Willbros Group, Inc.\NEW\ - FORM 8-K - EX-10

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8-K - FORM 8-K - Willbros Group, Inc.\NEW\	h80462e8vk.htm

EXHIBIT 10

EXECUTION COPY

AMENDMENT NO. 1 TO CREDIT AGREEMENT

This Amendment No. 1 to Credit Agreement (this “Amendment”) dated as of March 4, 2011, is among Willbros United States Holdings, Inc., a Delaware corporation (the “Borrower”), Willbros Group, Inc., a Delaware corporation (the “Parent”), certain subsidiaries of the Parent party hereto (collectively with the Parent, the “Guarantors”), and lenders party to the Credit Agreement (as defined below) that are party hereto.

PRELIMINARY STATEMENTS

A. The Borrower, the Guarantors, the lenders from time to time party thereto (the “Lenders”), Crédit Agricole Corporate and Investment Bank, as Administrative Agent, Collateral Agent, and Issuing Bank, UBS Securities LLC, as Syndication Agent, and Natixis, The Bank of Nova Scotia and Capital One, N.A., as Co-Documentation Agents, are parties to the Credit Agreement dated as of June 30, 2010 (the “Credit Agreement”).

B. The parties wish to enter into this Amendment to amend certain terms and provisions of the Credit Agreement.

NOW, THEREFORE, the parties agree as follows:

ARTICLE I
DEFINITIONS

Capitalized terms used in this Amendment are defined in the Credit Agreement, as amended hereby, unless otherwise stated.

ARTICLE II
AMENDMENT

2.01 Amendments to Section 1.01. Section 1.01 of the Credit Agreement is hereby amended as follows:

(a) The defined term “Asset Disposition” is hereby amended by inserting “, 6.04(g)(ii)” after the reference to “Section 6.04(c)”.

(b) The defined term “Consolidated EBITDA” is hereby amended as follows:

(1) by deleting and replacing clause (b)(v) with the following: “(v) extraordinary or non-recurring expenses or losses (other than any such expenses or losses arising from the accrual of the earnout liability related to the InfrastruX Merger),”;

(2) by deleting and replacing clause (c) with the following: “to the extent included in determining such Consolidated Net Income, (i) extraordinary or non-recurring gains and (ii) any non-cash gains arising from the reversal of the accrual of the earnout liability related to the InfrastruX Merger); minus (in case of a gain) or plus (in the case of a loss)”;

(3) by deleting and replacing clause (i) with the following: “cash payments made during such period in respect of non-cash charges added back in determining Consolidated EBITDA (including any such non-cash charges arising from the accrual of the earnout liability related to the InfrastruX Merger) for any previous period; plus”;

(4) by inserting the word “such” immediately prior to the word “Consolidated” in clause (n);

(5) by deleting the period at the end of clause (n) and inserting the following language in place thereof:

; plus

(o) to the extent deducted in determining such Consolidated Net Income, fees and expenses paid or payable in connection with any waiver or amendment of any Debt; plus

(p) to the extent deducted in determining such Consolidated Net Income, any premiums or similar fees paid or payable in connection with a prepayment of any Debt; plus

(q) to the extent deducted in determining such Consolidated Net Income, costs, expenses and charges relating to the independent compliance monitor retained as a result of the SEC/DOJ Investigation incurred on or prior to December 31, 2012, provided that the aggregate amount added pursuant to clauses (q) and (r) of this definition in any period of four consecutive fiscal quarters shall not exceed $5,000,000; plus

(r) to the extent deducted in determining such Consolidated Net Income, costs, expenses and charges relating to the TransCanada Pipeline Arbitration incurred on or prior to December 31, 2012, provided that the aggregate amount added pursuant to clauses (q) and (r) of this definition in any period of four consecutive fiscal quarters shall not exceed $5,000,000.

(h) Liens arising by virtue of Uniform Commercial Code financing statement filings (or similar filings under applicable law) regarding (i) operating leases entered into by the Parent or any of its Subsidiaries in the ordinary course of business or (ii) perfection of the acquiror’s or transferee’s interest in any sale, transfer or other disposition of assets permitted under Section 6.04;

(d) The defined term “Excess Cash Flow” is hereby amended as follows:

(1) by deleting and replacing clause (b)(vi) with the following:

(vi) to the extent not reducing Consolidated EBITDA for such fiscal year (but without duplication of any other deductions to Excess Cash Flow for such fiscal year), the aggregate amount actually paid in cash by the Parent and its Subsidiaries during such fiscal year in respect of litigation and similar proceedings, earn-out obligations and other obligations and liabilities (other than Debt), including any such amounts paid in respect of items referred to in clauses (q) and (r) of the Consolidated EBITDA definition,

and

(2) by inserting the following language at the end of clause (b)(vi):

plus (c) to the extent not otherwise included in Excess Cash Flow for such fiscal year, net cash proceeds received by the Parent or its Subsidiaries during such fiscal year from the TransCanada Pipeline Project, either through the collection of receivables or pursuant to the settlement of the TransCanada Pipeline Arbitration (it being understood and agreed that any amounts added back pursuant to this clause (c) with respect to any fiscal year shall, to the extent otherwise included in Excess Cash Flow for any subsequent fiscal year, be deducted in determining Excess Cash Flow for such subsequent fiscal year).

(e) The defined term “Tangible Net Worth” is hereby deleted in its entirety and replaced with the following:

“Tangible Net Worth” means, as of any date of determination, for the Parent and its Subsidiaries on a consolidated basis, (a) the Stockholders’ Equity as of such date minus (b) the goodwill of the Parent and its Subsidiaries as of such date; provided that to the extent the Stockholders’ Equity shall have been affected on and after December 31, 2010 by any amounts attributable to the net Tax liabilities for repatriation by any CFC to the Parent, the Borrower or any of its Domestic Subsidiaries of any cash earned from outside the United States of America, such amounts shall be added back to the Stockholders’ Equity for purposes of determining the Tangible Net Worth.

(f) The following new defined terms shall be inserted, in appropriate alphabetical order:

“TransCanada Pipeline Arbitration” means matter no. 17247/VRO pending in the International Court of Arbitration of the International Chamber of Commerce; WILLBROS CONSTRUCTION (US), LLC, Claimant/Counterclaim Respondent, and TRANSCANADA KEYSTONE PIPELINE, L.P., Respondent/Counterclaimant.

“TransCanada Pipeline Project” means project undertaken and performed by Willbros Construction (US), LLC, a Wholly-Owned Subsidiary of the Borrower, under Agreement No. 5948 between TransCanada Keystone Pipeline, LP and Willbros Construction (US), LLC for Construction of US Groups 3 & 4 Pump Stations for the Keystone Oil Pipeline Project, dated as of September 18, 2008, and any change orders or amendments thereto.

2.02 Amendment to Section 2.01(a). Section 2.01(a) of the Credit Agreement is hereby amended to insert the following second proviso at the end of the first sentence:

provided further that if, at the time of any Revolving Borrowing, the Total Leverage Ratio, determined as of the end of the then most recent fiscal quarter of the Borrower for which a Compliance Certificate has been delivered pursuant to Section 5.06(c) and giving pro forma effect to such Revolving Borrowing and the application of the proceeds thereof, is more than 3.0 to 1, then the aggregate principal amount of such Revolving Borrowing, when taken together with the aggregate then outstanding principal amount of all other Revolving Borrowings, shall not (unless consented to in writing by the Majority Revolving Lenders) exceed $25,000,000 (excluding, for purposes of this computation, any such Revolving Borrowing to the extent the proceeds thereof are only used to make any payment in respect of the Convertible Senior Notes permitted under Section 6.14).

2.03 Amendment to Section 2.08(b)(ii). Section 2.08(b)(ii) of the Credit Agreement is hereby amended by deleting and replacing the penultimate and final sentences in their entirety with the following::

In the event of any prepayment under this Section 2.08(b)(ii), (x) if such prepayment is made solely with Net Debt Proceeds of an incurrence of Debt or with Equity Issuance Proceeds, such prepayment shall be accompanied by a prepayment premium equal to (1) if such prepayment is made prior to December 31, 2011, 4.00% of the principal amount of the Term Loans then being prepaid and (2) if such prepayment is made on and after December 31, 2011 but prior to December 31, 2012, 1.00% of the principal amount of the Term Loans then being prepaid and (y) in the case of any other prepayment under this Section 2.08(b)(ii), (1) if such prepayment is made prior to the first anniversary of the Closing Date, 2.00% of the principal amount of the Term Loans then being prepaid and (2) if such prepayment is made on or after the first anniversary of the Closing Date but prior to the second anniversary of the Closing Date, 1.00% of the principal amount of the Term Loans then being prepaid. No prepayment premium will apply to prepayments of the Term Loans under this Section 2.08(b)(ii) occurring (i) in the case of any prepayment described in clause (x) above, on or after December 31, 2012, and (ii) in

the case of any prepayment described in clause (y) above, on or after the second anniversary of the Closing Date.

2.04 Amendment to Section 2.08(c)(vi). Section 2.08(c)(vi) of the Credit Agreement is hereby amended by deleting and replacing the second and third sentences in their entirety with the following:

Each such prepayment of the Term Loans pursuant to this Section 2.08(c)(vi) shall be accompanied by a prepayment premium equal to (1) if such prepayment is made prior to December 31, 2011, 4.00% of the principal amount of the Term Loans then being prepaid and (2) if such prepayment is made on and after December 31, 2011 but prior to December 31, 2012, 1.00% of the principal amount of the Term Loans then being prepaid. No prepayment premium will apply to prepayments of the Term Loans under this Section 2.08(c)(vi) occurring on or after December 31, 2012.

2.05 Amendment to Section 2.08(c)(vii). Section 2.08(c)(vii) of the Credit Agreement is hereby amended by deleting and replacing the second and third sentences in their entirety with the following:

Each such prepayment of the Term Loans pursuant to this Section 2.08(c)(vii) shall be accompanied by a prepayment premium equal to (1) if such prepayment is made prior to December 31, 2011, 4.00% of the principal amount of the Term Loans then being prepaid and (2) if such prepayment is made on and after December 31, 2011 but prior to December 31, 2012, 1.00% of the principal amount of the Term Loans then being prepaid. No prepayment premium will apply to prepayments of the Term Loans under this Section 2.08(c)(vii) occurring on or after December 31, 2012.

2.06 Amendment to Section 5.06(k). Section 5.06(k) of the Credit Agreement is hereby deleted and replaced with the following:

(k) Monthly Cash and Backlog Reports. Within 20 Business Days after the end of each month, (1) the amount of cash and cash equivalents of the Parent and its Subsidiaries as of the end of such month and (2) an internal backlog report consistent with the detail (but omitting any commentary) in the Parent’s Quarterly Report on Form 10-Q and Annual Report on Form 10-K and otherwise in form reasonably acceptable to the Administrative Agent; and

2.07 Amendment to Section 6.02(h). Section 6.02(h)(iii) of the Credit Agreement is hereby deleted (up to the parenthetical that follows) and replaced with the following:

(iii) neither the final scheduled maturity nor the weighted average life to maturity of such Debt is shorter than ninety one (91) days after the Term

Maturity Date or the remaining weighted average life to maturity of the Term Loans, respectively

2.08 Amendment to Section 6.04. Section 6.04 of the Credit Agreement is hereby amended as follows:

(a) by replacing subsection (g) with the following:

(g) sales of (i) real property (including fixtures and other interests relating thereto) in an aggregate amount not to exceed $40,000,000, provided that the Net Proceeds from such Asset Disposition are applied to prepay the Term Loans within five (5) Business Days after the receipt thereof (it being agreed that such prepayment shall be treated as a mandatory prepayment for purposes of Section 2.08(c)(viii)), and (ii) equipment in an aggregate amount not to exceed $15,000,000, provided that, to the extent required pursuant to Section 2.08(c)(v), the Net Proceeds of such Asset Disposition are applied in accordance with such Section; provided that if any Asset Disposition described in this subsection (g) shall be for consideration of $10,000,000 or more, the Agent shall have received a certificate of a Financial Officer of the Parent to the effect that such Asset Disposition was approved by the Board of Directors of the Parent;

(b) by deleting the word “and” at the end of subsection (h);

(d) by inserting the following new subsection (j):

(j) sale of any of the assets identified on page 42 of Schedule 1: POTENTIAL BUSINESS DIVESTITURES to the Lender Presentation dated as of February, 2011 among the Borrower and the Lenders, provided that if any Asset Disposition described in this subsection (j) shall be for consideration of $10,000,000 or more, the Agent shall have received a certificate of a Financial Officer of the Parent to the effect that such Asset Disposition was approved by the Board of Directors of the Parent.

2.09 Amendment to Section 6.16. Section 6.16 of the Credit Agreement is hereby amended by replacing the covenant levels as follows:


Fiscal Quarter		Minimum Interest Coverage Ratio
Fiscal quarters ending December 31, 2010, March 31, 2011, June 30, 2011, September 30, 2011 and December 31, 2011		2.00 to 1.00

Fiscal quarter ending March 31, 2012		2.25 to 1.00


Fiscal Quarter		Minimum Interest Coverage Ratio
Fiscal quarters ending June 30, 2012, September 30, 2012, December 31, 2012, March 31, 2013, June 30, 2013 and September 30, 2013		2.75 to 1.00

Fiscal quarters ending December 31, 2013 and thereafter		3.00 to 1.00

2.10 Amendment to Section 6.17. Section 6.17 of the Credit Agreement is hereby amended by replacing the covenant levels as follows:


Fiscal Quarter		Maximum Total Leverage Ratio
Fiscal quarters ending December 31, 2010, March 31, 2011, June 30, 2011 and September 30, 2011		5.00 to 1.00

Fiscal quarter ending December 31, 2011		4.75 to 1.00

Fiscal quarter ending March 31, 2012		3.75 to 1.00

Fiscal quarters ending June 30, 2012 and September 30, 2012		3.50 to 1.00

Fiscal quarters ending December 31, 2012, March 31, 2013, June 30, 2013 and September 30, 2013		3.25 to 1.00

Fiscal quarter ending December 31, 2013 and thereafter		3.00 to 1.00

2.11 Amendment to Section 6.19. Section 6.19 of the Credit Agreement is hereby amended by replacing the number “$292,000,000” with “$240,000,000”.

2.12 Amendment to Exhibit B. Exhibit B to the Credit Agreement is hereby deleted and replaced with the modified Exhibit B attached to Annex II to this Agreement.

Each of the amendments set forth in this Article II shall be deemed to be effective as of December 31, 2010 for all purposes of the Credit Agreement and the related Loan Documents, in each case irrespective of the date of effectiveness of this Amendment.

ARTICLE III
CONDITIONS PRECEDENT

This Amendment shall become effective (the date of effectiveness thereof, the “Effective Date”) upon the satisfaction of the following conditions precedent:

(a) Documentation. The Administrative Agent shall have received this Amendment duly executed by the Borrower, the Guarantors and the Majority Lenders.

(b) Payment of Fees and Expenses. The Borrower shall have paid in immediately available funds to the Administrative Agent (i) for the ratable benefit of each Lender (other than the Defaulting Lenders, if any) that shall have executed and delivered to the Administrative Agent this Amendment by 5:00 p.m. (New York time) on February 25, 2011, an amendment fee equal to 100 basis points on the amount of such Lender’s Revolving Commitment and aggregate outstanding Term Loans as of such date and (ii) for its own account, all fees and all reasonable documented out-of-pocket costs and expenses (including reasonable documented legal fees of the Administrative Agent which have been invoiced by February 25, 2011) that are payable pursuant to that certain Engagement Letter, dated February 10, 2011, among the Borrower, the Parent and the Administrative Agent.

ARTICLE IV
NO WAIVER

Except for the amendments to the Credit Agreement and the other Loan Documents set forth in this Amendment and the other agreements set forth herein, nothing contained in this Amendment shall be construed as a waiver by the Administrative Agent or any Lender of any covenant or provision of the Credit Agreement, the other Loan Documents, this Amendment, or of any other contract or instrument between the Borrower and the Administrative Agent or any Lender, and the failure of the Administrative Agent or any Lender at any time or times hereafter to require strict performance by the Borrower of any provision thereof shall not waive, affect or diminish any right of the Administrative Agent or any Lender to thereafter demand strict compliance therewith. The Administrative Agent and each Lender hereby reserves all rights granted under the Credit Agreement, the other Loan Documents, this Amendment and any other contract or instrument between any of them.

ARTICLE V
ACKNOWLEDGMENTS, RATIFICATIONS AND REPRESENTATIONS AND WARRANTIES

5.01 Acknowledgements and Ratifications. The Borrower acknowledges that on and as of the Effective Date all Obligations in effect on such date are payable without defense, offset, counterclaim or recoupment. The Borrower and each Guarantor reaffirms its liabilities and obligations under the Credit Agreement, as amended hereby, and acknowledges and agrees that such liabilities and obligations are not impaired in any respect by this Amendment. The Borrower hereby agrees that all liens and security interests securing payment of the Obligations under the Credit Agreement are hereby collectively renewed, ratified and brought

forward as security for the payment and performance of the Obligations. The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Credit Agreement and the other Loan Documents, and, except as expressly modified and superseded by this Amendment, the terms and provisions of the Credit Agreement and the other Loan Documents are ratified and confirmed and shall continue in full force and effect. The Borrower, the Administrative Agent and the Lenders agree that the Credit Agreement, as amended hereby, and the other Loan Documents shall continue to be legal, valid, binding and enforceable in accordance with their respective terms.

5.02 Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that:

(a) the execution, delivery and performance of this Amendment have been authorized by all requisite corporate action on the part of the Borrower and will not violate the applicable organization or governing documents of the Borrower;

(b) after giving effect to this Amendment, the representations and warranties contained in Article IV of the Credit Agreement, as amended hereby, and the other Loan Documents are true and correct in all material respects (provided that to the extent any representation and warranty is qualified as to “Material Adverse Effect” or otherwise as to “materiality”, such representation and warranty is true and correct in all respects) on and as of the Effective Date as though made on and as of each such date, except to the extent that any such representation or warranty relates to an earlier date, in which case such representation and warranty is true and correct in all material respects (provided that to the extent any representation and warranty is qualified as to “Material Adverse Effect” or otherwise as to “materiality”, such representation and warranty is true and correct in all respects) as of such earlier date;

(c) after giving effect to this Amendment, no Default or Event of Default under the Credit Agreement, as amended hereby, has occurred and is continuing;

(d) there are no governmental or other third party consents, licenses and approvals required in connection with the execution, delivery, performance, validity and enforceability of this Amendment; and

(e) the Borrower has not amended its applicable organizational or governing documents since the date of the Credit Agreement.

ARTICLE VI
MISCELLANEOUS PROVISIONS

6.01 Survival of Representations and Warranties. All representations and warranties made in the Credit Agreement or the other Loan Documents, including, without limitation, any document furnished in connection with this Amendment, shall survive the execution and delivery of this Amendment, and no investigation by the Administrative Agent or any Lender shall affect the representations and warranties or the right of the Administrative Agent and Lenders to rely upon them.

6.02 Reference to Credit Agreement. Each of the Credit Agreement and the other Loan Documents, and any and all other agreements, documents or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Credit Agreement, as amended hereby, are hereby amended so that any reference in the Credit Agreement and such other Loan Documents to the Credit Agreement shall mean a reference to the Credit Agreement as amended hereby.

6.03 Severability. Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.

6.04 Successors and Assigns. This Amendment is binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns permitted pursuant to the Credit Agreement.

6.05 Counterparts. This Amendment may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument. This Amendment may be executed by facsimile signature and all such signatures shall be effective as originals.

6.06 Headings. The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

6.07 Applicable Law. THIS AMENDMENT SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

[Remainder of page intentionally left blank. Signatures on following pages.]

IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment as of the date first above-written.


BORROWER: WILLBROS UNITED STATES HOLDINGS, INC.
By:	/s/ Van A. Welch
	Name:	Van A. Welch
	Title:	Chief Financial Officer