INDEMNIFICATION§17.114
September 1990 17-171
EXHIBIT “A”
INDEMNITY AGREEMENT
This Agreement made and entered into as of the day of , by and between Insituform
Southeast Corp., a Delaware corporation (hereinafter the “Company”) and , a of the
Company (hereinafter, together with his heirs, personal representatives, and estate, the “Indemnitee” or
“claimant”).
WITNESSETH: THAT
WHEREAS, Section 145 of the General Corporation Law of the State of Delaware (hereinaft er “Section
145”) empowers corporations to indemnify persons serving as a director, officer, employee, or agent of the
corporation or a person who serves at the request of the corporation as a director, officer, em ployee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise, and further specifies tha t the
indemnification set forth in said Section 145 “shall not be deemed exclusive of any ot her rights to which those
seeking indemnification may be entitled under any bylaw, agreement, vote of stockholde rs or disinterested
directors or otherwise”; and said Section 145 further empowers a corporation to “purchase and m aintain
insurance” on behalf of any of such persons “against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the corporation would have the power to
indemnify him against such liability under” Section 145; and
WHEREAS, the Company has initiated a thorough investigation to determine the type of insurance
available, the nature and extent of the coverage provided and the cost thereof to t he Company to insure each of
the directors and officers of the Company and of corporations affiliated with the Company aga inst expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by
him in connection with any action, suit or proceeding with which he is threatened or made a party by reason of
such status and/or his decisions, actions or omissions; however, upon receiving such information, the Board of
Directors of the Company concluded that at present, due to the high cost and other negative features of the
coverage available at the date hereof, it would not be in the best interests of its shareholders for the Company to
purchase and maintain an adequate amount of such insurance and that, on the contrary, i ts shareholders’
interests would be better served by the Company’s contracting to indemnify its directors and thereby to
effectively serf-insure against such potential liabilities in excess of, and in c ertain instances against liabilities
excluded from, acceptable insurance coverage which from time to time hereafter may be placed in force
(hereinafter collectively the “Policy”) provided that the aggregate liabilit y of the Company hereunder (stated as
$10,000,000 in Section 9(g) below) shall be reduced by the amounts insured under the Policy as in effe ct at any
given time;
WHEREAS, the Board of Directors has concluded that the Company directors should be provided wi th
maximum protection in order to insure that the most capable persons otherwise available will remain in, and in
the future be attracted to, such directorships and, furthermore, that it is not only fa ir, reasonable and prudent but
necessary for the Company to contractually obligate itself to indemnify present and fut ure directors of the
Company and their respective estates in a reasonable and adequate manner and t hat the Company assume for
itself the responsibility and liability for expenses and damages in connection wit h claims brought whether on
account of any prior, present or future alleged act, omission, injury, damage, or event; and
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WHEREAS, the Company desires to have Indemnitee serve or continue to serve as a direct or of the
Company and of the Affiliate free from undue concern for damages by reason of his being a di rector of the
Company and of the Affiliate or by reason of his decisions or actions on its behalf; and Indemni tee desires to
serve, or to continue to serve, provided that he is furnished the indemnity provided for hereinafte r, as a director
of the Company and of the Affiliate.
NOW, THEREFORE, in consideration of the mutually dependent covenants and agreements conta ined
herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:
1.Agreement to Serve; Definitions.
(a) Indemnitee will serve, and/or continue to serve, the Company and the Affiliate as a director so long
as he is duly elected and qualified in accordance with the provisions of the By-l aws thereof or until such time as
he tenders his resignation or is removed.
(b) Unless the context otherwise clearly indicates to the contrary, the following terms as used herein
shall have the respective meanings set forth below:
(i) Except as used in Section 11, “Affiliate” shall mean Insituform Southeast, Inc., a Fl orida
corporation, and any corporation, partnership, or other enterprise which is at least 30% owned by t he
Company or by any corporation at least 51% of which is owned by the Company; the term “Com pany”
shall specifically mean and refer to Insituform Southeast, Inc. prior to the organizati on of the Company
in 1986 and the transaction whereby the Company became the parent of Insituform Southeast, Inc.
(ii) “Person” means any one (or more) individual or natural person or any one (or more)
corporation, firm, joint venture, partnership, proprietorship, business venture, government, governmental
body, agency or instrumentality, estate, trust, association, or other legal entity wha tsoever or a group of
same.
(iii) “Non-governmental” shall refer to any Person which is not (A) the government of the Unit ed
States of America or of any state, district, territory, or possession thereof or of any county, pari sh, city,
town, township, or municipality within any such state, district, territory or possession, or (B) any
agency, tribunal, council, instrumentality or public body established by any Person described in (A).
(iv) “Policy” shall refer to any insurance policy or coverage obtained with respect of potential
liabilities of directors and officers of the Company. 2. Indemnification. Subject to the provisions of Sections 8 and 9, the Company shall indemnify
Indemnitee as follows:
(a) The Company will pay on behalf of the Indemnitee, and his executors, administrators and he irs, any
amount which he is or becomes legally obligated to pay because of (i) any claim or claims from time to time
threatened or made against him by any Person because of any act or omission or neglect or breach of duty,
including any actual or alleged error or misstatement or misleading statement, which he commits or suffers
while acting in his capacity as a director of the Company or an Affiliate or (ii) being a party, or being threatened
to be made a party, to any threatened, pending, or completed action, suit or proceeding, whet her civil, criminal,
administrative, or investigative, by reason of the fact that he is or was an officer, director, employee, or agent of
the Company or an Affiliate or is or was serving at the request of the Company as a di rector, officer, employee
or agent of another corporation, partnership, joint venture, trust or other enterprise. The payment s which the
Company will be obligated to make hereunder shall include, inter alia, damages, charges, judgments, fines,
penalties, settlements and costs, cost of investigation and costs of defense of lega l or equitable or criminal
INDEMNIFICATION§17.114
September 1990 17-173
actions, claims or proceedings and appeals therefrom, and costs of attachment, supersedeas, bail, surety or other
bonds.
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17-174 © 1990 Jefren Publishing Company, Inc.
(b) If a claim under this Agreement is not paid by the Company, or on its behalf, within sixt y (60) days
after a written claim has been received by the Company, the claimant ma y at any time thereafter bring suit
against the Company to recover the unpaid amount of the claim and, if successful in whole or in part, the
claimant shall be entitled to be paid also the expense (including reasonable a ttorney’s fees) of prosecuting such
claim.
(c) In the event of payment under this Agreement, the Company shall be subrogated to the extent of
such payment to all of the rights of recovery of the Indemnitee, who shall execute a ll documents and take all
actions reasonably requested by the Company to implement such right to subrogation.
(d) The Indemnitee shall give to the Company notice in writing as soon as practic able of any claim
made against him for which indemnity will or could be sought under this Agreement. The Indem nitee will
further notify and cooperate with the Company in the selection of counsel and in the incurrence of costs and
expenses in defending or investigating any claim for which indemnity may be sought hereunder. T he
Indemnitee shall give the Company such information and cooperation as it may reasonabl y require and as shall
be within the Indemnitee’s power.
3.Assumption of Liability by Company. If Indemnitee is deceased and is entitled to indemnification
under any provision of this Agreement, the Company shall indemnify Indemnitee’s estate and hi s spouse, heirs,
administrators and executors against, and the Company shall assume any and all costs, cha rges, and expenses
(including attorneys’ fees), penalties and fines actually and reasonably incurred by or for Indem nitee or his
estate, in connection with the investigation, defense, settlement or appeal of a ny such action, suit or proceeding.
Further, when requested in writing by the spouse of Indemnitee, and/or the heirs, executors or admi nistrators of
Indemnitee’s estate, the Company shall provide appropriate evidence of the Company’s agreem ent set out
herein to indemnify Indemnitee against and to assume itself such costs, charges, liabilities and expenses.
4.Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of the cost, charges and expenses (including attorneys’
fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in the
investigation, defense, appeal or settlement of such suit, action or proceeding but not, however, for all of the
total amount thereof, the Company shall nevertheless indemnify Indemnitee as to the portion thereof to which
Indemnitee is entitled.
5.Determination of Right to Indemnification. Anything contained elsewhere herein to the contrary
notwithstanding, any indemnification under Sections 2 through 4 hereinabove, inclusive, shall (unl ess order by
a court) be paid by the Company promptly or in any event within 60 days of written request t herefor, unless a
determination is made, as hereinafter provided, that indemnification is not proper i n the circumstances because
of the provisions of Sections 8 or 9.
The determination as to whether or not Indemnitee has met the standard of conduct require d to qualify
and entitle him, partially or fully, to indemnification under the provisions of any provisi on of Section 2 hereof
may be made (i) either by the Board of Directors by a majority vote of a quorum consi sting of directors who
were not parties of such action, suit or proceeding; or (ii) by independent legal counsel (who may be the outside
counsel regularly employed by the Company); provided that the manner in which (and, if appl icable, the
counsel by which) the right to indemnification is to be determined shall be approved i n advance in writing by
both the highest ranking executive officer of the Company who is not party to such action (som etimes
hereinafter referred to as “Senior Officer”) and by Indemnitee. In the event that such parties are unable to agree
on the manner in which the determination of the right to indemnity is to be m ade, such determination may be
made by independent legal counsel retained by the Company especially for such purpose, provided that such
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17-174A © 1990 Jefren Publishing company, Inc.
counsel be approved in advance in writing by both the said Senior Officer and Indemnitee and provided further,
that such counsel shall not be outside counsel regularly employed by the Company. The fees and expenses of
counsel in connection with making said determination contemplated hereunder shall be paid by the Company,
and, if requested by such counsel, the Company shall give such counsel an appropriate written a greement with
respect to the payment of their fees and expenses and such other matters as may be reasonably requested by
counsel.
Notwithstanding the foregoing, Indemnitee may, either before or within two (2) years after a
determination has been made as provided above, petition the Court of Chancery of Delawa re or any other court
of competent jurisdiction to determine whether Indemnitee is entitled to indemnification under the provisions
hereof under which he claims the right to indemnification, and such court shall thereupon have the exclusive
authority to make such determination unless and until such court dismisses or otherwise term inates such action
without having made such determination. The court shall, as petitioned, make an inde pendent determination of
whether Indemnitee is entitled to indemnification as provided hereunder, irrespective of any prior determination
made by the Board of Directors, the stockholders or counsel. If the court shall determine that Indemnitee is
entitled to indemnification hereunder as to any claim, issue or matter involved i n the action, suit or proceeding
with respect to which there has been no prior determination pursuant hereto or with respect to which there has
been a prior determination pursuant hereto that Indemnitee was not entitled to indem nification hereunder, the
Company shall pay all expenses (including attorneys’ fees) actually incurred by Indemnitee in connection with
such judicial determination.
If the Person (including the Board of Directors, independent legal counsel, the stockholders or a court)
making the determination hereunder shall determine that Indemnitee is entitle d to indemnification as to some
claims, issues or matters involved in the action, suit or proceeding but not as to others, such person shall
reasonably prorate the expenses (including attorneys’ fees), judgments, penalties, fines and am ounts paid in
settlement) with respect to which indemnification is sought by Indemnitee among such claims, issues or
matters.
If, and to the extent that, it is finally determined hereunder that Indemnitee i s not entitled to
indemnification, then Indemnitee agrees to reimburse the Company for all expenses advance d or prepaid
hereunder, or the proper proportion thereof, other than the expenses of obtaining the judicial determi nation
referred to above.
6.Advance of Costs, Charges, and Expenses. The costs, charges, and expenses incurred by
Indemnitee in investigating, defending, or appealing any threatened, pending or complete d civil or criminal
action, suit or proceeding (administrative or investigative) covered hereunder, shall be paid by the Company in
advance (unless, in the opinion of regular outside counsel to the Company, the provisions of Secti ons 8 or 9
preclude such advance payment) properly to investigate, defend or appeal any such action, sui t, or proceeding,
and any judgments, fines or amounts paid in settlement shall be paid by the Company i n advance, unless, in the
opinion of such counsel, the provisions of Sections 8 or 9 preclude such advance payment, all with t he
understanding and agreement hereby made and entered into by Indemnitee and the Company, that in the event it
shall ultimately be determined as provided hereunder that Indemnitee was not entitl ed to be indemnified, or was
not entitled to be fully indemnified, that Indemnitee shall repay to the Compa ny such amount, or the appropriate
portion thereof, so paid or advanced.
INDEMNIFICATION§17.114
September 199017-174B
7.Other Rights and Remedies. The indemnification and advance payment of expenses as provided by
any provision of this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may be
entitled under any provision of law, the Policy (as an Insured thereunder), the Company’s Cert ificate of
Incorporation, any By-law, this or any other agreement, vote of stockholders or disinterested directors, or
otherwise, as to action in his official capacity, and shall continue after Inde mnitee has ceased to occupy such
position and shall inure to the benefit of the heirs, executors and administrators of Indemnitee.
8.Construction.
(a) This Agreement shall not be construed so as to give rise to a “contractual lia bility” which is
excluded by the Policy. Each and every term hereof is enforceable by the Indemnitee solely as to amounts (i) in
excess of the limits of the Policy with respect to costs, charges and expenses (includi ng attorney’s fees),
judgments, fines, penalties and amounts paid in settlement for which coverage is in effe ct under the Policy and
(ii) used under the Policy as a “deductible” amount and (iii) which none of the Policy and the other liability
insurance policies of the Company clearly covers for the Indemnitee as Insured thereunder; however, in any
case in which the Company believes the Policy or its other insurance should cover a loss, cost or expense, the
Company may make a contingent advance of monies pursuant to the terms hereof without admission, waiver or
prejudice to its position that the Policy or the Company’s other insurance covers the loss, cost or expense. In
amplification and clarification but not in limitation hereof, it is the i ntent of the Company that this Agreement
operate as “excess coverage” above the Policy and other applicable insurance lim its up to the limit set forth in
Section 9(g) and that it operate as “first dollar” coverage in all matters whi ch are outside the scope of the Policy
or within the deductibles of the Policy and all other insurance maintained by the Com pany from time to time,
except as to the exclusions set forth in Section 9.
In amplification but not in limitation of the foregoing, there is hereby expressly inc luded “first dollar”
coverage with respect to the following matters if considered by the Policy to be exclusions:
(1) any act or omission in connection with the acquisition or assumption by Affiliates or t he Company
of the stock, assets and/or business of other corporations by merger, purchase of assets, bulk
reinsurance and otherwise;
(2) liabilities and expenses based on or arising out of any action, suit or proceeding by a Non-
governmental Person involving the Racketeer Influenced and Corrupt Organizations Act, 18
U.S.C. §1961 et seq.; and
(3) any act or omission the sole applicable exclusion for which by the Policy is on account of either (i)
lack of appropriate notice, (ii) the existence of prior insurance, (iii) the timing of the occurrence
and the claim, or (iv) other procedural defenses to coverage by the Policy.
(b) If any provision or provisions of this Agreement shall be held to be invalid, illegal, or une nforceable
for any reason whatsoever, (i) the validity, legality and enforceability of the remaini ng provisions of this
Agreement (including without limitation, all portions of any paragraphs or Sections of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal
or unenforceable) shall not in any way be affected or impaired thereby, and (ii) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, all portions of any paragraph or Sect ion of this
Agreement containing any such provision held to be invalid, illegal or unenforceable, that a re not themselves
invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision
held invalid, illegal or unenforceable.
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17-174C © 1990 Jefren Publishing company, Inc.
9.Exclusions and Limitation. Notwithstanding anything contained herein to the contrary:
(a) The Company shall not be liable to Indemnitee for, nor obligated to furnish advances in connection
with, any loss, cost or expense of Indemnitee resulting from his willful or negligent violation of Section 16(b) of
the Securities Exchange Act of 1934 or of the Foreign Corrupt Practices Act of 1977.
(b) The Company shall not be liable to the Indemnitee for, and shall not be obligat ed to furnish any
advances except for repayable costs, charges and expenses as hereinabove stated, in conne ction with, any loss,
cost or expense of Indemnitee as the direct result of a final judgment for money damages payable to the
Company or any Affiliate for or on account of loss, cost or expense directly or indirectly resul ting from the
Indemnitee’s negligence or misconduct within the meaning of Section 145(b).
(c) Unless otherwise allowed by a court of competent jurisdiction or in a separate act ion in the Chancery
Court of Delaware, the Company shall not be liable to Indemnitee for, and Indemnitee undertakes to repay the
Company for all advances which may have been made of, expenses of investigation, defense or a ppeal of any
matter the judgment of which is excluded under subsection 9(b) next above.
(d) Unless otherwise determined by a court of competent jurisdiction or in a separate ac tion in the
Chancery Court of Delaware, a settlement of any suit, action or proceeding shall be presumed to be an
“expense” in mitigation of the expenses of continued litigation and not the compromise of a judgment on the
merits of the action, suit or proceeding.
(e) Insofar as indemnification for liabilities arising under the Securities Act of 1933 (t he “Securities
Act”) may be permitted to directors of the Company pursuant to the foregoing provisions, or ot herwise, the
Board of Directors has been advised that in the opinion of the Securities and Exchange Com mission such
indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (othe r than the payment by the Company of
expenses incurred or paid by a director of the Company in the wholly or partially succ essful defense of any
action, suit or proceeding) is asserted by the Indemnitee in connection with Company securities which have
been registered, the Company will, unless in the opinion of its counsel the matter ha s been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnifi cation by it
hereunder is against public policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue. In effect, therefore, absent a court decision in the individual case or controlling
precedent, the provisions of the Agreement will not apply to liabilities of the Indemni tee arising under the
Securities Act unless and only to the extent that the Indemnitee is successful in the defense of the action, suit or
proceeding in question.
(f) The Company shall not be liable under this Agreement to make any payment in c onnection with any
claim made against the Indemnitee:
(i) based upon or attributable to the Indemnitee or any member of his immediate fami ly gaining in
fact any personal profit or advantage to which he was not legally entitled;
(ii) based upon or attributable to the dishonesty of the Indemnitee seeking payment hereunder;
provided that the Indemnitee shall be protected under this Agreement as to any claims upon which suit
may be brought against him by reason of any alleged dishonesty on his part, unless a judgment or ot her
final adjudication thereof adverse to the Indemnitee shall establish that he c ommitted acts of active and
deliberate dishonesty, with actual dishonest purpose and intent, which acts were mat erial to the cause of
action so adjudicated;
INDEMNIFICATION§17.114
September 199017-174D
(iii) for bodily injury, sickness, disease or death of any person, or damage to or destruction of any
tangible property; including loss of use thereof; or
(iv) for which indemnification under this Agreement is determined by a final adjudicati on of a
court of competent jurisdiction to be unlawful and violative of public policy.
(g) From and after the date hereof the cumulative total of all amounts paid pursuant to the terms of this
Agreement and all similar agreements entered into by the Company with its di rectors reduced by (1) all sums
repaid to the Company under the repayment provisions of this Agreement and such similar a greements with its
directors and (2) all sums insured under the Policy for risks covered by this Agreement and suc h similar
agreements with its directors, shall never exceed the sum of Ten Million Dollars ($10,000,000).
10.Change of Control.
(a) In the event that a Triggering Event, as hereafter defined, should take place, the obligation
of the Company to Indemnitee shall be funded, and any determination to be made by the Board of
Directors or a Senior Officer of the Company as hereinabove referred to, shall be delegate d automatically, as set
forth in Sections 11 and 10(b) below, respectively.
(b) Upon the occurrence of a Triggering Event set forth in Section 11, all references herei nabove to
actions of and determinations by the Board of Directors or by a Senior Officer of the Company (including
without limitation the choice of counsel by the Board of Directors) shall be deeme d to refer to action and
determinations solely by a Majority of the Continuing Directors as set forth in Section 11.
11.Security for Indemnification.
(a) In order to secure its obligations hereunder the Company shall cause an irrevocable st andby letter of
credit to be issued by such bank as is chosen by a Majority of the Continuing Directors (the “Bank”) exclusively
for the benefit jointly of Indemnitee and all other persons defined as “Indemnitee” under t his Agreement and
similar agreements entered into by the Company with persons serving as its directors from time to time
containing this provision, in the amount of $10,000,000 subject to the terms and conditions of this Section 11
(the “Letter of Credit”). The Company shall cause the Letter of Credit to be issued within two Business Days
following the occurrence of any of the following (the “Triggering Events”):
(i) The coming into being of a Related Person (as defined below);
(ii) The approval by the Board of Directors of the Company of any agreement, contract, plan,
or other arrangement that would, if consummated, result in a Business Combination (as defined below);
and
(iii) The commencement of a Tender Offer (as defined below).
Provided, however, that any event that would otherwise be a Triggering Event shall not be deem ed a Triggering
Event if a Majority of the Continuing Directors of the Company (1) has expressly approved in adva nce the
acquisition of outstanding shares of capital stock of the Company entitled to vote genera lly (the “Voting Stock”)
that caused the Related Person to become a Related Person, or (2) has approved the Busi ness Combination or
recommended acceptance by the shareholders of the Company of the Tender Offer. The Let ter of Credit shall,
by its terms, continue in effect and shall not be subject to modification, limit ation or termination until the earlier
of (A) 60 months from the date of its issuance or (B) the date on which the amounts drawn on the Letter of
Credit (the “Draw Amounts”) amount to $10,000,000 in the aggregate.
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(b) The conditions under which the Indemnitee may draw on the Letter of Credit shall be as set forth in
subparagraphs (b)(i) through (v) below, inclusive (the “Draw Conditions”):
(i) The Indemnitee shall have given written notice to the Continuing Directors (a s defined below)
of the occurrence of an event giving rise to a right of indemnification hereunder;
(ii) A Triggering Event shall have occurred;
(iii) A determination under Section 5 hereof that Indemnitee is not entitled to indemnification shall
not have been made;
(iv) Indemnitee shall have delivered a written undertaking to the Company to reimburse the
Company for amounts drawn on the Letter of Credit as to which amounts it may subsequently be
determined that Indemnitee was not entitled hereunder, under the Certificate of Inc orporation of the
Company or under Section 145; and
(v) A majority of the Continuing Directors not parties to the action, suit, or proceeding as to which
Indemnitee claims a right of indemnification hereunder, or independent legal counsel (who may be the
outside counsel regularly employed by the Company on the days prior to the Triggering Event) if
approved by a Majority of Continuing Directors shall have determined that the conditions spec ified in
subparagraphs (i) through (iv) above, inclusive, have been met.
The determination described in subparagraph (b)(v) above shall be a strictly factual dete rmination that the Draw
Conditions have or have not been met. Immediately upon a determination that the Draw Conditions have been
met, the Continuing Directors shall determine the appropriate amount to be drawn on the Letter of Credit in
accordance with Sections 2, 3, 4, and 6 of this Agreement and shall appoint a representati ve (the
“Representative”) and direct the Representative to co-sign, with Indemnitee, a draft on the Letter of Credit in
the Draw Amount.
(c) Upon the presentation to the Bank of a draft in the Draw Amount executed by the Indem nitee and
the Representative, Indemnitee shall receive the Draw Amount in partial payment of the Company’s obligations
hereunder, subject to reimbursement as described in subparagraph (b)(iv) above. At such time as the Draw
Amounts shall aggregate to $10,000,000, the Company’s obligations hereunder shall be deemed fully
performed.
(d) The Company hereby expressly agrees that, in addition to any and all other remedies available to
Indemnitee at law or in equity, specific performance of its obligations under this Sect ion 11 shall be the
preferred remedy for Company’s failure to perform the duties described in this Section 11 in st rict conformity
herewith.
(e) For purposes of this Section 11:
(i) The term “Business Combination” shall mean (A) any Reorganization of the Company or a
Subsidiary (as hereinafter defined) with or into a Related Person, (B) any sale, lease, excha nge, transfer
or other disposition, including without limitation a pledge, mortgage or any other securit y device, of all
or any Substantial Part (as hereinafter defined) of the assets either of the Company or of a Subsidiary, or
both, to a Related Person, (C) any Reorganization of a Related Person with or into the Company or a
Subsidiary, (D) any sale, lease, exchange, transfer or other disposition of all or any Substantia l Part of
the assets of a Related Person to the Company or a Subsidiary, (E) the issuance of any securities of the
Company or a Subsidiary to a Related Person except if such issuance were a stock spli t, stock dividend
or other distribution pro rata to all holders of the same class of Voting Stock, (F) any rec lassification of
securities (including a reverse stock split) or any other recapitalization that would have the effect of
INDEMNIFICATION§17.114
September 199017-174F
increasing the voting power of a Related Person, and (G) any agreement, contract, plan or other
arrangement providing for any of the transactions described in this definition of Business Combination.
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(ii) The term “Related Person” shall mean and include (A) any individual, corporat ion,
partnership, or other person or entity which, together with its “Affiliates” and “Associate s” (as defined
on December 22, 1986 in Rule 12b-2 under the Securities Exchange Act of 1934), “beneficially owns”
(as defined on December 22, 1986 in Rule 13d-3 under the Securities Exchange Act of 1934) in the
aggregate 20 percent or more of the outstanding Voting Stock of the Company, (B) any Affiliate or
Associate of any such individual, corporation, partnership, or other person or entity, and (C) any
assignee, transferee, or successor of any of the foregoing. Notwithstanding the foregoing, the term
“Related Person” shall not include (1) the Company, (2) any Subsidiary (unless the stock there of not
owned by the Company is owned by a Related Person as hereinabove defined), (3) any employee benefit
plan of the Company or any such Subsidiary, (4) any trustee of or fiduciary with respect to any such plan
when acting in such capacity, or (5) except as hereinbelow provided, the individuals comprising the
Board of Directors of the Company, their estates, immediate families, trusts est ablished by them, trusts
in which they have a beneficial interest, or corporations, partnerships, or other entitie s in which they
have a controlling interest, and which are otherwise Related Parties as of the date of this agreement. Any
person or other entity described in (5) above may, nevertheless, be a Related Person i nvolved in a
Business Combination, and shall not be counted in determining a Majority of the Continuing Directors,
if an Associate or Affiliate of such person or entity which is not excluded by any of (1) through (4),
inclusive, is a party to such Business Combination and such person or entity has one percent or greater
interest in the equity or profits of such Associate or Affiliate. Any person or entity who at any tune is a
Related Person continues at all times thereafter to be a Related Person.
(iii) Notwithstanding the definition of “beneficially owned” in subsection (ii) above, any Voting
Stock of the Company that any Related Person has the right to acquire pursuant to any a greement, or
upon exercise of conversion rights, warrants, or options, or otherwise, shall be deemed beneficially
owned by the Related Person.
(iv) The term “Substantial Part” shall mean more than 20 percent of the fair ma rket value of the
total assets of the corporation in question, as determined in good faith by a Majori ty of the Continuing
Directors, as of the end of its most recent fiscal year ending prior to the tune the determination is being
made.
(v) The term “Subsidiary” means any corporation of which a majority of any class of equity
security is owned directly or indirectly by the Company.
(vi) The term “Business Day” shall mean any day other than a Saturday, Sunday, or other day on
which commercial banks in Delaware are authorized or required to close.
(vii) The term “Continuing Director” shall mean a director of the Company at the relevant time
who was a member of the Board of Directors of the Company immediately prior to the ea rliest time that
(A) any Related Person involved in a Business Combination, or (B) any Related Person who is (1) a
Predecessor to such Related Person or (2) an assignor of beneficial ownership in the Company t o such a
Related Person or to its Predecessors, became a Related Person.
(viii) The term “Majority” shall mean that number which constitutes a majority of the members of
the Board of Directors of the corporation immediately prior to the earl Jest time that (A) any Related
Person involved in the business Combination, or (B) any Related Person who is (1) a predecessor to
such Related Person or (2) an assignor of beneficial ownership in the Company to such a Re lated Person
or its Predecessors, became a Related Person.
(ix) The term “Predecessor” shall mean each person or other entity (A) to which the subj ect
Related Person is a successor by merger, consolidation, sale and purchase of substantially al l of the
assets, or other reorganization or (B) which assigned or transferred beneficial ownership of Vot ing Stock
of the Company to the subject Related Person, directly or through successive transactions.
§17.114PROXY STATEMENTS: STRATEGY & FORMS
17-174G © 1990 Jefren Publishing company, Inc.
(x) The term “Reorganization” includes a merger, consolidation, plan of exchange, sale of all or
substantially all of the assets (including, as pertains to a subsidiary, bulk reinsurance, or cession of
substantially all of its policies and contracts) or other form of corporate reorganizati on pursuant to which
shares of voting Stock, or other securities of the subject corporation, are to be converted or exchanged
into cash or other property, securities or other consolidation.
(xi) The term “Tender Offer” shall mean any offer by any individual, corporation, partnership,
association, trust, or other organization or entity directed to the shareholders of the Com pany the results
of which, if consummated, could by its terms result in the coming into being of a Related Person.
(xii) No Associate or Affiliate of the directors of the Company shall be a Related Pe rson by
attribution to such Associate or Affiliate of the Common Stock ownership of such directors as of
December 22, 1986.
12. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall for all purposes be deemed to be an original and all of which shall constit ute the same instrument,
but only one of which need be produced.
13.Headings . The headings of the Sections of this Agreement are inserted for convenience only and
shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
14.Use of Certain Terms. As used in this Agreement, the words “herein,” “hereof,” “hereunder,” and
other words of similar import refer to this Agreement as a whole and not to any partic ular paragraph,
subparagraph or other subdivision.
15.Modification and Waiver . No supplement, modification or amendment of this Agreement shall
be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.
16.Notice to Company . Indemnitee agrees to promptly notify Company in writing upon being served
with any summons, subpoena, citation, complaint, indictment, or other document relating to a suit, action or
proceeding which is or may be covered hereunder, either civil or criminal.
17.Notices. All notices, requests, demand, and other communications hereunder shall be in writing
and shall be deemed to have been duly given if (i) delivered by hand by Federal Express, Purolator or other
commercial courier and receipted for by or on behalf of the party to whom said notice or other communication
shall have been directed or if (ii) mailed by certified or registered mail wi th postage prepaid, on the third
business day after the date on which it is so mailed:
(a) If to Indemnitee, to
________________________________________________________ ________________________________________________________________________________________________________________
[THE NEXT PAGE IS 17-175]
INDEMNIFICATION§ 17.114
September 1990 17-175
or to such other address as may have been furnished to Company by Indemnitee by like notice;
(b) If to Company, toInsituform Southeast Corp.
11511 Phillips Highway South
Jacksonville, Florida 32256
Attn: James J. Baird, Jr. or President
or to such other address as may have been furnished to Indemnitee by Company by like notice.
18.Governing Law. The parties agree that this Agreement shall be construed and
enforced in accordance with, and governed by, the laws of the State of Delaware.
19.Successors and Assigns. This Agreement shall be binding upon Company and its
successors and assigns and shall inure to the benefit of Indemnitee and his spouse, heirs,
executors, administrators and estate.
IN WITNESS WHEREOF, the Company has executed this Agreement by its duly
authorized officers, and Indemnitee has set his hand and seal hereto, on this_____ day of
________, 198__, as of the day and year first above written.
INSITUFORM SOUTHEAST CORP.
By
___________________________________________
James J. Baird, Jr.,
President
ATTEST: ___________________________________________
Charles A. Long, Jr.,
Secretary
(CORPORATE SEAL)
________________________________________
(L.S.)
Indemnitee
