Borrower's quarterly and annual
Financial Statements, beginning with the
measurements to occur as of June 30, 1995
(it being acknowledged and agreed that
all measurements as of June 30 and
September 30, 1995 shall give retroactive
effect to the IMA Merger on a pooling-
of-interests basis), and (ii) each
Applicable Margin so determined shall be
effective as of the first day of the
second Fiscal Quarter following the date
of such determination, and (iii) EBITDA
shall be calculated on a trailing four-
quarters basis.
"Assignment and Acceptance" means an Assignment and
Acceptance form executed by a Lender assigning its interest in
the Loan, or any portion therein (other than as a
participation), to an Eligible Assignee, in a form reasonably
satisfactory to Agent and Borrower.
"Base Rate" means the rate of interest established from
time to time and announced by Agent as its "base rate", such
rate being an interest rate used as an index for establishing
interest rates on loans. The Base Rate is determined daily.
"Bond Obligations" means, collectively, the Panola County
Bond Obligations and the Shelby County Bond Obligations.
"Borrowing Request" shall mean a request for a Revolving
Credit Loan and certificate duly executed by an authorized
officer of the Borrower, in the form of Exhibit A hereto,
appropriately completed.
"Business Day" means any day other than a Saturday,
Sunday or other day on which Agent is closed in Nashville
and/or Memphis, Tennessee.
"Closing" means the time and place of the execution
and/or delivery of the Loan Documents.
"Closing Date" means the 25th day of October, 1995.
"Code" means the Internal Revenue Code of 1986, as
amended, and any successor statute.
"Conditions Precedent" means those matters or events that
must be completed or must occur or exist prior to Lenders'
being obligated to fund any Advance, including, but not
limited to, those matters described in Article V hereof.
"Debt" means, with respect to any Person, (a) the
Obligations and all other indebtedness which in accordance
with GAAP would be classified on a balance sheet of such
Person as indebtedness of such Person, whether or not
represented by bonds, debentures, notes or other securities,
for the repayment of borrowed money, (b) all indebtedness,
contingent or otherwise, for reimbursement of drafts drawn or
available to be drawn under letters of credit, (c) all
deferred indebtedness which in accordance with GAAP would be
classified on a balance sheet of such Person as indebtedness
of such Person, for the payment of the purchase price of
property or assets purchased, (d) all capitalized lease
obligations, (e) all guaranties (including guaranties of
guaranties and guaranties of dividends and other monetary
obligations, endorsements, assumptions and other contingent
obligations with respect to, or to purchase or to otherwise
pay or acquire, Debt of all Persons that are not Subsidiaries
that are included in Borrower's consolidated financial
statements), (f) all indebtedness secured by any mortgage or
pledge of, or Lien on property of such Person, whether or not
any indebtedness secured thereby shall have been assumed, and
(g) all obligations of such Person to indemnify another Person
to the extent of the amount of indemnity, if any, which would
be payable by such Person at the time of determination of
Debt.
"Default" or "Event of Default" means the occurrence of
any of the events specified in Section 8.01 hereof.
"EBIT" means for any period (a) Net Income for such
period plus (b) the sum of the following items to the extent
deducted in determining such Net Income: (i) Fixed Charges and
(ii) provisions for taxes based on income or profit.
"EBITDA" means for any period (a) Net Income for such
period plus (b) the sum of the following items to the extent
deducted in determining such Net Income: (i) Fixed Charges and
(ii) provisions for depreciation, amortization and taxes based
on income or profit and other non-cash charges that reduced
such Net Income for such period, minus: the value or proceeds
received from the sale, transfer or disposition, outside the
ordinary course of business, of any assets during such period,
if the proceeds or amounts were included in the determination
of Net Income.
"Eligible Assignee" means (i) a commercial bank organized
under the laws of the United States or any state thereof
having total assets in excess of $1,000,000,000 or any
commercial finance or asset based lending Affiliate of any
such commercial bank, in each case which has complied with the
requirements set forth in Section 9.12(c) of this Agreement,
and (ii) any Lender.
"Environmental Law" means any federal, state or local
law, statute, ordinance or regulation applicable or pertaining
to health, industrial hygiene, waste materials, removal of
waste materials, oil, gas, or underground storage tanks,
Hazardous Substances, other environmental conditions on,
under, or affecting Borrower's Property or any interest
therein.
"Enviroq Obligations" shall mean all obligations of IMA
to Enviroq Corporation (formerly, New Enviroq Corporation)
arising from the subordinated promissory note by IMA to said
corporation dated April 18, 1995, in the original principal
amount of $3,000,000.
"Exempted Significant Subsidiaries" shall be those
Significant Subsidiaries organized under the laws of a
jurisdiction outside of the United States (whether or not
domesticated, so long as such domesticated company was
organized under and continues to be governed by the laws of a
non-United States jurisdiction), and Midsouth Partners.
"Federal Funds Rate" means for any period, a fluctuating
interest rate per annum equal for each day during such period
to the weighted average of the rates on overnight Federal
funds transactions with member banks of the Federal Reserve
System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of
Atlanta, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three (3)
Federal funds brokers of recognized standing selected by the
Agent.
"Financial Statements" means the financial statement or
statements of Borrower described or referenced in Section 6.01
hereof and delivered pursuant to this Agreement to Agent and
each Lender.
"Fiscal Month" means each of the twelve months in the
Fiscal Year.
"Fiscal Quarter" means each of the quarters of the Fiscal
Year ending on March 31, June 30, September 30, and December
31.
"Fiscal Year" or "Annually" means any twelve-month
accounting period ending December 31.
"Fixed Charges" means total interest expense including
without limitation, for borrowed money, and the interest
component (determined in accordance with GAAP) of capital
lease payments.
"Funded Debt" means all indebtedness for money borrowed,
indebtedness evidenced or secured by purchase money mortgages,
capitalized leases, face amounts of letters of credit issued
for the account of Borrower or any of its Subsidiaries,
conditional sales contracts and similar title retention debt
instruments, including any current maturities of such
indebtedness. The calculation of Funded Debt shall include all
Funded Debt of the Borrower and its Subsidiaries, plus all
Funded Debt of other Persons, which has been guaranteed by the
Borrower or any Subsidiary or which is supported by a letter
of credit issued for the account of the Borrower or any
Subsidiary, or as to which and to the extent which the
Borrower or a Subsidiary or its assets otherwise have become
liable for payment thereof. Funded Debt shall also include the
redemption amount with respect to any stock of the Borrower or
its Subsidiaries required to be redeemed within the next
twelve months.
"GAAP" means generally accepted accounting principles.
"Guarantor" and "Guarantors" mean each and all of the
Significant Subsidiaries of Borrower other than the Exempted
Significant Subsidiaries.
"Guaranty" and "Guaranties" mean each and all of the
guaranty agreements executed by Guarantors in favor of
Lenders, substantially in form and substance as set forth in
Exhibit F.
"Hanseatic Obligations" means that certain 8.5% Senior
Subordinated Note dated as of July 26, 1993 executed by the
Borrower to Deltec Asset Management Corporation, as custodian
for Hanseatic Corporation, in the original principal amount of
$5,000,000, together with the related purchase agreement of
even date therewith, as amended from time to time.
"Hazardous Substances" means those substances included
within the definition of hazardous substances, hazardous
materials, toxic substances, or solid waste under the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended, 42 U.S.C. Section 9601 et
seq.; the Resource Conservation and Recovery Act of 1976, 42
U.S.C. Section 6901 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq., any
applicable state law and in the regulations promulgated
pursuant to such acts and laws, and such other substances,
materials and waste which are or become regulated under any
Environmental Law.
"IMA" means Insituform Mid-America, Inc., a Delaware
corporation.
"IMA Merger" means the acquisition by Borrower of IMA as
a result of the merger of ITI Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Borrower, into
IMA upon substantially the terms described in the Agreement
and Plan of Merger dated May 23, 1995 among the Borrower, IMA
and ITI Acquisition Corp. and the Registration Statement.
"Interest Period" shall mean (a) in the case of interest
accruing at the Base Rate Interest Rate Option or the one-
month Adjusted LIBOR Rate Interest Rate Option, the period of
one calendar month, (b) in the case of interest accruing at
the two-month Adjusted LIBOR Rate Interest Option, the period
of two calendar months, and (c) in the case of interest
accruing at the three-month Adjusted LIBOR Rate Interest Rate
Option, the period of three calendar months, in all events
commencing with the first day of the calendar month in which
an Interest Rate Option is elected or otherwise becomes
applicable. No Interest Period may end on a date beyond the
Maturity Date (it being understood and agreed that any Base
Rate Interest Period otherwise including the Maturity Date
shall end on the Maturity Date).
"Interest Rate Option" means either (a) the Base Rate
plus the Applicable Margin as such rate may change from day to
day as the Base Rate changes, or (b) the one-month Adjusted
LIBOR Rate plus the Applicable Margin as such rate may change
from month to month on the first day of each month (having
been established for such month on the last Business Day of
the prior month), or (c) the two-month Adjusted LIBOR Rate
plus the Applicable Margin as such rate may changed every two
months on the first day of each two-month period (having been
established for such period on the last Business Day of the
month immediately preceding the first day of such period), or
(d) the three-month Adjusted LIBOR Rate plus the Applicable
Margin as such rate may change from quarter to quarter on the
first day of each quarter (having been established for such
quarter on the last Business Day of the month immediately
preceding the first day of such quarter), as selected by
Borrower pursuant to the terms of Section 2.06 of this
Agreement.
"Lender" or "Lenders" means STB, the other banks and
lending institutions listed on the signature pages hereof and
each permitted assignee thereof, if any, pursuant to Section
9.06 but shall not include any participants.
"Letters of Credit" means any and all letter(s) of credit
issued at any time and/or from time to time pursuant to this
Agreement by STB for the account of Borrower and/or any of its
Subsidiaries.
"Liabilities" means, with respect to any Person, all Debt
and all other items (including without limitation taxes
accrued as estimated) that, in accordance with GAAP, would be
included in determining total liabilities as shown on the
liabilities side of a balance sheet.
"LIBOR Loans" shall have the meaning set forth in Section
2.25.
"LIBOR Rate" means the offered rates for deposits in U.S.
Dollars for, as applicable, either one (1) month periods, (2)
month periods or three (3) month periods, as selected by
Borrower in accordance with the terms of Section 2.06, as
quoted on the Telerate System subscribed to by STB and listed
by STB's Funds Management Desk as the thirty (30) day LIBOR
rate or the sixty (60) day LIBOR rate or the ninety (90) day
LIBOR Rate, respectively, established on the last Business Day
of each month (it being acknowledged that the two-month and
three-month LIBOR rates, as initially established on the last
Business Day of a month, once such rate is selected by
Borrower and is in effect at any given time will not change
until the last Business Day of the second month or the third
month as the case may be after the establishment thereof). If
any of such one-month or two-month or three-month rate, as the
case may be, is unavailable on the Telerate System, then such
rate shall be determined by and based on any other
interest rate reporting service of generally recognized
standing designated in advance in writing by the Agent to
the Borrower.
"Lien" means any interest in Property securing an
obligation owed to, or a claim by, a Person other than the
owner of the Property, whether such interest is based on the
common law, statute, or contract, and including, but not
limited to, the lien or security interest arising from a
mortgage, encumbrance, pledge, security agreement, conditional
sale, or trust receipt or a lease, consignment, or bailment
for security purposes. For the purposes of this Agreement,
Borrower shall be deemed to be the owner of any Property that
it has acquired or holds subject to a conditional sale
agreement, financing lease, or other arrangement pursuant to
which title to the Property has been retained by or vested in
some other Person for security purposes.
"Loan" or "Loans" means any borrowing by Borrower and
collectively all borrowings by Borrower under the Revolving
Credit Loans and/or the Swing Line Loan and/or any or all of
the Notes, including without limitation all amounts
outstanding under the Revolving Credit Notes and all amounts
outstanding under the Swing Line Note, and/or any extension of
credit under the Revolving Credit Loans and/or the Swing Line
Loan by Lenders (or any of them) to or for Borrower pursuant
to this Agreement or any other Loan Document, including any
renewal, amendment, extension, or modification thereof.
"Loan Documents" means, collectively, each document,
paper or certificate executed, furnished or delivered in
connection with this Agreement (whether before, at, or after
the Closing Date), including, without limitation, this
Agreement, each and all of the Notes, the Guaranties, and all
other documents, certificates, reports, and instruments that
this Agreement requires or that were executed or delivered (or
both) at the request of Agent or any of the Lenders.
"LOC Committed Amount" shall have the meaning set forth
under Section 2.01(b)(ii).
"Mandatory Borrowing" shall have the meaning set forth
under Section 2.01(b)(vi).
"Master Letter of Credit Demand Note" means the
promissory note of the Borrower payable to STB, in the
principal amount of up to $5,000,000, in the form of Exhibit
C hereto (as such promissory note may be amended, endorsed or
otherwise modified from time to time), evidencing the
aggregate obligations of the Borrower to STB resulting from
draws under any Letters of Credit issued from time to time by
STB, in STB's discretion, for the account of Borrower or any
Subsidiary of Borrower, and also means all other promissory
notes accepted from time to time in substitution therefor or
renewal thereof.
"Maturity Date" means the earlier of (i) October 25,
2000, or (ii) the date Agent or Lenders accelerate the
Obligations following an Event of Default. All amounts owed by
Borrower to Lenders pursuant to this Agreement and the Loan
Documents shall be due and payable in full on the Maturity
Date, unless the Maturity Date is extended in writing by all
of the Lenders.
"Maximum Revolving Credit Note Amount" means the maximum
principal amount of any individual Revolving Credit Note,
which shall be in the applicable Lender's Percentage of the
Maximum Total Amount.
"Maximum Total Amount" means the principal amount of
$105,000,000, less the aggregate face amounts of all
outstanding Letters of Credit, less the aggregate amount of
unreimbursed drafts under any Letters of Credit, less the
amount of all indebtedness incurred by Borrower permitted
under Section 7.01(j), which is the maximum principal amount
that may be outstanding at any time under the Loans, as the
same may be permanently reduced pursuant to this Agreement.
"Net Income" means the consolidated net income before
extraordinary items (but after giving effect to the credit
resulting from tax loss carryforwards) of the Borrower for any
period determined in conformity with GAAP applied on a basis
consistent with those applied in preparing the Borrower's
audited annual reports.
"Non-Guaranteeing Joint Venture" shall have the meaning
set forth under Section 7.10.
"Non-Guaranteeing Subsidiary" shall have the meaning set
forth under Section 7.10.
"Note" or "Notes" means, as the context may require,
either any Revolving Credit Note or the Swing Line Note, or,
collectively, all Revolving Credit Notes and the Swing Line
Note, and any and all amendments, modifications, increases,
decreases, consolidations, extensions, restatements and
renewals thereto and thereof, and all changes in form thereof,
and all promissory notes accepted from time to time in
amendment, renewal, consolidation, payment and/or substitution
thereof and/or therefor.
"Obligations" means any and all amounts and liabilities
owing or to be owing by Borrower to Lenders (and/or to any of
them) from time to time whether now existing or hereafter
incurred, in connection with this Agreement and/or any of the
Notes, and/or Master Letter of Credit Demand Note, as any or
all of them may from time to time be modified, amended,
supplemented, extended, renewed, increased, decreased and/or
restated, and all changes in form thereof and all agreements
and notes given in substitution, payment, replacement,
amendment and/or supplement thereof and thereto, including
without limitation all of Borrower's agreements,
representations, warranties, and covenants therein.
"Offering Proceeds" means all net proceeds derived by
Borrower or any Subsidiary through the issuance in exchange
for cash of (a) any equity security (other than in connection
with any employee benefit plan or compensatory arrangement
generally available to employees or to the chief executive
officer) or, (b) any indebtedness evidenced by a note, bond,
debenture or certificate, other than Debt permitted under
Section 7.01 hereof; and includes without limitation (if not
already included by the foregoing language but subject to the
foregoing exceptions) the net amount raised by Borrower in an
equity offering (less expenses incurred in such equity
offering). At least five days prior notice of any proposed
equity offering giving rise to Offering Proceeds must be given
to Agent, and any information concerning which reasonably
requested by Agent shall be given to Agent.
"Panola County Bond Obligations" means those certain
$4,756,000 Panola County, Mississippi Industrial Development
Revenue Bonds Series 1988, of the Borrower, dated January 1,
1992, as amended from time to time.
"Partners" means each of the general partners of any and
all of the Guarantors that are partnerships.
"Payment Office" means, at any time for any Lender, the
Payment Office set forth opposite such Lender's name on the
signature pages hereof, as the same may be amended by written
notice to Agent from such Lender in accordance with this
Agreement specifically requesting that such Lender's Payment
Office be changed and specifying the new address and any other
information that may be required by Agent.
"PBGC" means the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under
ERISA.
"Percentage" means, relative to any Lender, the
percentage set forth opposite its signature hereto, as such
percentage may be adjusted from time to time as a result of
assignments or amendments made pursuant to this Agreement.
"Permitted Acquisition" means any purchase by the
Borrower, or any Subsidiary that is a Guarantor, of:
(A) a direct or indirect licensee or sublicensee of
Borrower or any Subsidiary, and any parent of any such
licensee or sublicensee, and the interest of other joint
venturers of any joint venture of which Borrower is a
joint venturer, if the following conditions are met: (i)
any such licensee or sublicensee or parent thereof was
either a licensee or sublicensee of Borrower or any
Subsidiary (or a parent thereof) as of December 31, 1994
and at all times thereafter, and with respect to any
joint venture Borrower was a joint venturer in such
venture as of December 31, 1994 and at all times
thereafter; (ii) no Event of Default hereunder has
occurred and is then continuing; (iii) no Event of
Default (or event or condition that, with the giving of
notice or the passage of time or both, would constitute
an Event of Default) would reasonably be expected to
occur as a result of such acquisition; (iv) Borrower has
delivered to the Agent Borrower's certificate, in form
and substance reasonably satisfactory to Agent, as to the
matters stated in this definition; and (v) either (1)
such acquisition is for a purchase price not exceeding a
total of $5,000,000, or (2) Agent has expressly approved
on behalf of the Lenders the acquisition in advance in
writing, which consent shall not be unreasonably withheld
by the Lenders and which consent may be evidenced by a
writing signed solely by Agent; or
(B) without limiting any provision of subsection (A)
immediately preceding, a joint venture interest in a
Solvent joint venture engaged in the Subject Business or
ownership interest in a Solvent Subsidiary engaged in the
Subject Business, if the following conditions are met:
(i) no Event of Default hereunder has occurred and is
then continuing; (ii) no Event of Default (or event or
condition that, with the giving of notice or the passage
of time or both, would constitute an Event of Default)
would reasonably be expected to occur as a result of such
acquisition; (iii) Borrower has delivered to the Agent
Borrower's certificate, in form and substance reasonably
satisfactory to Agent, as to the matters stated in this
definition; and (iv) either (1) such acquisition is for
a total price not exceeding $2,000,000, or (2) Agent has
expressly approved the acquisition in advance in writing,
which consent shall not be unreasonably withheld;
provided, however, that except for Permitted Acquisitions
described under subsection (A), in no event shall
Borrower be entitled to use any proceeds of the Loans for
a Permitted Acquisition described under this subsection
(B) with respect to any joint venture or Subsidiary
engaged in the Subject Business, if the aggregate amount
of all purchases of interests in joint ventures and/or
Subsidiaries engaged in the Subject Business, and
described in this subsection (B) excluding amounts used
in the acquisition of the entities described under the
provisions of subsection (A) above of the definition of
"Permitted Acquisitions", and excluding amounts invested
in Guarantors and excluding amounts used in purchases of
interests described under this subsection (B) that have
been expressly approved by the Agent, exceeds $6,000,000,
without the prior express written consent of the Agent on
behalf of the Lenders, which consent shall not be
unreasonably withheld by the Lenders and which consent
may be evidenced by a writing signed solely by Agent.
"Person" means any individual, corporation, partnership,
joint venture, limited liability company, limited liability
partnership, association, joint stock company, trust,
unincorporated organization, government, or any agency or
political subdivision thereof, or any other form of entity.
"Plan" means any employee benefit or other plan
established or maintained, or to which contributions have been
made, by the Borrower or any Subsidiary and covered by Title
IV of ERISA or to which Section 412 of the Code applies.
"Principal Office" means the principal office of the
Agent located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
"Prior TNB Loan Agreement" shall mean the Amended and
Restated Loan Agreement dated as of June 7, 1995 executed by
Borrower and STB (then known as Third National Bank in
Nashville) in connection with a certain loan facility between
STB and Borrower in the principal amount of up to $50,000,000,
which amended and restated a certain loan agreement previously
executed by Borrower and STB (then known as Third National
Bank in Nashville) dated July 12, 1993 in the original
principal amount of $30,000,000, as subsequently thereafter
increased and amended.
"Property" or "Properties" means any interest in any kind
of property or asset, whether real, personal, or mixed, or
tangible or intangible.
"Refinanced Indebtedness" means the indebtedness (without
limitation including accrued interest) of IMA to be paid on
the Closing Date with the proceeds of the Loans, as more
particularly described on Schedule 1 attached hereto.
"Registration Statement" means the Registration Statement
on Form S-4 filed by the Borrower with the Securities and
Exchange Commission on September 15, 1995, including the Joint
Proxy Statement Prospectus dated such date, of the Borrower
and IMA and the exhibits included with or incorporated by
reference in such Registration Statement.
"Required Lenders" means, at any time, Lenders holding at
least an aggregate of sixty-six and two-thirds percent (66
2/3%) of the then aggregate unpaid principal amount of the
Loans or, if no Loans are then outstanding, having at least an
aggregate Percentage of sixty-six and two-thirds (66 2/3%) of
the Maximum Total Amount.
"Revolving Credit Loan Commitment" means, relative to any
Lender, such Lender's obligation to make Advances pursuant to
Section 2.01 of this Agreement.
"Revolving Credit Loans" shall have the meaning set forth
in Section 2.01(a).
"Revolving Credit Note" and "Revolving Credit Notes"
means, as the context may require (a) any of the Promissory
Notes executed by Borrower payable to any Lender,
substantially in the form of Exhibit A hereto, originally in
the principal amounts each such Lender's Percentage bears to
the Maximum Total Amount, evidencing the aggregate
indebtedness of Borrower to such Lender resulting from
outstanding Revolving Credit Loans, as each such Promissory
Note may from time to time be amended, increased, decreased,
extended, renewed, restated and/or changed in any way, and all
other promissory notes accepted from time to time in
amendment, renewal, payment and/or substitution thereof and/or
therefor, and/or (b) collectively, all of the foregoing.
"Revolving Credit Termination Date" means October 25,
1997, or any later date (if expressly extended in writing
signed by Lenders) subsequent to which Borrower may not
request any additional Advances hereunder or under the Notes
and may not request the issuance of any Letter(s) of Credit.
"Shelby County Bond Obligations" means the indebtedness
evidenced by that certain promissory note dated December 20,
1985 issued by Borrower to the Industrial Development Board of
the City of Memphis and County of Shelby, Tennessee, in the
original principal amount of $1,500,000.
"Significant Subsidiary" means any Subsidiary that has
gross assets (based on undepreciated historical cost)
aggregating $125,000 or more at any time (excluding
Subsidiaries whose sole material assets consist of stock in
another Subsidiary). The Significant Subsidiaries include,
without limitation, the following Subsidiaries:
▇▇▇▇▇▇▇▇▇, Inc., a Missouri corporation
E-Midsouth, Inc., a Florida corporation
Gelco Services, Inc., an Oregon corporation
Geltech Constructors, Inc., an Oregon corporation
INA Acquisition Corp., a Delaware corporation
Insituform California, Inc., a Delaware corporation
Insituform Capital Corp., a Delaware corporation
Insituform Central, Inc., a Delaware corporation
Insituform de Puerto Rico, Inc., a Delaware
corporation
Insituform Gulf South, Inc., a Delaware corporation
(formerly known as ▇▇▇▇▇▇ EnviroSystems, Inc.)
Insituform Mid-America, Inc., a Delaware
corporation
Insituform Midwest, Inc., a Delaware corporation
Insituform Missouri, Inc., a Delaware corporation
Insituform of New England, Inc., a Massachusetts
corporation
Insituform North America Corp., a Tennessee
corporation
Insituform North, Inc., a Delaware corporation
Insituform Plains, Inc., a Delaware corporation
Insituform Rockies, Inc., a Delaware corporation
Insituform Southeast, Inc., a Florida corporation
Insituform Southwest, a partnership having
Insituform California, Inc., a Delaware
corporation, and NuPipe California, Inc., a
Delaware corporation, as sole general partners
Insituform Texark, Inc., a Delaware corporation
NuPipe California, Inc., a Delaware corporation
NuPipe, Inc., an Oregon corporation
NuPipe International, Inc., a Delaware corporation
PALTEM Systems, Inc., a Delaware corporation
Pipe Rehab International, Inc., a Delaware
corporation
United Pipeline Systems USA, Inc., a Delaware
corporation
"Solvent" means, with respect to any Person, that as of
any date of determination, (a) the then fair saleable value of
the assets of such Person is (i) greater than the then total
amount of liabilities (including contingent, subordinated,
matured and unliquidated liabilities), in each case determined
in accordance with GAAP, of such Person and (ii) greater than
the amount that will be required to pay such Person's probable
liability on such Person's then existing debts as they become
absolute and matured, (b) such Person's capital is not
unreasonably small in relation to its business or any
contemplated or undertaken transaction, and (c) such Person
does not intend to incur, or believe or reasonably should
believe that it will incur, debts beyond its ability to pay
such debts as they become due.
"Subject Business" means the reconstruction,
construction, rehabilitation, and repair of sewers, tunnels,
pipelines and other conduits, and related construction
activities, and the manufacture or other provision of the
materials, equipment, tooling and other apparatus used in
connection therewith, in each case in connection with current
or reasonably-anticipated legally binding obligations with
respect thereto.
"Subsidiary" means any corporation (or other entity) of
which more than fifty percent (50%) of the issued and
outstanding voting stock (or other ownership interest therein)
is owned or controlled at the time as of which any
determination is being made directly or indirectly, by the
Borrower and/or by one or more of any Subsidiaries of the
Borrower. A corporation that otherwise would be a "Subsidiary"
shall not be included within the definition of Subsidiary if,
on the date of this Agreement and at all times hereafter, such
corporation is dormant and has no material assets. Should any
such corporation that is dormant and has no material assets on
the date of this Agreement at any time become active or own
any asset other than immaterial assets, then such corporation
shall immediately be deemed to be included within the
definition of "Subsidiary".
"Substitute Revolving Credit Facility" shall have the
meaning set forth in Section 2.21.
"Swing Line Loan" shall have the same meaning as set
forth in Section 2.01(d).
"Swing Line Loan Commitment" means STB's obligation
pursuant to Section 2.01(d) to make Swing Line Loans.
"Swing Line Loan Maximum Amount" means, on any date, the
lesser of (a) $5,000,000 or (b) the difference between (x) the
Maximum Total Amount and (y) the sum of: (i) aggregate
principal amounts outstanding under all of the Revolving
Credit Notes on such date, and (ii) the aggregate face amounts
of all Letters of Credit outstanding on such date and (iii)
the aggregate amount of unreimbursed drafts under any Letters
of Credit.
"Swing Line Note" means the promissory note of the
Borrower payable to STB, in the principal amount of up to
$5,000,000, in the form of Exhibit B hereto (as such
promissory note may be amended, endorsed or otherwise modified
from time to time), evidencing the aggregate Obligations of
the Borrower to STB resulting from outstanding Swing Line
Loans, and also means all other promissory notes accepted from
time to time in substitution therefor or renewal thereof.
"Swing Line Termination Date" means the date that is the
earlier of (i) three Business Days after demand by STB or (ii)
the date the Swing Line Loan is accelerated due to the
occurrence of any Event of Default or (iii) three Business
Days prior to the Revolving Credit Termination Date. All
amounts owed by Borrower to STB pursuant to this Agreement and
the Loan Documents in connection with the Swing Line Loan
shall be due and payable in full on the Swing Line Termination
Date, it being understood and agreed that unless otherwise
paid by the Borrower, notwithstanding any other provision in
this Agreement, on the Revolving Credit Termination Date the
Swing Line Loan shall be refinanced as a Revolving Credit
Loan.
"Tangible Net Worth" means (i) the aggregate amount of
all assets of the Borrower as may properly be classified as
such under GAAP, other than goodwill and such other assets as
are properly classified as "intangible assets" in accordance
with GAAP, less (ii) the aggregate amount of all liabilities
of the Borrower as may properly be classified under GAAP.
"Total Capitalization" means Funded Debt plus Tangible
Net Worth.
"Voting Stock" means securities of any class of a
corporation the holders of which are ordinarily, in the
absence of contingencies, entitled to elect a majority of the
corporate directors (or persons performing similar functions).
ARTICLE II. THE LOAN.
Section 2.01. Revolving Credit Loan Commitment and Term Loan,
Revolving Credit Termination, Swing Line Loan, Letter of Credit
Facility, Etc..
(a) Revolving Credit Loan. Subject to the conditions and
pursuant to the terms of the Loan Documents, and in reliance upon
the representations, warranties and covenants set forth in the Loan
Documents, in the aggregate for all Lenders up to the Maximum Total
Amount and on any Business Day occurring prior to the Revolving
Credit Termination Date, each Lender severally agrees to make
Advances (relative to such Lender, and of any type, its "Revolving
Credit Loans") to the Borrower equal to such Lender's Percentage of
the aggregate amount of the borrowing of total Advances requested
by the Borrower to be made on such day (that are not requested by
the Borrower to be made under the Swing Line Loan). The commitment
of each Lender described in this Section 2.01(a) is herein referred
to as its "Revolving Credit Loan Commitment". On the terms and
subject to the conditions hereof, the Borrower may borrow, repay
and reborrow Revolving Credit Loans, provided that at no time may
the principal balance outstanding under any Revolving Credit Note
exceed the applicable Revolving Credit Loan Commitment, nor may the
aggregate principal balance outstanding at any time under all Notes
(including all Revolving Credit Notes and the Swing Line Note)
exceed the Maximum Total Amount. The failure of any Lender to make
any Advance under its Revolving Credit Loan Commitment shall not
relieve any other Lender of its obligations, if any, hereunder to
make Advances under such Lender's Revolving Credit Loan Commitment,
but no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender on the
date of any requested borrowing.
(b) Letter of Credit Facility. (i) As part of its agreement
to extend Revolving Credit Advances, the Lenders have agreed that
STB will issue to third-party beneficiaries on behalf of Borrower
and/or its Subsidiaries standby Letters of Credit in the maximum
aggregate face amounts of up to $5,000,000 outstanding at any time.
The issuance of any Letter of Credit shall reduce Borrower's
ability to receive Revolving Credit Advances by an amount equal to
the face amount of such outstanding Letter of Credit. Additionally,
any payment by STB under a Letter of Credit shall, as long as the
Revolving Credit Loan Commitments are still in effect and have not
been prepaid in whole and terminated, be treated as an Advance
under the Revolving Credit Loan Commitments, and the terms and
provisions of repayment shall be as set forth in the Revolving
Credit Note. Subject to and upon the terms and conditions herein
set forth, until the Revolving Credit Termination Date, Borrower
may request from time to time that STB issue standby Letters of
Credit for the account of Borrower or any Subsidiary of Borrower.
Borrower shall deliver to STB any information regarding the
requested Letter of Credit as STB may reasonably request, and
shall, and shall cause its applicable Subsidiary to, execute an
Application and Agreement for Standby Letter of Credit in the
customary form approved by STB (for all purposes of this Agreement,
to the extent any such application and agreement contains any terms
inconsistent with this Agreement, the provisions of this Agreement
shall govern). STB shall issue and deliver to the Borrower or such
Subsidiary, as the case may be, or the beneficiary, each Letter of
Credit so requested within three Business Days of submission of
such completed application, and such other requested information,
in each case. The language of the Letter of Credit, including the
requirements for a draw thereunder shall be subject to the
reasonable approval of STB. Borrower shall be jointly and severally
liable with the Subsidiary for whose account the Letter of Credit
is issued for payment of all amounts owing in connection with the
Letter of Credit.
(ii) Issuance. The Lenders shall participate in all
Letters of Credit requested by Borrower or its Subsidiary to
be issued for the account of the Borrower or such Subsidiary
from time to time upon request from the Closing Date until the
Revolving Credit Termination Date. Borrower agrees that (A)
the aggregate face amounts of all Letters of Credit shall not
at any time exceed FIVE MILLION DOLLARS ($5,000,000) (the "LOC
Committed Amount") and (B) the sum of the aggregate amount of
Revolving Credit Loans (other than Revolving Credit Loans made
for the purpose of repaying Swing Line Loans or reimbursing
STB for any amount drawn under any Letter of Credit but not
yet so applied) plus the aggregate face amounts of all Letters
of Credit then outstanding, or drawn on but not repaid, plus
the aggregate amount of Swing Line Loans shall not at any time
exceed the Maximum Total Amount and (C) any Letter of Credit
shall be issued in the ordinary course of business of the
Borrower and its Subsidiaries. Except as otherwise expressly
agreed upon by all the Lenders, no Letter of Credit shall have
an original expiry date more than one year from the date of
issuance; provided, however, so long as no Default or Event of
Default has occurred and is continuing and subject to the
other terms and conditions to the issuance of Letters of
Credit hereunder, the expiry dates of Letters of Credit may be
extended annually on each anniversary date of their date of
issuance for an additional period; provided, further, that no
Letter of Credit, as originally issued or as extended, shall
have an expiry date extending beyond the Revolving Credit
Termination Date. The day of issuance of each Letter of Credit
shall be a Business Day.
(iii) Notice and Reports. STB will, at least
quarterly, provide to the Lenders a detailed report specifying
the Letters of Credit that are then issued and outstanding and
any activity with respect thereto that may have occurred since
the date of the prior report, and including therein, among
other things, the account party, the beneficiary, the face
amount, and expiry date, as well as any payments or
expirations which may have occurred.
(iv) Participations. Each Lender, upon issuance of a
Letter of Credit, shall be deemed to have purchased without
recourse a risk participation from STB in such Letter of
Credit and the obligations arising thereunder and any
collateral relating thereto, in each case in an amount equal
to its Percentage of all obligations under such Letter of
Credit and shall absolutely, unconditionally and irrevocably
assume, as primary obligor and not as surety, and be obligated
to pay to STB therefor and discharge when due, its Percentage
of all obligations arising under such Letter of Credit.
Without limiting the scope and nature of each Lender's
participation in any Letter of Credit, to the extent that STB
has not been reimbursed as required hereunder or under any
such Letter of Credit, each such Lender shall pay to STB its
Percentage of such unreimbursed drawing in same day funds on
the day of notification by STB of an unreimbursed drawing
pursuant to the provisions of subsection (v) hereof. The
obligation of each Lender to so reimburse STB shall be
absolute and unconditional and shall not be affected by the
occurrence of a Default, an Event of Default or any other
occurrence or event; provided, however, that a Lender shall
not be obligated to reimburse STB for any wrongful payment
made by STB as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of STB. Any
such reimbursement shall not relieve or otherwise impair the
obligation of the Borrower to reimburse STB under any Letter
of Credit, together with interest as hereinafter provided.
(v) Reimbursement. In the event of any drawing under any
Letter of Credit, STB will make demand under the Master Letter
of Credit Demand Note and promptly notify the Borrower. While
the Revolving Credit Loans are still in effect and have not
been prepaid in whole and terminated, the Borrower shall be
deemed upon the occurrence of a draw under a Letter of Credit
to have requested a Revolving Credit Loan in the amount of the
drawing and any demand under the Master Letter of Credit Note,
or in the event payments under such Master Letter of Credit
Note shall otherwise be due at such note's Maturity Date,
shall be deemed to have requested a Revolving Credit Loan in
the amount thereof, the proceeds of which advance under the
Revolving Credit Loan will be used to satisfy the
reimbursement obligations and such payment under the Master
Letter of Credit Note. The Borrower shall reimburse STB under
any Letter of Credit (either with the proceeds of a Revolving
Credit Loan obtained hereunder or otherwise) in same-day funds
as provided herein on the same day as such draw while the
Revolving Credit Loans are in effect and have not been prepaid
in whole and terminated, or otherwise within three Business
Days of such draw. If the Borrower shall fail to reimburse STB
as provided hereinabove, the unreimbursed amount of such
drawing shall bear interest at a per annum rate equal to the
Base Rate plus two percent (2%). The Borrower's reimbursement
obligations hereunder shall be absolute and unconditional
under all circumstances irrespective of any rights of set-off,
counterclaim or defense to payment the Borrower may claim or
have against STB, STB as the Agent, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other
Person, including, without limitation, any defense based on
any failure of the Borrower to receive consideration or the
legality, validity, regularity or unenforceability of the
Letter of Credit; provided, however, that the Borrower shall
not be obligated to reimburse STB for any wrongful payment
made by STB under a Letter of Credit as a result of acts or
omissions constituting willful misconduct or gross negligence
on the part of STB. STB will promptly notify the other Lenders
of the amount of any unreimbursed drawing and each Lender
shall promptly pay to STB in Dollars and in immediately
available funds, the amount of such Lender's Percentage of
such unreimbursed drawing. Such payment shall be made on the
day such notice is received by such Lender from STB if such
notice is received at or before 2:00 P.M. (Nashville,
Tennessee time), otherwise such payment shall be made at or
before 12:00 Noon Nashville, Tennessee time) on the Business
Day next succeeding the day such notice is received. If such
Lender does not pay such amount to STB in full following such
request in accordance with the preceding sentence, such Lender
shall, on demand, pay to STB interest on the unpaid amount
during the period from the date of such drawing until such
Lender pays such amount to STB in full at a rate per annum
equal to, if paid within two (2) Business Days of the date of
drawing, the Federal Funds Rate and thereafter at a rate equal
to the Base Rate. Each Lender's obligation to make such
payment to STB, and the right of STB to receive the same,
shall be absolute and unconditional, shall not be affected by
any circumstance other than the gross negligence or willful
misconduct of STB and without regard to the termination of
this Credit Agreement or the Loans hereunder, the existence of
a Default or Event of Default or the acceleration of the
Obligations hereunder and shall be made without any offset,
abatement, withholding or reduction whatsoever.
(vi) Repayment with Revolving Credit Loans. On any day on
which the Borrower shall have requested, or been deemed to
have requested, a Revolving Credit Loan borrowing to reimburse
a drawing under a Letter of Credit or demand for payment under
the Master Letter of Credit Demand Note, or in the event
payment(s) under the Master Letter of Credit Demand Note shall
otherwise be due, STB shall give notice to the Lenders that a
Revolving Credit Loan has been requested or deemed requested,
in which case a Revolving Credit Loan borrowing (each such
borrowing, a "Mandatory Borrowing") shall be deemed
immediately made from all Lenders pro rata based on each
Lender's respective Percentage and the proceeds thereof shall
be paid directly to STB for application to the respective
obligations arising in connection with the Letters of Credit.
Each such Lender hereby irrevocably agrees to make such
Revolving Credit Loans promptly upon any such request or
deemed request on account of each Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence
and on the same such date (or by 12:00 noon on the next
Business Day if such notice is received after 2:00 P.M.
(Nashville, Tennessee time)) notwithstanding (A) the amount of
Mandatory Borrowing may not comply with the minimum amount for
borrowings of Revolving Credit Loans otherwise required
hereunder, (B) whether any conditions specified in Article V
are then satisfied, (C) whether an Event of Default (or any
condition which, with the giving of notice or passage of time
or both could constitute an Event of Default) then exists, (D)
failure of any such request or deemed request for a Revolving
Credit Loan to be made by the time otherwise required in
Section 2.03, (E) the date of such Mandatory Borrowing
(provided that such date must be a Business Day occurring
prior to the Revolving Credit Termination Date), or (F) any
reduction in the Maximum Revolving Credit Amount after any
such Letter of Credit may have been drawn upon. In the event
that any Mandatory Borrowing cannot for any reason be made on
the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to the Borrower), then
each such Lender hereby agrees that it shall forthwith fund
(as of the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase),
its Percentage of all amounts drawn under the Letters of
Credit (such Percentage being referred to as each Lender's
"Letter of Credit Participation Interest"); provided, further,
that in the event any Lender shall fail to fund its Percentage
on the day the Mandatory Borrowing would otherwise have
occurred, then the amount of such Lender's unfunded Percentage
therein shall bear interest payable to STB upon demand, at the
rate equal to, if paid within two (2) Business Days of such
date, the Federal Funds Rate, and thereafter at a rate equal
to the Base Rate.
(vii) Modification, Extension. The issuance of any
supplement, modification, amendment, renewal, or extension to
any Letter of Credit shall, for purposes hereof, be treated in
all respects the same as the issuance of a new Letter of
Credit hereunder.
(viii) Uniform Customs and Practices. STB may have the
Letters of Credit be subject to The Uniform Customs and
Practice for Documentary Credits, as published as of the date
of issue by the International Chamber of Commerce (the "UCP"),
in which case the UCP may be incorporated therein and deemed
in all respects to be a part thereof.
(c) Swing Line Loan. Subject to and upon the terms and
conditions herein set forth, from time to time on any Business Day
occurring prior to the Swing Line Termination Date, Borrower may
request Loans (the "Swing Line Loans") from STB under the Swing
Line Note. STB shall have no obligation to make any advances under
the Swing Line Loan to Borrower after the Swing Line Termination
Date and Borrower shall have no obligation to borrow a Swing Line
Loan rather than a Revolving Credit Loan at any time. All advances
under the Swing Line Loan requested by Borrower shall be in the
minimum principal amount of at least $10,000, and the total
principal amount of all Swing Line Loans outstanding on any day may
not exceed the Swing Line Loan Maximum Amount, nor may any Swing
Line Loan be made if after giving effect thereto, the aggregate of
Revolving Credit Loans, face amounts of Letters of Credit,
unreimbursed drafts under Letters of Credit and Swing Line Loans
would be greater than the Maximum Total Amount. On the terms and
subject to the conditions hereof, the Borrower may from time to
time borrow, repay and reborrow Swing Line Loans. Borrower shall
make monthly payments of interest, fees and any other charges under
the Swing Line Note. On the Swing Line Termination Date, all
outstanding principal and accrued interest and any fees or charges
in connection with the Swing Line Loan shall be immediately due and
payable.
(d) Extension of Revolving Credit Termination Date. Beginning
in 1996, during the period beginning on September 15 and ending on
October 15 of each year prior to the Revolving Credit Termination
Date, Borrower may request in writing delivered to Agent that Agent
and Lenders agree to extend the Revolving Credit Termination Date
to the date one year after the Revolving Credit Termination Date
then in effect. The Borrower shall furnish to Agent any information
Agent may reasonably request concerning Borrower and the
Subsidiaries in connection with such request. The decision whether
to agree to such extension is within the sole and absolute
discretion of the Agent and the Lenders, and if one hundred percent
(100%) of the Lenders do not agree to such extension, the Revolving
Credit Termination Date shall not be extended as to any of the
Revolving Credit Notes. The Agent and Lenders shall endeavor in
good faith to respond to Borrower's request by the following
November 30, and should the Agent and/or Lenders fail to respond to
the Borrower by such date, such failure shall be deemed a refusal
to extend the Revolving Credit Termination Date, and neither Agent
nor any of the Lenders shall have any liability to Borrower for any
failure to respond to Borrower's request. Should the Agent and
Lenders agree to extend the Revolving Credit Termination Date, such
extension shall be evidenced by extensions and consents of
guarantors and by amendments and other documentation as Agent and
Lenders may reasonably require, and such resolutions, certificates
of existence and other items as Agent and Lenders may reasonably
request shall be delivered by Borrower to Agent and Lenders, all at
Borrower's expense (it being understood that neither Borrower nor
any Guarantor shall be obligated to enter into any modifications of
this Agreement or its Guaranty, as the case may be, unless it has
agreed thereto, but that in such case, there may be no extension of
the Revolving Credit Termination Date).
(e) On and After Revolving Credit Termination Date. On the
Revolving Credit Termination Date Borrower shall have no further
ability to request any Advances under the Loans, and all amounts
outstanding under the Notes and Loans shall be repaid on a five-
year amortization schedule but due and payable in three years, as
follows: Beginning on the last day of the month following the month
in which the Revolving Credit Termination Date falls, and
continuing on the last day of each consecutive month thereafter,
Borrower shall pay to Lenders, via Agent, all then-accrued interest
on the Revolving Credit Loans and Revolving Credit Notes, and any
fees, expenses or other charges thereon, and additionally,
beginning on the first December 31 after the Revolving Credit
Termination Date, and continuing on the last day of each March,
June, September and December thereafter until the Maturity Date,
Borrower shall pay to Lenders, via Agent, principal payments equal
to one-twentieth (1/20th) of the total principal amount outstanding
under the Notes and Loans on the Revolving Credit Termination Date.
The Revolving Credit Loans will mature on the Maturity Date, at
which time a balloon payment of all outstanding principal and then-
accrued interest shall be immediately due and payable. If no
principal is outstanding under the Loans on December 31, 1997, then
this loan facility shall be cancelled, and Lenders will have no
further obligations to extend any credit to the Borrower.
(f) Prior TNB Loan Agreement. The Prior TNB Loan Agreement is
superseded by this Agreement and hereby terminated, and neither the
execution or delivery hereof or of any of the Notes, nor any
borrowing hereunder, shall constitute a default or Event of Default
or breach under the Prior Loan Agreement. For purposes of this
Agreement (but without waiving any of the provisions of this
Agreement), the IMA Merger shall be deemed consummated prior to
Closing.
Section 2.02. Lenders Not Permitted or Required To Make
Loans. No Lender shall be permitted or required to make any Loan
if, after giving effect thereto, the aggregate outstanding
principal amount of all Revolving Credit Loans made by such Lender
would exceed such Lender's Percentage of the Maximum Total Amount.
STB shall not be required to make any Swing Line Loan if the
aggregate outstanding principal amount of the Swing Line Loans made
by STB would exceed the Swing Line Loan Maximum Amount.
Section 2.03. Borrowing Procedure under Loans. (a) Revolving
Credit Loans. Until October 24, 1997 the Borrower shall give the
Agent at least three Business Days' written notice of a proposed
borrowing under the Revolving Credit Loan (except that, with regard
to borrowings to bear interest at the Base Rate plus the Applicable
Margin, such notice may be at least two Business Days), and shall
present any certificates or documentation required under this
Agreement to be given in connection with such borrowing, including
without limitation a Borrowing Request. Agent will promptly notify
Lenders after receiving such Borrowing Request. Written notice of
the borrowing request may be delivered by facsimile transmission
actually received by Agent at least three Business Days prior to
the date of the requested borrowing (except that, with regard to
borrowings to bear interest at the Base Rate plus the Applicable
Margin, such notice shall be at least two Business Days), followed
by a signed original of such request mailed or hand-delivered to
Agent. Borrower may not request that any Advance under the
Revolving Credit Loan be in the principal amount of less than
$500,000 (except that, from and after the Swing Line Termination
Date and through the Revolving Credit Termination Date, such amount
shall be $100,000 or greater).
(b) Swing Line Loan. Until the Swing Line Termination Date,
the Borrower shall give STB written or telephonic notice of a
requested borrowing (if telephonic, confirmed in writing if STB so
requests) under the Swing Line Loan by 11 a.m. on the date of the
requested borrowing, which date shall be on a Business Day.
Borrower shall specify that such request is a request under the
Swing Line Loan, and subject to availability under the Swing Line
Loan, STB shall make the advance by crediting Borrower's operating
account maintained with STB no later than the close of business on
the day of borrowing.
(c) All Loans. The following persons are authorized to
request an Advance under either the Revolving Credit Loan or the
Swing Line Loan: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, or such other person as may be designated in writing by
Borrower (which writing shall be signed by one of the
aforementioned individuals or by his successor designated as
aforesaid). Any such writing purportedly signed by such individual
or by a Person purportedly a successor to such individual may be
relied on by Agent. The giving of notice by the Borrower that it is
requesting any Loan or Advance shall constitute a warranty by the
Borrower that, as of the date notice is given and as of the date
the Advance is made, the officers of the Borrower do not have
knowledge of any Event of Default as defined herein; and that as of
such dates, the representations and warranties contained in Article
IV are and will be true and correct, except as to changes occurring
after the date of this Agreement caused by transactions permitted
under this Agreement.
Section 2.04. Disbursement of Funds. (a) No later than noon
(local time for the Agent) on the date of any borrowing pursuant to
the Revolving Credit Loan Commitments, each Lender will make
available its Percentage of the amount of such borrowing in
immediately available funds at the Principal Office of the Agent.
The Agent will make available to the Borrower the aggregate of the
amounts (if any) so made available by the Lenders to the Agent by
depositing the funds being advanced into the Borrower's operating
account with the Agent no later than the close of the Agent's
business on the date of such borrowing, or by wiring such funds in
accordance with the wiring instructions set forth in the applicable
Borrowing Certificate. Borrower shall pay all wiring charges
arising in connection with the wiring of any such funds. In the
event that the Lenders do not make such amounts available to the
Agent by the time prescribed above, but such amount is received
later that day, such amount may be credited to the Borrower in the
manner described in the preceding sentence on the next Business
Day, but such credit shall not be deemed to waive any rights of
Borrower against any such Lender not timely delivering any funds
required to be delivered hereunder.
(b) Unless the Agent shall have been notified by any Lender
prior to the date of a borrowing pursuant to the Revolving Credit
Loan Commitments that such Lender does not intend to make available
to the Agent such Lender's portion of the borrowing to be made on
such date, the Agent may assume that such Lender has made such
amount available to the Agent on such date and the Agent may make
available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent by
such Lender on the date of borrowing, the Agent shall be entitled
to recover such corresponding amount on demand from such Lender
together with interest at the Federal Funds Rate. If such Lender
does not pay such corresponding amount forthwith upon the Agent's
demand therefor, the Agent shall promptly notify the Borrower, and
the Borrower shall immediately pay such corresponding amount to the
Agent together with interest at the Interest Rate Option previously
selected by Borrower for such borrowing, which includes such amount
paid and any amounts due under Section 2.13 hereof. Nothing in this
Section 2.04 shall be deemed to relieve any Lender from its
obligation to fund its Revolving Credit Loan Commitments hereunder
or to prejudice any rights that the Borrower may have against any
Lender as a result of any default by such Lender hereunder.
(c) All borrowings under the Revolving Credit Loan
Commitments shall be loaned by the Lenders on the basis of their
Percentage of such commitments. No Lender shall be responsible for
any default by any other Lender in its obligations hereunder, and
each Lender shall be obligated to make the Loans provided to be
made by it hereunder, regardless of the failure of any other Lender
to fund its Revolving Credit Loan Commitments hereunder.
Section 2.05. Notes. Each Lender's Revolving Credit Loans
shall be evidenced by a Revolving Credit Note payable to the order
of such Lender in the applicable Maximum Revolving Credit Note
Amount. All Swing Line Loans shall be evidenced by the Swing Line
Note.
Section 2.06. Interest on Revolving Credit Loan. Borrower
shall elect which Interest Rate Option shall apply to all amounts
that are outstanding under the Revolving Credit Loans on the day of
such election, as follows: If the three-month LIBOR rate option or
the two-month LIBOR rate option is not then in effect, Borrower
shall make its election on the first Business Day of each month and
may elect either (a) the Base Rate Interest Rate Option, in which
case the interest rate applicable to all amounts outstanding under
the Revolving Credit Loans shall bear interest at the Base Rate
plus the Applicable Margin, from the first day of such month until
the last day of such month, as such rate may change from day to
day; or (b) the one-month Adjusted LIBOR Rate Interest Rate Option,
in which case the interest rate applicable to all amounts
outstanding under the Revolving Credit Loans as of the date the
election is made shall bear interest at the one-month Adjusted
LIBOR Rate plus the Applicable Margin, from the first day of such
month until the last day of such month, it being acknowledged that
such rate will not change during such month; or (c) the two-month
Adjusted LIBOR Rate Interest Option, in which case the interest
rate applicable to all amounts outstanding under the Revolving
Credit Loans as of the date the election is made shall bear
interest at the two-month Adjusted LIBOR Rate plus the Applicable
Margin, from the first day of such month until the last day of the
next month thereafter, it being acknowledged that such rate will
not change during such two-month period; or (d) the three-month
Adjusted LIBOR Rate Interest Rate Option, in which case the
interest rate applicable to all amounts outstanding under the
Revolving Credit Loans as of the date the election is made shall
bear interest at the three-month Adjusted LIBOR Rate plus the
Applicable Margin, from the first day of such month until the last
day of the second month thereafter, it being acknowledged that such
rate will not change during such three-month period. Advances made
during any month during which the one-month Adjusted LIBOR Rate is
then in effect shall bear interest at the Base Rate plus the
Applicable Margin, as such rate shall change from day to day, until
the end of such month, at which time (on the first Business Day of
the following month) a new election can be made by Borrower of an
Interest Rate Option encompassing all amounts previously applicable
to such one-month Adjusted LIBOR Rate, plus all advances made
during such month. Advances made during any two-month period during
which the two-month Adjusted LIBOR Rate is then in effect shall
bear interest at the Base Rate plus the Applicable Margin as such
rate shall change from day to day until the end of such two-month
period, at which time (on the first Business Day of the following
month) a new election can be made by Borrower of an Interest Rate
Option encompassing all amounts previously applicable to such two-
month Adjusted LIBOR Rate, plus all advances made during such two-
month period. Advances made during any three-month period during
which the three-month Adjusted LIBOR Rate is then in effect shall
bear interest at the Base Rate plus the Applicable Margin, as such
rate shall change from day to day, until the end of such three
month period, at which time (on the first Business Day of the
following month) a new election can be made by Borrower of an
Interest Rate Option encompassing all amounts previously applicable
to such three-month Adjusted LIBOR Rate, plus all advances made
during such three-month period. Borrower may not elect an Interest
Rate Option corresponding to an Interest Period that would extend
beyond the Maturity Date (it being understood and agreed that any
Base Rate Interest Period otherwise including the Maturity Date
shall end on the Maturity Date).
Borrower shall notify Agent of its elections of the Interest
Rate Option by telephone and, if requested to do so by Agent, in
writing. If on the first Business Day of a particular month during
which a prior election shall not otherwise extend Agent does not
receive proper notification as aforesaid of Borrower's election of
the Interest Rate Option, the parties agree that the Interest Rate
Option applicable to the Revolving Credit Loan (except for amounts
to which the three-month LIBOR rate is then applicable) for such
month shall be the Base Rate Interest Rate Option, if such option
was in effect as the immediately preceding month, or the one-month
Adjusted LIBOR Rate Option in all other cases. Elections of
Interest Rate Options shall be made on the first Business Day of a
month and if the first Business Day of the month is not the first
calendar day of the month, shall be retroactive to the first
calendar day of such month. The terms and provisions of repayment
of the obligations hereunder shall be as set forth in the Revolving
Credit Notes. Interest shall be paid at the end of each Interest
Period.
Section 2.07. (a) Required Prepayment. Whenever the
aggregate amount outstanding under the Notes exceeds the Maximum
Total Amount, Borrower shall immediately pay to Lenders such
amounts as may be necessary to cause the aggregate principal amount
outstanding under the Notes to be equal to or less than the Maximum
Total Amount. Whenever the amount outstanding under any individual
Revolving Credit Note exceeds such Note's Maximum Revolving Credit
Note Amount, Borrower shall immediately pay to the respective
Lender such amounts as may be necessary to cause the principal
amount outstanding under such Revolving Credit Note to be equal to
or less than such Note's Maximum Revolving Credit Note Amount; and
whenever the amount outstanding under the Swing Line Note exceeds
the Swing Line Loan Maximum Amount, Borrower shall immediately pay
to STB such amounts as may be necessary to cause the principal
amount outstanding under the Swing Line Note to be equal to or less
than the Swing Line Loan Maximum Amount; and
(b) Optional Prepayment. Upon ten days prior
written notice delivered from Borrower to Agent, the Borrower may
prepay the Revolving Credit Notes and/or the Swing Line Note in
whole or in part with accrued interest to the date of such
prepayment or the amount prepaid, provided that each partial
prepayment shall be in a principal amount of not less than $500,000
in the case of the Revolving Credit Notes and $10,000 in the case
of the Swing Line Note. Any such prepayments shall be subject to
payment of the amounts described in Section 2.13, in the manner set
forth therein, but not to any other prepayment charge, fee or
premium. All prepayments will be applied first to unpaid expenses
(if any), then to breakage costs (if any), then to accrued
interest, then to principal in the inverse order of maturity,
allocated, in the case of the Revolving Credit Notes, pro-rata
among the Revolving Credit Notes based on the relationship of the
Maximum Revolving Credit Note Amount of each Revolving Credit Note
to the total prepayment.
Section 2.08. Participation Agreements. Notwithstanding any
other provision of this Agreement, Borrower understands that
Lenders may, subject to applicable securities laws, at any time
enter into participation agreements with any of their affiliates,
whereby Lenders, or any of them, may allocate certain percentages
of their or its commitment to them. Borrower shall furnish a
reasonably sufficient number of copies of reports and certificates
to Lenders so that Lenders and each participating lender shall
receive a copy of each such document.
Section 2.09. Use of Proceeds. The proceeds of the Loans
hereunder shall be used by the Borrower only as follows: (a)
approximately $36,035,722.77 shall be used to refinance the
indebtedness (without limitation including accrued interest) of the
Borrower to STB under the Prior TNB Loan Agreement; (b)
approximately $30,579,001.29 shall be used to repay the Refinanced
Indebtedness of IMA to The Boatmen's National Bank of St. Louis and
▇▇▇▇ ▇▇▇▇▇ Bank; (c) for Permitted Acquisitions; and (d) to fund
working capital needs and for general corporate purposes, including
advances to Guarantors and their subsidiaries. All Permitted
Acquisitions shall be made in compliance with all applicable laws,
rules, regulations, orders and governmental and other requirements.
Section 2.10. Conditions of Lending. Notwithstanding any
other provision of this Agreement, the Lenders shall not be
obligated or required to make any Advance under any of the Notes or
issue any Letter of Credit unless each of the Conditions Precedent
set forth in this Agreement has been satisfied at the time each
Advance is made and each Letter of Credit is requested.
Section 2.11. Term of Agreement; Reduction of Maximum Total
Amount. This Agreement shall be binding on the Borrower so long as
any portion of the Loans described herein remains outstanding, any
amounts are available to be drawn hereunder, Borrower can request
a Letter of Credit to be issued by STB hereunder, any Letter of
Credit that is outstanding has not been fully secured by cash
collateral reasonably satisfactory to STB in an amount equal to the
face amount of such Letter of Credit pursuant to documentation
reasonably satisfactory to STB, and/or any Letter of Credit has
been drawn on but has not been reimbursed. However, if no Loans
remain outstanding and no charges or amounts are owed to any of the
Lenders by Borrower in connection with any of the Loans, and if
there are no outstanding Letters of Credit for which Borrower has
not pledged to Agent reasonably satisfactory cash collateral equal
to the face amount of such Letters of Credit, and no drawn but
unreimbursed Letter of Credit, and if there are no charges or
amounts owing by Borrower in connection with any of the Letters of
Credit, Borrower may terminate this Agreement by written notice
thereof delivered to the Agent. Following such termination,
Borrower shall have no ability to request the issuance of Letters
of Credit hereunder. In the event this Agreement shall be
terminated as aforesaid and any Letters of Credit shall remain
outstanding, Borrower shall pledge to TNB reasonably satisfactory
cash collateral for such Letters of Credit, in an amount equal to
the face amounts of such Letters of Credit, pursuant to
documentation reasonably satisfactory to STB. In addition, Borrower
may at any time in the absence of an Event of Default and from time
to time on at least three (3) Business Days' irrevocable written
notice to Agent permanently reduce the Maximum Total Amount,
provided, that reductions shall be in a minimum principal amount of
at least $1,000,000 and in increments of $1,000,000, and that such
new, reduced Maximum Total Amount, at the time of such notice,
shall be an amount that is greater than the aggregate amount of
Revolving Credit Loans plus the Swing Line Loan plus the face
amounts of all Letters of Credit then outstanding, plus the
aggregate amounts of any unreimbursed drafts under Letters of
Credit. Reductions in the Maximum Total Amount shall be applied to
first reduce the Revolving Credit Loan Commitments and then to
reduce the Swing Line Loan. Once reduced, the Maximum Total Amount
may not thereafter be increased without the prior express written
consent of the Required Lenders.
Section 2.12. Payments; Debit Authority; Etc. (a) Except as
otherwise specifically provided herein, all payments under the
Notes and under the Master Letter of Credit Demand Note (including
any prepayment and payment of interest) shall be made without
defense, set-off or counterclaim to the Agent in United States
Dollars at its Principal Office for the account of Lenders in
immediately available funds before 11:00 a.m. Nashville time on the
date such payment is due. The Agent may, but shall not be obligated
to, debit the amount of any such payment that is not made by such
time from any ordinary deposit account of the Borrower with the
Agent. All payments under the Notes (except for debits by Agent
which may be in any amount) shall be in amounts equal to or greater
than $500,000 with regard to the Revolving Credit Notes and $10,000
with regard to the Swing Line Note, unless a lesser amount is owed
thereunder.
(b) Each Lender that is not organized under the laws of the
United States of America or a state thereof (including each Lender
that becomes a party to this Agreement after the date hereof, if
any) by becoming a party to this Agreement hereby represents that
under applicable law and treaties no taxes are required to be
withheld by the Agent or the Borrower with respect to any payment
to be made thereto in respect of the Loans and agrees that, prior
to the first date on which any payment is due to it hereunder, it
will deliver to the Borrower and the Agent (i) two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224,
as applicable, or successor applicable form, as the case may be,
certifying in each case that such Lender is entitled to receive
payments under this Agreement and the Notes, and the Master Letter
of Credit Demand Note, payable to it, without deduction or
withholding of any United States federal income taxes, and (ii) an
Internal Revenue Service Form W-8 or W-9, as applicable, or
successor applicable form, as the case may be, to establish an
exemption from United States backup withholding tax. Each Lender
that delivers to the Borrower and the Agent a Form 1001 or 4224 and
Form W-8 and W-9 pursuant to the preceding sentence further
undertakes to deliver to the Borrower and the Agent two further
copies of the said letter and Form 1001 and 4224 and Form W-8 or W-
9, or successor applicable forms, or other manner or certification,
as the case may be, on or before the date that any such letter or
form expires or becomes obsolete or after the occurrence of any
event requiring a change in the most recent letter and form
previously delivered by it to the Borrower, and such extensions or
renewals thereof as may reasonably be requested by the Borrower.
(c) Subject to Section 2.07(b), whenever any payment to be
made hereunder or under any Note shall be stated to be due on a day
that is not a Business Day, the due date thereof shall be extended
to the Business Day immediately following such day and, with
respect to payments of principal, interest thereon shall be payable
at the applicable rate during such extension.
(d) All computations of interest and fees shall be made on
the basis of a year of three hundred and sixty (360) days for the
actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest or fees
are payable (to the extent computed on the basis of days elapsed).
(e) Payment by the Borrower to the Agent in accordance with
the terms of this Agreement shall, as to the Borrower, constitute
payment to the Lenders under this Agreement.
Section 2.13. Funding Losses. The Borrower shall compensate
each Lender, upon such Lender's written request to the Borrower
(which request shall set forth the basis for requesting such
amounts in reasonable detail and which request shall be made in
good faith and which request, in the event of a prepayment under
Section 2.07(b), shall be delivered no later than five days prior
to the date of prepayment), for all losses, expenses and
liabilities (including, without limitation, any interest paid by
such Lender to lenders of funds borrowed by it to make or carry its
Loans to which a LIBOR Rate applies in either case to the extent
not recovered by such Lender in connection with the reemployment of
such funds and including loss of anticipated profits), which such
Lender may sustain if (a) any repayment (including mandatory
prepayments) of any amounts to which the LIBOR Interest Rate Option
applies occurs on a date that is not the last Business Day of a
month (in the case of Loans to which the one-month LIBOR rate
applies) or on the last Business Day of the second month after the
beginning of a two-month term (in the case of Loans to which the
two-month LIBOR Rate applies) or the last Business Day of the third
month after the beginning of a three-month term (in the case of
Loans to which the three-month LIBOR rate applies), and/or (b)
Borrower fails to borrow any Loan requested to be borrowed in a
Borrowing Request after submitting such Borrowing Request, it being
understood that Borrower shall not be liable for consequential or
incidental losses, expenses or liabilities.
Section 2.14. Apportionment of Payments. Aggregate principal
and interest payments in respect of Revolving Credit Loans shall be
apportioned among all outstanding Revolving Credit Loan Commitments
and Revolving Credit Loans to which such payments relate
proportionately to the Lenders' respective Percentage of such
Revolving Credit Loan Commitments and outstanding Revolving Credit
Loans. The Agent shall distribute to each Lender at its Payment
Office its share of all such payments received by the Agent, with
such distribution by Agent occurring no later than the end of the
Business Day following the Business Day of Agent's receipt of such
payments.
Section 2.15. Sharing of Payments, Etc. If any Lender shall
obtain any payment or reduction (including, without limitation, any
amounts received as adequate protection of a deposit treated as
cash collateral under the Bankruptcy Code) of the Obligations
relating to Revolving Credit Loans (whether voluntary, involuntary,
through the exercise of any right of set-off or otherwise) in
excess of its Percentage of payments or reductions of such
Revolving Credit Loan Obligations obtained by all the Lenders, such
Lender shall forthwith (a) notify each of the other Lenders and
Agent of such receipt, and (b) purchase from the other Lenders such
participations in the affected Revolving Credit Loan Obligations as
shall be necessary to cause such purchasing Lender to share the
excess payment or reduction, net of costs incurred in connection
therewith, ratably with each of them, provided that if all or any
portion of such excess payment or reduction is thereafter recovered
from such purchasing Lender or additional costs are incurred, the
purchase shall be rescinded and the purchase price restored to the
extent of such recovery or such additional costs, but without
interest unless the Lender obligated to return such funds is
required to pay interest on such funds. Borrower agrees that any
Lender so purchasing a participation from another Lender pursuant
to this Section 2.15 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off)
with respect to such participation as fully as if such Lender were
the direct creditor of the Borrower in the amount of such
participation.
Section 2.16. Capital Adequacy. Without limiting any other
provision of this Agreement, but without duplication, in the event
that any law, treaty, governmental (or quasi-governmental) rule,
regulation, guideline or order regarding capital adequacy not
currently in effect or fully applicable as of the Closing Date, or
any change therein or in the interpretation or application thereof
after the Closing Date, or compliance by such Lender with any
request or directive regarding capital adequacy not currently in
effect or fully applicable as of the Closing Date (whether or not
having the force of law and whether or not failure to comply
therewith would be unlawful) from a central bank or governmental
authority or body having jurisdiction, does or shall have the
effect of reducing the rate of return on such Lender's capital as
a consequence of its obligations hereunder to a level below that
which such Lender could have achieved but for such law, treaty,
rule, regulation, guideline or order, or such change or compliance
(taking into consideration such Lender's policies with respect to
capital adequacy) by an amount deemed by such Lender to be
material, then within ten (10) Business Days after written notice
and demand by such Lender (with copies thereof to the Agent), the
Borrower shall from time to time pay to such Lender additional
amounts sufficient to compensate such Lender for such reduction
(but, in the case of outstanding Loans to which the Base Rate
Interest Rate Option applies, without duplication of any amounts
already recovered by such Lender by reason of an adjustment in the
applicable Base Rate). Such Lender shall submit to Agent and
Borrower a certificate as to the amount payable under this Section
2.16, which certificate shall set forth the basis for requesting
such amounts in reasonable detail and shall be submitted in good
faith.
Section 2.17. Right of Offset, Etc. The Borrower hereby
agrees that, in addition to (and without limitation of) any right
of set-off, banker's lien or counterclaim the Lenders may otherwise
have, the Lenders (and any participant of this Loan under Section
2.08) shall be entitled, at their option, to offset balances held
by any of them at any of their offices against any principal of or
interest on the Obligations hereunder, or any other Debt owed by
the Borrower to such Lender, that is not paid when due by reason of
a failure by the Borrower to make any payment when due to any
Lender (regardless whether such balances are then due to the
Borrower), in which case such offsetting Lender shall promptly
notify the Borrower, provided that its failure to give such notice
shall not affect the validity thereof.
Section 2.18. Non-Use Fee. As additional consideration for
the commitment of the Lenders to make the Revolving Credit Loans
hereunder and reservation of monies to fund such Loans, the
Borrower shall pay to the Agent, for the account of each Lender, on
each December 31, March 31, June 30 and September 30 after the
Closing Date through the Revolving Credit Termination Date (and/or
on any earlier date on which this Agreement is terminated, a fee in
the amount of 0.1875% per annum of the average unused portion of
the Maximum Total Amount during the prior Fiscal Quarter (or other
period following the previous date payment of the non-use fee was
due), in each case taking into account the entire outstanding
principal amount of Revolving Credit Loans and Swing Line Loans and
the face amounts of all Letters of Credit outstanding during such
quarter or other period in determining such use).
Section 2.19. Letter of Credit Fees. (a) Facing Fees.
Borrower shall pay to STB facing fees in the amount of one-eighth
of one percent (0.125%) of the face amount of each Letter of Credit
issued by STB. Each facing fee shall be paid prior to or at
issuance of the Letter of Credit.
(b) Letter of Credit Fee. Borrower shall pay to Agent, for the
account of each Lender in proportion to its pro-rata Percentage as
applied to the face amount of each requested Letter of Credit, a
letter of credit fee in the aggregate equal to the Applicable
Margin that would be applicable to the Adjusted LIBOR Rate at the
time each such fee is due (the fees described herein being referred
to as the "Letter of Credit Fees"), multiplied by the aggregate
face amounts of all Letters of Credit outstanding at any time
during the quarters ending on or about the dates payment is due of
the Letter of Credit Fees. The Letter of Credit Fees shall be paid
by Borrower to Agent quarterly in arrears, on the last Business Day
of each consecutive December, March, June and September so long as
any Letter of Credit is outstanding, and such fees shall be
remitted by Agent to the Lenders quarterly in arrears based on
their pro-rata Percentages.
Section 2.20. Other Fees. Borrower shall pay to STB or
SunTrust Capital Markets, Inc. as the case may be, the fees set
forth in the third paragraph of the engagement letter from SunTrust
Corporate Finance to Borrower dated August 30, 1995, executed by
Borrower on August 31, 1995.
Section 2.21. Substitute Revolving Credit Facility. Borrower
shall be entitled to obtain a working capital revolving credit
loan, and/or a standby letter of credit facility, from a bank or
other institutional lender in the maximum principal amount of no
more than (a) if made by a bank or other institutional lender that
is not a Lender, $10,000,000 for such revolver and $5,000,000 for
such letter of credit facility, or (b) if made by a Lender, the
greater of (x) $10,000,000, for such revolver and $5,000,000 for
such standby letter of credit facility, or (y) the remaining
availability under the Revolving Credit Loan (after deducting the
Swing Line Loan immediately prior to the Revolving Credit
Termination Date), up to a maximum of $25,000,000, for the purpose
of furnishing working capital for itself or any Subsidiary, plus
$5,000,000 for the purpose of furnishing a standby letter of credit
facility (the "Substitute Revolving Credit Facility"), if and only
if: (i) the Lenders have refused to extend the Revolving Credit
Termination Date as set forth in Section 2.01(b), (ii) solely in
the case of a Substitute Revolving Credit Facility from a bank or
other institutional lender other than a Lender, no Lender or group
of Lenders (including replacement Lenders) has agreed to make a
revolving working capital loan to Borrower in the principal amount
of $10,000,000 upon terms reasonably satisfactory to Borrower, plus
$5,000,000 for the purpose of furnishing a standby letter of credit
facility upon terms satisfactory to Borrower, (iii) the Revolving
Credit Termination Date has passed, (iv) the Substitute Revolving
Credit Facility is unsecured (except for ordinary provisions
regarding setoff of accounts maintained with the Lender thereof and
consisting solely of funds drawn from such Substitute Revolving
Credit Facility) and is pari passu with the Obligations, (v) copies
of all documents executed in connection with the Substitute
Revolving Credit Facility are delivered to Agent, and (vi) no Event
of Default and no event which, with the giving of notice or passage
of time or both would constitute an Event of Default, has occurred
hereunder or would otherwise occur by reason of the existence of
such Substitute Revolving Credit Facility.
Section 2.22. Usury. The parties to this Agreement intend to
conform strictly to applicable usury laws as presently in effect.
Accordingly, if the transactions contemplated hereby would be
usurious under applicable law (including the laws of the United
States of America and the state of Tennessee), then, in that event,
notwithstanding anything to the contrary in any Loan Document or
agreement executed in connection with or as security for the
Obligations or the Master Letter of Credit Demand Note or any of
the obligations or indebtedness arising from time to time in
connection with the Letters of Credit, Borrower and Lenders agree
as follows: (i) the aggregate of all consideration that constitutes
interest under applicable law that is contracted for, charged, or
received under any of the Loan Documents, shall under no
circumstance exceed the maximum lawful rate of interest permitted
by applicable law, and any excess shall be credited on the
Obligations by the holder thereof (or, if the Obligations shall
have been paid in full, at Agent's option credited on the Master
Letter of Credit Demand Note or on other Debt owed by Borrower to
Lenders or any of them or refunded to Borrower); and (ii) in the
event that the maturity of the Obligations is accelerated by reason
of an election of the holder resulting from any Event of Default
under this Agreement or otherwise, or in the event of any required
or permitted prepayment, then such consideration that constitutes
interest may never include more than the maximum amount of interest
permitted by applicable law, and excess interest, if any, for which
this Agreement provides, or otherwise, shall be cancelled
automatically as of the date of such acceleration or prepayment
and, if previously paid, shall be credited on the Obligations or if
the Obligations shall have been paid in full, at Agent's option
credited on other Debt owed by Borrower to Lenders or any of them,
or refunded to Borrower).
Section 2.23. Interest Rate Not Ascertainable, Etc. In the
event that the Agent shall in good faith have determined that on
any date for determining the Adjusted LIBOR Rate, by reason of any
changes arising after the date of this Agreement affecting the
London interbank market or the Agent's position in such market,
adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the
definition of Adjusted LIBOR Rate, then, and in any such event, the
Agent shall forthwith give notice (by telephone confirmed in
writing) to the Borrower and to the Lenders of such determination
and a summary of the basis for such determination. At the
expiration of any Interest Period then in effect and until the
Agent notifies the Borrower that the circumstances giving rise to
the suspension described herein no longer exist (which notice shall
be given forthwith after such determination is made by the Agent),
all Loans shall bear interest at the Base Rate plus the Applicable
Margin.
Section 2.24. Illegality. (a) In the event that any Lender
shall have determined any time that the making or continuance of
any Loan bearing interest at a LIBOR Rate Option has become
unlawful by compliance by such Lender in good faith with any
applicable law, governmental rule, regulation, guideline or order
(whether or not having the force of law and whether or not failure
to comply therewith would be unlawful), then, in any such event,
the Lender shall give prompt notice (by telephone confirmed in
writing) to the Borrower and to the Agent of such determination and
a summary of the basis for such determination (which notice the
Agent shall promptly transmit to the other Lenders).
(b) Upon the giving of the notice to the Borrower referred to
in Section 2.24(a), the Borrower's right to elect a LIBOR Rate
Option shall be immediately suspended, and all Loans shall bear
interest at the Base Rate plus the Applicable Margin.
Section 2.25. Increased Costs. (a) If by reason of (i) after
the date hereof, the introduction of or any change (including,
without limitation, any change by way of imposition or increase of
reserve requirements) in or in the interpretation of any law or
regulation, or (ii) the compliance with any guideline or request
from any central bank or other governmental authority or quasi-
governmental authority exercising control over banks or financial
institutions generally (whether or not having the force of law):
(A) any Lender shall be subject to any tax, duty or
other charge with respect to any Loans bearing interest at a
LIBOR Rate Interest Rate Option plus the Applicable Margin
(all such Loans being collectively referred to as the "LIBOR
Loans") or its obligation to make LIBOR Loans, or the basis of
taxation of payments to any Lender of the principal of or
interest on its LIBOR Loans or its obligation to make LIBOR
Loans shall have changed (except for changes in the tax on the
overall net income of such Lender, or similar taxes, pursuant
to the laws of jurisdictions with taxing authority over such
Lender); or
(B) any reserve (including, without limitation, any
reserve imposed by the Board of Governors of the Federal
Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account of, or
credit extended by, any Lender shall be imposed or deemed
applicable or any other condition affecting its LIBOR Loans or
its obligation to make LIBOR Loans shall be imposed on any
Lender or the London interbank market;
and as a result thereof there shall be any increase in the cost to
such Lender of agreeing to make or making, funding or maintaining
LIBOR Loans (except to the extent already included in the
determination of the interest rate for LIBOR Loans), or there shall
be a reduction in the amount received or receivable by such Lender,
then the Borrower shall from time to time, upon written notice from
and demand in good faith by such Lender on the Borrower (with a
copy of such notice and demand to the Agent), pay to the Agent for
the account of such Lender within five (5) Business Days after the
date of such notice and demand, additional amounts sufficient to
indemnify such Lender against such increased cost; provided,
however, that nothing in this section shall require Borrower to
indemnify any Lender for withholding taxes.
(b) If the Agent shall in good faith determine that at any
time, because of the circumstances described in Section 2.25(a)(i)
or (ii) arising after the date of this Agreement affecting any
Lender or the London interbank market or any Lender's position in
such market, the calculations for the interest rates for LIBOR
Loans as determined by the Agent will not adequately and fairly
reflect the cost to Lenders of funding such Loans, the Agent shall
forthwith give notice (by telephone confirmed in writing) to the
Borrower and to the Lenders of such advice, and a summary of the
basis for such determination, and then, and in any such event and
until Agent notifies the Borrower that such circumstances no longer
exist (which notice shall be given forthwith after such
determination is made by the Agent):
(i) The Borrower's right to request, and the Lenders'
obligation to make or permit portions of the Revolving Credit
Loans to remain outstanding past the last day of the then
current Interest Periods as LIBOR Loans shall be immediately
suspended; and
(ii) After the last day of the then-current Interest
Period, all Revolving Credit Loans shall bear interest at the
Base Rate plus the Applicable Margin.
ARTICLE III. GUARANTIES.
Section 3.01. Guarantors. Repayment and performance of the
Obligations, and payment and performance of the Master Letter of
Credit Note and all amounts, duties and obligations arising in
connection with the Letters of Credit shall be guaranteed by the
Guarantors pursuant to the Guaranties.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES.
To induce Lenders to enter this Agreement and extend credit
under this Agreement, Borrower covenants, represents, and warrants
to Lenders that as of the date hereof and as of the Closing Date:
Section 4.01. Organization and Qualification. Borrower is a
corporation duly organized and existing under the laws of the State
of Delaware, each of the corporate Subsidiaries is a corporation
duly organized and existing under the laws of its jurisdiction of
incorporation, and Borrower and each of the corporate Subsidiaries
is qualified to do business in all jurisdictions in which it
conducts its business, the failure to qualify in which would have
a material adverse effect on the business, Properties, operations
or financial condition of the Borrower and the Significant
Subsidiaries on a consolidated basis.
Section 4.02. Corporate Power and Authorization. Borrower and
each Guarantor is duly authorized and empowered to execute,
deliver, and perform under all Loan Documents to which it is a
party; the Borrower's and each Guarantor's board of directors or
other governing body has authorized the Borrower and each Guarantor
to execute and perform under those Loan Documents to which it is a
party; and all other corporate and/or shareholder and/or
partnership action on Borrower's part and on each Guarantor's part
required for the due execution, delivery, and performance of the
Loan Documents has been duly and effectively taken.
Section 4.03. Binding Obligations. This Agreement is, and the
Notes, Master Letter of Credit Demand Note, Guaranties and other
Loan Documents when executed and delivered in accordance with this
Agreement will be, legal, valid and binding upon the Borrower and
the Guarantors, respectively, enforceable in accordance with their
respective terms, subject to no defense, counterclaim, set-off, or
objection of any kind.
Section 4.04. No Legal Bar or Resultant Lien. The Borrower's
and each Guarantor's execution, delivery and performance of those
Loan Documents to which it is a party do not constitute a default
under, and will not violate any provisions of the articles of
incorporation or bylaws of Borrower or the respective Guarantor,
any contract, agreement, law, regulation, order, injunction,
judgment or decree to which Borrower or any Guarantor is subject,
or result in the creation or imposition of any lien upon any
Properties of Borrower or any Guarantor, other than those
contemplated by the Loan Documents (provided, however, that the
parties acknowledge that with respect to the Panola County Bond
Obligations, the Hanseatic Obligations and the Shelby County Bond
Obligations, Borrower may be required to obtain waivers of certain
breaches of certain financial covenants contained in the documents
evidencing such obligations, prior to borrowing under this
Agreement), which violation, creation or imposition would have a
material adverse effect on the business, Properties, operations or
financial condition of the Borrower and the Significant
Subsidiaries on a consolidated basis, or on the ability of the
Borrower or any Guarantor to perform its obligations under this
Agreement or any of the other Loan Documents.
Section 4.05. No Consent. Borrower's and each Guarantor's
execution, delivery, and performance of the Loan Documents do not
require the consent or approval of any other Person, which has not
been obtained (provided however that the parties acknowledge that
with respect to the Panola County Bond Obligations, the Hanseatic
Obligations and the Shelby County Bond Obligations, Borrower may be
required to obtain waivers of certain breaches of certain financial
covenants contained in the documents evidencing such obligations
prior to borrowing under this Agreement).
Section 4.06. Liabilities and Litigation. There is no
litigation, legal or administrative proceeding, investigation, or
other action of any nature pending or, to the knowledge of
Borrower, threatened against or affecting Borrower or any
Subsidiary, not fully covered by insurance, that may materially
adversely affect the business or the Properties of the Borrower and
the Significant Subsidiaries on a consolidated basis, the ability
of Borrower or any Guarantor to carry out the terms of the Loan
Documents, or the ability of Borrower and the Significant
Subsidiaries on a consolidated basis, to carry on its/their
business as now conducted. Notwithstanding any provision to the
contrary contained herein, the representation and warranty
contained in this Section 4.06 hereof shall not, insofar as made
when any Advance is requested or made under the Loans, and upon
execution and delivery of this Loan Agreement, include the
litigation matters disclosed in the Registration Statement, but
only to the extent such litigation matters are disclosed in all
material respects therein and only to the extent the nature and
amount of such litigation, and the likely outcome thereof, have not
changed from such disclosures in any material respect, all the
foregoing of which shall constitute notice under Sections
5.02(a)(iv) and 6.10(iii) and (iv) hereof.
Section 4.07. Taxes; Governmental Charges. Borrower and each
Subsidiary of Borrower has filed or caused to be filed all tax
returns and reports required to be filed and has paid all taxes,
assessments, fees, and other governmental charges levied upon it or
upon any of its Properties or income, which are due and payable,
including interest and penalties, in each case the failure to file
or pay which would have a material adverse effect on the business,
Properties, financial condition or operations of the Borrower and
the Significant Subsidiaries on a consolidated basis, or on the
ability of the Borrower or any of the Guarantors to perform their
obligations under this Agreement or any of the other Loan
Documents. Borrower and each Subsidiary has made all required
withholding deposits, the failure to make which would have a
material adverse effect on the business, Properties, financial
condition or operations of the Borrower and the Significant
Subsidiaries on a consolidated basis, or on the ability of the
Borrower or any of the Guarantors to perform its obligations under
this Agreement or any of the other Loan Documents. There are no
unpaid assessments pending against Borrower or any Subsidiary for
any taxes or withholdings, and neither Borrower nor any Subsidiary
knows of any basis therefor, in each case which would have a
material adverse effect on the business, Property, financial
condition or operations of the Borrower and the Significant
Subsidiaries on a consolidated basis or on the ability of the
Borrower or any of the Guarantors to perform its obligations under
this Agreement or any of the other Loan Documents.
Section 4.08. Title, Etc. Borrower and each Guarantor has
good title to its Properties, free and clear of all liens except
those referenced or reflected in the financial statements described
in Section 4.14 hereof, and except for any defects in title which
would not have a material adverse effect on the business,
Properties, financial condition or operations of the Borrower and
the Significant Subsidiaries on a consolidated basis or on the
ability of the Borrower or any of the Guarantors to perform its
obligations under this Agreement or any of the other Loan
Documents. Borrower and each Guarantor possesses all trademarks,
copyrights, trade names, patents, licenses, and rights therein,
adequate for the conduct of its business as now conducted and
presently proposed to be conducted, except insofar as would not
have a material adverse effect on the business, Properties,
financial condition or operations of the Borrower and the
Significant Subsidiaries on a consolidated basis or on the ability
of the Borrower or any of the Guarantors to perform its obligations
under this Agreement or any of the other Loan Documents.
Section 4.09. No Default. Borrower is not in default, and no
Subsidiary of Borrower is in default, in any respect that
materially adversely affects the business, Properties, operations,
or condition, financial or otherwise, of the Borrower and the
Significant Subsidiaries on a consolidated basis, under any
indenture, mortgage, deed of trust, credit agreement, note,
agreement, or other instrument to which Borrower or any Subsidiary
is a party or by which it or its Properties are bound. No party to
any such indenture, mortgage, deed of trust, credit agreement,
note, agreement or other instrument has declared a default
thereunder which such default or breach would have a material
adverse effect on the business, Properties, financial condition or
operations of the Borrower and the Significant Subsidiaries on a
consolidated basis, or has notified Borrower or any Subsidiary of
the occurrence of any breach or default thereunder involving Debt
of $1,100,000 or more. Notwithstanding any provision to the
contrary herein, the representation and warranty contained in this
Section 4.09 shall not, insofar as made when any Advance is
requested or made under the Loan, and upon execution and delivery
of this Agreement, include any reference to the Enviroq
Obligations.
Section 4.10. Compliance with Laws, Etc. Borrower is not in
violation, and no Subsidiary is in violation, of any law, judgment,
decree, order, ordinance, or governmental rule or regulation to
which Borrower or any Subsidiary of Borrower, or any of its
respective Properties, is subject, which violation would have a
material adverse effect on the business, Properties, financial
condition or operations of the Borrower and the Significant
Subsidiaries on a consolidated basis, or on the ability of the
Borrower or any of the Guarantors to perform their obligations
under this Agreement or any of the other Loan Documents. Borrower
is in compliance in all material respects with the applicable
provisions of ERISA. The Borrower has not incurred any "accumulated
funding deficiency" within the meaning of ERISA, and the Borrower
has not incurred any material liability to PBGC in connection with
any Plan, which deficiency or liability would be materially adverse
to the business, Properties, financial condition or operations of
the Borrower and the Significant Subsidiaries, on a consolidated
basis. Notwithstanding any provision to the contrary contained
herein, the representation and warranty contained in the first
sentence of this Section 4.10, insofar as relating to the business,
Properties, financial condition or operations of the Borrower and
the Significant Subsidiaries on a consolidated basis, and insofar
as made when any Advance is requested or made under the Loan, and
upon execution and delivery of this Loan Agreement, shall not
include the subject of the litigation matters described under the
final sentence of Section 4.06 hereof or of Borrower's letter to
Third National Bank in Nashville dated January 6, 1995, but only to
the extent set forth therein.
Section 4.11. Subsidiaries, Etc. As of the date hereof,
Borrower has no Significant Subsidiaries other than the Significant
Subsidiaries specifically listed in the definition of "Significant
Subsidiary" in Article 1 of this Agreement and other than the
Exempted Significant Subsidiaries. For purposes of any subsequent
Advance hereunder, the Significant Subsidiaries so referenced shall
be deemed to include Significant Subsidiaries later acquired or
created (provided Borrower is in compliance with Section 6.13
hereof).
Section 4.12. No Material Misstatements. No information,
exhibit, or report furnished or to be furnished by Borrower to
Lenders in connection with this Agreement, contain as of the date
thereof, or will contain as of the Closing Date, any material
misstatement of fact or failed or will fail to state any material
fact, the omission of which would render the statements therein
materially false or misleading.
Section 4.13. Use of Proceeds; Purpose of the Credit.
Borrower will use proceeds from the Loan exclusively for the
purposes stated in this Agreement. No proceeds of the Loans will be
used for any purpose that violates, or that would be inconsistent
or not in compliance with, the provisions of any of Regulation G,
Regulation T, Regulation U or Regulation X of the Board of
Governors of the Federal Reserve System, as the same may be in
effect from time to time.
Section 4.14. Financial Statement. The consolidated financial
statements of the Borrower dated December 31, 1994 previously
delivered by Borrower to Agent, and Borrower's financial statements
dated June 30, 1995 delivered by Borrower to Agent, fairly and
accurately present the consolidated financial condition of Borrower
(including the Subsidiaries at such dates) as of such dates and
have been prepared in accordance with generally accepted accounting
principles consistently applied. The consolidated financial
statements of IMA dated September 30, 1994 previously delivered by
Borrower to Agent, and IMA's financial statements dated June 30,
1995 delivered by Borrower to Agent fairly and accurately present
the consolidated financial condition of IMA as of such dates and
have been prepared in accordance with generally accepted accounting
principles consistently applied. Since June 30, 1995, there has
been no material, adverse change in the consolidated financial
condition of, respectively, Borrower and IMA as disclosed by such
financial statements, subject to the matters set forth therein and
without reference to any expenses associated with the IMA Merger or
the restructuring provisions in connection therewith in all
material respects in an amount not to exceed a total of
$15,000,000.
Section 4.15. Investment Company Act. Neither Borrower nor
any of its Subsidiaries is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
Section 4.16. Securities Act, Etc. The Notes and the Master
Letter of Credit Demand Note are not required to be registered
under the Securities Act of 1933, as amended, or under the
securities laws of any state. This Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended.
Section 4.17. Personal Holding Company; Subchapter S. Neither
the Borrower nor any of its Subsidiaries is a "personal holding
company" as defined in Section 542 of the Code, and Borrower is not
a "Subchapter S" corporation within the meaning of the Code.
Section 4.18. Solvency. Borrower individually and Borrower on
a consolidated basis is now and, after giving effect to the Loans
to be made hereunder, will be, Solvent.
Section 4.19. Filings. To the date hereof, Borrower has filed
all reports and statements required to be filed with the Securities
and Exchange Commission. As of the date thereof, the Registration
Statement referred to above complied in all material respects with
all rules and regulations promulgated by the Securities and
Exchange Commission and did not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
ARTICLE V. CONDITIONS PRECEDENT.
Section 5.01. Initial Conditions. Lenders' obligation to
extend credit and STB's obligation to issue any Letter of Credit or
make a Swing Line Loan hereunder is subject to the Conditions
Precedent that Agent shall have received (or agreed in writing to
waive or defer receipt of) all of the following, each duly
executed, dated and delivered as of the Closing Date (except as
otherwise indicated herein), in form and substance satisfactory to
Agent and its counsel:
(a) Note and Loan Documents. The Notes of Borrower
payable to the order of Lenders, respectively, the Master
Letter of Credit Demand Note of Borrower payable to the order
of STB, the Guaranties and all other Loan Documents;
(b) Evidence Of All Corporate Action By The Borrower.
Certified (as of the date of this Agreement) copies of all
corporate action taken by the Borrower, including resolutions
of its Board of Directors, authorizing the execution,
delivery, and performance of the Loan Documents to which it is
a party and each other document to be delivered pursuant to
this Agreement;
(c) Incumbency And Signature Certificate Of The
Borrower. A certificate (dated as of the date of this
Agreement) of the Secretary of the Borrower certifying the
names and true signatures of the officers of the Borrower
authorized to sign the Loan Documents to which it is a party
and the other documents to be delivered by the Borrower under
this Agreement;
(d) Opinion of Counsel For the Borrower and the
Subsidiaries. A favorable opinion of Krugman, ▇▇▇▇▇▇▇▇ and
Grimshaw, counsel for the Borrower and the Subsidiaries, in
substantially the form of Exhibit D and as to such other
matters as the Agent may reasonably request;
(e) Evidence Of All Corporate and Partnership Action By
The Guarantors. Certified (as of the date of delivery of their
respective Guaranties) copies of all corporate and partnership
action taken by the Guarantors and by the general partners of
Insituform Southwest and any other Partners, including
resolutions of their Boards of Directors, authorizing the
execution, delivery, and performance of the Guaranties;
(f) Incumbency And Signature Certificates Of The
Guarantors. A certificate (dated as of the date of delivery of
their respective Guaranties) of the secretary or assistant
secretary of each of the Guarantors, and/or of the secretaries
or assistant secretaries of the Partners of the partnership
Guarantors, certifying the names and true signatures of the
officers of the Guarantors authorized to sign the Guaranties,
and of the officers of the Partners authorized to sign on
behalf of Insituform Southwest and any other partnership
Guarantor;
(g) Other Opinions, Approvals And Documents. The Agent
shall have received such other approvals, opinions or
documents as the Agent or its counsel may reasonably request;
(h) No Material Adverse Change. No material adverse
changes in the financial or other condition of Borrower or any
of the Guarantors shall have occurred since the date of this
Agreement which, in the reasonable opinion of Lenders, is
likely to materially adversely affect the ability of Borrower
to perform its obligations under this Agreement, or of the
Guarantors to collectively perform their obligations under the
Guaranties (in each case without reference to any expenses
incurred in the IMA Merger or the restructuring provisions in
connection therewith in all material respects in an amount not
to exceed a total of $15,000,000).
(i) Certificates of Good Standing. Certificates of good
standing of Borrower and each corporate Guarantor from the
states of their incorporation and of Borrower in each state in
which Borrower has qualified to do business and is doing
business, in each case dated a date reasonably proximate to
Closing, as reasonably accepted by Agent;
(j) Consents, Etc. Certified copies of all documents
evidencing any necessary corporate action, consents, and
governmental approvals (if any) with respect to this Agreement
and the Loan Documents;
(k) Charter and By-Laws. Copies of Borrower's and
corporate Guarantors' and the Partners' by-laws and articles
of incorporation, and a copy of the partnership agreement of
Insituform Southwest (and any other partnership Guarantor)
(including all amendments thereto) certified by the secretary
of Borrower or the respective Guarantor, and by the partners
of Insituform Southwest (and any other partnership Guarantor),
as being true and complete copies of the current by-laws,
articles of incorporation and partnership agreement of
Borrower, the Partners, and the Guarantors, as applicable;
(l) Fees. Payment of the fees required to be paid by
Borrower to Agent and/or Lenders as of the Closing Date;
(m) Request for Borrowing. A Request for Borrowing,
properly completed and signed by Borrower;
(n) Letter of Credit Application(s) and Agreement(s).
Applications and Agreements for Standby Letters of Credit in
STB's customary form therefor, properly completed and signed
by Borrower or a Subsidiary for each Letter of Credit
requested to be issued as of the Closing Date, together with
payment of the facing fee therefor; and
(o) Other. Such other documents as Lenders may
reasonably request.
Section 5.02. All Borrowings; Acquisitions.
(a) The Lenders' obligations to extend credit under any
of the Notes and/or the obligations of STB to issue any Letter
of Credit are subject to the following additional Conditions
Precedent which shall be met when an Advance is requested and
an Advance is made and when the issuance of a Letter of Credit
is requested and a Letter of Credit is issued: (i) The
representations of the Borrower contained in Article IV are
true and correct as of the date of the requested Advance and
as of the date of the requested Letter of Credit, with the
same effect as though made on the date additional funds are
advanced and/or the Letter of Credit is issued; (ii) There has
been no material adverse change in the Borrower's consolidated
financial condition since the date of the last borrowing
hereunder (in each case without reference to any expenses
incurred in connection with the IMA Merger or the
restructuring provisions in connection therewith in all
material respects in an amount not to exceed a total of
$15,000,000); (iii) No Event of Default has occurred and
continues to exist; (iv) No material litigation or
governmental proceedings not disclosed in writing by the
Borrower to the Lenders prior to the date of the execution and
delivery of this Agreement is pending or known to be
threatened against the Borrower, which could reasonably be
expected to materially adversely affect the financial position
or business of the Borrower and the Significant Subsidiaries
on a consolidated basis or impair the ability of the Borrower
or the Guarantors to perform their obligations under this
Agreement or any other Loan Documents (in each case subject to
the final sentence of Section 4.06 hereof); (v) If Borrower
has a Significant Subsidiary (other than an Exempted
Significant Subsidiary) that has been owned by Borrower for 90
days or more which Significant Subsidiary did not previously
execute a Guaranty in favor of Agent and Lenders, such
Significant Subsidiary shall have executed a Guaranty, and
Agent shall have received copies as to such Significant
Subsidiary of all items described in Section 5.01 (provided,
that if such Significant Subsidiary is a limited liability
company or limited liability partnership, such Significant
Subsidiary shall have delivered also its articles of
organization, operating agreement, articles of conversion and
management agreement, as applicable); (vi) If a requested
Advance would cause a breach of a financial covenant under any
of the documents executed in connection with the Bond
Obligations or the Hanseatic Obligations, evidence reasonably
satisfactory to Agent that such breach has been waived; (vii)
if a borrowing is requested, a properly-completed Borrowing
Request has been received by Agent by at least three (3)
Business Days prior to the requested date of such borrowing in
the case of LIBOR Loans, and at least two (2) Business Days
prior to the requested date of such borrowing in the case of
Loans bearing interest at the Base Rate plus the Applicable
Margin; and (viii) if issuance of a Letter of Credit is
requested, a properly-completed Application and Agreement for
Standby Letter of Credit in STB's customary form therefor, has
been received by Agent at least three (3) Business Days prior
to the requested issuance date for such Letter of Credit,
together with payment of the facing fee therefor.
(b) Information Concerning Acquisitions. If any portion
of a requested Advance (or any Letter of Credit) is to be used
in connection with a Permitted Acquisition, and approval of
the Agent on behalf of the Required Lenders is required
hereunder, the Agent shall have received the following
information from the Borrower, in writing: (i) full
identification of any licensee or sublicensee, and/or its
holding company, or joint venture or Subsidiary interest being
acquired with the proceeds of the Loan; (ii) an explanation of
the terms of the acquisition, including without limitation the
purchase price; (iii) the estimated amount of goodwill that
will be added to the Borrower's balance sheet; (iv) historical
financial statements for any licensee or sublicensee acquired
with proceeds of the Loan, covering the three years
immediately preceding such acquisition, in a form reasonably
satisfactory to the Lenders, together with a current interim
financial statement of such entity, in a form reasonably
satisfactory to the Lenders, containing such information as
the Lenders may reasonably request; and (v) pro forma
financial statements for the period from the commencement of
Borrower's most recently completed fiscal year through the end
of its most recently completed fiscal quarter showing that
giving effect to such Permitted Acquisition Borrower would be
in compliance with the financial covenants described in this
Agreement for such period and that no default under such
covenants would occur by reason thereof.
Section 5.03. Additional Conditions to Funding. In addition
to the other Conditions Precedent set forth in this Agreement,
Borrower agrees with Agent and Lenders that prior to any funding or
Advances or the issuance of any Letters of Credit under this
Agreement:
(a) the IMA Merger must have occurred and Agent must
receive such reasonable evidence thereof as it may request.
The request by Borrower of any Advance under the Loan and/or
the issuance of any Letter of Credit shall be and is hereby
deemed to be a representation by Borrower that the IMA Merger
was made in accordance with applicable law and was not in
violation of any law, rule, order, regulation or other
governmental requirement, and that the IMA Merger complied
with the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976.
Additionally, as part of the initial funding of the Loan, all
of the Refinanced Indebtedness must be fully paid to The
Boatmen's National Bank of St. Louis and ▇▇▇▇ ▇▇▇▇▇ Bank and
IMA must be fully released from all liability and contractual
obligations to The Boatmen's National Bank of St. Louis and
▇▇▇▇ ▇▇▇▇▇ Bank, and evidence thereof reasonably satisfactory
to Agent must be furnished to Agent; and
(b) the Intercreditor Creditor Agreement previously
executed among Borrower, STB (as Third National Bank in
Nashville), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇.▇.
Investment Co., Pipe Recon Product, Ltd., Gelco Services, Inc.
and certain other parties dated October 21, 1994, as
previously amended in connection with the Prior TNB Loan
Agreement, must be further amended pursuant to documentation
reasonably satisfactory to Agent and Lenders to reflect that
the TNB Debt described therein has been replaced by the Loan
facility described herein, and to provide that the agreements
between the parties under the Intercreditor Credit Agreement
as to the TNB Debt shall relate to the Loans described herein.
ARTICLE V-A. POST-CLOSING CONDITIONS
Section 5A.01. Post-Closing Conditions and Agreements.
Borrower has requested that Agent and Lenders agree that the
duties, obligations and agreements described below may be performed
by Borrower after the Closing Date for the convenience of the
Borrower, and Borrower agrees that each and all of the following
duties, obligations and agreements will be performed and fulfilled
by the deadlines described below:
(a) All Liens securing the Refinanced Indebtedness must
be released and terminated, and Borrower shall, if Agent so
requests, furnish Agent with the results of UCC lien searches,
real property searches and/or other evidence that no such
liens exist, as Agent may reasonably request. All of the
foregoing shall be accomplished as promptly as practicable but
in any event by 100 days after the Closing Date.
(b) If required by STB, the documents, instruments and
agreements executed in connection with the Panola County Bond
Obligations must be amended by documentation reasonably
satisfactory to STB to provide that such obligations,
documents, instruments and agreements are fully cross-
defaulted with this Agreement and the Loans described herein,
and STB must receive an opinion of counsel reasonably
satisfactory to STB as to matters reasonably requested by STB
regarding such Panola County Bond Obligations and amendments.
All of the foregoing shall be accomplished by no later than
ninety (90) days after the Closing Date or as soon thereafter
as practicable provided Borrower is diligently pursuing such
action.
ARTICLE VI. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, during the term of this
Agreement (including any extensions hereof) and until all Loans and
any fees or expenses due the Agent or any Lender have been finally
paid, satisfied in full, and/or any amounts are available to be
requested or disbursed hereunder, and provided that there are no
unreimbursed drafts under any Letters of Credit, and so long as any
Letter of Credit is outstanding (unless Borrower has otherwise
pledged to STB reasonably satisfactory cash collateral for such
Letters of Credit, in an amount equal to the aggregate face amounts
of all such Letters of Credit, pursuant to documentation reasonably
satisfactory to STB), unless Agent shall otherwise first consent in
writing, Borrower shall:
Section 6.01. Financial Statements and Reports. Make no
changes in the dates of its Fiscal Year and Fiscal Quarters, and
promptly furnish to Agent and each Lender:
(a) Annual Reports. As soon as available, and in any
event within ninety (90) days after the close of each Fiscal
Year, from the present independent certified public
accountants of Borrower or by such other firm of independent
public accountants as may be designated by Borrower and be
reasonably satisfactory to the Agent, the audited consolidated
Financial Statements of the Borrower and its Subsidiaries
setting forth the audited consolidated and unaudited
consolidating balance sheets of Borrower and its Subsidiaries
at the end of such year, and the audited consolidated and
unaudited consolidating statements of income, statements of
cash flows, and statements of retained earnings of Borrower
and its Subsidiaries for such year, setting forth in each case
in comparative form (beginning when comparative data are
available) the corresponding figures for the preceding Fiscal
Year, together with the unqualified opinion of such
accountants regarding the fairness in all material respects of
such financial statements and their compliance with GAAP,
except as otherwise specified therein;
(b) Quarterly and Year-to-Date Reports. As soon as
available and in any event within forty-five (45) days after
the end of each Fiscal Quarter, the unaudited consolidated and
consolidating balance sheet of Borrower and its Subsidiaries
as of the end of such Fiscal Quarter and the unaudited
consolidated and consolidating statement of income of Borrower
and its Subsidiaries for such Fiscal Quarter and for the
period from the beginning of the Fiscal Year to the close of
such quarter, all certified by the chief financial or chief
accounting officer of the Borrower as being true and correct
to the best of his or her knowledge;
(c) Reports Concerning Subject Business. Quarterly with
the delivery of the financial statements described in Section
6.01(b) above, Borrower shall deliver to Agent a report
showing the identity of all Non-Guaranteeing Subsidiaries and
Non-Guaranteeing Joint Venturers engaged in any Subject
Business and to which amounts were advanced or loaned by
Borrower or any Guaranteeing Subsidiary during the immediately
preceding quarter (and exempted from the provisions of Section
7.10 by reason of clause (iv) thereof), including a
description of all amounts loaned to or received by such Non-
Guaranteeing Subsidiaries and Non-Guaranteeing Joint Ventures
from Borrower or any Guaranteeing Subsidiary (and so
exempted), the location of any project or projects entering
into such calculation for such quarter, and the status of such
project or projects, and such other information in connection
therewith as Agent may reasonably request; and
(d) Other Information. At the same time as they are
filed with the Securities and Exchange Commission, copies of
Borrower's 10-Q and 10-K reports, and at the same time as they
are released to the public, copies of all press releases
issued by Borrower and/or any of its Subsidiaries, and, with
reasonable promptness, such other information as the Agent
and/or the Lenders may from time to time reasonably request.
All such balance sheets and other Financial Statements referred to
in Sections 6.01(a) and (b) hereof shall conform to GAAP on a basis
consistent with those of previous Financial Statements.
Section 6.02. Certificates of Compliance. Concurrently with
the furnishing of the annual Financial Statements pursuant to
Section 6.01(a) hereof and the quarterly Financial Statements
pursuant to Section 6.01(b) hereof, furnish or cause to be
furnished to Agent a certificate of compliance in the form of
Exhibit G hereto, certified by the president or chief accounting or
financial officer of the Borrower, stating that neither such
officer nor the Borrower has obtained knowledge of any Event of
Default, or event which, after notice or lapse of time (or both),
would constitute an Event of Default or, if such officer or the
Borrower has obtained such knowledge, disclosing the nature,
details, and period of existence of such event.
Section 6.03. Taxes and Other Liens. Pay and cause the
Subsidiaries to pay and discharge promptly all taxes, assessments,
and governmental charges or levies imposed upon it or upon any of
its income or Property as well as all claims of any kind (including
claims for labor, materials, supplies, and rent) which, if unpaid,
might become a Lien (other than Liens permitted under Section 7.02)
upon any or all of its Property, the failure to pay which might
have material adverse effect on the business, Properties, financial
condition or operations of the Borrower and its Significant
Subsidiaries on a consolidated basis; provided, however, that
Borrower or such Subsidiary shall not be required to pay any such
tax, assessment, charge, levy, or claim if the amount,
applicability, or validity thereof shall currently be contested in
good faith by appropriate proceedings diligently conducted and if
Borrower or such Subsidiary shall establish reserves therefor
adequate under GAAP.
Section 6.04. Maintenance.
(a) Maintain its corporate existence;
(b) cause each Subsidiary to maintain its corporate
existence, the failure to maintain which would have a material
adverse effect on the business, Properties, operations or
financial condition of the Borrower and its Significant
Subsidiaries on a consolidated basis and except as otherwise
permitted under Section 7.06;
(c) Remain and cause each Subsidiary to remain
substantially in the business in which it is currently engaged
(other than changes to such business by Subsidiaries that
would not have a material adverse effect on the business,
Properties, operations or financial condition of Borrower or
on Borrower and the Subsidiaries as a whole);
(d) Observe and comply and cause each Subsidiary to
observe and comply (to the extent necessary so that any
failure will not materially and adversely affect the business
or Property of the Borrower and the Significant Subsidiaries
on a consolidated basis) with all applicable laws, statutes,
codes, acts, ordinances, orders, judgments, decrees,
injunctions, rules, regulations, certificates, franchises,
permits, licenses, authorizations, and requirements of all
federal, state, county, municipal, and other governments; and
(e) Maintain and cause each Subsidiary to maintain its
Property (and any Property leased by or consigned to it or
held under title retention or conditional sales contracts) in
good and workable condition at all times and make all repairs,
replacements, additions, and improvements to its Property
reasonably necessary and proper to ensure that the business
carried on in connection with its Property may in all respects
material to the business, financial condition or operations of
the Borrower and its Significant Subsidiaries on a
consolidated basis, be conducted properly and efficiently at
all times.
Section 6.05. Further Assurances. Promptly cure any defects
in the creation, issuance, and delivery of the Loan Documents.
Borrower at its expense promptly will execute and deliver to Agent
upon request all such other and further documents, agreements, and
instruments in compliance with or accomplishment of the covenants
and agreements of Borrower in the Loan Documents, or to correct any
omissions in the Loan Documents, or to state more fully the
Obligations and agreements set out in any of the Loan Documents, or
to file any notices, or to obtain any consents, all as may be
reasonably necessary or appropriate in connection therewith.
Section 6.06. Performance of Obligations.
(a) Pay the indebtedness of Borrower to Lenders
hereunder and the other Obligations according to the terms of
the Notes and this Agreement, and pay the indebtedness and
obligations of Borrower to Lenders under the Master Letter of
Credit Demand Note and/or the Letters of Credit and the other
Loan Documents; and
(b) do and perform, and cause to be done and to be
performed, every act and discharge all of the obligations
provided to be performed and discharged by Borrower under the
Notes, the Master Letter of Credit Demand Note and the other
Loan Documents, at the time or times and in the manner
specified.
Section 6.07. Insurance. Maintain and continue to maintain,
and cause the Subsidiaries to maintain and continue to maintain,
with financially sound and reputable insurors, insurance reasonably
satisfactory in type, coverage and amount to Agent against such
liabilities, casualties, risks, and contingencies and in such types
and amounts as is customary in the case of corporations engaged in
the same or similar businesses and similarly situated insofar as
appropriate in order to avoid any material adverse effect on the
business, Properties, operations or financial condition of the
Borrower and the Significant Subsidiaries on a consolidated basis.
Upon request of Agent, Borrower will furnish or cause to be
furnished to Agent from time to time a summary of the insurance
coverage of Borrower and the Subsidiaries in form and substance
satisfactory to Agent and if requested will furnish Agent copies of
the applicable policies.
Section 6.08. Accounts and Records. Keep books of record and
account, in which full, true, and correct entries will be made of
all dealings or transactions in accordance with GAAP.
Section 6.09. Right of Inspection. Permit and cause the
Subsidiaries to permit any officer, employee, or agent of Agent or
any Lender as may be designated by Agent to visit and inspect any
of the Property of Borrower or the Subsidiaries, to examine
Borrower's and the Subsidiaries' books of record and accounts, to
take copies and extracts from such books of record and accounts,
all at such reasonable times and upon reasonable (which may be
same-day) notice and as often as Agent may reasonably desire.
Section 6.10. Notice of Certain Events. Promptly notify Agent
if Borrower learns of the occurrence of (i) any event that
constitutes an Event of Default together with a detailed statement
by a responsible officer of Borrower of the steps being taken as a
result thereof; or (ii) other than the matters identified in
Schedule 2 or in connection with the Enviroq Obligations, the
receipt of any notice from, or the taking of any other action by,
the holder of any promissory note, debenture, or other evidence of
Debt of Borrower or of any security (as defined under the
Securities Act of 1933, as amended) of Borrower, representing Debt
in excess of $500,000, with respect to a claimed default, together
with a detailed statement by an officer of Borrower specifying the
notice given or other action taken by such holder and the nature of
the claimed default and what action Borrower is taking or proposes
to take with respect thereto; or (iii) subject to the final
sentence of Section 4.06 herein, any legal, judicial, or regulatory
proceedings affecting Borrower in which the amount involved is
material and is not covered by insurance or which, if adversely
determined, would have a material and adverse effect on the
business or the financial condition of Borrower; or (iv) subject to
the final sentence of Section 4.06 herein, any dispute between
Borrower and any governmental or regulatory authority or any other
person, entity, or agency which, if adversely determined, might
materially interfere with the normal business operations of
Borrower; or (v) any material adverse changes, either individually
or in the aggregate, in the assets, liabilities, financial
condition, business, operations, affairs, or circumstances of
Borrower from those reflected in the Financial Statements or from
the facts warranted or represented in any Loan Document (other than
as a result of any expenses associated with the IMA Merger, or the
restructuring provisions in connection therewith in all material
respects in an amount not to exceed a total of $15,000,000).
Section 6.11. ERISA Information and Compliance. Comply and
cause those Subsidiaries subject thereto to comply in all respects
in which noncompliance might cause a material adverse effect on the
business, Properties, financial condition or operations of the
Borrower and its Significant Subsidiaries on a consolidated basis,
with ERISA and all other applicable laws governing any pension or
profit sharing plan or arrangement to which Borrower or any
Subsidiary is a party. Borrower shall provide Agent and shall cause
those Subsidiaries subject thereto to provide Agent with notice of
any "reportable event" or "prohibited transaction" or the
imposition of a "withdrawal liability" within the meaning of ERISA.
Section 6.12. Management. Give immediate notice to Lenders of
any change in the senior management of Borrower, other than as
identified in the Registration Statement.
Section 6.13. Acquired Subsidiaries' Guaranties. In the event
of the Borrower's acquisition or creation subsequent to the date
hereof of any Significant Subsidiary, cause each such Significant
Subsidiary (other than an Exempted Significant Subsidiary) to
execute Guaranties and deliver to Lenders the related articles of
incorporation, bylaws, certificates of good standing, certificates
of incumbency, attorney opinion letters and all other applicable
items described in Article 5 related thereto, within 90 days after
the acquisition or creation by Borrower thereof.
Section 6.14. Indemnification of Agent and Lenders. Borrower
agrees to and hereby does indemnify and hold harmless Agent and
each Lender and each director, officer, employee, affiliate, and
agent thereof (each of the foregoing being referred to as an
"indemnified person") against, and to reimburse each indemnified
person, upon its demand, for any losses, claims, damages,
liabilities or other expenses ("Losses") incurred by such
indemnified person in connection with claims asserted against such
indemnified person by parties other than Borrower or its
Subsidiaries if such Losses arise out of or in connection with this
Agreement, the Letters of Credit or the Loans, including, without
limitation, Losses in connection with any legal proceeding relating
to any of the foregoing (whether or not such indemnified person is
a party thereto); provided that the foregoing will not apply to any
Losses to the extent that such losses result from the gross
negligence or willful misconduct of such indemnified person, and
will not apply to any amount paid in settlement of claims without
the Borrower's written consent having been obtained, which consent
shall not be unreasonably withheld. Neither Agent nor any other
indemnified person, nor the Borrower, shall be responsible or
liable to any other person for consequential damages which may be
alleged as a result of this Agreement. Reasonably promptly after an
indemnified person receives notice of the commencement of any
action in respect of which indemnification or reimbursement may be
sought hereunder, the indemnified person will notify the Agent and
Borrower thereof (provided, that if at the time of receipt by the
indemnified person of notice of the commencement of such action the
indemnified party has not identified such action as one in respect
of which indemnification may be sought, failure to notify the
Borrower promptly after receipt of such notice shall not limit,
waive or adversely affect the indemnification by the Borrower, and
promptly after such identification is made the indemnified person
shall give notice thereof to the Borrower). If any such action or
other proceeding shall be brought against any indemnified person,
the Borrower shall, upon written notice given reasonably promptly
following such a notice to the Borrower of such action or
proceeding, be entitled to assume the defense thereof at the
Borrower's expense with counsel chosen by the Borrower and
reasonably satisfactory to the indemnified persons; provided,
however, that the Borrower will keep the indemnified persons fully
informed with respect to such action or proceeding and the content
thereof and any indemnified person may at its own expense retain
separate counsel to participate in such defense. Notwithstanding
the foregoing, in no event shall the Borrower be required to pay
fees and expenses under this indemnity for more than one firm of
attorneys in any jurisdiction in any one legal action. The
obligations and indemnifications arising under this Section 6.14
shall survive termination of this Agreement, payment of the Loans
and the indebtedness arising in connection with the Letters of
Credit, and expiration of the Letters of Credit.
Section 6.15. Notice of Equity Offerings. Give to Agent and
cause any Subsidiary to give to Agent at least five (5) days prior
notice of any proposed equity offering intended to or that could
give rise to Offering Proceeds, and deliver to Agent any
information concerning which proposed equity offering that Agent
may reasonably request.
ARTICLE VII. NEGATIVE COVENANTS.
Borrower covenants and agrees that, during the term of this
Agreement (including any extensions hereof) and until all Loans and
any fees or expenses due the Agent or any Lender have been finally
paid, satisfied in full, and/or any amounts are available to be
requested or disbursed hereunder, and provided that there are no
unreimbursed drafts under any Letters of Credit, and so long as any
Letter of Credit is outstanding (unless Borrower has otherwise
pledged to STB reasonably satisfactory cash collateral for such
Letters of Credit, in an amount equal to the aggregate face amounts
of all such Letters of Credit, pursuant to documentation reasonably
satisfactory to STB), unless Agent shall otherwise first consent in
writing, Borrower will not, and will not allow or suffer any of its
Subsidiaries to,:
Section 7.01. Debts, Guaranties, and Other Obligations.
Incur, create, assume, suffer to exist or in any manner become or
be liable with respect to any Debt; provided that subject to all
other provisions of this Article, the foregoing prohibitions shall
not apply to: (a) any Debt outstanding on June 30, 1995 that is
reflected on the June 30, 1995 financial statement of Borrower or
IMA (as such statements supplement the most recent year-end
statements of the Borrower or IMA, respectively), that have been
delivered to Agent, or subsequently incurred pursuant to credit
lines in effect at June 30, 1995, or incurred in the ordinary
course of business for customary operating needs from June 30, 1995
to the date hereof; (b) indebtedness incurred under or pursuant to
this Agreement or any other agreement between Borrower or any
Subsidiary and STB; (c) trade indebtedness incurred in the ordinary
course of business payable (and paid) within 120 days of its
incurrence, whether paid directly or by reimbursement in connection
with any letter of credit facility; (d) any subordinated
indebtedness in form, amount and substance reasonably approved in
advance in writing by the Required Lenders and subordinated by
subordination agreements reasonably satisfactory to the Agent; (e)
Debt of a corporation acquired by the Borrower or a Subsidiary
subsequent to the date of this Agreement, which Debt was incurred
prior to such acquisition and is outstanding on the date of such
acquisition; (f) intercompany Debt arising solely among Borrower
and its Subsidiaries that is not otherwise prohibited under Section
7.10 of this Agreement; (g) guaranties given in the ordinary course
of business to secure bids or contracts or performance bonds
relating to work to be performed by Borrower or a Subsidiary; (h)
the matters identified on Schedule 3; and (i) the Substitute
Revolving Credit Facility described in Section 2.21, if all
conditions to such facility are fully met; (j) indebtedness not to
exceed $10,000,000 in the aggregate incurred by Borrower in
connection with tax-advantaged financing under United States or
Mississippi law for the construction of new facilities in
Batesville, Mississippi, provided that the availability under the
Revolving Credit Loans, and the corresponding Maximum Total Amount,
shall be reduced by the amount of all such indebtedness incurred;
and (k) other indebtedness (including guarantees therefor) not to
exceed $5,000,000 in the aggregate for Borrower and its
Subsidiaries at one time outstanding.
Section 7.02. Liens. Grant or permit to exist any Lien in, or
otherwise encumber, any of its Properties or assets or permit any
of the Subsidiaries to grant or permit to exist any Lien in, or
otherwise encumber, any of such Subsidiary's Properties or assets,
except for (i) Liens now existing (including Liens existing on the
date of acquisition of any corporation subsequently acquired by
Borrower as a Subsidiary in accordance with this Agreement) (except
for Liens securing the Refinanced Indebtedness, which must be
released); (ii) Liens for taxes not yet due and payable or which
are being actively contested in good faith by appropriate
proceedings; (iii) Liens arising in favor of the Lenders in
connection with this Agreement, and/or liens arising in favor of
STB; (iv) Liens incurred or pledges and deposits made in connection
with worker's compensation, unemployment insurance, old age
pensions, social security and public liability laws and similar
legislation; (v) liens securing the performance of bids, tenders,
leases, contracts (other than for the repayment of borrowed money),
statutory obligations, surety and appeal bonds and other
obligations of like nature, incurred as an incident to and in the
ordinary course of business; (vi) statutory liens of landlords and
other liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's and vendor's liens, incurred in good
faith in the ordinary course of business; (vii) zoning
restrictions, easements, licenses, reservations, restrictions on
the use or transfer of real property which do not in the aggregate
materially detract from the value of the property or assets of the
Borrower and its Subsidiaries taken as a whole, or materially
impair the use of such property or assets in the operations of the
business of the Borrower or any Subsidiary; (viii) attachment,
judgment or similar liens so long as the finality of any judgments
related thereto in excess of $500,000 in the aggregate is being
contested in good faith, and for which adequate reserves have been
provided in the financial statements of the Borrower; (ix) liens on
the improvements constructed with the proceeds of the financing
permitted under clause (j) under Section 7.01, and/or on the real
property on which such improvements are located, securing only such
indebtedness permitted under Section 7.01(j); and (x) liens
securing any property for rent or hire or any deferred purchase
price for any property.
Section 7.03. Investments. Subject to any limitations
otherwise provided in this Agreement:
(a) purchase or own any stock or other securities or
other ownership interest in any corporation, firm, or other
entity other than the Subsidiaries owned by Borrower or a
Subsidiary on the date of this Agreement or other than any of
Borrower's direct or indirect licensees and sublicensees, or
joint ventures or investments in similar or related businesses
with respect to the Insituform process, the NuPipe process or
other pipeline rehabilitation or construction business,
provided that such purchases and/or investments not reflected
in Borrower's or IMA's June 30, 1995 financial statements
delivered to Agent in each case is (i) a Permitted Acquisition
or (ii) is the IMA Merger or (iii) is in a Subsidiary that
becomes a Guarantor pursuant to the terms of this Agreement
provided that such investments or ownership interests in
Subsidiaries that become Guarantors do not exceed $5,000,000
per Guarantor or are otherwise consented to by the Agent on
behalf of the Lenders, which consent will not be unreasonably
withheld by the Lenders or other than investments or interests
of no more than $125,000 in any Subsidiary that is not a
Significant Subsidiary.
(b) invest in excess of 20% of its liquid assets in
other marketable securities (such 20% limitation shall not
apply to United States government backed securities, United
States government bonds and United States Treasury
investments).
Compliance with the foregoing Section 7.03(a) or with Section
7.10, in the event that Borrower or any Subsidiary is required by
the terms of an existing commitment (or any joint venture
arrangement of whatever legal form) including any investment
described in the Registration Statement under the caption "Business
of ITI Investments" or in connection with Insituform Linings Plc,
Midsouth Partners, Insituform Technologies Limited, or Insituform
Permaline Ltd., shall not in and of itself be deemed to constitute
a conflict with or a breach or default under such commitment
including so as to cause an Event of Default under this Loan
Agreement.
Section 7.04. Dividends, Distributions, and Redemptions;
Issuance of Stock. In any Fiscal Year commencing with the
Borrower's Fiscal Year beginning January 1, 1995, declare or pay
any dividend (other than dividends payable solely in common stock
of Borrower), or purchase, redeem, or otherwise retire or acquire
for value any of its stock, now or hereafter outstanding, or apply
or set apart any of its assets, or return any capital to its
stockholders, or make any distribution of its assets to its
stockholders as such, in excess of fifty percent (50%) of the
aggregate net income (as defined in accordance with GAAP) of
Borrower and its Subsidiaries, on a consolidated basis, for such
Fiscal Year and the prior Fiscal Year. Dividends may be paid no
more often than quarterly in any Fiscal Year. One-half of all
Offering Proceeds must be applied to the Obligations owed to the
Lenders arising from this Agreement (or any amendment hereto or
restatement hereof), if required by the Lenders, and all such
Offering Proceeds shall be applied first to outstanding expenses,
then to accrued interest, and then to principal in the inverse
order of maturity.
Section 7.05. Nature and Ownership of Business. Suffer or
permit any material change to be made in the character of
Borrower's business as carried on at the Closing Date, or any
change in the business of the Borrower or the Subsidiaries that
would materially change the character of business of the Borrower
and the Significant Subsidiaries on a consolidated basis.
Section 7.06. Mergers, Dispositions, Etc. (a) Except for the
acquisition by NuPipe Limited of Insituform Permaline Limited in a
scheme of arrangement under English law, sell, assign, lease,
transfer, or otherwise dispose of (whether in one transaction or in
a series of transactions) all or substantially all of its Property
(or any Subsidiary), or the Property (whether now owned or
hereafter acquired) of any of its Subsidiaries, to any Person,
except for transfers to a Subsidiary that is also a Guarantor that
has been previously approved by the Lenders, and that has executed
and delivered to Lenders its Guaranty and all related items as
described in Article 5 of this Agreement; or (b) consolidate with
or merge into, or permit any Subsidiary to consolidate with or
merge into, any other corporation or entity, (i) unless no Event of
Default (without reference to this Section 7.06) has occurred or
would occur after giving effect to such merger, and (ii) (x) unless
the Borrower or a Subsidiary that is also a Guarantor that has been
previously approved by the Lenders and that has executed and
delivered to Lenders its Guaranty and all related items as
described in Article 5 of this Agreement is the surviving entity,
or (y) such transaction is effectuated in order to consummate a
Permitted Acquisition and is effectuated by a newly-formed
Subsidiary (which is not a Significant Subsidiary) created for that
purpose; (c) suffer or permit in whole or in part dissolution or
liquidation of Borrower or any Subsidiary (except in a transaction
permitted by clause (b) immediately preceding and except, with
regard to a Subsidiary, but not with regard to the Borrower, in a
transaction permitted by clause (a) immediately preceding); or (d)
permit a reorganization or sale of securities that would cause
Borrower to no longer maintain control of the Subsidiaries (other
than any Subsidiary subject to a transaction permitted under
clauses (a), (b) or (c) immediately preceding). For purposes of
this Agreement, Lenders have previously approved as Guarantors all
Subsidiaries identified by name under the definition of
"Significant Subsidiary" in this Agreement.
Section 7.07. Transactions With Affiliates. Except for
transactions between Borrower and the Subsidiaries, or between
Subsidiaries, which are not otherwise prohibited by this Agreement,
enter into or be a party to any transaction or arrangement with any
Affiliate (including, without limitation, the purchase from, sale
to or exchange of Property with, or the rendering of any service by
or for, any Affiliate), except for transactions entered into prior
to the date hereof, which are noted in the Registration Statement
if material, and except in the ordinary course of and pursuant to
the reasonable and customary standards, practice and requirements
of the Borrower's business and upon fair and reasonable terms no
less favorable to the Borrower or such Subsidiary than would be
obtained by a Person other than an Affiliate in a comparable arm's
length transaction with Borrower or such Subsidiary. Borrower and
Lenders agree that this Section shall not be construed so as to
allow, and shall be read so as to disallow, pricing below cost on
product sales by Borrower or any Guarantor to any Affiliate, other
than sales to Borrower or a Guarantor.
Section 7.08. Use of Loan Proceeds. Permit the proceeds of
the Loan to be used for any purpose other than the purposes
described in Section 2.05 of this Agreement.
Section 7.09. Disposition of Assets. Dispose of any of its
assets or any assets of any of its Subsidiaries, other than as
permitted under Section 7.06 and other than in the ordinary course
of Borrower's (or the respective Subsidiary's, as applicable)
present business upon terms not materially adverse to Borrower (or
the applicable Subsidiary), and in any event only for full and
adequate consideration.
Section 7.10. No Loans. Make any loans, advances or
extensions of credit to any person or entity, except for such
loans, advances or extensions (i) set forth in the Registration
Statement (and except for loans made pursuant to the commitments
described in the Registration Statement), (ii) made to employees of
the Borrower or any Subsidiary not to exceed an aggregate of
$1,200,000, (iii) made to the Borrower or any Subsidiary that is
also a Guarantor that has been previously approved by the Lenders,
and that has executed and delivered to Lenders its Guaranty and all
related items as described in Article 5 of this Agreement; (iv) (A)
made to the entities described on Schedule 4 by Borrower, by United
Pipeline Systems USA, Inc. ("UPSI") and by INA Acquisition Corp. in
the amounts described in said Schedule, which amounts (for purposes
of this sub-clause (A)), may not be increased (except for interest
thereon and changes resulting from currency fluctuations) (and,
once repaid, may not be reborrowed or readvanced, except for the
amount from UPSI to United Sistema de Tuberias Ltd., which may be
readvanced), plus (B) amounts required to be loaned or invested by
Borrower or a Subsidiary due to a pro-rata call on all shareholders
of Insituform Linings Plc, to the extent permitted under Section
7A.01(a) of this Agreement, plus (C) other amounts (exclusive of
amounts identified elsewhere under clauses (i) through (v) of this
Section 7.10) to any Non-Guaranteeing Subsidiary or any Non-
Guaranteeing Joint Venture, in the aggregate (and when combined
with amounts permitted under Section 7A.01(a) to Insituform Linings
from Borrower) not exceeding $10,000,000 (of which not greater than
$5,000,000 shall be for loans, advances or extensions of credit
outside of the Subject Business) (a "Non-Guaranteeing Subsidiary",
for purposes of this Agreement, means any Subsidiary that is not an
approved Guarantor and that has not delivered to Lenders the
Guaranty and related items described in Article 5, and the "Non-
Guaranteeing Subsidiaries" means, collectively, each Non-
Guaranteeing Subsidiary; and a "Non-Guaranteeing Joint Venture",
for purposes of this Agreement, means any joint venture, in
whatever legal form, that has not delivered to Lenders the Guaranty
and other items described in Article 5 and to which the Borrower or
any Subsidiary is a party, provided that the position of Borrower
or its Subsidiary (or their respective representatives) in such
joint venture is as an active participant (whether or not as
manager) in connection with Subject Business and is not solely an
investment position, and the "Non-Guaranteeing Joint Ventures"
means, collectively, each Non-Guaranteeing Joint Venture); (v)
subject in all respects to Section 7.13 hereof, if due from Non-
Guaranteeing Subsidiaries and Non-Guaranteeing Joint Ventures in
respect of goods sold and services rendered, provided such amounts
(other than amounts for management or similar services from the
Borrower or a Guaranteeing Subsidiary to a Non-Guaranteeing
Subsidiary, and interest thereon, provided the amounts referenced
in this parenthetical clause do not represent cash advances or non-
service property transfers from the Borrower or such Guaranteeing
Subsidiary to such Non-Guaranteeing Subsidiary) shall not be
outstanding for longer than 120 days; (vi) extensions of credit
made for the purchase of goods and services in the ordinary course
of business to customers that are not Non-Guaranteeing Subsidiaries
or Non-Guaranteeing Joint Venturers); and (vii) otherwise made to
any licensee, sublicensee, vendor, sales agent or distributor not
to exceed $2,000,000 in the aggregate; provided, however, that a
Non-Guaranteeing Subsidiary may make loans, advances or extensions
of credit to the Borrower or any Subsidiary so long as such loans,
advances or extensions are not otherwise prohibited by this
Agreement (without reference to this Section 7.10).
Section 7.11. Prepayments of Other Debts. Prepay any Debt
(excluding trade payables) to any Person, except that the foregoing
restriction shall not apply to the Obligations (unless otherwise
expressly prohibited by another provision herein or in any Loan
Document) or to the Enviroq Obligations.
Section 7.12. Financial Covenants. On a consolidated basis
for Borrower and its Subsidiaries (compliance with the provisions
hereof to be measured solely at the time of delivery of each
certificate under Section 6.02 hereof).
(a) Interest Coverage Ratio. Permit EBIT divided by
Fixed Charges, calculated on a trailing four quarters period
(it being acknowledged and agreed that all measurements for
the quarters ended, respectively, September 30, 1995, June 30,
1995, March 31, 1995 and December 31, 1995 shall give
retroactive effect to the IMA Merger on a pooling-of-interests
basis), to equal or be less than 3.0 to 1.0 at any time.
(b) Funded Debt to Total Capitalization. Permit the
ratio of Funded Debt to Total Capitalization to be equal to or
greater than .70 to 1.0 at any time from the Closing Date
through December 31, 1996, or equal to or greater than .50 to
1.0 at any time thereafter.
(c) Tangible Net Worth. Permit Tangible Net Worth
(including Offering Proceeds raised in any equity offering) to
be less at any time than the amounts and for the periods
indicated below:
Time Periods Minimum Tangible Net Worth
From the Closing Date $50,000,000 (less
expenses associated with
through December 31, 1995 the IMA Merger and
restructuring provisions
in connection therewith,
not to exceed the total
amount of $15,000,000)
plus Offering Proceeds
received in any equity
offerings closed during
1995 (said sum being
referred to herein as
"1995 Required Net
Worth")
From January 1, 1996 1995 Required Net Worth
plus Offering Proceeds
through December 31, 1996 received in any equity
offerings closed during
1996 (said sum being
referred to as "1996
Required Net Worth")
From January 1, 1997 1996 Required Net Worth
plus 50 percent of net
through December 31, 1997 earnings, determined in
accordance with GAAP, for
1996, plus Offering
Proceeds received in any
equity offerings closed
during 1997 (said sum
being referred to as
"1997 Required Net
Worth")
From January 1, 1998 1997 Required Net Worth
plus 50 percent of net
through December 31, 1998 earnings, determined in
accordance with GAAP, for
1997, plus Offering
Proceeds received in any
equity offerings closed
during 1998 (said sum
being referred to as
"1998 Required Net
Worth")
From January 1, 1999 1998 Required Net Worth
plus 50 percent of net
through December 31, 1999 earnings, determined in
accordance with GAAP, for
1998, plus Offering
Proceeds received in any
equity offerings closed
during 1999 (said sum
being referred to as
"1999 Required Net
Worth")
From January 1, 2000 1999 Required Net Worth
plus 50 percent of net
through the Maturity Date earnings, determined in
accordance with GAAP, for
1999 plus Offering
Proceeds received in any
equity offerings closed
during the year 2000.
(d) Ratio of Funded Debt to EBITDA. Permit the ratio of
Funded Debt to EBITDA, calculated on a trailing four-quarter
period (it being acknowledged and agreed that all measurements
for the quarters ended respectively, September 30, 1995, June
30, 1995, March 31, 1995 and December 31, 1994 shall give
retroactive effect to the IMA Merger on a pooling-of-interests
basis), to equal or exceed 2.5 to 1.0 at any time from the
Closing Date through December 31, 1996, or 2.0 to 1.0 at any
time beginning January 1, 1997 and thereafter.
Section 7.13. Transactions with Guarantors. The Borrower
shall not, and its Subsidiaries who are Guarantors shall not, take
any action, and shall not allow any action to be taken, that would
result in direct or indirect loans, or in transactions that could
be construed as direct or indirect loans by the Borrower or such
Subsidiary, to any Subsidiary that is not a Guarantor approved by
Lenders that has delivered to Lenders its Guaranty and the other
related items described in Article 5 of this Agreement (as used in
this section, a "Guarantor") in excess of the loans permitted to be
made to such non-guaranteeing Subsidiaries under Section 7.10,
including without limitation pricing below cost on product sales by
the Borrower or its Subsidiaries who are Guarantors to Subsidiaries
that are not Guarantors.
ARTICLE VIIA. SPECIAL AGREEMENT REGARDING INSITUFORM LININGS PLC
AND MIDSOUTH PARTNERS
Section 7A.01. Insituform Linings Plc and Midsouth Partners.
With regard to Insituform Linings Plc, an English corporation
("Insituform Linings"), and Midsouth Partners, a general
partnership, Lenders acknowledge that they have been informed that
the Borrower does not, as of the Closing Date, have control over
Insituform Linings or Midsouth Partners, or that control thereover
is disputed. Therefore, Borrower and Lenders agree that:
Neither Insituform Linings nor Midsouth Partners shall be
deemed to be included within the term "Subsidiary" as that term is
used in Article 6 and Article 7 of this Agreement, except for
Section 7.12 of this Agreement. Additionally, Insituform Linings
shall not be deemed to be a "Subsidiary" to which the Events of
Default described in Article 8 of this Agreement apply, except for
Sections 8.01 (g), (h), (i), (j) and (o).
Provided, however, that notwithstanding any provision herein
to the contrary (and/or the effect, on any other provision of this
Agreement, of the agreements set forth above), the Borrower and
Lenders agree that:
(a) The Borrower and the other Subsidiaries (excluding
Insituform Linings and Midsouth Partners, respectively) shall
not have the ability to lend monies to, guarantee loans or
performance of, obtain bonds for, or otherwise extend credit
to or on behalf of or for the benefit of, or make itself or
any of its property liable for any indebtedness or obligations
of, Insituform Linings or invest additional capital in
Insituform Linings (except for amounts permitted under Section
7.10(iv)(C) as if Insituform Linings were a Non-Guaranteeing
Subsidiary and except that in the event Insituform Linings
makes a call on all shareholders on a pro-rata basis according
to the interest of each shareholder, Borrower or a Subsidiary
shall be permitted to loan or invest the amount of such call,
as the case may be, if such does not otherwise cause a Default
under this Agreement); and
(b) The Borrower and its Subsidiaries shall not deal
with Insituform Linings or Midsouth Partners on any basis
other than an arm's-length basis, no more favorable to
Insituform Linings or Midsouth Partners than to an entity not
owned (wholly or partially) by the Borrower, and shall not
dispose of or transfer any property or assets to Insituform
Linings or Midsouth Partners except for full and adequate
consideration; and
(c) Should the Borrower at any time gain control of
Insituform Linings or acquire the entire interest in Midsouth
Partners, Borrower agrees that immediately upon gaining such
control or interest Insituform Linings or Midsouth Partners as
the case may be, shall be deemed to be a "Subsidiary" for all
purposes under this Agreement, and the provisions of this
Section 7A.01 shall terminate.
ARTICLE VIII. EVENTS OF DEFAULT.
Section 8.01. Events of Default. Any of the following events
shall be considered an Event of Default as those terms are used in
this Agreement, unless otherwise consented to by the Agent:
(a) Borrower fails to make payment within five (5) days
of the due date (or, with respect to the Swing Line Note,
within three (3) days after demand is made thereunder or
otherwise within three (3) days after the Maturity Date
thereof (as "Maturity Date" is defined in the Swing Line
Note)) of any payment of interest or principal on any of the
Notes or due hereunder or under any of the Loan Documents; or
if the Revolving Credit Loans are in effect and have not been
prepaid in whole and terminated, Borrower fails on the date
any draw is honored or paid under a Letter of Credit to make
payment to STB, by means of an advance (whether deemed or
otherwise) under the Revolving Credit Note, the proceeds of
which are paid to STB, in the amount of all amounts advanced
by STB due to such draw on such Letter of Credit (provided,
that should a draw under a Letter of Credit be honored or paid
after 2:00 p.m. (Nashville, Tennessee time) on a Business Day,
the failure of the Lenders to remit to Agent their Percentages
of the deemed advance under the Revolving Credit Loan to pay
such draw by the close of Agent's business on the date of such
draw shall not constitute a default by Borrower hereunder, it
being understood that in such case the Agent may nevertheless
pay on the date of the draw the amount of the draw by means of
a deemed Advance under the Revolving Credit Loans on the date
of the draw, and the Lenders shall remit to Agent their
Percentages by 12:00 noon on the next Business Day); or
Borrower fails within three (3) days after the date demand is
made therefor to make payment to STB of all amounts owing to
STB under the Master Letter of Credit Demand Note;
(b) Failure by Borrower to pay to STB within five (5)
days from the due date thereof (in each case after expiration
of any applicable notice or cure periods, if any, without
timely cure) any principal or interest due on any other
indebtedness of Borrower to STB, now existing or hereafter
owing or arising, direct or contingent, secured or unsecured,
including without limitation any indebtedness or obligations
arising in connection with the Panola County Bond Obligations
or any documents, instruments or agreements now or hereafter
executed in connection therewith or with any of the
indebtedness evidenced thereby; or
(c) Any other default by Borrower or any of the
Subsidiaries under any document, note, agreement or
understanding with, held by, or executed in favor of STB which
is not cured within twenty (20) days from receipt by Borrower
of written notice from Lenders specifying such default (unless
a shorter cure period is expressly applicable to such default,
or it is expressly stated that no notice requirement or cure
period is applicable thereto, in which case such shorter cure
period, or such no notice requirement or cure period, shall
apply with respect thereto)
(d) Should any representation or warranty contained
herein or made by or furnished on behalf of Borrower or any of
the Subsidiaries in connection herewith be false or misleading
in any material respect as of the date made; or
(e) Failure to perform or observe any covenant, or
agreement, duty or obligation (other than those for which an
Event of Default is specifically listed in this Section 8.01,
for which no notice or cure period, or a shorter cure period,
is specified) contained in this Agreement within twenty (20)
days after Agent sends written notice to Borrower specifying
such non-performance; provided, however, that default or
breach of any of the financial covenants described in Section
7.12 shall not be subject to a notice requirement or cure
period); or
(f) Failure by Borrower or any of the Subsidiaries to
pay its debts generally as they become due; or
(g) Concealing, removing, or permitting to be concealed
or removed, any part of the Property of Borrower or any of the
Subsidiaries, with intent to hinder, delay or defraud its
creditors or any of them, or making or suffering a transfer of
any Property of Borrower or any of the Subsidiaries which may
be fraudulent under any bankruptcy, fraudulent conveyance or
similar law; or making any transfer of any of Property of
Borrower or any of the Subsidiaries to or for the benefit of
a creditor at a time when other creditors similarly situated
have not been paid, or suffering or permitting, while
insolvent, any creditor to obtain a lien upon any Property of
Borrower or any of the Subsidiaries through legal proceedings
or distraint which is not vacated within thirty days from the
date thereof;
(h) In each case except for Insituform Group Limited, an
Isle of Man corporation which Borrower represents has no
material assets and will not have any material assets
("Insituform Group Limited"), and except for the acquisition
by NuPipe Limited of Insituform Permaline Limited in a scheme
of arrangement under English law, and except as otherwise
permitted under this Agreement, a receiver, custodian,
liquidator, or trustee of Borrower or of any Subsidiary, or of
any of its respective Property, is appointed by the order or
decree of any court or agency or supervisory authority having
jurisdiction; or Borrower or any Subsidiary is adjudicated
bankrupt or insolvent; or any of the Property of Borrower or
any Subsidiary is sequestered by court order or a petition is
filed against Borrower and/or any Subsidiary under any state
or federal bankruptcy, reorganization, debt arrangement,
insolvency, readjustment of debt, dissolution, liquidation, or
receivership law of any jurisdiction, whether now or hereafter
in effect (and if made involuntarily against Borrower or such
Subsidiary, without the consent or cooperation of Borrower or
any Subsidiary, is not dismissed within 60 days of the filing
thereof) (it being acknowledged and agreed that no notice
requirement on the part of Agent or any Lender, and no cure
period except for the 60 days in which Borrower or the
applicable Subsidiary may obtain a dismissal of an involuntary
bankruptcy petition, shall apply to this Subsection 8.01(h));
or
(i) In each case except for Insituform Group Limited,
and except for the acquisition by NuPipe Limited of Insituform
Permaline Limited in a scheme of arrangement under English
law, and except as otherwise permitted by this Agreement,
Borrower or any Subsidiary takes affirmative steps to prepare
to file, or Borrower or any Subsidiary files a petition in
voluntary bankruptcy or to seek relief under any provision of
any bankruptcy, reorganization, debt arrangement, insolvency,
readjustment of debt, dissolution, or liquidation law of any
jurisdiction, whether now or hereafter in effect, or consents
to the filing of any petition against it under any such law
(it being acknowledged and agreed that no notice requirement
on the part of Agent or any Lender, and no cure period, shall
apply to this Subsection 8.01(i)); or
(j) In each case except for Insituform Group Limited,
and except for the acquisition by NuPipe Limited of Insituform
Permaline Limited in a scheme of arrangement under English
law, and except as otherwise permitted by this Agreement,
Borrower or any Subsidiary makes an assignment for the benefit
of its creditors, or admits in writing its inability to pay
its debts generally as they become due, or consents to the
appointment of a receiver, trustee, or liquidator of Borrower
(or any Subsidiary) or of all or any part of its Properties
(it being acknowledged and agreed that no notice requirement
on the part of Agent or any Lender, and no cure period, shall
apply to this Subsection 8.01 (j)); or
(k) Borrower or any Significant Subsidiary (other than
Pipe Rehab International, Inc.) discontinues its usual
business (it being acknowledged and agreed that no notice
requirement on the part of Agent or any Lender, and no cure
period, shall apply to this Subsection 8.01(k) and it being
acknowledged that Insituform Permaline Limited may discontinue
such business pursuant to a scheme of arrangement under
English law with NuPipe Limited); or
(l) Subject to any applicable grace period or waiver
prior to any due date, Borrower or any Subsidiary fails to
make any payment due on any Debt in excess of $1,100,000
(other than the Enviroq Obligations), or any Debt in an
aggregate of $5,000,000 or more (including the Enviroq
Obligations), or any other event shall occur or any condition
shall exist with respect to any Debt of Borrower or any
Subsidiary in excess of such limits or under any agreement
securing or relating to such Debt the effect of which is to
cause any holder of such Debt or other security or a trustee
to cause such Debt or security, or a portion thereof, to
become due prior to its stated maturity or prior to its
regularly scheduled dates of payment; or
(m) If final judgment for the payment of money in excess
of $1,000,000, or any judgments aggregating $5,000,000 are
rendered by any court or other governmental authority against
Borrower and/or any Subsidiary which is not fully covered
(less a reasonable deductible) by insurance or which is not
discharged, paid, satisfied or appealed, or execution is not
stayed, within 120 days of the date of the said judgments,
respectively; or
(n) Should any Guarantor give notice that the Guarantor
is terminating or attempting to terminate or revoke its
Guaranty, or assert that its guaranty is unenforceable, or
should any other event occur that results in the termination
or invalidity of the Guaranty of any Guarantor; or
(o) Borrower shall fail to observe or perform within any
applicable grace period any covenant or agreement contained in
any agreement, document or instrument relating to the
Substitute Revolving Credit Facility permitted under Section
2.21, or the tax-advantaged financing permitted under Section
7.01(j), in each case if entailing Debt in excess of
$1,100,000, or any other event shall occur if the effect of
such failure or other event is to accelerate, or to permit the
holder of such Substitute Revolving Credit Facility or such
tax-advantaged financing, in each case entailing Debt in
excess of $1,100,000, or any other Person to accelerate, the
maturity of such Substitute Revolving Credit Facility or such
tax-advantaged financing, or the Substitute Revolving Credit
Facility or tax-advantaged financing shall be required to be
prepaid in whole or in part prior to its stated maturity;
(p) Borrower or any Subsidiary violates any law,
judgment, decree, order, ordinance, or governmental rule or
regulation to which Borrower or any Subsidiary of Borrower, or
any of its respective Properties, is subject, which violation
would have a material adverse effect on the business,
Properties, financial condition or operations of the Borrower
and the Significant Subsidiaries on a consolidated basis, or
on the ability of the Borrower or any of the Guarantors to
perform their obligations under this Agreement or any of the
other Loan Documents; or Borrower or any Subsidiary fails or
refuses at any and all times to remain current in its
financial reporting requirements pursuant to such laws, rules,
and regulations or pursuant to the rules and regulations of
any exchange upon which any shares of Borrower or any
Subsidiary are traded, which failure or refusal would have a
material adverse effect on the business, Properties, financial
condition or operations of the Borrower and the Significant
Subsidiaries on a consolidated basis, or on the ability of the
Borrower or any of the Guarantors to perform their obligations
under this Agreement or any of the other Loan Documents.
Section 8.02. Cross-Default. It is the Borrower's intention
that all indebtedness and obligations owed by Borrower to STB, now
existing and hereafter arising or owing, direct or contingent,
secured or unsecured, and howsoever evidenced, be fully cross-
defaulted.
Section 8.03. Remedies. Upon the happening of any Event of
Default set forth above, with the exception of those events set
forth in Section 8.01(h) and 8.01(i): (i) the Agent, pursuant to
instruction from the Required Lenders, may declare the entire
principal amount of all Obligations then outstanding, including
interest accrued thereon, to be immediately due and payable without
presentment, demand, protest, notice of protest, or dishonor or
other notice of default of any kind, all of which Borrower hereby
expressly waives; (ii) at the sole discretion and option of STB,
all obligations of STB to issue any Letter of Credit shall
immediately cease and terminate unless and until STB shall
reinstate such obligations in writing, and with regard to any then-
outstanding Letters of Credit, Borrower shall, on Agent's request,
pledge to Agent reasonably satisfactory cash collateral to secure
the face amounts of such Letters of Credit; (iii) at the Required
Lenders' sole discretion and option, evidenced by notice from the
Agent, all other obligations of the Lenders under this Agreement
shall immediately cease and terminate unless and until the Required
Lenders, evidenced by notice from the Agent, shall reinstate such
obligations in writing; and/or (iv) the Required Lenders may bring
one or more actions to protect or enforce their rights under the
Loan Documents or seek to collect and/or enforce the Obligations
and any indebtedness or obligations arising in connection with the
Master Letter of Credit Demand Note and/or any of the Letters of
Credit by any lawful means.
Upon the happening of any event specified in Section 8.01(h)
and Section 8.01(i): (i) all Obligations, including all principal,
accrued interest, and other charges or monies due in connection
therewith shall be immediately and automatically due and payable in
full, without presentment, demand, protest, or dishonor or other
notice of any kind, all of which Borrower hereby expressly waives,
(ii) at the sole discretion and option of STB, all obligations of
STB to issue any Letter of Credit shall immediately cease and
terminate unless and until STB shall reinstate such obligations in
writing, and with regard to any then-outstanding Letters of Credit,
Borrower shall, at Agent's request, pledge to Agent reasonably
satisfactory cash collateral to secure the face amounts of such
Letters of Credit; (iii) all other obligations of Lenders under
this Agreement shall immediately cease and terminate unless and
until Lenders shall reinstate such obligations in writing; and/or
(iv) the Required Lenders may bring an action to protect or enforce
its rights under the Loan Documents or seek to collect and/or
enforce the Obligations and any indebtedness or obligations arising
in connection with the Master Letter of Credit Demand Note and/or
any of the Letters of Credit by any lawful means.
Section 8.04. Right of Set-off. Upon the occurrence and
during the continuance of any Event of Default, each Lender (and
any participant of this Loan under Section 2.04) is authorized, at
any time and from time to time, without notice to Borrower (any
such notice being expressly waived by Borrower), to set-off and
apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at
any time owing by any Lender to or for the credit or the account of
Borrower against any and all of the Obligations, the Master Letter
of Credit Demand Note and/or any of the Letters of Credit, and/or
any other Debt of Borrower to any Lender, irrespective of whether
or not Lenders shall have accelerated the Obligations or Master
Letter of Credit Demand Note or made any demand under this
Agreement or the Notes or Master Letter of Credit Demand Note and
although such Obligations, Master Letter of Credit Demand Note or
other Debt may be unmatured.
ARTICLE IX. THE AGENT.
Section 9.01. Appointment of Agent. Each Lender hereby
designates STB as Agent to administer all matters concerning the
Loans and to act as herein specified. Each Lender hereby
irrevocably authorizes, and each holder of any Note by the
acceptance of a Note shall be deemed irrevocably to authorize, the
Agent to take such actions on its behalf under the provisions of
this Agreement, the other Loan Documents and all other instruments
and agreements referred to herein or therein, and to exercise such
powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Agent by the terms
hereof and thereof and such other powers as are reasonably
incidental thereto. The Agent may perform any of its duties
hereunder by or through its agents or employees. The Lenders agree
that neither the Agent nor any of its directors, officers,
employees or agents shall be liable for any action taken or omitted
to be taken by it or them hereunder or in connection herewith,
except for its or their own gross negligence or willful misconduct.
The Lenders agree that the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any of the Lenders, and no implied
covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise be
imposed upon or exist against the Agent.
Section 9.02. Authorization of Agent with Respect to the Loan
Documents. (a) Each Lender hereby authorizes the Agent to enter
into each of the Loan Documents and to take all action contemplated
thereby, all in its capacity as Agent for the ratable benefit of
the Lenders. All rights and remedies under the Loan Documents may
be exercised by the Agent for the benefit of the Agent and the
Lenders upon the terms thereof. The Lenders further agree that the
Agent may assign its rights and obligations under any of the Loan
Documents to any affiliate of the Agent, if necessary or
appropriate under applicable law, which assignee in each such case
shall (subject to compliance with any requirements of applicable
law governing the assignment of such Loan Documents) be entitled to
all the rights of the Agent under and with respect to the
applicable Loan Document.
(b) The Lenders agree that the Agent shall be entitled to use
its discretion with respect to exercising or refraining from
exercising any rights which may be vested in it by, and with
respect to taking or refraining from taking any action or actions
which it may be able to take under or respect of, this Agreement,
unless the Agent shall have been instructed by the Required Lenders
to exercise or refrain from exercising such rights or to take or
refrain from taking such action except for such actions or rights
that expressly require the consent of the Required Lenders or all
of the Lenders. The Lenders agree that the Agent shall incur no
liability under or in respect of this Agreement with respect to
anything which it may do or refrain from doing in the reasonable
exercise of its judgment or which may seem to it to be necessary or
desirable in the circumstances, except for its gross negligence or
willful misconduct. Agent shall incur no liability to any of the
Lenders for giving consent on behalf of the Lenders when under the
terms of this Agreement consent may not be unreasonably withheld.
(c) The Agent shall not be liable to the Lenders or to any
Lender in acting or refraining from acting under this Agreement or
any other Loan Document in accordance with the instructions of the
Required Lenders or all of the Lenders, where expressly required by
this Agreement, and any action taken or failure to act pursuant to
such instructions shall be binding on all Lenders; provided,
however, that the Agent shall not be required to take any action
which exposes the Agent to personal liability or which is contrary
to any Loan Document or applicable law. In each circumstance where
any consent of or direction from the Required Lenders or all of the
Lenders is required or requested by Agent, the Agent shall send to
the Lenders a notice setting forth a description in reasonable
detail of the matter as to which consent or direction is requested
and the Agent's proposed course of action with respect thereto. In
the event the Agent shall not have received a response from any
Lender within five (5) Business Days after Agent sends such notice,
such Lender shall be deemed to have agreed to the course of action
proposed by the Agent.
Section 9.03. Agent's Duties Limited; No Fiduciary Duty. The
Lenders agree that the Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement
and the other Loan Documents. The Lenders agree that none of the
Agent nor any of its respective officers, directors, employees or
agents shall be liable for any action taken or omitted by it as
such hereunder or in connection herewith, unless caused by its or
their gross negligence or willful misconduct. The Agent shall not
have by reason of this Agreement a fiduciary relationship to or in
respect of any Lender, and nothing in this Agreement, express or
implied, is intended to or shall be so construed as to impose upon
the Agent any obligations in respect of this Agreement or the other
Loan Documents except as expressly set forth herein.
Section 9.04. No Reliance on the Agent. (a) Each Lender
represents and warrants to the Agent and the other Lenders that
independently and without reliance upon the Agent, each Lender, to
the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial
condition and affairs of the Borrower and its Subsidiaries in
connection with the taking or not taking of any action in
connection herewith, and (ii) its own appraisal of the
creditworthiness of the Borrower and its Subsidiaries, and, each
Lender further agrees that, except as expressly provided in this
Agreement, the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any
credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time
or times thereafter. As long as any of the Loans are outstanding
and/or any amount is available to be requested or borrowed
hereunder, or this Agreement and the Loan Documents have not been
cancelled and terminated, each Lender shall continue to make its
own independent evaluation of the financial condition and affairs
of the Borrower and its Subsidiaries.
(b) The Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties
herein or in any document, certificate or other writing delivered
in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility, priority or
sufficiency of this Agreement, the Notes, the Master Letter of
Credit Demand Note, the Guaranties, the other Loan Documents, or
any other documents contemplated hereby or thereby, or the
financial condition of the Borrower or any of the Subsidiaries, or
be required to make any inquiry concerning either the performance
or observance of any of the terms, provisions or conditions of this
Agreement, the Notes, the Master Letter of Credit Demand Note, the
Guaranties, the other Loan Documents or the other documents
contemplated hereby or thereby, or the financial condition of the
Borrower or any of the Subsidiaries or the existence or possible
existence of any Default or Event of Default; provided, however, to
the extent that the Agent has been advised in writing that a Lender
has not received any information formally delivered to the Agent
pursuant to Section 8.01, the Agent shall deliver or cause to be
delivered such information to such Lender.
Section 9.05. Certain Rights of Agent. The Lenders agree that
if the Agent shall request instructions from the Required Lenders
(or all of the Lenders where unanimity is expressly required under
the terms of this Agreement) with respect to any action or actions
(including the failure to act) in connection with this Agreement,
the Agent shall be entitled to refrain from such act or taking such
act, unless and until the Agent shall have received instructions
from the Required Lenders (or all of the Lenders where unanimity is
expressly required under the terms of this Agreement); and the
Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Lender shall have
any right of action whatsoever against the Agent as a result of the
Agent acting or refraining from acting hereunder in accordance with
the instructions of the Required Lenders (or, with regard to acts
for which the consent of all of the Lenders is expressly required
under the terms of this Agreement, in accordance with the
instructions of all of the Lenders).
Section 9.06. Reliance by Agent. The Lenders agree that the
Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other documentary, teletransmission or
telephone message reasonably believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person.
The Lenders agree that the Agent may consult with legal counsel
(including counsel for any Lender), independent public accountants
and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
Section 9.07. Indemnification of Agent. To the extent the
Agent is not reimbursed and indemnified by the Borrower, each
Lender will reimburse and indemnify the Agent, ratably according to
the respective amounts of the Loans outstanding hereunder (or if no
amounts are outstanding, ratably in accordance with their
applicable Percentages), in either case, for, from and against any
and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including fees of
experts, consultants and counsel and disbursements) or disburse-
ments of any kind or nature whatsoever that may be imposed on,
incurred by or asserted against the Agent in performing its duties
hereunder, in any way relating to or arising out of this Agreement
or the other Loan Documents; provided that no Lender shall be
liable to the Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct. The obligations and indemni-
fications arising under this Section 9.07 shall survive termination
of this Agreement, repayment of the Loans and indebtedness arising
in connection with the Letters of Credit and expiration of the
Letters of Credit.
Section 9.08. The Agent in its Individual Capacity. With
respect to its obligation to lend under this Agreement, the Loan
made by it and the Note issued to it, the Agent shall have the same
rights and powers hereunder as any other Lender or holder of a Note
and may exercise the same as though it were not performing the
duties of Agent specified herein; and the terms "Lenders,"
"Required Lenders," "holders of Notes," or any similar terms shall,
unless the context clearly otherwise indicates, include the Agent
in its individual capacity. The Agent and its Affiliates may accept
deposits from, lend money to, and generally engage in any kind of
banking, trust, financial advisory or other business with the
Borrower, its Subsidiaries or any Affiliate of the Borrower as if
it were not performing the duties specified herein as Agent, and
may accept fees and other consideration from the Borrower and/or
its Subsidiaries for services in connection with this Agreement and
otherwise without having to account for the same to the Lenders.
Section 9.09. Holders of Notes. The Agent and the Borrower
may deem and treat the payee of any Note as the owner thereof for
all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with the Agent
and the Borrower. Any request, authority or consent of any Person
who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee or assignee of such Note or of
any Note or Notes issued in exchange therefor.
Section 9.10. Successor Agent. (a) The Agent may resign at
any time by giving written notice thereof to the Lenders and the
Borrower and may be removed at any time with cause by the Required
Lenders; provided, however, the Agent may not resign or be removed
until a successor Agent has been appointed and shall have accepted
such appointment. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Agent.
If no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within thirty
(30) days after the retiring Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a bank that maintains an office in
the United States, or a commercial bank organized under the laws of
the United States of America or any State thereof, or any Affiliate
of such bank, having a combined capital and surplus of at least
$100,000,000.
(b) Upon the acceptance of any appointment as the Agent
hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article IX shall inure
to its benefit as to any actions taken or omitted to be taken by it
while it was an Agent under this Agreement.
Section 9.11. Notice of Default or Event of Default. In the
event that the Agent or any Lender shall acquire actual knowledge,
or shall have been notified, of any Default or Event of Default
(other than through a notice by one party hereto to all other
parties), the Agent or such Lender shall promptly notify the Agent,
and the Agent shall take such action and assert such rights under
this Agreement as the Required Lenders or of all the Lenders, where
expressly required by this Agreement, shall request in writing, and
the Agent shall not be subject to any liability by reason of its
acting pursuant to any such request. If, following notification by
Agent to Lenders, the Required Lenders shall fail to request the
Agent to take action or to assert rights under this Agreement in
respect of any Default or Event of Default within five (5) Business
Days after their receipt of the notice of any Default or Event of
Default from the Agent or any Lender, or shall request inconsistent
action with respect to such Default or Event of Default, the Agent
may, but shall not be required to, take such action and assert such
rights (other than rights under Article IX hereof) as it deems in
its discretion to be advisable for the protection of the Lenders.
Section 9.12. Benefit of Agreement.
(a) Any Lender may make, carry or transfer Loans at, to or
for the account of, any of its branch offices or the office of an
Affiliate of such Lender, provided that no such action shall
increase the cost of the Loans to the Borrower.
(b) Each Lender may assign all or a portion of its interests,
rights and obligations under this Agreement (including all or a
portion of any of its commitments (including without limitation its
commitment to participate in Letters of Credit) and the Loans at
the time owing to it and the Notes held by it) to any Eligible As-
signee; provided, however, that (i) the Borrower must give its
prior written consent to such assignment (which consent shall not
be unreasonably withheld or delayed) unless such assignment is an
Affiliate of the assigning Lender or unless an Event of Default has
occurred and is continuing, (ii) the amount of the Loan commitments
of the assigning Lender subject to each assignment (determined as
of the date the assignment and acceptance with respect to such
assignment is delivered to the Agent) shall not be less than an
amount equal to $5,000,000 or greater integral multiples thereof,
and (iii) the parties to each such assignment shall execute and
deliver to the Agent and the Borrower an Assignment and Acceptance,
together with a Note or Notes subject to such assignment and, un-
less such assignment is to an Affiliate of such Lender, a process-
ing and recordation fee of $3,000. Borrower shall not be
responsible for such processing and recordation fee or any costs or
expenses incurred by any Lender or the Agent in connection with
such assignment. From and after the effective date specified in
each Assignment and Acceptance, which effective date shall be at
least five (5) Business Days after the execution thereof, the
assignee thereunder shall be a party hereto and to the extent of
the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement.
Notwithstanding the foregoing, the assigning Lender must retain
after the consummation of such Assignment and Acceptance, a minimum
aggregate amount of Loan commitments of $5,000,000; provided,
however, no such minimum amount shall be required with respect to
any such assignment made at any time there exists an Event of
Default hereunder. Within five (5) Business Days after receipt of
the notice and the Assignment and Acceptance, Borrower, at its own
expense, shall execute and deliver to the Agent, in exchange for
the surrendered Note or Notes, a new Note or Notes to the order of
such assignee in a principal amount equal to the applicable Loan
commitments assumed by it pursuant to such Assignment and
Acceptance and new Note or Notes to the assigning Lender in the
amount of its retained Loan commitment. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be dated
the date of the surrendered Note or Notes that they replace, and
shall otherwise be in substantially the form attached hereto.
(c) No assignment of all or any portion of this Agreement by
any Lender shall be permitted without compliance with the
provisions of Section 2.12(b) hereof, or if such assignment would
violate any applicable securities law. In connection with its
execution and delivery hereof each Lender represents that it is
acquiring its interest herein for its own account for investment
purposes and not with a view to further distribution thereof, and
shall require any proposed assignee to furnish similar
representations to the Agent and the Borrower.
(d) Each Lender may, without the consent of Borrower or the
Agent but subject to the provisions of Section 2.08, sell
participations in its respective Loan and Letter of Credit
commitments to such Lender's affiliate(s), but sales of
participations to Persons other than such Lender's affiliates shall
be made only with the prior consent of the Agent and in all events
subject to said section. Provided, however, that (i) no Lender may
sell a participation in its aggregate Loan and Letter of Credit
commitments (after giving effect to any permitted assignment
hereof) unless it retains an aggregate exposure of at least
$5,000,000 (except that no such limitation shall be applicable to
any such participation sold at any time there exists an Event of
Default hereunder, (ii) such Lender's obligations under this
Agreement shall remain unchanged, (iii) such Lender shall remain
solely responsible to the other parties hereto for the performance
of such obligations, and (v) Borrower and the Agent and other
Lenders shall continue to deal solely and directly with each Lender
in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents, and such Lender shall
retain the sole right to enforce the obligations of Borrower
relating to the Loan and to approve any amendment, modification or
waiver of any provisions of this Agreement. Each Lender shall
promptly notify in writing the Agent and the Borrower of any sale
of a participation hereunder.
(e) Any Lender or participant may, in connection with the
assignment or participation or proposed assignment or
participation, pursuant to this Section 9.12, disclose to the
assignee or participant or proposed assignee or participant any
information relating to Borrower or its Subsidiaries furnished to
such Lender by or on behalf of Borrower or any Subsidiary. With
respect to any disclosure of confidential, non-public, proprietary
information, such proposed assignee or participant shall agree to
use the information only for the purpose of making any necessary
credit judgments with respect to this credit facility and not to
use the information in any manner prohibited by any law, including
without limitation, the securities laws of the United States. The
proposed participant or assignee shall agree in writing not to
disclose any of such information except (i) to directors,
employees, auditors or counsel to whom it is necessary to show such
information, each of whom shall be informed of the confidential
nature of the information and agree to maintain the confidentiality
thereof as described herein, (ii) in any statement or testimony
pursuant to a subpoena or order by any court, governmental body or
other agency asserting jurisdiction over such entity, or as
otherwise required by law (provided prior notice is given to
Borrower and the Agent unless otherwise prohibited by the subpoena,
order or law), and (iii) upon the request or demand of any
regulatory agency or authority with proper jurisdiction. The pro-
posed participant or assignee, and such representatives, shall
further agree to return to Borrower at Borrower's expense all
documents or other written material and copies thereof received
from any Lender, the Agent or Borrower relating to such confiden-
tial information.
(f) Any Lender may at any time assign all or any portion of
its rights in this Agreement and the Notes issued to it to a
Federal Reserve Bank; provided that no such assignment shall
release the Lender from any of its obligations hereunder.
ARTICLE X. GENERAL PROVISIONS.
Section 10.01. Representation and Indemnity Regarding
Hazardous Substances.
(a) Borrower has no knowledge of any spills, releases,
discharges, or disposal of Hazardous Substances that have
occurred or are presently occurring on or onto any of its
Property; or of any spills or disposal of Hazardous Substances
that have occurred or are occurring off any of its Property as
a result of any construction on or operation and use of the
Property; in each case under this paragraph (a) so as to
violate any Environmental Law in a manner that would have a
material adverse effect on the business, Properties or
financial condition of the Borrower and the Significant
Subsidiaries on a consolidated basis or the ability of the
Borrower or the Guarantors to perform their respective
obligations under this Agreement or any of the other Loan
Documents.
(b) Borrower represents that its Property and any
current operation concerning its Property and its business
operations are not in violation of any applicable
Environmental Law and Borrower has no actual knowledge or any
notice from any governmental body claiming that the Property
or its business operations or operations or uses of the
Property have or may result in any violation of any
Environmental Law or requiring or calling attention to the
need for any work, repairs, corrective actions, construction
alterations or installation on or in connection with the
Property or Borrower's business in order to comply with any
Environmental Law with which Borrower has not complied, in
each case under this paragraph (b) wherein such violation
would have a material adverse effect on the business,
Properties, or financial condition of the Borrower and the
Significate Subsidiaries on a consolidated basis. If there are
any such notices which would have such effect with which
Borrower has not complied, Borrower shall provide Agent with
copies thereof. If Borrower receives any such notice which
would have such effect, Borrower will immediately provide a
copy to Agent.
(c) Borrower agrees to indemnify and hold Lenders
harmless from and against any and all claims, demands,
damages, losses, liens, liabilities, penalties, fines,
lawsuits, and other proceedings, costs and expenses
(including, without limitation, reasonable attorneys' fees),
arising directly or indirectly from or out of, or in any way
connected with (i) the presence of any Hazardous Substances on
any of its Property in violation of any Environmental Law;
(ii) any violation or alleged violation of any Environmental
Law relating to Hazardous Substances on any of its Property,
whether attributable to events occurring before or after
Borrower's acquisition of any of its Property; (iii) any
violation of any Environmental Law by Borrower resulting from
the conduct of its business, use of its Property, or
otherwise; or (iv) any inaccuracy in the certifications
contained in this Section 10.01.
As used in this section, the term "release" means any
spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or
disposing into the environment. The term "environment" means
any surface or groundwater, drinking water supply, land,
surface or subsurface strata or the ambient air.
The obligations and indemnifications arising under this
Section 10.01 shall survive termination of this Agreement,
repayment of the Loans and indebtedness in connection with the
Letters of Credit and expiration of the Letters of Credit.
Section 10.02. Notices. All communications under or in con-
nection with this Agreement or any of the other Loan Documents
shall be in writing and shall be mailed by first class certified
mail, postage prepaid, or otherwise sent by telex, telegram,
telecopy, or other similar form of rapid transmission confirmed by
mailing (in the manner stated above) a written confirmation at
substantially the same time as such rapid transmission, or
personally delivered to an officer of the receiving party. All such
communications shall be mailed, sent, or delivered as follows:
(a) if to Borrower, to its address shown below, or to
such other address as Borrower may have furnished to Lenders
in writing:
Insituform Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(b) if to Agent and/or to STB as a Lender, to its
addresses shown below, or to such other address(es) or to such
individual's or department's attention as it may have
furnished Borrower in writing:
with a copy to:
SunTrust Bank, Nashville, N.A. SunTrust Bank, Nashville, N.A.
Suite 320, 6410 Poplar Avenue P.O. Box 305110
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Department: U.S. Banking Attn: ▇▇. ▇.▇. ▇▇▇▇▇
Department: U.S. Banking
(c) If to the other Lenders, to the addresses set forth
opposite such party's name on the signature pages hereof, or
such other address as such party may hereafter specify in
writing to Agent and Borrower.
Each such notice, request or other communication shall be
effective (a) if given by mail seventy-two (72) hours after such
communication is deposited in the mails with first-class postage
prepaid, addressed as aforesaid, (b) if given by telecopy, when
such telecopy is transmitted to the telecopy number as described
above and the appropriate confirmation is received, or (c) if given
by any other means (including, without limitation, by air courier),
when delivered or received at the address specified in this
Section, provided that notices to the Agent shall not be effective
until received.
Section 10.03. Deviation from Covenants. The procedure to be
followed by Borrower to obtain the consent of Agent and/or Lenders
to any deviation from the covenants contained in this Agreement or
any other Loan Document shall be as follows:
(a) Borrower shall send a written notice to Agent
setting forth (i) the covenant(s) relevant to the matter, (ii)
the requested deviation from the covenant(s) involved, and
(iii) the reason for the requested deviation from the
covenant(s); and
(b) Agent will send a written notice to Borrower,
signed by Agent, permitting the request with the approval of
the Required Lenders, or refusing the request, but in no event
will any deviation from the covenants of this Agreement or any
other Loan Document be effective without the express prior
written consent of Agent, which shall be conditioned upon the
Agent's receiving consent thereto from the Required Lenders.
Agent's failure to provide such written notice shall be deemed
a refusal of such request.
Section 10.04. Invalidity. In the event that any one or more
of the provisions contained in any Loan Document for any reason
shall be held invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or unenforceability shall not affect
any other provision of any Loan Document.
Section 10.05. Survival of Agreements. All representations and
warranties of Borrower in this Agreement and all covenants and
agreements in this Agreement not fully performed before the Closing
Date of this Agreement shall survive the Closing.
Section 10.06. Successors and Assigns. Borrower may not assign
its rights or delegate its duties under this Agreement or any other
Loan Document without the prior express written consent of the
Agent. All covenants and agreements contained by or on behalf of
Borrower in any Loan Document shall bind the Borrower's successors
and assigns and shall inure to the benefit of Lenders and their
successors and assigns. In the event that Lenders sell
participations in the Loans to participating lenders, each of such
participating lenders shall have the rights of set-off against such
Obligations and similar rights or Liens to the same extent
available to Lenders, except as otherwise provided in this
Agreement.
Section 10.07. Renewal, Extension, or Rearrangement. All
provisions of this Agreement relating to Debt and Obligations and
the Master Letter of Credit Demand Note and indebtedness arising in
connection with the Letters of Credit shall apply with equal force
and effect to each and all promissory notes (and, with regard to
Letters of Credit, reimbursement agreements) executed hereafter
which in whole or in part represent a renewal, extension for any
period, increase, or rearrangement of any part of such Debt,
Obligations, Master Letter of Credit Demand Note (or indebtedness
arising in connection with the Letter(s) of Credit) originally
represented by any part of such other Debt or Obligations or Master
Letter of Credit Demand Note (or Letter(s) of Credit).
Section 10.08. Waivers. Pursuant to T.C.A. Section ▇▇-▇▇-▇▇▇,
no action or course of dealing on the part of Agent or Lenders,
their officers, employees, consultants, or agents, nor any failure
or delay by Agent, STB or Lenders with respect to exercising any
right, power, or privilege of Agent, STB or Lenders under the
Notes, the Master Letter of Credit Demand Note, the Letters of
Credit, this Agreement, or any other Loan Document shall operate as
a waiver thereof, except as otherwise provided in this Agreement.
Agent, STB or Lenders may from time to waive any requirement
hereof, including any of the Conditions Precedent; however no
waiver shall be effective unless in writing and signed by the
Agent. The execution by Agent, STB and/or Lenders of any waiver
shall not obligate Agent, STB or the Lenders to grant any further,
similar, or other waivers.
Section 10.09. Cumulative Rights. Rights and remedies of
Lenders, Agent and STB under each Loan Document shall be
cumulative, and the exercise or partial exercise of any such right
or remedy shall not preclude the exercise of any other right or
remedy.
Section 10.10. Nature of Loan Commitment. With respect to the
Loans and the Advances and the Letters of Credit, Lenders'
obligation to make the Loans or any Advances or issue or
participate in any Letters of Credit shall be deemed to be pursuant
to a contract to make a loan or to extend debt financing or
financial accommodations to or for the benefit of Borrower within
the meaning of Sections 365(c)(2) and 365(e)(2)(B) of the United
States Bankruptcy Code, 11 U.S.C. Section 101 et seq.
Section 10.11. Governance; Exhibits. The terms of this Agree-
ment shall govern if determined to be in conflict with the terms or
provisions in any other Loan Document. The exhibits attached to
this Agreement are incorporated in this Agreement and shall be
considered a part of this Agreement except that in the event of any
conflict between an exhibit and this Agreement or another Loan
Document, the provisions of this Agreement or the Loan Document, as
the case may be, shall prevail over the exhibit.
Section 10.12. Titles of Articles, Sections, and Subsections.
All titles or headings to articles, sections, subsections, or other
divisions of this Agreement or the exhibits to this Agreement are
only for the convenience of the parties and shall not be construed
to have any effect or meaning with respect to the other content of
such articles, sections, subsections, or other divisions, such
other content being controlling with respect to the agreement
between the parties.
Section 10.13. Time of Essence. Time is of the essence with
regard to each and every provision of this Agreement.
Section 10.14. Remedies. All remedies for which this Agreement
and all other Loan Documents provide for Agent, STB and/or Lenders
shall be in addition to all other remedies available to Lenders
under the principles of law and equity, and pursuant to any other
body of law, statutory or otherwise.
Section 10.15. Application of Prepayments. Prepayments shall
be applied at Agent's sole discretion (i) first to any unpaid
expenses or other charges hereunder, (ii) then to any amounts due
under the Master Letter of Credit Demand Note, (iii) then to
accrued interest under any of the Obligations as determined by
Agent, (iv) then to reduce principal of any of the Obligations, all
in such manner as determined by Agent.
Section 10.16. Costs, Expenses, and Taxes. Borrower agrees to
pay on demand all out-of-pocket costs and expenses of the Agent in
the administration (both before and after the execution hereof and
including reasonable expenses relating to advice of counsel as to
the rights and duties of the Agent and/or the Lenders with respect
thereto) of, and in connection with the preparation, execution and
delivery of, preservation of rights under, enforcement of, and
refinancing, renegotiation and/or restructuring of, this Agreement
and the other Loan Documents and the documents and instruments
referred to therein, and any amendment, waiver or consent relating
thereto (including, without limitation, the reasonable fees and
disbursements of counsel for the Agent), and of the Lenders
(including the reasonable fees and out-of-pocket expenses of
counsel for Lenders) incurred by Lenders in connection with the
preparation of the Loan Documents and any waivers or amendments in
connection therewith or the enforcement or protection of Lenders'
rights under the Loan Documents. In addition, subject to compliance
with Section 2.12(b), Borrower agrees to pay, and to hold Agent and
Lenders harmless from all liability for, any taxes which may be
payable in connection with the execution or delivery of this
Agreement, the Advances, or the issuance of any of the Notes, the
Master Letter of Credit Demand Note, any of the Letters of Credit
or any other Loan Documents. Borrower, upon request, promptly will
reimburse Agent and Lenders for all amounts expended, advanced, or
incurred by Agent or Lenders to satisfy any obligation of Borrower
under this Agreement or any other Loan Documents, or to protect the
Properties or business of Borrower or to collect the obligations,
or to enforce the rights of Agent and/or Lenders under this
Agreement or any other Loan Document, which amounts will include
all court costs, reasonable attorney's fees, fees of auditors and
accountants, and investigation expenses reasonably incurred by
Lenders in connection with any such matters, together with interest
thereon at the rate applicable to past due principal and interest
as set forth in the Loan Documents but in no event in excess of the
maximum lawful rate of interest permitted by applicable law on each
such amount. All obligations for which this Section provides shall
survive any termination of this Agreement.
Section 10.17. Governing Law; Construction; Consent to Forum.
This Agreement, each of the Notes and the Master Letter of Credit
Demand Note have been negotiated, executed and delivered in and
shall be deemed to have been made in Tennessee. This Agreement, the
Notes and the other Loan Documents shall be governed by and
construed in accordance with the internal laws of the State of
Tennessee. As part of the consideration for new value received, and
regardless of any present or future domicile or principal place of
business of Borrower or Lenders, Borrower hereby consents and
agrees that any Tennessee state courts sitting in Davidson County,
Tennessee, or, at Agent's or Lenders' option, the United States
District Court for the Middle District of Tennessee, shall have
jurisdiction to hear and determine any claims or disputes between
Borrower, Agent and/or Lenders pertaining to this Agreement or to
any matter arising out of or related to this Agreement; provided,
however, Agent and/or Lenders may, at their option, commence any
action, suit or proceeding in any other appropriate forum or
jurisdiction to obtain possession of or foreclosure upon any
collateral, to obtain equitable relief or to enforce any judgment
or order obtained by Agent and/or Lenders against Borrower or with
respect to any collateral, to enforce any other right or remedy
under this Agreement or to obtain any other relief deemed
appropriate by Lenders and/or Agent. Borrower expressly submits and
consents in advance to such jurisdiction in any action or suit
commenced in any such court, and Borrower hereby waives any
objection which Borrower may have based upon lack of personal
jurisdiction, improper venue or forum non conveniens and hereby
consents to the granting of such legal or equitable relief as is
deemed appropriate by such court. Borrower hereby waives personal
service of the summons, complaint and other process issued in any
such action or suit and agrees that service of such summons,
complaint and other process may be made by registered or certified
mail addressed to Borrower at the address set forth in this
Agreement and that service so made shall be deemed completed upon
the earlier of Borrower's actual receipt thereof or three (3) days
after deposit in the U.S. Mails, proper postage prepaid. Nothing in
this Agreement shall be deemed or operate to affect the right of
Agent or Lenders to serve legal process in any other manner
permitted by law.
Section 10.18. Effectiveness. This Agreement shall become
effective on the date on which all of the parties hereto shall have
executed a copy hereof (whether the same or different copies) and
shall have delivered the same to the Agent or, in the case of the
Lenders, shall have given to the Agent written or telex notice
(actually received) that the same has been executed and mailed to
them.
Section 10.19. Severability. In case any provision in or
obligation under this Agreement or the other Loan Documents shall
be invalid, illegal or unenforceable, in whole or in part, in any
jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
Section 10.20. Counterparts. This Agreement may be executed by
counterpart signature pages, and it shall not be necessary that the
signatures of all parties be contained on any one counterpart; each
counterpart shall be deemed an original, but all of them together
shall constitute one and the same instrument.
Section 10.21. Entire Agreement; No Oral Representations
Limiting Enforcement. This Agreement represents the entire
agreement between the parties hereto except for such other
agreements set forth in the Loan Documents, and any and all oral
statements heretofore made regarding the matters set forth herein
are merged herein.
Section 10.22. Amendments, Etc. No amendment of any provision
of this Agreement or the other Loan Documents, nor consent to any
departure by Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Required
Lenders, except that any waiver of any covenant contained in
Article VI or Article VII, or any Event of Default under Article
VIII, or any consent to any departure by Borrower or any Subsidiary
from any such covenant, shall be effective if in writing and signed
solely by the Agent (provided, that the Agent shall not sign any
such waiver or consent unless with the consent of the Required
Lenders), and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which
given; provided that no amendment, waiver or consent shall, unless
in writing and signed by all the Lenders do any of the following:
(a) increase the Revolving Credit Loan Commitments or other
contractual obligations to the Borrower under this Agreement, (b)
reduce the principal of, or interest on, the Notes or any fees
hereunder, (c) postpone any date fixed for the payment in respect
of principal of, or interest on, the Notes or any fees hereunder,
(d) change the percentage of the Revolving Credit Loan Commitments
or of the aggregate unpaid principal amount of the Notes, or the
number or identity of Lenders that shall be required for the
Lenders or any of them to take any action hereunder, (e) modify the
definition of "Required Lenders," (f) release any Guarantor, or (g)
without limiting the Agent's authority to waive the provisions
thereof, modify Article VIII or (g) modify this Section 9.02.
Notwithstanding the foregoing, (i) no amendment, waiver or consent
shall, unless in writing and signed by the Agent in addition to the
Lenders required hereinabove to take such action, affect the rights
or duties of the Agent under this Agreement or under any other Loan
Document; and (ii) no amendment, waiver or consent shall, unless in
writing and signed by STB, affect the interests, rights or duties
of STB in its capacity as the provider of the Swing Line Loan.
Section 10.23. Jury Waiver. IF ANY ACTION OR PROCEEDING
INVOLVING THIS LOAN AGREEMENT OR ANY LOAN DOCUMENT IS COMMENCED IN
ANY COURT OF COMPETENT JURISDICTION, EACH OF BORROWER, THE AGENT
AND EACH LENDER HEREBY WAIVE THEIR RIGHTS TO DEMAND A JURY TRIAL.
IN WITNESS WHEREOF, the undersigned execute this Credit
Agreement as of the day and date first set forth above.
BORROWER:
INSITUFORM TECHNOLOGIES, INC.
By: s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Title: Senior Vice President
-----------------------
AGENT:
SUNTRUST BANK, NASHVILLE,
NATIONAL ASSOCIATION,
as Agent
By: s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Title: Group Vice President
------------------------
LENDERS:
Percentage: 33.3333% SUNTRUST BANK, NASHVILLE,
Initial Maximum Note NATIONAL ASSOCIATION
Amount: $35,000,000
By: s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Title: Group Vice President
--------------------
Address for Notices: THE BOATMEN'S NATIONAL BANK
OF ST. LOUIS
One Boatmen's Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇ By: s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ---------------------------
Title: Vice President
-----------------------
Payment Office:
One Boatmen's Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Percentage: 21.4286%
Initial Maximum Note Amount: $22,500,000
Address for Notices: UNITED STATES NATIONAL BANK
OF OREGON
▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
By: s/▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Title: Corporate Banking
Officer
------------------------
Payment Office:
▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇
Assistant Relationship Manager
U.S. Bank of Oregon
▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Percentage: 16.6667%
Initial Maximum Note Amount: $17,500,000
Address for Notices: ▇▇▇▇▇▇ TRUST AND SAVINGS BANK
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇ By: s/▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ---------------------------
Title: Vice President
---------------------
Payment Office:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Percentage: 14.2857%
Initial Maximum Note Amount: $15,000,000
Address for Notices: THE DAIWA BANK, LIMITED
One Peachtree Center
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Suite 4420 ----------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Title: Vice President
------------------
Payment Office:
Chicago, IL
Percentage: 9.5238%
Initial Maximum Note Amount: $10,000,000
Address for Notices: UNION PLANTERS NATIONAL BANK
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By: s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Title: Vice President
------------------------
Payment Office:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Percentage: 4.7619%
Initial Maximum Note Amount: $5,000,000
SCHEDULE 1
DESCRIPTION OF REFINANCED INDEBTEDNESS
Indebtedness, including accrued interest, of IMA pursuant to:
(i) the Credit Agreement dated February 15, 1995 between IMA and
the Boatmen's National Bank of St. Louis and ▇▇▇▇ ▇▇▇▇▇ Bank and
The Boatmen's National Bank of St. Louis, as agent, and (ii) the
Term Loan Agreement dated April 18, 1995 among IMA, The Boatmen's
National Bank of St. Louis and ▇▇▇▇ ▇▇▇▇▇ Bank and The Boatmen's
National Bank of St. Louis, as agent, in each case together with
all documents referred to therein, as may be amended.
SCHEDULE 2
NOTIFICATIONS
Letter dated December 29, 1994 from the Borrower to Third
National Bank in Nashville, and the matters set forth therein.
SCHEDULE 3
ADDITIONAL PERMITTED DEBT
Debt described in the letter dated December 31, 1993 from the
Borrower to Third National Bank in Nashville, and in the letter
dated March 23, 1995 from Third National Bank in Nashville to the
Borrower.
SCHEDULE 4
Schedule of Certain Net Positive
Receivables Outstanding at June 30, 1995
to Borrower and Guaranteeing Subsidiaries
by Non-Guaranteeing Subsidiaries (1)
Receivable
INA Acquisition Corp.: Balance (2)
Insituform Licensees B.V. $10,192,166(3)
Insituform (Netherlands) B.V. 638,500(4)
Insituform Management Services 3,019,449(5)
Insituform Japan 1,656,920(6)
Other 133,908
Insituform Technologies, Inc.
Other 134,932
United Pipeline Systems
USA, Inc.
United Sistema de Tuberias, Ltda. (7) 952,147
(1) Capitalized terms are as defined in the Credit Agreement.
(2) Calculations herein exclude reference to transactions exempted
from the provisions of Section 7.10 of the Credit Agreement
other than pursuant to clause (iv) (A) thereof.
(3) Primarily represents transfer of United States license in
1987, plus interest.
(4) Primarily represents transfers made for tax payments.
(5) Primarily represents receipts of royalties on behalf of INA
Acquisition Corp.
(6) Primarily represents intercompany debt between Insituform
Japan KK and Insituform Group Limited ("IGL") existing prior
to acquisition of IGL by ITI, plus interest.
(7) Primarily represents receivable for goods and services which
may not be paid within 120 days.
EXHIBIT A TO CREDIT AGREEMENT
REVOLVING CREDIT BORROWING REQUEST
Via fax (▇▇▇) ▇▇▇-▇▇▇▇ and
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Attn: ▇.▇. ▇▇▇▇▇
SunTrust Bank, Nashville, N.A. SunTrust Bank, Nashville, N.A.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ P.O. Box 305110
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Date: ,
Re: Credit Agreement dated October 25, 1995 by and among
INSITUFORM TECHNOLOGIES, INC., the lenders listed therein
and SunTrust Bank, Nashville, National Association, as
agent (as may be amended from time to time, the "Credit
Agreement")
Agent:
Capitalized terms not otherwise defined in this request have the
same meaning as in the Credit Agreement. The individual signing this
request certifies that (i) he or she is an individual authorized by
the Borrower to submit Borrowing Requests to the Agent pursuant to
the Credit Agreement, (ii) the undersigned hereby irrevocably gives
notice of and requests, pursuant to Section 2.03 of the Credit
Agreement, a borrowing under the Revolving Credit Loan facility
described in the Credit Agreement (the "Proposed Borrowing"), and
(iii) the amount of the Proposed Borrowing is available to the
Borrower pursuant to the Credit Agreement. The information below is
true and correct as of the date of this Borrowing Request and relates
to the loan and letter of credit facility described in the Credit
Agreement and the Proposed Borrowing:
a. Current principal amount outstanding under all Revolving
Credit Loans: $
b. Current principal amount outstanding under Swing Line
Loan: $
c. Aggregate face amounts of all outstanding Letters of
Credit: $
d. Total amount of all unreimbursed drafts under Letters of
Credit: $
1. AMOUNT OF PROPOSED BORROWING: $
2. DATE OF PROPOSED BORROWING:
Borrowing Requests must be given three (3) Business Days prior to
the Proposed Borrowing or, in the case of borrowings to bear interest
at the Base Rate, two (2) Business Days prior to the Proposed
Borrowing. All Borrowing Requests received after 1:00 P.M. shall be
deemed received on the next Business Day.
3. (a) DEPOSIT PROCEEDS OF BORROWING INTO BORROWER'S ACCOUNT NO.
MAINTAINED WITH AGENT:
OR
(b) WIRE TRANSFER PROCEEDS OF BORROWING ACCORDING TO THE
FOLLOWING INSTRUCTIONS:
ABA No.
Account No.
Name of Bank:
Customer Reference:
Other Information:
In connection with the Proposed Borrowing the undersigned
represents on the date hereof and on the date of the Proposed
Borrowing (a) it has not obtained knowledge that there exists any
Event of Default and (b) all representations and warranties by the
Borrower contained in the Credit Agreement are true and correct in
all material respects.
Very truly yours,
BORROWER:
INSITUFORM TECHNOLOGIES, INC.
By:
---------------------------
Title:
-----------------------
EXHIBIT B TO CREDIT AGREEMENT
PROMISSORY NOTE
Nashville, Tennessee $
October , 1995
FOR VALUE RECEIVED, INSITUFORM TECHNOLOGIES, INC. ("Borrower")
promises and agrees to pay to the order of
("Lender") at the offices of SunTrust Bank, Nashville,
National Association, as agent (the "Agent"), in Nashville,
Tennessee, or at such other place as may be designated in writing by
the holder, in lawful money of the United States of America, the
principal sum of and no/100 Dollars
($ ), or so much thereof as may be advanced from time
to time by Lender, together with interest on the principal balance
outstanding from time to time hereon computed as provided below, from
the date of each advance through the Maturity Date. Interest for each
year shall be computed based upon a 360-day year for the actual
number of days elapsed.
This Note is issued pursuant to, and is one of the Revolving
Credit Notes referred to in, that certain Credit Agreement of even
date herewith among Borrower, the Agent, Lender, The Boatmen's
National Bank of St. Louis, United States National Bank of Oregon,
▇▇▇▇▇▇ Trust and Savings Bank, The Daiwa Bank, Limited, Union
Planters National Bank and the other lenders from time to time
parties thereto (such credit agreement, as it may be amended,
modified, extended and/or renewed from time to time, including
without limitation all restatements thereof, replacements therefor
and changes in form thereto, being collectively referred to herein as
the "Credit Agreement"). Any term not otherwise defined in this Note
shall have the same meaning as in the Credit Agreement. Reference is
made to the Credit Agreement, which, among other things, provides for
the acceleration of the maturity hereof upon the occurrence of
certain events in certain circumstances and upon certain terms and
conditions.
Interest shall accrue on all amounts outstanding under this Note
at the applicable interest rate(s) elected by Borrower in accordance
with Section 2.06 of the Credit Agreement. Borrower promises to pay
interest on the outstanding principal amount of each Loan hereunder,
at such interest rates, payable at such times, and computed in such
manner, as in accordance with the terms of the Credit Agreement in
strict accordance with the terms thereof.
As long as no Event of Default has occurred, Borrower may
borrow, repay, reborrow and repay hereunder until the Revolving
Credit Termination Date; provided, however, that at no time shall the
principal amount outstanding hereunder exceed
Dollars ($ ) (the
"Maximum Principal Amount"), or, when combined with the principal
amounts outstanding under all Revolving Credit Loans under the Credit
Agreement and the Swing Line Loan described in the Credit Agreement
and the face amounts of all outstanding Letters of Credit and the
amount of all unreimbursed draws paid under Letters of Credit, exceed
the Maximum Total Amount. If any such excess occurs, Borrower shall
immediately pay to Agent for the benefit of the Lender or the
Lenders, as the case may be, all principal outstanding hereunder in
excess of the Maximum Principal Amount (or Maximum Total Amount, as
applicable), plus all interest, fees and charges accrued as required
by the Credit Agreement.
The terms and conditions of any prepayment of this Note shall be
governed by the Credit Agreement. Any such prepayment(s) shall be
applied first to payment of any fees or expenses due Lender, then to
funding losses (if any), then to accrued interest and then to
principal. All or part of the indebtedness evidenced by this Note may
be prepaid during the period any LIBOR Rate Interest Rate Option is
in effect only in accordance with the terms set forth in, and subject
to payment of the amounts described in Section 2.13 of, the Credit
Agreement.
The terms and conditions in connection with requesting an
Advance by Borrower and for making any Advances by Lender hereunder
shall be governed by the applicable provisions of the Credit
Agreement.
This Note shall be repaid as follows:
(a) From the date hereof through the Maturity Date,
Borrower shall pay to Lender all fees or other charges (if any)
under this Note on the last Business Day of each month, and
shall pay to Lender accrued interest under this Note, as
follows:
(i) interest on all Loans bearing interest at the Base
Rate plus the Applicable Margin, and on all Loans bearing
interest at the one-month Adjusted LIBOR rate plus the
Applicable Margin, shall be paid by Borrower to Lender on
the last Business Day of each month;
(ii) interest on all Loans bearing interest at the
two-month Adjusted LIBOR rate plus the Applicable Margin
shall be paid by Borrower to Lender on the last Business
Day of the month following the month such interest rate
was elected by Borrower under the terms of the Credit
Agreement;
(ii) interest on all Loans bearing interest at the
three-month Adjusted LIBOR rate plus the Applicable Margin
shall be paid by Borrower to Lender on the last Business
Day of the second month following the month such interest
rate was elected by Borrower under the terms of the Credit
Agreement; and
(b) Beginning on the first December 31 after the Revolving
Credit Termination Date, and continuing on the last Business Day
of each consecutive March, June, September and December
thereafter until the Maturity Date, Borrower shall pay to Lender
principal payments each equal to one-twentieth (1/20th) of the
unpaid principal balance outstanding under this Note as of the
Revolving Credit Termination Date.
This Note shall mature on October 25, 2000 (the "Maturity
Date"), at which time all outstanding principal, accrued interest,
and all unpaid fees or charges hereunder (if any) will be immediately
due and payable.
Notwithstanding any provision to the contrary, it is the intent
of Lender, Borrower and all parties liable on this Note, that neither
Lender nor any subsequent holder shall be entitled to receive,
collect, reserve or apply, as interest, any amount in excess of the
maximum lawful rate of interest permitted to be charged by applicable
law or regulations, as amended or enacted from time to time. In the
event the Note calls for an interest payment that exceeds the maximum
lawful rate of interest then applicable, such interest shall not be
received, collected, charged or reserved until such time as that
interest, together with all other interest then payable, falls within
the then applicable maximum lawful rate of interest. In the event
Lender, or any subsequent holder, receives any such interest in
excess of the then maximum lawful rate of interest, such amount which
would be excessive interest shall be deemed a partial prepayment of
principal and treated hereunder as such, or, if the principal
indebtedness evidenced hereby is paid in full, any remaining excess
funds shall immediately be paid to Borrower. In determining whether
or not the interest paid or payable, under any specific contingency,
exceeds the maximum lawful rate of interest, Borrower and Lender
shall, to the maximum extent permitted under applicable law, (a)
exclude voluntary prepayments and the effects thereof, and (b)
amortize, prorate, allocate and spread, in equal parts, the total
amount of interest throughout the entire term of the indebtedness;
provided that if the indebtedness is paid in full prior to the end of
the full contemplated term hereof, and if the interest received for
the actual period of existence hereof exceeds the maximum lawful rate
of interest, the holder of the Note shall refund to Borrower the
amount of such excess or credit the amount of such excess against the
principal portion of the indebtedness as of the date it was received,
and, in such event, Lender shall not be subject to any penalties
provided by any laws for contracting for, charging, reserving,
collecting or receiving interest in excess of the maximum lawful rate
of interest.
In the event that there occurs any Event of Default under the
Loan Agreement (any such event constituting an Event of Default under
this Note), then, in such event, at the option of the Required
Lenders or automatically in the case of Events of Default under
Sections 8.01(h) or (i) of the Credit Agreement, as evidenced by
notice from the Agent, the entire indebtedness hereby evidenced shall
become due, payable and collectible then or thereafter, without
further notice, as the holder may elect regardless of the date of
maturity. The Required Lenders, evidenced by notice from the Agent,
may waive any default or Event of Default before or after the same
has been declared and restore this Note to full force and effect
without impairing any rights hereunder, such right of waiver being a
continuing one.
Following the occurrence of an Event of Default, principal and
unpaid interest bear interest at the lesser of (a) four percentage
points (4%) above the Base Rate of SunTrust Bank, Nashville, National
Association or (b) the maximum lawful rate of interest permitted by
law until paid. The undersigned will pay all costs and expenses in
connection with the collection, enforcement, protection and/or
litigation with regard to this Note and/or any of Lender's rights
hereunder, including without limitation reasonable attorneys' fees.
The makers, endorsers, guarantors and all parties to this Note
and all who may become liable for same, jointly and severally waive
presentment for payment, protest, notice of protest, notice of
nonpayment of this Note, demand and all legal diligence in enforcing
collection, and hereby expressly agree that the lawful owner or
holder of this Note may defer or postpone collection of the whole or
any part thereof, either principal and/or interest, or may extend or
renew the whole or any part thereof, either principal and/or
interest, or may accept additional collateral or security for the
payment of this Note, or may release the whole or any part of any
collateral security and/or liens given to secure the payment of this
Note, or may release from liability on account of this Note any one
or more of the makers, endorsers, guarantors and/or other parties
thereto, all without notice to them or any of them; and such
deferment, postponement, renewal, extension, acceptance of additional
collateral or security and/or release shall not in any way affect or
change the obligation of any such maker, endorser, guarantor or other
party to this Note, or of any who may become liable for the payment
thereof.
Borrower shall pay a "late charge" of five percent (5%) of any
payments of principal and/or interest due when paid after the due
date thereof (provided that in no event shall said "late charge"
result in the payment of interest in excess of the maximum lawful
rate of interest permitted by applicable law), to cover the extra
expenses involved in handling delinquent payments.
The term "maximum lawful rate of interest" as used herein shall
mean a rate of interest equal to the higher or greater of the
following: (a) the "applicable formula rate" defined in Tennessee
Code Annotated Section 47-14-102(2), or (b) such other rate of
interest as may be charged under other applicable laws or
regulations.
This Note has been executed and delivered in, and shall be
governed by and construed according to the laws of the State of
Tennessee except to the extent pre-empted by applicable laws of the
United States of America.
Executed this the day of October, 1995.
INSITUFORM TECHNOLOGIES, INC.
By:
Title:
EXHIBIT C TO CREDIT AGREEMENT
SWING LINE PROMISSORY NOTE
$5,000,000 October , 1995
For value received, the undersigned, INSITUFORM TECHNOLOGIES,
INC., a Delaware corporation (the "Borrower") promises to pay on the
earlier of DEMAND or the Swing Line Termination Date to the order of
SUNTRUST BANK, NASHVILLE, NATIONAL ASSOCIATION, a national banking
association (the "Lender") at its principal office in Nashville,
Tennessee, or at such other place as Lender may designate in writing,
the principal sum of up to Five Million Dollars ($5,000,000) in
lawful money of the United States of America, or, if less, so much
thereof as may be from time to time advanced by Lender to the
Borrower hereunder and remain outstanding, together with interest
from the date hereof on the unpaid principal balance outstanding from
time to time hereon computed from the date of each advance until the
Maturity Date (hereafter defined) at a varying rate of interest which
is one-half of one percentage point (0.5%) per annum below the base
rate of interest from time to time charged by SunTrust Bank,
Nashville, National Association. Interest for each year shall be
computed based upon a 360-day year of actual days elapsed. The "base
rate of interest" is defined as that rate of interest established
from time to time and announced by SunTrust Bank, Nashville, National
Association as its "base rate," such rate being an interest rate used
as an index for establishing interest rates on loans. The rate of
interest provided herein shall be determined daily to reflect changes
in the base rate of interest charged by SunTrust Bank, Nashville,
National Association as such base rate of interest may change from
time to time. Interest shall be paid to the Lender on the last
Business Day of each month for the preceding month (or portion
thereof) following the date of execution.
This Note is issued pursuant to, and is the Swing Line Note
referred to in, that certain Credit Agreement of even date herewith
by and between Borrower, Lender, the other lenders set forth on the
signature pages thereof and SunTrust Bank, Nashville, National
Association, as Agent (as it may be amended, restated and/or modified
from time to time, the "Credit Agreement"). This Note, and all
advances hereunder, and repayment hereof, is subject to the terms and
provisions of the Credit Agreement. Any term not otherwise defined in
this Note shall have the same meaning as in the Credit Agreement.
Reference is made to the Credit Agreement, which, among other things,
provides for the automatic maturity hereof upon the occurrence of
certain events in certain circumstances and upon certain terms and
conditions. Borrower's failure to pay this Note prior to the Maturity
Date (as hereinafter defined) shall not be considered a default
hereunder if full payment of this Note is made by Borrower on the
Maturity Date.
Borrower shall be entitled to borrow, repay and reborrow funds
hereunder, up to the Swing Line Loan Maximum Amount, pursuant to the
terms and conditions of this Note and the Credit Agreement. On any
Business Day on or prior to the Swing Line Termination Date, Borrower
may request an advance pursuant to this Note by a communication
received by Lender not later than 11:00 a.m. o'clock Central Standard
Time or Central Daylight Time, whichever is in effect, requesting an
advance in a minimum amount of $10,000. The following persons are
authorized to request an advance hereunder: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇-
▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, or such other person as may be
designated in writing by Borrower (which writing purportedly shall be
signed by one of the aforementioned individuals or by his successor
designated as aforesaid).
Nothing in this Note shall be deemed a commitment to make an
advance to Borrower subsequent to the Swing Line Termination Date or
the Maturity Date. The Lender shall make the advance by depositing
such advance into the Borrower's operating account maintained with
Lender. The term "Business Day" means a day other than a Saturday,
Sunday, or a day on which commercial banks are authorized to close
under federal laws or the laws of the State of Tennessee, or other
day on which Lender is closed.
On the date that is the earlier of (a) three Business Days after
demand by Lender for repayment hereunder, or (b) the date Borrower
files any petition in bankruptcy or three Business Days after it has
had filed against it any such petition, or three Business Days after
any other date on which Lender is for any reason precluded under law
from making demand on Borrower under this Note, or (c) the Swing Line
Termination Date (the earliest of such dates being referred to herein
as the "Maturity Date"), the entire principal amount outstanding
hereunder, together with all accrued interest and any fees or other
charges hereunder, shall be immediately due and payable. Borrower
acknowledges that the actual crediting of the amount of any advance
to an account of Borrower, or the transfer to Borrower, or to any
bank for the account of Borrower, of any advance shall constitute
presumptive evidence of such advance and that an advance to Borrower
was made pursuant to this Note.
Any borrowing under this Note shall be deemed a representation
and warranty that all amounts outstanding under this Note, plus all
advances requested to be made hereunder, do not exceed the Swing Line
Loan Maximum Amount, and that all amounts outstanding under the this
Note, plus all advances requested to be made hereunder, plus all
amounts outstanding under all Revolving Credit Loans described in the
Credit Agreement, plus the aggregate face amounts of all Letters of
Credit then outstanding, do not exceed the Maximum Total Amount (as
such term is used in the Credit Agreement). Any request for a
borrowing shall also be deemed a representation by Borrower that it
does not have any knowledge that any Event of Default has occurred
and is then existing, and that the representations and warranties set
forth in the Credit Agreement are true and correct.
Advances may be prepaid at any time before their or its maturity
without penalty or premium.
This Note is a revolving credit note and it is contemplated that
by reason of payments hereon, there may be times when no indebtedness
is owing hereunder. Notwithstanding such occurrence, this Note shall
remain valid and in full force and effect as to each advance made
hereunder. This Note shall be valid and enforceable as to the
aggregate amount advanced at any time hereunder, plus interest
thereon, whether or not the full face amount hereof is advanced.
Notwithstanding anything to the contrary contained herein,
Lender may cancel its option to make advances under this Note, in its
sole discretion, at any time in accordance with the Credit Agreement,
and/or upon any Event of Default by Borrower under the Credit
Agreement. Any such cancellation shall in no way lessen or release
Borrower's obligations hereunder.
All parties now or hereafter liable with respect to this Note,
whether the Borrower or any guarantor, endorser or any other person
or entity, hereby waive presentment for payment, demand, notice of
non-payment or dishonor, protest and notice of protest. No delay or
omission on the part of the Lender, or any holder hereof, in
exercising its rights under this Note shall operate as a waiver of
such rights or any other right of the Lender or of any holder hereof
of any such right or rights on any occasion be deemed a bar to, or
waiver of, the same right or rights on any future occasion.
Lender may, but shall not be required to, apply to the payment
of any advance hereunder, on or after the maturity of such advance,
any funds or credit held by Lender on deposit for the account of
Borrower or any other party liable hereon.
Following the earlier of (a) three Business Days after demand by
Lender for repayment hereunder, or (b) the occurrence of any Event of
Default under the Loan Agreement (any such event being a default
hereunder), then at the option of Lender or automatically in the case
of Events of Default under Sections 8.01(h) or (i) under the Credit
Agreement, all unpaid amounts advanced hereunder and interest thereon
may be accelerated and become due in accordance with the Credit
Agreement regardless of the due date of any advance made hereunder.
Lender may waive any default before or after the same has been
declared and restore this Note to full force and effect without
impairing any of Lender's rights hereunder, such right of waiver
being a continuing one.
Borrower shall have no right to assign any rights or obligations
under this Note without the written consent of Lender.
Following the earlier to occur of (a) three Business Days after
demand is made hereunder, or (b) the occurrence of an Event of
Default, principal and unpaid interest shall bear interest at the
rate that is the lesser of (a) the maximum lawful rate of interest
permitted by law, or (b) four percentage points (4%) above the Base
Rate, until paid. The undersigned will pay all costs and expenses in
connection with the collection, enforcement, protection and/or
litigation with regard to this Note and/or any of Lender's rights
hereunder, including without limitation reasonable attorneys' fees.
The makers, endorsers, guarantors and all parties to this Note
and all who may become liable for same, jointly and severally waive
presentment for payment, protest, notice of protest, notice of
nonpayment of this Note, demand and all legal diligence in enforcing
collection, and hereby expressly agree that the lawful owner or
holder of this Note may defer or postpone collection of the whole or
any part thereof, either principal and/or interest, or may extend or
renew the whole or any part thereof, either principal and/or
interest, or may accept additional collateral or security for the
payment of this Note, or may release the whole or any part of any
collateral security and/or liens given to secure the payment of this
Note, or may release from liability on account of this Note any one
or more of the makers, endorsers, guarantors and/or other parties
thereto, all without notice to them or any of them; and such
deferment, postponement, renewal, extension, acceptance of additional
collateral or security and/or release shall not in any way affect or
change the obligation of any such maker, endorser, guarantor or other
party to this Note, or of any who may become liable for the payment
thereof.
Borrower shall pay a "late charge" of five percent (5%) of any
payments of principal and/or interest due when paid after the due
date thereof (provided that in no event shall said "late charge"
result in the payment of interest in excess of the maximum lawful
rate of interest permitted by applicable law), to cover the extra
expenses involved in handling delinquent payments.
The term "maximum lawful rate of interest" as used herein shall
mean a rate of interest equal to the higher or greater of the
following: (a) the "applicable formula rate" defined in Tennessee
Code Annotated Section 47-14-102(2), or (b) such other rate of
interest as may be charged under other applicable laws or
regulations.
This Note has been executed and delivered in, and shall be
governed by and construed according to the laws of the State of
Tennessee except to the extent pre-empted by applicable laws of the
United States of America.
This Note may not be changed or terminated without the prior
written approval of Lender and Borrower. No waiver of any term or
provision hereof shall be valid unless in writing signed by the
holder.
IN WITNESS WHEREOF, the duly authorized officer of the Borrower,
being an authorized signatory, has executed this Note as of the day
and date first set forth above.
INSITUFORM TECHNOLOGIES, INC.
By:
---------------------------------
Title:
------------------------------
EXHIBIT D TO CREDIT AGREEMENT
MASTER LETTER OF CREDIT DEMAND NOTE
$5,000,000 October , 1995
For value received, the undersigned, INSITUFORM TECHNOLOGIES,
INC., a Delaware corporation (the "Borrower") promises to pay on
demand of Lender (or otherwise on the Maturity Date, as set forth
below, whichever is earlier), to the order of SUNTRUST BANK,
NASHVILLE, NATIONAL ASSOCIATION, a national banking association (the
"Lender") at its principal office in Nashville, Tennessee, or at such
other place as Lender may designate in writing, the principal sum of
up to Five Million Dollars ($5,000,000) in lawful money of the United
States of America, or, if less, so much thereof as may be from time
to time deemed advanced by Lender to the Borrower hereunder by reason
of any draws under any Letters of Credit issued by Lender for the
account of Borrower and/or a Subsidiary of Borrower, together with
interest from the date hereof on the unpaid principal balance
outstanding from time to time hereon computed from the date of any
draw(s) under any such Letter(s) of Credit at a varying rate of
interest equal to the base rate of interest from time to time charged
by SunTrust Bank, Nashville, National Association. Interest for each
year shall be computed based upon a 360-day year of actual days
elapsed. The "base rate of interest" is defined as that rate of
interest established from time to time and announced by SunTrust
Bank, Nashville, National Association as its "base rate," such rate
being an interest rate used as an index for establishing interest
rates on loans. The rate of interest provided herein shall be
determined daily to reflect changes in the base rate of interest
charged by SunTrust Bank, Nashville, National Association as such
base rate of interest may change from time to time.
This Note is issued pursuant to, and is the Master Letter of
Credit Demand Note referred to in, that certain Credit Agreement of
even date herewith by and between Borrower, Lender, the other lenders
set forth on the signature pages thereof and SunTrust Bank,
Nashville, National Association, as Agent (as it may be amended,
restated and/or modified from time to time, the "Credit Agreement").
Any term not otherwise defined in this Note shall have the same
meaning as in the Credit Agreement. Reference is made to the Credit
Agreement, which, among other things, provides for the automatic
maturity hereof upon the occurrence of certain events in certain
circumstances and upon certain terms and conditions. Borrower's
failure to pay this Note prior to the Maturity Date (as hereinafter
defined) shall not be considered a default hereunder if full payment
of this Note is made by Borrower on the Maturity Date.
This Note shall be repaid as follows: On the date that is the
earliest of (a) the date any draw is made under a Letter of Credit,
if the Revolving Credit Loan Commitments are still in effect and have
not been terminated, or (b) three Business Days after demand by
Lender for repayment under this Note, or (c) the date Borrower files
any petition in bankruptcy, or (d) three Business Days after Borrower
has had filed against it any petition in bankruptcy, or (e) three
Business Days after any other date on which Lender is for any reason
precluded under law from making demand on Borrower under this Note,
or (f) the Revolving Credit Termination Date (the earliest of such
dates being referred to herein as the "Maturity Date"), the entire
principal amount outstanding hereunder, together with all accrued
interest and any fees or other charges hereunder, shall be
immediately due and payable. Borrower acknowledges that payment by
Lender of any amount(s) under any Letter of Credit shall constitute
an advance to Borrower under this Note. This Note shall be repaid by
an advance under the Revolving Credit Loan Commitments made on the
date of any draw under any Letter of Credit so long as such Revolving
Credit Loans have not been terminated.
This Note evidences amounts due to Lender in connection with
draws under Letters of Credit issued from time to time by Lender for
the account of Borrower or any Subsidiary of Borrower. Borrower is
personally and jointly and severally liable with any such Subsidiary
for any such Letter of Credit issued by Lender. There may be times
when no indebtedness is owing hereunder. Notwithstanding such
occurrence, this Note shall remain valid and in full force and effect
as to each advance deemed made hereunder due to draws under any
Letters of Credit.
All parties now or hereafter liable with respect to this Note,
whether the Borrower or any guarantor, endorser or any other person
or entity, hereby waive presentment for payment, demand, notice of
non-payment or dishonor, protest and notice of protest. No delay or
omission on the part of the Lender, or any holder hereof, in
exercising its rights under this Note shall operate as a waiver of
such rights or any other right of the Lender or of any holder hereof
of any such right or rights on any occasion be deemed a bar to, or
waiver of, the same right or rights on any future occasion.
Lender may, but shall not be required to, apply to the payment
of any advance hereunder, on or after the maturity of such advance,
any funds or credit held by Lender on deposit for the account of
Borrower or any other party liable hereon.
Following the earliest of (a) the date of any draw under any
Letter of Credit if the Revolving Credit Loan Commitments are still
in effect and have not been prepaid in whole and terminated, or (b)
three Business Days after demand by Lender for repayment hereunder,
or (c) the occurrence of any Event of Default under the Loan
Agreement (any such event being a default hereunder), then at the
option of Lender or automatically in the case of Events of Default
under Section 8.01(h) or (i) of the Credit Agreement, all unpaid
amounts advanced hereunder and interest thereon may be accelerated
and become due in accordance with the Credit Agreement regardless of
the due date of any advance made hereunder. Lender may waive any
default before or after the same has been declared and restore this
Note to full force and effect without impairing any of Lender's
rights hereunder, such right of waiver being a continuing one.
Borrower shall have no right to assign any rights or obligations
under this Note without the written consent of Lender.
Following the earlier to occur of (a) three Business Days after
demand is made hereunder, or (b) the occurrence of an Event of
Default, principal and unpaid interest bear interest at the rate that
is the lesser of (a) the maximum lawful rate of interest permitted by
law, or (b) four percentage points (4%) above the Base Rate, until
paid. The undersigned will pay all costs and expenses in connection
with the collection, enforcement, protection and/or litigation with
regard to this Note and/or any of Lender's rights hereunder,
including without limitation reasonable attorneys' fees.
The makers, endorsers, guarantors and all parties to this Note
and all who may become liable for same, jointly and severally waive
presentment for payment, protest, notice of protest, notice of
nonpayment of this Note, demand and all legal diligence in enforcing
collection, and hereby expressly agree that the lawful owner or
holder of this Note may defer or postpone collection of the whole or
any part thereof, either principal and/or interest, or may extend or
renew the whole or any part thereof, either principal and/or
interest, or may accept additional collateral or security for the
payment of this Note, or may release the whole or any part of any
collateral security and/or liens given to secure the payment of this
Note, or may release from liability on account of this Note any one
or more of the makers, endorsers, guarantors and/or other parties
thereto, all without notice to them or any of them; and such
deferment, postponement, renewal, extension, acceptance of additional
collateral or security and/or release shall not in any way affect or
change the obligation of any such maker, endorser, guarantor or other
party to this Note, or of any who may become liable for the payment
thereof.
Borrower shall pay a "late charge" of five percent (5%) of any
payments of principal and/or interest due when paid after the due
date thereof (provided that in no event shall said "late charge"
result in the payment of interest in excess of the maximum lawful
rate of interest permitted by applicable law), to cover the extra
expenses involved in handling delinquent payments.
The term "maximum lawful rate of interest" as used herein shall
mean a rate of interest equal to the higher or greater of the
following: (a) the "applicable formula rate" defined in Tennessee
Code Annotated Section 47-14-102(2), or (b) such other rate of
interest as may be charged under other applicable laws or
regulations.
This Note has been executed and delivered in, and shall be
governed by and construed according to the laws of the State of
Tennessee except to the extent pre-empted by applicable laws of the
United States of America.
This Note may not be changed or terminated without the prior
written approval of Lender and Borrower. No waiver of any term or
provision hereof shall be valid unless in writing signed by the
holder.
IN WITNESS WHEREOF, the duly authorized officer of the Borrower,
being an authorized signatory, has executed this Note as of the day
and date first set forth above.
INSITUFORM TECHNOLOGIES, INC.
By:
Title:
EXHIBIT E TO CREDIT AGREEMENT
FORM OF BORROWER'S COUNSEL'S OPINION LETTER
KRUGMAN, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Park ▇▇ ▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
October 25, 1995
Each of the Lenders (collectively,
the "Lenders") party to the Credit
Agreement dated as of even date
herewith (the "Loan Agreement")
among Insituform Technologies,
Inc. (the "Borrower"), the Lenders
and SunTrust Bank, Nashville,
National Association, acting as
agent (the "Agent") for the Lenders
Ladies and Gentlemen:
We have acted as counsel for Insituform Technologies, Inc., a
Delaware corporation (the "Borrower"), and each of the guarantors
(each, a "Guarantor" and, collectively, the "Guarantors") named in
Schedule A attached hereto and made a part hereof in connection with
the loan to the Borrower in the principal amount of up to
$105,000,000 (the "Loan") from the Lenders, and related transactions.
As such counsel, we have examined the original or copies,
certified or otherwise authenticated to our satisfaction of, and are
familiar with, the following documents:
1. The Loan Agreement;
2. The Promissory Notes, each dated as of even date herewith,
in the aggregate principal amount of up to $105,000,000 executed by
the Borrower and payable to the Lenders, respectively, or their
respective order (collectively, the "Revolving Credit Notes");
3. The Swing Line Promissory Note dated as of even date
herewith in the principal amount of up to $5,000,000 executed by the
Borrower and payable to SunTrust Bank, Nashville, National
Association, or order (the "Swing Line Note");
4. The Master Letter of Credit Demand Note dated as of even
date herewith in the principal amount of up to $5,000,000 executed by
the Borrower and payable to SunTrust Bank, Nashville, National
Association, or order (the "Master Letter of Credit Demand Note"; the
Loan Agreement, the Revolving Credit Notes, the Swing Line Note and
the Master Letter of Credit Demand Note are sometimes referred to
herein, collectively, as the "Loan Documents"); and
5. The Guaranties dated as of even date herewith (each a
"Guaranty" and, collectively, the "Guaranties") executed by each of
the Guarantors, respectively, to the Lenders guaranteeing payment of
the Loan and the Master Letter of Credit Demand Note.
In addition, we have examined such further documents and records
and such questions of law as we have considered necessary or
appropriate for the purposes of this opinion. On the basis of the
foregoing examination, we advise you that, in our opinion:
(i) The Borrower is a corporation duly organized, existing and
in good standing under the General Corporation Law of the State of
Delaware and no certificate of dissolution has been filed with the
Secretary of State of Delaware, nor has any legal proceeding been
instituted by the State of Delaware questioning the legal status of
the Borrower as a corporation.
(ii) The Borrower has been qualified as a foreign corporation
in the State of Tennessee, and such qualification has not been
revoked or permitted to lapse.
(iii) The Borrower has the corporate power and corporate
authority under the General Corporation Law of Delaware to own and
operate its properties, to carry on its business as now conducted, to
enter into the Loan Documents and to carry out the terms of the Loan
Documents.
(iv) The Loan Documents have been duly authorized, executed and
delivered by the Borrower, and are valid, binding and enforceable
obligations of the Borrower, in accordance with their respective
terms.
(v) The amounts to be received by the Lenders as interest under
the Revolving Credit Notes, the Swing Line Note and the Master Letter
of Credit Demand Note, respectively, constitute lawful interest under
applicable law and are neither usurious nor illegal.
(vi) The execution and delivery by the Borrower of the Loan
Documents and the performance by the Borrower of its obligations
thereunder do not violate any provision of law or any regulation
applicable to the Borrower, or any applicable judgment, writ, decree,
order or regulation of any court or of any public or governmental
agency or authority having jurisdiction over the Borrower or any of
its activities or property and, to the best of our knowledge after
due inquiry of the Borrower, do not conflict with or result in any
breach of or constitute a default under, any of the provisions of any
agreement or instrument to which the Borrower is a party or by which
it is bound (except that, under the Panola County Bond Obligations,
the Shelby County Bond Obligations and the Hanseatic Obligations [as
defined in the Loan Agreement], the Borrower may be required to
obtain waivers of breaches of certain financial covenants contained
in the documents evidencing such obligations prior to borrowing under
the Loan Agreement); which violation, conflict, breach or default
would have a material adverse effect on the business of the Borrower
and the Guarantors on a consolidated basis.
(vii) All consents, approvals, and authorizations, if any, of
any governmental authority required in connection with the execution,
delivery and performance by the Borrower of its obligations under the
Loan Documents have been obtained (except that, under the Panola
County Bond Obligations and the Shelby County Bond Obligations, the
Borrower may be required to obtain waivers of breaches of certain
financial covenants contained in the documents evidencing such
obligations prior to borrowing under the Loan Agreement).
(viii) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, public
board or body, pending, or, to the best of our knowledge after due
inquiry of the Borrower, threatened against or affecting the
Borrower, nor, to the best of our knowledge, is there any basis
therefor, in each case wherein an unfavorable decision, ruling or
finding could materially adversely affect the transactions
contemplated by, or the validity of, any of the Loan Documents, or
the Borrower's ability to perform its obligations thereunder.
(ix) Each of the Guarantors (other than Insituform Southwest)
is a corporation duly organized, existing and in good standing under
the laws of its state of incorporation and no certificate of
dissolution has been filed with the Secretary of State of such state
of incorporation, nor has any legal proceeding been instituted by
such state questioning the legal status of the Guarantor as a
corporation. Insituform Southwest is a general partnership duly
formed under the laws of the State of California.
(x) Each of the Guarantors (other than Insituform Southwest)
has the corporate power and corporate authority under the corporation
act of its state of incorporation to carry on its business as now
conducted, to enter into its Guaranty and to carry out the terms of
its Guaranty; and Insituform Southwest has the partnership power and
partnership authority to carry on its business as now conducted, to
enter into its Guaranty and carry out the terms of its Guaranty, in
accordance with its terms.
(xi) Each Guaranty has been duly authorized, executed and
delivered by the Guarantor thereof, and is the valid, binding and
enforceable obligation of the Guarantor.
(xii) The execution and delivery by the Guarantors of their
respective Guaranties and performance by the Guarantors of their
respective obligations thereunder do not violate any provisions of
law or any regulation applicable to the Guarantors, or any applicable
judgment, writ, decree, order or regulation of any court of any
public or governmental agency or authority having jurisdiction over
the Guarantors, or any of their activities or property and, to the
best of our knowledge after due inquiry of the Guarantors, do not
conflict with or result in any breach of, or constitute a default
under, any of the provisions of any agreement or instrument to which
any of the Guarantors is a party or by which they are bound,
respectively (except that under the Panola County Bond Obligations
and the Shelby County Bond Obligations and the Hanseatic Obligations,
the Borrower may be required to obtain waivers of breaches of certain
financial covenants contained in the documents evidencing such
obligations prior to borrowing under the Loan Agreement); which
violation, conflict, breach or default would have a material adverse
effect on the business of the Borrower and the Guarantors on a
consolidated basis.
(xiii) All consents, approvals, and authorizations, if any, of
any governmental authority required in connection with the execution
and delivery and the performance by each of the Guarantors of its
obligations under their respective Guaranties have been obtained
(except that, under the Panola County Bond Obligations and the Shelby
County Bond Obligations, the Borrower may be required to obtain
waivers of breaches of certain financial covenants contained in the
documents evidencing such obligations prior to borrowing under the
Loan Agreement).
(xiv) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, or before or by any court, public
board or body, pending or, to the best of our knowledge after due
inquiry of the Guarantors, threatened against or affecting any of the
Guarantors, nor, to the best of our knowledge, is there any basis
therefor, in each case wherein an unfavorable decision, ruling or
finding would materially adversely affect the transactions
contemplated by or the validity of any Guaranty.
In rendering the opinion expressed above, we advise you that
members of this firm are members of the bars of the States of New
York and New Jersey and the District of Columbia. We do not hold
ourselves out as experts in the law of any other jurisdictions. We
have, however, examined such questions of the laws of such other
jurisdictions as we have considered relevant to our opinion.
To the extent that matters of fact are involved in the
conclusions expressed in the foregoing opinion, such opinion is based
upon certificates of officers of the Borrower or the Guarantors,
respectively, or of public officials, and the representations of the
Borrower and the Guarantors set forth in the Loan Documents and of
the parties thereto set forth in the Agreement and Plan of Merger
dated as of May 23, 1995 among the Borrower, Insituform Mid-America,
Inc. and ITI Acquisition Corp. In rendering the opinion expressed in
Paragraphs (viii) and (xiv) above, we have relied solely upon the
litigation files of the Borrower and the Guarantors and the
certificates described in the immediately preceding sentence. Without
limiting the immediately preceding sentence, insofar as statements
are made herein which relate to our knowledge of certain matters, our
inquiry to supplement matters otherwise actually known to us has been
limited to a review of documents in our files and due inquiry of the
Borrower and the Guarantors, respectively, without any independent
review of the records of any court or governmental agency, except
that, in rendering the opinions expressed in Paragraphs (i), (ii) and
(ix) above, we have relied upon good standing certificates issued by
the relevant jurisdictions in respect of the Borrower and the
Guarantors. In rendering the opinion set forth in Paragraph (vi)
above, we have relied, without limitation, on the final paragraph of
Section 7.3 of the Loan Agreement. In addition, the opinion expressed
in Paragraph (viii) above does not extend to the litigation matters
disclosed in the Registration Statement on Form S-4 (No. 33-62677)
filed by the Borrower with the Securities and Exchange Commission on
September 15, 1995, to the extent such litigation matters are
disclosed in all material respects therein and to the extent the
nature and amount of such litigation, and the likely outcome thereof,
have not materially changed from such disclosures.
In rendering the opinion set forth herein, we have also assumed
the genuineness of all signatures on documents not signed in our
presence (and confirm that the Loan Documents and the Guaranties have
been signed in our presence), the authenticity of all documents
submitted to us as originals, the conformity with the originals of
all documents submitted to us as copies and the due authorization,
execution and delivery of the Loan Agreement by the Lenders,
respectively, and the Agent.
The opinion expressed above is subject to the further
qualification that: (i) the enforceability of the rights and remedies
of the parties thereto in the Loan Documents may be subject to
limitations imposed by any applicable bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting the
enforcement of creditors' rights generally or by the principles
governing the availability of equity remedies, and the unavailability
of the remedy of specific performance in certain cases; and (ii)
certain of the remedial provisions in the documents may be limited or
rendered unenforceable under applicable laws and judicial decisions,
provided, however, that the inclusion of such provisions does not
affect the validity of the Loan Documents, and the Loan Documents
contain adequate provision for enforcing payment of the Note and for
the practical realization of the rights and benefits afforded by the
Loan Documents.
This opinion is furnished by us as counsel for the Borrower and
the Guarantors solely for your benefit in connection with the
transactions contemplated by the Loan Agreement. This opinion may not
be relied upon by you for any other purpose, or used or relied upon
by, or circulated, furnished or quoted to, any other person, firm or
corporation for any purpose without our prior written consent.
Very truly yours,
KRUGMAN, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SCHEDULE A
▇▇▇▇▇▇▇▇▇, Inc.,
a Missouri corporation
E-Midsouth, Inc.,
a Florida corporation
Gelco Services, Inc.,
an Oregon corporation
Geltech Constructors, Inc.,
an Oregon corporation
INA Acquisition Corp.,
a Delaware corporation
Insituform California, Inc.,
a Delaware corporation
Insituform Capital Corp.,
a Delaware corporation
Insituform Central, Inc.,
a Delaware corporation
Insituform de Puerto Rico, Inc.,
a Delaware
Insituform Gulf South, Inc.,
a Delaware corporation
Insituform Mid-America, Inc.,
a Delaware corporation
Insituform Midwest, Inc.,
a Delaware corporation
Insituform Missouri, Inc.,
a Delaware corporation
Insituform North America Corp.,
a Tennessee corporation
Insituform North, Inc.,
a Delaware corporation
Insituform of New England, Inc.,
a Massachusetts corporation
Insituform Plains, Inc.,
a Delaware corporation
Insituform Rockies, Inc.,
a Delaware corporation
Insituform Southeast, Inc.,
a Florida corporation
Insituform Southwest,
a partnership having Insituform
California, Inc., a Delaware
corporation, and NuPipe
California, Inc., a Delaware
corporation, as sole partners
Insituform Texark, Inc.,
a Delaware corporation
NuPipe California, Inc.,
a Delaware corporation
NuPipe, Inc.,
an Oregon corporation
NuPipe International, Inc.,
a Delaware corporation
PALTEM Systems, Inc.,
a Delaware corporation
Pipe Rehab International, Inc.,
a Delaware corporation
United Pipeline Systems USA, Inc.,
a Delaware corporation
EXHIBIT F TO CREDIT AGREEMENT
GUARANTY
THIS GUARANTY ("Guaranty") is executed as of October ,
1995, by , a
corporation [or ]
("Guarantor"), in favor of SUNTRUST BANK, NASHVILLE, NATIONAL
ASSOCIATION, a national banking association with principal offices in
Nashville, Tennessee, as lender/issuer under the Letter of Credit
Documents, as hereinafter defined, and as lender under the Swing Line
Loan (hereafter defined) ("STB"), and in favor of STB and the other
lenders, banks and lending institutions from time to time parties to
and/or lenders under the Credit Agreement as hereinafter defined
(STB, in all its lender/issuer capacities, and such other lenders,
banks and lending institutions collectively referred to herein as the
"Lenders"), and accepted by SUNTRUST BANK, NASHVILLE, NATIONAL
ASSOCIATION for itself and in its capacity as agent for the Lenders
under the Credit Agreement (the "Agent").
W I T N E S S E T H:
WHEREAS, Guarantor is a direct or indirect subsidiary of
Insituform Technologies, Inc., a Delaware corporation (the
"Borrower"); and
WHEREAS, Guarantor desires that Lenders extend credit to
Borrower; and
WHEREAS, Lenders have agreed to extend certain credit to
Borrower under certain terms and conditions; and
WHEREAS, among the conditions to Lenders' agreement to extend
credit to Borrower is that Guarantor must guarantee the obligations
of Borrower to Lenders, as described herein, without which guarantee
Lenders would not extend credit to Borrower; and
WHEREAS, Guarantor's business is a specialized part of an
integrated and coordinated enterprise conducted by Borrower through
Borrower and Guarantor for the convenience, economic advantage and
greater profit of the integrated and coordinated enterprise
represented by Borrower and Guarantor;
NOW, THEREFORE, as an inducement to cause Lenders to extend
credit to Borrower, and for other valuable consideration, the receipt
and sufficiency of which are acknowledged, Guarantor agrees as
follows:
Article I. Definitions.
Section 1.01 The following terms shall have the following
meanings unless the context expressly requires otherwise:
(a) "Borrower" means Insituform Technologies, Inc. and its
successors and assigns, and shall include, without limitation:
(i) Borrower as debtor-in-possession or any trustee in any
bankruptcy proceeding, (ii) any trustee, receiver, custodian,
conservator, or other similar appointee over Borrower or over
any of Borrower's Property pursuant to any court proceeding of
any kind, and (iii) any successor corporation or successor
Person.
(b) "Collateral" means: (i) any and all Property and
things of value in or against which a lien and/or security
interest has been granted or may in the future be granted to
secure to Lenders repayment and performance of the Guaranteed
Obligations; (ii) any and all Property and things of value now
held or which may in the future be held by or for the benefit of
Lenders as security for or for application to the Guaranteed
Obligations; and (iii) any and all Property and things of value
assigned to or which may in the future be assigned to or for the
benefit of Lenders as security for or for application to the
Guaranteed Obligations.
(c) "Guaranteed Obligations" means (i) any and all
obligations of any kind and character whatsoever of Borrower to
Lenders or any of them, evidenced by and/or arising in
connection with any of the following: (A) the Revolving Credit
Notes (as such term is defined in the Credit Agreement) executed
by Borrower in favor of each of the Lenders under the Credit
Agreement, in the initial aggregate principal amount of
$105,000,000, originally dated as of October 25, 1995, and any
and all amendments, modifications, increases, decreases,
restatements, extensions and renewals of, to and for any of the
foregoing, and all notes given in modification, consolidation,
separation, extension, renewal, payment and/or replacement
thereof, and all changes in form thereof (collectively referred
to herein as the "Notes"), (B) that certain Swing Line Note (as
such term is defined in the Credit Agreement) executed by
Borrower in favor of STB under the Credit Agreement, in the
initial principal amount of $5,000,000, originally dated as of
October 25, 1995, and any and all amendments, modifications,
increases, decreases, restatements, extensions and renewals
thereof, thereto and therefor, and all notes given in
modification, consolidation, separation, extension, renewal,
payment and/or replacement thereof, and all changes in form
thereof (collectively referred to herein as the "Swing Line
Note"), and/or (C) any and all applications and/or agreements
for standby letter(s) of credit, reimbursement agreements,
promissory notes and/or other documents, instruments or
agreements executed from time to time by Borrower in connection
with any letter(s) of credit issued at any time and/or from time
to time by STB for the account of Borrower (or any subsidiary of
Borrower) or otherwise on behalf of Borrower or any subsidiary
of Borrower for the benefit of any Person, including without
limitation all indebtedness and obligations evidenced by and/or
arising in connection with that certain Master Letter of Credit
Demand Note dated October 25, 1995 in the original principal
amount of $5,000,000, executed by Borrower in favor of STB, and
any and all amendments, modifications, increases, decreases,
restatements, extensions and renewals thereof, thereto and
therefor, and all notes given in modification, consolidation,
separation, extension, renewal, payment and/or replacement
thereof, and all changes in form thereof (collectively referred
to herein as the "Master Letter of Credit Demand Note") and any
and all renewals, replacements, extensions, increases, decreases
and/or substitutions of or to any of the foregoing, and all
changes in form thereof (all of the foregoing being collectively
referred to as "Letter of Credit Documents"), and/or (D) that
certain Credit Agreement between and among Borrower, STB as
Agent and the lenders parties thereto from time to time, dated
as of October ,1995, and any and all amendments,
modifications, restatements and extensions thereof and thereto
and all replacements therefor (collectively referred to herein
as the "Credit Agreement"), including without limitation all
interest that would accrue and be payable but for the operation
of any provisions of the Bankruptcy Code, plus (ii) all costs,
fees and expenses associated with and/or incurred in connection
with the enforcement of this Guaranty and/or the Guaranteed
Obligations, and/or the protection of the rights of Lenders or
any of them, under this Guaranty and/or the Guaranteed
Obligations, including without limitation any reasonable legal
fees and expenses incurred by Lenders in connection with such
enforcement or protection, whether any of the foregoing
indebtednesses and obligations are now existing or hereafter
arising, whether direct or indirect, whether absolute or
contingent, whether such indebtedness and obligations are from
time to time reduced and thereafter increased or entirely
extinguished and thereafter incurred, whether such indebtedness
arises with or without notice to Guarantor, whether such
indebtedness expressly arises with or without reliance on this
Guaranty, including, without limitation, all renewals,
extensions, amendments, increases, decreases, restatements and
modifications of and to any of the aforementioned, and shall
include all principal, interest, fees, reasonable attorney fees,
court costs, and all other monies evidenced by and comprising
the Guaranteed Obligations.
(d) "Guarantor" means ,
a corporation [or
], and its successors and assigns,
and shall include without limitation: (i) Guarantor as
debtor-in-possession or any trustee in any bankruptcy
proceeding, (ii) any trustee, receiver, custodian, conservator
or other similar appointee over Guarantor or over Guarantor's
Property pursuant to any court proceeding of any kind, and (iii)
any successor corporation or successor Person.
(e) "Other Guarantors" means any and all Persons who now
or in the future guarantee to Lenders all or any portion of the
Guaranteed Obligations.
(f) "Person" means any individual, corporation,
partnership, joint venture, association, joint stock company,
trust, unincorporated organization, government, or any agency or
political subdivision thereof, or any other form of entity.
(g) "Property" or "Properties" means any interest in any
kind of property or asset, whether real, personal, or mixed, or
tangible or intangible.
Article II. Representations and Warranties.
To induce Lenders to accept this Guaranty and to cause Lenders
to extend credit from time to time to Borrower, Guarantor hereby
represents and warrants to Lenders the following:
Section 2.01 Corporate Existence. Guarantor is a corporation
duly organized, legally existing, and in good standing under the laws
of the State of and it is duly qualified as a
foreign corporation in all jurisdictions in which the Property owned
or the business transacted by it makes such qualification necessary,
failure to qualify in which would have a material adverse effect on
the business, Properties, financial condition or operations of
Guarantor.
[Alternatively: Guarantor is a general partnership duly
organized and legally existing under the laws of the state of
, having as its [sole] general partner[s]
and , each a corporation
duly organized, legally existing and in good standing under the
laws of the State of Delaware, and it is duly qualified as a
foreign partnership in all jurisdictions in which the Property
owned or the business transacted by it makes such qualification
necessary, the failure to qualify in which would have a material
adverse effect on the business, Properties, financial condition
or operations of the Guarantor.]
Section 2.02 Corporate Power and Authorization. Guarantor is
duly authorized and empowered to execute, deliver, and perform under
this Guaranty; Guarantor's board of directors and shareholders
[Alternatively: the board of directors and shareholders of
Guarantor's general partners] have authorized Guarantor to execute
and perform under this Guaranty; and all other corporate and/or
shareholder action on Guarantor's part required for the due
execution, delivery, and performance of this Guaranty has been duly
and effectively taken.
Section 2.03 Binding Obligations. This Guaranty is legal, valid
and binding upon and against Guarantor, enforceable in accordance
with its terms, subject to no defense, counterclaim, set-off, or
objection of any kind.
Section 2.04 No Legal Bar or Resultant Lien. Guarantor's
execution, delivery and performance of this Guaranty do not
constitute a default under, and will not violate any provisions of
the articles of incorporation (or charter) or bylaws of Guarantor,
any contract, agreement, law, regulation, order, injunction,
judgment, decree, or writ to which Guarantor is subject, or result in
the creation or imposition of any lien upon any Properties of
Guarantor (provided that, it is acknowledged that Borrower will have
obtained any required waivers of certain breaches of certain
financial covenants contained in the documents evidencing the Panola
County Bond Obligations, the Shelby County Bond Obligations and the
Hanseatic Obligations (as defined in the Credit Agreement) prior to
borrowing under the Credit Agreement), which violation, creation or
imposition would have a material adverse effect on the business,
Properties, financial condition or operations of Guarantor.
Section 2.05 No Consent. Guarantor's execution, delivery, and
performance of this Guaranty do not require the consent or approval
of any other Person (provided that, it is acknowledged that Borrower
will have obtained any required waivers of certain breaches of
certain financial covenants contained in the documents evidencing the
Panola County Bond Obligations, the Shelby County Bond Obligations
and the Hanseatic Obligations (as defined in the Credit Agreement)
prior to borrowing under the Credit Agreement).
Section 2.06 Solvency. Guarantor is solvent as of the date
hereof. Guarantor is generally paying its debts as they mature and
the fair value of Guarantor's assets exceeds the sum total of
Guarantor's liabilities without reference to the Guaranteed
Obligations.
Section 2.07 In Furtherance of Business Purposes. The extension
of credit to Borrower by Lenders is a direct or indirect financial
benefit to Guarantor and the execution of this Guaranty is made in
furtherance of the purposes of Guarantor. Guarantor's business is a
specialized part of an integrated and coordinated enterprise
conducted by Borrower through Guarantor and Borrower's other
subsidiaries. Borrower, Guarantor and Borrower's other subsidiaries
are so related and situated that they share an identity of interests,
because what benefits one will benefit the other. For these and other
reasons, Guarantor is directly and indirectly benefited by the credit
extended by Lenders to Borrower; and this benefit is reasonably
equivalent value received by Guarantor in exchange for this Guaranty.
Article III. Covenants and Agreements.
Section 3.01 Guarantee of Payment.
(a) Guarantor hereby irrevocably and unconditionally
guarantees to Lenders the full and timely payment and
performance of the Guaranteed Obligations.
(b) All payments by Guarantor shall be paid in lawful
money of the United States of America.
(c) Each and every default in payment of the Guaranteed
Obligations shall give rise to a separate cause of action
hereunder, and separate suits may be brought hereunder by
Lenders as each cause of action arises.
(d) Guarantor shall pay on demand to Lenders all costs and
expenses (including without limitation reasonable legal fees,
and the reasonable fees and expenses of auditors and
consultants) incurred by Lenders in protecting, interpreting,
and/or enforcing any of their rights or in the pursuance of any
of their remedies in respect of the Guaranteed Obligations or
this Guaranty.
Section 3.02 Obligations Continuing and Unconditional. The
obligations of Guarantor under this Guaranty are continuing, absolute
and unconditional and shall remain in full force and effect until the
entire principal of and interest and expenses on the Guaranteed
Obligations shall have been paid in full and discharged and none of
STB or any of the Lenders have any obligation to lend or issue
Letters of Credit under the Credit Agreement, and such obligations
shall not be affected, modified or impaired by any state of facts or
the happening from time to time of any event whatsoever, including,
without limitation, any of the following, whether or not with notice
to or the consent of Guarantor:
(a) the invalidity, irregularity, illegality or
unenforceability of, or any defect in, any instrument, document,
agreement or contract evidencing or comprising the Guaranteed
Obligations;
(b) any present or future law or order of any government
or of any agency thereof purporting to reduce, amend or
otherwise affect the Guaranteed Obligations or any other
obligation of Borrower or any other obligor or to vary any terms
of payment;
(c) any claim of immunity or defense (other than full and
final payment of the Guaranteed Obligations) on behalf of
Borrower or any other obligor;
(d) the waiver, compromise, settlement, release or
termination of any or all of the Guaranteed Obligations or the
release of any Collateral or any Other Guarantor;
(e) the failure to give notice to Guarantor of the
occurrence of any event of default or breach of any of the
Guaranteed Obligations or the breach of any provisions
hereunder;
(f) the extension of the time for payment of any principal
of or interest or premium on any of the Guaranteed Obligations
or of the time for performance of any other obligations,
covenants or agreements under or arising out of the Guaranteed
Obligations;
(g) the modification or amendment (whether material or
otherwise) of any obligation, instrument, contract, covenant or
agreement set forth in, evidencing, or comprising any part of,
or failure to marshal any of, the Guaranteed Obligations;
(h) the taking of, or the omission to take, any of the
actions referred to in this Guaranty or in any of the
instruments, documents, agreements, and contracts evidencing or
comprising the Guaranteed Obligations;
(i) any failure, omission or delay on the part of Lenders
or any other Person to enforce, assert or exercise any right,
power or remedy conferred on Lenders or such other Person in the
Guaranty or the Guaranteed Obligations;
(j) the voluntary or involuntary liquidation of,
dissolution of, sale or other disposition of all or
substantially all the assets of, cessation of business of,
marshalling of assets and liabilities of, receivership of,
financial decline of, insolvency of, bankruptcy of, assignment
for the benefit of creditors of, reorganization of, arrangement
of, composition with creditors or readjustment of, or other
similar proceedings affecting, Borrower or any of its
subsidiaries or assets or any allegation or contest of the
validity of the Guaranteed Obligations or this Guaranty, or the
disaffirmance or attempted disaffirmance of the Guaranteed
Obligations or this Guaranty, in any such proceedings;
(k) the default or failure of Guarantor fully to perform
any of its obligations set forth in this Guaranty;
(l) the merger or consolidation of Borrower or a change in
Borrower's business operations or management;
(m) the failure of any other Person to guarantee any or
all of the Guaranteed Obligations;
(n) the failure of Lenders to take or perfect a lien,
security interest, or any other interest in any Collateral, or
the failure by Lenders to give notice to Guarantor of any
foreclosure or other sale of the Collateral by Lenders;
(o) the release by Lenders of any Collateral or
determination by Lenders not to assert a claim against or
proceed against Borrower, any Collateral or any Other Guarantor;
(p) Lenders' compromise or settlement with or without
release of any other Person liable for any of the Guaranteed
Obligations;
(q) Lenders' failure to file suit against Borrower
(regardless whether Borrower is becoming insolvent, is believed
to be about to leave the state, or any other circumstance);
(r) Lenders' acceleration of any or all of the Guaranteed
Obligations;
(s) the renewal, extension, or amendment of any of the
Guaranteed Obligations;
(t) Lenders' failure to exercise diligence in the
collection of the Guaranteed Obligations;
(u) the termination of any relationship of Guarantor with
Borrower or Borrower's business, including, without limitation,
any relationship of employment, ownership, commerce, or
marriage; or
(v) to the extent permitted by law, any event or action
that would, in the absence of this paragraph, result in the
release or discharge of Guarantor from the performance or
observance of any obligation, covenant or agreement contained in
this Guaranty.
Section 3.03 Waivers by Guarantor.
(a) Guarantor hereby waives with respect to the Guaranteed
Obligations and this Guaranty: diligence; presentment; demand of
payment; filing of claims with a court in the event of
bankruptcy of Borrower or any other Person liable in respect of
the Guaranteed Obligations; any right to require Lenders to
proceed first against Borrower or any other Person; protest;
notice of dishonor or nonpayment of any such liabilities; notice
of the release of any Other Guarantor; notice of the release or
sale of any Collateral; and any other notice and all demands
whatsoever. Guarantor hereby waives notice from Lenders and the
holders at any time or from time to time of the Guaranteed
Obligations, of the issuance of the instruments evidencing the
Guaranteed Obligations, and of acceptance of, or notice and
proof of reliance on, the benefits of this Guaranty.
(b) Guarantor hereby agrees that it shall have no right of
subrogation, reimbursement or indemnity whatsoever and no right
of recourse to or with respect to any assets or property of
Borrower even upon payment in full of the Guaranteed
Obligations.
(c) The obligations of Guarantor hereunder shall not be
discharged except by full and final payment and discharge of the
Guaranteed Obligations.
Section 3.04 Primary Liability of Guarantor. This Guaranty
constitutes a guarantee of payment and performance and not of
collection. Accordingly, Lenders may enforce this Guaranty against
Guarantor without first making demand or instituting collection
proceedings upon the Guaranteed Obligations. Guarantor's liability
for the Guaranteed Obligations is hereby declared to be primary, and
not secondary, and each document presently or hereafter executed by
Borrower to evidence or secure an obligation to Lenders is
incorporated herein by reference and shall be fully enforceable
against Guarantor. Guarantor shall not be entitled to satisfy this
Guaranty by contributing ratably with any Other Guarantor or
otherwise paying less than the entire unpaid indebtedness comprising
the Guaranteed Obligations.
Section 3.05 Subordination. Guarantor agrees that any presently
existing or hereafter arising loan or extension of credit made by
Guarantor to Borrower and any other presently existing or hereafter
arising obligation of Borrower to Guarantor shall be subordinate to
the Guaranteed Obligations as to both payment and collection.
Accordingly, Guarantor agrees not to accept any payment whatsoever
from Borrower or to allow any payment by Borrower on Guarantor's
behalf while any default, event of default, or breach exists with
respect to the Guaranteed Obligations. Guarantor agrees that in the
event of a bankruptcy or other insolvency proceeding involving
Borrower, Guarantor will timely file a claim for the amount of the
subordinated debt, in form reasonably acceptable to Lenders.
Guarantor agrees to pursue said claim with diligence. The proceeds of
such claim shall be delivered to Lenders to the extent Guarantor owes
to Lenders any amounts under this Guaranty.
Section 3.06 Statute of Limitations. Guarantor acknowledges that
the statute of limitations applicable to this Guaranty shall begin to
run only upon Lenders' accrual of a cause of action against Guarantor
hereunder caused by Guarantor's refusal to honor a demand for
performance hereunder made by Lenders in writing; provided, however,
if, subsequent to the demand upon Guarantor, Lenders reach an
agreement with Borrower on any terms causing Lenders to forbear in
the enforcement of their demand upon Guarantor, the statute of
limitations shall be reinstated for its full duration until Lenders
subsequently again make demand upon Guarantor.
Section 3.07 Recovery of Avoided Payments. If any amount
applied by Lenders to the Guaranteed Obligations is subsequently
challenged by a bankruptcy trustee or debtor-in-possession or other
Person as an avoidable transfer on the grounds that the payment
constituted a preferential payment or a fraudulent conveyance under
state law or the Bankruptcy Code or any successor statute thereto or
on any other grounds, Lenders may at their option and in their sole
discretion, elect whether to contest such challenge. If Lenders
contest the avoidance action, all costs of the proceeding, including
Lenders' reasonable attorneys' fees, will become part of the
Guaranteed Obligations, and shall be due and payable by Guarantor on
demand. If the contested amount is successfully avoided, the avoided
amount will become part of the Guaranteed Obligations hereunder and
shall be due and payable by Guarantor on demand. If Lenders elect not
to contest the avoidance action, Lenders may tender the amount
subject to the avoidance action to the bankruptcy court, trustee or
debtor-in-possession and the amount so advanced shall become part of
the Guaranteed Obligations hereunder, and shall be due and payable by
Guarantor on demand. Guarantor's obligation to reimburse Lenders for
amounts due under this section shall survive the purported
cancellation hereof.
Article IV. Setoff Rights. In order to further secure the
payment of the Guaranteed Obligations, Guarantor hereby grants
Lenders a right to setoff against all of Guarantor's presently owned
or hereafter acquired monies, securities, deposits, instruments
(including certificates of deposit), and other Property presently or
hereafter in the possession of Lenders. By maintaining any such
accounts with Lenders or placing Property in Lenders' possession,
Guarantor acknowledges that Guarantor voluntarily subjects the
Property to Lenders' rights hereunder.
Article V. Events Requiring Guarantor to Perform.
Section 5.01 Events. Upon the occurrence of any of the following
events, Guarantor shall immediately and without notice pay to Lenders
an amount equal to all of the Guaranteed Obligations, and Lenders
shall be entitled to enforce the provisions hereof, and to exercise
any other rights, powers, and remedies provided hereunder. Guarantor
agrees that if any of the following events occurs, Guarantor shall
pay to Lenders an amount equal to all Guaranteed Obligations,
regardless whether any of the Guaranteed Obligations themselves have
been accelerated, are past due, or are in default:
(a) any warranty, representation or other statement by or
on behalf of Guarantor contained in this Guaranty is false or
misleading in any material respect; or
(b) an Event of Default occurs under or in connection with
any of the Guaranteed Obligations or any of the instruments,
documents, agreements or contracts evidencing the Guaranteed
Obligations, including without limitation the Notes or any of
them, the Swing Line Note, the Credit Agreement, the Letter of
Credit Documents or any of the other documents, instruments or
agreements executed or delivered at any time in connection with
any of the foregoing.
Section 5.02 Remedies; Waiver, Etc.
(a) No remedy herein conferred upon or reserved to Lenders
is intended to be exclusive of any other available remedy or
remedies, but each and every remedy shall be cumulative and
shall be in addition to every other remedy given under this
Guaranty or now or hereafter existing at law or in equity or by
statute or by contract.
(b) No delay or omission to exercise any right or power
accruing upon the occurrence of any of the events specified in
Section 5.01 hereunder shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right or
power may be exercised from time to time and as often as may be
deemed expedient.
(c) In order to entitle Lenders to exercise any remedy
reserved to them in this Guaranty, it shall not be necessary to
give any notice, except as may be set forth in the Guaranteed
Obligations regarding notice to Borrower.
(d) In the event any provision contained in this Guaranty
should be breached by any party and thereafter duly waived by
the other party so empowered to act, such waiver shall be
limited to the particular breach so waived and shall not be
deemed to waive any other breach hereunder.
(e) No waiver, amendment, release or modification of this
Guaranty shall be established by conduct, custom or course of
dealing.
Article VI. Miscellaneous
Section 6.01. Notices. All communications under or in con-
nection with this Guaranty shall be in writing and shall be mailed by
first class certified mail, postage prepaid, or otherwise sent by
telex, telegram, telecopy, or other similar form of rapid
transmission confirmed by mailing (in the manner stated above) a
written confirmation at substantially the same time as such rapid
transmission, or personally delivered to an officer of the receiving
party. All such communications shall be mailed, sent, or delivered
as follows:
(a) if to Guarantor, to its address shown below, or to
such other address as Borrower may have furnished to Lenders in
writing:
Attn:
(b) if to Lenders, to the Agent at the address shown
below, or to such other address or to such individual's or
department's attention as Lenders may have furnished Borrower in
writing:
with a copy to:
SunTrust Bank, Nashville, N.A. SunTrust Bank, Nashville, N.A.,
as Agent as Agent
▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Department: U.S. Banking Attn: ▇▇. ▇.▇. ▇▇▇▇▇
department: U.S. Banking
Any communication so addressed and mailed by certified mail shall be
deemed to be given when so mailed.
Section 6.02. Invalidity. In the event that any one or more of
the provisions contained in this Guaranty for any reason shall be
held invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any
other provision of this Guaranty.
Section 6.03 Survival. All warranties, representations, and
covenants made by Guarantor herein shall be deemed to have been
relied upon by Lenders and the holder(s) from time to time of the
Guaranteed Obligations and shall survive the delivery to Lenders of
this Guaranty.
Section 6.04 Successors and Assigns. This Guaranty shall inure
to the benefit of and be binding upon the successors and assigns of
each of the parties, except that Guarantor shall not assign any
rights or delegate any obligation hereunder without the prior written
consent of Agent (and/or STB with regard to the Swing Line Loan and
Letter of Credit Documents). Any attempted assignment or delegation
without the required prior consent shall be void. The provisions of
this Guaranty are intended to be for the benefit of Lenders and any
other holder or holders of the Guaranteed Obligations. Guarantor
acknowledges that the Guaranteed Obligations and this Guaranty may be
assigned or sold by Lenders to one or more third parties.
Section 6.05. Renewal, Extension, or Rearrangement. All
provisions of this Guaranty relating to Guaranteed Obligations shall
apply with equal force and effect to each and all promissory notes
and other documents executed hereafter which in whole or in part
represent a renewal, extension for any period, increase, or
rearrangement of any part of the Guaranteed Obligations originally
represented by any part of such other Guaranteed Obligations.
Section 6.06. Waivers. Pursuant to T.C.A. Section ▇▇-▇▇-▇▇▇,
no action or course of dealing on the part of Lenders, their
officers, employees, consultants, or agents, nor any failure or delay
by Lenders with respect to exercising any right, power, or privilege
of Lenders under this Guaranty, shall operate as a waiver thereof,
except as otherwise provided in this Guaranty. Agent may from time
to waive any requirement hereof on behalf of the Lenders and each of
them; however no waiver shall be effective unless in writing and
signed by Agent. The execution by Agent of any waiver shall not
obligate Lenders or Agent to grant any further, similar, or other
waivers.
Section 6.07. Cumulative Rights. Rights and remedies of
Lenders under this Guaranty shall be cumulative, and the exercise or
partial exercise of any such right or remedy shall not preclude the
exercise of any other right or remedy.
Section 6.08. Construction. This Guaranty constitutes a
contract made under and shall be construed in accordance with and
governed by the laws of the State of Tennessee.
Section 6.09. Titles of Articles, Sections, and Subsections.
All titles or headings to articles, sections, subsections, or other
divisions of this Guaranty or the exhibits to this Guaranty are only
for the convenience of the parties and shall not be construed to have
any effect or meaning with respect to the other content of such
articles, sections, subsections, or other divisions, such other
content being controlling with respect to the agreement between the
parties.
Section 6.10. Time of Essence. Time is of the essence with
regard to each and every provision of this Guaranty.
Section 6.11. Remedies. All remedies that this Guaranty
provides for Lenders shall be in addition to all other remedies
available to Lenders under any other document or under the principles
of law and equity, and pursuant to any other body of law, statutory
or otherwise.
Section 6.12 Entire Agreement. This Guaranty represents the
entire agreement between the parties concerning the liability of
Guarantor for the Guaranteed Obligations, and any previously made
oral statements regarding Guarantor's liability for the Guaranteed
Obligations are merged herein. Without limiting the foregoing,
Guarantor acknowledges that Lenders have made no oral statements to
Guarantor that could be construed as a waiver of Lenders' right to
enforce this Guaranty by all available legal means. By its acceptance
hereof, Agent, on behalf of STB individually hereby releases any and
all prior guaranties executed by Guarantor for its benefit.
Section 6.13. Amendments. The parties hereto agree that this
Guaranty may not be modified or amended except in writing signed by
the parties hereto; provided, however, that Agent, in Agent's
discretion, may at any time and from time to time grant waivers of
the provisions hereof in accordance with Section 6.06.
Section 6.14. No Partners; No Third Party Beneficiaries. Nothing
contained herein or in any related document shall be deemed to render
Lenders partners of Borrower or Guarantor for any purpose. This
Guaranty and any documents securing the Guaranteed Obligations have
been executed for the sole benefit of Lenders as an inducement to
cause Lenders to extend credit to Borrower, and neither Guarantor nor
any other third party is authorized to rely upon Lenders' rights
hereunder or to rely upon an assumption that Lenders have exercised
or will exercise their rights under any document.
Section 6.15. Indulgence Not Waiver. Lenders' indulgence in the
existence of a default hereunder or any other departure from the
terms of this Guaranty shall not prejudice Lenders' rights to make
demand and recover from Guarantor.
Section 6.16. Costs of Collection Against Guarantor. Guarantor
agrees to pay on demand all reasonable costs of collection,
including, without limitation, court costs, reasonable attorneys'
fees and compensation for time spent by Lenders' employees, that
Lenders may incur in enforcing the terms of this Guaranty or that may
be incurred in any legal proceeding brought to construe, enforce, or
apply this Guaranty.
Section 6.17. Governing Law; Consent to Forum. This Guaranty
has been negotiated, executed and delivered at and shall be deemed to
have been made in Nashville, Tennessee. This Guaranty shall be
governed by and construed in accordance with the internal laws of the
State of Tennessee. As part of the consideration for new value
received, and regardless of any present or future domicile or
principal place of business of Guarantor or Lenders, Guarantor hereby
consents and agrees that any Tennessee state courts sitting in
Davidson County, Tennessee, or, at Agent's option, the United States
District Court for the Middle District of Tennessee, shall have
jurisdiction to hear and determine any claims or disputes between
Guarantor and Lenders pertaining to this Guaranty or to any matter
arising out of or related to this Guaranty; provided, however,
Lenders may, at their option, commence any action, suit or proceeding
in any other appropriate forum or jurisdiction to obtain possession
of or foreclosure upon any collateral, to obtain equitable relief or
to enforce any judgment or order obtained by Lenders against
Guarantor or with respect to any collateral, to enforce any other
right or remedy under this Guaranty or to obtain any other relief
deemed appropriate by Lenders. Guarantor expressly submits and
consents in advance to such jurisdiction in any action or suit
commenced in any such court, and Guarantor hereby waives any
objection which Guarantor may have based upon lack of personal
jurisdiction, improper venue or forum non conveniens and hereby
consents to the granting of such legal or equitable relief as is
deemed appropriate by such court. Guarantor hereby waives personal
service of the summons, complaint and other process issued in any
such action or suit and agrees that service of such summons,
complaint and other process may be made by registered or certified
mail addressed to Guarantor at the address set forth in this Guaranty
and that service so made shall be deemed completed upon the earlier
of Guarantor's actual receipt thereof or three (3) days after deposit
in the United States Mails, proper postage prepaid. Nothing in this
Guaranty shall be deemed or operate to affect the right of Lenders to
serve legal process in any other manner permitted by law.
Section 6.18. Gender. Words used herein indicating gender or
number shall be read as context may require.
Section 6.19. Cancellation by Lenders. Lenders may evidence
their cancellation of this Guaranty and the release of Guarantor from
liability hereunder by delivering to Guarantor an instrument of
release, or by delivering the original of this Guaranty to Guarantor
with a notation on its face signed and dated by an authorized officer
of Lenders stating "Cancelled in Full As To All Guaranteed
Obligations." However, the purported cancellation hereof and release
of Guarantor shall not impair Guarantor's continuing liability for
(i) any amount of principal, interest, or expenses that was
mistakenly omitted by Lenders in calculating the final payment due
under the Guaranteed Obligations, if the release of Guarantor was
based upon Lenders' belief that it had been paid in full,
(ii) liability for avoided payments and expenses related thereto set
forth in Section 3.07 hereto, and (iii) any surviving liability of
Borrower to reimburse Lenders or to indemnify Lenders for any amounts
whatsoever. Lenders shall not be obligated to release any collateral
securing this Guaranty until after all applicable time periods have
expired regarding bankruptcy preference or other avoidance actions
that may be applicable to the circumstances of payment of any or all
of the Guaranteed Obligations.
Section 6.20. Guaranty Irrevocable. Guarantor's guarantee of the
Guaranteed Obligations is irrevocable, except that Guarantor may
terminate its continuing obligation to guarantee new indebtedness of
Borrower by providing written notice to Agent of such termination and
obtaining written confirmation thereof by Agent. No attempted or
purported termination by Guarantor shall be effective unless receipt
of the notice of termination is acknowledged by Agent thereof in
writing. Termination shall apply only to principal portions of the
Guaranteed Obligations arising after Agent has confirmed in writing
receipt of such notice of termination and shall apply only to such
Guaranteed Obligations with respect to which Lenders were not
obligated to advance credit to Borrower prior to confirmation by
Agent in writing of receipt of such notice of termination. The notice
of termination shall not relieve Guarantor of any of the Guaranteed
Obligations: (i) incurred by Borrower before delivery (and
confirmation of receipt thereof) of the notice of termination; (ii)
arising from and out of Lenders' commitments and agreements to extend
credit to Borrower made before delivery (and confirmation of receipt
thereof) of the notice of termination; and (iii) consisting of
accrued interest, attorney fees, premiums, and other costs, charges,
and monies owing under or pursuant to any of the instruments,
documents, agreements, or contracts evidencing or comprising any of
the Guaranteed Obligations. Termination of this Guaranty may
constitute an event of default under the Guaranteed Obligations.
Section 6.21. No Marshaling of Assets. Lenders may proceed
against any Collateral and against parties liable therefor in such
order as it may elect, and Guarantor shall not be entitled to require
Lenders to marshal assets. The benefit of any rule of law or equity
to the contrary is hereby expressly waived.
Section 6.22. Bankruptcy, Etc. of Borrower. Without limitation,
the Guarantor's obligations hereunder shall not be affected by: (a)
the filing of a petition in bankruptcy by or against Borrower under
11 U.S.C. Section 101, et seq., or the appointment of a trustee,
receiver, custodian, conservator, or other similar appointment over
Borrower or any of Borrower's assets, whether under 11 U.S.C.
Section 101, et seq. or other statutory, administrative, or other
laws, rules, or regulations; (b) any order, ruling, or action taken
(by Lenders, Borrower, or others) in any bankruptcy case initiated by
or against Borrower or in any receivership, conservatorship, or other
similar estate. Lenders may in their discretion modify any of the
terms of the Guaranteed Obligations with any successor or assignee of
Borrower or its Property including a debtor-in-possession or trustee
in bankruptcy, receiver, custodian, conservator, or similar Person,
without affecting Guarantor's obligations hereunder. Any such
debtor-in-possession, trustee, receiver, custodian, conservator, or
other similarly appointed Person shall be deemed to be authorized to
act on behalf of Borrower, and Guarantor authorizes Lenders to deal
with any such Person as if that Person were Borrower for purposes of
this Guaranty.
Section 6.23. Guarantor's Independent Decision. Guarantor
delivers this Guaranty based solely on its own independent
investigation and determination, and Guarantor has not relied on any
statement or representation of Lenders or its agents with respect to
any matter whatsoever. Guarantor is in a position to and hereby
assumes full responsibility for obtaining any additional information
concerning the Guaranteed Obligations and Borrower.
ENTERED INTO the date first set forth above.
GUARANTOR:
By:
--------------------------------
Title:
------------------------------
Accepted in Tennessee by:
LENDERS:
SUNTRUST BANK, NASHVILLE,
NATIONAL ASSOCIATION, as Agent
By:
-----------------------------
Title:
--------------------------
STATE OF NEW JERSEY )
COUNTY OF )
Before me, , a Notary Public of said County
and State, personally appeared , with whom I am
personally acquainted (or proved to me on the basis of satisfactory
evidence), and who, upon oath, acknowledged himself/herself to be
(or other officer authorized to execute the
instrument) of , the within
named bargainor, a corporation, and that as such
executed the foregoing instrument for the
purposes therein contained, by signing the name of the corporation by
himself/herself as .
Witness my hand and seal, at Office, this day of ,
1995.
Notary Public
My Commission Expires:
EXHIBIT G TO CREDIT AGREEMENT
CERTIFICATE OF COMPLIANCE
I, , (the
"undersigned") hereby certify that I am the duly elected and
qualified of Insituform
Technologies, Inc. ("Borrower"), and I hereby make the following
certifications as required under the terms of the Credit Agreement
dated October , 1995, as may be amended from time to time
(the "Credit Agreement") by and among Borrower, SunTrust Bank,
Nashville, National Association as Agent ("Agent"), and the lenders
now or hereafter parties thereto (collectively, "Lenders"):
1. This Certificate of Compliance is given to Lenders on the
day of , 19 . The
information set forth below is derived from Borrower's and its
Subsidiaries' [check one]
____ quarterly ____ annual
financial statements dated [check one]:
____ March 31, 19 ____ September 30, 19
____ June 30, 19 ____ December 31, 19
The date checked and completed above is referred to herein as the
"Covenant Test Date."
2. On the Covenant Test Date as calculated pursuant to the
Credit Agreement, Borrower's and its Subsidiaries':
(a) Consolidated ratio of EBIT to Fixed Charges is
to 1.0 ; and
(b) Consolidated ratio of Funded Debt to Total
Capitalization is to 1.0 ; and
(c) Tangible Net Worth (including Offering Proceeds) is
$ .
(d) Consolidated ratio of Funded Debt to EBITDA is
to 1.0 ; and
3. The undersigned certifies that attached to this
Certificate of Compliance are illustrations of the calculations
made to determine the covenants described in Section 2 above.
4. The undersigned certifies that neither the undersigned
nor Borrower has obtained knowledge of any Event of Default, or
event which, after notice or lapse of time (or both), would
constitute an Event of Default, except for:
.
5. Capitalized terms appearing herein shall have the
meanings ascribed to them in the Credit Agreement.
INSITUFORM TECHNOLOGIES, INC.
By:
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Title:
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