Document:

Exhibit 10.1 to 8-K - Credit Facility Amendment (10-10-14)

Exhibit 10.1

SECOND AMENDMENT TO CREDIT AGREEMENT

THIS SECOND AMENDMENT TO CREDIT AGREEMENT dated as of October 6, 2014 (this “Amendment”) is entered into among Aegion Corporation, a Delaware corporation (the “Borrower”), the Guarantors, the Lenders and Bank of America, N.A., as Administrative Agent.  All capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Credit Agreement (as defined below).

RECITALS

WHEREAS, the Borrower, the Guarantors, the Lenders and Bank of America, N.A., as Administrative Agent entered into that certain Credit Agreement dated as of July 1, 2013 (as amended and modified from time to time, the “Credit Agreement”); and

WHEREAS, the Borrower has requested that the Lenders amend the Credit Agreement as set forth below.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.    Amendments.  The Credit Agreement is hereby amended as follows:

(a)    The following definitions are hereby added to Section 1.01 of the Credit Agreement in the appropriate alphabetical order to read as follows:

“2014 Strategic Restructuring Charges” means (a) a pre-tax charge in an aggregate amount not to exceed $55,000,000 relating to office closures, employee terminations and write-down/reserve of receivables and other assets (including goodwill and deferred tax assets) primarily incurred by the Borrower and its Subsidiaries in connection with the exit by the Borrower and its Subsidiaries from certain international locations, (b) a pre-tax charge in an aggregate amount not to exceed $5,000,000 relating to office consolidation, employee downsizing and write-down/reserve of receivables and other assets incurred by the Borrower and its Subsidiaries in connection with the consolidation of the Insituform and Fyfe business units worldwide and (c) a pre-tax charge in an aggregate amount not to exceed $40,000,000 relating to fixed asset write-offs, intangible impairments and land lease consolidations incurred by the Borrower and its Subsidiaries in connection with the optimization of facility operations of The Bayou Companies, LLC located in New Iberia, Louisiana.  Notwithstanding anything to the contrary contained herein, the cash portion of the 2014 Strategic Restructuring Charges shall not exceed $17,000,000.

“Non-Recurring Operating Losses” means the operating losses not associated with continuing operations incurred by the Borrower and its Subsidiaries in certain international markets in an aggregate amount not to exceed (a) $5,500,000 for the fiscal quarter ended September 30, 2014, (b) $4,300,000 for the fiscal quarter ending December 31, 2014, (c) $2,400,000 for the fiscal quarter ending March 31, 2015 and (d) $1,400,000 for the fiscal quarter ending June 30, 2015.

(b)    The following definitions in Section 1.01 of the Credit Agreement are hereby amended to read as follows:

“CDOR Rate” means, the rate per annum, equal to the average of the annual yield rates applicable to Canadian Dollar banker’s acceptances at or about 10:00 a.m. (Toronto, Ontario time) on the Rate Determination Date as published on the applicable Bloomberg screen page (or such other page or commercially available source displaying Canadian interbank bid rates for Canadian Dollar bankers’ acceptances as may be designed by the Administrative Agent from time to time) for a term 

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equivalent to such Interest Period (or if such Interest Period is not equal to a number of months, for a term equivalent to the number of months closest to such Interest Period).  

“Consolidated EBITDA” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis (inclusive of the acquired operations of Brinderson, on a Pro Forma Basis) and without duplication, an amount equal to Consolidated Net Income for such period plus (a) the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges for such period, (ii) the provision for federal, state, local and foreign income taxes payable by the Borrower and its Subsidiaries for such period, (iii) depreciation and amortization expense for such period, (iv) non-cash stock based compensation expense for such period, (v) transaction costs (not including any costs that will be capitalized) in respect of the Brinderson Acquisition in an aggregate amount not to exceed (x) $7,000,000 for the Borrower and (y) $19,000,000 for Brinderson pursuant to the Brinderson Acquisition, (vi) to the extent incurred on or before June 30, 2014, any net loss from the discontinued operations of Bayou Welding Works in an aggregate amount not to exceed $6,500,000 for any four fiscal quarter period, (vii) other non-recurring expenses of the Borrower and its Subsidiaries reducing such Consolidated Net Income which do not represent a cash item in such period or any future period, (viii) to the extent recorded on or before December 31, 2014, the 2014 Strategic Restructuring Charges and (ix) the Non-Recurring Operating Losses for such period and minus (b) the following to the extent included in calculating such Consolidated Net Income: all non-cash items increasing Consolidated Net Income for such period, all as determined in accordance with GAAP and without duplication of any other income statement items used in calculating Consolidated EBITDA on a Pro Forma Basis.  Notwithstanding the foregoing, for purposes of calculating the Consolidated Leverage Ratio for purposes of determining the Applicable Rate, Non-Recurring Operating Losses shall not be added back to Consolidated EBITDA pursuant to clause (a)(ix) above.

“Eurocurrency Rate” means, 

(a)    for any Interest Period with respect to a Eurocurrency Rate Loan, 

(i)    in the case of a Eurocurrency Rate Loan denominated in a LIBOR Quoted Currency, the rate per annum equal to the London Interbank Offered Rate or a successor thereto as approved by the Administrative Agent (“LIBOR”), as published on the applicable Bloomberg screen page (or such other commercially available source providing quotations of LIBOR as may be designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for deposits in the relevant currency (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period;

(ii)    in the case of Eurocurrency Rate Loan denominated in Canadian Dollars, the CDOR Rate per annum; and

(iii)    in the case of a Eurocurrency Rate Loan denominated in Australian Dollars, the rate per annum equal to the Bank Bill Swap Reference Bid rate or a successor thereto approved by the Administrative Agent (“BBSY”) as published on the applicable Bloomberg screen page (or such other page or commercially available source providing BBSY (Bid) quotations as may be designated by the Administrative Agent from time to time) at or about 10:30 a.m. (Melbourne, Australia time) on the Rate Determination Date with a term equivalent to such Interest Period (or if such Interest Period is not equal to a number of months, with a term equivalent to the number of months closest to such Interest Period); 

(iv)    in the case of any other Eurocurrency Rate Loan denominated in a Non-LIBOR Quoted Currency, the rate designated with respect to such Alternative 

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Currency at the time such Alternative Currency is approved by the Administrative Agent and the Lenders pursuant to Section 1.09; and

(b)    for any interest rate calculation with respect to a Base Rate Loan, the rate per annum equal to LIBOR, at approximately 11:00 a.m., London time two Business Days prior to the date of determination (provided that if such day is not a Business Day, the next preceding Business Day) for Dollar deposits being delivered in the London interbank market for a term of one month commencing that day.

For all Non-LIBOR Quoted Currencies, the calculation of the applicable reference rate shall be determined in accordance with market practice.  If the Eurocurrency Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.

(c)    A new Exhibit F is hereby added to the Credit Agreement in the form of Exhibit F attached hereto.

2.    Conditions Precedent.  This Amendment shall be effective as of the date hereof upon satisfaction of the conditions set forth below (the “Second Amendment Effective Date”):

(a)    Amendment.  Receipt by the Administrative Agent of counterparts of this Amendment executed by the Borrower, the Guarantors, the Required Lenders and the Administrative Agent.

(b)    Amendment Fee. Receipt by the Administrative Agent and MLPFS of any fees required to be paid on or before the Second Amendment Effective Date, including, without limitation, receipt by MLPFS, for the account of each Lender executing this Amendment, a fee in an amount equal to 0.10% of the sum of such Lender’s (i) Revolving Commitment and (ii) outstanding Term Loan.

(c)    Legal Fees.  Payment by the Loan Parties of the reasonable out-of-pocket costs and expenses of the Administrative Agent, including without limitation, the reasonable fees and expenses of Moore & Van Allen, PLLC.

3.    Miscellaneous.

(a)    The Credit Agreement and the obligations of the Loan Parties thereunder and under the other Loan Documents, are hereby ratified and confirmed and shall remain in full force and effect according to their terms.  This Amendment is a Loan Document.

(b)    Each Guarantor (a) acknowledges and consents to all of the terms and conditions of this Amendment, (b) affirms all of its obligations under the Loan Documents and (c) agrees that this Amendment and all documents executed in connection herewith do not operate to reduce or discharge its obligations under the Credit Agreement or the other Loan Documents.

(c)    The Borrower and the Guarantors hereby represent and warrant as follows:

(i)    Each Loan Party has taken all necessary action to authorize the execution, delivery and performance of this Amendment.

(ii)    This Amendment has been duly executed and delivered by the Loan Parties and constitutes each of the Loan Parties’ legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be subject to (A) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (B) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

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(iii)    No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by any Loan Party of this Amendment.

(d)    The Loan Parties represent and warrant to the Lenders that (i) the representations and warranties of the Loan Parties set forth in Article VI of the Credit Agreement and in each other Loan Document are true and correct as of the date hereof with the same effect as if made on and as of the date hereof, except to the extent such representations and warranties expressly relate solely to an earlier date and (ii) no event has occurred and is continuing which constitutes a Default or an Event of Default.

(e)    The Borrower hereby certifies to the Administrative Agent and the Lenders that the obligations of the Borrower set forth in the Credit Agreement, as modified by this Amendment, qualify as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).  From and after the effective date of this Amendment, the Borrower shall indemnify the Administrative Agent, and hold it harmless from, any and all losses, claims, damages, liabilities and related interest, penalties and expenses, including, without limitation, Taxes and the fees, charges and disbursements of any counsel for any of the foregoing, arising in connection with the Administrative Agent’s treating, for purposes of determining withholding Taxes imposed under FATCA, obligations of the Borrower set forth in the Credit Agreement, as modified by this Amendment, as qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).  The Borrower’s obligations hereunder shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all of the Obligations.

(f)    This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.  Delivery of an executed counterpart of this Amendment by telecopy or other secure electronic format (.pdf) shall be effective as an original and shall constitute a representation that an executed original shall be delivered.

(g)    THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

BORROWER:            AEGION CORPORATION,
a Delaware corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, GC, CAO, Secy

GUARANTORS:        INSITUFORM TECHNOLOGIES USA, LLC,    
a Delaware limited liability company

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

INA ACQUISITION CORP.,
a Delaware corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: President, CAO, Secy

ITI INTERNATIONAL SERVICES, INC.,
a Delaware corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: President, CAO, Secy

MISSISSIPPI TEXTILES CORPORATION,
a Mississippi corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

                

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THE BAYOU COMPANIES, LLC,
a Delaware limited liability company

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

KINSEL INDUSTRIES, INC., 
a Texas corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

COMMERCIAL COATING SERVICES INTERNATIONAL, LLC,
a Texas limited liability company

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

INFRASTRUCTURE GROUP HOLDINGS, LLC,
a Delaware limited liability company

By:    /s/ David F. Morris        
Name: David F. Morris
Title: President, CAO, Secy

FIBRWRAP CONSTRUCTION SERVICES, INC.,
a Delaware corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: President, SVP, CAO, Secy

                

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FIBRWRAP CONSTRUCTION SERVICES USA, INC.,
a Delaware corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: President, SVP, CAO, Secy

FYFE CO. LLC,
a Delaware limited liability company

By:    /s/ David F. Morris        
Name: David F. Morris
Title: President, CAO, Secy
    

SPECIALIZED FABRICS LLC,
a Washington limited liability company

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

UNITED PIPELINE SYSTEMS INTERNATIONAL, INC.,
a Delaware corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

UNITED PIPELINE MIDDLE EAST, INC.,
a Delaware corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

    

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ENERGY & MINING HOLDING COMPANY, LLC,
a Delaware limited liability company

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy
    

CRTS, INC.,
an Oklahoma corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

CORRPRO COMPANIES, INC.,
an Ohio corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

CORRPRO COMPANIES INTERNATIONAL, INC.,
a Nevada corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

OCEAN CITY RESEARCH CORP.,
a New Jersey corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

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CORRPRO CANADA HOLDINGS, INC.,
a Delaware corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

CORRPRO HOLDINGS, LLC,
a Delaware limited liability company

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

INSITUFORM TECHNOLOGIES, LLC,
a Delaware limited liability company

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

UNITED PIPELINE SYSTEMS, INC.,
a Nevada corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

BRINDERSON, L.P.,
a California limited partnership

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

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BRINDERSON CONSTRUCTORS INC.,
a California corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: President, CAO, Secy

GENERAL ENERGY SERVICES,
a California corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: SVP, CAO, Secy

BRINDERSON HOLDINGS, INC.,
a Delaware corporation

By:    /s/ David F. Morris        
Name: David F. Morris
Title: President, CAO, Secy

BRINDERSON SERVICES, LLC,
a Delaware limited liability company

By:    /s/ David F. Morris        
Name: David F. Morris
Title: President, CAO, Secy

INSITUFORM NETHERLANDS HOLDINGS, LLC,
a Delaware limited liability company

By:    /s/ David F. Morris        
Name: David F. Morris
Title: Director

                

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AEGION REHABILITATION SERVICES LIMITED,
a company incorporated in England and Wales

By:    /s/ David F. Morris        
Name: David F. Morris
Title: Director

CORRPRO COMPANIES ENGINEERING LTD.,
a company incorporated in England and Wales

By:    /s/ David F. Morris        
Name: David F. Morris
Title: Director

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ADMINISTRATIVE 
AGENT:            BANK OF AMERICA, N.A.,
as Administrative Agent

By:    /s/ Rosanne Parsill        
Name: Rosanne Parsill
Title: Vice President

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LENDERS:            BANK OF AMERICA, N.A.,
as a Lender, Swing Line Lender and L/C Issuer

By:    /s/ Eric A. Escagne        
Name: Eric A. Escagne
Title: Senior Vice President

JPMORGAN CHASE BANK, N.A.,
as a Lender and L/C Issuer

By:    /s/ Donna B. Kirtian        
Name: Donna B. Kirtian
Title: Authorized Officer

U.S. BANK NATIONAL ASSOCIATION,
as a Lender and L/C Issuer

By:    /s/ Amanda A. Schmitt        
Name: Amanda A. Schmitt
Title: Vice President

FIFTH THIRD BANK,
as a Lender

By:    /s/ Kiley Hill            
Name: Kiley Hill
Title: VP

REGIONS BANK,
as a Lender

By:    /s/ John Holland        
Name: John Holland
Title: Senior Vice President

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PNC BANK, NATIONAL ASSOCIATION,
as a Lender

By:    /s/ David Bentzinger        
Name: David Bentzinger
Title: Senior Vice President

COMPASS BANK,
as a Lender

By:    /s/ Kevin Wisel            
Name: Kevin Wisel
Title: Senior Vice President

HSBC BANK USA, N.A.,
as a Lender 

By:    /s/ Lewis Fisher            
Name: Lewis Fisher
Title: Senior Vice President

KEYBANK NATIONAL ASSOCIATION,
as a Lender

By:    /s/ Suzannah Valdivia        
Name: Suzannah Valdivia
Title: Vice President

BANK OF THE WEST,
as a Lender

By:    /s/ Roger Lumley        
Name: Roger Lumley
Title: Director

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BRANCH BANKING AND TRUST COMPANY,
as a Lender

By:    /s/ R. Andrew Beam        
Name: R. Andrew Beam
Title: Senior Vice President

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as a Lender

By:    /s/ Stephen Bode        
Name: Stephen Bode
Title: Senior Vice President

BMO Harris Bank, N.A.,
as a Lender

By:    /s/ Brian Russ            
Name: Brian Russ
Title: Vice President

COMERICA BANK,
as a Lender and L/C Issuer

By:    /s/ Mark J. Leveille        
Name: Mark J. Leveille
Title: Vice President

NATIONAL BANK OF KUWAIT SAK,
as a Lender

By:    /s/ Wendy Wanninger        
Name: Wendy Wanninger
Title: Executive Manager

By:    /s/ Steve Allen            
Name: Steve Allen
Title: Treasurer

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STIFEL BANK & TRUST,
as a Lender

By:    /s/ Benjamin L. Dodd                
Name: Benjamin L. Dodd
Title: Senior Vice President

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Exhibit F
[FORM OF]
COMPLIANCE CERTIFICATE

Financial Statement Date: __________, 20___   

To:    Bank of America, N.A., as Administrative Agent

		
	Re:
	Credit Agreement dated as of July 1, 2013 (as amended, modified, supplemented or extended from time to time, the “Credit Agreement”) among Aegion Corporation, a Delaware corporation (the “Borrower”), the Guarantors from time to time party thereto, the Lenders from time to time party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and a L/C Issuer.  Capitalized terms used but not otherwise defined herein have the meanings provided in the Credit Agreement.

Ladies and Gentlemen:

The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the _______________ of the Borrower, and that, in his/her capacity as such, he/she is authorized to execute and deliver this Compliance Certificate to the Administrative Agent on the behalf of the Borrower, and that:

[Use following paragraph 1 for fiscal year‐end financial statements:]

		
	1.
	[Attached hereto as Schedule 1 are the][The] year‐end audited financial statements required by Section 7.01(a) of the Credit Agreement for the fiscal year of the Borrower ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section [have been electronically delivered to the Administrative Agent pursuant to the conditions set forth in Section 7.02 of the Credit Agreement].

[Use following paragraph 1 for fiscal quarter‐end financial statements:]

		
	1.
	[Attached hereto as Schedule 1 are the][The] unaudited financial statements required by Section 7.01(b) of the Credit Agreement for the fiscal quarter of the Borrower ended as of the above date [have been electronically delivered to the Administrative Agent pursuant to the conditions set forth in Section 7.02 of the Credit Agreement].  Such financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year‐end audit adjustments and the absence of footnotes.

		
	2.
	The undersigned has reviewed and is familiar with the terms of the Credit Agreement and has made, or has caused to be made, a detailed review of the transactions and condition (financial or otherwise) of the Borrower during the accounting period covered by the attached financial statements.

		
	3.
	A review of the activities of the Borrower during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Borrower performed and observed all its Obligations under the Loan Documents, and 

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[select one:]

[during such fiscal period, the Borrower performed and observed each covenant and condition of the Loan Documents applicable to it, and no Default has occurred and is continuing.]

[or:]

[the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]

		
	4.
	The representations and warranties of the Loan Parties contained in the Credit Agreement or any other Loan Document, are true and correct on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Compliance Certificate, the representations and warranties contained in subsections (a) and (b) of Section 6.05 of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 7.01 of the Credit Agreement, including the statements in connection with which this Compliance Certificate is delivered.

		
	5.
	Set forth on Schedule [1][2] hereto are true and accurate calculations demonstrating compliance with Section 8.11 of the Credit Agreement on and as of the date of this Compliance Certificate.

		
	6.
	The Consolidated Leverage Ratio for purposes of determining the Applicable Rate is ______: 1.0.

IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as of __________, 20___.

AEGION CORPORATION,
a Delaware corporation

By:                    
Name:
Title:

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Schedule [1][2]
to Compliance Certificate

1.    Consolidated Leverage Ratio

(a)    Consolidated Funded Indebtedness             $____________

(b)    Consolidated EBITDA                

(i)    Consolidated Net Income            $____________

(ii)    Consolidated Interest Charges            $____________

(iii)    federal, state, local and foreign 
income taxes                    $____________
        
(iv)    depreciation and amortization expense        $        

(v)    non-cash stock based compensation expense     $____________

(vi)    transaction costs (not including any costs 
that will be capitalized) in respect of the 
Brinderson Acquisition in an aggregate amount
not to exceed (A) $7,000,000 for the Borrower
and (B) 19,000,000 for Brinderson        $____________

(vii)    to the extent incurred on or before June 30, 2014,
any net loss from the discontinued operations
of Bayou Welding Works in an aggregate
amount not to exceed $6,500,000 for any four
fiscal quarter period                $____________

(viii)    other non-recurring expenses of the Borrower
and its Subsidiaries reducing Consolidated Net
Income which do not represent a cash item    $____________

		
	(ix)
	to the extent recorded on or before December 

31, 2014, the 2014 Strategic Restructuring 
Charges                        $____________

(x)    Non-Recurring Operating Losses        $____________

(xi)    all non-cash items increasing Consolidated 
Net Income                    $____________
        
(xii)    Consolidated EBITDA
[sum of (i) though (x) above minus (xi)]        $____________1 

_______________________________

1 For purposes of calculating the Consolidated Leverage Ratio to determine the Applicable Rate, Consolidated EBITDA is $_______________ (such amount excludes the add back to Consolidated EBITDA in clause (x) above).

    

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(c)    Consolidated Leverage Ratio        
[(a)/(b)(xii)]                            __________:1.02 

2.    Consolidated Fixed Charge Coverage Ratio

(a)    Consolidated Adjusted EBITDAR            $____________

(i)    Consolidated EBITDA                 $____________
[1(b)(xii) above]

(ii)    rent and lease expense                $____________

(iii)    Consolidated Capital Expenditures        $____________

(iv)    Consolidated Taxes                $____________

(v)    Consolidated Adjusted EBITDAR
[(i) + (ii) - (iii) - (iv)]                $____________

(b)    Consolidated Fixed Charges                

(i)    Consolidated Interest Charges            $____________

(ii)    Consolidated Scheduled Funded 
Debt Payments                    $____________

(iii)    the amount of cash dividends and other
other distributions and purchases, redemptions
and acquisitions of Equity Interests made by
the Borrower3                    $____________

(iv)    rent and lease expense                 $____________
        
(v)    Consolidated Fixed Charges
[sum of (i) though (iv) above]            $____________

(c)    Consolidated Fixed Charge Coverage Ratio        
[(a)(v)/(b)(v)]                        __________:1.0

_____________________________

2 For purposes of determining the Applicable Rate, the Consolidated Leverage Ratio is _____:1.0 (such Consolidated Leverage Ratio to be calculated using Consolidated EBITDA set forth in footnote 4).

3 Other than the 2012 Special Share Repurchase and the 2013 Special Share Repurchase

20Exhibit 10.2 to 8-K - Employment Letter (10-10-14)

Exhibit 10.2

[Aegion Corporation Letterhead]

October 6, 2014

Charles R. Gordon
104 Audubon Road
Sewickley, PA 15143

Dear Chuck:

We are pleased to offer you the position of President and Chief Executive Officer of Aegion Corporation (“Aegion” or the “Company”).  The principal terms and conditions of the offer are as follows: 

1.    Base Salary. You will be compensated on a salaried basis for your services as President and Chief Executive Officer at an annual rate of $625,000.  Your base salary will be reviewed on an annual basis by the Compensation Committee of the Board of Directors of Aegion.

2.    Annual Incentive Bonus. During 2014, you will be eligible to earn an annual incentive bonus in an amount calculated as a percentage of your base salary determined by reference to: (i) a range of percentages identified by the Compensation Committee based upon a center point objective of 100% (intended to provide an opportunity of up to two times such center point) and (ii) actual corporate financial performance of Aegion as compared against the metrics set forth in Aegion’s 2014 Annual Incentive Plan (the “2014 AIP”) on the same terms as are applicable to participants in the 2014 AIP.  The Compensation Committee will review the amount of and criteria for your annual incentive bonus annually.  Your 2014 award will be pro-rated to reflect that portion of 2014 that you are either employed with us or engaged by us as an independent contractor (i.e., from May 5, 2014 through December 31, 2014).  You must be employed on the date the incentive bonus is paid to be eligible to receive any such payment, and in case of a termination of employment there is no pro-ration of the incentive for that year. An annual incentive that is earned will be paid out no later than March 15, 2015.  All bonus determinations and payments will be made in a manner that complies with “qualified performance-based compensation” requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and, in determining the amount of your bonus, the Compensation Committee shall have the right to exercise “negative discretion” and reduce the amount of the bonus for any year in the manner contemplated by Section 162(m) of the Code.
 
3.    Long-Term Incentive Compensation. You are eligible to participate in the Aegion Corporation 2013 Employee Equity Incentive Plan (the “LTIP”).  The Compensation Committee on an annual basis determines LTIP awards for officers, and you will be eligible for a new award each year.  Your 2014 award will have a nominal value of approximately $1.5 million, and be comprised of performance units (50% or $750,000) and restricted stock (50% or $750,000):  

(a)    Performance units (number of performance units to be awarded shall equal $750,000 divided by the greater of (1) closing market price of the Common Stock on October 8, 2014 (the “Award Date”) and (2) the average of the closing market price of the Common Stock for the 60 consecutive trading days commencing on October 8, 2014 (the greater of (1) and (2) is hereafter the “Award Price”)).  The performance units will be subject to the terms of a performance unit agreement, with customary terms and conditions and additional performance criteria and other terms that the Compensation Committee determines to be necessary or advisable to permit the award to constitute “qualified performance-based compensation” for purposes of Section 162(m) of the Code, including the right to exercise negative discretion with respect to the amount of the award.  The performance units will be awarded by the Compensation Committee, with such award to occur on the Award Date.

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(b)    Restricted stock (number of shares to be awarded shall equal $750,000 divided by the Award Price).  The restricted stock awarded pursuant to this Section 3 (the “Annual Restricted Stock”) will be subject to the terms of a restricted stock agreement, with customary terms and conditions and additional performance criteria and other terms that the Compensation Committee determines to be necessary or advisable to permit the award to constitute “qualified performance-based compensation” for purposes of Section 162(m) of the Code, including the right to exercise negative discretion with respect to the amount of the award.  The Restricted Stock will be awarded by the Compensation Committee, with such award to occur on the Award Date.  

4.    One Time Inducement Award.  In connection with your commencement of employment you will be: (a) paid a cash inducement bonus of $100,000, to be paid concurrent with your hiring; and (b) awarded shares of restricted stock (the “Inducement Restricted Stock”) with a nominal value of approximately $1.4 million (number of shares to be awarded shall equal $1.4 million divided by the Award Price).  Vesting of the Inducement Restricted Stock will be subject to the following: (y) achievement by the Company of positive aggregate Net Income (as defined in the 2014 AIP) for the year ending December 31, 2015; and (z) your continued employment with the Company through the fifth anniversary of the date of the award.  In addition to the above terms, the Inducement Restricted Stock will be subject to the terms of a restricted stock agreement, with customary terms and conditions and additional performance criteria and other terms that the Compensation Committee determines to be necessary or advisable to permit the award to constitute “qualified performance-based compensation” for purposes of Section 162(m) of the Code, including the right to exercise negative discretion with respect to the amount of the award.  The Inducement Restricted Stock will be awarded by the Compensation Committee, with such award to occur on the Award Date.  

5.    Deferred Compensation. You are eligible to participate in the Company’s Senior Management Voluntary Deferred Compensation Plan upon, and subject to, the terms and conditions of that plan.  

6.    Additional Benefits. 

(a)    You are eligible to participate in the Company’s health, dental, vision, life, long-term disability and accident insurance plans on the same terms as are applicable to other participants generally (provided that the amount of life insurance shall be $1.0 million and you shall be eligible to participate in the Company’s supplemental disability insurance plan for executives), and any future plans and programs implemented by Aegion for its employees generally or by the Compensation Committee for you or executives specifically, and in the Aegion 401(k) Profit Sharing Plan and any future plans or programs supplemental to the Aegion 401(k) Profit Sharing Plan.  Details about specific benefits will be provided to you in benefit plan documents. All such plans and benefits are subject to cancellation and change from time to time in the Company’s discretion.

(b)    You will receive holidays in accordance with Aegion’s policy.  During 2014, you will receive four weeks of vacation, pro-rated to reflect the portion of 2014 that you are employed by us.  For 2015 and beyond, you will receive four weeks of vacation.

(c)    For a period of up to four months from the date hereof, you will be reimbursed for:

		
	(i)
	the documented cost of travel (one time per week) between your current residence in Pennsylvania and Chesterfield, Missouri;

		
	(ii)
	documented temporary lodging expenses while in Chesterfield, Missouri;

		
	(iii)
	the documented cost of renting, in St. Louis, Missouri, a non-luxury vehicle commensurate with your status; and

		
	(iv)
	the documented cost of meals.

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7.    Relocation.  You agree that you will establish a residence in the St. Louis, Missouri metropolitan area on or before March 31, 2015 and, further, that you will establish your permanent residence in the St. Louis, Missouri metropolitan area on or before June 30, 2016.  In connection with establishing a permanent residence in the St. Louis, Missouri metropolitan area, you will be provided relocation assistance as provided for in Aegion’s relocation policy.  Your relocation, including the sale of your home, must be handled through Aegion’s relocation coordinator.  For the avoidance of doubt, after the four-month period set forth in in Section 6(c), you will bear any temporary housing expense in St. Louis, travel costs between your current residence and St. Louis (until such time as you establish your permanent residence in the St. Louis metropolitan area) and the cost associated with meals and transportation (e.g., a rental car) in St. Louis.

8.    Severance. As President and Chief Executive Officer, you will report to the Board of Directors of the Company.  Your employment is for no definite term and you will serve at the pleasure of  Aegion’s Board of Directors; however, if your employment is terminated by Aegion for reasons other than “Cause” during your employment, you will receive, upon the terms described below, a severance payment equal to twenty-four (24) months’ of your then current base salary and twenty-four (24) months of the monthly cost the Company then was paying for health, dental, vision, life, long-term disability and accident insurance coverage for you.  This amount will (subject to the provisions described below) be paid out in forty-eight (48) equal semi-monthly installments commencing on the Company’s first semi-monthly payday following your termination date; provided, however, that no payment will be paid to you prior to the first semi-monthly payday following the 60th day after your termination date (the “First Severance Payment Date”) and on the First Severance Payment Date, you will receive a catch-up payment equal to the sum of the payments that have accrued from your termination date to the First Severance Payment Date.  In all instances, any such payment is conditioned upon (i) your entering into an enforceable separation agreement in form and substance satisfactory to the Company containing a release of all claims you may have against the Company, its subsidiaries and any of their respective directors, employees and agents, cooperation, non-disparagement and confidentiality clauses, and such other terms as are customarily requested by employers in executive separation agreements, and (ii) your resignation of all employment and offices and positions, including all directorships, you hold with the Company and any of its subsidiaries and affiliates within thirty (30) days after your employment terminates.  A form of separation agreement will be delivered to you within thirty (30) days after your employment terminates (and if this does not occur then the provision will be deemed waived), and you must sign and deliver the agreement within twenty-two (22) days after it is delivered.  In order to avoid any tax consequences of Section 409A of the Code, payment of any installments may be deferred until the releases and the separation agreement are enforceable and until the first day following the six (6) month anniversary of the date you have a separation from service within the meaning of Section 409A (in which case any deferred installments will be paid the first payday after the six (6) month and one (1) day period expires).  Any termination of employment will also constitute an automatic resignation from all offices and directorships you may hold with the Company or any of its subsidiaries or affiliates. 

References to “termination of employment” (and corollary terms) means “separation from service” (as determined under Treas. Reg. Section 1.409A-l(h)).  For purposes of Section 409A, your right to receive installment payments will be treated as a right to receive a series of separate and distinct payments.  Whenever there is a payment period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Company.  You are not obligated to seek other employment or otherwise mitigate the amounts payable to you per this Section 8 and such amounts are not subject to offset unless required by law.  In the event of your death prior to full payment of such amounts, any remaining payment will be made to your surviving spouse or, if none, to your estate.

In the event that the Compensation Committee of the Board of Directors approves a severance plan for your position that provides greater benefits than those listed in this section, that plan in its entirety shall supersede this provision.

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9.    Definition of “Cause”.  

For purposes of this letter, “Cause” shall be defined as:

		
	(i)
	breaching any employment, confidentiality, noncompete, nonsolicitation or other agreement with the Company, any written Company policy relating to compliance with laws (during employment) or any general undertaking or legal obligation to the Company;

		
	(ii)
	causing, inducing, requesting or advising, or attempting to cause, induce, request or advise, any employee, representative, consultant or other similar person to terminate his/her relationship, or breach any agreement, with the Company; 

		
	(iii)
	causing, inducing, requesting or advising, or attempting to cause, induce, request or advise, any customer, supplier or other Company business contact to withdraw, curtail or cancel its business with the Company; or

		
	(iv)
	failing or refusing to perform any stated duty or assignment, misconduct, disloyalty, violating any Company policy or work rule, engaging in criminal conduct in connection with your employment, being indicted or charged with any crime constituting a felony or involving dishonesty or moral turpitude, violating any term in this Agreement, unsatisfactory job performance, or any other reason constituting cause within the meaning of Missouri common law.    

The cessation of employment shall not be deemed to be for “Cause” unless and until there shall have been delivered to you an affirmation signed by a majority of the independent members of the Board of Directors finding that, in the good faith opinion of such individuals, your conduct has met one or more of the above-described criteria constituting “Cause”. 

10.    Confidentiality and Non-Competition; Code of Conduct; Drug Testing.  Prior to commencing and as a condition to employment you must sign Aegion’s standard employee confidentiality, work product and non-competition agreement, Aegion’s business code of conduct, Aegion’s Code of Ethics (for CEO, CFO and senior financial employees), Aegion’s recoupment policy, Aegion’s Employee Policy Acknowledgement, Aegion’s Acknowledgement of Insider Trading Policy and Aegion’s Acknowledgement of ITS Corporate Policies.  These policies and agreements are not superseded or cancelled by this letter, and you agree to comply with all such agreements and policies.  You also must successfully pass Aegion’s standard drug screen.    

11.     Duties.    You will perform your duties and such executive and administrative duties as  
may be assigned to you from time to time by the Board of Directors or the Chairman of the Board in accordance with applicable law and all written policies and Codes of Conduct of the Company, and will devote your entire business time and attention to the performance of your duties (excluding any passive investments).  You will carry out and comply with all lawful directives of the Board of Directors or the Chairman of the Board and all Company Codes of Conduct and written policies established from time to time.

12.    Miscellaneous Provisions.  

(a)    The Company may withhold from any payments and benefits described in this letter such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation. In no event shall the Company be required to make, or you be required to receive, any payment called for by this letter at a particular time if such payment at that time shall result in the application of the tax consequences spelled out in Section 409A of the Code. In that case, payment will be made at such time as will not result in the imposition of any adverse tax consequences spelled out in Section 409A of the Code.  To the extent that reimbursements or in-kind benefits due to you under this Agreement constitute “deferred compensation” under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid to you in a manner consistent with Treasury Regulations Section 1.409A 3(i)(1)(iv), including the requirement that any reimbursement amounts shall be paid to you on or before the last day of the year following the year in which the expense was incurred.  The amount of expenses eligible for reimbursement (and in-kind benefits provided to you) during any one year may not effect amounts reimbursable or 

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provided in any subsequent year.  Notwithstanding the foregoing, you shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on you or for your account in connection with this Agreement (including any taxes and penalties under Section 409A), and the Company shall have any obligation to indemnify or otherwise hold you (or any beneficiary) harmless from any or all of such taxes or penalties.  Each payment (including, without limitation, any severance payment) under this Agreement that constitutes deferred compensation for purposes of Section 409A shall be treated as a separate payment from all other payments of deferred compensation for purposes of Section 409A compliance.

(b)    Except as set forth herein, this letter (and the terms of the plans, documents and standard agreements referred to herein) contains the entire agreement of the parties with respect to the subject matter hereof, and supersedes any and all prior oral or written communications, commitments and agreements with respect thereto, including, for the avoidance of doubt and without limitation, Section 4(a)(2) of that certain Independent Contractor Agreement, dated May 4, 2014, between you and the Company, which Section 4(a)(2) relates to the payment of a bonus for calendar year 2014 for the time you are engaged and serving as Acting Chief Executive Officer  (as defined in such Independent Contractor Agreement).  It is deemed to be entered into and accepted in the State of Missouri and will be governed by the laws of the State of Missouri applicable to contracts fully executed and performed in such state. The terms of this letter (but not the standard agreements referred to herein) will expire when the severance provisions expire.

(c)    Your appointment as President and Chief Executive Officer will not be effective until your first day of active employment with Aegion at its executive offices in Chesterfield, Missouri, which must occur on or before October 10, 2014. This offer will expire if it is not accepted and returned to me by October 10, 2014.

(d)    The Company and you agree that in the event either party shall incur any costs to enforce the terms of this letter, including reasonable attorneys’ fees, then the prevailing party in such action shall be entitled to recover all such costs, including reasonable attorneys’ fees, from the other party.

(e)    This letter does not constitute an employment agreement.  You shall be an at-will employee of the Company and your employment may be terminated by the Company at any time and for any reason.  

If the above terms accurately reflect your understanding and agreement, please sign this letter where indicated below and return it to me acknowledging your acceptance. 

Very truly yours, 

AEGION CORPORATION

By:    /s/ Alfred L. Woods                    
Alfred L. Woods
Chairman of the Board of Directors

ACCEPTED AND AGREED
TO AS OF THE DATE OF 
THIS LETTER: 

/s/ Charles R. Gordon                    
Charles R. Gordon

Date   10/06/2014                            

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