SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported): September 15, 1998
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INSITUFORM TECHNOLOGIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-10786 13-3032158
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
702 Spirit 40 Park Drive, Chesterfield, Missouri 63005
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (314) 530-8000
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Item 5. Other Events.
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Video Injection Acquisition
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On September 15, 1998, the Registrant completed its
acquisition of 80% of the shares (the "Initial Shares") of Video
Injection S.A.R.L. ("Video Injection"), a company that utilizes
multifunctional robotic devices developed by it in connection with
the inspection and repair of pipelines. The purchase price for the
Initial Shares was 28,000,000FF, 13,500,000FF of which was paid at
closing, 7,020,000FF of which is due on the first anniversary of
closing and 7,480,000FF of which is due on the second anniversary
of closing, such additional installments secured by the
Registrant's letter of credit arrangements. On the fifth
anniversary of closing (or earlier, in specified events), the
Registrant will purchase the remaining 20% of the shares of Video
Injection pursuant to a formula based on Video Injection's results
of operations. The Company has also obtained non-competition
arrangements from the two principals of Video Injection (who remain
employed by Video Injection) that extend three years beyond the
period of employment.
Cat Proceeding
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On September 10, 1998, in previously reported legal
proceedings initiated by the Registrant against Cat Contracting,
Inc. ("Cat"), Michigan Sewer Construction Company ("Michigan"),
Inliner U.S.A. ("Inliner") and Kanal Sanierung Hans Muller GmbH &
Co., the United States Court of Appeals for the Federal Circuit has
issued its opinion affirming the December 1996 determination of the
United States District Court for the Southern District of Texas
that Inliner's multiple-cup process infringed the Registrant's
serial vacuum impregnation patent, but reversed the lower court and
ruled that Inliner's process involving the use of multiple needles
for impregnation of cured-in-place tubes did not infringe the
Registrant's patent.
On September 2, 1998, prior to the decision of the Court of
Appeals, the lower court had issued its opinion and ruling as to
damages sustained by the Registrant for infringement. The court
awarded to the Registrant damages in the amount of approximately
$21.9 million, consisting of reasonable royalties on work performed
by defendants Cat, Michigan and Inliner utilizing the Registrant's
patented processes and enhanced damages against Cat and Inliner for
willful infringement of the Registrant's serial vacuum impregnation
patent and prejudgment interest. In addition, the court awarded to
the Registrant recovery of its attorney's and expert witness fees. <PAGE>
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The Registrant is reviewing its alternatives with respect to
a reconsideration by the Court of Appeals of its determination
regarding infringement, and is currently unable to predict the
effect of the Court of Appeal's decision on the award of damages by
the lower court. In the event the Court of Appeals decision remains
unmodified, the damages award by the lower court would be
substantially reduced. In addition, the Registrant is unable to
predict the likelihood of any recovery from defendants of amounts
awarded, whether defendants will elect to appeal any damages award
or whether defendants will be positioned to pursue any such appeal
in view of applicable bonding requirements with respect to any
award.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
INSITUFORM TECHNOLOGIES, INC.
By s/Robert L. Kelley
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Robert L. Kelley
Vice President-General Counsel
Dated: as of September 15, 1998
