EXHIBIT 10.3
FOURTH AMENDMENT
to
CREDIT AGREEMENT
by and among
WILLBROS GROUP, INC.,
THE DESIGNATED SUBSIDIARIES FROM TIME TO TIME,
and
ABN AMRO BANK N.V.,
as Agent,
CREDIT LYONNAIS NEW YORK BRANCH,
as Co-Agent,
and
THE SEVERAL FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTIES HERETO
Effective as of June 30, 0000
XXXXXX XXXXXXXXX TO
CREDIT AGREEMENT
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This FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Fourth
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Amendment"), executed as of August 14, 2000, and effective as of
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June 30, 2000 (the "Amendment Effective Date"), is by and among
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WILLBROS GROUP, INC., a Republic of Panama corporation ("WGI" or
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the "Company"); certain Designated Subsidiaries (WGI and such
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Designated Subsidiaries collectively, the "Borrowers" and
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individually, a "Borrower"); the several financial institutions
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from time to time parties to the Credit Agreement defined below
(individually, together with its successors and assigns, a "Bank"
----
and, collectively, the "Banks"); CREDIT LYONNAIS NEW YORK BRANCH,
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individually as a Bank and as Co-Agent; and ABN AMRO BANK N.V.,
individually ("ABN AMRO") as a Bank and as agent for the Banks
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(in such capacity, the "Agent").
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R E C I T A L S:
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A. The Borrowers, the Agent and the Banks are parties to
that certain Credit Agreement dated as of February 20, 1997, as
amended by First Amendment to Credit Agreement dated as of April 2,
1998, by Second Amendment to Credit Agreement dated as of
October 1, 1998 and by Third Amendment to Credit Agreement
effective as of June 30, 2000 (such Credit Agreement, together
with any amendments, modifications or supplements thereto,
referred to herein as the "Credit Agreement"), pursuant to which
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the Lenders agreed to make certain loans to and extensions of
credit on behalf of the Borrowers upon the terms and conditions
as provided therein; and
B. The Borrowers have requested and the Agent, the Co-
Agent and the Banks have agreed to amend certain provisions of
the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained and for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
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1.1 Terms Defined in the Credit Agreement. Each term
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defined in the Credit Agreement and used herein without
definition shall have the meaning assigned to such term in the
Credit Agreement, unless expressly provided to the contrary.
Unless otherwise indicated, all section references in this Fourth
Amendment refer to the Credit Agreement.
ARTICLE II
AMENDMENTS TO CREDIT AGREEMENT
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2.1 Amendments to Section 1.1.
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(a) The definitions of "Agreement", "Applicable
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Margin", "CDLC Fee Percentage", "Commitment Fee Percentage",
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"Financial SBLC Fee Percentage",
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"Nonfinancial SBLC Fee Percentage" and "Pricing Schedule"
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are hereby amended to read in their entirety as follows:
"Agreement" means this Credit Agreement, as
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amended by the First Amendment, the Second Amendment,
the Third Amendment, and the Fourth Amendment and as
further amended from time to time.
"Applicable Margin" means, on any day, the
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per annum percentage, expressed in basis points, beside
the label "Applicable Margin" in the appropriate table
in the Pricing Schedule and, when applicable,
determined by finding the Company's Interest Coverage
Ratio on such date. The Applicable Margin shall be
adjusted on the date required by Section 7.1 for the
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delivery of each of the Company's financial statements.
"CDLC Fee Percentage" means, on any day, the
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per annum percentage, expressed in basis points, beside
the label "CDLC" in the appropriate table in the
Pricing Schedule and, when applicable, determined by
finding the Company's Interest Coverage Ratio on such
date. The CDLC Fee Percentage shall be adjusted on the
date required by Section 7.1 for the delivery of each
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of the Company's financial statements.
"Commitment Fee Percentage" means, on any
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day, the per annum percentage, expressed in basis
points, beside the label "Commitment Fee" in the
appropriate table in the Pricing Schedule and, when
applicable, determined by finding the Company's
Interest Coverage Ratio on such date. The Commitment
Fee Percentage shall be adjusted on the date required
by Section 7.1 for the delivery of each of the
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Company's financial statements.
"Financial SBLC Fee Percentage" means, on any
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day, the per annum percentage, expressed in basis
points, beside the label "Financial SBLCs" in the
appropriate table in the Pricing Schedule and, when
applicable, determined by finding the Company's
Interest Coverage Ratio on such date. The Financial
SBLC Fee Percentage shall be adjusted on the date
required by Section 7.1 for the delivery of each of the
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Company's financial statements.
"Nonfinancial SBLC Fee Percentage" means, on
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any day, the per annum percentage, expressed in basis
points, beside the label "Nonfinancial SBLCs" in the
appropriate table in the Pricing Schedule and, when
applicable, determined by finding the Company's
Interest Coverage Ratio on such date. The Nonfinancial
SBLC Fee Percentage shall be adjusted on the date
required by Section 7.1 for the delivery of each of the
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Company's financial statements.
"Pricing Schedule" means the schedule of that
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name attached as Exhibit A to the Fourth Amendment.
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(b) The following definitions of "Interest Coverage
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Ratio" and "Fourth Amendment" are hereby added where
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alphabetically appropriate:
"Interest Coverage Ratio" means the ratio of
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(a) EBIT for the immediately preceding four quarters to
(b) Consolidated Net Interest Expense for the
immediately preceding four quarters.
"Fourth Amendment" means the Fourth Amendment
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to Credit Agreement effective as of June 30, 2000, by
and among the Company, the Agent, the Co-Agent and the
Banks.
2.2 Amendment to Section 7.1(e). Section 7.1(e) is hereby
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amended to read in its entirety as follows:
(e) (i) until such time that the Company has
maintained for two consecutive quarters an Interest Coverage
Ratio (measured as of the last day of each fiscal quarter
for the four quarters then ended) of 2.5 to 1.0 or greater,
as soon as possible after the end of each calendar month,
but in any event not later than 45 days after the end of
each calendar month, except for December and January which
shall be not later than 60 days after the end of such
months, financial statements similar to those referred to in
paragraphs (c) and (d) of this Section 7.1 for such month,
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in addition to the requirements set forth in such
paragraphs, which financial statements shall set forth the
financial information required by paragraph (c) or (d), as
--------------------
applicable, for such month and include current EBITDA
calculations of WGI and consolidating income statements and
balance sheets for such month of each of WGI showing WGI,
WII, Xxxxxx & Xxxxxxxx, Inc. and WUSA, and WUSA showing
WUSA, WESCO and WEI, and (ii) upon request by the Agent,
reports as to the location of property that is collateral
under any Security Document including information as to
owner, net book value and location, certified by an
appropriate Responsible Officer of the Company.
2.3 Amendment to Section 8.3(g); Addition of
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Section 8.3(h). Section 8.3(g) is hereby amended, and a new
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Section 8.3(h) is hereby added, together to read in their
entirety as follows:
(g) Permitted Acquisitions and Investments not to
exceed $62,500,000 in the aggregate; provided that (i) at
the time of any such proposed Permitted Acquisition and
Investment there are no outstanding Loans or any Letter of
Credit Obligations for any financial Standby Letters of
Credit under the Credit Agreement, (ii) none of the proceeds
of the Loans and no Letter of Credit shall be used for the
purpose of any Permitted Acquisition and Investment, and
(iii) the Company would be in compliance with the financial
covenants set forth in this Agreement, after giving effect
to such transaction for the period of the most recently
ended four consecutive fiscal quarters preceding such
transaction, assuming such transaction had occurred on the
first day of such period; and
(h) acquisitions that are Permitted Acquisitions
and Investments with shares of the Company's stock as the
sole consideration (except that Loan proceeds up to an
aggregate of the lesser of $750,000 or 15% of the value of
the total consideration may be
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used to reimburse transactional expenses payable by the
Company in connection with each such acquisitions); provided
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that after giving effect pro forma to any such acquisition,
no Default or Event of Default would have occurred or exist;
provided further, that such stock is not mandatorily
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redeemable by the holder thereof, is not subject to any
repurchase requirements by the Company and does not have a
scheduled maturity date prior to the day that is 180 days
after the Commitment Termination Date.
2.4 Amendment to Section 8.12. Section 8.12 is hereby
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amended to read in its entirety as follows:
8.12 Consolidated Net Worth. The Company shall not
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permit its Consolidated Net Worth to be less than the sum of
(a) $65.0 million plus (b) 50% of the Company's cumulative
net income for the calendar year to date (without deduction
for loss) at the end of each fiscal quarter, starting with
the fiscal quarter beginning July 1, 2000.
2.5 Amendment to Section 8.14. Section 8.14 is hereby
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amended to read in its entirety as follows:
8.14 Minimum EBITDA; Interest Coverage Ratio.
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(a) The Company shall not permit EBITDA for the
four quarters then most recently ended (i) on June 30, 2000,
to be less than $11.4 million, (ii) on September 30, 2000,
to be less than $12.7 million, (iii) on December 31, 2000,
to be less than $11.3 million, (iv) on March 31, 2001, to be
less than $15.3 million, (v) on June 30, 2001, to be less
than $17.3 million, and (vi) on September 30, 2001, to be
less than $24.8 million.
(b) Beginning with the fiscal quarter ending on
December 31, 2001, the Company shall not permit the Interest
Coverage Ratio to be less than 2.50 to 1.00 at the end of
any fiscal quarter.
2.6 Amendment to Section 8.15. Section 8.15 is hereby
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amended to read in its entirety as follows:
8.15 Indebtedness. The Company shall not at any time
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(whether at the end of a fiscal quarter or otherwise)
create, incur, assume or suffer to exist any Indebtedness if
immediately after such creation, incurrence, sufferance and
after giving effect to it:
(a) the ratio of the Company's Funded
Indebtedness at such time to the Total Capitalization as of
such date of the Company would exceed (i) .40 to 1.00 at any
time prior to April 1, 2001, or (ii) 0.50 to 1.00 at all
other times.
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(b) the ratio of the Company's Funded
Indebtedness at such time to EBITDA for the four fiscal
quarters most recently ended at such time would exceed the
following ratios for the periods indicated:
Period Applicable Ratio
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through June 30,2000 3.50 to 1.00
July 1, 2000 through
March 31, 2001 3.00 to 1.00
on and after April 1, 2001 2.75 to 1.00
2.7 Borrowing Base Addendum. The "Borrowing Base Addendum"
-----------------------
attached hereto is made a part hereof for all purposes, and upon
the Amendment Effective Date, the Borrowing Base Addendum shall
become a part of the Credit Agreement for all purposes.
ARTICLE III
CONDITIONS PRECEDENT
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The effectiveness of this Fourth Amendment is subject to the
receipt by the Agent of the following documents, payment of any
fees due to the Agent pursuant to any agreement between the
Company and the Agent, and the satisfaction of the other
conditions provided in this Article III, each of which shall be
reasonably satisfactory to the Agent in form and substance.
3.1 Certain Documents. The Agent shall have received
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multiple original counterparts, as requested by the Agent, of
each of the following:
(a) this Fourth Amendment, executed and delivered by a duly
authorized officer of the Company, the Designated Subsidiaries,
the Agent, the Co-Agent and the Required Banks;
(b) customary opinions of counsel of the Company in a form and
substance acceptable to the Agent; and
(c) an initial Borrowing Base Certificate, substantially in the
form of Exhibit A-1 to the Borrowing Base Addendum.
3.2 Representations and Warranties. Subject to the
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exceptions set forth in Section 3.2 of the Third Amendment, each
of the representations and warranties made by the Borrowers in or
pursuant to the Credit Documents, including the Credit Agreement,
shall be true and correct in all material respects as of the
Amendment Effective Date, as if made on and as of such date.
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3.3 No Default. Subject to the exceptions set forth in
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Section 3.3 of the Third Amendment, no Default or Event of
Default shall have occurred and be continuing as of the Amendment
Effective Date.
3.4 No Change. Subject to the exceptions set forth in
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Section 3.4 of the Third Amendment, no event shall have occurred
since March 31, 2000 which, in the reasonable opinion of the
Banks, could have a Material Adverse Effect.
3.5 Due Diligence. The Agent shall have completed review
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and analysis, satisfactory to the Agent and with the assistance
of officers and advisors of the Company, of the property to
constitute collateral under the Security Documents referred to in
Section 3.1(b), including the owner, location and net book value
of all such property.
3.6 Amendment Fee. Each of the Banks that is a party to
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this Fourth Amendment shall have received from or on behalf of
the Company an amendment fee equal to the result of (a) such
Bank's Commitment multiplied by (b) .1875% (.001875), which
amendment fee shall be fully earned when paid and shall be non-
refundable.
3.7 Other Instruments or Documents. The Agent or any Bank
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or counsel to the Agent shall receive such other instruments or
documents as they may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
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Each Borrower hereby represents and warrants to the Banks
that:
4.1 Credit Documents.
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(a) Subject to the exceptions set forth in
Section 4.1(a) of the Third Amendment, as of the date of
execution and delivery of this Fourth Amendment, all of the
representations and warranties contained in each Credit
Document to which such Borrower is a party are true and
correct in all material respects as though made on and as of
the Amendment Effective Date.
(b) Except to the extent arising out of circumstances
previously disclosed to the Agent and the Banks by the
Company in writing (including in any letter agreement among
the Company and the Banks), after giving effect to this
Fourth Amendment and of the Letter of Understanding and to
the transactions and contemplated hereby and thereby, no
Defaults exist under the Credit Documents or will exist
under the Credit Documents.
(c) Musketeer hereby affirms that, as of the date of
execution and delivery of this Fourth Amendment, all of the
representations and warranties contained in the Parent
Pledge Agreement to which it is a party are true and correct
in all material respects as though made on and as of the
Amendment Effective Date.
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4.2 Corporate Authorization; No Contravention. The
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execution, delivery and performance by each Borrower and each
Designated Subsidiary and each Subsidiary of WGI executing any
Credit Document or this Fourth Amendment and any other Credit
Document (including such documents executed in connection with
this Fourth Amendment) to which such Person is a party:
(a) are within such Person's corporate power and
authority and have been duly authorized by all necessary
corporate action on the part of such Person, including any
shareholder action that is required on the part of any
shareholder of such Person;
(b) do not and will not contravene the terms of that
Person's certificate of incorporation, bylaws, other
organizational document or any amendment of any thereof;
(c) do not and will not conflict with, or result in
any breach or contravention of, or the creation of any Lien
under, any indenture, agreement, lease, instrument,
Contractual Obligation, injunction, order, decree or
undertaking to which such Person is a party; and
(d) do not and will not violate any Legal Requirement.
4.3 Governmental Authorization. No approval, consent,
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exemption , authorization, or other action by, or notice to, or
filing with, any Governmental Authority or, to the knowledge of
the Borrowers, any other Person, is necessary or required in
connection with the execution, delivery or performance of this
Fourth Amendment or its enforcement against any Borrower.
4.4 Binding Effect. This Fourth Amendment constitutes the
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legal, valid and binding obligation of each Borrower and
Designated Subsidiary enforceable against such Person in
accordance with its terms except as enforceability may be limited
by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally or by equitable
principles relating to enforceability.
4.5 Borrowings and Letter of Credit Obligations. As of the
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date of execution and delivery of this Fourth Amendment, (a) the
outstanding Borrowings are in an amount equal to $34,000,000 and
(b) the outstanding Letter of Credit Obligations are in an amount
equal to approximately $15,364,626 using current exchange rates.
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ARTICLE V
MISCELLANEOUS
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5.1 Confirmation. The provisions of the Credit Agreement
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(as amended by this Fourth Amendment) shall remain in full force
and effect in accordance with its terms following the
effectiveness of this Fourth Amendment.
5.2 Ratification and Affirmation of Borrowers. Each of the
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Borrowers hereby expressly (a) acknowledges the terms of this
Fourth Amendment, (b) ratifies and affirms its obligations under
its respective Credit Documents to which it is a party, (c)
acknowledges, renews and extends its continued liability under
its respective Credit Documents to which it is a party and (d)
agrees that its respective Credit Documents to which it is a
party remain in full force and effect with respect to the
Obligations as amended hereby.
5.3 Successors and Assigns. This Fourth Amendment shall be
----------------------
binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns permitted pursuant to the
Credit Agreement.
5.4 Counterparts. This Fourth Amendment may be executed by
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one or more of the parties hereto in any number of separate
counterparts, and all of such counterparts taken together shall
be deemed to constitute one and the same instrument.
5.5 Invalidity. In the event that any one or more of the
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provisions contained in this Fourth Amendment shall for any
reason be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect
any other provision of this Fourth Amendment.
5.6 Governing Law. This Fourth Amendment shall be deemed
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to be a contract made under and shall be governed by and
construed in accordance with the internal laws of the State of
New York.
5.7 Entire Agreement. This Fourth Amendment, the Credit
----------------
Agreement, as amended hereby, the Notes, and the other Credit
Documents embody the entire agreement and understanding among the
parties herein and supersede all prior or contemporaneous
agreements and understandings of such Persons, verbal or written,
relating to the subject matter hereof except for any fee letters
and any prior arrangements made with respect to the payment by
any Borrower of (or any indemnification for) any fees, costs or
expenses payable to or incurred (or to be incurred) by or on
behalf of the Agent or the Banks.
[signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this
Fourth Amendment to be duly executed and delivered by their
proper and duly authorized officers as of the Amendment Effective
Date.
BORROWERS:
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WILLBROS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
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Title: Executive Vice President
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WILLBROS USA, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
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Title: Executive Vice President
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WILLBROS INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Vice President
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WILLBROS ENGINEERING & CONSTRUCTION
LIMITED
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Vice President
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WILLBROS WEST AFRICA, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Vice President
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[Fourth Amendment Signature Page]
WILLBROS (NIGERIA) LIMITED
By: /s/ X. X. Xxxxxxx
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Name: X. X. Xxxxxxx
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Title: Managing Director
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THE OMAN CONSTRUCTION COMPANY, LLC
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
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Title: General Manager
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XXXXXX & XXXXXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
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Title: President
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CONSTRUCTORA CAMSA, C.A.
By: /s/ G. Xxxxxxx Xxxx
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Name: G. Xxxxxxx Xxxx
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Title: General Manager
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WILLBROS OPERATING SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: President
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WILLBROS ENERGY SERVICES COMPANY
By: /s/ Xxxxx X. Xxxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxxx
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Title: Vice President
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[Fourth Amendment Signature Page]
WILLBROS MARINE ASSETS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Vice President
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INTERNATIONAL PIPELINE EQUIPMENT, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Vice President
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WILLBROS MIDDLE EAST, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Vice President
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INVERSIONES CAMSA, C.A.
By: /s/ G. Xxxxxxx Xxxx
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Name: G. Xxxxxxx Xxxx
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Title: General Manager
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WILLBROS ENGINEERS, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: President
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"ESCA" EQUIPMENT SERVICE COMPANIA
ANONIMA
By: /s/ G. Xxxxxxx Xxxx
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Name: G. Xxxxxxx Xxxx
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Title: General Manager
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[Fourth Amendment Signature Page]
WILLBROS INTERNATIONAL PTY LIMITED
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
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Title: Managing Director
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WILLBROS FAR EAST, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Vice President
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WILLBROS SURAMERICA, S.A.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Vice President
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WILLBROS (OVERSEAS) LIMITED
By: /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
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Title: Managing Director
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MUSKETEER, with respect to its
representations and warranties set forth
in Section 4.1 of this Fourth Amendment:
MUSKETEER OIL B.V.
By: /s/ illegible
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Name:
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Title: Holland Intertrust Corporation B.V.
Managing Director
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[Fourth Amendment Signature Page]
AGENT AND BANK:
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ABN AMRO BANK N.V.
By: /s/ W. Xxxxx Xxxxxxx
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Name: W. Xxxxx Xxxxxxx
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Title: Group Vice President
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By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: Vice President
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CO-AGENT AND BANK:
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CREDIT LYONNAIS NEW YORK BRANCH
By:
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Name:
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Title:
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BANKS:
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BANK OF AMERICA, N.A. (formerly known as
Boatmen's National Bank of Oklahoma)
By: /s/ E. Xxxxxx Xxxxxxx, III
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Name: E. Xxxxxx Xxxxxxx, III
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Title: Vice President
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THE BANK OF NOVA SCOTIA
By:
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Name:
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Title:
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ARAB BANKING CORPORATION (B.S.C.)
By: /s/ Xxxxx X. XxXxxxxx
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Name: Xxxxx X. XxXxxxxx
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Title: Vice President
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[Fourth Amendment Signature Page]
AUSTRALIA AND NEW ZEALAND BANKING GROUP
LTD.
By: /s/ Xxx Xxxxxxx
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Name: Xxx Xxxxxxx
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Title: Executive Vice President - The Americas
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BANK AUSTRIA AKTIENGESELLSCHAFT - GRAND
CAYMAN BRANCH
By: /s/ Xxxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxx Xxxxxxx X. Xxxxxx
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Title: Vice President Vice President
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BANK OF OKLAHOMA, N.A.
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Title: Vice President
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THE BANK OF TOKYO-MITSUBISHI LTD.-
HOUSTON AGENCY
By: /s/ Xxxx X. XxXxxx
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Name: Xxxx X. XxXxxx
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Title: Vice President
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[Fourth Amendment Signature Page]
The following exhibit to the Fourth Amendment to Credit Agreement
dated as of June 30, 2000, by and among Willbros Group, Inc., certain of
its designated subsidiaries, ABN AMRO Bank N.V., Credit Lyonnais New York
Branch and certain other banks which are parties to the Credit Agreement
dated as of February 20, 1997 have been omitted, and the Registrant agrees
to furnish supplementally a copy of such omitted exhibit to the
Securities and Exchange Commission upon its request:
Exhibit A Pricing Schedule
BORROWING BASE ADDENDUM
This Borrowing Base Addendum (this "Addendum") is attached
--------
to and made a part of the Fourth Amendment to Credit Agreement,
dated as of August 14, 2000, and effective as of June 30, 2000,
among Willbros Group, Inc. and the Borrowers named therein, ABN
AMRO Bank N.V., Credit Lyonnais New York Branch, and the Banks
named therein (the "Fourth Amendment"). The Fourth Amendment,
----------------
upon due execution, shall cause the effectiveness of this
Addendum as of the Amendment Effective Date (as defined in the
Fourth Amendment), and this Addendum shall become a part of, for
all purposes, the Credit Agreement (as defined in the Fourth
Amendment), and references to the Credit Agreement shall include
this Addendum. Capitalized terms used but not defined in this
Addendum shall have the meanings given to such terms in the
Credit Agreement.
1. Borrowing Base.
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(a) Generally. The "Borrowing Base" at any time,
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determined by reference to the most recent Borrowing Base
Certificate in effect, shall be equal to the sum (without
duplication) of the following: (i) 100% of Cash
Equivalents; (ii) 70% of Net Trade Receivables; (iii) 50% of
Revenue Accruals; (iv) 50% of Contract Cost and Recognized
Income Not Yet Billed; and (v) 40% of Property, Plant and
Equipment and Spare Parts; provided, that in all events, if
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the items set forth in clauses (i) through (iv) shall
comprise, in the aggregate, less than 50% of the Borrowing
Base, the Borrowing Base shall be deemed to be an amount
equal to the product of the aggregate amounts of the items
set forth in clauses (i) through (iv) multiplied by two.
(b) Certain Defined Terms.
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(i) "Cash Equivalents" shall mean the sum (without
----------------
duplication) of (A) 100% of (I) cash held in US Dollars and
other currencies approved by the Agent, (II) investments in
direct obligations of the United States of America or any
agency thereof, (III) investments in certificates of deposit
of maturities less than one year issued by, or time deposits
with, commercial banks in the United States having capital
and surplus in excess of $500,000,000, (IV) investments in
commercial paper of maturities less than one year rated A1
or P1 by Standard & Poor's Corporation or Xxxxx'x Investors
Service, Inc., respectively, or any equivalent rating from
any other rating agency satisfactory to the Agent, (V)
investments in securities purchased by the Company under
repurchase obligations pursuant to which arrangements are
made with selling financial institutions (being a financial
institution with a rating of A1 or P1 by Standard & Poor's
Corporation or Xxxxx'x Investors Service, Inc.,
respectively) for such financial institutions to repurchase
such securities within 30 days from the date of purchase by
the Company, and other similar short-term investments made
in connection with the Company's cash management practices,
and (VI) investments in institutional money market mutual
funds that abide by the criteria set forth by rule 2a-7 of
the Investment Company Act of 1940, as amended, and (B) 50%
of the US Dollar equivalent (determined using prevailing
exchange rates on the date of delivery of the then most
recent Borrowing Base Certificate) of cash held in
currencies other than in US Dollars or such currencies
approved by the Agent; provided, that in all events, if the
--------
value of the items set forth in clause (B) exceeds the
product of the value of the items set forth in clause (A)
multiplied by three, Cash Equivalents shall be deemed to be
an amount equal to the product of the value of the items set
forth in clause (A) multiplied by four.
(ii) "Net Trade Receivables" shall mean the accounts
---------------------
receivable of WGI and the WGI Ownership Percentage of the
accounts receivable of the Operating Subsidiaries and the
Material Joint Ventures, in each case, with respect to each
of WGI, the Operating Subsidiaries and the Material Joint
Ventures, that is in the ordinary course of its business and
upon which its right to receive payment is absolute and not
contingent upon the fulfillment of any condition whatsoever.
Net Trade Receivables shall not include:
(A) any account that is unpaid more than 60 days
past the date of invoice, except for accounts of WII
and its subsidiaries, in which case shall not include
any account that is unpaid more than 120 days past the
date of invoice;
(B) any account that arises out of a contract or
order that, specifically by its terms, forbids or makes
void or unenforceable any assignment by the payee to
the Agent for the benefit of the Lenders of the account
receivable arising with respect thereto;
(C) any account arising from a "sale on
approval," "sale or return," "xxxx and hold,"
"consignment," or subject to any other repurchase or
return agreement;
(D) all accounts of any Customer (except for
accounts payable by Shell Petroleum Development Company
of Nigeria Limited and for accounts payable by Exxon
Mobil Corporation entities in connection with the Chad-
Cameroon project) if 20% or more of the aggregate
dollar amount of all outstanding invoices to such
Customer are unpaid more than 60 days (or 180 days in
the case of WII and its subsidiaries); or
(E) any account on which the Agent is not or does
not continue to be, in the Agent's sole discretion
(which shall not be unreasonable), satisfied with the
credit standing of the Customer of the WGI Entity in
relation to the amount of credit extended.
(iii) "Revenue Accruals" shall mean revenue
----------------
accruals of WGI and the WGI Ownership Percentage of revenue
accruals of the Operating Subsidiaries and the Material
Joint Ventures, in each case in the ordinary course of
business and as reflected on the balance sheet of the
respective WGI Entity, each such balance sheet shall be
prepared in accordance with GAAP, consistently applied.
Revenue Accruals shall not include any revenue accrual that
arises out of a contract or order that, specifically by its
terms, forbids or makes void or unenforceable any assignment
by the payee to the Agent for the benefit of the Lenders of
the account receivable arising with respect thereto.
- 2 -
(iv) "Contract Cost and Recognized Income Not Yet
-------------------------------------------
Billed" shall mean the contract cost and recognized income
------
not yet billed of WGI and the WGI Ownership Percentage of
the contract cost and recognized income not yet billed of
the Operating Subsidiaries and the Material Joint Ventures,
in each case in the ordinary course of business and as
reflected on the balance sheet of the respective WGI Entity,
each such balance sheet shall be prepared in accordance with
GAAP, consistently applied. Contract Cost and Recognized
Income Not Yet Billed shall not include any contract cost
and recognized income that arises out of a contract or order
that, specifically by its terms, forbids or makes void or
unenforceable any assignment by the payee to the Agent for
the benefit of the Lenders of the account receivable arising
with respect thereto.
(v) "Property, Plant and Equipment and Spare Parts"
---------------------------------------------
shall mean the net book value of those items as reflected on the
balance sheet of WGI and the WGI Ownership Percentage of the
value of those items as reflected on the balance sheets of
the Operating Subsidiaries and Material Joint Ventures, in
all cases which balance sheets shall be prepared in
accordance with GAAP, consistently applied.
(vi) "Operating Subsidiary" shall mean, at any time,
--------------------
any direct or indirect Subsidiary of the Company which at
the end of the preceding fiscal quarter had assets equal to
1% or more of the total consolidated assets of the Company
(vii) "Material Joint Venture" shall mean any
----------------------
Project Related Partnership and/or Joint Venture, other than
a Operating Subsidiary, in which WGI or any of its
Subsidiaries holds an equity interest or joint venture
interest and that has assets equal to 1% or more of the
total consolidated assets of the Company.
(viii) "WGI Ownership Percentage" shall mean, with
------------------------
respect to a Operating Subsidiary or Material Joint Venture,
the percentage of the common stock, equity interest or joint
venture interest in such Operating Subsidiary or Material
Joint Venture owned or controlled directly or indirectly by
WGI; provided, that with respect to entities deemed to be
wholly-owned Subsidiaries of WII in the definition of
"Subsidiaries" in the Credit Agreement, the WGI Ownership
Percentage, if applicable, shall be 100%.
(ix) "Customers" shall mean the account debtors
---------
obligated on the Net Trade Receivables.
(x) "WGI Entity" shall mean each of WGI, the Operating
----------
Subsidiaries and the Material Joint Ventures.
2. Limitations on Advances. In addition to the limitations set
-----------------------
forth in Sections 2.1(a) and 3.1(a) of the Credit Agreement, the
aggregate of the principal amounts of all Loans outstanding and
the Letter of Credit Obligations with respect to financial
Standby Letters of Credit shall not exceed the Borrowing Base at
any time. The Agent and the Banks shall be under no obligation
to make any Loans to the Company or issue Financial Standby
Letters of Credit in excess of the limitations stated above
and in the Credit Agreement.
- 3 -
3. Reporting. In addition to any reporting requirements
---------
set forth in the Credit Agreement, the Company will submit the
following in form and substance satisfactory to the Agent:
(a) Borrowing Base Information. Not later than 45
--------------------------
days after and as of the end of each month, except for
December and January which shall be not later than 60 days
after the end of such months, the following information
relating to the calculation of the Borrowing Base:
(i) a listing, including a reasonable description
and value, of all Cash Equivalents;
(ii) a listing of Net Trade Receivables in excess
of US$10,000 each (values less than $10,000 may be
grouped together), aged from the date of invoice,
including the name of each debtor;
(iii) a listing of all Revenue Accruals, in
each case including a reasonable description and value
and the name of each debtor;
(iv) a listing of all Contract Cost and Income Not
Yet Billed, including a reasonable description and
value and the name of each debtor; and
(v) a listing of all Property, Plant and
Equipment and Spare Parts, including the owner, net
book value and location of all such property.
(b) Borrowing Base Certificate. Not later than 45
--------------------------
days after and as of the end of each month, except for
December and January which shall be not later than 60 days
after the end of such months, the Company shall supply the
Agent, in form and detail satisfactory to the Agent, a
"Borrowing Base Certificate" in the form of Exhibit A-1
--------------------------
attached hereto for all purposes, executed by a Responsible
Officer and verifying that the Company is in compliance with
the terms and conditions of the Credit Agreement (including,
but not limited to, this Addendum). At the time of each
request for a Borrowing or a financial Standby Letter of
Credit, the Company shall supply the Agent a Borrowing Base
Certificate updating the information required in lines 9 and
11.
(c) Right to Request Field Audit. The Agent, at any
----------------------------
time upon the request of the Required Banks, shall have the
right to conduct, or to hire a third party to conduct on
behalf of the Agent and the Banks, in each case at the
Company's expense, a field audit or on-site inspection of
the properties of the Company and the Operating
Subsidiaries; provided that the Agent may not exercise such
--------
right more than once during any calendar year.
- 4 -
4. Mandatory Payment. In addition to the limitations set
-----------------
forth in Section 2.8(a) of the Credit Agreement, if at any time
the sum of the outstanding aggregate principal amount of the
Loans and the Letter of Credit Obligations with respect to
financial Standby Letters of Credit exceeds the then effective
Borrowing Base, then the Company shall (a) on such date pay or
prepay Loans in an aggregate amount equal to such excess together
with any amount required to be paid in connection therewith
pursuant to Section 4.13 (in accordance with the terms and
provisions of the Credit Agreement, including but not limited to
Section 2.8 thereof), or (b) provide the Agent, for the benefit
of the Banks, with additional collateral acceptable to the Agent
to eliminate such Borrowing Base deficiency.
- 5 -
EXHIBIT A-1
to the
BORROWING BASE ADDENDUM
FORM OF BORROWING BASE CERTIFICATE
Dated as of , 200 .
------------ --
Status as of , 200 (except with respect to lines 9
---------- --
and 11, for which the status shall be as of the date of delivery
hereunder).
In accordance with the terms of the Borrowing Base Addendum made
a part of the Credit Agreement dated as of February 20, 1997, as
amended, by and among Willbros Group, Inc., the Designated
Subsidiaries, ABN AMRO Bank N.V., Credit Lyonnais New York Branch
and the Banks named therein (with all capitalized terms used
herein having the same meanings as provided in such Credit
Agreement), the Company hereby represents and warrants that the
following calculations are true, accurate and complete and
correctly set forth the components of the Borrowing Base and
other related amounts as of the appropriate date set forth above:
1. Cash Equivalents $
------------------------
2. Net Trade Receivables $
------------------------
3. Revenue Accruals $
------------------------
4. Contract Cost and Recognized Income
Not Yet Billed $
------------------------
5. Property, Plant and Equipment and Spare Parts $
------------------------
6. (a) 100% of line 1 $
------------------------
(b) 70% of line 2 $
------------------------
(c) 50% of line 3 $
------------------------
(d) 50% of line 4 $
------------------------
(e) 40% of line 5 $
------------------------
7. The sum of lines 6(a) through 6(d) $
------------------------
8. The lesser of (a) two times line 7 or
(b) the sum of lines 6(e) and 7
(the "Borrowing Base") $
-------------- ------------------------
9. Outstanding balance on the Loans and
Letter of Credit Obligations with respect
to financial Standby Letters of Credit
as of report date $
------------------------
10. Commitments $
------------------------
- 6 -
11. Available for further advances
((a) lesser of line 8 or line 10,
minus (b) line 9) $
----- ------------------------
THE COMPANY:
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
- 7 -
