<PAGE>
EXHIBIT 10.4
THIRD AMENDMENT AND WAIVER
THIS THIRD AMENDMENT AND WAIVER (this "Amendment") dated as of
November 23, 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 by the First
Amendment and Waiver dated as of August 6,
2004, and the Second Amendment and
Waiver dated as of July 19, 2005 (the
"Second Amendment"), 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 (as previously amended and
modified, the "Credit Agreement").
PRELIMINARY STATEMENTS
WHEREAS, as of the date hereof, certain Events of Default described
as
the "Existing Defaults" in the Second
Amendment have not been cured or waived
and remain in effect as of the date hereof,
and certain matters described as the
"Probable Defaults" in the Second Amendment
have now become Events of Default
and also have not been cured or waived and
remain in effect as of the date
hereof (collectively, such Existing
Defaults and such Probable Defaults which
are now Events of Default are hereinafter
called the "Second Amendment
Defaults");
WHEREAS, as of the date hereof, the Company believes that (i) it
will
fail to maintain a minimum cash balance of
$15,000,000 after the date hereof in
accordance with the terms of Section 4.8 of
the Credit Agreement ("Minimum Cash
Balance Default"), (ii) it probably failed
to comply with its covenant in
Section 9.12 (Consolidated Tangible Net
Worth) as of the fiscal quarter ending
September 30, 2005 and possibly for earlier
fiscal quarters during 2005
("Tangible Net Worth Default"), and (iii)
it probably failed, and will fail, to
comply with its covenant in Section 9.13
(Fixed Charge Coverage Ratio) as of
each of the fiscal quarters ending
September 30, 2005, December 31, 2005 and
March 31, 2006 ("Fixed Charge Coverage
Default");
WHEREAS, as of the date hereof, the Company believes that it will
fail
to timely deliver (i) its unaudited
quarterly financial statement for the fiscal
quarter ending September 30, 2005 and
accompanying certificates as required
under Section 8.1(c) and 8.2(b) of the
Credit Agreement, and (ii) the Borrowing
Base Certificate for the month of
September, 2005, in accordance with the terms
of Section 4.2 of the Credit Agreement
(collectively, the "New Probable
Defaults");
<PAGE>
WHEREAS, the Company has requested the Banks (i) to permanently
waive
the Second Amendment Defaults and the
Tangible Net Worth Default, (ii) to waive
the Minimum Cash Balance Default and Fixed
Charge Coverage Default for the
period through March 31, 2006, (iii) to
waive the New Probable Defaults for the
period through December 15, 2005, (iv) to
restore the Company's ability to
borrow Loans under the Credit Agreement up
to $30,000,000, (v) to consent to the
Company's sale of the Opal Facility, and
(vi) to amend certain provisions of the
Credit Agreement in order to restore
compliance with its obligations under such
provisions following such amendments and
the aforementioned waivers; and
WHEREAS, the Banks have agreed to such waivers and amendments
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 permanently waive the Second Amendment
Defaults and the Tangible Net Worth Default
and to restore the availability of
Loans under the Credit Agreement subject to
the terms and conditions therein, as
modified by this Amendment.
(b) The Banks
hereby agree to waive the Minimum Cash Balance Default and
the Fixed Charge Coverage Default for the
quarters ending September 30, 2005,
December 31, 2005, and March 31, 2006;
(c) The Banks
hereby agree to waive, subject to the conditions described
below, from the Amendment Effective Date
until December 15, 2005 (the "Waiver
Period"), the New Probable Defaults, and
further agree that such waiver of the
New Probable Defaults shall automatically
become permanent, effective as of the
last day of the Waiver Period, only if the
Company shall have delivered to the
Agent each of 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
Company's audited consolidated annual financial statements for
the year ended
December 31, 2004, together with the certificates required
to be delivered
with such financial statements pursuant to Section 8.1(c)
and Section
8.2(a) of the Credit Agreement, to be delivered on or before
November 30,
2005;
(ii) the Company's unaudited consolidated quarterly financial
statement for
the fiscal quarter ending March 31, 2005, together with the
certificates
required to be delivered with such financial statements
pursuant to
Section 8.1(c) and Section 8.2(b) of the Credit Agreement, to
be delivered on
or before November 30, 2005;
2
<PAGE>
(iii) the Company's unaudited consolidated quarterly financial
statement for
the fiscal quarter ending June 30, 2005, together with the
certificates
required to be delivered with such financial statements
pursuant to
Section 8.1(c) and Section 8.2(b) of the Credit Agreement, to
be delivered on
or before November 30, 2005;
(iv) the Company's unaudited consolidated quarterly financial
statement for
the fiscal quarter ending September 30, 2005, together with
the certificates
required to be delivered with such financial statements
pursuant to
Section 8.1(c) and Section 8.2(b) of the Credit Agreement, to
be delivered on
or before December 15, 2005; and
(v) a completed and certified Borrowing Base Certificate for
October,
2005 in
accordance with the terms of Section 4.2 of the Credit
Agreement,
to be delivered
on or before December 15, 2005.
(d) 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 Credit Agreement is amended as
follows:
(a) Section 1.1.
Section 1.1 is amended by (i) deleting the definition for
the term "Pricing Schedule" in its
entirety, (ii) restating the definitions for
"Applicable Margin", "Asset Sale,"
"Convertible Notes" and "Loan Limit" in their
entirety as follows, and (iii) adding a new
definition for the term "Loan
Maturity Date" as follows:
"Applicable Margin" means (i) on any day when no Event of Default
has
occurred and is
continuing, the per annum percentage, expressed in basis
points, set
forth for such interest and fees below, and (ii) on any day
when an Event of
Default has occurred and is continuing, the "Applicable
Margin"
determined pursuant to clause (i) above for the applicable
interest
or fees, plus
two hundred (200) basis points per annum.
<TABLE>
<S>
<C>
Commitment Fees:
0.75%
Eurodollar Loans
5.00%
Base Rate Loans
3.50%
Commercial LC Fees 3.00%
Performance SBLC Fees 3.00%
Financial SBLC Fees 5.00%
</TABLE>
"Asset Sale" means the sale, lease, transfer, or other disposition
for
value of any
Collateral, whether voluntary or involuntary, by the Company
or any of its
Subsidiaries to any Person other than an Obligor; provided,
however, that
any Excluded Asset Sale shall not be an Asset Sale for
purposes of this
Agreement. For purposes of this definition, the term
"Excluded Asset
Sale" means any sale, transfer or other disposition of
Collateral where
the Net Cash Proceeds of such sale, transfer or other
disposition
would not cause the aggregate amount of Asset
3
<PAGE>
Sales completed
on or after November 1, 2005, to exceed $100,000 or the
Dollar
Equivalent thereof.
"Convertible Notes" means (i) the unsecured convertible notes
issued
or to be issued
by the Company on or after the Closing Date on terms
reasonably
satisfactory to the Agent, and (ii) unsecured convertible notes
to be issued by
the Company on or after November 23, 2005 on terms
reasonably
satisfactory to the Agent.
"Loan Limit" means $30,000,000, less the aggregate amount of any
Loans
prepaid pursuant
to any mandatory prepayment under Section 2.6 at any time
after November 23,
2005.
"Loan Maturity Date" means May 23, 2006.
(b) Section 2.1.
Section 2.1 is amended by replacing the term "Maturity
Date" in each place it appears in such
Section with the term "Loan Maturity
Date."
(c) Section 2.6.
Section 2.6 is amended by replacing paragraph (f) thereof
in it entirety as follows:
(f) Additional Capital. On the date of any Obligor's receipt of
Net
Cash Proceeds of
(i) any Equity Issuance, (ii) any capital markets
transaction
(debt or equity), whether public or private, or (iii) any third
party capital
infusion, the Company shall cause one or more Borrowers to
prepay Loans in
an aggregate amount equal to the lesser of (i) such Net
Cash Proceeds or
(ii) the Loans then outstanding, together with any amount
required to be
paid in connection therewith pursuant to Section 5.12.
(d) Section 2.7.
Section 2.7 is amended by replacing the term "Maturity
Date" in each place it appears in such
Section with the term "Loan Maturity
Date."
(e) Section
3.1(a). Section 3.1(a) is amended by adding "or (z) the
aggregate Letter of Credit Obligations
would exceed $70,000,000" at the end of
clause (i) thereof.
(f) Section 4.7.
Section 4.7 is hereby amended and restated in its entirety
as follows:
4.7 Mandatory Reduction of Total Commitment. The Total
Commitment
shall be automatically and permanently reduced as follows:
(a) Upon the date of receipt by the Company or any of its
Subsidiaries of any Net Cash Proceeds of any Financing
Transaction,
the Total Commitment shall automatically and permanently be reduced
by
an amount equal to the lesser of (i) such Net Cash Proceeds or
(ii)
the Loan Limit.
4
<PAGE>
(b) Upon the date of any mandatory prepayment of Loans pursuant
to Section 2.6 (d), (e), or (f), the Total Commitment shall
automatically and permanently be reduced by an amount equal to
the
lesser of (i) such Net Cash Proceeds or (ii) the Loan Limit in
effect
immediately prior to the making of such mandatory prepayment.
Any reduction of the Total Commitment pursuant to this Section
4.7
shall be applied to ratably reduce the Commitment of each Bank by
an
amount equal to such Bank's Percentage Share of the amount of
the
mandatory reduction of the Total Commitment.
(g) Section
9.12. Section 9.12 is amended by restating such Section in its
entirety as follows:
9.12 Consolidated Tangible Net Worth. The Company shall not permit
its
Consolidated
Tangible Net Worth as at the end of any fiscal quarter after
September 30,
2005 to be less than the sum of (a) $140,000,000 plus (b) 75%
of the Company's
cumulative net income for each fiscal quarter (without
deduction for
loss) beginning with the fiscal quarter ended December 31,
2005 plus (c)
100% of the Net Cash Proceeds received by the Company with
respect to any
Equity Issuance after November 21, 2005, plus (d) the net
amount of
capital deemed to have been contributed to the Company as a
result of the
conversion of the Convertible Notes to common stock of the
Company.
(h) New Article
IX Sections. Article IX is amended by adding the following
new Sections 9.20, 9.21 and 9.22:
Section
