EXHIBIT 10
Execution Copy
SECOND AMENDMENT AND WAIVER
THIS SECOND AMENDMENT AND WAIVER (this "Amendment") dated as of July
19, 2005 (the "Amendment Effective Date"), is by and among Willbros Group, Inc.,
a Republic of Panama corporation (herein referred to as the "Company"); the
financial institutions parties hereto which are Banks under the Credit Agreement
(as defined below); and Calyon New York Branch (formerly known as Credit
Lyonnais New York Branch), as administrative agent for the Banks (in such
capacity, the "Agent"), and amends the Amended and Restated Credit Agreement
dated as of March 12, 2004, as previously amended and modified by the First
Amendment and Waiver dated as of August 6, 2004, the Consent and Wavier
Agreement dated as of April 8, 2005, and the Consent and Wavier Agreement dated
as of June 13, 2005 (as previously amended and modified, the "Credit
Agreement"), among the Company, the Designated Subsidiaries from time to time
(WGI and such Designated Subsidiaries collectively, the "Obligors" and
individually, an "Obligor"); the several financial institutions from time to
time parties thereto as Banks, Calyon New York Branch (formerly known as Credit
Lyonnais New York Branch), as a Bank, as Issuing Bank (as defined herein), as
Agent, and as Lead Arranger and Book Runner; and CIBC, Inc., as Syndication
Agent
PRELIMINARY STATEMENTS
WHEREAS, as of the date hereof, certain Events of Default
(collectively, the "Existing Defaults") have occurred and are continuing under
the Credit Agreement, including the Company's (i) failure to timely deliver
audited annual financial statements for the year ended December 31, 2004 and
accompanying certificates as required under Sections 8.1(a) and 8.2(a) of the
Credit Agreement, respectively (such financial statements and accompanying
certificates referred to herein as the "Year-End Financials"), (ii) failure to
timely deliver unaudited quarterly financial statement for the fiscal quarter
ending March 31, 2005 and accompanying certificates as required under Section
8.1(c) and 8.2(b) of the Credit Agreement (the "March Quarterly Financials"),
and (iii) failure to timely deliver Borrowing Base Certificates for the month of
December, 2004, and the months of January, February, March, April, and May,
2005, in accordance with the terms of Section 4.2 of the Credit Agreement;
WHEREAS, as of the date hereof, the Company believes that it (A)
will fail to timely deliver (i) its unaudited quarterly financial statement for
the fiscal quarter ending June 30, 2005 and accompanying certificates as
required under Section 8.1(c) and 8.2(b) of the Credit Agreement (the "June
Quarterly Financials"), and (ii) the Borrowing Base Certificates for the months
of June, July and August, 2005, in accordance with the terms of Section 4.2 of
the Credit Agreement; and (B) probably failed to comply with its covenants set
forth in Section 9.11(b) (Financial Indebtedness to Adjusted EBITDA ratio)
and/or Section 9.13 (Fixed Charge Coverage Ratio), in each case as of the fiscal
quarters ending December 31, 2004, March 31, 2005 and June 30, 2005 (any such
failure to timely deliver the June Quarterly Financials and such Borrowing Base
Certificates, and to comply with such financial covenants, hereinafter
collectively called the "Probable Defaults");
WHEREAS, the Company has requested the Banks to waive the Existing
Defaults and the Probable Defaults, to reduce the Total Commitment to
$100,000,000, and to amend certain provisions of the Credit Agreement in order
to restore compliance with its obligations under such provisions following the
Existing Defaults and the Probable Defaults; and
WHEREAS, the Banks have agreed to such amendments and waivers in
respect subject to the terms and conditions set forth in this Amendment;
AGREEMENT
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,
intending to be legally bound, hereby agree as follows. Capitalized terms used
but not otherwise defined herein shall have the meanings assigned such terms in
the Credit Agreement.
Section 1. Waivers.
(a) The Banks hereby agree to waive, subject to the conditions described
below, from the Agreement Effective Date (as hereinafter defined) until
September 30, 2005 (the "Waiver Period"), the Existing Defaults and the Probable
Defaults.
(b) The Banks agree that the waiver set forth in paragraph (a) above shall
automatically become permanent, effective as of the last day of the Waiver
Period, if prior to such day the Company shall have delivered to the Agent each
of the the following, substantively in the form required under the terms of the
Credit Agreement, and the Agent shall have confirmed such delivery to the
Borrower and the Banks:
(i) the Year-End Financials, the March Quarterly Financials, and the
June Quarterly Financial, and
(ii) a completed and certified Borrowing Base Certificate for the
calendar month ending not more than 45 days prior to the date of delivery
of such Borrowing Base Certificate (presumably this will be either the
finalized Borrowing Base Certificate for June, July or August, 2005).
(b) The express waivers set forth in this Section 1 are the only waivers
provided by the Agent and the Banks pursuant to this Agreement, and all other
rights and remedies of the Agent and the Banks under the Credit Agreement remain
unchanged.
Section 2. Amendment of Credit Agreement. As of the Amendment Effective
Date, the Total Commitment is reduced to $100,000,000 (and each Bank's
Commitment is ratably reduced in accordance with such Bank's Percentage Share of
the total reduction), and the Credit Agreement is amended as follows:
(a) Section 1.1. The following defined terms are hereby amended and
restated in their entirety as set forth below:
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"Adjusted EBITDA" means, as of any date of determination for the
Company and its consolidated Subsidiaries, an amount equal to (a) the sum
of earnings before interest, taxes, depreciation and amortization,
calculated in accordance with GAAP as of the end of the preceding fiscal
quarter of the Company for the trailing four fiscal quarters of the
Company, minus (b) non-cash charges, including without limitation contract
reversals or receivables write downs, but excluding non-cash charges for
depreciation and amortization. For the avoidance of doubt, Adjusted EBITDA
will not be reduced by any non-cash compensation.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of
(i) the Company's consolidated earnings before interest and taxes,
calculated in accordance with GAAP as of the end of the preceding fiscal
quarter of the Company for the trailing four fiscal quarters of the
Company, to (ii) fixed charges (where fixed charges include Consolidated
Interest Expense, scheduled principal repayments and cash dividends paid
in the trailing four quarters of the Company).
"Senior Secured Financial Indebtedness" means Financial Indebtedness
incurred in connection with this Agreement and any other Financial
Indebtedness of any Obligor permitted under this Agreement that is secured
by Permitted Liens.
(b) New Section 4.8. Section 4.8 is amended by deleting the word
[RESERVED] and adding the following new covenant to maintain a minimum aggregate
cash balance:
4.8 Maintenance of Minimum Cash Balance. The Company shall at all
times ensure that the Obligors collectively maintain a minimum aggregate
cash balance in Acceptable Bank Accounts of not less than $15,000,000, and
shall promptly notify the Agent if at any time the aggregate cash balance
in Acceptable Bank Accounts is less than $20,000,000.
(c) Section 9.11 (b). Section 9.11(b) is deleted in its entirety and the
word "RESERVED" is added in lieu thereof.
(d) Section 9.12. Section 9.12 is amended by deleting the reference to
"$180.00 million" in clause (a) and substituting "$170.00 million" therefore.
(e) Annex A. Annex A to the Credit Agreement is replaced in its entirety
with Annex A attached hereto to reflect the revised Commitments of the Banks
after giving effect to the reduction of the Total Commitment to $100,000,000 and
any previously effective Assignment and Assumption.
Section 3. Interim Additional Agreements. Notwithstanding anything to the
contrary in the Credit Agreement, the Company agrees that at all times prior to
the Agent's confirmation to the Borrower and the Banks that all Existing
Defaults and Probable Defaults have been permanently waived by the Banks,
whether as contemplated in Section 1(a) above or otherwise, the following
agreements shall apply as if fully incorporated into the terms of the Credit
Agreement:
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(a) The Borrower shall not be entitled to borrow Loans under Section 2.1
of the Credit Agreement.
(b) The Borrower shall provide to the Agent uncertified draft forms (in
each case on or before the time it would have been required to deliver final
forms thereof in accordance with the terms of the Credit Agreement) of (i) its
unaudited quarterly financial statement for the fiscal quarter ending June 30,
2005 and accompanying certificates as required under Section 8.1(c) and 8.2(b)
of the Credit Agreement (the "Draft June Quarterly Financials") and (ii) the
Borrowing Base Certificates for the months of June, July and August, 2005.
(c) The Borrower shall provide to the Agent the following additional
reports: (i) a cash report on the first and the fifteenth day of each calendar
month (or if any such day is not a Business Day, on the next succeeding Business
Day thereafter), in form and substance satisfactory to the Agent, and (ii)
simultaneously with the delivery of each Borrowing Base Certificate, a contract
status and back-log report in form and substance satisfactory to the Agent,
which will list each existing contract or order (a "Contract") between an
Obligor and a Customer, the total value of such Contract, the percentage of work
completed under such Contract, the amount billed by the Obligors under such
Contract, the aggregate amount received from the Customer, the aggregate amount
due and owing under such Contract, and any remaining backlog, among other
information.
Section 4. Conditions to Effectiveness. This Amendment shall become
effective as of the Amendment Effective Date when the Agent has confirmed (and
has so notified the Company and the Banks) that it has received:
(a) counterparts hereof duly executed by the Obligors and the
Required Banks;
(b) a Certificate of the Company, signed on behalf of the Company by
its President or Chief Financial Officer, dated as of the date hereof,
certifying that, after giving effect hereto, the following statements
shall be true:
(i) the representations and warranties of each Obligor
contained in the Credit Documents are correct in all material
respects on and as of such date (other than those representations
and warranties that (A) expressly relate solely to a specific
earlier date, which shall remain correct as of such earlier date, or
(B) relate to the matters described as Existing Defaults or Probable
Defaults), as though made on and as of such date; and
(ii) no event has occurred and is continuing, or is
anticipated to occur prior to the end of the Waiver Period, which
constitutes (or would constitute when it occurs) a Default, an Event
of Default or both unless waived by this Amendment; and
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(c) payment to the Agent for the account of each Bank which executes
this Amendment prior to the Amendment Effective Date, a fee of 0.25% of
such Bank's Commitment as set forth on Annex A hereto.
Section 5. Amendment and Ratification. Upon the effectiveness hereof as
provided in the foregoing Section 4, this Amendment shall be deemed to be an
amendment and waiver to the Credit Agreement, and the Credit Agreement, as
modified hereby, is hereby ratified, approved and confirmed to be in full force
and effect in each and every respect. All references to the Credit Agreement in
any other document, instrument, agreement or writing shall hereafter be deemed
to refer to the Credit Agreement as modified hereby.
Section 6. Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.
Section 7. Descriptive Headings, Etc. The descriptive headings of the
several sections of this Amendment are inserted for convenience only and shall
not be deemed to affect the meaning or construction of any of the provisions
hereof.
Section 8. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
Section 9. Waiver of Jury Trial. Each of the parties hereto hereby
irrevocably and unconditionally waives, to the fullest extent it may effectively
do so under applicable law, any and all right to trial by jury in any action or
proceeding arising out of or relating to any Loan Document or the transactions
contemplated hereby or thereby.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective duly authorized officers as
of the Amendment Effective Date.
OBLIGORS:
WILLBROS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President, Chief Financial
Officer and Treasurer
WILLBROS U.S.A., INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President, Chief Financial
Officer and Treasurer
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WILLBROS INTERNATIONAL, INC.,
WILLBROS WEST AFRICA, INC.,
WILLBROS MIDDLE EAST, INC.
WILLBROS MARINE ASSETS, INC.
INTERNATIONAL PIPELINE EQUIPMENT, INC.,
WILLBROS CONSTRUCTORS, INC.,
WILLBROS OPERATING SERVICES, INC.
WILLBROS RPI, INC.,
WILLBROS MSI CANADA, INC. and
WILLBROS PROCESS ELECTRIC AND CONTROL, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
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WILLBROS (NIGERIA) LIMITED and
WILLBROS (OFFSHORE) NIGERIA LIMITED
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Representative
CONSTRUCTORA CAMSA, C.A. and
ESCA EQUIPMENT SERVICE C.A.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Attorney-in-Fact
WILLBROS ENERGY SERVICES COMPANY,
WILLBROS ENGINEERS SLC, INC. (f/k/a Willbros
Process Engineering Design, Inc.) and
WILLBROS MT. WEST, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President and Treasurer
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WILLBROS TRANSANDINA S.A.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxx X. Xxxxxxx
Title: Alternate Director
WILLBROS ENGINEERS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Treasurer
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AGENT:
CALYON NEW YORK BRANCH (formerly known as
Credit Lyonnais New York Branch)
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
By: /s/ Attila Coach
--------------------------
Name: Attila Coach
Title: Managing Director
ISSUING BANK:
CALYON NEW YORK BRANCH (formerly known as
Credit Lyonnais New York Branch)
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
By: /s/ Attila Coach
--------------------------
Name: Attila Coach
Title: Managing Director
LEAD ARRANGER AND
BOOK RUNNER:
CALYON NEW YORK BRANCH (formerly known as
Credit Lyonnais New York Branch)
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
By: /s/ Attila Coach
--------------------------
Name: Attila Coach
Title: Managing Director
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SYNDICATION AGENT:
CIBC INC.
By:__________________________________
Name:
Title:
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BANKS:
CALYON NEW YORK BRANCH (formerly known as
Credit Lyonnais New York Branch)
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
By: /s/ Attila Coach
----------------------------------------------
Name: Attila Coach
Title: Managing Director
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XXX XXXXX INTERNATIONAL BANK INC.
By: ______________________________________________
Name:
Title:
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ARAB BANKING CORPORATION (B.S.C.)
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: General Manager
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: VP Head of Credit
00
XXX XXXX XX XXXX XXXXXX
By: /s/ X. Xxxx
----------------------------------------------
Name: X. Xxxx
Title: Senior Manager
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BANK OF TEXAS, N.A.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President
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CIBC INC.
By: ______________________________________________
Name:
Title:
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COMMERCEBANK, N.A.
By: ______________________________________________
Name:
Title:
By: ______________________________________________
Name:
Title:
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COMPASS BANK
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
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JPMORGAN CHASE BANK
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
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NATEXIS BANQUES POPULAIRES
By: /s/ Xxxxxx Xxxxx
-----------------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President and Account Officer
By: /s/ Xxxxxx x'Xxxxxx
-----------------------------------------------
Name: Xxxxxx x'Xxxxxx
Title: Senior Vice President and
Regional Manager
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RZB FINANCE, LLC
By: /s/ Xxxx Xxxxx
-----------------------------------------------
Name: Xxxx Xxxxx
Title: Group Vice President
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Group Vice President
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AMEGY BANK NATIONAL ASSOCIATION
(formerly known as Southwest Bank of Texas, NA)
By: /s/ C. Xxxx Xxxxxxx
-----------------------------------------------
Name: C. Xxxx Xxxxxxx
Title: Vice President
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ANNEX A
COMMITMENTS
Omitted. Registrant agrees to furnish supplementally a copy of this Annex to
the Securities and Exchange Commission upon its request.
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