<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 7, 1996.
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
WILLBROS GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------
REPUBLIC OF PANAMA 1623 98-0160660
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)
EDIFICIO TORRE BANCO GERMANICO
CALLE 50 Y 55 ESTE, APARTADO 850048
PANAMA 5, REPUBLIC OF PANAMA
(507) 263-9282
(ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
LARRY J. BUMP
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
WILLBROS GROUP, INC.
EDIFICIO TORRE BANCO GERMANICO
CALLE 50 Y 55 ESTE, APARTADO 850048
PANAMA 5, REPUBLIC OF PANAMA
(507) 263-9282
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
ROBERT A. CURRY, ESQ. JONATHAN I. MARK, ESQ.
CONNER & WINTERS CAHILL GORDON & REINDEL
2400 FIRST PLACE TOWER 80 PINE STREET
15 EAST 5TH STREET NEW YORK, NEW YORK 10005-1702
TULSA, OKLAHOMA 74103-4391 (212) 701-3000
(918) 586-5711
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practical after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2) PRICE(2) FEE(2)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.05 per
share................................. 6,900,000 shares $13.00 $89,700,000 $30,932
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Includes 900,000 shares that the Underwriters have the option to purchase
to cover over-allotments, if any.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c).
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K
<TABLE>
<CAPTION>
FORM S-1 ITEM NUMBER AND HEADING CAPTION OR LOCATION IN PROSPECTUS
-------------------------------- ---------------------------------
<C> <S> <C>
1. Forepart of the Registration
Statement and Outside Front
Cover Page of Prospectus.... Outside Front Cover Page.
2. Inside Front and Outside Back
Cover Pages of Prospectus... Inside Front and Outside Back Cover Pages.
3. Summary Information, Risk
Factors and Ratio of
Earnings to Fixed Charges... Prospectus Summary; Risk Factors; Selected
Consolidated Financial and Other Data;
Consolidated Financial Statements.
4. Use of Proceeds.............. Prospectus Summary; Use of Proceeds.
5. Determination of Offering
Price....................... Outside Front Cover Page; Risk Factors;
Underwriting.
6. Dilution..................... Dilution.
7. Selling Security Holders..... Principal and Selling Stockholders.
8. Plan of Distribution......... Outside Front Cover Page; Underwriting.
9. Description of Securities to
be Registered............... Dividend Policy; Description of Capital
Stock.
10. Interests of Named Experts
and Counsel................. Not Applicable.
11. Information With Respect to
the Registrant.............. Outside Front Cover Page; Prospectus
Summary; Risk Factors; Dividend Policy;
Selected Consolidated Financial and Other
Data; Management's Discussion and Analysis
of Financial Condition and Results of
Operations; Business; Management; Certain
Transactions; Principal and Selling
Stockholders; Description of Capital
Stock; Shares Eligible for Future Sale;
Consolidated Financial Statements.
12. Disclosure of Commission
Position on Indemnification
for Securities Act
Liabilities................. Not Applicable.
</TABLE>
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+THE INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JUNE 7, 1996
6,000,000 SHARES
[LOGO APPEARS HERE]
WILLBROS GROUP, INC.
COMMON STOCK
THE SHARES OF COMMON STOCK, PAR VALUE $.05 PER SHARE (THE "COMMON STOCK"), OF
WILLBROS GROUP, INC. (THE "COMPANY") OFFERED HEREBY (THE "OFFERING") ARE BEING
SOLD BY CERTAIN STOCKHOLDERS (THE "SELLING STOCKHOLDERS"). SEE "PRINCIPAL AND
SELLING STOCKHOLDERS." THE COMPANY WILL NOT RECEIVE ANY OF THE PROCEEDS FROM
THE SALE OF SHARES BY THE SELLING STOCKHOLDERS.
PRIOR TO THE OFFERING, THERE HAS BEEN NO PUBLIC MARKET FOR THE COMMON STOCK.
IT IS CURRENTLY ESTIMATED THAT THE INITIAL PUBLIC OFFERING PRICE WILL BE
BETWEEN $ AND $ PER SHARE. SEE "UNDERWRITING" FOR THE FACTORS CONSIDERED
IN DETERMINING THE INITIAL PUBLIC OFFERING PRICE. APPLICATION WILL BE MADE TO
LIST THE COMMON STOCK ON THE NEW YORK STOCK EXCHANGE UNDER THE SYMBOL "WG."
FOR A DISCUSSION OF CERTAIN RISKS OF AN INVESTMENT IN THE SHARES OF COMMON
STOCK OFFERED HEREBY, SEE "RISK FACTORS" ON PAGES 8-12.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-----------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE DISCOUNTS PROCEEDS TO
TO AND SELLING
PUBLIC COMMISSIONS* STOCKHOLDERS+
<S> <C> <C> <C>
PER SHARE..................................... $ $ $
TOTAL++....................................... $ $ $
</TABLE>
- -----
* THE COMPANY AND THE SELLING STOCKHOLDERS HAVE AGREED TO INDEMNIFY THE
UNDERWRITERS AGAINST CERTAIN LIABILITIES, INCLUDING LIABILITIES UNDER THE
SECURITIES ACT OF 1933. SEE "UNDERWRITING."
+ NO EXPENSES ARE PAYABLE BY THE SELLING STOCKHOLDERS. EXPENSES PAYABLE BY THE
COMPANY ARE ESTIMATED TO BE $ .
++THE COMPANY HAS GRANTED THE UNDERWRITERS A 30-DAY OPTION TO PURCHASE UP TO
900,000 ADDITIONAL SHARES OF COMMON STOCK ON THE SAME TERMS PER SHARE SOLELY
TO COVER OVER-ALLOTMENTS, IF ANY. IF SUCH OPTION IS EXERCISED IN FULL, THE
TOTAL PRICE TO PUBLIC WILL BE $ , THE TOTAL UNDERWRITING DISCOUNTS AND
COMMISSIONS WILL BE $ AND THERE WILL BE PROCEEDS TO THE COMPANY OF $ .
SEE "UNDERWRITING."
-----------
THE COMMON STOCK IS BEING OFFERED BY THE UNDERWRITERS AS SET FORTH UNDER
"UNDERWRITING" HEREIN. IT IS EXPECTED THAT DELIVERY OF CERTIFICATES THEREFOR
WILL BE MADE AT THE OFFICES OF DILLON, READ & CO. INC., NEW YORK, NEW YORK, ON
OR ABOUT , 1996, AGAINST PAYMENT THEREFOR. THE UNDERWRITERS INCLUDE:
DILLON, READ & CO. INC. MERRILL LYNCH & CO.
THE DATE OF THIS PROSPECTUS IS , 1996
<PAGE>
Construction
Willbros specializes in
logistically complex and techni-
cally difficult construction pro- Engineering
jects in remote areas with diffi-
cult terrain and harsh climatic
conditions.
Engineering services include
feasibility studies, conceptual and
detailed design, field services,
material procurement and overall
project management.
[Picture of excavation site]
PIPELINE RECONSTRUCTION FOLLOWING A
MAJOR EARTHQUAKE - ECUADOR [Picture of engineer working at
computer design terminal]
STATE OF THE ART CADD SYSTEM - USA
[LOGO]
Specialty Services
Specialty services include pipe coating,
removal and installation of flow lines,
maintenance and repair of pipelines,
concrete pile fabrication, dredging and
transportation.
[Picture of pipe maintenance crew]
[Picture of flow lines]
FLOW LINES - KUWAIT
MAINTENANCE - OMAN
[Picture of dredging]
GATE--[World map showing Willbros
presence]
DREDGING - NIGERIA
IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and Consolidated Financial Statements and notes thereto appearing
elsewhere in this Prospectus. Unless otherwise indicated, (a) all references in
this Prospectus to the "Company" refer to Willbros Group, Inc. ("WGI") and its
consolidated subsidiaries, (b) all references to the "Predecessor Company"
refer to the consolidated subsidiaries of WGI prior to their acquisition by WGI
in 1992 and predecessors in interest to the business conducted by such
entities, and (c) all references to "Willbros" refer to the Company and the
Predecessor Company collectively or in a historical sense. See "Business--
Willbros Background." Unless otherwise indicated, all data in this Prospectus
assumes (a) no exercise of the Underwriters' over-allotment option, and (b)
conversion of all outstanding shares of Preferred Stock of the Company into
Common Stock prior to the effectiveness of the Registration Statement of which
this Prospectus is a part.
THE COMPANY
GENERAL
The Company is one of the leading independent contractors serving the oil and
gas industry, providing construction services, engineering services and other
specialty oilfield-related services ("specialty services") to industry and
government entities worldwide. The Company places particular emphasis on
projects in developing countries where the Company believes its experience
gives it a competitive advantage. The Company's construction services include
the building and replacement of major pipelines and gathering systems, flow
stations, pump stations, gas compressor stations, gas processing facilities and
oil and gas production facilities; and the construction of piers, dock
facilities and bridges. The Company's engineering services include feasibility
studies; conceptual and detailed facility design; field services; material
procurement; and overall project management. The Company's specialty services
include dredging; pipe coating; pipe double jointing; removal and installation
of flowlines; the fabrication and installation of concrete piles and platforms;
maintenance and repair of pipelines, stations and facilities; pipeline
rehabilitation; and transport of oilfield equipment, rigs and vessels.
The Company provides its services through a large fleet of equipment
comprised of, among other things, marine vessels, barges, dredges, pipelaying
equipment, heavy construction equipment, transportation equipment and camp
equipment. The Company's equipment fleet is supported by warehouses of spare
parts and tools which are located to maximize availability and minimize cost.
The Company obtains contracts for its work primarily by competitive bidding
or through negotiations with long-standing clients. In evaluating bid
opportunities, the Company considers such factors as the client, the geographic
location and the difficulty of the work, the Company's current and projected
workload, including the availability of personnel and Company owned equipment,
the likelihood of additional work, the project's cost and profitability
estimates and the Company's competitive advantage relative to other likely
bidders. See "Business--General."
The Company traces its roots to the construction business of Williams
Brothers Company, founded in 1908. Through successors to that business,
Willbros has completed many landmark projects around the world, including the
"Big Inch" and "Little Big Inch" War Emergency Pipelines (1942-44), the Mid-
America Pipeline (1960), the TransNiger Pipeline (1962-64), the Trans-
Ecuadorian Pipeline (1970-72), the northernmost portion of the Trans-Alaskan
Pipeline System (1974-76), the All American Pipeline System (1984-86),
Colombia's Alto Magdalena Pipeline System (1989-90) and a portion of the
Pacific Gas Transmission System expansion (1992-93). Willbros has been involved
in nine of the ten largest gas pipeline projects undertaken in the United
States since 1988. See "Business--Willbros Milestones."
3
<PAGE>
Over the years, Willbros has been employed by more than 400 clients to carry
out work in over 50 countries. Within the past 10 years, Willbros has worked in
Africa, Asia, the Commonwealth of Independent States (the "C.I.S."), the Middle
East, North America and South America. Willbros' relatively steady base of
ongoing construction, engineering and specialty services operations in Nigeria,
Oman, the United States and Venezuela has been enhanced by major construction
and engineering projects in Abu Dhabi, Colombia, Ecuador, Egypt, Gabon, Kuwait,
Morocco, Nigeria, Oman, Pakistan, and the United States. Major clients of the
Company in these countries include operating units of Royal Dutch Shell,
Chevron Corp., Occidental Petroleum, Pacific Gas and Electric and Great Lakes
Gas Transmission Company and governmental entities such as the U.S. Army Corps
of Engineers, Nigerian National Petroleum Corporation, Kuwait Oil Company, Pak-
Arab Refinery, Ltd. and operating units of Petroleos de Venezuela S.A. See
"Business--General."
Between 1979 and 1992, a controlling interest in the Company was held by
Heerema Holding Construction, Inc. ("Heerema"), a leading offshore fabrication
and installation contractor. In 1992, the Company was purchased from Heerema by
a group of investors including management of the Company, certain private
investment partnerships managed by Dillon, Read & Co. Inc. and persons related
to Dillon, Read & Co. Inc. (collectively, the "Yorktown and Concord
Investors"), and Heerema. Subsequent to the Offering, Company management and
employees will own approximately 32.8% of the Company. See "Business--Willbros
Background" and "Principal and Selling Stockholders."
CURRENT MARKET CONDITIONS
Relatively high crude oil and natural gas prices have resulted in
correspondingly strong levels of current and projected capital expenditures by
oil and gas companies to explore for and produce oil and gas reserves.
Accordingly, many significant natural gas, crude oil, petroleum products and
liquified natural gas ("LNG") pipeline projects, together with ancillary
construction and other associated projects, are being undertaken, particularly
in developing countries or regions where energy infrastructure spending has
lagged.
The Company believes that certain of these projects will meet its bidding
criteria, and that the Company's worldwide pipeline construction, engineering
and specialty services experience place it in an advantageous position to
compete for such projects. The Company currently has approximately 70 bids
outstanding with respect to potential contract awards in Australia, China,
Egypt, Indonesia, Mexico, Nigeria, Oman, Russia, Saudi Arabia, the United
States and Venezuela. The Company is currently preparing bids with respect to
potential contract awards in Egypt, Indonesia, Nigeria, Oman, Saudi Arabia,
Tanzania and the United States. Finally, the Company expects to prepare and
submit bids with respect to certain other potential construction and
engineering projects in Africa, Asia, the C.I.S., the Middle East, North
America and South America before the end of 1996. See "Business--Current Market
Conditions."
BUSINESS STRATEGY
The Company historically pursued a strategy of maximizing stockholder returns
while maintaining a strong balance sheet. More recently, the Company has
emphasized a growth strategy which encompasses geographic expansion in areas
such as Pakistan and Indonesia, strategic alliances, acquisitions and quality
improvements. In pursuing this strategy, the Company relies on its competitive
advantage in completing logistically complex and technically difficult projects
in remote areas with difficult terrain and harsh climatic conditions. The
Company also relies on its experienced multinational work force of
approximately 3,520 employees, over 80% of whom are citizens of the respective
countries in which they work. See "Business--Business Strategy."
Geographic Expansion. The Company seeks to maintain its presence in regions
where it has previously developed a strong base of operations, such as Africa,
the Middle East, North America and
4
<PAGE>
South America, and to establish a presence in additional strategically
important locations, such as Russia, Pakistan, Indonesia, Egypt and Brazil. In
pursuing this strategy, the Company seeks to identify a limited number of long-
term niche markets in which the Company can outperform the competition and
establish an advantageous position.
Strategic Alliances. The Company seeks to establish strategic alliances with
companies whose resources, skills and strategies are complementary to and are
likely to enhance the Company's business opportunities, including the formation
of joint ventures and consortia to achieve competitive advantage and share
risks. Such alliances have already been established in Australia, Indonesia,
Malaysia, Mexico, Russia, Thailand, the United States and Venezuela. As a
related strategy, the Company may decide to seek an equity stake in a project
in order to enhance its competitive position and/or maximize project returns.
Acquisitions. The Company seeks to identify and acquire companies which
complement its business strategy. For example, in 1994 the Company acquired
(from an affiliate of Heerema) Construcciones Acuaticas Mundiales, S.A.
("CAMSA"), a company operating in the Lake Maracaibo area of Venezuela whose
primary expertise is in marine construction and the fabrication and
installation of concrete piles and platforms for offshore projects. See
"Certain Transactions." The Company will continue to evaluate acquisition
candidates that offer growth opportunities and the ability to complement the
Company's resources and capabilities.
Quality Improvements. The Company's quality improvement program is focused on
obtaining ISO 9000 certification and on continually improving the readiness,
utilization and overall quality of its fleet of equipment. ISO 9000 is an
internationally recognized verification system for quality management overseen
by the International Standards Organization based in Geneva, Switzerland. The
ISO 9000 certification is important to the Company's international operations
in that in recent years such certification has been made a criterion for
prequalification of contractors by certain potential clients and this trend is
expected to continue. The certification process involves a rigorous review and
audit of the Company's management processes and quality control procedures. In
April 1996, the Company's subsidiary in Oman achieved ISO 9000 certification;
the Company's engineering subsidiary anticipates certification by the third
quarter of 1996; and the Company's Nigerian subsidiary is on schedule to
achieve certification by the end of 1996.
Conservative Financial Management. The Company expects to continue to
emphasize the maintenance of a conservative balance sheet in order to finance
the development and growth of its business. The Company also seeks to obtain
contracts that are likely to result in recurring revenues in order to mitigate
the cyclical nature of its construction and engineering businesses. For
example, the Company generally seeks to obtain specialty services contracts of
more than one year in duration. Additionally, the Company acts to minimize its
exposure to currency fluctuations through the use of U.S. dollar-denominated
contracts, by limiting payments in local currency to approximately the amount
of local currency expenses, and otherwise by hedging activities.
WGI is incorporated in the Republic of Panama and maintains its headquarters
at Edificio Torre Banco Germanico, Calle 50 y 55 Este, Panama 5, Republic of
Panama; its telephone number is (507) 263-9282. Administrative services for the
Company are provided by Willbros USA, Inc., which is located at 2431 East 61st
Street, Suite 700, Tulsa, Oklahoma 74136-1267; its telephone number is (918)
748-7000.
5
<PAGE>
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by the
Selling Stockholders............. 6,000,000 shares
Common Stock to be outstanding
after the Offering............... 13,860,000 shares (1)
Use of proceeds to the Company.... The Company will not receive any of the
proceeds from the sale of shares by the
Selling Stockholders. If the Underwriters'
over-allotment option granted by the
Company is exercised, there will be
proceeds to the Company which will be used
as working capital to support expansion of
operations and for possible acquisitions of
assets and businesses. See "Use of
Proceeds."
Proposed NYSE symbol.............. WG
</TABLE>
- --------
(1) Does not include (a) 900,000 shares of Common Stock that may be sold by the
Company upon exercise of the Underwriters' over-allotment option, (b)
1,125,000 shares of Common Stock reserved for issuance under the Company's
1996 Stock Plan, and (c) 125,000 shares of Common Stock reserved for
issuance under the Company's Director Stock Plan.
6
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PREDECESSOR
COMPANY (1) COMPANY
------------ ----------------------------------------------------------
THREE MONTHS
YEAR ENDED YEAR ENDED DECEMBER 31, ENDED MARCH 31,
DECEMBER 31, -------------------------------------- ------------------
1991 1992 1993 1994 1995 1995 1996
------------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME
DATA:
Contract revenues...... $168,875 $180,947 $210,011 $145,716 $220,506 $ 36,001 $ 53,479
Operating expenses:
Contract cost.......... 124,925 127,942 147,991 98,700 161,584 25,594 41,204
Depreciation and
amortization.......... 14,272 15,029 16,672 14,598 15,193 3,634 3,190
General and
administrative........ 19,098 20,200 24,267 24,695 28,184 6,232 6,698
-------- -------- -------- -------- -------- -------- --------
Operating income....... 10,580 17,776 21,081 7,723 15,545 541 2,387
Net interest income
(expense)............. 1,062 (2,133) (785) 835 144 162 (140)
Minority interest...... (1,408) (1,014) (3,615) (1,758) (1,589) (238) (490)
Other income
(expense)............. 3,681 176 5,567 113 (381) 117 570
-------- -------- -------- -------- -------- -------- --------
Income before income
taxes................. 13,915 14,805 22,248 6,913 13,719 582 2,327
Provision for income
taxes................. 4,289 2,764 8,405 (4,146) (75) 465 283
-------- -------- -------- -------- -------- --------
Net income (2)......... 11,636 $ 12,041 $ 13,843 $ 11,059 $ 13,794 $ 117 $ 2,044
======== ======== ======== ======== ======== ========
Net income per share... N/A(1) $ .92 $ 1.00 $ .79 $ .97 $ .01 $ .09(3)
OTHER DATA:
EBITDA (4)............. $ 30,366 $ 33,257 $ 40,752 $ 22,881 $ 30,631 $ 4,649 $ 5,871
Net income plus
depreciation and
amortization.......... $ 25,908 $ 27,070 $ 30,515 $ 25,657 $ 28,987 $ 3,751 $ 5,234
Capital expenditures... $ 20,150 $ 15,047 $ 16,534 $ 7,171 $ 18,946 $ 4,225 $ 2,160
Backlog (5)............ $146,734 $160,565 $ 76,066 $ 97,493 $139,359 $139,407 $104,524
Employees.............. 2,080 3,090 1,870 2,030 3,110 2,630 3,520
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1995 1996 (6)
------------ ---------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents............................... $ 19,859 $ 22,288
Working capital......................................... 38,767 40,977
Total assets............................................ 149,954 143,712
Total debt.............................................. 3,119 2,574
Stockholders' equity.................................... 83,391 84,423
</TABLE>
- --------
(1) Effective for accounting purposes as of January 1, 1992, the Company's then
parent company was sold to a group of investors which included Company
management, the Yorktown and Concord Investors and Heerema. As a result of
the acquisition of the Predecessor Company by the Company, the consolidated
financial statements of the Company reflect the application of purchase
accounting and, accordingly, are presented on a different basis than those
of the Predecessor Company and, therefore, are not comparable. See
"Business--Willbros Background."
(2) Net income in 1991 includes a $1,457 gain on discontinuation of Willbros'
U.S. contract drilling business and a $553 extraordinary item for the tax
benefit of a net operating loss carryforward.
(3) After deducting $724 of dividends on the Company's Preferred Stock.
(4) EBITDA represents earnings before interest expense, income taxes,
depreciation and amortization. EBITDA is not intended to represent cash
flows for the period, nor has it been presented as an alternative to
operating income as an indicator of operating performance. It should not be
considered in isolation or as a substitute for measures of performance
prepared in accordance with generally accepted accounting principles. See
the Company's Consolidated Statements of Cash Flows in the Company's
Consolidated Financial Statements included elsewhere in this Prospectus.
EBITDA is included in this Prospectus because it is a basis upon which the
Company assesses its financial performance.
(5) The Company follows a practice of reflecting anticipated revenues from
uncompleted portions of existing contracts as backlog. Historically, a
substantial amount of the Company's revenues in a given year have not been
reflected in its backlog at the beginning of that year. On average, over
the past four years, actual annual revenues have exceeded 150% of backlog
recorded at the end of each preceding year. No assurance can be given that
future experience will be similar to historical results in this respect.
See "Business--Backlog."
(6) Unless the Underwriters' over-allotment option granted by the Company is
exercised, the Company will not receive any proceeds from the Offering.
Accordingly, no adjustment to the balance sheet to reflect the Offering is
shown. See "Use of Proceeds."
7
<PAGE>
RISK FACTORS
Prospective purchasers of the Common Stock offered hereby should carefully
consider the following factors, as well as the other information contained
elsewhere in this Prospectus.
DEPENDENCE ON OIL AND GAS INDUSTRY
The demand for the Company's services depends largely on the conditions
prevailing in the international oil and gas industry, and specifically the
level of capital expenditures of major oil and gas companies. Numerous factors
influence capital expenditure decisions, including current and projected oil
and gas prices; exploration, extraction, production and transportation costs;
the discovery rate of new oil and gas reserves; the sale and expiration dates
of leases and concessions; local and international political and economic
conditions; technological advances; and the abilities of oil and gas companies
to generate capital. These factors are beyond the control of the Company.
Therefore, no assurance can be given that the Company's business and results
of operations will not be adversely affected because of reduced activity in
the oil and gas industry. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business--General."
FLUCTUATING REVENUES AND CASH FLOW
While the Company relies on its specialty services as a relatively steady
revenue base from year to year, the Company is dependent upon major
construction projects to enhance revenues and cash flow. The availability of
such projects is dependent upon the condition of the oil and gas industry. The
failure to obtain major projects, the delay in awards of major projects, the
cancellation of major projects or delays in completion of contracts could
result in the under-utilization of the Company's resources which would have an
adverse impact on revenues and cash flow. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
While the Company's revenues and operating income for the three months ended
March 31, 1996, are higher than those for the comparable period in the prior
year, no assurance can be given that the Company's revenues and operating
income for the full year 1996 will not be lower than revenues and operating
income for the full year 1995. Backlog as of March 31, 1996, was $104.5
million, as compared to $139.4 million as of March 31, 1995, a decrease of
$34.9 million. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business--Backlog."
CONCENTRATION OF RISK BY COUNTRY
Due to the limited number of major projects worldwide, the Company may, at
any one time, have a substantial portion of its resources dedicated to one
country. The Company's results of operations are, therefore, susceptible to
adverse events beyond its control which may occur in a particular country in
which the Company's business may be concentrated. For the year ended December
31, 1995, 43% of revenues were generated in Nigeria (47% in 1994 and 40% in
1993); 24% of revenues were generated in the United States (33% in 1994 and
28% in 1993); 13% of revenues were generated in Pakistan (0% in 1994 and
1993); 9% of revenues were generated in Oman (16% in 1994 and 20% in 1993);
and 9% of revenues were generated in Venezuela (3% in 1994 and 0% in 1993).
Operating profit attributable to projects in Africa, substantially all of
which was in Nigeria, accounted for 61%, 105% and 88% of total operating
profit in the years 1993, 1994 and 1995, respectively. At December 31, 1995,
39% of the Company's property, plant and equipment was located in Nigeria, 19%
in Venezuela and 15% in Oman. The Company's operations and assets are subject
to various risks inherent in conducting business in these countries. See "--
Political and Economic Risks," "Business--Geographic Regions" and Note 13 to
the Consolidated Financial Statements included elsewhere in this Prospectus.
DEPENDENCE ON KEY CLIENTS
The Company operates primarily in the oil and gas industry, providing
services to a limited number of clients. Much of the Company's success depends
on developing and maintaining relationships with
8
<PAGE>
certain major clients and obtaining a share of contracts from such clients.
Ten clients were responsible for 78% of the Company's total revenues in 1995
(69% in 1994 and 86% in 1993). Operating units of Royal Dutch Shell accounted
for 32% of the Company's total revenues in 1995 (29% in 1994 and 26% in 1993).
See "Business."
DEPENDENCE ON KEY MANAGERS
The Company's success depends heavily on the continued services of its
senior management, who possess bidding, procurement, transportation,
logistics, planning, project management, risk management and financial skills.
The loss or interruption of services provided by one or more of its senior
officers could adversely affect the Company's results of operations.
Furthermore, there can be no assurance that the Company will continue to
attract and retain sufficient qualified personnel. See "Management."
RISKS ASSOCIATED WITH FIXED PRICE CONTRACTS
A substantial portion of the Company's projects are currently performed on a
fixed-price basis, although some projects are performed on a cost-plus or day-
rate basis or some combination of the foregoing. The Company attempts to cover
increased costs of anticipated changes in labor, material and service costs of
long-term contracts either through an estimation of such changes, which is
reflected in the original price, or through price adjustment clauses. Despite
these attempts, however, the revenue, cost and gross profit realized on a
fixed-price contract will often vary from the estimated amounts because of
unforseen conditions or changes in job conditions and variations in labor and
equipment productivity over the term of the contract. These variations and the
risks generally inherent in construction may result in gross profits realized
by the Company being different from those originally estimated and may result
in the Company experiencing reduced profitability or losses on projects.
Depending on the size of a project, these variations from estimated contract
performance could have a significant effect on the Company's operating results
for any quarter or year. In general, turnkey contracts to be performed on a
fixed-price basis involve an increased risk of significant variations, as a
result of the long-term nature of such contracts (and the inherent
difficulties in estimating costs) and the interrelationship of the integrated
services to be provided under such contracts (where unanticipated costs or
delays in performing part of the contract could have compounding effects by
increasing costs of performing other parts of the contract). See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business--Contract Provisions and Subcontracting."
RISKS ASSOCIATED WITH PERCENTAGE-OF-COMPLETION ACCOUNTING
The Company's contract revenues are recognized using the percentage-of-
completion method. Under this method, estimated contract revenues are accrued
based generally on the percentage that costs to date bear to total estimated
costs, taking into consideration physical completion. Estimated contract
losses are recognized in full when determined. Accordingly, contract revenues
and total cost estimates are reviewed and revised periodically as the work
progresses and as change orders are approved, and adjustments based upon the
percentage of completion are reflected in contract revenues in the period when
such estimates are revised. To the extent that these adjustments result in an
increase, a reduction or an elimination of previously reported contract
revenues, the Company would recognize a credit or a charge against current
earnings, which could be material. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--General."
OPERATIONAL RISKS
Pipeline construction, dredging, pipeline rehabilitation services, marine
support services and operation of vessels and heavy equipment involve a high
degree of operational risk. Natural disasters, adverse weather conditions,
collisions, and operator or navigational error can cause personal injury or
loss of life, severe damage to and destruction of property and equipment and
suspension of operations. The occurrence of any such event could result in
revenue and casualty loss, increased costs and significant liability to third
9
<PAGE>
parties. Litigation arising from such an occurrence may result in the Company
being named as a defendant in lawsuits asserting large claims.
The Company maintains risk management and safety programs to mitigate the
effects of loss or damage. These programs have resulted in favorable loss
ratios and cost savings. While the Company maintains such insurance protection
as it deems prudent, there can be no assurance that any such insurance will be
sufficient or effective under all circumstances or against all hazards to
which the Company may be subject. An enforceable claim for which the Company
is not fully insured could have a material adverse effect on the Company.
Moreover, no assurance can be given that the Company will be able to maintain
adequate insurance in the future at rates that it considers reasonable. See
"Business--Insurance and Bonding."
GOVERNMENT REGULATIONS
Many aspects of the Company's operations are subject to government
regulations in the countries in which the Company operates, including those
relating to currency conversion and repatriation, taxation of its earnings and
earnings of its personnel, and its use of local employees and suppliers. In
addition, the Company depends on the demand for its services from the oil and
gas industry and, therefore, is affected by changing taxes, price controls and
laws and regulations relating to the oil and gas industry generally. The
adoption of laws and regulations by countries in which the Company operates,
curtailing exploration and development drilling for oil and gas for economic
and other policy reasons, could adversely affect the Company's operations by
limiting demand for its services. The Company's operations are also subject to
the risk of changes in foreign and domestic laws and policies which may impose
restrictions on the Company, including trade restrictions, which could have a
material adverse effect on the Company's operations. The Company cannot
determine to what extent future operations and earnings of the Company may be
affected by new legislation, new regulations or changes in, or new
interpretations of, existing regulations. See "Business--Government
Regulations--General."
ENVIRONMENTAL MATTERS
The Company's operations are subject to numerous environmental protection
laws and regulations which are complex and stringent. The Company regularly
works in and around sensitive environmental areas such as rivers, lakes and
wetlands. Significant fines and penalties may be imposed for non-compliance
with environmental laws and regulations, and certain environmental laws
provide for joint and several strict liability for remediation of releases of
hazardous substances, rendering a person liable for environmental damage,
without regard to negligence or fault on the part of such person. In addition
to potential liabilities that may be incurred in satisfying these
requirements, the Company may be subject to claims alleging personal injury or
property damage as a result of alleged exposure to hazardous substances. Such
laws and regulations may expose the Company to liability arising out of the
conduct of operations or conditions caused by others, or for the acts of the
Company which were in compliance with all applicable laws at the time such
acts were performed. The Company is not aware of any non-compliance with any
environmental law that could have a material adverse effect on the Company's
business or operations. See "Business--Government Regulations--Environmental."
COMPETITION
The Company operates in a highly competitive environment. The Company
competes against government-owned or supported companies and other companies
that have financial and other resources substantially in excess of those
available to the Company. In certain markets, there is competition from
national and regional firms against which the Company may not be price
competitive. See "Business--Competition."
POLITICAL AND ECONOMIC RISKS
The Company has substantial operations and assets in developing countries in
Africa, Asia, the Middle East and South America, and is seeking to increase
its level of activity in the C.I.S. and Indonesia.
10
<PAGE>
Accordingly, the Company is subject to risks which ordinarily would not be
expected to exist in the United States, Canada, Japan or western Europe,
including foreign currency restrictions, extreme exchange rate fluctuations,
expropriation of assets, civil uprisings and riots, government instability and
legal systems of decrees, laws, regulations, interpretations and court
decisions which are not always fully developed and which may be retroactively
applied. The Company's operations in developing countries may be adversely
affected in that certain government agencies in such countries may interpret
laws, regulations or court decisions in a manner which might be considered
inconsistent or inequitable in the United States, Canada, Japan or western
Europe. The Company may be subject to unanticipated income taxes, excise
duties, import taxes, export taxes or other governmental assessments which
could have a material adverse effect on the Company's results of operations
for any quarter or year. See "--Concentration of Risk by Country" and
"Business--Geographic Regions."
The Company has attempted to mitigate the risks of doing business in
developing countries by separately incorporating its operations in many such
countries; having local partners in certain countries; contracting primarily
with major international oil companies; entering into contracts providing for
payment in U.S. dollars instead of the local currency where possible;
maintaining reserves for credit losses; maintaining insurance on equipment
against certain political risks and terrorism; and limiting its capital
investment in each country. The Company retains local advisors to assist it in
interpreting the laws, practices and customs of the countries in which the
Company operates. Given the unpredictable nature of the risks described in the
preceding paragraph, there can be no assurance that such risks will not result
in a loss of business which could have a material adverse effect on the
Company's results of operations for any quarter or year. See "Business."
TAX MATTERS
WGI is incorporated in Panama and is not a "controlled foreign corporation"
for purposes of U.S. tax law. Moreover, WGI and its non-U.S. subsidiaries
carry out their activities in a manner which the Company believes does not
constitute the conduct of a trade or business in the United States.
Accordingly, although the Company reports taxable income and pays taxes in the
countries where it operates, the Company believes that income earned by WGI
and its non-U.S. subsidiaries from operations outside the United States is not
reportable in the United States for tax purposes and is not subject to U.S.
income tax. If income earned, currently or historically, by WGI or its non-
U.S. subsidiaries from operations outside the United States constituted income
effectively connected to a United States trade or business and as a result
became taxable in the United States, the consolidated operating results of the
Company could be materially and adversely affected.
NO PRIOR MARKET AND POSSIBLE VOLATILITY OF STOCK PRICE
Prior to the Offering, there has been no public market for the Company's
Common Stock. There can be no assurance that a regular trading market will
develop or be sustained after the Offering. The initial public offering price
will be determined by negotiations between the Company and the Managing
Underwriters. The market price of the Common Stock could be subject to
significant fluctuations in response to variations in operating results,
conditions in the oil and gas industry and other factors. In addition, the
stock market has in recent years experienced significant price and volume
fluctuations. These fluctuations often have been unrelated to the operating
performance of the specific companies whose stocks are traded. Broad market
fluctuations, as well as general economic conditions such as a recessionary
period or high interest rates, may adversely affect the market price of the
Company's Common Stock. See "Underwriting."
SHARES ELIGIBLE FOR FUTURE SALE
Future sales of Common Stock in the public market following the Offering
could adversely affect the market price of the Common Stock. Upon completion
of the Offering, the Company will have 13,860,000
11
<PAGE>
shares of Common Stock outstanding. Of these shares, the 6,000,000 shares sold
in the Offering (plus any additional shares sold upon exercise of the
Underwriters' over-allotment option) will, in general, be freely tradeable
without restriction under the Securities Act of 1933, as amended (the
"Securities Act"). Stockholders of the Company holding in the aggregate
approximately shares of Common Stock have agreed, subject to certain
limited exceptions, not to sell or otherwise dispose of any of the shares held
by them as of the date of this Prospectus for a period of 180 days after the
date of this Prospectus without the prior written consent of Dillon, Read &
Co. Inc. ("Dillon Read"). At the end of such 180 day period, all of these
shares of Common Stock will be eligible for immediate resale, subject, in some
cases, to compliance with Rule 144 and/or Rule 701 under the Securities Act.
The holders of approximately 6,054,240 shares of Common Stock have the right,
under certain circumstances, to require the Company to register their shares
under the Securities Act for resale to the public. If such holders, by
exercising their demand registration rights, cause a large number of shares to
be registered and sold in the public market, such sales could have an adverse
effect on the market price for the Common Stock. If the Company were required
to include in a Company-initiated registration shares held by such holders
pursuant to the exercise of their piggyback registration rights, such sales
may have an adverse effect on the Company's ability to raise additional
capital. In addition, soon after the date of this Prospectus, the Company
expects to file a registration statement on Form S-8 registering a total of
approximately 1,250,000 shares of Common Stock reserved for issuance under the
Company's 1996 Stock Plan and Director Plan. See "Shares Eligible for Future
Sale," "Underwriting," "Description of Capital Stock--Registration Rights" and
"Management--Compensation of Directors" and "--1996 Stock Plan."
USE OF PROCEEDS
The net proceeds to the Selling Stockholders from the sale of shares of
Common Stock in the Offering are estimated to be approximately $ . The
Company will not receive any of the proceeds from the sale of shares of Common
Stock by the Selling Stockholders in the Offering. The Company will pay
substantially all of the fees and expenses (other than underwriting discounts
and commissions) of the Selling Stockholders incurred in connection with the
Offering.
If the Underwriters' over-allotment option granted by the Company is
exercised in full or in part, there will be proceeds to the Company. If
exercised in full, the net proceeds to the Company are estimated to be
approximately $ .
The net proceeds to the Company, if any, will be used as working capital to
support expansion of operations in new work countries and to fund possible
acquisitions of assets and businesses which would complement the Company's
capabilities. Although the Company from time to time evaluates acquisition
opportunities, the Company has no present commitments or agreements with
respect to any material acquisition.
DIVIDEND POLICY
In order to fund the development and growth of the Company's business
following the Offering, the Company intends to retain its earnings rather than
pay dividends in the foreseeable future. From 1987 through 1991, Willbros paid
$96.2 million in dividends out of excess cash to Heerema, its sole stockholder
at that time. Since 1991, the Company has not paid any dividends, except
dividends in 1996 on its outstanding shares of Preferred Stock. The Preferred
Stock will be converted into shares of Common Stock prior to the effectiveness
of the Registration Statement of which this Prospectus is a part. The
Company's present credit agreement prohibits the payment of dividends on
Common Stock.
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<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of March
31, 1996, adjusted to give effect to (a) the conversion of all outstanding
shares of the Company's Preferred Stock into shares of Common Stock prior to
the effectiveness of the Registration Statement of which this Prospectus is a
part, and (b) the 30-for-1 Common Stock split effected on May 27, 1996.
<TABLE>
<CAPTION>
MARCH 31, 1996
--------------
(IN THOUSANDS)
<S> <C>
Long-term debt................................................ $ -
Stockholders' equity:
Preferred Stock (1)(2)...................................... $ -
Class A Preferred Stock (1)................................. -
Common Stock (1)(2)(3)...................................... 693
Capital in excess of par value (3).......................... 41,224
Cumulative foreign currency translation adjustment.......... (784)
Retained earnings........................................... 46,440
Notes receivable for stock purchases........................ (2,363)
Treasury stock at cost...................................... (787)
-------
Total stockholders' equity................................ $84,423
-------
Total capitalization...................................... $84,423
=======
</TABLE>
- --------
(1) On May 27, 1996, the Company's Articles of Incorporation were amended and
restated to (a) authorize 1,000,000 shares of Class A Preferred Stock, par
value $.01 per share, (b) increase the number of authorized shares of
Common Stock to 35,000,000, (c) reduce the par value per share of the
Common Stock from $1.00 to $.05, and (d) allow a 30-for-1 Common Stock
split. There are 362,000 shares of Preferred Stock, $100.00 par value per
share, authorized. See "Description of Capital Stock."
(2) As of the date of this Prospectus, there are 13,860,000 shares of Common
Stock outstanding, after giving effect to the conversion of all
outstanding shares of Preferred Stock into shares of Common Stock. The
number of shares of Common Stock outstanding excludes (a) 900,000 shares
of Common Stock that may be sold by the Company upon exercise of the
Underwriters' over-allotment option, (b) 1,125,000 shares of Common Stock
reserved for issuance under the Company's 1996 Stock Plan, and (c) 125,000
shares of Common Stock reserved for issuance under the Company's Director
Stock Plan. See "Management --1996 Stock Plan" and "--Compensation of
Directors."
(3) If the Underwriters' over-allotment option is exercised in full, the
receipt of the estimated net proceeds from the sale by the Company of
900,000 shares of Common Stock in the Offering at the initial public
offering price of $ per share will be equal to $ of which $45,000
(equal to the par value of the shares issued) will be recorded in Common
Stock and $ will be recorded in capital in excess of par value.
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<PAGE>
DILUTION
The net tangible book value of the Company at March 31, 1996, was $84.4
million or approximately $6.15 per share. Net tangible book value per share
represents the amount of total tangible assets less total liabilities of the
Company, divided by the number of shares of Common Stock outstanding, after
giving effect to the 30-for-1 Common Stock split and the conversion of all
outstanding shares of the Company's Preferred Stock into shares of Common
Stock. Assuming an initial public offering price per share in the Offering of
$ per share, this represents an immediate dilution (i.e., the difference
between the initial public offering price per share and the net tangible book
value per share at March 31, 1996) of $ per share to purchasers of the
shares of Common Stock offered hereby. The following table illustrates this
per share dilution:
<TABLE>
<S> <C>
Assumed initial public offering price per share........................ $
Net tangible book value per share at March 31, 1996.................... 6.15
----
Dilution per share to new investors in the Offering (1)................ $
====
</TABLE>
- --------
(1) If the Underwriters' over-allotment option is exercised in full, dilution
per share to new investors would be $ .
14
<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
The selected consolidated statement of income and balance sheet data set
forth below for and at the end of each of the years in the five-year period
ended December 31, 1995, are derived from the audited Consolidated Financial
Statements of Willbros examined by KPMG Peat Marwick, independent public
accountants, of which the Consolidated Balance Sheets as of December 31, 1994
and 1995, and the Consolidated Statements of Income, Stockholders' Equity and
Cash Flows for the years ended December 31, 1993, 1994 and 1995, are included
elsewhere in this Prospectus. The data for 1992 and subsequent periods
reflects purchase accounting; therefore, it is presented on a different cost
basis than that of the Predecessor Company. The selected consolidated
statement of income and balance sheet data set forth below for and at the end
of each of the three months ended March 31, 1995 and 1996, are derived from
the unaudited Consolidated Financial Statements of the Company included
elsewhere in this Prospectus. In the opinion of management, these interim
period financial statements have been prepared on the same basis as the
audited Consolidated Financial Statements and include all adjustments, none of
which were other than normal recurring accruals, necessary for the fair
presentation of financial position and results of operations. The results for
the three months ended March 31, 1996, are not necessarily indicative of the
results to be achieved for the full year. The selected consolidated statement
of income and balance sheet data should be read in conjunction with the
Consolidated Financial Statements and the related Notes thereto included
elsewhere in this Prospectus and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
<TABLE>
<CAPTION>
PREDECESSOR
COMPANY (1) COMPANY
------------ ----------------------------------------------------------
THREE MONTHS
YEAR ENDED YEAR ENDED DECEMBER 31, ENDED MARCH 31,
DECEMBER 31, -------------------------------------- ------------------
1991 1992 1993 1994 1995 1995 1996
------------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME
DATA:
Contract revenues...... $168,875 $180,947 $210,011 $145,716 $220,506 $ 36,001 $ 53,479
Operating expenses:
Contract cost.......... 124,925 127,942 147,991 98,700 161,584 25,594 41,204
Depreciation and
amortization.......... 14,272 15,029 16,672 14,598 15,193 3,634 3,190
General and
administrative........ 19,098 20,200 24,267 24,695 28,184 6,232 6,698
-------- -------- -------- -------- -------- -------- --------
Operating Income....... 10,580 17,776 21,081 7,723 15,545 541 2,387
Net interest income
(expense)............. 1,062 (2,133) (785) 835 144 162 (140)
Minority interest...... (1,408) (1,014) (3,615) (1,758) (1,589) (238) (490)
Other income
(expense)............. 3,681 176 5,567 113 (381) 117 570
-------- -------- -------- -------- -------- -------- --------
Income before income
taxes................. 13,915 14,805 22,248 6,913 13,719 582 2,327
Provision for income
taxes................. 4,289 2,764 8,405 (4,146) (75) 465 283
Net income (2)......... 11,636 $ 12,041 $ 13,843 $ 11,059 $ 13,794 $ 117 $ 2,044
Net income per share... N/A(1) $ .92 $ 1.00 $ .79 $ .97 $ .01 $ .09(3)
OTHER DATA:
EBITDA (4)............. $ 30,366 $ 33,257 $ 40,752 $ 22,881 $ 30,631 $ 4,649 $ 5,871
Net income plus
depreciation and
amortization.......... $ 25,908 $ 27,070 $ 30,515 $ 25,657 $ 28,987 $ 3,751 $ 5,234
Capital expenditures... $ 20,150 $ 15,047 $ 16,534 $ 7,171 $ 18,946 $ 4,225 $ 2,160
Backlog (5)............ $146,734 $160,565 $ 76,066 $ 97,493 $139,359 $139,407 $104,524
Employees.............. 2,080 3,090 1,870 2,030 3,110 2,630 3,520
BALANCE SHEET DATA (AT
PERIOD END): (6)
Cash and cash
equivalents........... $ 25,855 $ 24,080 $ 67,346 $ 49,142 $ 19,859 $ 36,803 $ 22,288
Working capital........ 33,458 14,481 20,663 28,390 38,767 27,403 40,977
Total assets........... 116,926 118,831 152,059 131,188 149,954 128,155 143,712
Total debt............. 10,000 16,000 6,639 5,828 3,119 5,334 2,574
Stockholders' equity... 59,820 45,021 59,774 68,970 83,391 69,066 84,423
</TABLE>
- --------
(1) Effective for accounting purposes as of January 1, 1992, the Company's
then parent company was sold to a group of investors which included
Company management, the Yorktown and Concord Investors and Heerema. As a
result of the acquisition of the Predecessor Company by the Company, the
consolidated financial statements of the Company reflect the application
of purchase accounting and, accordingly, are presented on a different
basis than those of the Predecessor Company and, therefore, are not
comparable. See "Business--Willbros Background."
(2) Net income in 1991 includes a $1,457 gain on discontinuation of Willbros'
U.S. contract drilling business and a $553 extraordinary item for the tax
benefit of a net operating loss carryforward.
(3) After deducting $724 of dividends on the Company's Preferred Stock.
15
<PAGE>
(4) EBITDA represents earnings before interest expense, income taxes,
depreciation and amortization. EBITDA is not intended to represent cash
flows for the period, nor has it been presented as an alternative to
operating income as an indicator of operating performance. It should not
be considered in isolation or as a substitute for measures of performance
prepared in accordance with generally accepted accounting principles. See
the Company's Consolidated Statements of Cash Flows in the Company's
Consolidated Financial Statements included elsewhere in this Prospectus.
EBITDA is included in this Prospectus because it is a basis upon which the
Company assesses its financial performance.
(5) The Company follows a practice of reflecting anticipated revenues from
uncompleted portions of existing contracts as backlog. Historically, a
substantial amount of the Company's revenues in a given year have not been
reflected in its backlog at the beginning of that year. On average, over
the past four years, actual annual revenues have exceeded 150% of backlog
recorded at the end of each preceding year. No assurance can be given that
future experience will be similar to historical results in this respect.
See "Business--Backlog."
(6) Unless the Underwriters' over-allotment option granted by the Company is
exercised, the Company will not receive any proceeds from the Offering.
Accordingly, no adjustment to the balance sheet to reflect the Offering is
shown. See "Use of Proceeds."
16
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion is intended to provide an analysis of the Company's
results of operations, capital structure and resources and should be read in
conjunction with the Company's Consolidated Financial Statements included
elsewhere in this Prospectus and "Selected Consolidated Financial and Other
Data."
GENERAL
The Company derives its revenues from providing construction services,
engineering services and specialty services to the oil and gas industry and
government entities worldwide. The Company obtains contracts for its work
primarily by competitive bidding or through negotiations with long standing
clients. Bidding activity, backlog and revenues resulting from the award of
contracts to the Company may vary significantly from period to period. See
"Business--Backlog."
A number of factors relating to the Company's business affect the Company's
recognition of contract revenues. Revenues from fixed price construction and
engineering contracts are recognized on the percentage-of-completion method.
Under this method, estimated contract revenues are accrued based generally on
the percentage that costs to date bear to total estimated costs, taking into
consideration physical completion. Generally, the Company does not recognize
income until a contract is approximately 10% complete. Costs which are
considered to be reimbursable are excluded before the percentage-of-completion
calculation is made. Accrued revenues pertaining to reimbursables are limited
to the cost of the reimbursables. If a current estimate of total contract cost
indicates a loss on a contract, the projected loss is recognized in full when
determined. Revenues from unit-price contracts are recognized as earned.
Revenues from change orders, extra work, variations in the scope of work and
claims are recognized when realization is assured.
The Company derives its revenues from contracts with durations from a few
weeks to several months and sometimes years. Unit-price contracts provide
relatively even quarterly results; however, major projects are usually fixed-
price contracts that may result in uneven quarterly financial results due to
the method by which revenues are recognized. These financial factors, as well
as external factors such as weather, client needs, labor, governmental
regulation and politics may affect the progress of a project's completion and
the timing of revenue recognition. The Company believes that its operating
results should be evaluated over a sufficiently long time horizon over which
major contracts in progress are completed and change orders, extra work,
variations in the scope of work and claims are negotiated and realized.
While the Company's revenues and operating income for the three months ended
March 31, 1996, are higher than those for the comparable period in the prior
year, no assurance can be given that the Company's revenues and operating
income for the full year 1996 will not be lower than revenues and operating
income for the full year 1995. Backlog as of March 31, 1996, was $104.5
million, as compared to $139.4 million as of March 31, 1995, a decrease of
$34.9 million. See "Business--Backlog."
RESULTS OF OPERATIONS
Three Months Ended March 31, 1996, Compared to Three Months Ended March 31,
1995
Contract Revenues. Contract revenues increased to $53.5 million for the
three months ended March 31, 1996, from $36.0 million for the comparable
period in 1995. The $17.5 million (49%) increase is primarily attributable to
(a) a $14.4 million increase in contract revenues in Africa related to
construction of a 20 inch gas pipeline river crossing and related facilities
and specialty services associated with construction of swamp flow lines,
flowline leak repair, dredging and material procurement in Nigeria; (b) an
$8.9 million increase in contract revenues in Asia due to engineering,
material procurement and construction services related to a 16-18 inch, 225
mile (365 kilometer) pipeline and four pump stations in Pakistan; offset by
(c) a $4.3 million decrease in contract revenues in North America due to
reduced material procurement and construction services in the United States.
17
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Contract Cost. Contract cost increased to $41.2 million for the three months
ended March 31, 1996, from $25.6 million for the comparable period in 1995.
The $15.6 million (61%) increase is primarily attributable to (a) a $10.5
million increase in contract cost in Africa associated with construction and
specialty services in Nigeria; (b) a $9.1 million increase in contract cost in
Asia due to engineering, material procurement and construction services in
Pakistan; offset by (c) a $3.4 million decrease in contract cost in North
America due to reduced material procurement and construction services in the
United States.
Depreciation and Amortization. Depreciation and amortization expense
decreased to $3.2 million for the three months ended March 31, 1996, from $3.6
million for the comparable period in 1995, due primarily to certain assets
becoming fully depreciated.
General and Administrative. General and administrative expense increased to
$6.7 million for the three months ended March 31, 1996, from $6.2 million for
the comparable period in 1995, due primarily to increased costs associated
with the increased level of activity in Africa.
Operating Income. Operating income increased to $2.4 million for the three
months ended March 31, 1996, from $.5 million for the comparable period in
1995. The $1.9 million (380%) increase was primarily attributable to (a) a
$3.3 million increase in Africa related to increased construction and
specialty services, offset by (b) a $1.1 million decrease in the Middle East
due to reduced specialty services.
Net Interest Income (Expense). Net interest income decreased to an expense
of $.1 million for the three months ended March 31, 1996, from income of $.2
million for the comparable period in 1995, due primarily to a decrease in
interest income on short-term investments.
Minority Interest Expense. Minority interest expense increased to $.5
million for the three months ended March 31, 1996, from $.2 million for the
comparable period in 1995, due to increased revenues in certain work
countries.
Other Income (Expense). Other income increased to $.6 million for the three
months ended March 31, 1996, from $.1 million for the comparable period in
1995, due primarily to an increase in foreign exchange gains.
Provision (Credit) for Income Taxes. The provision for income taxes
decreased to $.3 million for the three months ended March 31, 1996, from $.5
million for the comparable period in 1995, principally due to a reduction in
previous estimates of income taxes in certain countries.
Year Ended December 31, 1995, Compared to Year Ended December 31, 1994
Contract Revenues. Contract revenues increased to $220.5 million for the
year ended December 31, 1995, from $145.7 million in 1994. The $74.8 million
(51%) increase is primarily attributable to (a) a $29.7 million increase in
contract revenues in Asia from the start of the engineering, material
procurement and construction services related to a 16-18 inch, 225 mile (365
kilometer) pipeline and four pump stations in Pakistan; (b) a $27.1 million
increase in contract revenues in Africa related to specialty services
associated with dredging, pipe coating and material procurement in Nigeria;
(c) a $14.8 million increase in contract revenues in South America related to
fabrication and installation of concrete piles and platforms and other
specialty services in Venezuela; (d) a $7.0 million increase in contract
revenues in North America associated with construction of a 20 inch, 130 mile
(205 kilometer) gas pipeline in the United States; partially offset by (e) a
$2.6 million decrease in contract revenues in Oman due to reduced speciality
services.
Contract Cost. Contract cost increased to $161.6 million for the year ended
December 31, 1995, from $98.7 million in 1994. The $62.9 million (64%)
increase is primarily attributable to (a) a $30.0 million increase in contract
cost in Asia due to engineering, material procurement and construction
services in Pakistan; (b) a $22.7 million increase in contract cost in Africa
associated with specialty services in Nigeria; and (c) a $6.3 million increase
in contract cost in South America related to increased construction and
specialty services in Venezuela.
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Depreciation and Amortization. Depreciation and amortization expense
increased to $15.2 million for the year ended December 31, 1995, from $14.6
million in 1994, due primarily to equipment and spare parts additions in 1995
of $18.9 million (compared to $7.2 million in 1994).
General and Administrative. General and administrative expense increased to
$28.2 million for the year ended December 31, 1995, from $24.7 million in
1994, due primarily to increased costs associated with new contracts in Africa
and South America and the opening of a new office in Asia.
Operating Income. Operating income increased to $15.5 million for the year
ended December 31, 1995, from $7.7 million in 1994. The $7.8 million (101%)
increase was primarily attributable to (a) a $6.8 million increase in South
America related to increased specialty services; (b) a $3.2 million increase
in Africa related to increased specialty services; (c) a $2.8 million increase
in North America related to increased construction contracts and engineering
margins; offset by (d) a $4.6 million decrease in the Middle East due to
reduced specialty services.
Net Interest Income (Expense). Net interest income decreased to $.1 million
for the year ended December 31, 1995, from $.8 million in 1994, due primarily
to reduced interest income on short-term investments.
Minority Interest Expense. Minority interest expense decreased to $1.6
million for the year ended December 31, 1995, from $1.8 million in 1994, due
to decreased activity in certain work countries.
Other Income (Expense). Other income decreased to an expense of $.4 million
for the year ended December 31, 1995, from income of $.1 million in 1994, due
primarily to a foreign exchange loss.
Provision (Credit) for Income Taxes. The credit for income taxes decreased
to a credit of $.1 million for the year ended December 31, 1995, from a credit
of $4.1 million in 1994, principally due to increased taxable income in 1995
and a lesser reduction in 1995 than in 1994 in previous estimates of income
taxes in certain countries.
Year Ended December 31, 1994, Compared to Year Ended December 31, 1993
Contract Revenues. Contract revenues decreased to $145.7 million for the
year ended December 31, 1994, from $210.0 million in 1993. The $64.3 million
(31%) decrease was primarily attributable to (a) a $36.5 million decrease in
contract revenues in the Middle East due to the substantial completion in 1993
of a flowline construction contract in Kuwait and an engineering, material
procurement and construction contract in Oman, offset by an increase in
pipeline maintenance contracts in Oman; (b) an $18.3 million decrease in
contract revenues in Africa due to substantial completion in 1993 of pipeline
construction contracts, offset by increased flowline, pipe coating and
material procurement, equipment rental and dredging work in Nigeria; (c) a
$13.4 million decrease in contract revenues in North America due to reduced
construction services, in the United States; partially offset by (d) a $4.7
million increase in contract revenues in Venezuela resulting from the
acquisition of CAMSA.
Contract Cost. Contract cost decreased to $98.7 million for the year ended
December 31, 1994, from $148.0 million in 1993. The $49.3 million (33%)
decrease was primarily attributable to (a) a $28.8 million decrease in
contract cost in the Middle East associated with a reduction in construction
services in Kuwait and Oman; (b) a $17.7 million decrease in contract cost in
Africa due to reduced construction services in Nigeria; (c) a $9.0 million
decrease in contract cost in North America due to reduced construction
services in the United States; partially offset by (d) a $5.5 million increase
in contract cost in South America due to new business activities resulting
from the acquisition of CAMSA.
Depreciation and Amortization. Depreciation and amortization expense
decreased to $14.6 million for the year ended December 31, 1994, from $16.7
million in 1993, due primarily to full amortization of certain spare parts in
1993.
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General and Administrative. General and administrative expense increased to
$24.7 million for the year ended December 31, 1994, from $24.3 million in 1993
due primarily to the acquisition of CAMSA, offset by decreased activity in
other areas. See "Certain Transactions."
Operating Income. Operating income decreased to $7.7 million for the year
ended December 31, 1994, from $21.1 million in 1993. The $13.4 million (63%)
decrease was primarily attributable to (a) a $6.9 million decrease in the
Middle East related to decreased construction services; (b) a $3.9 million
decrease in North America due to reduced construction services; (c) a $2.3
million decrease in South America due to new business activities resulting
from the acquisition of CAMSA; offset by (d) a $1.5 million increase in Africa
due to increased specialty services.
Net Interest Income (Expense). Net interest income increased to income of
$.8 million for the year ended December 31, 1994, from expense of $.8 million
in 1993 due to increased interest income on short-term investments and reduced
interest expense on short-term borrowing.
Minority Interest Expense. Minority interest expense decreased to $1.8
million for the year ended December 31, 1994, from $3.6 million in 1993 due to
decreased activity in certain work countries.
Other Income (Expense). Other income decreased to $.1 million for the year
ended December 31, 1994, from $5.6 million in 1993 due to a decrease in
foreign exchange gains.
Provision (Credit) for Income Taxes. The provision for income taxes
decreased to a credit of $4.1 million for the year ended December 31, 1994,
from an expense of $8.4 million in 1993 principally due to a reduction in
previous estimates of income taxes in certain countries.
EFFECT OF INFLATION AND CHANGING PRICES; FOREIGN EXCHANGE RISK MANAGEMENT
The Company's operations are affected by increases in prices, whether caused
by inflation, government mandates or other economic factors in the countries
in which it operates. The Company attempts to recover anticipated increases in
the cost of labor, fuel and materials through price escalation provisions in
certain of its major contracts or by considering the estimated effect of such
increases when bidding or pricing new work.
The Company attempts to negotiate contracts which provide for payment in
U.S. dollars, but it may be required to take all or a portion of payment under
a contract in another currency. To mitigate non-U.S. currency exchange risk,
the Company seeks to match anticipated non-U.S. currency revenues with
expenses in the same currency. To the extent it is unable to match non-U.S.
currency revenues with expenses in the same currency, the Company may use
forward contracts, options or other common hedging techniques in the same non-
U.S. currencies. As a result of the Company's foreign exchange risk management
measures, aggregate foreign exchange gains during the last five years have
exceeded aggregate foreign exchange losses during the same period. There can
be no assurance that this strategy will continue to be successful in the
future.
CAPITAL STRUCTURE, LIQUIDITY AND CAPITAL RESOURCES
The Company's primary requirements for capital are to fund the acquisition,
upgrade and maintenance of its equipment, provide working capital for current
projects, finance the mobilization of employees and equipment to new projects
and establish a presence in countries where the Company perceives growth
opportunities. Historically, the Company has met its cash requirements from
operating cash flow, interest income from investments and utilization of bank
borrowings.
Cash and cash equivalents decreased to $19.9 million for the year ended
December 31, 1995, from $49.1 million in 1994. The $29.2 million (59%)
decrease is primarily due to a $39.6 million increase in working capital
(excluding cash and cash equivalents) and an $18.6 million increase in net
capital expenditures for property, equipment and spare parts, offset by $29.0
million of cash flow from operations.
The Company has a $100 million line of credit under a credit agreement with
several financial institutions and Bank of America National Trust and Savings
Association, as agent. This credit agreement
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provides a revolving credit facility and a standby and commercial letter of
credit facility. The aggregate of all loans, together with all commercial and
financial letters of credit issued under the agreement, may not exceed the
Company's tangible net worth as defined in the credit agreement ($89.5 million
at March 31, 1996). Principal is payable at termination (October 31, 1997) and
interest is payable quarterly at a reference rate plus 50 basis points or, at
the Company's option, other alternative interest rates. The annual commitment
fee is 3/8% on the unused portion of the line. The Company's obligations under
its credit agreement are secured by the stock of the principal subsidiaries of
the Company. At March 31, 1996, there were no borrowings, financial letters of
credit or commercial letters of credit outstanding, and standby letters of
credit outstanding totaled $28.1 million, leaving $71.9 million available
under this facility. The credit agreement requires the Company to maintain
certain financial ratios, restricts dividend payments on Common Stock and
limits, among other things, the Company's ability to purchase its own stock
and its ability to make acquisitions. The credit agreement limits the value of
acquisitions to an annual maximum of 20% of tangible net worth and requires
that such acquisitions be made with cash or stock. The Company intends to
renegotiate its credit agreement in the fourth quarter of 1996 in order that
these limitations not significantly restrict its ability to implement its
business strategy. No assurance can be given that this agreement can be so
renegotiated.
The Company has credit facilities in certain countries outside the United
States. Borrowings under these lines, in the form of short-term notes and
overdrafts, are made at competitive local interest rates. Generally, each line
is available only for borrowings related to operations in a specific country.
At March 31, 1996, there was an aggregate of $2.6 million outstanding and $1.7
million available under these facilities. The Company's credit agreement
limits the Company's ability to borrow from sources outside the agreement to
20% of tangible net worth.
If the Underwriters' over-allotment option granted by the Company is
exercised in full or in part, resulting in proceeds to the Company, it is
anticipated that the net proceeds therefrom will be used for working capital,
to support expansion of operations and for possible acquisitions of assets and
businesses. The Company believes that cash flow from operations and borrowing
under existing credit facilities will be sufficient to finance working capital
and capital expenditures for ongoing operations in the foreseeable future. The
Company estimates capital expenditures for equipment and spare parts of
approximately $20 million during 1996.
RECENTLY ISSUED ACCOUNTING STANDARDS
The Company does not believe the adoption, in 1996, of Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" will have a
significant effect on its consolidated financial position or consolidated
results of operations.
The Company does not plan to adopt the fair value-based measurement
methodology for employee and director stock options contemplated by Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation." Accordingly, this Standard is not expected to have a
significant effect on the Company's consolidated financial position or
consolidated results of operations.
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BUSINESS
GENERAL
The Company is one of the leading independent contractors serving the oil
and gas industry, providing construction services, engineering services and
specialty services to industry and government entities worldwide. The Company
places particular emphasis on projects in developing countries where the
Company believes its experience gives it a competitive advantage. The
Company's construction services include the building and replacement of major
pipelines and gathering systems, flow stations, pump stations, gas compressor
stations, gas processing facilities and oil and gas production facilities; and
the construction of piers, dock facilities and bridges. The Company's
engineering services include feasibility studies; conceptual and detailed
facility design; field services; material procurement; and overall project
management. The Company's specialty services include dredging; pipe coating;
pipe double jointing; removal and installation of flowlines; the fabrication
and installation of concrete piles and platforms; maintenance and repair of
pipelines, stations and facilities; pipeline rehabilitation; and transport of
oilfield equipment, rigs and vessels.
The Company provides its services through a large fleet of equipment
comprised of, among other things, marine vessels, barges, dredges, pipelaying
equipment, heavy construction equipment, transportation equipment and camp
equipment. The Company's equipment fleet is supported by warehouses of spare
parts and tools which are located to maximize availability and minimize cost.
The Company obtains contracts for its work primarily by competitive bidding
or through negotiations with long-standing clients. In evaluating bid
opportunities, the Company considers such factors as the client, the
geographic location and the difficulty of the work, the Company's current and
projected workload, including the availability of personnel and Company owned
equipment, the likelihood of additional work, the project's cost and
profitability estimates and the Company's competitive advantage relative to
other likely bidders.
The Company traces its roots to the construction business of Williams
Brothers Company, founded in 1908. Through successors to that business,
Willbros has completed many landmark projects around the world, including the
"Big Inch" and "Little Big Inch" War Emergency Pipelines (1942-44), the Mid-
America Pipeline (1960), the TransNiger Pipeline (1962-64), the Trans-
Ecuadorian Pipeline (1970-72), the northernmost portion of the Trans-Alaskan
Pipeline System (1974-76), the All American Pipeline System (1984-86),
Colombia's Alto Magdalena Pipeline System (1989-90) and a portion of the
Pacific Gas Transmission System expansion (1992-93). Willbros has been
involved in nine of the ten largest gas pipeline projects undertaken in the
United States since 1988. See "--Willbros Milestones."
Over the years, Willbros has been employed by more than 400 clients to carry
out work in over 50 countries. Within the past 10 years, Willbros has worked
in Africa, Asia, the C.I.S., the Middle East, North America and South America.
Willbros' relatively steady base of ongoing construction, engineering and
specialty services operations in Nigeria, Oman, the United States and
Venezuela has been enhanced by major construction and engineering projects in
Abu Dhabi, Colombia, Ecuador, Egypt, Gabon, Kuwait, Morocco, Nigeria, Oman,
Pakistan and the United States.
Representative clients (or affiliates of clients) of the Company include the
Caspian Pipeline Consortium (see "--C.I.S."); Royal Dutch Shell; Chevron
Corp.; Kuwait Oil Company; U.S. Army; Pacific Gas & Electric; Petroleum
Development Oman; Enron Corp.; Petroleos de Venezuela S.A. ("PDVSA");
Occidental Petroleum; PanEnergy Corp; Great Lakes Gas Transmission Company;
E.N.I.; Nigerian National Petroleum Corporation ("NNPC"); and the Pak-Arab
Refinery, Ltd. Private clients such as Shell have historically accounted for
the majority of the Company's revenues. Government entities and agencies such
as the U.S. Army, Kuwait Oil Company and PDVSA have accounted for the
remainder.
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CURRENT MARKET CONDITIONS
Relatively high crude oil and natural gas prices have resulted in
correspondingly strong levels of current and projected capital expenditures by
oil and gas companies to explore for and produce oil and gas reserves.
Accordingly, many significant natural gas, crude oil, petroleum products and
LNG pipeline projects, together with ancillary construction and other
associated projects, are being undertaken, particularly in developing
countries or regions where energy infrastructure spending has lagged.
The Company believes that certain of these projects will meet its bidding
criteria, and that the Company's worldwide pipeline construction, engineering
and specialty services experience place it in an advantageous position to
compete for such projects. The Company currently has approximately 70 bids
outstanding with respect to potential contract awards in Australia, China,
Egypt, Indonesia, Mexico, Nigeria, Oman, Russia, Saudi Arabia, the United
States and Venezuela. The Company is currently preparing bids with respect to
potential contract awards in Egypt, Indonesia, Nigeria, Oman, Saudi Arabia,
Tanzania and the United States. Finally, the Company expects to prepare and
submit bids with respect to certain other potential construction and
engineering projects in Africa, Asia, the C.I.S., the Middle East, North
America and South America before the end of 1996.
BUSINESS STRATEGY
The Company historically pursued a strategy of maximizing stockholder
returns while maintaining a strong balance sheet. More recently, the Company
has emphasized a growth strategy which encompasses geographic expansion in
areas such as Pakistan and Indonesia, strategic alliances, acquisitions and
quality improvements. In pursuing this strategy, the Company relies on its
competitive advantage in completing logistically complex and technically
difficult projects in remote areas with difficult terrain and harsh climatic
conditions. The Company also relies on its experienced multinational work
force of approximately 3,520 employees, over 80% of whom are citizens of the
respective countries in which they work.
Geographic Expansion. The Company seeks to maintain its presence in regions
where it has previously developed a strong base of operations, such as Africa,
the Middle East, North America and South America, and to establish a presence
in additional strategically important locations, such as Russia, Pakistan,
Indonesia, Egypt and Brazil. In pursuing this strategy, the Company seeks to
identify a limited number of long-term niche markets in which the Company can
outperform the competition and establish an advantageous position.
Strategic Alliances. The Company seeks to establish strategic alliances with
companies whose resources, skills and strategies are complementary to and are
likely to enhance the Company's business opportunities, including the
formation of joint ventures and consortia to achieve competitive advantage and
share risks. Such alliances have already been established in Australia,
Indonesia, Malaysia, Mexico, Russia, Thailand, the United States and
Venezuela. As an example of this strategy, the Company has entered into a
Joint Development Agreement with a unit of British Gas plc to promote the
utilization of an epoxy-filled pipeline repair sleeve developed by British Gas
and offer a full range of pipeline rehabilitation services to the oil and gas
industry, including assessment and rehabilitation construction services. As a
related strategy, the Company may decide to seek an equity stake in a project
in order to enhance its competitive position and/or maximize project returns.
Acquisitions. The Company seeks to identify and acquire companies which
complement its business strategy. For example, in 1994 the Company acquired
(from an affiliate of Heerema), CAMSA, a company operating in the Lake
Maracaibo area of Venezuela whose primary expertise is in marine construction
and the fabrication and installation of concrete piles and platforms for
offshore projects. See "Certain Transactions." The Company will continue to
evaluate acquisition candidates that offer growth opportunities and the
ability to complement the Company's resources and capabilities.
Quality Improvements. The Company's quality improvement program is focused
on obtaining ISO 9000 certification and on continually improving the
readiness, utilization and overall quality of its fleet
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of equipment. ISO 9000 is an internationally recognized verification system
for quality management overseen by the International Standards Organization
based in Geneva, Switzerland. The ISO 9000 certification is important to the
Company's international operations in that in recent years such certification
has been made a criterion for prequalification of contractors by certain
potential clients, and this trend is expected to continue. The certification
process involves a rigorous review and audit of the Company's management
processes and quality control procedures. In April 1996, the Company's
subsidiary in Oman achieved ISO 9000 certification; the Company's engineering
subsidiary anticipates certification by the third quarter of 1996; and the
Company's Nigerian subsidiary is on schedule to achieve certification by the
end of 1996.
Conservative Financial Management. The Company expects to continue to
emphasize the maintenance of a conservative balance sheet in order to finance
the development and growth of its business. The Company also seeks to obtain
contracts that are likely to result in recurring revenues in order to mitigate
the cyclical nature of its construction and engineering businesses. For
example, the Company generally seeks to obtain specialty services contracts of
more than one year in duration. Additionally, the Company acts to minimize its
exposure to currency fluctuations through the use of U.S. dollar-denominated
contracts, by limiting payments in local currency to approximately the amount
of local currency expenses, and otherwise by hedging activities.
WILLBROS BACKGROUND
The Company is the successor to the pipeline construction business of
Williams Brothers Company which was started in 1908 by Miller and David
Williams. In 1949, the business was reconstituted and acquired by the next
generation of the Williams family. The resulting enterprise eventually became
The Williams Companies, Inc., a major U.S. interstate natural gas and
petroleum products pipeline company ("Williams").
In 1975, Williams elected to discontinue its pipeline construction
activities and, in December 1975, sold substantially all of the non-U.S.
assets and entities comprising its pipeline construction division to a newly
formed Panama corporation (eventually renamed "Willbros Group, Inc.") owned by
employees of the division. In 1979, Willbros Group, Inc. retired its debt
incurred in the acquisition by selling a 60% equity stake to Heerema. In 1986,
Heerema acquired the balance of Willbros Group, Inc., which then operated as a
wholly owned subsidiary of Heerema until April 1992.
In April 1992, Heerema sold Willbros Group, Inc. to a corporation formed by
members of the Company's management, the Yorktown and Concord Investors and
Heerema. Subsequently, the original Willbros Group, Inc. was dissolved into
the acquiring corporation which was renamed "Willbros Group, Inc."
The term "Willbros," as used in this Prospectus, includes the Company, the
original Willbros Group, Inc. and their predecessors in the pipeline
construction business, as described above.
WILLBROS MILESTONES
The following are selected milestones which Willbros has achieved:
1939 Executed its first international pipeline project in Venezuela.
1942-44 Principal contractor on the "Big Inch" and "Little Big Inch" War
Emergency Pipelines which delivered U.S. Gulf Coast crude oil to the
Eastern Seaboard.
1947-48 Built the 370 mile (600 kilometer) Camiri to Sucre and Cochabamba
crude oil pipeline in Bolivia.
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1951 Completed the 400 mile (645 kilometer) western segment of the Trans-
Arabian Pipeline System in Jordan, Syria and Lebanon.
1954-55 Built Alaska's first major pipeline system, consisting of 625 miles
(1,000 kilometers) of crude oil pipeline, housing, communications, two
tank farms, five pump stations and marine dock and loading facilities.
1956-57 Led a joint venture which constructed the 620 mile (1,000 kilometer)
Trans-Iranian Pipeline, a products pipeline system extending from
Abadan to Tehran.
1958 Constructed pipelines and related facilities for the world's largest
oil export terminal at Kharg Island, Iran.
1960 Built the first major liquified petroleum gas pipeline system, the
2,190 mile (3,520 kilometer) Mid-America Pipeline in the United
States, including six delivery terminals, two operating terminals, 13
pump stations, communications and cavern storage.
1962 Began operations in Nigeria with the commencement of construction of
the TransNiger Pipeline, a 170 mile (275 kilometer) crude oil
pipeline.
1964-65 Built the 390 mile (625 kilometer) Santa Cruz to Sica Sica crude oil
pipeline in Bolivia. The highest altitude reached by this line is
14,760 feet (4,500 meters) above sea level, which management believes
is higher than the altitude of any other pipeline in the world.
1965 Began operations in Oman with the commencement of construction of the
175 mile (280 kilometer) Fahud to Muscat crude oil pipeline system.
1967-68 Built the 190 mile (310 kilometer) Orito to Tumaco crude oil pipeline
in Colombia, one of five Willbros crossings of the Andes mountains, a
project notable for the use of helicopters in high altitude
construction.
1969 Completed a gas gathering system and 105 miles (170 kilometers) of 42
inch trunkline for the Iranian Gas Trunkline Project (IGAT) in Iran to
supply gas to the USSR.
1970-72 Built the Trans-Ecuadorian Pipeline, consisting of 315 miles (505
kilometers) of 20 and 26 inch pipeline, seven pump stations, four
pressure reducing stations and six storage tanks.
1974-76 Led a joint venture which built the northernmost 225 miles (365
kilometers) of the Trans-Alaskan Pipeline System.
1974-76 Led a joint venture which constructed 290 miles (465 kilometers) of
pipeline and two pump stations in the inaccessible western Amazon
basin of Peru.
1974-79 Designed and engineered the 500 mile (795 kilometer) Sarakhs-Neka gas
transmission line in northeastern Iran.
1976-79 Acted as technical leader of a consortium which designed and supplied
six modularized gas compressor stations totaling 726,000 horsepower
for the 56 inch Urengoy to Chelyabinsk gas pipeline system in western
Siberia.
1982-83 Built the Cortez carbon dioxide pipeline system in the southwestern
United States, consisting of 505 miles (815 kilometers) of 30 inch
pipe.
1984-86 Through a joint venture, constructed the All American Pipeline System,
a 1,240 mile (1,995 kilometer) 30 inch heated pipeline, including 23
pump stations, in the southwestern United States.
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1985-86 Built a 185 mile (300 kilometer) 24 inch crude oil pipeline from
Ayacucho to Covenas in Colombia.
1987 Rebuilt 25 miles (40 kilometers) of the Trans-Ecuadorian crude oil
pipeline within six months after major portions were destroyed by an
earthquake.
1988-92 Performed the project management, engineering, procurement and field
support services to expand the Great Lakes Gas Transmission System in
the northern United States. The expansion involved modifications to 13
compressor stations and the addition of 660 miles (1,060 kilometers)
of 36 inch pipeline in 50 separate loops.
1989-90 Built the Alto Magdalena Pipeline System in Colombia, consisting of
250 miles (400 kilometers) of 20 inch crude oil pipeline, one pump
station and a tank farm.
1989-92 Provided pipeline engineering and field support services for the Kern
River Gas Transmission System, a 36 inch pipeline project extending
over 685 miles (1,100 kilometers) of desert and mountains from Wyoming
to California in the United States.
1984-95 Developed and furnished a rapid deployment fuel pipeline distribution
and storage system for the U.S. Army which was used extensively and
successfully in Saudi Arabia during Operation Desert Shield/Desert
Storm in 1990/1991 and in Somalia during 1993.
1992-93 Rebuilt oil field gathering systems in Kuwait as part of the post-war
reconstruction effort.
1992-93 Built 150 miles (240 kilometers) of a 42 inch pipeline in Oregon to
expand the Pacific Gas Transmission System.
1992-94 Resumed activities in the C.I.S. Selected to develop export pipeline
system for Caspian Pipeline Consortium from Tengiz field in Kazakstan
to Black Sea oil terminal at Novorossysk, Russia, and established a
representative office and joint stock company in Russia.
1994 Re-entered the Venezuela oil service market through the acquisition of
CAMSA.
1995 Entered into a cooperation agreement with a Japanese trading company
providing for the joint development of projects in selected markets in
Southeast Asia and established an office in Jakarta, Indonesia, to
pursue major projects in the region.
1995-96 Carrying out two contracts in Pakistan for construction, material
procurement and engineering of the MFM Pipeline Extension Project,
which consists of 225 miles (365 kilometers) of 18 inch and 16 inch
multi-product pipeline and related facilities.
LINES OF BUSINESS
The Company operates in a single industry segment, primarily providing
contract services to the oil and gas industry. The main lines of business
within this segment include construction, engineering and specialty services.
Construction Services
The Company is one of the most experienced contractors serving the oil and
gas industry. The Company's construction capabilities include the expertise to
construct and replace large diameter cross-country pipelines. The Company also
possesses the ability to construct oil and gas production facilities, pump
stations, flow stations, gas compressor stations, gas processing facilities
and other related facilities; and to construct piers, docks and bridges.
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Pipeline Construction. World demand for pipelines results from the need to
move millions of barrels of crude oil and petroleum products and billions of
cubic feet of natural gas to refiners, processors and consumers each day.
Pipeline construction is capital intensive, and the Company owns, operates and
maintains a fleet of specialized equipment necessary for it to engage in the
pipeline construction business. The Company focuses on pipeline construction
activity in remote areas and harsh climates where it believes its experience
gives it a competitive advantage. Willbros believes that it has constructed
more miles of pipeline than any other private sector company.
The construction of a cross country pipeline involves a number of sequential
operations along the designated pipeline right-of-way. These operations are
virtually the same for all overland pipelines, but personnel and equipment may
vary widely depending upon such factors as the time required for completion,
general climatic conditions, seasonal weather patterns, the number of road
crossings, the number and size of river crossings, terrain considerations,
extent of rock formations, density of heavy timber and amount of swamp.
Construction often involves separate crews to perform the following different
functions: clear the right-of-way; grade the right-of-way; excavate a trench
in which to bury the pipe; haul pipe to intermediate stockpiles from which
stringing trucks carry pipe and place individual lengths (joints) of pipe
alongside the ditch; bend pipe joints to conform to changes of direction and
elevation; clean pipe ends and line up the succeeding joint; perform various
welding operations; non-destructively inspect welds; clean pipe and apply
anti-corrosion coatings; lower pipe into the ditch; backfill the ditch; bore
and install highway and railroad crossings; drill, excavate or dredge and
install pipeline river crossings; tie in all crossings to the pipeline;
install mainline valve stations; conduct hydro/pneumatic testing; install
cathodic protection system; and perform final clean up.
Special equipment and techniques are required to construct pipelines across
wetlands. From a launching station on dry land, a section of several joints of
pipe may be pushed into a flooded ditch. By securing floaters to the pipe it
is possible to float the pipe. The next section is then welded to the end of
the previous section, after which it is pushed into the flooded ditch. The
same method can be used from a properly secured and anchored barge. Another
specialized swamp pipe laying technique is to lay the pipe from a lay barge
which moves along the right of way, laying one joint at a time; each joint is
aligned and welded, and the weld non-destructively inspected and coated before
being lowered in. The Company uses swamp pipelaying methods extensively in
Nigeria, where most of its construction operations are carried out in the
Niger River delta. In addition to primary equipment such as laybarges, dredges
and swamp backhoes, the Company has a substantial investment in support
vessels, including tugboats, barges, supply boats, and houseboats, which are
required in order to maintain a capability in swamp pipeline construction.
Station Construction. Oil and gas companies require various facilities in
the course of producing, processing, storing and moving oil and gas. The
Company is experienced and capable of constructing facilities such as pump
stations, flow stations, gas processing facilities, gas compressor stations
and metering stations. The Company is capable of building such facilities
onshore, offshore or in swamp locations. The construction of station
facilities, while not nearly as capital intensive as pipeline construction, is
generally characterized by complex logistics and scheduling, particularly on
projects in locations where seasonal weather patterns limit construction
options, and in countries where the importation process is difficult.
Willbros' capabilities have been enhanced by its experience in dealing with
such challenges in numerous countries around the world.
Marine Construction. The Company constructs and installs fixed drilling and
production platforms in Venezuela, primarily in Lake Maracaibo. Because of the
extremely corrosive conditions, concrete, rather than steel, piling is driven
deep into the lakebed and supports such platforms. The Company is also capable
of building bridges, docks, jetties and mooring or breasting dolphins. The
Company's marine fleet includes pile driving barges, derrick barges and other
vessels which support marine construction operations.
Construction services contributed 56%, 29% and 31%, respectively, of the
Company's contract revenues in 1993, 1994 and 1995.
27
<PAGE>
Engineering Services
The Company provides engineering, project management and material
procurement services to the oil and gas industry and government agencies. To
complement its engineering services, the Company also provides a full range of
field services, including surveying, right-of-way acquisition, material
receiving and control, construction inspection and facilities startup
assistance. Such services are furnished to a number of oil and gas industry
and government clients on a stand-alone basis; and, in addition, are provided
as part of engineering, procurement and construction contracts undertaken by
the Company.
The Company specializes in providing engineering services to assist clients
in constructing or expanding pipeline systems, compressor stations, pump
stations, fuel storage facilities and field gathering and production
facilities. Through experience, the Company has developed expertise in
addressing the unique engineering issues involved with pipeline systems and
associated facilities to be installed where climatic conditions are extreme,
where areas of environmental sensitivity must be crossed, where fluids which
present extreme health hazards must be transported and where fluids which
present technical challenges regarding material selection are transported.
Climatic Constraints. In the design of pipelines and associated facilities
to be installed in harsh environments, special provisions for metallurgy of
materials and foundation design must be addressed. The Company is experienced
in designing pipelines in arctic conditions, where permafrost and extremely
low temperatures are prevalent, and in desert conditions, mountainous terrain
and swamp.
Environmental Impact of River Crossings. The Company has considerable
capability in designing pipeline crossings of rivers and streams in such a way
as to minimize environmental impact. The Company possesses expertise to
determine the optimal crossing techniques (e.g., open cut, directionally
drilled or overhead) and to develop site specific construction methods to
minimize bank erosion, sedimentation and other environmental impacts.
Seismic Design and Stress Analysis. Company engineers are experienced in
seismic design of pipeline crossings of active faults and areas where
liquefaction or slope instability may occur due to seismic events. They also
carry out specialized stress analyses of piping systems that are subjected to
expansion and contraction due to temperature changes, as well as loads from
equipment and other sources.
Hazardous Materials. Special care must be taken in the design of pipeline
systems transporting sour gas. Sour gas presents not only challenges regarding
personnel safety (hydrogen sulfide leaks can be extremely hazardous), but
material must be specified to withstand extremely corrosive conditions.
Hydraulics Analysis for Fluid Flow in Piping Systems. The Company employs
engineers with the specialized knowledge necessary to address properly the
effects of both steady state and transient flow conditions for a wide variety
of fluids transported by pipelines (natural gas, crude oil, refined petroleum
products, natural gas liquids, carbon dioxide and water). This expertise is
important in optimizing the capital costs of pipeline projects where pipe
material costs typically represent a significant portion of total project
capital costs.
Natural Gas Transmission Systems. The expansion of the natural gas
transportation network in the United States in recent years has been a major
contributor to the engineering business of the Company. The Company believes
it has established a strong position as a leading supplier of engineering
services to natural gas pipeline transmission companies in the United States.
Since 1988, Willbros has provided, or is providing, engineering services for
seven major natural gas pipeline projects in the United States, totaling more
than 3,300 miles (5,400 kilometers) of large diameter pipe for new systems and
expansions of existing systems. During this same period, Willbros was also the
engineering contractor for 15 compressor stations (or additions to existing
stations) for six clients.
28
<PAGE>
Liquids Pipelines and Storage Facility Design. Since the 1970's, when
Willbros engineered a number of crude oil and refined petroleum products
systems in the United States, Colombia, Nigeria, Iran and Peru, Willbros has
become recognized for its expertise in the engineering of systems for the
storage and transportation of petroleum products and crude oil. More recently,
the Company has been responsible for the engineering of a major expansion of a
products pipeline system in the United States, involving 395 miles (640
kilometers) of pipeline in New Mexico and Texas. Currently, the Company is
providing project management, engineering and field services for a major
expansion of a crude oil system in Minnesota and Illinois, involving over 450
miles (725 kilometers) of large diameter pipeline to serve the upper midwest
refineries with Canadian crude oil.
U.S. Government Services. Since 1981, Willbros has established its position
with U.S. government agencies as a leading engineering contractor for jet fuel
storage and aircraft fueling facilities, having performed the engineering for
major projects at seven U.S. military bases including three air bases outside
the U.S. The award of these projects was based on contractor experience and
personnel qualifications.
Design of Peripheral Systems. The Company's expertise extends to the
engineering of a wide range of project peripherals, including various types of
support buildings and utility systems, power generation and electrical
transmission, communications systems, fire protection, water and sewage
treatment, water transmission, roads and railroad sidings.
Material Procurement. Because material procurement plays such a critical
part in the success of any project, the Company maintains an experienced staff
to carry out material procurement activities. Material procurement services
are provided to clients as a complement to the engineering services performed
for a project. On engineering, procurement and construction contracts
undertaken by the Company, material procurement is especially critical to the
timely completion of construction. The Company maintains a computer-based
material procurement, tracking and control system, which utilizes software
enhanced to meet the Company's specific requirements.
Engineering services contributed 16%, 23% and 15%, respectively, of the
Company's contract revenues in 1993, 1994 and 1995.
Specialty Services
The Company provides a wide range of support and ancillary services related
to the construction, operation, repair and rehabilitation of pipelines.
Frequently, such services require the utilization of special equipment which
is costly and requires operating expertise. Due to the initial equipment cost
and operating expertise required, many companies contract for the use of such
special equipment and experienced personnel. The Company owns and operates a
variety of the special equipment that is used to support construction projects
and to provide a wide range of oilfield services. The following is a
description of the primary types of specialty services.
Dredging. The Company conducts dredging operations on its own projects and
as a subcontractor for other companies. Dredging equipment is required to pump
sand to establish a land location in a swamp and to excavate trenches for
pipelines in swamps or offshore locations and for river crossings. Dredging
equipment is also used to maintain required depth of navigation channels for
barges and other water craft. This maintenance dredging is often performed on
annual or multi-year contracts. The Company owns a fleet of dredges, including
cutter suction dredges and grab dredges, which are routinely used in Nigeria
and can be readily deployed to other projects in the region.
Pipe Coating. The Company owns and operates coating equipment which applies
a variety of protective anti-corrosion coatings to the external surface of
line pipe. The external coating is required to protect buried pipe in order to
mitigate external corrosion.
Concrete Weight Coating. Pipelines installed in wetlands or marine
environments must be heavy enough to offset the buoyancy forces on the buried
pipeline to keep the pipeline from floating out of the
29
<PAGE>
ditch. The most effective method of achieving the required negative buoyancy
is concrete coating applied over the anti-corrosion coating to a calculated
thickness. The Company owns and operates a facility in Nigeria to apply
concrete weight coating to line pipe.
Pipe Double Jointing. Large diameter pipe for onshore pipeline projects is
normally manufactured in 40 foot (12 meter) nominal lengths (joints) to
facilitate ocean transportation. On long distance, large diameter pipeline
projects, it is usually economical to weld two joints into an 80 foot (24
meter) double joint at a location or locations along the pipeline route. This
technique reduces the amount of field welding by 50%, and, because welding is
often the critical operation, it may accelerate construction of the pipeline.
The double joint welds are made with a semi-automatic submerged arc welding
process which produces high quality and consistent welds at lower costs than
field welding. The Company owns two transportable self-contained double joint
plants which can handle 24 inch to 48 inch pipe and are used on both domestic
and international projects.
Piling. The Company's subsidiary in Venezuela specializes in the fabrication
and installation of 36 inch concrete piles up to 220 feet (67 meters) in
length. These piles are used to construct marine facilities such as drilling
platforms, production platforms, bridges, docks, jetties and mooring or
breasting dolphins. The Company also owns barges and pile driving equipment to
install piles in Venezuela and Nigeria.
Marine Heavy Lift Services. The primary equipment used for oil and gas
production facilities is usually manufactured on skids at the vendor's shop
and transported to the production site by ocean-going water craft. The Company
owns a variety of heavy lift barges and tugs to transport such equipment from
the receiving country port to the production location and to install the
equipment on the platforms. Other services include marine salvage and dry-dock
facilities for inland water barges.
Transport of Dry and Liquid Cargo. Exploration and production operations in
marine environments require logistical support services to transport a variety
of liquid and dry cargo to the work sites. The Company owns and operates a
diversified fleet of marine equipment to provide transportation services to
support these operations in Nigeria and Venezuela.
Rig Moves. Derricks used for drilling oil and gas wells and for well work-
overs require heavy transportation equipment to move such equipment and tanks
and storage vessels between well locations. The Company owns a fleet of heavy
trucks and trailers and provides transportation services to move rigs for
clients in Oman and Venezuela.
Pipeline Rehabilitation Services. The Company and BG Inspection Services,
Inc., the U.S. pipeline inspection unit of British Gas plc, have executed a
Joint Development Agreement to pursue pipeline repair and rehabilitation
projects in North, Central and South America. The joint effort will promote
the utilization of the British Gas developed "epoxy-filled repair sleeve" and
will offer a full range of related pipeline rehabilitation services related to
the oil and gas industry, including inspection, assessment and rehabilitation
construction services. This repair technique permits permanent repairs to be
made to a pipeline without cutting sections of pipe from the pipeline and
without interruption of service. The Company and British Gas have also used
this rehabilitation procedure for a client in Oman on approximately 790 miles
(1,275 kilometers) of 6 inch through 38 inch crude oil and natural gas
pipelines.
Maintenance and Repair Services. The Company provides a wide range of other
services including mechanical, electrical, instrumentation, civil works, road
maintenance and provision of camp services for operating personnel associated
with operation and maintenance of oil and gas gathering systems and production
equipment.
Specialty services contributed 28%, 48% and 54%, respectively, of the
Company's contract revenues in 1993, 1994 and 1995.
30
<PAGE>
GEOGRAPHIC REGIONS
The Company currently operates in the following geographic regions: Africa,
Asia, the C.I.S., the Middle East, North America and South America.
The following table reflects the Company's contract revenues by geographic
region for 1993, 1994 and 1995.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1993 1994 1995
---------------- ---------------- ----------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
-------- ------- -------- ------- -------- -------
(DOLLAR AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Africa....................... $ 87,215 41% $ 68,908 48% $ 95,972 43%
Asia......................... -- -- -- -- 29,728 13
C.I.S. ...................... 4,851 2 540 -- 1,283 1
Middle East.................. 60,006 29 23,469 16 21,870 10
North America................ 57,939 28 48,061 33 52,100 24
South America................ -- -- 4,738 3 19,553 9
-------- --- -------- --- -------- ---
$210,011 100% $145,716 100% $220,506 100%
======== === ======== === ======== ===
</TABLE>
See Note 13 to the Consolidated Financial Statements included elsewhere in
this Prospectus for additional information about the Company's operations in
these geographic regions.
Africa
Willbros began serving the petroleum industry in Nigeria in 1962, when it
was selected to construct the TransNiger Pipeline System, and has maintained a
continuous operating presence in Nigeria since that time. Willbros has also
completed a number of major projects in other African countries including
Algeria, Libya, Egypt, Morocco and Gabon, the most recent being the Peace
Vector Project for the U.S. Army Corps of Engineers in Egypt, which involved
procuring materials for an air base to support F-16 aircraft and providing
onsite technical assistance to Egyptian contractors building the base. The
Company has formed an Egyptian limited liability company and has established a
business development office in Cairo to pursue work prospects in Egypt.
The Company has management staff resident in Africa, assisted by engineers,
managers and craftsmen with extensive African experience, capable of providing
construction expertise, repair and maintenance services, dredging operations,
pipe coating and engineering support. Strong local relationships have enabled
Willbros to satisfy the varied needs of its clientele in the region.
The Company's activities in Nigeria are directed from a fully staffed
operational base near Port Harcourt. This 60 acre compound includes office and
living facilities, equipment and vehicle repair shops, a marine jetty and
warehouses for both Company and client materials and spare parts. Customized
computer systems are utilized for payroll and personnel, accounting,
estimating, cost and progress control, inventory control, maintenance
management and the health, safety and environmental program. The Company has
diversified its range of services by adding dredging and pipe coating
expertise. Having diverse yet complementary capabilities has often given the
Company a competitive advantage on projects which contain several distinct
work elements within the project's scope of work. For example, the Company is
the only contractor operating in the Nigerian oil and gas sector capable, on
its own, of executing a pipeline construction project, which requires yard
coating of line pipe, installation of major water crossings and both swamp and
cross country segments of pipeline.
The Company's current backlog in Nigeria includes the construction of a 24
inch pipeline crossing of the Escravos River for NNPC, contracts with Shell to
provide dredging services and swamp flowline maintenance services, a swamp
pipeline construction contract and various pipe coating services related to
Shell, Chevron and NNPC projects.
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<PAGE>
The Company believes that there will be significant opportunities to expand
its business in Africa, particularly through the development of natural gas
projects. There are large reserves of natural gas in West Africa, extending
from Ivory Coast to Angola, which are potentially exploitable. Depending upon
the world market for natural gas and the availability of financing, the amount
of potential new work could be substantial. The Company intends to maintain
its presence in the region and seeks to increase its share of available work.
The Company is currently monitoring major work prospects in Cameroon, Chad,
Egypt, Nigeria and Tanzania. The Company anticipates submitting bids for these
prospects.
Asia
In an effort to take advantage of the rapidly growing economies in Asia, the
Company has identified this region as a priority target market for geographic
expansion. In March 1995, the Company established an office in Jakarta,
Indonesia, to pursue potential major projects in Asia. In October 1995, the
Company entered into a cooperation agreement with a major Japanese trading
company providing for the joint development of projects in Indonesia, Malaysia
and Thailand. The Company is currently constructing, bidding, or developing
projects in Australia, China, Indonesia, Malaysia, Pakistan, the Philippines,
Thailand and Vietnam.
In January 1995, Pak-Arab Refinery, Ltd. awarded the Company two contracts,
one for the supply of project materials and the other for the engineering and
construction of the MFM Pipeline Extension Project in Pakistan. The project
scope includes 225 miles (365 kilometers) of 18 and 16 inch petroleum products
pipeline commencing at Mahmood Kot and ending at Machhike. In May 1995, the
Company was awarded an additional part of the MFM project which consists of
the expansion of an existing terminal at Mahmood Kot (including 267,000
barrels of storage capacity), addition of a new terminal and pump station at
Faisalabad (including 270,000 barrels of storage), addition of a storage
terminal at Machhike (including 443,000 barrels of storage) and design of a
future pump station at Kot Bahadur Shah. The Company has established a project
office in Lahore, Pakistan, to manage these projects.
Commonwealth of Independent States (C.I.S.)
The C.I.S. contains vast reserves of oil and gas. The oil reserves contained
in the Tengiz Field, the largest field to be served by the planned Caspian
Crude Oil Export Pipeline System (the "CPC Pipeline System"), and the gas
reserves contained in the Bovanenkovskoye Field, the anchor field on the gas-
rich Yamal peninsula, are each generally recognized to be among the largest in
the world. These are but two of many fields which are candidates for
significant exploration and production investments. Many of the Company's
clients are major oil and gas companies who are candidates to participate in
the development of energy resources in the C.I.S. The Company is prepared to
offer its support services to such clients.
Willbros' activities in this region date back to 1976, when Willbros was the
technical leader of a consortium which was awarded a major contract to design
and supply six modularized gas turbine compressor stations, housing 42
compressor units with a total capacity of 726,000 horsepower, for the Urengoy
to Chelyabinsk 56 inch gas pipeline system in western Siberia. Since the
completion of the project in 1979, contacts and relationships have been
maintained with personnel throughout the Russian oil and gas sector, including
members of various technical institutes. To compete in the Russian market, the
Company has established an Accredited Representative Office in Moscow, as well
as a Russian joint stock company.
In 1992, the Company was selected to perform the project development of the
CPC Pipeline System designed to transport oil from the Tengiz field in
Kazakstan approximately 930 miles (1,500 kilometers) to Russia's Black Sea oil
terminal at Novorossysk. The project is principally owned by the governments
of Russia, Kazakstan and Oman. In late 1993, this development effort was
completed with the submission of a full set of turnkey contract documents to
the project sponsors, who subsequently decided to build the system in two
phases. Recently, a Willbros-led joint venture was selected for exclusive
negotiations
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<PAGE>
regarding a turnkey contract for Phase I of the CPC Pipeline System, which
includes a new pump station near Kropotkin, Russia, approximately 155 miles
(250 kilometers) of 40 inch pipeline, a 1.5 million barrel tank farm, a tanker
loading facility on the Black Sea, and up to 2 miles (3 kilometers) of 36 inch
submarine pipeline. A Memorandum of Agreement has been executed, pursuant to
which the Company is carrying out certain engineering work. Until ownership
interests have been finalized, it is unlikely that a contract for Phase I of
the project will be awarded.
In 1995, the Company was awarded a contract by Transneft, the Russian oil
pipeline monopoly, to perform pipeline routing studies and other project
development activities related to the Baltic Crude Oil Export System. This
proposed multi-billion dollar project originated in a Conceptual Development
Plan submitted by the Company to Transneft in February 1995. Recently,
Transneft appointed the Company as its technical and financial advisor on a
project to upgrade and reverse the flow of the Russian sector of the Baku to
Tikhoretsk oil pipeline system to carry a minimum of 36.5 million barrels
annually of export crude oil from Azerbaijan.
In February 1996, the Company established a formal business alliance with
Giprotruboprovod, a design company based in Moscow which is a subsidiary of
Transneft. The two companies will cooperate to offer joint technical services
to international as well as Russian companies in respect of pipelines and
related facilities. The Company believes that this alliance will enhance its
long term prospects in the C.I.S. and that it is well positioned to increase
its presence and its level of activity in the C.I.S.
Middle East
Willbros operations in the Middle East date back to 1948. It has worked in
most of the countries in the region, with particularly heavy involvement in
Iran, Kuwait, Oman and Saudi Arabia. In Iran, Willbros designed or constructed
a substantial portion of the pipelines and related facilities that exist
today. Currently, the Company has ongoing operations in Oman, where Willbros
has been active for more than 30 years.
The Company maintains a fully staffed facility in Oman with equipment repair
facilities and spare parts on site and offers construction expertise, repair
and maintenance services, engineering support, oil field transport services,
materials procurement and a variety of related services to its clients.
Current operations in Oman include a multi-year Mechanical Services Contract
and a pipeline maintenance program for Petroleum Development Oman ("PDO").
Work carried out in Oman during 1995 included ongoing pipeline maintenance,
mechanical services and flowline work for Occidental of Oman and PDO. A recent
major project completed in Oman involved engineering, procurement and
construction services on a turnkey contract for a gas injection facility in
Occidental of Oman's Safah Field. The project included facilities for gas
dehydration, gas compression, injection gas metering, electrical power
generation and associated support utilities and buildings.
During 1992 and 1993, following the Gulf War, the Company carried out a
significant program of gathering line replacement in Kuwait to help Kuwait Oil
Company restore its production capacity. Willbros has since established a
local company and has a base of operations, including an inventory of
equipment, from which it can offer additional services.
The Company is aggressively pursuing business opportunities throughout the
Middle East and is currently bidding work or monitoring prospects in Abu
Dhabi, Kuwait, Oman, Qatar, Saudi Arabia and Yemen.
North America
Willbros has provided services to the U.S. oil and gas industry for more
than 80 years. The Company is recognized as an industry leader in the United
States, for providing state-of-the-art engineering and construction services.
The Company maintains a staff of experienced management, construction,
engineering and support personnel in the United States.
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<PAGE>
Among Willbros' significant achievements in the United States are (a) the
construction of the two northernmost segments of the Trans-Alaskan Pipeline
System (1974-76), which consisted of a 225 mile (365 kilometer) crude oil
pipeline and a 140 mile (225 kilometer) fuel gas pipeline, (b) a joint venture
to build the All American Pipeline System (1984-86), a 1,240 mile (1,995
kilometer) heated crude oil pipeline with 23 pumping and heating stations, and
(c) Willbros involvement in nine of the ten largest gas pipeline projects
undertaken in the United States since 1988. The Company was a construction
contractor on the Pacific Gas & Electric-PGT pipeline expansion project in
Oregon and the Tuscarora Gas Transmission project in Nevada and California.
Willbros provided engineering services for the Great Lakes Gas Transmission
Company's system expansion, the Kern River Gas Transmission System, the
Northwest Pipeline System expansion, the NorAm Line AC pipeline project and
the Florida Gas pipeline project. During the same period, Willbros was the
engineering contractor for 15 compressor stations or station expansions, on
behalf of six different clients in the United States. Currently, the Company
is providing engineering services for the Northern Border pipeline extension
and the Portland Natural Gas Transmission Project in New England.
On a recent notable project, the Company was selected to provide engineering
services for the largest grass roots crude oil storage facility built in the
United States in the last decade. The facility, built in Cushing, Oklahoma,
for Plains Resources, Inc., consists of tankage with 2.0 million barrels of
storage capacity and all related facilities.
Willbros has also provided significant engineering services to the U.S.
Government during the past 15 years, particularly in fuel storage and
distribution systems and aircraft fueling facilities. Willbros performed the
engineering for major projects on seven U.S. military bases, four of which
were located within the United States. In 1984, Willbros was selected by the
U.S. Army to act as the systems integration contractor for the Southwest Asia
Petroleum Distribution Operational Project. Willbros was responsible for
developing and procuring a tactical fuel distribution and storage system to
support military operations worldwide. The system was successfully deployed in
Saudi Arabia during Operation Desert Storm. Willbros acted as the systems
integrator for this project until 1995.
The Company believes that the United States will continue to be an important
market for all of its lines of business. Environmental concerns will likely
continue to require careful, thorough and specialized professional engineering
and planning for all new facilities within the oil and gas sector.
Furthermore, the demand for replacement and rehabilitation of pipelines is
expected to increase as pipeline systems in the United States approach the end
of their design lives and population trends influence overall energy needs.
South America
Willbros' first entry into South America was in Venezuela in 1939. Since
then, Willbros has performed numerous major projects in Venezuela and other
South American countries, where its accomplishments include the construction
of five major pipeline crossings of the Andes Mountains and setting a world
altitude record for constructing a pipeline. Willbros' largest project in
South America was a $134.0 million turnkey project for the procurement and
construction of the Alto Magdalena Crude Oil Pipeline System in Colombia,
awarded to Willbros in 1989 and completed in 1990.
Venezuela, the largest oil producer in South America with production of
approximately 2.5 million barrels of oil per day, remains an important market
for the Company. In May 1994, the Company completed the acquisition (from an
affiliate of Heerema) of CAMSA, a Venezuelan company whose offices, equipment
yard and dock facilities are located in the City of Maracaibo on a 15 acre
waterfront site on Lake Maracaibo. Approximately 50% of Venezuelan crude oil
is produced from beneath Lake Maracaibo. Although the Venezuelan company's
primary expertise is in marine construction and the fabrication and
installation of 36 inch diameter cylindrical concrete piles up to 220 feet (67
meters) long and platforms for offshore projects, the Company has added
onshore equipment to complement the existing marine fleet, enabling CAMSA to
compete for both onshore and offshore construction projects, as well as
specialty
34
<PAGE>
services contracts. This acquisition provides the Company with the ability to
furnish marine support services to the oil and gas industry in the Lake
Maracaibo area, along the Venezuelan coast, and throughout the Caribbean
basin. See "Certain Transactions."
The Company maintains a fully staffed facility in Maracaibo, with resident
management personnel assigned who are responsible for estimating and tendering
bids, providing construction expertise, repair and maintenance services,
marine related services, engineering support and other needed services. Major
clients include international oil companies such as Shell, Occidental
Petroleum, and operating subsidiaries of Petroleos de Venezuela S.A.,
including Maraven, Corpoven and Lagoven.
In addition to Venezuela, the Company is aggressively pursuing business
opportunities throughout South America and is currently bidding work or
monitoring prospects in Brazil, Argentina, Bolivia, Peru, Ecuador and Chile.
Recent developments involving political changes and privatization efforts in
many of the South American countries make this region one of high interest in
the immediate future.
BACKLOG
The Company's backlog (anticipated revenue from the uncompleted portions of
existing contracts) was $104.5 million at March 31, 1996. The Company's
backlog was $139.4 million, $97.5 million and $76.1 million at December 31,
1995, 1994 and 1993, respectively. The Company includes a contract in its
backlog at such time as the contract is awarded or a firm letter of commitment
is obtained. The Company believes the backlog figures are firm, subject only
to the cancellation and modification provisions contained in various
contracts. Historically, a substantial amount of the Company's revenues in a
given year have not been reflected in its backlog at the beginning of that
year; such revenues may result from contracts of long or short duration
entered into during a year as well as from various contractual processes,
including change orders, extra work, variations in the scope of work and the
effect of escalation or currency fluctuation formulas. These revenue sources
are not added to backlog until realization of revenue is assured.
35
<PAGE>
The following is a breakdown of the Company's backlog by geographic region
as of March 31, 1995 and 1996:
<TABLE>
<CAPTION>
MARCH 31, 1995 MARCH 31, 1996
---------------- ----------------
AMOUNT PERCENT AMOUNT PERCENT
-------- ------- -------- -------
(DOLLAR AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C>
Africa........................................ $ 6,206 4.5% $ 30,184 28.9%
Asia.......................................... 67,892 48.7 33,672 32.2
C.I.S......................................... 1,144 0.8 883 0.8
Middle East................................... 43,277 31.0 19,573 18.7
North America................................. 12,095 8.7 18,572 17.8
South America................................. 8,793 6.3 1,640 1.6
-------- ----- -------- -----
Total....................................... $139,407 100.0% $104,524 100.0%
======== ===== ======== =====
</TABLE>
The $34.9 million decrease in backlog to $104.5 million at March 31, 1996,
from $139.4 million at March 31, 1995, is due mainly to work completed on
engineering, procurement and construction contracts for the MFM Pipeline
Extension Project in Pakistan, work completed and modifications of a
speciality services contract in Oman, partially offset by the addition of a
contract for the construction of a 24 inch pipeline crossing of the Escravos
River for NNPC.
A substantial percentage of the Company's revenues in past years resulted
from contracts entered into during that year or the immediately preceding
year. The following table sets forth revenues for the years indicated as a
percentage of backlog at the beginning of each such year (dollar amounts in
thousands):
<TABLE>
<CAPTION>
REVENUES FOR
BACKLOG AT YEAR ENDED
JANUARY 1 DECEMBER 31 PERCENT
---------- ------------ -------
<S> <C> <C> <C>
1991....................................... $129,220 $168,875 131%
1992....................................... 146,734 180,947 123
1993....................................... 160,565 210,011 131
1994....................................... 76,066 145,716 191
1995....................................... 97,493 220,506 226
Average 1991-95............................ $122,016 $185,211 152%
</TABLE>
No assurance can be given that future experience will be similar to historical
results in this respect.
COMPETITION
The Company's primary competitors on construction projects in developing
countries include Entrepose (France), Mannesmann (Germany), CCC (Lebanon),
Nippon Kokan (Japan), Saipem (Italy), Spie-Capag (France), Techint
(Argentina), and Bechtel (U.S.). The Company believes that it is one of the
few companies among its competitors possessing the ability to carry out large
projects in developing countries on a turnkey basis, without subcontracting
major elements of the work. As a result, the Company may be more cost
effective than its competitors in certain instances.
The Company has different competitors in different markets. In Nigeria, the
Company competes for pipe coating work with Bredero Price (Netherlands), while
its dredging competitors include Bos Kalis Westminster (Netherlands), Dredging
International (Belgium), Bilfinger & Berger (Germany), Nigerian Dredging &
Marine (Netherlands), Phillip Holzmann (Germany) and HBG (Netherlands). In
Oman, competitors in oil field transport services include Desert Lines, Al
Ahram, Hamdam and TruckOman, all Omani companies; and in construction and the
installation of flowlines and mechanical services, the Company competes with
Taylor Woodrow Towell (Britain), CCC, Dodsal (India), Saipem, Desert Lines,
36
<PAGE>
and Galfar (Oman). In Venezuela, competitors in marine support services
include Raymond de Venezuela, Petrolago, Flag Instalaciones and Siemogas, all
Venezuelan companies. In Pakistan, major competitors include Saipem and Tekfen
(Turkey).
In the United States, the Company's primary construction competitors on a
national basis include Associated, Gregory & Cook, Henkels & McCoy, Murphy
Brothers, H. C. Price, Sheehan, and Welded. In addition, there are a number of
regional competitors. Primary competitors for engineering services include
Bechtel, Brown and Root, Gulf Interstate, Marmac, Fluor Daniel Williams
Brothers, Mustang Engineering, Stone & Webster, Paragon Engineering, Trigon
Engineering and Universal Ensco.
CONTRACT PROVISIONS AND SUBCONTRACTING
Most of the Company's revenues are derived from construction, engineering
and specialty services contracts. The Company enters into four basic types of
construction contracts: firm fixed-price or lump-sum fixed-price contracts
providing for a single price for the total amount of work or for a number of
fixed lump sums for the various work elements comprising the total price;
unit-price contracts which specify a price for each unit of work performed;
time and materials contracts under which personnel and equipment are provided
under an agreed schedule of daily rates with other direct costs being
reimbursable; or a combination of the above (for example, lump sums for
certain items and unit rates for others).
The Company enters into three types of engineering contracts: firm fixed-
price or lump-sum fixed-price contracts; time and materials contracts pursuant
to which engineering services are provided under an agreed schedule of hourly
rates for different categories of personnel, and materials and other direct
costs are reimbursable; and cost-plus-fee contracts, common with U.S.
government clients under which income is earned solely from the fee received.
Cost-plus-fee contracts are often used for material procurement services.
Specialty services contracts generally are unit-price contracts which
specify a price payable per unit of work performed (e.g., per cubic meter, per
lineal meter, etc.). Such contracts usually include hourly rates for various
categories of personnel and equipment to be applied in cases where no unit
price exists for a particular work element. Under a services contract, the
client is typically responsible for supplying all materials; a cost-plus-
percentage-fee provision is generally included in the contract to enable the
client to direct the contractor to furnish certain materials.
The Company usually obtains contracts through competitive bidding or through
negotiations with long-standing clients. The Company is typically invited to
bid on projects undertaken by its clients who maintain approved bidder lists.
Bidders are pre-qualified by virtue of their prior performance for such
clients, as well as their experience, reputation for quality, safety record,
financial strength and bonding capacity.
In evaluating bid opportunities, the Company considers such factors as the
client, the geographic location and the difficulty of the work, the Company's
current and projected workload, the likelihood of additional work, the
project's cost and profitability estimates, and the Company's competitive
advantage relative to other likely bidders. The Company uses a computer-based
estimating system. The bid estimate forms the basis of a project budget
against which performance is tracked through a project cost system, enabling
management to monitor projects effectively. Project costs are accumulated
weekly and monitored against billings and payments to facilitate cash flow
management on the project.
All U.S. government contracts and many of the Company's other contracts
provide for termination of the contract for the convenience of the client. In
addition, many contracts are subject to certain completion schedule
requirements with liquidated damages in the event schedules are not met as the
result of circumstances within the control of Willbros. The Company has not
been materially adversely affected by these provisions in the past.
37
<PAGE>
The Company acts as prime contractor on a majority of the construction
projects it undertakes. In its capacity as prime contractor and when acting as
a subcontractor, the Company performs most of the work on its projects with
its own resources and typically subcontracts only such specialized activities
as hazardous waste removal, non-destructive inspection, tank erection,
catering and security. In the construction industry, the prime contractor is
normally responsible for the performance of the entire contract, including
subcontract work. Thus, when acting as a prime contractor, the Company is
subject to the risk associated with the failure of one or more subcontractors
to perform as anticipated. The Company has not incurred any significant loss
or liability on work performed by subcontractors to date.
EMPLOYEES
The Company believes its employees are its most valuable asset and that
their loyalty, productivity, pioneering spirit, work ethic and strong
commitment in providing quality services have been crucial elements in the
successes Willbros has achieved on numerous projects in remote, logistically
challenging locations around the world.
At March 31, 1996, the Company employed a multi-national work force of
approximately 3,520 persons, over 80% of whom are citizens of the respective
countries in which they work. Although the level of activity may vary from
year to year, Willbros has maintained an average work force of approximately
2,490 over the past five years. The minimum employment during that period has
been 1,840 and the maximum 4,030. At March 31, 1996, approximately 1,530 of
the Company's employees were covered by collective bargaining agreements. The
Company believes its relations with its employees are good.
The following table sets forth an approximate breakdown of the Company's
employees as of March 31, 1996.
<TABLE>
<CAPTION>
NUMBER
OF EMPLOYEES PERCENT
------------ -------
<S> <C> <C>
Nigeria................................................. 1,120 32%
Oman.................................................... 820 23
Pakistan................................................ 620 18
Venezuela............................................... 520 15
U.S. Construction....................................... 10 -
U.S. Engineering........................................ 330 9
U.S. Administration..................................... 80 2
Other Countries......................................... 20 1
----- ---
3,520 100%
===== ===
</TABLE>
EQUIPMENT
The Company owns and maintains a fleet of generally standardized
construction, transportation and support equipment and spare parts. In 1994
and 1995, expenditures for capital equipment and spare parts were $7.2 million
and $18.9 million, respectively. In addition, during 1994, the Company
acquired $4.6 million of equipment in connection with the acquisition of CAMSA
in Venezuela. At March 31, 1996, the Company's net book value of property,
plant, equipment and spare parts was $47.7 million. An estimated breakdown of
the Company's major capital equipment at December 31, 1995, is as follows:
heavy construction equipment, 690 units; transportation equipment, 890 units;
and support equipment, 3,300 units.
The Company believes the ownership of equipment is preferable to leasing to
ensure the equipment is available as needed. In addition, such ownership has
historically resulted in lower equipment costs. The Company attempts to obtain
projects that will keep its equipment fully utilized in order to increase
38
<PAGE>
profitability. All equipment is subject to scheduled maintenance to maximize
fleet readiness. The Company has maintenance facilities at Port Harcourt,
Nigeria; Azaiba, Oman; Maracaibo, Venezuela; and Broken Arrow, Oklahoma; as
well as temporary site facilities on major jobs to minimize downtime.
FACILITIES
The Company owns a 14 acre equipment yard/maintenance facility and an
adjoining 39 acre undeveloped industrial site at Broken Arrow, Oklahoma, a
short distance from Tulsa, Oklahoma. The Company also owns a 4.1 acre
commercial building site in Tulsa, which is currently for sale. In Venezuela,
the Company's offices and construction facilities are located on 15 acres of
land, which it owns, on the shores of Lake Maracaibo. The Company leases all
other facilities used in its operations, including corporate offices in
Panama; administrative and engineering offices in Tulsa, Oklahoma, and
Houston, Texas; and various office facilities, equipment sites and expatriate
housing units in England, Nigeria, Oman, Pakistan, Russia, Egypt, Kuwait,
Saudi Arabia and Indonesia. The aggregate lease payments made by the Company
for its facilities were $1.9 million in both 1994 and 1995.
INSURANCE AND BONDING
The Company maintains workers' compensation, employers' liability, general
liability, directors' and officers' liability, automobile liability, aircraft
liability, marine liability and excess liability insurance to provide benefits
to employees and to protect the Company against claims by third parties. Such
insurance is underwritten by A+ or better rated insurance companies (AM Best
rating as to claims paying ability) and, when possible, in loss-sensitive
plans with return premiums for favorable loss experience. The Company also
maintains physical damage insurance covering loss of or damage to Company
property on a worldwide basis, with special insurance covering loss or damage
caused by political or terrorist risks in locations where such coverage is
deemed prudent. Formal risk management and safety programs are maintained,
which have resulted in favorable loss ratios and cost savings. The Company
believes its risk management, safety and insurance programs are adequate to
meet its needs.
The Company is often required to provide surety bonds guaranteeing its
performance and/or financial obligations. The amounts of bonding available
depend upon experience and reputation in the industry, financial condition,
backlog and management expertise, among other factors. The Company maintains
relationships with two top-rated surety companies to provide surety limits.
LEGAL PROCEEDINGS
The Company is a party to a number of legal proceedings. The Company
believes that the nature and number of these proceedings are typical for a
firm of its size engaged in the Company's type of business and that none of
these proceedings is material to the Company's financial position.
GOVERNMENT REGULATIONS
General
Many aspects of the Company's operations are subject to government
regulations in the countries in which the Company operates, including those
relating to currency conversion and repatriation, taxation of its earnings and
earnings of its personnel, its use of local employees and suppliers. In
addition, the Company depends on the demand for its services from the oil and
gas industry and, therefore, is affected by changing taxes, price controls and
laws and regulations relating to the oil and gas industry generally. The
ability of the Organization of Petroleum Exporting Countries to meet and
maintain production targets also influences the demand for the Company's
services. The adoption of laws and regulations by countries in which the
Company operates, curtailing exploration and development drilling for oil and
gas for economic and other policy reasons, could adversely affect the
Company's operations by limiting demand
39
<PAGE>
for its services. The Company's operations are also subject to the risk of
changes in foreign and domestic laws and policies which may impose
restrictions on the Company, including trade restrictions, which could have a
material adverse effect on the Company's operations. The Company cannot
determine to what extent future operations and earnings of the Company may be
affected by new legislation, new regulations or changes in, or new
interpretations of, existing regulations.
Environmental
The Company's operations are subject to numerous environmental protection
laws and regulations which are complex and stringent. The Company regularly
works in and around sensitive environmental areas such as rivers, lakes and
wetlands. Significant fines and penalties may be imposed for non-compliance
with environmental laws and regulations, and certain environmental laws
provide for joint and several strict liability for remediation of releases of
hazardous substances, rendering a person liable for environmental damage,
without regard to negligence or fault on the part of such person. In addition
to potential liabilities that may be incurred in satisfying these
requirements, the Company may be subject to claims alleging personal injury or
property damage as a result of alleged exposure to hazardous substances. Such
laws and regulations may expose the Company to liability arising out of the
conduct of operations or conditions caused by others, or for the acts of the
Company which were in compliance with all applicable laws at the time such
acts were performed. The Company is not aware of any non-compliance with any
environmental law that could have a material adverse effect on the Company's
business or operations.
40
<PAGE>
MANAGEMENT
DIRECTORS, EXECUTIVE OFFICERS AND KEY PERSONNEL
The following table sets forth certain information regarding the directors,
executive officers and key personnel of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Larry J. Bump.................. 56 Director, Chairman of the Board of
Directors, President, Chief Executive
Officer and Chief Operating Officer
Melvin F. Spreitzer(1)......... 57 Director, Executive Vice President, Chief
Financial Officer, Secretary and Treasurer
Gary L. Bracken................ 58 Vice President; President and Chief
Executive Officer of Willbros Engineering
& Construction Limited
M. Kieth Phillips.............. 53 Vice President; President, Chief Executive
Officer and Chief Operating Officer of
Willbros International, Inc.
James R. Beasley............... 53 President, Chief Executive Officer and
Chief Operating Officer of Willbros
Engineers, Inc.
John N. Hove................... 48 General Counsel
David L. Kavanaugh............. 48 Senior Vice President of Willbros
International, Inc.
Steve W. Shores................ 46 Senior Vice President of Willbros
Engineers, Inc.
Joel M. Gall................... 47 Vice President of Willbros International,
Inc.
Arthur J. West................. 52 Vice President of Willbros International,
Inc.
Adrian P. Wright............... 50 Vice President of Willbros International,
Inc.
Jack W. Jones.................. 59 Vice President of Willbros Engineers, Inc.
Robert L. Walker............... 64 Vice President and Chief Operating Officer
of Willbros Energy Services Company
Harold A. Weller............... 59 Vice President of Willbros Engineering &
Construction Limited
Carlos A. Atik................. 33 General Manager of Willbros Construction &
Engineering--Egypt, L.L.C.
Monica M. Bagguley............. 55 Director of Willbros (Overseas) Limited
Gordon D.M. Bishop............. 44 General Manager of Willbros Middle East,
Inc.--Pakistan Branch
Jack F. Furrh, Jr.............. 56 General Manager of The Oman Construction
Company, LLC
G. Patrick Riga................ 41 General Manager of Constructora CAMSA, C.A.
James K. Tillery............... 38 Managing Director of Willbros (Nigeria)
Limited
Guy E. Waldvogel(1)(2)(3)...... 59 Director
Bryan H. Lawrence(2)(3)........ 53 Director
Peter A. Leidel(1)(2)(3)....... 40 Director
</TABLE>
- --------
(1) Member of Compensation Committee.
(2) Member of Audit Committee.
(3) Member of Stock Plan Committee.
41
<PAGE>
LARRY J. BUMP joined Willbros in 1977 as President and Chief Operating
Officer and was elected to the Board of Directors. He was named Chief
Executive Officer in 1980 and elected Chairman of the Board of Directors in
1981. He served as Chairman of the Board of Directors and Chief Executive
Officer of Heerema Holding Company, Inc. ("HHC"), a major marine engineering,
fabrication and installation contractor, the parent corporation of Heerema, in
Geneva, Switzerland, from 1985 to 1988 while he continued his duties with
Willbros. Mr. Bump continues to serve as a Director of HHC and Heerema. He has
over 32 years international experience in pipeline construction and
contracting industries, all of which were in management positions.
MELVIN F. SPREITZER joined Willbros in 1974 as Controller and was elected
Vice President of Finance in 1978. He was elected Executive Vice President,
Chief Financial Officer, Secretary and Treasurer in 1987, and a Director in
1992. He has over 20 years of corporate finance experience and is responsible
for all phases of financial management of the Company.
GARY L. BRACKEN joined Willbros in 1960 as an engineer and has served the
Company for over 33 years, excluding a brief period from 1972 through 1974
when he was employed by another major U.S. pipeline contractor. He rejoined
Willbros in 1975 and was promoted to Vice President in 1978. He was elected
Executive Vice President of Willbros Energy Services Company ("WESCO") in 1982
and served as its President from 1988 to 1990. In 1990, Mr. Bracken was
elected Chairman of the Board of Directors and Chief Executive Officer of
Willbros Engineers, Inc. ("WEI") and served in those capacities through 1992.
In late 1992, he was elected President and Chief Executive Officer of Willbros
Engineering & Construction Limited ("WECL").
M. KIETH PHILLIPS joined Willbros in 1978 as Vice President. He was elected
Vice President of Willbros International, Inc. ("WII") in 1979 and was
promoted to Senior Vice President of WII in 1980, Executive Vice President of
WII in 1983, President and Chief Operating Officer of WII in 1988 and Chief
Executive Officer in 1990. Most of his more than 28 years experience in the
pipeline construction industry has been international and in management
positions.
JAMES R. BEASLEY joined Willbros in 1981 when WEI was acquired. He was
elected Vice President of WEI in 1981, Senior Vice President and General
Manager of WEI in 1982, President and Chief Operating Officer of WEI in 1986
and Chief Executive Officer of WEI in 1993. Mr. Beasley has more than 25 years
of experience in pipeline engineering and operations.
JOHN N. HOVE became General Counsel of Willbros in 1991. He has more than 24
years experience as a lawyer and has provided legal assistance to Willbros
since 1973. Prior to 1991, he was a shareholder in a law firm in Tulsa,
Oklahoma, where he concentrated his practice on international business
transactions.
DAVID L. KAVANAUGH joined Willbros in 1977 as an engineer assigned to Saudi
Arabia. From 1979 until 1988, he served as Project Engineer and Project
Manager in Nigeria. From 1988 to 1991, he managed construction projects in
Gabon and Colombia. In 1991, he was elected Vice President of WII, and in 1995
he was promoted to Senior Vice President of operations and business
development for WII. Mr. Kavanaugh has over 25 years of pipeline construction
experience.
STEVE W. SHORES joined Willbros in 1981 when WEI was acquired. He was
elected Vice President of WEI in 1986 and Senior Vice President of WEI in
1991. Mr. Shores has over 20 years of pipeline engineering experience.
JOEL M. GALL joined Willbros in 1978 as an Office Manager in the Middle
East. He was transferred to Nigeria in 1979 where he served as Administrative
Manager, General Manager and Managing Director until 1991 when he was elected
Vice President of WII. Since 1994, he has been responsible for business
development activities in Southeast Asia. Mr. Gall has over 25 years of
experience in the international pipeline construction industry.
42
<PAGE>
ARTHUR J. WEST joined Willbros in 1962 in North Africa. In 1988, he became
Vice President of Willbros Middle East, Inc. ("WMEI") and, in 1992, he was
elected Vice President of WII and became responsible for business development
and operations for WMEI in the Middle East. Mr. West has over 30 years
experience in pipeline construction in the areas of administrative and project
management.
ADRIAN P. WRIGHT joined Willbros in 1973 as an engineer assigned to Algeria.
From 1974 until 1982, he served as Project Engineer and Project Manager in
Nigeria. From 1982 to 1992, he served as Project Manager in Oman, Colombia and
the United States. In 1992, Mr. Wright was elected Vice President of WII, and
he is currently responsible for WII's estimating and technical services.
JACK W. JONES joined Willbros in 1983. He was elected Vice President of WEI
in 1991 and was assigned as General Manager of Willbros' Houston office in
1994. Mr. Jones has over 35 years of pipeline engineering experience.
ROBERT L. WALKER joined Willbros in 1981 as Vice President of U.S.
construction operations for WESCO. Prior to joining Willbros, Mr. Walker was
in project management on the Trans-Alaskan Pipeline System and was Operations
Vice President for a major U.S. contractor. In 1990, he was appointed Chief
Operating Officer of WESCO. Mr. Walker has nearly 35 years experience in
pipeline construction in the areas of estimating, planning, administration and
management.
HAROLD A. WELLER joined Willbros in 1975. From 1976 to 1979, he was Project
Director on a project to design and supply gas compressor stations for a gas
pipeline system in western Siberia. In 1979, he left Willbros to join a major
gas compressor manufacturer until 1984. Following that he operated a private
consulting business until 1991. In 1991, he returned to Willbros as Director
of Business Development for Willbros (Overseas) Limited ("WOL"). In 1994, he
was elected Vice President of WECL. Mr. Weller has over 35 years experience in
the engineering and management of petrochemical, oil refinery and pipeline
projects in the oil and gas industry.
CARLOS A. ATIK joined Willbros in 1991 as an assistant Project Manager in
Egypt. He assumed the duties of Project Manager in 1992 and continued in that
role until 1995 when he was named General Manager of Willbros Construction &
Engineering--Egypt, L.L.C. Mr. Atik has over 11 years of engineering and
construction experience in Africa and the Middle East.
MONICA M. BAGGULEY joined WOL in 1974. Since 1985, she has served as
Director of Personnel and Purchasing for WOL. Ms. Bagguley has over 20 years
experience in international personnel management and project procurement.
GORDON D.M. BISHOP joined Willbros in 1976 as Senior Surveyor. He has 19
years experience in pipeline construction at various levels of engineering and
project management capacities in Iran, Nigeria and Oman. He is currently
Project Manager of a major turnkey pipeline construction project in Pakistan.
JACK F. FURRH, Jr. joined Willbros in 1981 as Administrative Manager. He
left Willbros in 1986 to operate his own business. In 1990, he rejoined the
Company as Project Manager and in 1991 he was promoted to General Manager of
The Oman Construction Company, LLC. He has over 25 years experience in the
energy-related industry in contracts, safety and administrative management.
G. PATRICK RIGA joined Willbros in 1981 in Oman as a warehouseman. From 1985
to 1988, he served in administrative capacities in Colombia and Ecuador. From
1989 until 1994, he was employed by HDI, a horizontal drilling company. He
rejoined the Company in 1994 as Assistant General Manager in Venezuela and, in
1995, was promoted to General Manager of Constructora CAMSA. Mr. Riga has over
17 years experience in the pipeline industry, including operations, quality
control and administrative management.
43
<PAGE>
JAMES K. TILLERY joined Willbros in 1983 as a field engineer. He has over 15
years experience as an Engineer and Project Manager working in both U.S. and
international pipeline construction. In 1995, he was named Managing Director
of Willbros (Nigeria) Limited.
GUY E. WALDVOGEL has been a Director of Willbros since 1990. He has been the
Management Consultant of Business and Corporate Strategy of Heerema and HHC
since 1990 and also currently serves as Chief Financial Officer and as a
director of Heerema. He was formerly Senior Executive Vice President of
Societe Generale De Surveillance, a leading international cargo inspection
firm. Mr. Waldvogel also serves as a Director of Renaissance Group, Inc., Bank
Julius Baer (a Swiss public company) and PetitJean S.A. (a French public
company).
BRYAN H. LAWRENCE has been a Director of the Company since 1992. He has been
employed by Dillon Read since 1966 and is currently a Managing Director. Mr.
Lawrence also serves as a Director of D & K Wholesale Drug, Inc., Hallador
Petroleum Company, TransMontaigne Oil Company, Vintage Petroleum, Inc., Benson
Petroleum Ltd. (a Canadian public company) and certain non-public companies in
the energy industry in which affiliates of Dillon Read hold equity interests.
PETER A. LEIDEL has been a Director of the Company since 1992. He has been
employed continously by Dillon Read since 1983 and is currently a Senior Vice
President of Dillon Read.
Messrs. Bump, Spreitzer, Waldvogel, Lawrence and Leidel currently serve as
directors of the Company pursuant to a Stockholders Agreement among certain
stockholders of the Company owning a majority of the outstanding shares of
Common Stock and Preferred Stock of the Company. This Agreement will
automatically terminate upon the effectiveness of the Registration Statement
of which this Prospectus is a part. All of these directors will continue as
directors of the Company following the Offering.
In May 1996, the stockholders of the Company voted to amend and restate the
Articles of Incorporation of the Company to provide for a classified Board of
Directors consisting of three approximately equal classes. The terms of office
of those directors in the first class (Messrs. Lawrence and Leidel) expire in
1997, of those in the second class (Mr. Spreitzer) in 1998, and of those in
the third class (Messrs. Bump and Waldvogel) in 1999. The directors of the
class elected at each annual meeting of stockholders hold office for a term of
three years. Following consummation of the Offering, the Company intends to
appoint one or more additional non-employee directors to the Board of
Directors. Officers are elected annually by, and serve at the discretion of,
the Board of Directors.
COMPENSATION OF DIRECTORS
Members of the Board of Directors, including employee directors, do not
currently receive compensation for their services as directors other than
reimbursement for expenses incurred in attending meetings. Non-employee
directors will automatically receive non-qualified stock options under the
Willbros Group, Inc. Director Stock Plan (the "Director Plan") upon or
following the effectiveness of the Registration Statement of which this
Prospectus is a part. Under the Director Plan, an initial option to purchase
up to 5,000 shares of Common Stock will be granted to each existing non-
employee director on the date of the effectiveness of the Registration
Statement of which this Prospectus is a part and to each new non-employee
director on the date such director is elected or appointed to the Board of
Directors. Each non-employee director will also receive annually an option to
purchase 1,000 shares of Common Stock on the annual anniversary of the date on
which such director received an initial option and on each succeeding annual
anniversary of such date during the period of such director's incumbency. Upon
effectiveness of the Registration Statement of which this Prospectus is a
part, Messrs. Waldvogel, Lawrence and Leidel will each receive an option to
purchase 5,000 shares of Common Stock plus 1,000 shares of Common Stock for
each year of prior service as a director of the Company. The option exercise
price of each option granted under the Director Plan is equal to the fair
market value of the Common Stock
44
<PAGE>
on the date of grant. A total of 125,000 shares of Common Stock is available
for issuance under the Director Plan.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has a standing Compensation Committee, Audit
Committee, Stock Plan Committee and several other committees.
The Compensation Committee is composed of Messrs. Leidel, Waldvogel and
Spreitzer. The Compensation Committee reviews and takes final action for and
on behalf of the Board of Directors with respect to compensation, bonus,
incentive and benefit provisions for the officers of the Company and its
subsidiaries. The Compensation Committee meets at such times as may be deemed
necessary by the Board of Directors or the Compensation Committee. There were
two meetings of the Compensation Committee during 1995.
The recently established Audit Committee is composed of Messrs. Waldvogel,
Lawrence and Leidel, all of whom are non-employee directors of the Company.
The Audit Committee, which has not convened to date, will recommend to the
full Board of Directors the firm to be appointed each year as independent
auditors of the Company's financial statements and to perform services related
to the completion of such audit. The Audit Committee also has the
responsibility to (a) review the scope and results of the audit with the
independent auditors, (b) review with management and the independent auditors
the Company's interim and year-end financial condition and results of
operations, (c) consider the adequacy of the internal accounting, bookkeeping
and other control procedures of the Company, and (d) review any non-audit
services and special engagements to be performed by the independent auditors
and consider the effect of such performance on the auditors' independence. The
Audit Committee will also review at least once each year, the terms of all
material transactions and arrangements, if any, between the Company and its
directors, officers and affiliates.
The recently established Stock Plan Committee, which has not convened to
date, is composed of Messrs. Waldvogel, Lawrence and Leidel, and administers
the Company's 1996 Stock Plan. See "--1996 Stock Plan."
Certain members of the Board of Directors and others also constitute a
Retirement Plans Committee and a Medical Plan Committee, which oversee the
administration of such plans.
LIMITATIONS ON THE LIABILITY OF DIRECTORS AND INDEMNIFICATION MATTERS
The Company's Restated Articles of Incorporation provide that, to the
fullest extent permitted by the general corporation laws of the Republic of
Panama, a director of the Company shall not be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty
as a director.
The Company's Restated By-laws provide for indemnification of directors and
officers of the Company to the fullest extent permitted by, and in the manner
permissible under, the laws of the Republic of Panama. The Company has also
entered into indemnification agreements with each of its directors and
officers to provide for the indemnification of, and the advancement of
expenses to, the Company's directors and officers to the fullest extent
(whether partial or complete) permitted by the laws of the Republic of Panama.
The Company also carries directors' and officers' liability insurance to
defray costs of a suit or proceeding against an officer or director.
45
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information with respect to the
compensation of the Company's Chief Executive Officer and each of the
Company's four other most highly compensated executive officers, based on
salary and bonus earned during fiscal 1995, for services in all capacities to
the Company and its subsidiaries during fiscal 1995.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------- --------------------- ---------
SECURITIES
RESTRICTED UNDERLYING LONG-TERM
OTHER ANNUAL STOCK OPTIONS/ INCENTIVE ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARD(S) SARS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(1) ($) (#)(2) ($) ($)(3)
------------------ ---- ------- ------- ------------ ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Larry J. Bump........... 1995 328,000 539,223 38,100 -0- 30,000 -0- 6,000
Chairman, President and
Chief Executive Officer
Gary L. Bracken......... 1995 197,000 323,855 11,430 -0- 9,000 -0- 9,500
President of Willbros
Engineering &
Construction Limited
M. Kieth Phillips....... 1995 197,000 323,924 11,430 -0- 9,000 -0- 9,500
President of Willbros
International, Inc.
Melvin F. Spreitzer..... 1995 175,500 288,456 11,430 -0- 9,000 -0- 9,500
Executive Vice
President and Chief
Financial Officer
James R. Beasley........ 1995 129,000 86,094 5,715 -0- 4,500 -0- 9,500
President of Willbros
Engineers, Inc.
</TABLE>
- --------
(1) Consists of the realizable value (on the date of exercise) of shares of
Common Stock purchased upon exercise of non-qualified stock options due to
exercise price being below fair market value on the date of grant. Does
not include the value of perquisites and other personal benefits because
the aggregate amount of such compensation, if any, does not exceed the
lesser of $50,000 or 10% of the total amount of annual salary and bonus
for any named individual.
(2) Consists solely of options to acquire shares of Common Stock.
(3) Consists of Company contributions to the Company's (a) Investment Plan in
the amount of $6,000 each for Messrs. Bump, Bracken, Phillips, Spreitzer
and Beasley, and (b) Executive Life Plan in the amount of $3,500 each for
Messrs. Bracken, Phillips, Spreitzer and Beasley.
46
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information with respect to options
granted to the named executive officers of the Company during fiscal 1995. The
Company has never granted any stock appreciation rights.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- -------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/ POTENTIAL REALIZABLE VALUE
UNDERLYING SARS MARKET AT ASSUMED ANNUAL RATES
OPTIONS/ GRANTED TO PRICE OF STOCK PRICE APPRECIATION
SARS EMPLOYEES EXERCISE OR ON DATE FOR OPTION TERM(3)
GRANTED IN FISCAL BASE PRICE OF GRANT EXPIRATION -----------------------------
NAME (#)(1) YEAR ($/SH) ($/SH)(2) DATE 0%($) 5%($) 10%($)
---- ---------- ---------- ----------- --------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Larry J. Bump........... 30,000 15.4 3.83 5.10 11-8-95 38,100 38,100 38,100
Gary L. Bracken......... 9,000 4.6 3.83 5.10 11-8-95 11,430 11,430 11,430
M. Kieth Phillips....... 9,000 4.6 3.83 5.10 11-8-95 11,430 11,430 11,430
Melvin F. Spreitzer..... 9,000 4.6 3.83 5.10 11-8-95 11,430 11,430 11,430
James R. Beasley........ 4,500 2.3 3.83 5.10 11-8-95 5,715 5,715 5,715
</TABLE>
- --------
(1) Consists solely of options to acquire shares of Common Stock. The options
were granted for a term of eight days, subject to earlier termination in
certain events related to termination of employment, and were exercisable
in full on the date of grant. The option exercise price may be paid in
cash or in cash and a promissory note.
(2) The market price of shares of Common Stock has been determined in the past
by the Company's Board of Directors considering all relevant factors,
including the Company's book value, in accordance with the Company's stock
ownership plans.
(3) Potential realizable value illustrates the value that might be realized
upon exercise of the options immediately prior to the expiration of their
term. The 0% column represents the realizable value on the date of the
grant due to the exercise price being below the market price on the grant
date. The values in the 5% and 10% columns do not significantly appreciate
due to the limited term of the options (which was eight days from the date
of grant).
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table sets forth certain information with respect to options
exercised by the named executive officers of the Company during fiscal 1995,
and the number and value of unexercised options held by such executive
officers at the end of the fiscal year. The Company has never granted any
stock appreciation rights.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF SECURITIES IN-THE-MONEY
ACQUIRED UNDERLYING UNEXERCISED OPTIONS/SARS AT FY-END
ON VALUE OPTIONS/SARS AT FY-END(#) ($)(1)
EXERCISE REALIZED ------------------------- -------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Larry J. Bump........... 30,000 38,100 -0- -0- -0- -0-
Gary L. Bracken......... 9,000 11,430 -0- -0- -0- -0-
M. Kieth Phillips....... 9,000 11,430 -0- -0- -0- -0-
Melvin F. Spreitzer..... 9,000 11,430 -0- -0- -0- -0-
James R. Beasley........ 4,500 5,715 -0- -0- -0- -0-
</TABLE>
- --------
(1) Market value of the underlying securities at exercise date or fiscal year-
end, as the case may be, minus the option exercise price.
47
<PAGE>
PENSION PLAN TABLE
The following table sets forth estimated annual lifetime retirement benefits
payable to eligible employees (including the persons named in the Summary
Compensation Table) under the Company's qualified retirement and non-qualified
benefit restoration plans in the specified compensation and years of service
classifications following retirement at age 65.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL LIFETIME RETIREMENT BENEFITS FOR
AVERAGE YEARS OF SERVICE INDICATED
ANNUAL -------------------------------------------------
EARNINGS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
-------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$125,000.................. $ 33,923 $ 45,165 $ 56,505 $ 67,748 $ 79,088
150,000.................. 41,248 54,915 68,705 82,373 96,163
175,000.................. 48,573 64,665 80,905 96,998 113,238
200,000.................. 55,898 74,415 93,105 111,623 130,313
300,000.................. 85,198 113,415 141,905 170,123 198,613
400,000.................. 114,498 152,415 190,705 228,623 266,913
600,000.................. 173,098 230,415 288,305 345,623 403,513
</TABLE>
The years of credited service for the persons named in the Summary
Compensation Table as of December 31, 1995, are: Larry J. Bump, 18 years; Gary
L. Bracken, 20 years; M. Kieth Phillips, 17 years; Melvin F. Spreitzer, 21
years; and James R. Beasley, 14 years. Amounts shown in the Pension Plan Table
are straight life annuities for years of service classifications listed. The
Pension Plan is an "excess" plan and is not offset by receipt of Social
Security benefits.
The Company maintains multiple contributory retirement plans for all
eligible employees (excluding nonresident aliens, union members, and certain
temporary and contract employees). Participants who retire at age 65 are
entitled to receive retirement benefits determined on the basis of a formula
reflecting years of credited service multiplied by a percentage of the final
average salary. The final average salary is derived from base salary and
annual bonus received in the highest-paid five consecutive years during the
participant's total years of service with Willbros.
Benefits are nonforfeitable when a participant completes five years of
vesting service. Benefits may commence when a participant reaches the later of
Normal Retirement Date (age 65) or the five-year anniversary of the
participation date. Reduced benefits may commence upon a participant's
attaining age 55 and five years of participation. Multiple joint and survivor
benefit options are available to married participants.
Contributions are made by the Company based on the actuarially determined
cost of accrued retirement benefits, subject to statutory limits. Employee
contributions are 2% of compensation up to the limit imposed under Section
401(a)(17) of the Internal Revenue Code of 1986, as amended (the "Code").
Employee contributions and interest may be distributed upon the participant's
request at termination or retirement, resulting in a reduced annuity for
vested participants.
In addition to the qualified retirement plans, the Company maintains an
Executive Benefit Restoration Plan ("EBRP") to partially restore retirement
benefits to its top five officers. Benefit reductions resulting from statutory
limits will be partially replaced in the form of a lump sum benefit, according
to the plan, which limits the amount of compensation to be used in calculating
the restoration benefit to 150% of the participant's base salary. The Company
makes an annual, actuarially calculated contribution to an irrevocable trust
for future distributions from the EBRP. The EBRP is administered by the
Company's Retirement Plans Committee appointed by the Company's Board of
Directors.
48
<PAGE>
1996 STOCK PLAN.
General. Effective May 21, 1996, the Company established the Willbros Group,
Inc. 1996 Stock Plan (the "1996 Plan"), the purpose of which is to strengthen
the ability of the Company to attract and retain well-qualified executive and
managerial personnel and to encourage stock ownership by such personnel in
order to increase their proprietary interest in the Company's success. The
1996 Plan provides for awards to key employees of the Company, including
officers and directors who are also employees of the Company. The total amount
of Common Stock currently authorized and reserved for issuance under the 1996
Plan is 1,125,000 shares. No awards have been granted under the 1996 Plan.
The 1996 Plan provides that during any calendar year, no participant may be
granted awards with respect to more than 150,000 shares, subject to certain
adjustments. The stock issuable under the 1996 Plan may be authorized and
unissued shares or treasury shares. If any shares subject to any award are
forfeited or payment is made in a form other than shares or the award
otherwise terminates without payment being made, the shares subject to such
awards will again be available for issuance under the 1996 Plan. In addition,
the number of shares deemed to be issued under the 1996 Plan upon exercise of
a stock option will be reduced by the number of shares surrendered in payment
of the exercise or purchase price of such stock option.
The 1996 Plan is administered by the Stock Plan Committee of the Board of
Directors (the "Committee"). The members of the Committee are not eligible for
awards under the 1996 Plan. The Committee is authorized to determine plan
participants, the types and amounts of awards to be granted and the terms,
conditions and provisions of awards, prescribe forms of award agreements,
interpret the 1996 Plan, establish, amend and rescind rules and regulations
relating to the 1996 Plan and make all other determinations which may be
necessary or advisable for the administration of the 1996 Plan. The Committee
has not made a determination as to the number of employees currently eligible
for consideration as participants in the 1996 Plan.
Summary of Awards. The 1996 Plan permits the granting of any or all of the
following types of awards: (a) stock options, (b) stock appreciation rights
("SARs"), and (c) restricted stock. Generally, awards under the 1996 Plan are
granted for no consideration other than prior and future services. Awards
granted under the 1996 Plan may, in the discretion of the Committee, be
granted alone or in addition to, in tandem with or in substitution for any
other award under the 1996 Plan or other plan of the Company. Such grants
could include grants of options after a decline in the market price of the
Common Stock in substitution for previously granted options having a higher
exercise price.
Stock options granted pursuant to the 1996 Plan may, at the discretion of
the Committee, be either incentive stock options ("ISOs"), within the meaning
of Section 422 of the Code, or non-qualified stock options. The exercise price
of an ISO may not be less than the fair market value of the Common Stock on
the date of grant (or 110 percent of such fair market value in the case of
ISOs granted to employees who possess more than 10 percent of the combined
voting power of all classes of stock of the Company). In the case of non-
qualified stock options, the exercise price shall be as determined by the
Committee in its sole discretion, except that it shall not be less than 85
percent of the fair market value of the Common Stock on the date of grant.
Options granted pursuant to the 1996 Plan are exercisable in whole or in part
at such time or times as may be determined by the Committee, except that ISOs
may not be exercised after the expiration of 10 years from the date granted.
Generally, options may be exercised by the payment of cash, promissory notes,
stock or a combination thereof.
Any SARs granted under the 1996 Plan will give the holder the right to
receive cash or stock in an amount equal to the difference between the fair
market value of a share of Common Stock on the date of exercise and the grant
price. The grant price of an SAR is determined by the Committee but may not be
less than the fair market value of a share of Common Stock on the date of
grant. Methods of exercise and settlement and other terms of SARs are
determined by the Committee.
49
<PAGE>
The Committee may award restricted stock, generally consisting of shares
which may not be disposed of by participants until certain restrictions
established by the Committee lapse. Such restrictions may lapse in whole or in
installments as the Committee determines. A participant receiving restricted
stock will have all of the rights of a stockholder of the Company, including
the right to vote the shares and the right to receive any dividends, unless
the Committee otherwise determines. Upon termination of employment during the
restriction period, restricted stock will be forfeited, subject to such
exceptions, if any, as are authorized by the Committee.
Awards are not transferable other than by will or the laws of descent and
distribution. In the event of any change affecting the shares of Common Stock
by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares, or other corporate
change or any distributions to Common Stock holders, the Committee may make
such substitution or adjustment in the aggregate number or kind of shares
which may be distributed under the 1996 Plan and in the number, kind and
exercise, grant or purchase price of shares subject to the outstanding awards
granted under the 1996 Plan, or make provisions for a cash payment relating to
any award, as it deems to be appropriate in order to maintain the purpose of
the original grant.
Amendment to and Termination of the 1996 Plan. The Board of Directors may
amend, alter, suspend, discontinue or terminate the 1996 Plan without the
consent of stockholders or participants, except that stockholder approval of
such action will be sought if such approval is required by any federal or
state law or regulation, or if the Board of Directors in its discretion
determines that obtaining such stockholder approval is advisable. Unless
earlier terminated by the Board of Directors, the 1996 Plan will terminate
when no shares remain reserved and available for issuance, and the Company has
no further obligation with respect to any award granted under the 1996 Plan.
Change of Control. In the event of a Change of Control of the Company, as
defined in the 1996 Plan, all outstanding awards under the 1996 Plan,
regardless of any limitations or restrictions, become fully exercisable and
freed of all restrictions.
EMPLOYMENT AGREEMENTS
On April 9, 1992, the Company entered into Employment Agreements with
Messrs. Bump, Spreitzer, Phillips and Bracken, which remained in effect until
December 31, 1995, at which time they were renewed for the three-year period
ending December 31, 1998. Each employee received an annual base salary equal
to his total annual base salary then in effect, which may be increased, but
not decreased, upon direction from the Board of Directors of that employee's
employer. Each agreement provides for salary adjustments for cost of living
increases; the payment of bonuses at the discretion of such Board of
Directors; and the eligibility to participate in the Management Incentive
Plan, as amended, which remained in effect until December 31, 1995, and was
renewed for the three year period ending December 31, 1998. There is a
confidentiality provision which would be in effect for two years after
termination of employment, as well as a non-competition provision under which
the employee's employer has the right to require compliance for two years from
the date of termination of employment or retirement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1995, Melvin F. Spreitzer, an executive officer of the Company, was a
member of the Compensation Committee and participated in deliberations
concerning executive officer compensation. The other two members of the
Compensation Committee, Guy E. Waldvogel and Peter A. Leidel, are non-employee
directors of the Company.
On September 30, 1993, certain subordinated notes of the Company, in an
aggregate principal amount of $10 million, were prepaid in full, and certain
warrants which had been issued in connection with such subordinated notes,
representing the right to acquire 12,000 shares of the Company's Preferred
Stock in the aggregate, were exercised. Such notes and warrants were issued by
the Company in 1992 and were held by Heerema, the Yorktown and Concord
Investors and certain members of the Company's
50
<PAGE>
management, including Mr. Spreitzer. Upon effectiveness of the Registration
Statement of which this Prospectus is a part, such shares of Preferred Stock
will convert into 360,000 shares of Common Stock. Mr. Waldvogel is a director
of Heerema, and Mr. Leidel is a Senior Vice President of Dillon Read.
On May 25, 1994, a subsidiary of the Company completed the acquisition of
CAMSA, a Venezuelan company, from an affiliate of Heerema for a purchase price
of $7.3 million. CAMSA is the parent company of Inversiones Camsa, C.A., which
in turn has three operating subsidiaries: Constructora CAMSA C.A.; Equipment
Service, C.A.; and Pretensado S.A. The Company also received a $2.5 million
indemnity from the seller against certain defined items including unrecorded
liabilities. Heerema guaranteed the seller's performance under the indemnity.
During 1995, pursuant to provisions of the seller's indemnity, the Company
received $1.5 million, in consideration for which it released the seller and
Heerema from any further liability under the indemnity. The amount received
($1.5 million) was recorded as a reduction of costs. Mr. Waldvogel is a
director of Heerema.
Since January 1, 1993, Mr. Spreitzer, an executive officer of the Company,
has been indebted to the Company in amounts in excess of $60,000. The largest
amount of such indebtedness outstanding during such period was $71,550. This
indebtedness bears no interest and the outstanding balance of such
indebtedness as of March 31, 1996, was $71,550.
CERTAIN TRANSACTIONS
On May 25, 1994, a subsidiary of the Company completed the acquisition of
CAMSA, a Venezuelan company from an affiliate of Heerema. Mr. Bump is a
director of Heerema and HHC, and Mr. Waldvogel is a director of Heerema. See
"Management--Compensation Committee Interlocks and Insider Participation."
Since January 1, 1993, certain executive officers of the Company have been
indebted to the Company in amounts in excess of $60,000 under various notes.
Such notes were issued to evidence certain loans by the Company to such
officers in connection with the purchase of shares of Common Stock and
Preferred Stock pursuant to certain management and employee stock ownership
plans. No shares will be sold in the future under these plans.The following
table sets forth, as to the persons shown, the largest amounts of their
indebtedness outstanding during such period, the interest rates, the final
maturity dates and the outstanding balances of such indebtedness as of May 31,
1996:
<TABLE>
<CAPTION>
LARGEST FINAL OUTSTANDING
AMOUNT OF INTEREST MATURITY BALANCE AT
NAME INDEBTEDNESS RATE DATE MAY 31, 1996
---- ------------ -------- -------------- ------------
<S> <C> <C> <C> <C>
Larry J. Bump................ $493,181 0% April 15, 2000 $493,181
Gary L. Bracken.............. 143,730 0 April 15, 2000 143,730
M. Kieth Phillips............ 143,730 0 April 15, 2000 143,730
Melvin F. Spreitzer.......... 143,730 0 April 15, 2000 143,730
James R. Beasley............. 93,645 0 April 15, 2000 71,160
</TABLE>
On September 30, 1993, certain subordinated notes of the Company, in an
aggregate principal amount of $10 million, were prepaid in full, and certain
warrants which had been issued in connection with such subordinated notes,
representing the right to acquire 12,000 shares of the Company's Preferred
Stock in the aggregate, were exercised. See "Management--Compensation
Committee Interlocks and Insider Participation."
51
<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of the date of this Prospectus, and
as adjusted to reflect the sale by the Selling Stockholders of the shares of
Common Stock offered hereby, by (a) each person who is known by the Company to
own beneficially more than five percent of the outstanding shares of Common
Stock, (b) each director of the Company, (c) each of the executive officers of
the Company named in the Summary Compensation Table, (d) all executive
officers and directors of the Company as a group, and (e) each Selling
Stockholder. Except as otherwise indicated, the Company believes that the
beneficial owners of the Common Stock listed below, based on information
furnished by such owners, have sole investment and voting power with respect
to such shares.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED PRIOR TO SHARES BENEFICIALLY
OFFERING(1) NUMBER OWNED AFTER OFFERING(1)
-------------------------- OF SHARES -------------------------------
BENEFICIAL OWNERS NUMBER PERCENT OFFERED NUMBER PERCENT(2)
----------------- ------------ ---------- --------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Heerema Holding
Construction, Inc.
(3).................... 4,964,520 35.8% 4,964,520 -- -- %
Yorktown Energy
Partners, L.P.; Concord
Partners II, L.P.; et
al (4)................. 4,223,040(5) 30.0 1,035,480(6) 3,187,560(7) 23.0
Larry J. Bump (8)(9).... 1,006,590 7.3 -- 1,006,590 7.3
Melvin F. Spreitzer..... 257,100 1.9 -- 257,100 1.9
Bryan H. Lawrence (10).. -- -- -- -- --
Guy E. Waldvogel (9).... -- -- -- -- --
Peter A. Leidel (11).... -- -- -- -- --
M. Kieth Phillips....... 255,300 1.8 -- 255,300 1.8
Gary L. Bracken......... 257,100 1.9 -- 257,100 1.9
James R. Beasley........ 67,500 * -- 67,500 *
All executive officers
and directors as a
group
(9 people)
(9)(10)(11)............ 1,843,590 13.3 -- 1,843,590 13.3
</TABLE>
- --------
*Less than 1%.
(1) Assumes conversion of all outstanding shares of Preferred Stock into
Common Stock prior to the effectiveness of the Registration Statement of
which this Prospectus is a part.
(2) Assumes no exercise of the Underwriters' over-allotment option.
(3) Heerema's address is 5 rue Pedro-Meylan, 1208 Geneva, Switzerland.
Heerema is a wholly owned subsidiary of Heerema Holding Company, Inc., a
Panama corporation ("HHC").
(4) The stockholders' address is 535 Madison Avenue, New York, New York
10022.
(5) Includes (a) 3,324,120 shares held by Yorktown Energy Partners, L.P.
("Yorktown"), a private equity fund managed by Dillon Read; (b) 651,600
shares held by Concord Partners II, L.P. ("Concord II"), a private
venture capital fund managed by Dillon Read; (c) 96,240 shares held by
Concord Partners Japan Limited ("Concord Japan"), a private venture
capital fund managed by Dillon Read; (d) 146,130 shares held by Dillon
Read as agent for certain related persons; and (e) 4,950 shares held by
Lexington Partners IV, L.P. ("Lexington"), a private investment fund for
certain Dillon Read affiliated persons and managed by Dillon Read. These
investors are referred to in this Prospectus as the "Yorktown and Concord
Investors."
(6) Includes 845,310 shares being offered by Yorktown, 165,700 shares being
offered by Concord II and 24,470 shares being offered by Concord Japan.
(7) Includes (a) 2,478,810 shares held by Yorktown, (b) 485,900 shares held
by Concord II, (c) 71,770 shares held by Concord Japan, (d) 146,130
shares held by Dillon Read as agent for certain affiliated persons, and
(e) 4,950 shares held by Lexington.
(8) The stockholder's address is 2431 East 61st Street, Suite 700, Tulsa,
Oklahoma 74136-1267.
(9) Mr. Bump is a director of Heerema and HHC, and Mr. Waldvogel is a
director of Heerema. They disclaim beneficial ownership of the shares of
Common Stock held by Heerema.
(10) Dillon Read, as agent for Mr. Lawrence, holds 18,618 shares of Common
Stock. Mr. Lawrence does not have voting or investment power with respect
to such shares. Mr. Lawrence is a Managing Director of Dillon Read which
manages Yorktown.
(11) Mr. Leidel is an Investment Manager in the Dillon Read Venture Capital
group and is responsible for managing Concord II and Concord Japan, which
hold 747,840 shares of Common Stock in the aggregate. He is also a
partner in Concord II. Mr. Leidel disclaims beneficial ownership of the
shares of Common Stock owned by such funds.
52
<PAGE>
DESCRIPTION OF CAPITAL STOCK
Under the Company's Restated Articles of Incorporation (the "Company's
Charter"), the Company is currently authorized to issue (a) 35,000,000 shares
of Common Stock, par value $.05 per share; (b) 362,000 shares of Preferred
Stock, par value $100.00 per share; and (c) 1,000,000 shares of Class A
Preferred Stock, par value $.01 per share.
COMMON STOCK
As of the date of this Prospectus, there were 13,860,000 shares of Common
Stock outstanding, held by 164 holders of record, after giving effect to the
conversion into Common Stock of the outstanding Preferred Stock. All of such
outstanding shares of Common Stock are fully paid and nonassessable. Each
share of Common Stock has an equal and ratable right to receive dividends
when, as and if declared by the Board of Directors of the Company out of
assets legally available therefor and subject to the dividend obligations of
the Company to the holders of any Preferred Stock or Class A Preferred Stock
then outstanding. The Company's present credit agreement prohibits the payment
of dividends on Common Stock. See "Dividend Policy."
In the event of a liquidation, dissolution or winding up of the Company, the
holders of Common Stock are entitled to share equally and ratably in the
assets available for distribution after payment of all liabilities, subject to
any prior rights of any holders of Preferred Stock or Class A Preferred Stock
that at the time may be outstanding.
The holders of Common Stock have no preemptive, subscription, conversion or
redemption rights, and are not subject to further calls or assessments of the
Company. There are no sinking fund provisions applicable to the Common Stock.
Each share of Common Stock is entitled to one vote in the election of
directors and on all other matters submitted to a vote of stockholders.
Holders of Common Stock have no right to cumulate their votes in the election
of directors.
PREFERRED STOCK
Prior to the Offering, there were outstanding 362,000 shares of Preferred
Stock. Prior to the effectiveness of the Registration Statement of which this
Prospectus is a part, the outstanding shares of Preferred Stock will be
converted into 10,860,000 shares of Common Stock. The shares of Preferred
Stock, upon conversion, will become authorized but unissued shares of
Preferred Stock. Due to the terms of such Preferred Stock, as set forth in the
Company's Charter, the Company does not intend to issue any shares of
Preferred Stock in the future.
CLASS A PREFERRED STOCK
Prior to the Offering, there were no outstanding shares of Class A Preferred
Stock. Class A Preferred Stock may be issued from time to time in one or more
series, and the Board of Directors, without further approval of the
stockholders, is authorized to fix the dividend rates and terms, conversion
rights, voting rights, redemption rights and terms, liquidation preferences,
sinking fund and any other rights, preferences, privileges and restrictions
applicable to each series of Class A Preferred Stock. The purpose of
authorizing the Board of Directors to determine such rights, preferences,
privileges and restrictions is to eliminate delays associated with a
stockholder vote on specific issuances. The issuance of Class A Preferred
Stock, while providing flexibility in connection with possible acquisitions
and other corporate purposes, could in certain instances decrease the amount
of earnings and assets available for distribution to holders of Common Stock
and adversely affect the rights and powers, including voting rights, of such
holders, and may have the effect of delaying, deferring or preventing a change
in control of the Company. For example, the Board of Directors, with its broad
power to establish the rights and preferences of authorized but unissued Class
A Preferred Stock, could issue one or more series of Class A Preferred Stock
entitling holders to vote separately as a class on any proposed merger or
consolidation, to convert Class A Preferred Stock into a larger number of
shares of Common Stock or other securities, to demand redemption at a
53
<PAGE>
specified price under prescribed circumstances related to a change in control,
or to exercise other rights designed to impede a takeover.
POSSIBLE ANTI-TAKEOVER PROVISIONS
The Company's Charter and Restated By-laws contain certain provisions that
might be characterized as anti-takeover provisions. Such provisions may render
more difficult certain possible proposals to acquire control of the Company
and make removal of management of the Company more difficult.
The Company's Charter provides for the Board of Directors to be divided into
three classes of directors serving staggered three-year terms, with the number
of directors in the three classes to be as nearly equal as possible. Any
director of the Company may be removed from office but only for cause and only
by the affirmative vote of a majority of the then outstanding shares of stock
entitled to vote on the matter. Any stockholder wishing to submit a nomination
to the Board of Directors must follow certain procedures outlined in the
Company's Charter. Any proposal to amend or repeal the provisions of the
Company's Charter relating to the matters contained above in this paragraph
requires the affirmative vote of the holders of 75 percent or more of the
outstanding shares of stock entitled to vote on the matter. Under the
Company's Restated By-laws, stockholder action taken without a meeting may be
taken only by unanimous written consent of the stockholders.
As described above, the Company's Charter authorizes a class of undesignated
Class A Preferred Stock consisting of 1,000,000 shares. Class A Preferred
Stock may be issued from time to time in one or more series, and the Board of
Directors, without further approval of the stockholders, is authorized to fix
the rights, preferences, privileges and restrictions applicable to each series
of Class A Preferred Stock. The purpose of authorizing the Board of Directors
to determine such rights, preferences, privileges and restrictions is to
eliminate delays associated with a stockholder vote on specific issuances. The
issuance of Class A Preferred Stock, while providing flexibility in connection
with possible acquisitions and other corporate purposes, could, among other
things, adversely affect the voting power of the holders of Common Stock and,
under certain circumstances, make it more difficult for a third party to gain
control of the Company.
REGISTRATION RIGHTS
Pursuant to a Registration Rights Agreement dated April 9, 1992 (the
"Registration Rights Agreement"), certain holders of Common Stock and
Preferred Stock convertible into Common Stock are entitled to certain rights
with respect to the registration of certain of their shares of Common Stock
under the Securities Act. Parties to the Registration Rights Agreement include
Heerema, the Yorktown and Concord Investors and certain officers, directors
and other stockholders of the Company. A total of 12,054,240 shares of Common
Stock are covered by the Registration Rights Agreement, including the
6,000,000 shares being sold in the Offering.
The Registration Rights Agreement provides that (a) after March 31, 1996,
the holders of 10 percent or more of the shares of registrable securities
under the Registration Rights Agreement have the right to request the Company
to register under the Securities Act shares of Common Stock held by them in an
initial public offering; (b) following such initial public offering such
holders have the right to request the Company to make up to four additional
registrations under the Securities Act of Common Stock held by such parties;
and (c) if the Company proposes to register any Common Stock under the
Securities Act pursuant to a form which may be utilized for the registration
of Common Stock held by parties to the Registration Rights Agreement, such
parties have the right to request the Company to include in such registration
the Common Stock held by such parties. Apart from the shares of Common Stock
being sold by the Selling Stockholders in the Offering, parties to the
Registration Rights Agreement have waived all rights to require the Company to
register their shares of Common Stock concurrently with the registration
54
<PAGE>
of shares in the Offering. Such parties have also waived all rights to demand
the registration of Common Stock until 180 days after the date of this
Prospectus.
Under most circumstances, the Company has agreed to pay substantially all
expenses incident to its performance of or compliance with the Registration
Rights Agreement in connection with certain registration statements effected
pursuant to the Registration Rights Agreement. The underwriters have the
right, subject to certain limitations, to limit the number of shares included
in such registrations. The Company has agreed to indemnify the holders of
Common Stock to be registered pursuant to the Registration Rights Agreement.
LISTING
Application will be made to list the Common Stock on the New York Stock
Exchange.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock is .
SHARES ELIGIBLE FOR FUTURE SALE
Prior to the Offering, there has been no public market for the Common Stock.
Future sales of substantial amounts of Common Stock could adversely affect
market prices prevailing from time to time. Sales of substantial amounts of
Common Stock in the public market after the lapse of existing resale
restrictions could adversely affect the prevailing market price and the
ability of the Company to raise equity capital in the future.
Upon completion of the Offering, the Company will have 13,860,000 shares of
Common Stock outstanding. Of these shares, the 6,000,000 shares sold in the
Offering will be freely tradeable without restriction or further registration
under the Securities Act except for any shares purchased by an "affiliate" (as
that term is defined under the Securities Act) of the Company, which will be
subject to the resale limitations of Rule 144 promulgated under the Securities
Act ("Rule 144").
The remaining shares held by officers, directors, employees, consultants and
other stockholders of the Company are either "restricted securities," within
the meaning of Rule 144, or shares which were issued under Regulation S under
the Securities Act. In either case such shares may be publicly sold only if
registered under the Securities Act or sold in accordance with an applicable
exemption from registration, such as Rule 144 or Section 4(1) of the
Securities Act. Certain of these shares are also subject to agreements
prohibiting resale before certain dates. See "Underwriting." Beginning 180
days after the date of this Prospectus, upon the expiration of agreements not
to sell such shares, shares will become eligible for sale, subject, in
some cases, to compliance with Rule 144 and/or Rule 701.
In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned restricted securities
for at least two years, or who is an "affiliate" (as defined in Rule 144), is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of: (a) one percent of the then outstanding shares of
the Common Stock (138,600 shares immediately after the Offering), or (b) an
amount equal to the average weekly reported volume of trading in such shares
during the four calendar weeks preceding such sale. Sales under Rule 144 are
also subject to certain manner of sale limitations, notice requirements and
the availability of current public information about the Company. A person (or
persons whose shares are aggregated) who is not deemed an "affiliate" of the
Company and who has beneficially owned restricted securities for at least
three years is entitled to sell such
55
<PAGE>
shares under Rule 144 without regard to these volume or other limitations.
Restricted securities properly sold in reliance on Rule 144 are thereafter
freely tradeable without restrictions or registration under the Securities
Act, unless thereafter held by an affiliate of the Company.
Any employee, officer or director of or consultant to the Company who
purchased his or her shares pursuant to a written compensatory plan or
contract is entitled to rely on the resale provisions of Rule 701, which
permits nonaffiliates to sell their Rule 701 shares without having to comply
with the public-information, holding-period, volume-limitation or notice
provisions of Rule 144 and permits affiliates to sell their Rule 701 shares
without having to comply with Rule 144's holding-period restrictions, in each
case commencing 90 days after the closing of the Offering.
The Company intends to file a registration statement on Form S-8 under the
Securities Act to register shares of Common Stock reserved for issuance under
the 1996 Stock Plan and the Director Plan, thus permitting the resale of such
shares by nonaffiliates in the public market without restriction under the
Securities Act. Such registration statement is expected to become effective
soon after the date of this Prospectus.
Upon completion of the Offering, the holders of 6,054,240 shares of Common
Stock, in the aggregate, will have certain rights to have such shares
registered under the Securities Act. See "Description of Capital Stock--
Registration Rights."
CERTAIN INCOME TAX CONSIDERATIONS
GENERAL
The following is a summary of certain U.S. federal and Panamanian income tax
matters that may be relevant with respect to the acquisition, ownership and
disposition of shares of Common Stock. This summary does not purport to be a
complete analysis or listing of all the potential tax consequences of holding
Common Stock, nor does it purport to furnish information in the level of
detail or with attention to an investor's specific tax circumstances that
would be provided by an investor's own tax advisor. Accordingly, prospective
purchasers of Common Stock should consult their own tax advisors as to the
United States, Panamanian or other state, local or foreign tax consequences to
them of the acquisition, ownership and disposition of Common Stock.
UNITED STATES TAXES
This summary describes the principal United States federal income tax
consequences of the acquisition, ownership and disposition of shares of Common
Stock, but it does not purport to be a comprehensive description of all of the
tax considerations that may be relevant to a decision to acquire shares of
Common Stock. This summary applies only to holders that purchase Common Stock
in connection with the Offering and that will hold Common Stock as capital
assets. This summary does not address special classes of holders, such as a
broker-dealer, an insurance company, a tax-exempt organization, a financial
institution, an investor who holds Common Stock as part of a hedging or
conversion transaction, a holder whose "functional currency" is not the U.S.
dollar or a holder that owns (directly, indirectly or through attribution) 10%
or more of the voting shares of the Company. This summary also does not
consider the tax treatment of persons who will hold Common Stock through a
partnership or other pass-through entity.
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), judicial decisions, administrative pronouncements, and existing,
temporary and proposed Treasury regulations as in effect on the date of this
Prospectus, any of which are subject to change (possibly on a retroactive
basis) and to differing interpretations. Prospective purchasers of shares of
Common Stock should consult their own tax advisors as to the United States or
other tax consequences of the purchase, ownership and disposition of the
Common Stock in their particular circumstances, including the effect of any
state or local tax laws.
56
<PAGE>
As used herein, the term "U.S. Holder" refers to a holder of shares of
Common Stock that is, for United States federal income tax purposes, (a) a
citizen or resident of the United States, (b) a corporation, partnership or
other entity organized or created in or under the laws of the United States or
any political subdivision thereof, or (c) otherwise subject to United States
federal income taxation with respect to the Common Stock (including a non-
resident alien individual or foreign corporation that holds, or is deemed to
hold, any share of Common Stock in connection with the conduct of a U.S. trade
or business).
Taxation of Distributions. To the extent paid out of current or accumulated
earnings and profits of the Company as determined under United States federal
income tax principles ("earnings and profits"), distributions (including any
withholding tax thereon) made with respect to shares of Common Stock (other
than certain distributions of capital stock of the Company or rights to
subscribe for shares of capital stock of the Company) will be includable in
income of a U.S. Holder as ordinary dividend income on the date such
distribution is received by the U.S. Holder. To the extent that a distribution
exceeds the Company's earnings and profits, it will be treated as a nontaxable
return of capital to the extent of the U.S. Holder's tax basis in the shares
of Common Stock and will reduce the U.S. Holder's tax basis in such shares,
but not below zero, and thereafter as a taxable capital gain. See "--United
States Taxes--Taxation of Capital Gains." The amount of the distribution will
equal the dollar value of the distribution received by the U.S. Holder, plus
the dollar value of any Panamanian taxes withheld from such distribution.
The Company does not expect to pay dividends for the foreseeable future.
Nonetheless, any distributions made with respect to the shares of Common Stock
out of earnings and profits generally will be treated as dividend income from
sources outside the United States. U.S. Holders that are corporations will not
be entitled to the "dividends received deduction" under Section 243 of the
Code with respect to such dividends. Distributions of dividend income made
with respect to the shares of Common Stock generally will be treated as
"passive" income or, in the case of certain U.S. Holders, "financial services
income," for purposes of computing a U.S. Holder's U.S. foreign tax credit.
Alternatively, a U.S. Holder may elect to claim a U.S. tax deduction for any
Panamanian tax withheld, but only for a year in which the U.S. Holder elects
to do so with respect to all foreign income taxes. In addition, a noncorporate
U.S. Holder may not elect to deduct Panamanian taxes if such U.S. Holder does
not itemize deductions.
A holder of shares of Common Stock that is not a U.S. Holder (a "non-U.S.
Holder") generally will not be subject to United States federal income tax or
withholding tax on distributions received on shares of Common Stock that are
treated as dividend income for U.S. federal income tax purposes. A non-U.S.
Holder generally will not be subject to United States federal income tax or
withholding tax on distributions received on shares of Common Stock that are
treated as capital gains for United States federal income tax purposes, unless
such non-U.S. Holder would be subject to United States federal income tax on
gain realized on the sale of shares of Common Stock, as discussed below.
Taxation of Capital Gain. Gain or loss realized by a U.S. Holder on the sale
or other disposition of shares of Common Stock will be subject to United
States federal income tax as capital gain or loss in an amount equal to the
difference between the U.S. Holder's tax basis in the shares of Common Stock
and the amount realized on the disposition. Such gain or loss will be long
term if the Common Stock has been held for more than one year. Gain realized
by a U.S. Holder on the sale or other disposition of shares of Common Stock
generally will not be treated as foreign source income for U.S. foreign tax
credit purposes, unless the gain is attributable to an office or fixed place
of business maintained by the U.S. Holder outside the United States or is
recognized by an individual whose tax home is outside the United States, and
certain other conditions are met. The source of a loss attributable to the
taxable sale or other taxable disposition of Common Stock is uncertain at the
present time. Therefore, holders are encouraged to consult their tax advisors
regarding the proper treatment of such losses. For United States federal
income tax purposes, capital losses are subject to limitations on
deductibility. As a general rule, U.S. Holders that are corporations can use
capital losses for a taxable year only to offset capital gains in that year. A
corporation may be entitled to carry back unused capital losses to the three
preceding tax years and to carry over losses
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<PAGE>
to the five following tax years. In the case of noncorporate U.S. Holders,
capital losses in a taxable year are deductible to the extent of any capital
gains plus ordinary income of up to $3,000. Unused capital losses of
noncorporate U.S. Holders may be carried over indefinitely.
A non-U.S. Holder of shares of Common Stock will not be subject to United
States federal income tax or withholding tax on gain realized on the sale or
other disposition of the shares of Common Stock unless such holder is an
individual who is present in the United States for 183 days or more in the
taxable year of the sale, and certain other conditions are met.
Information Reporting and Backup Withholding. Except as discussed below with
respect to backup withholding, dividends paid by the Company will not be
subject to U.S. withholding tax.
Information reporting to the U.S. Internal Revenue Service by paying agents
and custodians located in the United States will generally be required with
respect to payments to U.S. Holders of dividends on, and proceeds of sales of,
Common Stock. A U.S. Holder of Common Stock may be subject to backup
withholding at the rate of 31% with respect to dividends on, and proceeds of
sales of, Common Stock paid by such paying agents or custodians to such holder
unless the holder (i) is a corporation or comes within certain other exempt
categories and, when required, demonstrates this fact, or (ii) provides a
taxpayer identification number, certifies as to no loss of exemption from
backup withholding, and otherwise complies with applicable requirements of the
backup withholding rules. Any amounts withheld under the backup withholding
tax rules from a payment to a U.S. Holder will be allowed as a refund or a
credit against such holder's U.S. federal income tax, provided that the
required information is furnished to the U.S. Internal Revenue Service.
Dividends paid on shares of Common Stock to a holder that is not a U.S.
Holder are generally exempt from information reporting and backup withholding
under current law; however, such a holder should provide a properly completed
Form W-8 to secure such exemption.
There is no income tax treaty between Panama and the United States.
PANAMANIAN TAXES
The following summary of certain Panamanian tax matters is based upon the
tax laws of Panama and regulations thereunder, in effect as of the date of
this Prospectus and is subject to any subsequent change in Panamanian laws and
regulations which may come into effect after such date. The principal
Panamanian tax consequences of ownership of shares of Common Stock are as
follows.
General. Panama's income tax is exclusively territorial. Only income
actually derived from sources within Panama is subject to taxation. Income
derived by Panama or foreign corporations or individuals from off-shore
operations is not taxable. The territorial principle of taxation has been in
force throughout the history of the country and is supported by legislation,
administrative regulations and court decisions. The Company has not been in
the past and does not in the future expect to be subject to income taxes in
Panama because all of its income has arisen from activities conducted entirely
outside Panama. This is the case even though the Company maintains its
registered office in Panama.
Taxation of Distributions and Capital Gains. There will be no Panamanian
taxes on distribution of dividends or capital gains realized by an individual
or corporation, regardless of its nationality or residency, on the sale or
other disposition of shares of Common Stock so long as the Company's assets
are held and activities are conducted entirely outside of Panama.
58
<PAGE>
UNDERWRITING
The names of the Underwriters of the shares of Common Stock offered hereby
and the aggregate number of shares which each has severally agreed to purchase
from the Selling Stockholders, subject to the terms and conditions specified
in the Underwriting Agreement, are as follows:
<TABLE>
<CAPTION>
NUMBER
UNDERWRITERS OF SHARES
------------ ---------
<S> <C>
Dillon, Read & Co. Inc...........................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................
---------
Total.......................................................... 6,000,000
=========
</TABLE>
The Managing Underwriters are Dillon Read and Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("Merrill Lynch"). As of the date of this Prospectus,
certain private investment partnerships managed by Dillon Read, and persons
related to Dillon Read, owned 4,223,040 shares of Common Stock of the Company
in the aggregate. Bryan H. Lawrence, a Managing Director of Dillon Read, and
Peter A. Leidel, a Senior Vice President of Dillon Read, have been members of
the Board of Directors of the Company since April 1992.
If any shares of Common Stock offered hereby are purchased by the
Underwriters, all such shares will be so purchased. The Underwriting Agreement
contains certain provisions whereby, if any Underwriter defaults in its
obligation to purchase such shares, and the aggregate obligations of the
Underwriters so defaulting do not exceed 10 percent of the shares offered
hereby, the remaining Underwriters, or some of them, must assume such
obligations.
The shares of Common Stock offered hereby are being initially offered
severally by the Underwriters for sale at the price set forth on the cover
page hereof, or at such price less a concession not to exceed per share on
sales to certain dealers. The Underwriters may allow, and such dealers may
reallow, a
59
<PAGE>
concession not to exceed per share on sales to certain other dealers. The
offering of the shares of Common Stock is made for delivery when, as, and if
accepted by the Underwriters and subject to prior sale and to withdrawal,
cancellation or modification of the offer without notice. The Underwriters
reserve the right to reject any order for the purchase of the shares. After
the initial public offering, the public offering price, the concession and the
reallowance may be changed by the Managing Underwriters.
If the Underwriters exercise the over-allotment option referred to on the
cover page of this Prospectus to purchase from the Company up to an additional
900,000 shares of Common Stock, each of the Underwriters will be obligated,
subject to certain conditions, to purchase the number of additional shares of
Common Stock proportionate to such underwriter's initial commitment. The
Underwriters may exercise such option on or before the thirtieth day from the
date of the Underwriting Agreement and only to cover over-allotments made of
the shares in connection with the Offering.
Prior to the Offering, there has been no public market for the Common Stock.
In determining the initial public offering price, consideration was given,
among other things to (a) the market values of certain publicly-traded common
stocks of similar companies in relation to their book values, revenues,
earnings and cash flows; (b) the book value, revenues, earnings, cash flow and
operating history of the Company; (c) the current financial position of the
Company; (d) the experience of the Company's management; (e) the position of
the Company in its industry; and (f) the Company's prospects. Consideration
was also given to the general status of the securities market, the demand for
similar securities of comparable companies and other relevant factors.
The Company and certain stockholders of the Company prior to the Offering
have agreed not to sell, contract to sell, grant any option to sell, or
otherwise dispose of, directly or indirectly, any shares of Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock or
warrants or other rights to purchase Common Stock or permit the registration
of Common Stock, for a period of 180 days after the date of this Prospectus,
without the prior written consent of Dillon Read, except that the Company may,
without such consent, (a) grant options or issue Common Stock upon the
exercise of outstanding options pursuant to any of the Company's stock plans,
and (b) register the Common Stock and sell such shares pursuant to the
Offering.
Under the Rules of Fair Practice of the National Association of Securities
Dealers, Inc. (the "NASD"), when more than 10 percent of the net proceeds of a
public offering of equity securities, not including underwriting compensation,
are to be paid to a member of the NASD participating in such public offering
of equity securities or an affiliate of such member, the price at which the
equity securities are distributed to the public must be no lower than that
recommended by a "qualified independent underwriter" meeting certain
standards. Dillon Read is a member of the NASD and under NASD regulations
Yorktown, Concord II and Concord Japan are deemed to be its affiliates.
Yorktown, Concord II and Concord Japan are all Selling Stockholders in the
Offering and as a result will receive, in the aggregate, more than 10 percent
of the net proceeds from the Offering. As a result, the Offering is being made
in compliance with paragraph (8) of Section 44(c) of The Corporate Financing
Rule of the NASD which relates to offerings where proceeds are directed to a
member of the NASD. Merrill Lynch will act as the qualified independent
underwriter in connection with the Offering and assume the customary
responsibilities of acting as a qualified independent underwriter in pricing
and conducting due diligence for the Offering.
The Company and the Selling Stockholders have agreed in the Underwriting
Agreement to indemnify the Underwriters and Merrill Lynch, as the qualified
independent underwriter, against certain liabilities, including liabilities
under the Securities Act, or to contribute to payments that the Underwriters
or Merrill Lynch, as the qualified independent underwriter, may be required to
make in respect thereof.
The Underwriters do not intend to confirm sales to accounts over which they
exercise discretionary authority.
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<PAGE>
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered by this
Prospectus will be passed upon for the Company by Arias, Fabrega & Fabrega,
Panama, Republic of Panama. Certain other legal matters in connection with the
sale of the Common Stock offered hereby will be passed upon for the Company by
Conner & Winters, A Professional Corporation, Tulsa, Oklahoma, U.S.A. Certain
legal matters in connection with the sale of the Common Stock offered hereby
will be passed upon for the Underwriters by Cahill Gordon & Reindel, a
partnership including a professional corporation, New York, New York, U.S.A.
EXPERTS
The consolidated financial statements and financial statement schedule of
the Company as of December 31, 1994 and 1995, and for each of the years in the
three-year period ended December 31, 1995, included herein and elsewhere in
the Registration Statement of which this Prospectus is a part have been
included herein and in such Registration Statement in reliance upon the
reports of KPMG Peat Marwick, independent certified public accountants,
appearing elsewhere herein and in such Registration Statement, and upon the
authority of said firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission a
Registration Statement on Form S-1 (the "Registration Statement") under the
Securities Act with respect to the Common Stock offered hereby. This
Prospectus, which is part of the Registration Statement, does not contain all
of the information set forth in the Registration Statement and the exhibits
and schedules filed therewith. For further information with respect to the
Company and the Common Stock offered hereby, reference is hereby made to the
Registration Statement and the exhibits and schedules filed therewith.
Statements contained in this Prospectus regarding the contents of any contract
or any other document are not necessarily complete and, in each instance,
reference is hereby made to the copy of such contract or document filed as an
exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference. The Registration Statement, including the
exhibits and schedules thereto, may be inspected without charge at the
principal office of the Securities and Exchange Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, and copies of all or any part thereof may be
obtained at prescribed rates from the Securities and Exchange Commission's
Public Reference Section at the same address.
The Company intends to furnish its stockholders with annual reports
containing audited consolidated financial statements and quarterly reports for
the first three quarters of each fiscal year containing unaudited interim
financial information.
ENFORCEABILITY OF CIVIL LIABILITIES
UNDER THE FEDERAL SECURITIES LAWS
The Company is a corporation organized under the laws of the Republic of
Panama. In addition, certain of the directors of the Company are residents of
countries other than the United States and the independent certified public
accountants of the Company are located outside of the United States.
Accordingly, it may not be possible to effect service of process on such
persons in the United States and to enforce judgments against such persons
predicated on the civil liability provisions of the federal securities laws of
the United States. Because a substantial amount of the assets of the Company
is located outside the United States, any judgment obtained in the United
States against the Company may not be fully collectible in the United States.
The Company has been advised by its counsel in the Republic of Panama, Arias,
Fabrega & Fabrega, that courts in the Republic of Panama will enforce foreign
judgments for liquidated amounts in civil matters, subject to certain
conditions and exceptions. WGI's registered agent for service of process in
the United States is CT Corporation System, 1633 Broadway, New York, New York
10019.
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<PAGE>
WILLBROS GROUP, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report.............................................. F-2
Consolidated Balance Sheets--December 31, 1994 and 1995 and March 31, 1996
(unaudited).............................................................. F-3
Consolidated Statements of Income--Years ended December 31, 1993, 1994 and
1995 and for the three months ended March 31, 1995 and 1996 (unaudited).. F-4
Consolidated Statements of Stockholders' Equity--Years ended December 31,
1993, 1994 and 1995 and for the three months ended March 31, 1996
(unaudited).............................................................. F-5
Consolidated Statements of Cash Flows--Years ended December 31, 1993, 1994
and 1995 and for the three months ended March 31, 1995 and 1996
(unaudited).............................................................. F-6
Notes to Consolidated Financial Statements................................ F-7
</TABLE>
F-1
<PAGE>
When the conversion of the Preferred Stock described in Note 15 in the
accompanying consolidated financial statements has been consummated, we will
be in a position to render the following report.
KPMG Peat Marwick
INDEPENDENT AUDITORS' REPORT
The Stockholders and Board of Directors
Willbros Group, Inc.:
We have audited the accompanying consolidated balance sheets of Willbros
Group, Inc. and subsidiaries (the "Company") as of December 31, 1994 and 1995
and the related consolidated statements of income, stockholders' equity, and
cash flows for each of the years in the three-year period ended December 31,
1995. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the aforementioned consolidated financial statements present
fairly, in all material respects, the financial position of Willbros Group,
Inc. and subsidiaries as of December 31, 1994 and 1995 and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 1995, in conformity with generally accepted
accounting principles in the United States.
Panama City, Panama
January 31, 1996, except as to Note 15,
which is as of , 1996.
F-2
<PAGE>
WILLBROS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- MARCH 31,
1994 1995 1996
--------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................. $ 49,142 $ 19,859 $ 22,288
Accounts receivable........................ 31,729 65,652 60,393
Contract cost and recognized income not yet
billed.................................... 718 11,515 8,359
Prepaid expenses........................... 2,275 1,992 2,728
--------- --------- ---------
Total current assets..................... 83,864 99,018 93,768
Spare parts, net............................. 4,212 4,615 4,630
Property, plant and equipment, net........... 41,948 44,318 43,089
Other assets................................. 1,164 2,003 2,225
--------- --------- ---------
Total assets............................. $ 131,188 $ 149,954 $ 143,712
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to banks..................... $ 5,828 $ 3,119 $ 2,574
Accounts payable and accrued liabilities... 32,085 41,015 33,569
Accrued income taxes....................... 6,459 4,918 4,358
Contract billings in excess of cost and
recognized income......................... 11,102 11,199 12,290
--------- --------- ---------
Total current liabilities................ 55,474 60,251 52,791
Deferred income taxes........................ 2,334 1,358 1,358
Other liabilities............................ 4,410 4,954 5,140
--------- --------- ---------
Total liabilities........................ 62,218 66,563 59,289
Stockholders' equity:
Class A Preferred Stock, par value $.01 per
share, 1,000,000 shares authorized, none
issued.................................... -- -- --
Common stock, par value $.05 per share,
35,000,000 shares authorized and
13,860,000 issued at March 31, 1996 and
December 31, 1995 (13,707,000 at December
31, 1994)................................. 685 693 693
Capital in excess of par value............. 40,453 41,224 41,224
Cumulative foreign currency translation
adjustment................................ (776) (784) (784)
Retained earnings.......................... 31,326 45,120 46,440
Notes receivable for stock purchases....... (2,395) (2,377) (2,363)
Treasury stock at cost, 123,000 shares at
March 31, 1996 and 78,000 shares at
December 31, 1995 (60,000 at December 31,
1994)..................................... (323) (485) (787)
--------- --------- ---------
Total stockholders' equity............... 68,970 83,391 84,423
--------- --------- ---------
Total liabilities and stockholders'
equity.................................. $ 131,188 $ 149,954 $ 143,712
========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE>
WILLBROS GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
---------------------------------- ----------------------
1993 1994 1995 1995 1996
---------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Contract revenues....... $210,011 $145,716 $220,506 $36,001 $53,479
Operating expenses:
Contract.............. 147,991 98,700 161,584 25,594 41,204
Depreciation and amor-
tization............. 16,672 14,598 15,193 3,634 3,190
General and adminis-
trative.............. 24,267 24,695 28,184 6,232 6,698
---------- ---------- ---------- ---------- ----------
188,930 137,993 204,961 35,460 51,092
---------- ---------- ---------- ---------- ----------
Operating income.... 21,081 7,723 15,545 541 2,387
Other income (expense):
Foreign exchange gain
(loss)............... 4,631 42 (331) (21) 244
Interest income....... 1,047 2,205 1,863 595 214
Minority interest..... (3,615) (1,758) (1,589) (238) (490)
Interest expense...... (1,832) (1,370) (1,719) (433) (354)
Other--net............ 936 71 (50) 138 326
---------- ---------- ---------- ---------- ----------
1,167 (810) (1,826) 41 (60)
---------- ---------- ---------- ---------- ----------
Income before income
taxes.............. 22,248 6,913 13,719 582 2,327
Provision (credit) for
income taxes........... 8,405 (4,146) (75) 465 283
---------- ---------- ---------- ---------- ----------
Net income.......... $ 13,843 $ 11,059 $ 13,794 $ 117 $ 2,044
========== ========== ========== ========== ==========
Net income per common
and common equivalent
share.................. $ 1.00 $ .79 $ .97 $ .01 $ .09
========== ========== ========== ========== ==========
Weighted average number
of common and common
equivalent shares
outstanding............ 13,872,691 13,981,201 14,215,181 14,241,181 14,148,181
========== ========== ========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
WILLBROS GROUP, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
CUMULATIVE NOTES
CAPITAL FOREIGN RECEIVABLE TOTAL
COMMON STOCK IN EXCESS CURRENCY FOR STOCK-
-------------------- OF PAR TRANSLATION RETAINED STOCK TREASURY HOLDERS'
SHARES PAR VALUE VALUE ADJUSTMENT EARNINGS PURCHASES STOCK EQUITY
---------- --------- --------- ----------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1,
1993................... 12,900,000 $645 $37,305 $(385) $ 9,198 $(1,742) $ -- $45,021
Net income............. -- -- -- -- 13,843 -- -- 13,843
Exercise of stock
warrants.............. 360,000 18 1,182 -- -- -- -- 1,200
Purchase of treasury
stock................. -- -- -- -- -- -- (88) (88)
Payment of notes
receivable............ -- -- -- -- -- 31 -- 31
Exercise of stock
options............... 75,000 4 309 -- -- (236) 88 165
Translation
adjustments........... -- -- -- (398) -- -- -- (398)
---------- ---- ------- ----- ------- ------- ----- -------
Balance, December 31,
1993................... 13,335,000 667 38,796 (783) 23,041 (1,947) -- 59,774
---------- ---- ------- ----- ------- ------- ----- -------
Net income............. -- -- -- -- 11,059 -- -- 11,059
Purchase of treasury
stock................. -- -- -- -- -- -- (323) (323)
Payment of notes
receivable............ -- -- -- -- -- 648 -- 648
Exercise of stock
options............... 372,000 18 1,657 -- -- (1,096) -- 579
Translation
adjustments........... -- -- -- 7 -- -- -- 7
Deemed dividend........ -- -- -- -- (2,774) -- -- (2,774)
---------- ---- ------- ----- ------- ------- ----- -------
Balance, December 31,
1994................... 13,707,000 685 40,453 (776) 31,326 (2,395) (323) 68,970
---------- ---- ------- ----- ------- ------- ----- -------
Net income............. -- -- -- -- 13,794 -- -- 13,794
Purchase of treasury
stock................. -- -- -- -- -- -- (376) (376)
Payment of notes
receivable............ -- -- -- -- -- 663 -- 663
Exercise of stock
options............... 153,000 8 771 -- -- (645) 214 348
Translation
adjustments........... -- -- -- (8) -- -- -- (8)
---------- ---- ------- ----- ------- ------- ----- -------
Balance, December 31,
1995................... 13,860,000 693 41,224 (784) 45,120 (2,377) (485) 83,391
---------- ---- ------- ----- ------- ------- ----- -------
Net income
(unaudited)........... -- -- -- -- 2,044 -- -- 2,044
Preferred dividends
(unaudited)........... -- -- -- -- (724) -- -- (724)
Purchase of treasury
stock (unaudited)..... -- -- -- -- -- -- (302) (302)
Payment of notes
receivable
(unaudited)........... -- -- -- -- -- 14 -- 14
---------- ---- ------- ----- ------- ------- ----- -------
Balance, March 31, 1996
(unaudited)............ 13,860,000 $693 $41,224 $(784) $46,440 $(2,363) $(787) $84,423
========== ==== ======= ===== ======= ======= ===== =======
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE>
WILLBROS GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
---------------------------- -----------------
1993 1994 1995 1995 1996
-------- -------- -------- -------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income................... $ 13,843 $ 11,059 $ 13,794 $ 117 $ 2,044
Reconciliation of net income
to cash provided by (used
in) operating activities:
Depreciation and
amortization............... 16,672 14,598 15,193 3,634 3,190
Loss (gain) on sales and
retirements................ (871) 394 592 (79) 7
Changes in operating assets
and liabilities:
Accounts receivable........ 9,765 (607) (33,923) (7,523) 5,259
Contract cost and
recognized income not yet
billed.................... (916) 2,308 (10,797) 170 3,156
Prepaid expenses and other
assets.................... 9 (679) (556) (1,548) (958)
Accounts payable and
accrued liabilities....... 3,220 (2,066) 8,930 419 (7,446)
Accrued income taxes....... 4,657 (9,977) (1,541) 119 (560)
Contract billings in excess
of cost and recognized
income.................... 18,934 (19,228) 97 (3,315) 1,091
Deferred income taxes...... 629 (207) (976) -- --
Other liabilities.......... 396 200 544 142 186
-------- -------- -------- -------- -------
Cash provided by (used
in) operating
activities.............. 66,338 (4,205) (8,643) (7,864) 5,969
Cash flows from investing
activities:
Proceeds from sales of
property and equipment...... 1,913 759 388 265 177
Purchase of property and
equipment................... (9,809) (3,703) (13,179) (3,005) (858)
Purchase of spare parts...... (6,725) (3,468) (5,767) (1,220) (1,302)
Purchase of CAMSA, net of
cash received of $663....... -- (6,757) -- -- --
-------- -------- -------- -------- -------
Cash used in investing
activities.............. (14,621) (13,169) (18,558) (3,960) (1,983)
Cash flows from financing
activities:
Proceeds from notes payable.. 4,570 11,211 6,530 1,070 7,843
Proceeds from common stock... 165 579 348 -- --
Collection of notes
receivable for stock
purchases................... 31 648 663 16 14
Proceeds from bank debt...... 5,000 -- -- -- --
Exercise of stock warrants... 1,200 -- -- -- --
Repayment of notes payable... (2,931) (7,952) (9,239) (1,564) (8,388)
Payment of dividends on
preferred stock............. -- -- -- -- (724)
Purchase of treasury stock... (88) (323) (376) (37) (302)
Repayment of stockholders'
debt........................ (10,000) -- -- -- --
Repayment of bank debt....... (6,000) (5,000) -- -- --
-------- -------- -------- -------- -------
Cash used in financing
activities.............. (8,053) (837) (2,074) (515) (1,557)
Effect of exchange rate
changes on cash and cash
equivalents.................. (398) 7 (8) -- --
-------- -------- -------- -------- -------
Cash provided by (used in) all
activities................... 43,266 (18,204) (29,283) (12,339) 2,429
Cash and cash equivalents,
beginning of period.......... 24,080 67,346 49,142 49,142 19,859
-------- -------- -------- -------- -------
Cash and cash equivalents, end
of period.................... $ 67,346 $ 49,142 $ 19,859 $ 36,803 $22,288
======== ======== ======== ======== =======
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation--The consolidated financial statements include
the accounts of Willbros Group, Inc. ("WGI"), a Republic of Panama
corporation, and all majority-owned subsidiaries (the "Company"). WGI is owned
36% by Heerema Holding Construction, Inc. ("Heerema"), 32% by Dillon, Read &
Co. Inc. affiliates, and 32% by Company employees at December 31, 1995. All
material intercompany accounts and transactions are eliminated in
consolidation. The ownership interest of minority participants in subsidiaries
that are not wholly owned (principally in Nigeria and Oman) is not material.
The minority participants' share of the net income of those subsidiaries is
included in other expense.
The consolidated financial statements are prepared in accordance with
generally accepted accounting principles in the United States and include
certain estimates and assumptions that affect the reported amounts of assets
and liabilities, the disclosure of contingent assets and liabilities and the
reported amounts of revenues and expenses. Actual results could differ from
those estimates.
Accounts Receivable--Accounts receivable include retainage, all due within
one year, of $1,828 in 1994 and $2,654 in 1995 and are stated net of
allowances for bad debts of $2,442 in 1994 and $2,992 in 1995.
Spare Parts--Spare parts (excluding expendables), stated net of accumulated
depreciation of $10,270 in 1994 and $10,641 in 1995, are depreciated over
three years on the straight-line method.
Property, Plant and Equipment--Depreciation is provided on the straight-line
method using principally estimated lives of four to six years. When assets are
retired or otherwise disposed of, the cost and related accumulated
depreciation are removed from the accounts and any resulting gain or loss is
recognized in income for the period. Normal repair and maintenance costs are
charged to expense as incurred. Major overhaul costs are accrued and allocated
to contracts based on estimates of equipment condition at the end of the year.
Significant renewals and betterments are capitalized.
Revenues--Construction and engineering fixed-price contracts are accounted
for using the percentage- of-completion method. Under this method, estimated
contract revenues are accrued based generally on the percentage that costs to
date bear to total estimated costs, taking into consideration physical
completion. Estimated contract losses are recognized in full when determined.
Revenues from unit-price contracts are recognized as earned. Revenues from
change orders, extra work, variations in the scope of work and claims are
recognized when realization is assured.
Income Taxes--The Company accounts for income taxes by the asset and
liability method under which deferred tax assets and liabilities are
recognized for the future tax consequences of operating loss and tax credit
carryforwards and differences between the financial carrying value of assets
and liabilities and their tax bases.
Retirement Plans and Benefits--The Company has defined benefit and defined
contribution retirement plans and a postretirement medical benefits plan that
provide retirement benefits to substantially all regular employees. Qualified
plans are contributory on the part of employees. Pension costs are funded in
accordance with annual actuarial valuations. The Company records the cost of
postretirement medical benefits, which are funded on the pay-as-you-go basis,
over the employees' working lives.
F-7
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
Foreign Currency Translation--All significant asset and liability accounts
stated in currencies other than United States dollars are translated into
United States dollars at year-end exchange rates. Translation adjustments are
accumulated in a separate component of stockholders' equity. Revenue and
expense accounts are converted at prevailing rates throughout the year.
Foreign currency transaction adjustments and translation adjustments in highly
inflationary economies are recorded in income.
Cash Flows--In the determination of cash flows, all highly liquid debt
instruments are considered to be cash equivalents. The Company paid interest
of $1,770 in 1993, $1,377 in 1994 and $1,712 in 1995 and income taxes of
$3,117 in 1993, $2,227 in 1994 and $2,426 in 1995.
Income per Share--Primary income per share is calculated by dividing net
income, less any preferred dividend requirements, by the weighted average
number of common share and dilutive share equivalents (options and warrants),
outstanding during the year. Fully diluted income per share is calculated
assuming all shares and dilutive share equivalents are outstanding as of the
beginning of the year. There is no significant difference between primary and
fully diluted income per share. The weighted average number of common share
and share equivalents assumes that all common shares issued in the twelve
months ended May 31, 1996 were outstanding for all periods presented.
Interim Periods (Unaudited)--The accompanying consolidated balance sheet at
March 31, 1996 and the consolidated statements of income and of cash flows for
the three months ended March 31, 1995 and 1996 and the consolidated statement
of stockholders' equity for the three months ended March 31, 1996 are
unaudited. In the opinion of management, these interim period statements have
been prepared on the same basis as the audited financial statements and
include all adjustments, none of which were other than normal recurring
accruals, necessary for the fair presentation of financial position and
results of operations.
2. CONCENTRATION OF CREDIT RISK
The Company has a concentration of customers in the oil and gas industry
which exposes the Company to a concentration of credit risk within an
industry. The Company seeks to obtain advance and progress payments for
contract work performed on major contracts. Receivables are generally not
collateralized. The Company believes that its allowance for bad debts is
adequate.
3. CONTRACTS IN PROGRESS
Most contracts allow for progress billings to be made during performance of
the work. These billings may be made on a basis different from that used for
recognizing revenue. Contracts in progress for which cost and recognized
income exceed billings or billings exceed cost and recognized income consist
of:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------- MARCH 31,
1994 1995 1996
--------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Costs incurred on contracts in progress... $ 97,695 $ 73,928 $ 74,549
Recognized income......................... 35,801 3,359 3,588
--------- -------- --------
133,469 77,287 78,137
Progress billings and advance payments.... 143,880 76,971 82,068
--------- -------- --------
$ (10,384) $ 316 $ (3,931)
========= ======== ========
Contract cost and recognized income not
yet billed............................... $ 718 $ 11,515 $ 8,359
Contract billings in excess of cost and
recognized income........................ (11,102) (11,199) (12,290)
--------- -------- --------
$ (10,384) $ 316 $ (3,931)
========= ======== ========
</TABLE>
F-8
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, at cost, consist of:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------- MARCH 31,
1994 1995 1996
-------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Construction equipment....................... $ 30,124 $ 33,346 $ 33,370
Marine equipment............................. 17,899 23,100 23,448
Transportation equipment..................... 12,781 15,208 15,193
Land, buildings, furniture and equipment..... 8,290 8,677 8,891
-------- -------- --------
69,094 80,331 80,902
Less accumulated depreciation and amortiza-
tion........................................ 27,146 36,013 37,813
-------- -------- --------
$ 41,948 $ 44,318 $ 43,089
======== ======== ========
</TABLE>
5. NOTES PAYABLE TO BANKS
The Company has unsecured credit facilities in certain countries outside the
United States. Borrowings under these lines, in the form of short-term notes
and overdrafts, are made at competitive interest rates. Generally, each line
is available only for borrowings related to operations in a specific country.
Credit available under these facilities is approximately $10,200 at December
31, 1995 and $1,700 (unaudited) at March 31, 1996.
6. LINE OF CREDIT
The Company has a $100,000 credit agreement with a bank consortium which
provides for revolving loans and letters of credit. The aggregate of all
loans, together with all commercial and financial letters of credit issued
under the agreement, may not exceed the Company's tangible net worth. The
agreement limits the Company's ability to purchase its own stock, acquire
other companies and borrow outside the agreement, requires the Company to
maintain certain financial ratios and restricts dividend payments on common
stock. Principal is payable at termination (October 31, 1997) and interest is
payable quarterly at prime or, at the Company's option, other alternative
interest rates. The annual commitment fee is 3/8% on the unused portion of the
line. The agreement is secured by the stock of the principal subsidiaries of
the Company. There were no borrowings and outstanding letters of credit
totaled $35,178, of which $9,798 were commercial or financial, at December 31,
1995, and $28,068 (unaudited) at March 31, 1996 leaving amounts fully
available under the line of $64,822 at December 31, 1995 and $71,932
(unaudited) at March 31, 1996.
7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities consist of:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------- MARCH 31,
1994 1995 1996
-------- -------- ----------- ---
(UNAUDITED)
<S> <C> <C> <C> <C>
Trade payables........................... $ 18,090 $ 23,826 $ 18,860
Payrolls and payroll liabilities......... 8,701 13,452 11,204
Equipment reconditioning and overhaul re-
serves.................................. 5,294 3,737 3,505
-------- -------- --------
$ 32,085 $ 41,015 $ 33,569
======== ======== ========
</TABLE>
F-9
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
8. RETIREMENT PLANS
The Company has defined benefit plans (pension plans) covering substantially
all regular employees which are funded by employee and Company contributions.
The Company's funding policy is to contribute at least the minimum required by
the Employee Retirement Income Security Act of 1974 in accordance with annual
actuarial valuations. Benefits under the plans are determined by employee
earnings and credited service. Pension expense includes the following
components:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Service cost for benefits earned during the
period...................................... $ 1,081 $ 1,206 $ 915
Interest cost on projected benefit
obligation.................................. 1,391 1,447 1,608
Actual loss (gain) on plan assets............ (1,533) 550 (4,855)
Deferred gain (loss) on plan assets.......... 111 (2,169) 3,285
Amortization................................. 28 22 --
-------- -------- --------
$ 1,078 $ 1,056 $ 953
======== ======== ========
Accrued pension liability includes the following components:
<CAPTION>
DECEMBER 31,
----------------------------
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Projected benefit obligation over plan
assets:
Projected benefit obligation:
Vested benefits.......................... $ 15,268 $ 16,478 $ 20,477
Nonvested benefits....................... 882 510 505
-------- -------- --------
Accumulated benefits..................... 16,150 16,988 20,982
Related to future pay increases.......... 5,828 3,561 4,180
-------- -------- --------
21,978 20,549 25,162
Plan assets at fair value (primarily listed
stocks and bonds)......................... (18,753) (18,595) (23,660)
-------- -------- --------
3,225 1,954 1,502
Unrecognized net gain (loss)................. (2,619) (1,124) (499)
Unrecognized prior service cost.............. (313) (282) (253)
Transition asset at January 1, 1987.......... 229 201 172
-------- -------- --------
$ 522 $ 749 $ 922
======== ======== ========
</TABLE>
The projected benefit obligation is determined using a weighted average
discount rate of 7.0 percent at December 31, 1993, 8.0 percent at December 31,
1994 and 7.0 percent at December 31, 1995 and a rate of increase in future pay
increases of 6.5 percent at December 31, 1993, 6.0 percent at December 31,
1994 and 6.0 percent at December 31, 1995. The assets are expected to have a
long-term rate of return of 8.5 percent. The transition asset is amortized
over 15 years.
The Company has a defined contribution plan which is funded by participating
employee contributions and the Company. The Company matches employee
contributions up to a maximum of 5% of salary. Company contributions for this
plan were $556 in 1993, $487 in 1994 and $506 in 1995.
F-10
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
8. RETIREMENT PLANS--(CONTINUED)
Effective January 1, 1994, the Company established an Executive Benefit
Restoration Plan. The Plan partially restores benefits to certain executives
whose benefits under the defined benefit pension plans are reduced as a result
of limitations imposed by the Internal Revenue Code. Plan expense is $285 in
1994 and $303 in 1995 and plan liability, included in accounts payable and
accrued liabilities, is $285 at December 31, 1994 and $909 at December 31,
1995. The Company established a trust to fund benefit payments. Contributions
of assets to the trust by the Company are irrevocable but are subject to
creditor claims under certain conditions. Assets held in trust, included in
other assets, are $315 at December 31, 1994 and $605 at December 31, 1995.
9. POSTRETIREMENT MEDICAL BENEFITS
Postretirement medical benefit expense is $647 in 1993, $615 in 1994 and
$690 in 1995 and includes service cost of $322 in 1993, $269 in 1994 and $262
in 1995 and interest cost of $325 in 1993, $315 in 1994 and $405 in 1995 and
amortization of $31 in 1994 and $23 in 1995.
Accrued postretirement medical benefit liability includes the following
components:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1994 1995
------ ------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees.................................................. $2,010 $2,062
Fully eligible active plan participants................... 753 562
Other active plan participants............................ 2,299 2,326
------ ------
Accumulated postretirement benefits..................... 5,062 4,950
Unrecognized net loss....................................... (771) (70)
------ ------
$4,291 $4,880
====== ======
</TABLE>
The non-current portion of the liability, $4,173 at December 31, 1994 and
$4,717 at December 31, 1995, is included in other liabilities.
The weighted average annual assumed rate of increase in the per capita cost
of covered benefits is 8.5 percent for 1996 and is assumed to decrease to 5.5
percent by the year 2010 and to remain at that level. The discount rate used
in determining the liability is 7.0 percent at December 31, 1993, 8.0 percent
at December 31, 1994 and 7.0 percent at December 31, 1995. Increasing the
assumed health care cost trend rates by one percentage point in each year
would increase the postretirement medical liability at December 31, 1995 by
$752 and expense for 1995 by $125.
10. INCOME TAXES
The provision (credit) for income taxes represents income taxes arising as a
result of operations and credits for revision of previous estimates of income
taxes payable in a number of countries. The Company is not subject to income
tax in Panama on income earned outside of Panama. All income has been earned
outside of Panama; therefore there is no expected relationship between income
(loss) before income taxes and the provision (credit) for income taxes. The
effective consolidated tax rate differs from the statutory tax rate in each
country because taxable income and operating losses from different countries
cannot be offset and tax rates and methods of determining taxes payable are
different in each country.
F-11
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
10. INCOME TAXES--(CONTINUED)
Income (loss) before income taxes and the provision (credit) for income
taxes in the Consolidated Statements of Income consist of:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------- --------------------
1993 1994 1995 1995 1996
------- ------- ------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Income (loss) before income
taxes:
Other countries............ $23,283 $12,303 $16,557 $1,029 $3,316
United States.............. (1,035) (5,390) (2,838) (447) (989)
------- ------- ------- --------- ---------
$22,248 $ 6,913 $13,719 $ 582 $2,327
======= ======= ======= ========= =========
Provision (credit) for income
taxes:
Currently payable:
Other countries.......... $ 7,491 $(3,942) $ 893 $ 464 $ 283
United States:
Federal................ 100 -- -- -- --
State.................. 185 3 8 1 --
------- ------- ------- --------- ---------
7,776 (3,939) 901 465 283
Deferred, other countries.. 629 (207) (976) -- --
------- ------- ------- --------- ---------
$ 8,405 $(4,146) $ (75) $ 465 $ 283
======= ======= ======= ========= =========
</TABLE>
The Company has a deferred tax asset in the United States of $18,630 at
December 31, 1994 and $19,436 at December 31, 1995 relating to United States
net operating loss and credit carryforwards and employee benefit expense, and
a deferred tax liability of $1,254 at December 31, 1994 and $1,485 at December
31, 1995 relating to excess tax depreciation. The net deferred tax asset is
reduced to zero by a valuation allowance. The Company has a deferred tax
liability in other countries of $2,334 at December 31, 1994 and $1,358 at
December 31, 1995 related to temporary differences, principally in contract
revenues and expenses.
The Company has $44,017 in United States net operating loss carryforwards
and $1,379 of United States investment tax credit carryforwards at December
31, 1995. The United States net operating loss carryforwards will expire,
unless utilized, beginning in 1996 and ending December 31, 2010. The
carryforwards available on an annual basis are limited. The Company has a
nonexpiring operating loss carryforward in the United Kingdom of $26,350
((Pounds)17,000) as of December 31, 1995.
11. NOTES RECEIVABLE FOR STOCK PURCHASES AND STOCK OWNERSHIP PLANS
Under employee stock ownership plans established in 1992 and 1995, certain
key employees are issued options to purchase common stock at a discount from
fair value and are allowed to finance up to 90% of the option price with
three-year non-interest bearing recourse notes. Options were issued to
purchase 372,000 shares of common stock at $3.33 per share in 1994 and 195,000
shares (including 42,000 treasury shares) of common stock at $3.83 per share
in 1995. During May 1996, options were issued to purchase 428,760 shares of
common stock, all from treasury stock, at $4.53. The discounts from fair value
were recorded as additional compensation and all options were exercised
shortly after issuance.
F-12
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
11. NOTES RECEIVABLE FOR STOCK PURCHASES AND STOCK OWNERSHIP PLANS--
(CONTINUED)
During May 1996, the Company established the Willbros Group, Inc. 1996 Stock
Plan (the "1996 Plan") which provides for awards to key employees of the
Company. The 1996 Plan has 1,125,000 shares of common stock authorized and
reserved for issuance. No awards have been granted. The Company also
established the Willbros Group, Inc. Director Stock Plan (the "Director Plan")
which provides for the grant of stock options to non-employee directors. The
Director Plan has 125,000 shares of common stock authorized and reserved for
issuance. No options have been granted.
12. ACQUISITION
Effective May 1, 1994, the Company acquired 100 percent of the shares of
Construcciones Acuaticas Mundiales, S.A. ("CAMSA"), a Venezuelan company, from
an affiliate of Heerema for $7,300 cash in a transaction accounted for as a
purchase. Accordingly, the Company has made allocations of the purchase price
and $120 in transaction fees among acquired assets and liabilities based on
their respective fair values at the date of purchase. The net assets of CAMSA
included $663 of cash. Heerema's residual interest in CAMSA was reduced to its
previous carrying value by a deemed dividend. Pro forma net income of the
Company assuming the acquisition occurred at January 1, 1993 is not materially
different from historical results for the years ended December 31, 1993 and
1994.
13. SEGMENT INFORMATION
The Company operates in a single industry segment. The main lines of
business include construction, engineering and specialty services to the oil
and gas industry. Due to a limited number of major projects and clients, the
Company may have a substantial part of its operations dedicated to one
project, client and country.
Customers with more than 10% of contract revenues are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Customer A................................... 26% 29% 32%
Customer B................................... 14 2 --
Customer C................................... -- -- 13
------- ------- -------
40% 31% 45%
======= ======= =======
</TABLE>
F-13
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
13. SEGMENT INFORMATION--(CONTINUED)
Information about the Company's operations in different geographic areas is
shown below:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Contract Revenues: (1)
Africa....................................... $ 87,215 $ 68,908 $ 95,972
Asia......................................... -- -- 29,728
C.I.S........................................ 4,851 540 1,283
Middle East.................................. 60,006 23,469 21,870
North America................................ 57,939 48,061 52,100
South America................................ -- 4,738 19,553
-------- -------- --------
$210,011 $145,716 $220,506
======== ======== ========
Operating profit (loss): (2)
Africa....................................... $ 21,449 $ 23,080 $ 26,300
Asia......................................... (169) (580) (1,026)
C.I.S........................................ (643) (1,601) (179)
Middle East.................................. 13,569 6,326 1,499
North America................................ 1,566 (2,417) 478
South America................................ (538) (2,850) 2,648
-------- -------- --------
$ 35,234 $ 21,958 $ 29,720
======== ======== ========
Identifiable assets:
Africa....................................... $ 44,245 $ 37,211 $ 63,281
Asia......................................... 1 -- 20,498
C.I.S........................................ 711 174 690
Middle East.................................. 22,901 13,626 15,543
North America................................ 84,167 67,375 36,160
South America................................ 34 12,802 13,782
-------- -------- --------
$152,059 $131,188 $149,954
======== ======== ========
</TABLE>
- --------
(1) Net of inter-geographic area revenues in North America of $5,544 in 1993,
$2,001 in 1994 and $4,986 in 1995.
(2) Operating profit (loss) is before deducting general corporate expenses of
$14,153 in 1993, $14,235 in 1994 and $14,175 in 1995.
14. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of financial instruments does not materially differ from
fair value.
15. INITIAL PUBLIC OFFERING
On June 7, 1996, the Company filed a registration statement with the
Securities and Exchange Commission relating to the initial public offering of
6,000,000 shares of its common stock. The Company will not receive any of the
proceeds from the sale. In May 1996, the Company effected a 30-for-1 split of
its
F-14
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
15. INITIAL PUBLIC OFFERING--(CONTINUED)
common stock; 362,000 shares of preferred stock outstanding prior to the
offering have been converted to common stock so that 13,860,000 shares of
common stock are outstanding.
The share and per share amounts in the accompanying financial statements
have been adjusted to retroactively include all shares issued during the
twelve months prior to May 31, 1996 and to reflect the common stock split and
the conversion of the preferred stock for all periods presented.
16. CONTINGENCIES, COMMITMENTS AND OTHER CIRCUMSTANCES
The Company provides construction, engineering and specialty services to the
oil and gas industry. The Company's principal markets are currently Africa,
the Middle East, South America and the United States. Operations outside the
United States may be subject to certain risks which ordinarily would not be
expected to exist in the United States, including foreign currency
fluctuations, expropriation of assets, civil uprisings and riots, instability
of government and legal systems of decrees, laws, regulations, interpretations
and court decisions which are not always fully developed and which may be
retroactively applied. Management is not presently aware of any events of the
type described in the countries in which it operates that have not been
provided for in the accompanying consolidated financial statements. Based upon
the advice of knowledgeable professionals in the various work countries
concerning the interpretation of the laws, practices and customs of the
countries in which it operates, management believes the Company has followed
the current practices in those countries; however, because of the nature of
these potential risks, there can be no assurance that the Company may not be
adversely affected by them in the future. The Company insures substantially
all of its equipment in countries outside the United States against certain
political risks and terrorism. As of December 31, 1995, the Company had 86
percent (81 percent in 1994) of its assets outside of the United States.
The Company has the usual liability of contractors for the completion of
contracts and the warranty of its work. Where work is performed through a
joint venture, the Company also has possible liability for the contract
completion and warranty responsibilities of its joint venturers. Management is
not aware of any material exposure related thereto which has not been provided
for in the accompanying consolidated financial statements.
Certain post contract completion audits and reviews are being conducted by
clients and/or government entities. While there can be no assurance that
claims will not be received as a result of such audits and reviews, management
does not believe a legitimate basis for any material claims exists. At the
present time it is not possible for management to estimate the likelihood of
such claims being asserted or, if asserted, the amount or nature thereof.
The Company has an obligation to purchase, under certain conditions, stock
held by retiring or terminating employees at a formula price. The obligation
terminates upon the effectiveness of an initial public offering. Provisions of
the notes receivable for stock purchases entitle employees to sell stock to
the Company at book value or less under certain circumstances.
The Company has certain operating leases for office and camp facilities.
Rental expense, excluding daily rentals and reimbursable rentals under cost
plus contracts, was $2,018 in 1993, $1,876 in 1994 and $1,896 in 1995. Minimum
lease commitments under operating leases as of December 31, 1995, total
$10,278 and are payable as follows: 1996, $1,596; 1997, $960; 1998, $1,355;
1999, $1,460; 2000, $1,473; later years, $3,434.
F-15
<PAGE>
THE WILLBROS MISSION IS . . .
[Picture of Company Advertisement]
To provide - anytime, any-
where - safe, efficient and
extraordinarily competent
services to our worldwide
clients in a manner which [Picture of Certificate of Registration
justifies employee pride and (ISO 9000)]
customer confidence.
[LOGO]
[Picture of Company Advertisement]
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMA-
TION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPEC-
TUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHO-
RIZED BY THE COMPANY, THE SELLING STOCKHOLDERS OR ANY UNDERWRITER. THIS PRO-
SPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO
BUY, SHARES OF COMMON STOCK IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
NOT LAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UN-
DER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 3
Risk Factors............................................................. 8
Use of Proceeds.......................................................... 12
Dividend Policy.......................................................... 12
Capitalization........................................................... 13
Dilution................................................................. 14
Selected Consolidated Financial and Other Data........................... 15
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 17
Business................................................................. 22
Management............................................................... 41
Certain Transactions..................................................... 51
Principal and Selling Stockholders....................................... 52
Description of Capital Stock............................................. 53
Shares Eligible for Future Sale.......................................... 55
Certain Income Tax Considerations........................................ 56
Underwriting............................................................. 59
Legal Matters............................................................ 61
Experts.................................................................. 61
Additional Information................................................... 61
Enforceability of Civil Liabilities Under the Federal Securities Laws.... 61
Index to Consolidated Financial Statements............................... F-1
</TABLE>
----------------
UNTIL , 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT PARTICI-
PATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS
IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING
AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(LOGO)
WILLBROS GROUP, INC.
----------------
6,000,000 SHARES
COMMON STOCK
PROSPECTUS
, 1996
----------------
DILLON, READ & CO. INC.
MERRILL LYNCH & CO.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
All amounts which are payable by the Registrant, except SEC, NASD and New
York Stock Exchange fees, are estimates.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee................ $30,932
NASD filing fee.................................................... 9,470
New York Stock Exchange listing fee................................ *
Transfer agent's fees and expenses................................. *
Printing, engraving and shipping expenses.......................... *
Legal fees and expenses............................................ *
Blue sky fees and expenses (including legal fees).................. *
Accounting fees and expenses....................................... *
Miscellaneous...................................................... *
-------
Total............................................................ $ *
=======
</TABLE>
- --------
* To be supplied by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 64 of the General Corporation Law of Panama (the "PGCL") provides
that directors shall be liable to creditors of the Registrant for authorizing
a dividend or distribution of assets with knowledge that such payments impair
the Registrant's capital or for making a false report or statement in any
material respect. In addition, Article 444 of the Panama Code of Commerce
("Article 444") provides that directors are not personally liable for the
Registrant's obligations, except for liability to the corporation and third
parties for the effectiveness of the payments made by stockholders, the
existence of dividends declared, the good management of the accounting, and in
general, for execution or deficient performance of their mandate or the
violation of laws, the Articles of Incorporation, the By-laws or resolutions
of the stockholders. Article 444 provides that the liability of directors may
only be claimed pursuant to a resolution of the stockholders.
The PGCL does not address the issue as to whether or not a corporation may
eliminate or limit a director's, officer's or agent's liability to the
corporation. Nevertheless, Arias, Fabrega & Fabrega, Panama counsel to the
Registrant, has advised the Registrant that, as between the Registrant and its
directors, officers and agents, such liability may be released under general
contract principles, to the extent that a director, officer or agent, in the
performance of his duties to the corporation, has not acted with gross
negligence or malfeasance. This release may be included in the Articles of
Incorporation or By-laws of the Registrant or in a contract entered into
between the Registrant and the director, officer or agent. While such a
release may not be binding with respect to a third person or stockholder
claiming liability under Article 444, in order to claim such liability, a
resolution of the stockholders would be necessary, which the Registrant
believes would be difficult to secure in the case of a publicly held company.
The PGCL does not address the extent to which a corporation may indemnify a
director, officer or agent. However, the Registrant's Panama counsel has
advised the Registrant that, under general agency principles, an agent, which
would include directors and officers, may be indemnified against liability to
third persons, except for a claim based on Article 64 of the PGCL or for
losses due to gross negligence or malfeasance in the performance of his
duties. The Registrant's Restated Articles of Incorporation release directors
from personal liability to the Registrant or its stockholders for breach of
fiduciary duty and authorize the Registrant's board of directors to adopt
bylaws or resolutions to this effect or to cause the Registrant to enter into
contracts providing for limitation of liability and for indemnification of
directors,
II-1
<PAGE>
officers and agents. The Registrant's Restated By-laws provide for
indemnification of directors and officers of the Registrant to the full extent
permitted by, and in the manner permissible under, the laws of the Republic of
Panama. The Registrant has also entered into specific agreements with its
directors and officers providing for indemnification of such persons under
certain circumstances.
The preceding discussion is subject to the Registrant's Restated Articles of
Incorporation and Restated By-laws and the provisions of Article 64 of the
PGCL and Article 444 as applicable. It is not intended to be exhaustive and is
qualified in its entirety by the Registrant's Restated Articles of
Incorporation, the Registrant's Restated By-laws and Article 64 of the PGCL
and Article 444.
The form of Underwriting Agreement included as Exhibit 1 provides for
indemnification of the Registrant and certain controlling persons under
certain circumstances, including liabilities under the Securities Act of 1933,
as amended (the "Securities Act").
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
The following information is furnished as to securities of the Registrant
sold within the past three years which were not registered under the
Securities Act. Each of the issuances and sales described below was effected
and relies upon an exemption from registration as set forth below. No
underwriting discounts or commissions were paid in connection with such sales.
All references in this Item 15 to the number of shares of Common Stock and to
common stock per share data have been restated to reflect a 30-for-1 stock
split effected on May 27, 1996.
1. Within the past three years, the Registrant has granted stock options,
all of which have been exercised, for the purchase of a total of 786,000
shares of Common Stock, pursuant to the Registrant's employee non-qualified
stock ownership plans. Such options were issued to employees of the Registrant
in reliance on an exemption from registration under the Securities Act,
pursuant to Rule 701 promulgated under the Securities Act for securities
issued under compensatory plans, as follows:
<TABLE>
<CAPTION>
PER SHARE
DATE OF EXERCISE NUMBER OF SHARES EXERCISE PRICE
---------------- ---------------- --------------
<S> <C> <C>
October 11, 1993 96,000 $2.90
October 27, 1994 223,500 3.33
November 4, 1994 148,500 3.33
October 31, 1995 91,500 3.83
November 15, 1995 103,500 3.83
May 8, 1996 123,000 4.53
</TABLE>
2. On May 8, 1996, the Registrant granted stock options, all of which have
been exercised, for the purchase of a total of 150,000 shares of Common Stock
and 5,192 shares of Preferred Stock, at per share exercise prices of $4.53 and
$136, respectively, pursuant to the Registrant's management personnel non-
qualified stock ownership plans. Such options were issued to officers and key
employees of the Registrant in reliance on an exemption from registration
under the Securities Act, pursuant to Rule 701 promulgated under the
Securities Act for securities issued under compensatory plans.
3. On September 30, 1993, certain subordinated notes of the Registrant, in
an aggregate principal amount of $10 million, were prepaid in full, and
certain warrants which had been issued in connection with such subordinated
notes, representing the right to acquire 12,000 shares of Preferred Stock in
the aggregate, at an exercise price of $100 per share, were exercised. Such
notes and warrants were issued by the Registrant in 1992 and were held by
Heerema, the Yorktown and Concord Investors and certain members of the
Registrant's management. Exemption from registration under the Securities Act
for such transaction is claimed under Section 4(2) of the Securities Act for
transactions by an issuer not involving any public offering, or in a certain
instance, under Regulation S under the Securities Act for transactions made
outside the United States.
II-2
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits*:
The following is a list of all exhibits filed as a part of this Registration
Statement on Form S-1.
<TABLE>
<C> <S>
1.** Form of Underwriting Agreement.
3.1 Restated Articles of Incorporation of the Registrant.
3.2** Restated By-laws of the Registrant.
4.** Form of stock certificate for the Registrant's Common Stock, par
value $.05 per share.
5.1** Opinion of Arias, Fabrega & Fabrega, regarding the legality of
the Common Stock.
10.1 Credit Agreement dated September 16, 1993, among the Registrant,
Willbros International, Inc., Willbros USA, Inc., Willbros
Engineering & Construction Limited, certain designated
subsidiaries, certain financial institutions, and Bank of
America National Trust and Savings Association, as agent.
10.2 First Amendment to Credit Agreement dated November 30, 1994,
among the Registrant, Willbros International, Inc., Willbros
USA, Inc., Willbros Engineering & Construction Limited, certain
designated subsidiaries, certain financial institutions, and
Bank of America National Trust and Savings Association, as
agent.
10.3** Employment Agreement dated , 199 , between the Registrant
and Larry J. Bump.
10.4** Employment Agreement dated , 199 , between the Registrant
and Melvin F. Spreitzer.
10.5** Employment Agreement dated , 199 , between the Registrant
and Gary L. Bracken.
10.6** Employment Agreement dated , 199 , between the Registrant
and M. Kieth Phillips.
10.7 Form of Indemnification Agreement between the Registrant and its
officers and directors.
10.8 Willbros Group, Inc. 1996 Stock Plan.
10.9 Willbros Group, Inc. Director Stock Plan.
10.10 Willbros USA, Inc. Executive Benefit Restoration Plan.
10.11 Form of Secured Promissory Note under the Willbros International,
Inc. and Willbros USA, Inc. 1995 Management Personnel Non-
Qualified Stock Ownership Plans.
10.12 Form of Secured Promissory Note under the Willbros International,
Inc. and Willbros USA, Inc. 1992 Employee Non-Qualified Stock
Ownership Plans.
10.13 Registration Rights Agreement dated April 9, 1992, between the
Registrant and Heerema Holding Construction, Inc., Yorktown
Energy Partners, L.P., Concord Partners II, L.P., Concord
Partners Japan, Limited and certain other stockholders of the
Registrant.
10.14 Stock Purchase Agreement dated May 1, 1994, between Willbros
Suramerica, S.A. and Inversiones 252-28, C.A., providing for the
purchase of Construcciones Acuaticas Mundiales, S.A. (CAMSA).
21. Subsidiaries of the Registrant.
</TABLE>
II-3
<PAGE>
<TABLE>
<C> <S>
23.1 Consent of KPMG Peat Marwick.
23.2** Consent of Arias, Fabrega & Fabrega (included in the opinion
filed as Exhibit 5.1 to this Registration Statement).
24. Power of Attorney (included in this Part II).
27. Financial Data Schedule.
</TABLE>
- --------
*Exhibits excluded are not applicable.
** To be filed by amendment.
(b) Financial Statement Schedules:
Index to Consolidated Financial Statement Schedule
Independent Auditors' Report
II--Consolidated Valuation and Qualifying Accounts
All other schedules are omitted as inapplicable or because the required
information is contained in the financial statements or included in the
footnotes thereto.
ITEM 17. UNDERTAKINGS.
(f) The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.
(h) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions referred to in Item 14 of this
Registration Statement, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
(i) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
THE REGISTRANT. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF DALLAS,
STATE OF TEXAS, ON THE 7TH DAY OF JUNE, 1996.
Willbros Group, Inc.
/s/ Larry J. Bump
By: _________________________________
LARRY J. BUMP
CHAIRMAN OF THE BOARD, PRESIDENT,
CHIEF EXECUTIVE OFFICER AND CHIEF
OPERATING OFFICER
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears
below constitutes and appoints Larry J. Bump, Melvin F. Spreitzer and John N.
Hove, and each of them, his true and lawful attorneys-in-fact and agents with
full power of substitution, for him and in his name, place and stead, in any
and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and any subsequent registration
statement filed by the Registrant pursuant to Rule 462(b) of the Securities
Act of 1933, which relates to this Registration Statement, and to file the
same, with all exhibits thereto, and all documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or his or
their substitutes, may lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
/s/ Larry J. Bump Director, Chairman of the June 7,
_________________________________ Board, President, Chief 1996
LARRY J. BUMP Executive Officer and Chief
Operating Officer (Principal
Executive Officer and
Authorized Representative in
the United States)
/s/ Melvin F. Spreitzer Director, Executive Vice June 7,
_________________________________ President, Chief Financial 1996
MELVIN F. SPREITZER Officer, Secretary and
Treasurer (Principal
Financial Officer and
Principal Accounting Officer)
/s/ Guy E. Waldvogel Director June 7,
_________________________________ 1996
GUY E. WALDVOGEL
/s/ Bryan H. Lawrence Director June 7,
_________________________________ 1996
BRYAN H. LAWRENCE
/s/ Peter A. Leidel Director June 7,
_________________________________ 1996
PETER A. LEIDEL
II-5
<PAGE>
WILLBROS GROUP, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENT SCHEDULE
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report on Consolidated Financial Statement
Schedule................................................................ S-2
Schedule II--Consolidated Valuation and Qualifying Accounts.............. S-3
</TABLE>
S-1
<PAGE>
When the conversion of the Preferred Stock described in Note 15 in the
accompanying consolidated financial statements has been consummated, we will
be in a position to render the following report.
KPMG Peat Marwick
INDEPENDENT AUDITORS' REPORT ON CONSOLIDATED FINANCIAL STATEMENT SCHEDULE
The Stockholders and Board of Directors
Willbros Group, Inc.:
The audits referred to in our report dated January 31, 1996, except as to
Note 15, which is as of , 1996, included the related consolidated
financial statement schedule for each of the years in the three-year period
ended December 31, 1995, included in the registration statement. This
consolidated financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion on the
consolidated financial statement schedule based on our audits. In our opinion,
such consolidated financial statement schedule, when considered in relation to
the basic consolidated financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.
Panama City, Panama
January 31, 1996
S-2
<PAGE>
WILLBROS GROUP, INC.
SCHEDULE II--CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE AT CHARGED TO BALANCE AT
YEAR BEGINNING COSTS AND CHARGE OFFS END OF
ENDED DESCRIPTION OF YEAR EXPENSES AND OTHER YEAR
----- ----------------------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
December
31, 1993 Allowance for bad debts $ 733 $ 945 $(326) $1,352
December
31, 1994 Allowance for bad debts $1,352 $1,086 $ 4 $2,442
December
31, 1995 Allowance for bad debts $2,442 $ 694 $(144) $2,992
</TABLE>
S-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
1.** Form of Underwriting Agreement.
3.1 Restated Articles of Incorporation of the Registrant.
3.2** Restated By-laws of the Registrant.
4.** Form of stock certificate for the Registrant's Common Stock,
par value $.05 per share.
5.1** Opinion of Arias, Fabrega & Fabrega, regarding the legality of
the Common Stock.
10.1 Credit Agreement dated September 16, 1993, among the
Registrant, Willbros International, Inc., Willbros USA, Inc.,
Willbros Engineering & Construction Limited, certain
designated subsidiaries, certain financial institutions, and
Bank of America National Trust and Savings Association, as
agent.
10.2 First Amendment to Credit Agreement dated November 30, 1994,
among the Registrant, Willbros International, Inc., Willbros
USA, Inc., Willbros Engineering & Construction Limited,
certain designated subsidiaries, certain financial
institutions, and Bank of America National Trust and Savings
Association, as agent.
10.3** Employment Agreement dated , 199 , between the Registrant
and Larry J. Bump.
10.4** Employment Agreement dated , 199 , between the Registrant
and Melvin F. Spreitzer.
10.5** Employment Agreement dated , 199 , between the Registrant
and Gary L. Bracken.
10.6** Employment Agreement dated , 199 , between the Registrant
and M. Kieth Phillips.
10.7 Form of Indemnification Agreement between the Registrant and
its officers and directors.
10.8 Willbros Group, Inc. 1996 Stock Plan.
10.9 Willbros Group, Inc. Director Stock Plan.
10.10 Willbros USA, Inc. Executive Benefit Restoration Plan.
10.11 Form of Secured Promissory Note under the Willbros
International, Inc. and Willbros USA, Inc. 1995 Management
Personnel Non-Qualified Stock Ownership Plans.
10.12 Form of Secured Promissory Note under the Willbros
International, Inc. and Willbros USA, Inc. 1992 Employee Non-
Qualified Stock Ownership Plans.
10.13 Registration Rights Agreement dated April 9, 1992, between the
Registrant and Heerema Holding Construction, Inc., Yorktown
Energy Partners, L.P., Concord Partners II, L.P., Concord
Partners Japan, Limited and certain other stockholders of the
Registrant.
10.14 Stock Purchase Agreement dated May 1, 1994, between Willbros
Suramerica, S.A. and Inversiones 252-28, C.A., providing for
the purchase of Construcciones Acuaticas Mundiales, S.A.
(CAMSA).
21. Subsidiaries of the Registrant.
23.1 Consent of KPMG Peat Marwick.
23.2** Consent of Arias, Fabrega & Fabrega (included in the opinion
filed as Exhibit 5.1 to this Registration Statement).
24. Power of Attorney (included in this Part II).
27. Financial Data Schedule.
</TABLE>
- --------
*Exhibits excluded are not applicable.
** To be filed by amendment.
<PAGE>
EXHIBIT 3.1
CERTIFICATE OF AMENDMENT AND RESTATEMENT
OF ARTICLES OF INCORPORATION OF
WILLBROS GROUP, INC.
We, the undersigned, Larry J. Bump and Melvin F. Spreitzer, President and
Secretary, respectively, of WILLBROS GROUP, INC., a corporation organized and
existing in accordance with the laws of the Republic of Panama, do hereby
certify that the Articles of Incorporation of said Corporation have been amended
and restated so that henceforth said Articles of Incorporation shall read in its
entirety as follows:
RESTATED ARTICLES OF INCORPORATION
----------------------------------
FIRST: Name. The name of the Corporation is
------ ----
WILLBROS GROUP, INC.
SECOND: Purposes. The general purpose of the Corporation is to do any
------- --------
and all of the things and to exercise any and all of the powers hereinafter
set forth, in any part of the world, namely:
(a) To carry on and conduct a general contracting, engineering and
petroleum services and construction business; to engineer, design, operate,
plan, maintain, erect, construct, improve, enlarge, repair, alter, renovate,
decorate, furnish and engage in work upon pipelines and related facilities,
refineries, buildings, streets, roads, highways, bridges, viaducts, railroads,
railway structures, piers, docks, mines, shafts, waterworks, reservoirs, dams,
canals, sewer systems, electrical transmission systems, excavations, and
telephone and telegraph systems, and other structures and works; to employ
<PAGE>
-2-
mechanics, laborers, artisans, and workmen; to make contracts and sub-contracts
for work and materials; and to purchase, manufacture, sell and otherwise deal in
and with building and construction materials, machinery, equipment and supplies
of every kind and description.
To construct, engineer, design, purchase, plan or otherwise
acquire, improve, enlarge, repair, alter, renovate, lease as lessee, maintain,
operate, sell or otherwise dispose of, lease as lessor, mortgage and deal in and
with pipelines, gathering lines, lateral lines, pumping stations, tanks,
compressors, bridges, structures, tunnels, buildings, plants and communication
equipment used for the transmission, storage, processing and distributing of
gas, oil, petroleum products and by-products, dairy products, water,
fertilizers, coal slurries and any and all other products, commodities and
materials, whether of a similar or different nature.
To explore for, mine, refine, develop, improve, conduct
experimentation on, process, generate, retrieve, transport, transmit or gather
any form of energy and to design, construct or provide any facilities, machinery
or equipment necessary or convenient to the conduct of such activities.
(b) To establish, transact and carry on generally a financial,
investment holding, brokerage, guaranty, consultancy, underwriting, mercantile,
trading, manufacturing, exporting, importing, freight forwarding, design,
engineering, architectural, construction, installation, maintenance, repair,
purchasing, inspection, shipping, transportation, chartering, leasing,
agricultural, auditing, hostelry, food, beverage, clothing, fishing, mining,
exploration, development, communication, advertising, and warehousing business
and, in general, to engage in any other lawful business, trade or activity
related to such activities, including without limitation marine services such as
the design, engineering, construction, fabrication or installation of onshore
and offshore structures, pilings, pipelines, piers, dock facilities and bridges,
the operation of
<PAGE>
-3-
vessels, the transportation of rigs and offshore facilities, whether or not such
business, trade or activity is similar to the aforementioned purposes.
(c) To invest the capital of the Corporation, accretions to capital
and the income of the Corporation or any part thereof, as the Board of Directors
may determine, in real property, including the construction and alteration of
buildings, and in personal property of any description whatsoever, including
mortgages, bonds, shares and other securities, and from time to time to change
said investments by sale, exchange or otherwise, and to invest the proceeds of
any sale or sales in other investments of a like nature.
(d) To establish, transact and carry on the business of a
manufacturing, merchandising and trading company; to manufacture, purchase,
lease, sublease and acquire by contract, license or otherwise; to hold, own,
mortgage, pledge, hypothecate, exchange, sell, assign, and transfer, or
otherwise dispose of; and to manage, invest, trade and deal in and with, both
for its own account and for the account of others, raw materials, goods, wares,
merchandise, commodities and other property of every kind, nature and
description.
(e) To establish, transact and carry on the business of exporters,
importers and forwarders as principal, factor, agent, broker, commission
merchant or otherwise, in the Republic of Panama, and in any and all colonies,
dependencies, dominions, possessions, states, territories and countries foreign
thereto; to export from and import into the Republic of Panama and from and into
any and all colonies, dependencies, dominions, possessions, states, territories
and countries foreign thereto, as principal, factor, agent, broker, commission
merchant or otherwise, raw materials, goods, wares, merchandise, commodities and
other property of every kind, nature and description; to deal in bills of
lading, warehouse receipts and any and all other documents necessary or
incidental to the conduct of such business; to act as factor, agent, broker,
<PAGE>
-4-
representative, trustee or commission merchant for any person or company and as
trustee without conducting trust businesses in the Republic of Panama.
(f) To purchase, build, hire, charter, or otherwise own, hold, use
and dispose of steam and other ships and vessels and their appurtenances; to
establish, operate and maintain steam and other ships and vessels between any
cities, towns and ports in the Republic of Panama or in any part of the world;
and generally to transport passengers, raw materials, goods, wares, merchandise,
commodities, animals and other property of every kind, nature and description.
(g) To apply for, purchase, register or in any manner to acquire,
hold, own, use, operate, introduce, sell, lease, assign, pledge or in any manner
dispose of, and in any manner deal with, patents, patent rights, licenses,
copyrights, trade marks, trade names, formulae, secret processes, inventions,
improvements and processes used in connection with or secured under leases,
patents or similar rights granted by the Republic of Panama or by any other
country or government or otherwise; to acquire, own, use, deal in or with, and
in any manner dispose of any and all inventions, improvements, and processes,
labels, designs, brands and other rights; and to work operate, exercise or
develop the same and to carry on any business which the Corporation may deem
advantageous to effectuate, directly or indirectly, these purposes or any of
them.
(h) To guarantee or become liable for the payment of money or for the
performance of any obligations, and generally to transact all kinds of guarantee
business, and also to transact all kinds of agency business.
(i) To acquire by original subscription, syndicate participation,
tender, purchase, or otherwise, and to hold, sell, exchange, surrender, lease,
assign, transfer, mortgage, charge, convert, turn to account, deal in, pledge or
otherwise dispose of shares, stocks, debenture stocks, scrip, debentures, bonds,
mortgages, notes, warrants, coupons, drafts, obligations, securities, produce,
<PAGE>
-5-
concessions, options, patents, annuities, licenses, policies, debts, business
concerns and goodwill, claims, privileges, choses in action, commercial
instruments, evidences of indebtedness and contracts, of every nature and kind,
issued, created or guaranteed by any other person or company and irrespective of
the business which it may be carrying on or be authorized to carry on, and
irrespective of the locality in which it operates, or issued, created or
guaranteed by any government, public body or authority, municipal, local or
otherwise, and whether of the Republic of Panama or elsewhere, and while the
owner thereof to receive, collect and dispose of interest and dividends thereon
and income therefrom, and to exercise all the rights, powers and privileges of
ownership, including the right to vote thereon.
(j) To acquire and undertake the whole or any part of the business,
property and liabilities of any person or company carrying on any business or
possessed of property suitable for the purposes of the Corporation, and to carry
on, conduct, assist, subsidize, contribute to, dissolve or liquidate any
business so acquired, or any other business which can be advantageously carried
on by the Corporation; to organize, incorporate, reorganize, aid, assist
(financially or otherwise), amalgamate, consolidate or merge with any subsidiary
or affiliated company, or any other company and to do any and all things
necessary or convenient to carry such purposes into effect.
(k) To draw, make, accept, indorse, discount, execute, issue and deal
in promissory notes, bills of exchange, bills of lading, warrants, debentures
and other negotiable or transferable instruments.
(l) To purchase, take on lease or in exchange, hire or otherwise
acquire, hold, sell, mortgage or pledge, transfer or otherwise dispose of any
real and personal property and any rights and privileges which the Corporation
may think necessary or convenient for the purposes of its business; and to pay
for any such property and any rights, interests or privileges acquired by the
Corporation in exchange for money or other property, rights or interests
<PAGE>
-6-
held by the Corporation, or for the issuance or assignment and delivery in
exchange therefor (in any manner permitted by law) its own shares, bonds,
debentures, notes, certificates of indebtedness or other obligations, or any of
them, however evidenced.
(m) To purchase or otherwise acquire, hold, sell, pledge, transfer or
otherwise dispose of, and to reissue its own capital stock, bonds, debentures,
notes or other securities, obligations or evidences of indebtedness of the
Corporation from time to time to such extent and in such manner and upon such
terms and conditions as the Board of Directors shall determine; provided,
however, that shares of its own capital stock belonging to the Corporation shall
not be voted upon directly or indirectly.
(n) To borrow money, to issue bonds, promissory notes, bills of
exchange, debentures, and other obligations, securities and evidences of
indebtedness, whether secured by mortgage, pledge, deed of trust or otherwise,
or unsecured, for money borrowed or in payment of property, real or personal,
purchased or acquired, for labor done or for any other lawful object; and to
mortgage or pledge all or any part of its properties, rights, interests,
easements and franchises, including after-acquired property or rights, and any
and all shares of stock, bonds, debentures or other securities, obligations or
evidences of indebtedness at any time owned or held by it.
(o) To insure with any other person or company against losses,
damages, risks and liabilities of all kinds which may affect the Corporation.
(p) To establish and support or aid in the establishment and support
of associations, institutions, funds and services calculated to benefit
employees or ex-employees of the Corporation or the dependents or relatives of
such persons, to grant pensions and allowances, to make payments towards
insurance, and to subscribe or guarantee money for charitable or benevolent
objects or for any exhibition or for any public, general or useful objects.
<PAGE>
-7-
(q) To make and carry into effect any agreement or contract for
sharing profits, union of interests, cooperation, joint adventure, reciprocal
concession or otherwise with, and to manage or supervise any person or company,
carrying on or engaged in, or about to carry on or engage in, any business or
transaction which the Corporation is authorized to carry on or engage in, or any
business or transaction capable of being conducted so as to benefit the
Corporation directly or indirectly; and to accept by way of consideration for
any such agreement or contract or for management services, cash or any stock,
debentures or securities of any person or company.
(r) To establish or promote and to cause to be incorporated any
company for the purpose of acquiring all or any part of the property and
liabilities of the Corporation, or for any other purpose which may seem
calculated to benefit the Corporation directly or indirectly.
(s) To enter into, make, perform and carry out contracts of every
kind for any lawful purpose; to enter into any arrangements with any governments
or authorities, municipal, local or otherwise and to obtain from any such
government or authority, any rights, privileges and concessions which the
Corporation may consider desirable to obtain; and to carry out, exercise, and
comply with any such arrangements, rights, privileges and concessions.
(t) To sell, lease or otherwise dispose of the whole or any part of
the assets, rights, property or undertakings of the Corporation for cash,
shares, debentures, bonds, mortgages or other securities of any other company,
or for such consideration as the Board of Directors may think fit; and to
improve, manage, develop, exchange, mortgage, turn to account or otherwise deal
with all or any part of the assets, rights and property of the Corporation.
(u) To lend or advance money or give credit to, or give guarantee or
become security for, stockholders, officers or directors of the Corporation, to
any person, firm or corporation in which the Corporation has any direct or
indirect beneficial interest, wherever located, any customers or others
<PAGE>
-8-
having dealings with the Corporation, on such terms as the Board of Directors
may deem expedient.
(v) To have one or more offices and to carry on and conduct any or
all of its operations and business and to do all such things as are conducive or
incidental to the attainment of its corporate purposes in the Republic of Panama
and in any and all colonies, dependencies, dominions, possessions, states,
territories and counties foreign thereto; to keep the books and accounts of the
Corporation, including the Stock Register, at any place or places, either within
or without the Republic of Panama; and to procure the registration or
qualification or recognition of the Corporation in or under the laws of any
colony, dependency, dominion, possession, state, territory or country in the
world.
(w) To provide for the management of the affairs of the Corporation
abroad in such manner and by such means as the Board of Directors may from time
to time deem suitable and appropriate and for the delegation to an attorney or
attorneys of the Corporation, who may be any person or persons, of such powers,
authorities and discretions as the directors may think fit.
(x) To issue shares of the capital stock of the Corporation for cash,
for labor done, for property, real or personal, or for leases thereof, or for
any combination of any of the foregoing, or in exchange for the stock,
debentures, debenture stock, bonds, securities or obligations of any person,
firm, association, corporation or other organization.
(y) To accept and vote a proxy or proxies from individuals,
partnerships, persons, firms, associations or corporations.
(z) To distribute in specie, by way of dividend or otherwise, among
the stockholders, customers or employees of the Corporation, any shares of stock
or securities belonging to the Corporation or any property or assets of the
Corporation.
<PAGE>
-9-
(aa) To do any and all of the above acts and things and to have and
exercise any and all of the above powers in any part of the world and either as
principal, attorney, factor, broker, commission merchant, trustee (without
conducting trust businesses in the Republic of Panama), agent, contractor or
otherwise and either alone or in conjunction with others and either by or
through agents, trustees or otherwise.
(bb) To do all things necessary for the accomplishment of the objects
and purposes enumerated in these Articles of Incorporation or any amendment
thereto or necessary or incidental to the protection or benefit of the
Corporation.
(cc) In general, to carry on any lawful business not prohibited to
corporations in any part of the world whether or not such business is similar in
nature to the objects set forth in these Articles of Incorporation or any
amendment thereto, including without limitation to have and exercise all the
powers conferred by the laws of the Republic of Panama upon corporations formed
under the Act hereinafter referred to, and to do any or all of the things
hereinbefore set forth to the same extent as natural persons might or could do.
It is hereby declared that the word "company" wherever used in this Article
SECOND shall be deemed to include any partnership or other body of persons,
whether incorporated or not incorporated, and whether organized or domiciled in
the Republic of Panama or elsewhere. The purposes specified in each paragraph of
this Article SECOND shall, except where otherwise expressed in such paragraph,
be in no wise limited or restricted by reference or inference, from the terms of
any other paragraph and that in the event of any ambiguity this Article SECOND
shall be construed in such a way as to widen and not to restrict the powers of
the Corporation.
With these purposes the Corporation shall have all the powers outlined in
Article 19 of Law 32 of 1927 of the Republic of Panama as well as any other
powers which may be granted to the Corporation by any other laws in force.
<PAGE>
-10-
THIRD: Capital. The authorized capital of the Corporation shall
----- -------
consist of THIRTY-SEVEN MILLION NINE HUNDRED SIXTY THOUSAND U.S. DOLLARS (U.S.
$37,960,000), consisting of: THIRTY-FIVE MILLION (35,000,000) shares of common
stock, par value FIVE U.S. CENTS (U.S. $.05) per share ("Common Stock"); THREE
HUNDRED SIXTY-TWO THOUSAND (362,000) shares of preferred stock, par value ONE
HUNDRED U.S. DOLLARS (U.S. $100.00) per share ("Preferred Stock"); and ONE
MILLION (1,000,000) shares of class A preferred stock, par value ONE U.S. CENT
(U.S. $.01) per share ("Class A Preferred Stock"). Shares shall all be in
nominative form and may not be issued to bearer.
A. The powers, designations and preferences and the relative,
participating, optional and other special rights of Common Stock and Preferred
Stock, and the qualifications, limitations and restrictions of such preferences
and/or rights, are as follows:
(a) Dividends. The holders of Preferred Stock, in preference to
---------
the holders of Common Stock, shall be entitled to receive, when and as declared
by the Board of Directors out of any funds legally available therefor,
cumulative dividends in cash, payable quarterly on the last day of each of the
months of March, June, September and December in each year commencing with 1996
to holders of Preferred Stock of record on the first day of the calendar month
in which such dividends are payable, of EIGHT U.S. DOLLARS (U.S. $8.00) per
share per annum. Dividends on shares of Preferred Stock shall first begin to
accrue on January 1, 1996, shall be cumulative, and shall be paid pro rata to
the holders of Preferred Stock. Accrued but unpaid dividends shall not bear
interest.
Commencing January 1, 1996, and for so long thereafter as
any shares of Preferred Stock are outstanding, no dividend or other
<PAGE>
-11-
distribution shall be declared or paid on shares of Common Stock with respect to
any calendar year, unless the cumulative dividends on all outstanding shares of
Preferred Stock shall have been paid in full or contemporaneously are declared
and paid through December 31st of such calendar year. At any time after such
cumulative dividends have been paid in full or contemporaneously declared and
paid through December 31st of such calendar year, a dividend or other
distribution may be declared or paid on shares of Common Stock; provided that,
after the holders of Common Stock shall have received in any calendar year
commencing January 1, 1996, dividends or other distributions, in the aggregate,
in an amount per share of Common Stock held by such holders equal to the
quotient obtained by dividing EIGHT U.S. DOLLARS (U.S. $8.00) by the Conversion
Ratio then in effect pursuant to paragraph (d) below, no further dividends or
other distributions shall be declared or paid on shares of Common Stock during
such calendar year, unless an equivalent dividend or distribution on the
outstanding shares of Preferred Stock shall have been paid or declared and a sum
sufficient for the payment thereof set apart. For purposes of the declaration or
payment of dividends or other distributions, a dividend or distribution on
shares of Preferred Stock shall be deemed "equivalent" to a dividend or
distribution on shares of Common Stock if the dividend or distribution declared
or paid on each outstanding share of Preferred Stock entitles the holder thereof
to the same money or other property to which such holder would have been
entitled if such holder held the number of full and fractional shares of Common
Stock into which such share of Preferred Stock is then convertible.
(b) Liquidation. Upon any voluntary or involuntary liquidation,
-----------
dissolution or winding up of the Corporation: (i) each holder of record of
shares of Preferred Stock shall be entitled, before any distribution is made on
shares of Common Stock, to be paid ONE HUNDRED U.S. DOLLARS (U.S. $100.00) per
share of Preferred Stock held by such holder, plus, in each
<PAGE>
-12-
case, an amount equal to all accrued and unpaid dividends thereon, if any; (ii)
thereafter, each holder of record of shares of Common Stock shall be entitled,
before any further distribution is made on shares of Preferred Stock, to be paid
an amount per share of Common Stock held by such holder equal to the quotient
obtained by dividing ONE HUNDRED U.S. DOLLARS (U.S. $100.00) by the Conversion
Ratio then in effect pursuant to paragraph (d) below; and (iii) thereafter, the
holders of Common Stock and Preferred Stock shall be entitled to participate in
the net assets of the Corporation remaining after such dissolution, liquidation
or winding up and after payment or provision for the payment of the debts and
liabilities of the Corporation, distributing such proceeds pro rata among the
holders of Common Stock and Preferred Stock without priority between such
classes, and for purposes of liquidating distributions each share of Preferred
Stock shall be treated as the number of full and fractional shares of Common
Stock into which such share of Preferred Stock is then convertible.
The foregoing provisions of this paragraph (b) shall not,
however, be deemed to require the distribution of assets among the holders of
Common Stock and Preferred Stock in the event of a merger, consolidation, or
sale, transfer or lease of all or substantially all of the Corporation's assets
if such transaction does not in fact result in the dissolution, liquidation or
winding up of the Corporation.
(c) Voting. Each share of Common Stock shall entitle the
------
registered holder thereof to one vote on all matters brought before the
stockholders of the Corporation for a vote. The registered holders of shares of
Preferred Stock shall also be entitled to vote on all matters brought before the
stockholders of the Corporation for a vote, with each share of Preferred Stock
entitling the registered holder thereof to one vote for each whole share of
<PAGE>
-13-
Common Stock into which such share of Preferred Stock is then convertible.
Except as set forth below or as otherwise required by law, the holders of
Preferred Stock and the holders of Common Stock shall vote together as one class
on all matters brought before the stockholders of the Corporation for a vote.
The holders of the Preferred Stock shall be entitled to vote
as a class upon any proposed amendment to the Corporation's Articles of
Incorporation, if and to the extent such amendment would increase or decrease
the aggregate number of authorized shares of Preferred Stock, increase or
decrease the par value of the shares of Preferred Stock, alter or change the
powers, preferences or special rights of the Preferred Stock so as to affect
them adversely, or authorize a class of equity security of the Corporation
senior to the Preferred Stock.
(d) Conversion. Each share of Preferred Stock shall be
----------
convertible, at the option of the holder thereof, at any time, into that number
of full shares of Common Stock equal to the Conversion Ratio (as hereinafter
defined and as the same may be adjusted as set forth below). Conversion of a
share of Preferred Stock shall be effected by surrender of the holder's
certificate representing such share of Preferred Stock, accompanied by a written
notice from such holder addressed to the Corporation requesting conversion. Upon
voluntary conversion, holders of converted shares of Preferred Stock will be
issued certificates representing the full shares of Common Stock (and cash with
respect to any fractional interest in a share of Common Stock as provided below)
to which they are entitled.
Upon the effectiveness of the Corporation's first
registration statement covering Common Stock filed under the United States
<PAGE>
-14-
Securities Act of 1933, as amended, or any successor to such statute, each share
of Preferred Stock shall immediately and automatically become converted into
that number of full shares of Common Stock equal to the Conversion Ratio, as the
same may be adjusted as set forth below. Upon automatic conversion, holders of
converted shares of Preferred Stock shall promptly surrender their certificates
representing such shares to the Corporation, whereupon such holders will be
issued certificates representing the full shares of Common Stock (and cash with
respect to any fractional interest in a share of Common Stock as provided below)
to which they are entitled.
The Conversion Ratio at the time of the first issuance of
shares of Preferred Stock shall equal one (1.0). Thereafter, the Conversion
Ratio shall be subject to the following adjustments:
(i) If the Corporation shall declare a dividend or
distribution of its capital stock or of evidences of the Corporation's
indebtedness or assets (excluding cash dividends or distributions) on Common
Stock, or effect a stock split or reverse stock split with respect to Common
Stock, or issue shares of its capital stock by reclassification of shares of
Common Stock, the Conversion Ratio in effect on the record date, for any such
stock dividend or distribution, or the effective date of any such other event,
shall be adjusted proportionately so that the holder of a share of Preferred
Stock thereafter shall be entitled to receive upon conversion the aggregate
number of shares of Common Stock or other capital stock that such holder would
own or be entitled to receive after the happening of any of the events mentioned
above if such share of Preferred Stock had been converted immediately prior to
the close of business on such record date or effective date, as applicable.
<PAGE>
-15-
(ii) If the Corporation shall effect any reclassification or
similar change of outstanding shares of Common Stock (other than as set forth in
clause (i) of this paragraph (d)) or a consolidation or merger of the
Corporation with another corporation or a conveyance of all or substantially all
of the assets of the Corporation, a share of Preferred Stock shall, after such
capital reorganization, reclassification, change, consolidation, merger or
conveyance, be convertible only into the number of shares of stock or other
properties, including cash, to which a holder of the number of shares of Common
Stock deliverable upon conversion of a share of Preferred Stock would have been
entitled upon such capital reorganization, reclassification, change,
consolidation, merger or conveyance if such share of Preferred Stock had been
converted immediately prior to the effective date of such event; and, in any
such case, appropriate adjustments (as determined by the Board of Directors)
shall be made in the application of the provisions set forth in this Article
THIRD with respect to the rights and interests thereafter of the holders of
Preferred Stock to the end that the provisions set forth in this Article THIRD
(including provisions with respect to changes in and other adjustments of the
conversion rights in this paragraph (d)) shall thereafter be applicable, as
nearly as may be reasonable, in relation to any shares of stock or other
securities thereafter deliverable upon the conversion of a share of Preferred
Stock.
(iii) The Corporation shall give written notice to the
holders of Preferred Stock of any proposed transaction within the scope of
clause (i) or (ii) of this paragraph (d) not less than ten (10) days prior to
the anticipated record date or effective date, as the case may be, therefor and
provide in such written notice a brief description of the terms and conditions
of such transaction.
<PAGE>
-16-
In connection with the conversion of any shares of Preferred
Stock, no fractions of shares of Common Stock shall be issued, but the
Corporation shall pay a cash adjustment in respect of such fractional interest
in an amount equal to the fair market value of such fractional interest as
determined by the Board of Directors. If more than one share of Preferred Stock
shall be surrendered for conversion at any one time by the same holder, the
number of full shares of Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of Preferred Stock so
surrendered.
Upon conversion of any shares of Preferred Stock the holder
thereof shall be entitled to receive from the Corporation, in respect of the
shares so converted, payment in cash of any dividends which have become payable
in accordance with paragraph (a) of this Article THIRD but remain unpaid. In the
event the Corporation is prevented by applicable corporate law, in whole or in
part, from making such dividend payment, the Corporation shall have a continuing
obligation to make such payment, which shall survive such conversion, until the
same is paid.
(e) Redemption. On March 31, 2001, the Corporation, upon
----------
notice given as provided below, shall redeem all then outstanding shares of
Preferred Stock by paying therefor in cash, as provided below, the sum of ONE
HUNDRED U.S. DOLLARS (U.S. $100.00) per share, plus, in each case, a cash amount
equal to all accrued and unpaid dividends thereon, if any (the "Redemption
Price").
At least ten (10) and not more than thirty (30) days'
previous notice of such redemption of Preferred Stock shall be mailed to the
<PAGE>
-17-
holders of record of such Preferred Stock at their respective addresses as the
same shall appear on the books of the Corporation.
On or before March 31, 2001, the Corporation may provide for
the payment of an amount sufficient to redeem the shares of Preferred Stock
called for redemption by either (i) setting aside the amount, separate from its
other funds, in trust for the benefit of the holders of the shares to be
redeemed, or (ii) depositing such amount in a bank or trust company as a trust
fund, with irrevocable instructions and authority to the bank or trust company
to give or complete the notice of redemption and to pay to the holders of the
shares of Preferred Stock to be redeemed, on or after March 31, 2001, the
Redemption Price upon surrender of their respective share certificates. If the
Corporation so provides for payment of the Redemption Price by either method,
then, from and after March 31, 2001, (i) the shares of Preferred Stock shall be
deemed to be redeemed, (ii) dividends thereon shall cease to accrue, (iii) such
setting aside or deposit shall be deemed to constitute full payment for the
shares, (iv) the shares no longer shall be deemed to be outstanding, (v) the
holders thereof shall cease to be stockholders with respect to such shares, and
(vi) the holders shall have no rights with respect thereto, except the right to
receive (without interest) the Redemption Price upon surrender of their stock
certificates. Any interest accruing on funds so set aside or deposited shall
belong to the Corporation. If funds are deposited with a bank or trust company
as provided herein, and the holders of the shares of Preferred Stock do not,
within three (3) years after such deposit, claim any amount so deposited for the
redemption thereof, the bank or trust company shall pay over to the Corporation
upon demand the balance of the funds so deposited, and the bank or trust company
thereupon shall be relieved of all responsibility to such holders.
<PAGE>
-18-
In the event the Corporation is prevented by applicable
corporate law, in whole or in part, from making any redemption payments at the
time called for under this paragraph (e), the Corporation shall make such
redemption at the appointed time, only to the extent permitted by applicable
corporate law, and shall then complete such redemption (in one or more later
transactions) at such time or times as the same is permitted by applicable
corporate law.
(f) Identical Rights and Privileges. Except as otherwise
-------------------------------
expressly provided above in this Article THIRD, the holders of Common Stock and
the holders of Preferred Stock shall be entitled to the same rights and
privileges.
B. Class A Preferred Stock may be issued from time to time in one or
more series, each of such series to have such voting powers, full or limited, or
no voting powers, and such designations, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereon or thereof, as are stated and expressed herein and in
the resolution or resolutions providing for the issue of such series adopted by
the Board of Directors as hereinafter provided. Authority is hereby expressly
granted to the Board of Directors, subject to the provisions of this Part B, to
authorize the issue of one or more series of Class A Preferred Stock and, with
respect to each series, to fix by resolution or resolutions providing for the
issue of such series:
(a) The number of shares to constitute such series and the
distinctive designation thereof, provided that unless otherwise stated in any
resolution or resolutions relating to such series, such number of shares may be
increased or decreased by the Board of Directors in connection with any
classification or reclassification of unissued shares of Class A Preferred
Stock;
<PAGE>
-19-
(b) The annual dividend rate on the shares of such series and
the date or dates from which dividends shall accumulate;
(c) Whether the holders of such series are or are not entitled
to participate in earnings of the Corporation through dividends in excess of (or
in lieu of) dividends at an annual rate and the terms of any such right to
participate;
(d) Whether or not the shares of such series shall be subject to
redemption, the limitations and restrictions with respect to such redemption, if
any, and the times of redemption of the shares of such series and the amounts
(or methods of calculating such amounts) which the holders of such series shall
be entitled to receive upon the redemption thereof, which amounts (or method of
calculating such amounts) may vary at different redemption dates and may also,
with respect to shares redeemed through the operation of any retirement or
sinking fund, be different from the amounts (or method of calculating such
amounts) with respect to shares otherwise redeemed;
(e) The amount (or method of calculating such amount) which the
holders of such series shall be entitled to receive upon the voluntary or
involuntary liquidation, dissolution or winding up of the Corporation;
(f) Whether or not the shares of such series shall be subject to
the operation of a retirement or sinking fund and, if so, the extent to and
manner in which it shall be applied to the purchase or redemption of the shares
of such series for retirement or to other corporate purposes and the terms and
provisions relative to the operation thereof;
<PAGE>
-20-
(g) Whether or not the shares of such series shall be
convertible into, or exchangeable for, shares of stock of any other class or
classes, or of any other series of the same class, and if so convertible or
exchangeable, the price or prices or the rate or rates of conversion or exchange
and the method, if any, of adjusting the same, and the other terms and
conditions of such conversion or exchange;
(h) The voting rights, if any, of holders of shares of such
series in addition to the voting rights provided for by applicable law;
(i) The limitations and restrictions, if any, to be effective
while any shares of such series are outstanding upon the payment of dividends or
making of other distributions on, and upon the purchase, redemption or other
acquisition by the Corporation of Common Stock or any other class or classes of
stock of the Corporation ranking junior to the shares of such series;
(j) The conditions or restrictions, if any, upon the creation of
indebtedness of the Corporation or upon the issue of any additional stock
(including additional shares of such series or of any other series or class)
ranking on a parity with or prior to the shares of such series as to dividends
or upon liquidation; and
(k) Any other preference and relative, participating, optional,
or other special rights, and qualifications, limitations or restrictions thereon
or thereof, as shall not be inconsistent with this Part B.
All shares of any one series of Class A Preferred Stock shall be
identical with each other in all respects, except that shares of any one
<PAGE>
-21-
series issued at different times may differ as to the dates from which dividends
thereon shall be cumulative if dividends on such series accumulate; and all
series shall rank equally and be identical in all respects, except as permitted
by the foregoing provisions of this Part B.
For purpose hereof and of any resolution of the Board of
Directors providing for the classification or reclassification of any shares of
Class A Preferred Stock or for the purpose of any certificate filed with the
Republic of Panama (unless otherwise provided in any such resolution or
certificate):
(i) The term "outstanding," when used in reference to shares of
stock, shall mean issued shares, excluding shares held by the Corporation and
shares called for redemption, funds for the redemption of which shall have been
deposited in trust; and
(ii) The amount of dividends "accrued" on any share of Class A
Preferred Stock of any series providing for cumulative dividends as at any
dividend date shall be deemed to be the amount of any unpaid dividends
accumulated thereon to and including such dividend date, whether or not earned
or declared, and the amount of dividends "accrued" on any share of Class A
Preferred Stock of any series as at any date other than a dividend date shall be
calculated thereon to and including the last preceding dividend date, whether or
not earned or declared, plus an amount equivalent to the pro rata portion of the
periodic dividend with respect thereto at the annual dividend rate fixed for the
shares of such series for the period after such last preceding dividend date to
and including the date as of which the calculation is made.
<PAGE>
-22-
FOURTH: Limited Liability. The liability of each stockholder is
------- -----------------
limited to the amount, if any, unpaid on his shares.
FIFTH: Domicile. The domicile of the Corporation is in the
------ --------
Republic of Panama, and the name of its Resident Agent is the law firm ARIAS,
FABREGA & FABREGA, whose domicile is at Edificio Plaza Bancomer, 50th Street,
Panama, Republic of Panama.
SIXTH: Duration. The duration of the Corporation's existence is
------ --------
to be perpetual.
SEVENTH: Board of Directors. The business of the Corporation shall be
------- ------------------
managed under the direction of a Board of Directors in accordance with the
following:
(a) The Board of Directors may exercise all of the powers of the
Corporation except such as are by law, by these Articles of Incorporation or by
the Bylaws conferred upon or reserved to the stockholders.
(b) The number of directors constituting the entire Board of
Directors shall be not less than three (3) directors nor more than fifteen (15)
directors, the exact number within such limits to be determined from time to
time by resolution adopted by the affirmative vote of a majority of the
directors present at a meeting of the Board of Directors at which a quorum is
present; provided, however, that the number of directors shall not be reduced so
as to shorten the term of any director at that time in office; and provided
further, that the number of directors constituting the entire Board of Directors
shall be six (6) until otherwise fixed by a majority of the entire Board of
Directors.
<PAGE>
-23-
(c) The Board of Directors shall be divided into three classes,
designated Class I, Class II and Class III. All classes shall be as nearly equal
in number as possible, and no class shall include less than one (1) director.
The terms of office of the directors initially classified shall be as follows:
at the 1996 annual meeting of stockholders, Class I directors shall be elected
for a one-year term expiring at the next annual meeting of stockholders; Class
II directors shall be elected for a two-year term expiring at the second
succeeding annual meeting of stockholders; and Class III directors shall be
elected for a three-year term expiring at the third succeeding annual meeting of
stockholders. At each annual meeting of stockholders after such initial
classification, directors to replace those whose terms expire at such annual
meeting shall be elected to hold office until the third succeeding annual
meeting. Each director shall hold office until the expiration of that director's
term and until that director's successor is elected and qualifies, unless that
director earlier dies, resigns or is removed. If the number of directors is
changed in accordance with the terms of these Articles of Incorporation, any
increase or decrease shall be apportioned among the classes so as to maintain
the number of directors in each class as nearly equal in number as possible.
(d) Nominations of candidates for election as directors of the
Corporation at any meeting of the stockholders at which election of one or more
directors shall be held (an "Election Meeting") may be made by or at the
direction of the Board of Directors or by any stockholder entitled to vote at
such Election Meeting, in accordance with the following procedures. Nominations
made by or at the direction of the Board of Directors may be made at any time.
At the request of the Secretary of the Corporation, each proposed nominee shall
provide the Corporation with such information concerning the proposed nominee as
is required, under the rules of the U.S. Securities and Exchange Commission, to
be included in the Corporation's proxy statement soliciting proxies for the
<PAGE>
-24-
nominee's election as a director. Nominations, other than those made by or at
the direction of the Board of Directors, shall be made pursuant to timely notice
in writing to the Secretary of the Corporation. Not less than forty-five (45)
days nor more than ninety (90) days prior to the date of the Election Meeting,
any stockholder who intends to make a nomination at the Election Meeting shall
deliver a notice to the Secretary of the Corporation setting forth (i) the name,
age, business address and residence address of each nominee proposed in such
notice, (ii) the principal address of each nominee proposed in such notice;
(iii) the number and type of shares of stock of the Corporation which are
beneficially owned by each such nominee, and (iv) such other information
concerning each such nominee as would be required, under the rules of the U.S.
Securities and Exchange Commission, in a proxy statement soliciting proxies for
the election of such nominees. Such notice shall include a signed consent of
each such nominee to serve as a director of the Corporation, if elected. In the
event that a person who is validly designated as a nominee in accordance with
this paragraph shall thereafter become unable or unwilling to stand for election
to the Board of Directors, the Board of Directors may designate a substitute
nominee. If the Chairman of the Election Meeting determines that a nomination
was not made in accordance with the foregoing procedures, such nomination shall
be void.
(e) Any vacancies in the Board of Directors for any reason, and
any directorships resulting from any increase in the number of directors, may be
filled by the Board of Directors, acting by a majority of the directors then in
office, although less than a quorum, and any director so chosen shall hold
office until the next election of the class for which such director shall have
been chosen and until such director's successor shall be elected and shall
qualify.
<PAGE>
-25-
(f) There shall be no cumulative voting in the election of
directors. Election of directors need not be by written ballot unless the Bylaws
of the Corporation so provide.
(g) No director may be removed from office by the stockholders
except for cause with the affirmative vote of the holders of not less than a
majority of the total voting power of all outstanding securities of the
Corporation then entitled to vote generally in the election of directors, voting
together as a single class.
(h) Notwithstanding the foregoing, whenever the holders of any
one or more classes or series of preferred stock issued by the Corporation shall
have the right, voting separately by class or series, to elect directors at an
annual or special meeting of stockholders, the election, term of office, filling
of vacancies and other features of such directorships shall be governed by the
terms of these Articles of Incorporation applicable thereto (including the
resolutions adopted by the Board of Directors pursuant to Article THIRD), and
such directors so elected shall not be divided into classes pursuant to
paragraph (c) of this Article SEVENTH unless expressly provided by such terms.
(i) Meetings of directors may be held in the Republic of Panama
or in any other country. A majority of the directors then in office shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors.
(j) At any meeting of the directors, any director may be
represented and vote by proxy or proxies (who need not be directors) appointed
by an instrument in writing, public or private, with or without power of
<PAGE>
-26-
substitution. One or more directors may participate in a meeting of the Board of
Directors, or of a committee of the Board of Directors, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation in a meeting by
such means shall constitute presence in person at such meeting.
(k) A director may hold any remunerative office of profit with
the Corporation in addition to the office of director. No director shall be
disqualified from entering into contracts, arrangements or dealings with the
Corporation and no such contracts, arrangements or dealings shall be voided,
whether they be with the director or with a corporation in which he is
interested as member or director or officer or otherwise, and no director shall
be liable to account to the Corporation for any profit arising out of any such
contract, arrangement or dealing, provided that such director discloses to the
directors of the Corporation his interest in such contract, arrangement or
dealing at or before the time such contract, arrangement or dealing is
determined upon or entered into and such contract, arrangement or dealing is
approved by the Board of Directors.
(l) The Board of Directors may appoint two or more of their
number to constitute an Executive Committee or any other committee or
committees, who shall have and exercise the powers of the Board of Directors in
the management of the business and affairs of the Corporation to the extent and
subject to the restrictions expressed in these Articles of Incorporation, the
Bylaws or the resolution appointing such committee or committees.
(m) The Board of Directors may make, alter, amend and repeal the
Bylaws.
<PAGE>
-27-
(n) The Board of Directors may, without stockholder approval,
cause the Corporation to guaranty debts and obligations of its wholly- or
partly-owned subsidiaries or entities within the common control of the
stockholders of the Corporation, and pledge, encumber, hypothecate, or otherwise
grant as security, assets of the Corporation as guaranty or security for said
debts.
(o) Notwithstanding any other provisions of these Articles of
Incorporation or the Bylaws of the Corporation (and notwithstanding the fact
that a lesser percentage may be specified by law, these Articles of
Incorporation or the Bylaws of the Corporation), any proposal to amend or
repeal, or adopt any provision inconsistent with, this Article SEVENTH or any
provision of this Article SEVENTH shall require the affirmative vote of the
holders of seventy-five percent (75%) or more of the outstanding shares of stock
of the Corporation entitled to vote on such matter.
(p) To the fullest extent permitted by the General Corporation
Law of the Republic of Panama, as the same exists or may hereafter be amended, a
director of the Corporation shall not be personally liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director. The Board of Directors may (i) cause the Corporation to enter into
contracts with directors providing for the limitation of liability set forth in
this paragraph (p) to the fullest extent permitted by law, and (ii) adopt Bylaws
or resolutions or cause the Corporation to enter into contracts providing for
indemnification of directors and officers of the Corporation and other persons.
No amendment to or repeal of this paragraph (p) shall apply to, or have any
effect on, the liability or alleged liability of any director of the Corporation
for or with respect to any acts or omissions of such director occurring prior to
such amendment or repeal.
<PAGE>
-28-
EIGHTH: Meetings. All the meetings of the stockholders and of the
------ --------
Board of Directors shall be held at the office of the Corporation in the
Republic of Panama or at any other place or places, within or without the
Republic of Panama, as may be determined from time to time by the Board of
Directors.
NINTH: Amendment. The Corporation reserves the right to amend these
----- ---------
Articles of Incorporation as from time to time amended, in the manner now or
hereafter prescribed by law, and all rights conferred on officers, directors and
stockholders herein are granted subject to this reservation.
TENTH: No Preemptive Right. No stockholder shall have a preferential
----- -------------------
or preemptive right to purchase or subscribe for any shares of the Corporation,
whether now or hereafter authorized or issued, including any shares issued
pursuant to an increase in authorized capital stock, or pursuant to the issuance
of stock which has previously been authorized but remains unissued or from a
prior issue that has remained unsold, or in respect of stock that the
Corporation has purchased and which remains outstanding as treasury stock.
SIGNED this 21st day of the month of May, 1996.
WILLBROS GROUP, INC.
By: /s/ Larry J. Bump
----------------------------------------
Larry J. Bump, President
By: /s/ Melvin F. Spreitzer
----------------------------------------
Melvin F. Spreitzer, Secretary
<PAGE>
-29-
CERTIFICATION
We, the undersigned, Larry J. Bump and Melvin F. Spreitzer, President and
Secretary, respectively, of WILLBROS GROUP, INC., hereby certify that we have
been duly authorized to execute the foregoing Certificate of Amendment and
Restatement of the Articles of Incorporation of WILLBROS GROUP, INC. by
resolution adopted by the holders, or their proxies, of the majority of the
issued and outstanding shares of the Common Stock and the Preferred Stock of
WILLBROS GROUP, INC. with the right to vote, at a meeting of the Shareholders
duly held in Panama City, Panama, at 10:00 a.m., local time, on the 21st day of
the month of May, 1996, pursuant to proper notice thereof.
SIGNED this 21st day of the month of May, 1996.
WILLBROS GROUP, INC.
By: /s/ Larry J. Bump
-----------------------------------------
Larry J. Bump, President
By: /s/ Melvin F. Spreitzer
-----------------------------------------
Melvin F. Spreitzer, Secretary
<PAGE>
EXHIBIT 10.1
================================================================================
CREDIT AGREEMENT
AMONG
WILLBROS INTERNATIONAL, INC.,
WILLBROS USA, INC.
AND
WILLBROS ENGINEERING & CONSTRUCTION LIMITED
AS BORROWERS
* * * * *
WILLBROS GROUP, INC.,
WILLBROS ENGINEERING & CONSTRUCTION LIMITED
WILLBROS ENERGY SERVICES COMPANY
AND
WILLBROS BUTLER ENGINEERS, INC.
AS GUARANTORS
AND
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
AS AGENT
================================================================================
Dated as of September 16, 1993
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C> <C>
ARTICLE I DEFINITIONS....................................................... 1
1.01 Defined Terms................................................... 1
1.02 Other Definitional Provisions................................... 23
ARTICLE II AMOUNT AND TERMS OF COMMITMENTS.................................. 24
2.01 The Revolving Credit............................................ 24
2.02 Loan Accounts................................................... 25
2.03 Procedure for Borrowing......................................... 26
2.04 Conversion and Continuation Elections........................... 27
2.05 Voluntary Termination or Reduction of Commitments............... 29
2.06 Optional Prepayments............................................ 29
2.07 Mandatory Prepayments of Loans.................................. 30
2.08 Repayment....................................................... 30
2.09 Interest........................................................ 30
ARTICLE III LETTERS OF CREDIT............................................... 32
3.01 The Letter of Credit Commitment................................. 32
3.02 The Letters of Credit........................................... 33
3.03 Issuance of the Letters of Credit............................... 35
3.04 Drawings and Reimbursements..................................... 37
3.05 Cash Collateral Account......................................... 39
3.06 Role of the Issuing Bank and the Syndicated L/C Bank............ 41
3.07 Obligation to Reimburse for, or Participate in,
Letters of Credit............................................... 41
3.08 Indemnification by the Banks.................................... 43
3.09 Special Provisions Relating to Commercial Letters of Credit..... 43
ARTICLE IV FEES; PAYMENTS; TAXES; CHANGES IN CIRCUMSTANCES.................. 45
4.01 Arrangement Fee................................................. 45
4.02 Commitment Fees................................................. 45
4.03 Participation Fee............................................... 45
4.04 Agency Fee...................................................... 45
4.05 Letter of Credit Fees........................................... 45
4.06 Computation of Fees and Interest................................ 47
4.07 Payments by the Borrowers....................................... 48
4.08 Payments by the Banks to the Agent.............................. 49
4.09 Security and Guarantees......................................... 50
4.10 Taxes........................................................... 50
4.11 Sharing of Payments, Etc........................................ 56
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
4.12 Illegality...................................................... 56
4.13 Increased Costs and Reduction of Return......................... 57
4.14 Funding Losses.................................................. 58
4.15 Eurodollar Rate Protection...................................... 59
4.16 Certificates of Banks........................................... 59
ARTICLE V REPRESENTATIONS AND WARRANTIES.................................... 60
5.01 Corporate Existence and Power................................... 60
5.02 Corporate Authorization; No Contravention....................... 60
5.03 Governmental Authorization...................................... 61
5.04 Binding Effect.................................................. 61
5.05 Litigation...................................................... 61
5.06 No Default...................................................... 62
5.07 ERISA Compliance................................................ 62
5.08 Use of Proceeds; Margin Regulations............................. 64
5.09 Title to Properties............................................. 64
5.10 Taxes........................................................... 64
5.11 Financial Condition............................................. 65
5.12 Environmental Matters........................................... 65
5.13 Collateral Documents............................................ 66
5.14 Investment Company.............................................. 67
5.15 Full Disclosure................................................. 67
5.16 No Burdensome Restrictions...................................... 67
5.17 Solvency........................................................ 67
5.18 Labor Relations................................................. 67
5.19 Copyrights, Patents, Trademarks and Licenses,
Patents, etc.................................................... 68
5.20 Subsidiaries.................................................... 68
5.21 Broker's; Transaction Fees...................................... 69
5.22 Insurance....................................................... 69
ARTICLE VI CONDITIONS PRECEDENT............................................. 70
6.01 Conditions of Initial Loans or Letter of Credit................. 70
6.02 Conditions to all Borrowings.................................... 73
6.03 Conditions for Participation by a Designated Subsidiary......... 73
ARTICLE VII AFFIRMATIVE COVENANTS........................................... 75
7.01 Financial Statements............................................ 75
7.02 Certificates; Other Information................................ 76
7.03 Preservation of Corporate Existence............................. 77
7.04 Maintenance of Property......................................... 77
7.05 Insurance....................................................... 77
7.06 Payment of Obligations.......................................... 78
7.07 Compliance with Laws............................................ 78
7.08 Inspection of Property and Books and Records.................... 78
7.09 Environmental Laws.............................................. 79
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
7.10 Notices......................................................... 79
7.11 Use of Proceeds................................................. 81
7.12 Further Assurances.............................................. 81
ARTICLE VIII NEGATIVE COVENANTS............................................. 83
8.01 Limitation on Liens............................................. 83
8.02 Consolidations and Mergers...................................... 84
8.03 Acquisitions and Investments.................................... 85
8.04 Limitation on Indebtedness...................................... 86
8.05 Transactions with Affiliates.................................... 87
8.06 Contingent Obligations.......................................... 87
8.07 Compliance with ERISA........................................... 88
8.08 Use of Proceeds................................................. 88
8.09 Lease Obligations............................................... 89
8.10 Restricted Payments............................................. 89
8.11 Construction Contracts.......................................... 90
8.12 Capital Expenditures............................................ 90
8.13 Funded Debt..................................................... 90
8.14 Consolidated Tangible Net Worth................................. 90
8.15 Leverage Ratio.................................................. 91
8.16 Interest Coverage Ratio......................................... 91
8.17 Change in Business.............................................. 91
8.18 Change in Structure............................................. 91
8.19 Accounting Changes.............................................. 91
8.20 Other Contracts................................................. 91
ARTICLE IX EVENTS OF DEFAULT................................................ 92
9.01 Events of Default............................................... 92
9.02 Remedies........................................................ 95
9.03 Rights Not Exclusive............................................ 96
ARTICLE X THE AGENT......................................................... 97
10.01 Appointment and Authorization................................... 97
10.02 Delegation of Duties............................................ 97
10.03 Liability of Agent.............................................. 97
10.04 Reliance by Agent............................................... 98
10.05 Notice of Default............................................... 98
10.06 Credit Decision................................................. 99
10.07 Indemnification................................................. 99
10.08 Agent in Individual Capacity.................................... 100
10.09 Successor Agent................................................. 100
10.10 Collateral Matters.............................................. 101
ARTICLE XI MISCELLANEOUS.................................................... 102
11.01 Amendments and Waivers.......................................... 102
11.02 Notices......................................................... 102
11.03 No Waiver; Cumulative Remedies.................................. 103
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
11.04 Costs and Expenses.............................................. 103
11.05 Indemnity....................................................... 104
11.06 Successors and Assigns.......................................... 105
11.07 Assignments, Participations, Etc................................ 105
11.08 Set-off......................................................... 107
11.09 Notification of Addresses, Lending Offices, Etc................. 107
11.10 Counterparts.................................................... 108
11.11 Severability.................................................... 108
11.12 Governing Law and Jurisdiction.................................. 108
11.13 ENTIRE AGREEMENT................................................ 109
11.14 Conflict with Collateral Documents.............................. 109
11.15 Termination..................................................... 110
11.16 Currency Conversion............................................. 110
11.17 Limitation of WECL Liability ................................... 111
</TABLE>
-iv-
<PAGE>
The following exhibits and schedules to the Credit Agreement have been
omitted, excluding Exhibits G, H, I, J-1, J-2 and M which have been provided,
and the Registrant agrees to furnish supplementally a copy of any such omitted
exhibits and schedules to the Securities and Exchange Commission upon its
request:
EXHIBITS
--------
Exhibit A Notice of Borrowing
Exhibit B Notice of Conversion/Continuation
Exhibit C Form of Election to Participate
Exhibit D Form of Election to Terminate
Exhibit E Form of Syndicated Letter of Credit
Exhibit F-1 Form of Standby Letter of Credit Application
Exhibit F-2 Form of Commercial Letter of Credit Application
Exhibit F-3 Form of Power of Attorney
Exhibit G Parent Guaranty
Exhibit H Guaranty Agreement
Exhibit I Subsidiary Guaranty
Exhibit J-1 Parent Pledge Agreement
Exhibit J-2 Pledge Agreement
Exhibit K Form of Increase in Commitments
Exhibit L Form of Supplement
Exhibit M Borrower Pledge Agreement
Exhibit N Opinion of Counsel - WGI, WII
Exhibit O Opinion of Counsel - WUSA, WESCO, WBEI
Exhibit P Opinion of Counsel - WECL
Exhibit Q Opinion of Counsel - Agent
Exhibit R Opinion of Counsel - Designated Subsidiary
Exhibit S Opinion of Nauta Dutilh
Exhibit T Financial Condition Certificate (Solvency)
Exhibit U Assignment & Assumption
SCHEDULES
Schedule 2.01 Commitments
Schedule 3.01 Existing Letters of Credit
Schedule 5.05 Litigation and Claims
Schedule 5.07 ERISA
Schedule 5.10 Contested Taxes
Schedule 5.12 Environmental Matters
Schedule 5.19 Copyrights, Patents, Trademarks, Licenses, etc.
Schedule 5.20(a) Subsidiaries
Schedule 5.20(b) Equity Investments
Schedule 8.01 Existing Liens
Schedule 8.04 Indebtedness
Schedule 8.06 Contingent Obligations
Schedule 8.11 Partnerships and Joint Ventures; Construction Contracts
-v-
<PAGE>
CREDIT AGREEMENT
This CREDIT AGREEMENT, is entered into as of September 16, 1993, among
WILLBROS GROUP, INC., a Republic of Panama corporation (hereinafter referred to
as either "WGI" or the "Company"), WILLBROS INTERNATIONAL, INC., a Republic of
--- -------
Panama corporation ("WII"), WILLBROS USA, INC., a Delaware corporation ("WUSA"),
--- ----
WILLBROS ENGINEERING & CONSTRUCTION LIMITED, an Ontario, Canada corporation
("WECL"), the Designated Subsidiaries (as defined below) (WII, WUSA, WECL and
----
the Designated Subsidiaries are collectively referred to as the "Borrowers"),
---------
the several financial institutions parties to this Agreement (collectively, the
"Banks"; individually, a "Bank"), and Bank of America National Trust and
Savings Association, as Agent (the "Agent").
WHEREAS, the Banks have agreed to make available to the Borrowers a
revolving credit facility and a standby and commercial letter of credit facility
upon the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
1.01 Defined Terms. In addition to the terms defined elsewhere in this
-------------
Agreement, the following terms have the following meanings:
"Affiliate" means as to any Person, any other Person which, directly
---------
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of five percent
(5%) or more of the equity of a Person shall, for the purposes of this
Agreement, be deemed to control the other Person. Notwithstanding the foregoing,
under no circumstances shall the Agent or any Bank be deemed to be an Affiliate
of the Company or the Borrowers or any Subsidiary of the Company.
"Agent" means Bank of America, in its capacity as agent for the Banks
-----
hereunder, and any successor agent.
<PAGE>
"Agreement" means this Credit Agreement, as amended, supplemented or
---------
modified from time to time.
"Alternative Currency" means any currency other than Dollars which is
--------------------
freely transferable into Dollars.
"Applicable Margin" means
-----------------
(i) with respect to Reference Rate Loans, .50% per annum;
(ii) with respect to CD Rate Loans, 1.75% per annum; and
(iii) with respect to Eurodollar Rate Loans, 1.50% per annum.
"Assignee" has the meaning specified in Section 11.07.
--------
"Assignment and Assumption" has the meaning specified in Section
-------------------------
11.07.
"Bank of America" means Bank of America National Trust and Savings
---------------
Association, a national banking institution.
"Borrower Pledge Agreement" means the agreement by WUSA under which
-------------------------
the stock of WESCO and WBEI is pledged as security for the Obligations in
substantially the form of Exhibit M hereto.
"Borrowing" means a borrowing hereunder consisting of Loans made to
---------
any Borrower on the same day by the Banks pursuant to Article II.
"Business Day" means any day other than a Saturday, Sunday or other
------------
day on which commercial banks in New York City or San Francisco or any other
city in which any Bank's Lending Office is located are authorized or required by
law to close and, if the applicable Business Day relates to any Eurodollar Rate
Loan, means such a day on which dealings are carried on in the London interbank
market.
"Capital Expenditures" means for any period and with respect to any
--------------------
Person, the aggregate of all expenditures by such Person and its Subsidiaries
for the acquisition or leasing of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) which should be capitalized under GAAP on a consolidated balance
-2-
<PAGE>
sheet of such Person and its Subsidiaries, less (a) net proceeds from sales of
----
fixed or capital assets received by such Person or any of its Subsidiaries
during such period and (b) the net proceeds in such period in respect of
insurance recoveries in respect of assets which are damaged or destroyed and not
replaced. For the purpose of this definition, the purchase price of equipment
which is purchased simultaneously with the trade-in of existing equipment owned
by such Person or any of its Subsidiaries or with insurance proceeds shall be
included in Capital Expenditures only to the extent of the gross amount of such
purchase price less the credit granted by the seller of such equipment for such
equipment being traded in at such time, or the amount of such proceeds, as the
case may be.
"Capital Lease Obligations" means all monetary obligations of the
-------------------------
Company or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, is classified as a capital lease.
"Cash Collateral Account" has the meaning set forth in Section 3.05
-----------------------
hereof.
"Cash Equivalents" means:
----------------
(a) securities issued or fully guaranteed or insured by the
United States Government or any agency thereof and backed by the full faith
and credit of the United States having maturities of not more than twelve
(12) months from the date of acquisition;
(b) certificates of deposit, time deposits, Eurodollar time
deposits, or bankers' acceptances having in each case a tenor of not more
than twelve (12) months from the date of acquisition issued by any Bank, or
by any U.S. commercial bank or any branch or agency of a non-U.S. bank
licensed to conduct business in the U.S. having combined capital and
surplus of not less than Five Hundred Million dollars ($500,000,000) whose
short term securities are rated at least A-1 by Standard & Poor's
Corporation and P-1 by Moody's Investors Service, Inc.;
(c) commercial paper of an issuer rated at least A-1 by Standard
& Poor's Corporation or P-l by Moody's Investors Service Inc. and in either
case having a tenor of not more than six (6) months; and
-3-
<PAGE>
(d) investments in repurchase obligations with a term not more
than 15 days for underlying securities of the types described in clause (a)
entered into with any officer of a bank meeting the qualifications of a
bank listed in clause (b).
"CD Rate" means, for each Interest Period in respect of CD Rate Loans
-------
comprising a part of the same Borrowing, the rate of interest (rounded upward,
if necessary, to the nearest 1/100 of one percent) determined pursuant to the
following formula:
Certificate of Deposit Rate
---------------------------
CD Rate = 1.00 - Reserve Percentage + Assessment Rate
Where,
"Assessment Rate" means for any day of any Interest Period
for CD Rate Loans, the rate determined by the Agent as equal to
the annual assessment rate in effect on such day that is payable
to the FDIC by a member of the Bank Insurance Fund that is
classified as adequately capitalized and within supervisory
subgroup "A" (or a comparable successor assessment risk
classification within the meaning of 12.C.F.R. (S)327.3(d)) for
insuring time deposits at offices of such member in the United
States, or, in the event that the FDIC shall at any time
hereafter cease to assess time deposits based upon such
classifications or successor classifications, equal to the
maximum annual assessment rate in effect on such day that is
payable to the FDIC by any commercial bank (whether or not
applicable to the Banks) for insuring time deposits at offices of
such bank in the United States.
"Certificate of Deposit Rate" means for any Interest Period
for CD Rate Loans the rate of interest determined by the Agent to
be the arithmetic average (rounded upward, if necessary, to the
nearest one-hundredth of one percent (1/100%)) of the rates
notified to the Agent as the rates of interest bid by two or more
certificate of deposit dealers of recognized standing selected by
the Agent for the purchase at face value of U.S. dollar
certificates of deposit issued by major United States banks, for
such period and in the amount of the Agent's CD Rate Loans to be
made, at the time selected by the Agent on the first day of such
Interest Period.
-4-
<PAGE>
"Reserve Percentage" means for any Interest Period for CD
Rate Loans the maximum reserve percentage (expressed as a decimal
rounded upward, if necessary, to the next 1/100 of one percent)
as determined by the Agent in effect at the beginning of such
Interest Period (including, but not limited to, marginal,
emergency, supplemental, special and other reserve percentages)
prescribed by the Federal Reserve Board for determining the
maximum reserves to be maintained by member banks of the Federal
Reserve System with deposits exceeding One Billion dollars
($1,000,000,000) for new non-personal time deposits for a period
approximating such Interest Period and in an amount of One
Hundred Thousand dollars ($100,000) or more.
"CD Rate Loan" means a Loan that bears interest based on the CD Rate.
------------
"Closing Date" means the date on which all conditions precedent set
------------
forth in Article VI are satisfied or waived.
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Collateral" means all property and interests in property and proceeds
----------
thereof now owned or hereafter acquired by the Borrowers or any Guarantor and
their respective Subsidiaries in or upon which a lien now or hereafter exists in
favor of the Banks or the Agent on behalf of the Banks, whether under this
Agreement or under any other documents executed by any such Persons and
delivered to the Agent or the Banks.
"Collateral Documents" means, collectively, (i) the Parent Guaranty,
--------------------
the Subsidiary Guarantees, the WECL Guaranty, the Pledge Agreements, and all
other security agreements, mortgages, deeds of trust, patent and trademark
assignments, lease assignments, guarantees and other agreements among the
Borrowers, any Guarantor or their respective Subsidiaries and the Banks or the
Agent for the benefit of the Banks now or hereafter delivered to the Banks or
the Agent pursuant to or in connection with the transactions contemplated
hereby, and all financing statements (or comparable documents) now or hereafter
filed in accordance with the Uniform Commercial Code (or comparable law) against
the Borrowers, any Guarantor or any of their respective Subsidiaries in favor of
the Banks or the Agent for the benefit of the Banks and (ii) any amendments,
supplements, modifications, renewals, replacements,
-5-
<PAGE>
consolidations, substitutions and extensions of any of the foregoing.
"Commercial Letter of Credit" means a documentary Letter of Credit
---------------------------
which is drawable upon presentation of documents evidencing the sale or shipment
of goods purchased by any of the Borrowers in the ordinary course of its
business.
"Commitment Percentage" means as to any Bank, the percentage of the
---------------------
aggregate Commitments constituted by such Bank's Commitment.
"Commitments" means the aggregate Commitments of the Banks to make
-----------
Loans under the Revolving Commitments and to issue and/or participate in Letters
of Credit under the Letter of Credit Commitments in an amount in the aggregate
not to exceed Seventy Five Million dollars ($75,000,000) as such amount may be
reduced or increased from time to time pursuant to the terms of this Agreement.
"Commitment Termination Date" means the earlier to occur of (a) the
---------------------------
second anniversary of the Closing Date, as such date may be extended pursuant to
Section 2.01(b) and (b) the date on which the Commitments shall terminate in
accordance with the provisions of this Agreement.
"Consolidated Net Interest Expense" means, for any period, gross
---------------------------------
consolidated interest expense for the period for the Company and its
Subsidiaries, less interest income for such period, as determined in accordance
----
with GAAP.
"Contingent Obligation" means, as applied to any Person, any direct or
---------------------
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligations") of
-------------------
another Person (the "primary obligor"), in any manner, whether directly or
---------------
indirectly, including, without limitation, any obligation of that Person,
whether or not contingent, (a) to purchase, repurchase or otherwise acquire such
primary obligations or any property constituting direct or indirect security
therefor, or (b) to advance or provide funds (i) for the payment or discharge of
any such primary obligation, or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or cash
flow or solvency or any balance sheet item, level of income or financial
condition of the primary obligor, or (c) to purchase property, assets,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor
-6-
<PAGE>
to make payment of such primary obligation, or (d) otherwise to assure or hold
harmless the holder of any such primary obligation against loss in respect
thereof. The amount of any Contingent Obligation shall be deemed to be an amount
equal to the stated or determinable amount of the primary obligation in respect
of which such Contingent Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect thereof.
"Contractual Obligations" means, as to any Person, any provision of
-----------------------
any security issued by such Person or of any agree ment, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound.
"Controlled Group" means the Company and all Persons (whether or not
----------------
incorporated) under common control or treated as a single employer with the
Company or any of its Subsidiaries pursuant to Section 414(b), (c), (m) or (o)
of the Code.
"Conversion Date" means any date on which the Borrowers elect to
---------------
convert a Reference Rate Loan to a Eurodollar Rate Loan or a CD Rate Loan; a CD
Rate Loan to a Eurodollar Rate Loan or a Reference Rate Loan; or a Eurodollar
Rate Loan to a CD Rate Loan or a Reference Rate Loan.
"Default" means any of the events specified in Article IX, whether or
-------
not any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"Designated Subsidiary" means any Subsidiary of WII, WUSA or WECL as
---------------------
to which an Election to Participate shall have been delivered to the Agent and
as to which an Election to Terminate shall not have been delivered to the Agent.
Each such Election to Participate and Election to Terminate shall be duly
executed on behalf of such Subsidiary and WII, WUSA or WECL in such number of
copies as the Agent may request. The receipt by Agent of an Election to
Terminate shall not affect any Obligation of a Designated Subsidiary incurred
prior to the Agent's receipt of the Election to Terminate. The Agent shall
promptly give notice to the Banks of the receipt of any Election to Participate
or Election to Terminate.
"Dollars", "dollars" and "$" means lawful money of the United States.
------------------ -
-7-
<PAGE>
"Domestic Dollar Loans" means CD Rate Loans and Reference Rate Loans,
---------------------
collectively.
"Domestic Lending Office" means, with respect to each Bank, the office
-----------------------
of the Bank designated as such on the signature pages hereof or such other
office of the Bank as it may from time to time specify to the Borrowers and the
Agent.
"EBIT" means, for any period, for the Company and its Subsidiaries on
----
a consolidated basis, determined in accordance with GAAP, the sum of (a) the
consolidated net income (or net loss), plus (b) all amounts treated as expenses
for interest to the extent included in the determination of such net income (or
loss), plus (c) all income taxes recorded as expenses for income statement
purposes; provided, however, that net income (or loss) shall be computed for the
-------- -------
purposes of this definition without giving effect to extraordinary losses or
extraordinary gains.
"Election to Participate" means an Election to Participate by a
-----------------------
Designated Subsidiary, substantially in the form of Exhibit C hereto.
"Election to Terminate" means an Election to Terminate by a Designated
---------------------
Subsidiary, substantially in the form of Exhibit D hereto.
"Eligible Assignee" means (i) a commercial bank organized under the
-----------------
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least One Hundred Million dollars ($100,000,000); (ii) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a combined capital and
surplus of at least One Hundred Million dollars ($100,000,000), provided that
such bank is acting through a branch or agency located in the country in which
it is organized or another country which is also a member of the OECD.
"Environmental Claim" means all claims, however asserted, by any
-------------------
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law or for release or injury
to the environment or threat to public health, personal injury (including
sickness, disease or death), property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages (punitive or
otherwise), cleanup, removal, remedial, or responsive costs, restitution, civil
or criminal penalties, injunctive relief, or other type of relief,
-8-
<PAGE>
resulting from or based upon (a) the presence, placement, discharge, emission or
release (including intentional and unintentional, negligent and non-negligent,
sudden or non-sudden, accidental or non-accidental placement, spills, leaks,
discharges, emissions or releases) of any Hazardous Material at, in or from
property, whether or not owned by the Company, WESCO or WBEI or (b) any other
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law.
"Environmental Laws" means all federal, state or local laws, statutes,
------------------
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of and agreements with, any Governmental Authority, in each case
relating to environmental health, safety and land use matters, including the
Comprehensive Environmental Response, Compensation, and Liability Act (42
U.S.C.(S)960l et seq.) ("CERCLA"), the Hazardous Material Transportation Act (49
-- ---
U.S.C.(S)180l et seq.), the Resource Conservation and Recovery Act (42
-- ---
U.S.C.(S)690l et seq.) ("RCRA"), the Federal Water Pollution Control Act (33
-- ---
U.S.C.(S)1251 et seq.), the Clean Air Act (42 U.S.C.(S)1251 et seq.), the Toxic
-- --- -- ---
Substances Control Act (15 U.S.C.(S)2601 et seq.), and the Occupational Safety
-- ---
and Health Act (29 U.S.C.(S)651 et seq.) ("OSHA"), as such laws have been
-- ---
amended or supplemented, and any analogous or future federal, or present or
future applicable state or local, statutes and the regulations promulgated
thereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time and any regulation promulgated thereunder.
"ERISA Affiliate" means, any trade or business (whether or not
---------------
incorporated) under common control with the Company or any Subsidiary of the
Company within the meaning of Section 414(b), 414(c) or 414(m) of the Code.
"ERISA Event" means (a) a Reportable Event with respect to a Qualified
-----------
Plan or a Multiemployer Plan; (b) a withdrawal by any member of the Controlled
Group from a Qualified Plan subject to Section 4063 of ERISA during a plan year
in which it was a substantial employer (as defined in Section 4001(a)(2) of
ERISA); (c) a complete or partial withdrawal by any member of the Controlled
Group from a Multiemployer Plan; (d) the filing of a notice of intent to
terminate, the treatment of a plan amendment as a termination under Section 4041
or 4041A of ERISA or the commencement of proceedings by the PBGC to terminate a
Qualified Plan or Multiemployer Plan subject to Title IV of ERISA; (e) a
-9-
<PAGE>
failure to make required contributions to a Qualified Plan or Multiemployer
Plan; (f) an event or condition which might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Qualified Plan or Multiemployer Plan; (g) the
imposition of any liability under Title IV of ERISA, other than PBGC premiums
due but not delinquent under Section 4007 of ERISA, upon any member of the
Controlled Group; (h) an application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code with respect to any
Qualified Plan; (i) any member of the Controlled Group engages in or otherwise
becomes liable for a non-exempt prohibited transaction; or (j) a violation of
the applicable requirements of Section 404 or 405 of ERISA or the exclusive
benefit rule under Section 401(a) of the Code by any fiduciary with respect to
any Qualified Plan for which the Company or any of its Subsidiaries may be
directly or indirectly liable.
"Eurocurrency Liabilities" has the meaning assigned to such term in
------------------------
Regulation D of the Federal Reserve Board, as in effect from time to time.
"Eurodollar Lending Office" means with respect to each Bank, the
-------------------------
office of such Bank designated as such on the signature pages hereof or such
other office of such Bank, as such Bank may from time to time specify to the
Borrowers and the Agent.
"Eurodollar Rate" means, for each Interest Period for any Eurodollar
---------------
Rate Loan, an interest rate per annum (rounded upward, if necessary, to the
nearest one-hundredth of one percent (1/100%)) determined pursuant to the
following formula:
Eurodollar Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means the maximum reserve
-----------------------------
percentage (expressed as a decimal, rounded upward, if necessary,
to the next 1/100 of one percent) in effect on the date LIBOR for
such Interest Period is determined (whether or not applicable to
any Bank) under regulations issued from time to time by the
Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to liabilities or
assets consisting of or including
-10-
<PAGE>
Eurocurrency Liabilities having a term equal to such Interest
Period; and
"LIBOR" means the rate of interest per annum determined by
-----
the Agent to be the arithmetic mean (rounded upward, if
necessary, to the nearest one-sixteenth of one percent (1/16%))
of the rates of interest per annum notified to the Agent by each
Reference Bank as the rate of interest at which dollar deposits
in an amount approximately equal to the amount of the Loan to be
made or continued as, or converted into, a Eurodollar Rate Loan
by such Reference Bank and having a maturity equal to such
Interest Period would be offered to major banks in the London
Interbank market at their request at or about 11:00 a.m. (London
Time) on the second Business Day before the commencement of such
Interest Period. If one of the Reference Banks shall be unable or
shall otherwise fail to notify the Agent of such a rate, LIBOR
shall be determined on the basis of the rates as notified by the
remaining Reference Banks.
"Eurodollar Rate Loan" means a Loan that bears interest based on the
--------------------
Eurodollar Rate.
"Event of Default" means any of the events specified in Article IX,
----------------
provided that any requirement for the giving of notice, the lapse of time, or
- --------
both, or any other condition, event or act specified in Section 9.01 has been
satisfied.
"Existing Letters of Credit" means, collectively, the Letters of
--------------------------
Credit identified as such in Schedule 3.01.
"Federal Funds Rate" means, for any day, the federal funds effective
------------------
rate for the previous Business Day as quoted by the Federal Reserve Bank of New
York.
"Federal Reserve Board" means the Board of Governors of the Federal
---------------------
Reserve System or any successor thereof.
"Funded Indebtedness" means (a) any indebtedness for borrowed money,
-------------------
(b) all obligations evidenced by notes, bonds, debentures or similar
instruments, (c) all reimbursement obliga tions with respect to any letter of
credit, and (d) all Capital Lease Obligations.
"GAAP" means generally accepted accounting principles set forth in the
----
opinions and pronouncements of the Accounting
-11-
<PAGE>
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
accounting profession), or in such other statements by such other entity as may
be in general use by significant segments of the U.S. accounting profession,
which are applicable to the circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any state or
----------------------
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guarantor" means WGI under the Parent Guaranty, WII, WECL and WUSA
---------
under the Guaranty Agreement, WECL under the WECL Guaranty and WESCO and WBEI
under the Subsidiary Guarantees.
"Guaranty Agreement" means the agreement by each of WII, WECL and WUSA
------------------
to guaranty the Obligations of a Designated Subsidiary, substantially in the
form of Exhibit H hereto.
"Hazardous Materials" means all those substances which are regulated
-------------------
by, or which may form the basis of liability under, any Environmental Law,
including all substances identified under any Environmental Law as a pollutant,
contaminant, waste, solid waste, hazardous waste, hazardous constituent, special
waste, hazardous substance, hazardous material, or toxic substance, and
petroleum or petroleum derived substance or waste.
"Indebtedness" of any Person means without duplication, (a) all
------------
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services, except trade
payables; (c) all reimbursement obligations with respect to surety bonds,
letters of credit, bankers' acceptances and similar instruments (in each case,
whether or not matured); (d) all obligations evidenced by notes, bonds,
debentures or similar instruments; (e) all indebtedness created or arising under
any conditional sale or other title retention agreement or incurred as financing
in either case with respect to property acquired by the Person (even though the
rights and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property); (f) all Capital
Lease Obligations; (g) all indebtedness referred to in paragraphs
-12-
<PAGE>
(a) through (f) above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien upon
or in property (including accounts and contracts rights) owned by such Person,
even though such Person has not assumed or become liable for the payment of such
Indebtedness; and (h) all direct or indirect guaranties in respect of and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in paragraphs (a) through (f)
above, including the Parent Guaranty, the Guaranty Agreement, the WECL Guaranty
and the Subsidiary Guarantees.
"Interest Payment Date" means, with respect to any CD Rate Loan or
---------------------
Eurodollar Rate Loan, the last day of each Interest Period applicable to such
Loan, and, with respect to Reference Rate Loans, the last day of each calendar
quarter, and each date a Reference Rate Loan is converted into a Eurodollar Rate
Loan or a CD Rate Loan; provided, however, that if any Interest Period for a CD
-------- -------
Rate Loan or Eurodollar Rate Loan exceeds ninety (90) days or three (3) months,
as the case may be, interest shall also be paid on the date which falls ninety
(90) days or three (3) months, as the case may be, after the beginning of such
Interest Period.
"Interest Period" means,
---------------
(a) with respect to any Eurodollar Rate Loan, the
period commencing on the Business Day the Loan is disbursed or
continued or on the Conversion Date on which the Loan is
converted to the Eurodollar Rate Loan and ending on the date one,
two, three or six months thereafter, as selected by a Borrower in
its Notice of Borrowing or Notice of Conversion/Continuation; and
(b) with respect to any CD Rate Loan, the period
commencing on the Business Day the CD Rate Loan is disbursed or
continued or on the Conversion Date on which a Loan is converted
to the CD Rate Loan and ending 30, 60, 90 or 180 days thereafter,
as selected by a Borrower in its Notice of Borrowing or Notice of
Conversion/Continuation;
provided that:
--------
(i) if any Interest Period pertaining to a
Eurodollar Rate Loan or CD Rate Loan would otherwise end on
a day which is not a
-13-
<PAGE>
Business Day, that Interest Period shall be extended to the
next succeeding Business Day unless, in the case of a
Eurodollar Rate Loan, the result of such extension would be
to carry such Interest Period into another calendar month,
in which event such Interest Period shall end on the
immediately preceding Business Day;
(ii) any Interest Period pertaining to a
Eurodollar Rate Loan that begins on the last Business Day of
a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business
Day of the calendar month at the end of such Interest
Period;
(iii) if any Interest Period pertaining to a
Domestic Dollar Loan would otherwise end on a day which is
not a Business Day, such Interest Period shall be extended
to the next succeeding Business Day;
(iv) no Interest Period for any Loan shall extend
beyond the Commitment Termination Date.
"Issuing Bank" means any Bank or, consistent with applicable laws,
------------
BankAmerica International.
"Lending Office" means, with respect to any Bank, the office or
--------------
offices of the Bank specified as its "Lending Office" or "Domestic Lending
Office" or "Eurodollar Lending Office", as the case may be, opposite its name on
the signature pages hereof or such other office or offices of the Bank as it may
from time to time specify to the Company, the Borrowers and the Agent.
"L/C Application" has the meaning specified in Section 3.03(b).
---------------
"L/C Related Documents" has the meaning specified in Section 3.07(a).
---------------------
"Letter of Credit" means a Commercial Letter of Credit or a Standby
----------------
Letter of Credit.
-14-
<PAGE>
"Letter of Credit Commitments" means the commitments of the Banks to
----------------------------
issue or participate in Letters of Credit in a maximum aggregate amount equal to
the difference between Seventy Five Million dollars ($75,000,000) and the
aggregate sum of all Loans, as such amount may be reduced or increased from time
to time pursuant to the terms of this Agreement.
"Letter of Credit Expiration Date" means with respect to Commercial
--------------------------------
Letters of Credit, the third anniversary of the Closing Date, and with respect
to Standby Letters of Credit, the fifth anniversary of the Closing Date, or such
other dates as may be determined for a like period of time as the Commitment
Termination Date is extended pursuant to Section 2.01(b).
"Letter of Credit Facility" means, at any time, that portion of the
-------------------------
Commitments allocated to Letters of Credit and described in Article III.
"Letter of Credit Obligation" means, in respect of any Letter of
---------------------------
Credit as at any date or determination, the sum of (a) the maximum aggregate
amount which is then available to be drawn under such Letter of Credit plus (b)
----
the aggregate amount of all Reimbursement Obligations then outstanding with
respect to such Letter of Credit.
"Leverage Ratio" means at any date, the ratio of Total Liabilities to
--------------
Tangible Net Worth at such date.
"Lien" means any mortgage, deed of trust, pledge, hypo thecation,
----
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including, without limitation,
those created by, arising under or evidenced by any conditional sale or other
title retention agreement, the interest of a lessor under a Capital Lease
Obligation, any financing lease having substantially the same economic effect as
any of the foregoing, or the filing of any financing statement naming the owner
of the asset to which such lien relates as debtor, under the Uniform Commercial
Code or comparable law of any jurisdiction) and any contingent or other
agreement to provide any of the foregoing.
"Loan" means an extension of credit by a Bank to a Borrower pursuant
----
to Article II, and may be a Reference Rate Loan, CD Rate Loan or Eurodollar Rate
Loan.
-15-
<PAGE>
"Loan Documents" means this Agreement, each L/C Application, the
--------------
Collateral Documents, and all documents, instruments and agreements executed
and/or delivered to the Agent in connection therewith.
"Majority Banks" means at any time Banks holding at least sixty-six
--------------
and two-thirds percent (66-2/3%) of the then aggregate unpaid principal amount
of the Loans or Letters of Credit, or, if no such principal amount is then
outstanding, Banks having at least sixty-six and two-thirds percent (66-2/3%) of
the Commitments.
"Management Stockholders Agreement" means that certain Management
---------------------------------
Stockholders Agreement dated April 9, 1992 between the Company and its
management stockholders.
"Margin Stock" means "margin stock" as such term is defined in
------------
Regulation G, T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means a material adverse change in, or a
-----------------------
material adverse effect upon, (a) any of the operations, business, properties,
or condition (financial or otherwise) of the Company and its Subsidiaries on a
consolidated basis; (b) the ability of WGI, WII, WUSA, WECL, or any Designated
Subsidiary or any Guarantor to perform under any Loan Document; (c) the
legality, validity, binding effect or enforceability of any Loan Document; (d)
the perfection or priority of any Lien granted to the Banks or to the Agent for
the benefit of the Banks under any of the Collateral Documents.
"Multiemployer Plan" means a "multiemployer plan" (within the meaning
------------------
of Section 4001(a)(3) of ERISA) and to which any member of the Controlled Group
makes, is making, or is obligated to make contributions or has made, or been
obligated to make, contributions.
"Musketeer" means Musketeer Oil B.V., a Netherlands corporation, which
---------
owns WUSA.
"Non-Qualified Pension Benefit Restoration Plan" means a compensation
----------------------------------------------
program providing for payment to an employee of an amount equal to the
difference between the statutory benefit limitation imposed by the Code and the
employee's benefit as calculated under the Qualified Plan applicable to the
employee.
"Note and Warrant Purchase Agreement" means that certain Note and
-----------------------------------
Warrant Purchase Agreement dated April 9, 1992 between the Company and the
purchasers of the Company's Subordinated Notes.
-16-
<PAGE>
"Notice of Borrowing" means a notice given by a Borrower to the Agent
-------------------
pursuant to Section 2.03(a), in substantially the form of Exhibit A.
"Notice of Conversion/Continuation" means a notice given by a Borrower
---------------------------------
to the Agent pursuant to Section 2.04(b), in substantially the form of Exhibit
B.
"Notice of Lien" means any "notice of lien" or similar document
--------------
intended to be filed or recorded with any court, registry, recorder's office,
central filing office or Governmental Authority for the purpose of evidencing,
creating, perfecting or preserving the priority of a Lien securing obligations
owing to a Governmental Authority.
"Obligations" means all Loans, Letter of Credit Obliga tions and other
-----------
Indebtedness, advances, debts, liabilities, obligations, covenants and duties
owing by the Borrowers to any Bank, the Agent, or any other Person required to
be indemnified under any Loan Document, of any kind or nature, present or
future, whether or not evidenced by any note, guaranty or other instrument,
arising under this Agreement, under any other Loan Document, whether or not for
the payment of money, whether arising by reason of an extension of credit, loan,
guaranty, indemnification or in any other manner, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired. The term
"Obligations" includes, without limitation, all interest, charges, expenses,
fees, attorneys' fees and disbursements (including the allocated cost of in-
house counsel) and any other sum chargeable to the Borrowers under this
Agreement or any other Loan Document.
"Other Taxes" has the meaning specified in Section 4.10(b).
-----------
"Parent Guaranty" means the guaranty of WGI of the Obligations of the
---------------
Borrowers, in substantially the form of Exhibit G.
"Parent Pledge Agreements" means the agreements by each of WGI and
------------------------
Musketeer under which certain stock is pledged as security for the Obligations
and the Parent Guaranty, in substantially the form of Exhibits J-1 and J-2,
respectively.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
-17-
<PAGE>
"Permitted Acquisitions and Investments" has the meaning specified in
--------------------------------------
Section 8.03.
"Permitted Liens" has the meaning specified in Section 8.01.
---------------
"Person" means an individual, partnership, corporation, business
------
trust, joint stock company, trust, unincorporated association, joint venture or
Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
----
ERISA) which the Company or any members of the Controlled Group sponsors or
maintains or to which the Company or member of the Controlled Group makes or is
obligated to make contributions, and includes any Multiemployer Plan or
Qualified Plan.
"Pledge Agreements" means (i) the Borrower Pledge Agreement and (ii)
-----------------
the Parent Pledge Agreements.
"Pledged Collateral" has the meaning given to such term in the Pledge
------------------
Agreements.
"Project Related Partnerships and/or Joint Ventures" means
--------------------------------------------------
partnerships and/or joint ventures formed in conjunction with specific projects
to perform services of a type provided by the Company and its Subsidiaries in
the ordinary course of business, including construction, engineering and related
field services, material procurement and petroleum services.
"Qualified Plan" means a pension plan (as defined in Section 3(2) of
--------------
ERISA) intended to be tax-qualified under Section 401(a) of the Code and which
any member of the Controlled Group sponsors, maintains, or to which it makes or
is obligated to make contributions, or in the case of a multiple employer plan
(as described in Section 4064(a) of ERISA) has made contributions at any time
during the immediately preceding period covering at least five (5) plan years,
but excluding any Multiemployer Plan.
"Reference Banks" means Bank of America and Credit Lyonnais acting
---------------
through its New York Branch.
"Reference Rate" means the higher of:
--------------
(a) the rate of interest publicly announced from time
to time by Bank of America in San Francisco, California, as its
reference rate. It is a rate set by
-18-
<PAGE>
Bank of America based upon various factors including Bank of
America's costs and desired return, general economic conditions
and other factors, and is used as a reference point for pricing
some loans, which may be priced at, above, or below such
announced rate; and
(b) 0.50% per annum above the Federal Funds Rate
determined by the Agent daily and adjusted to the nearest basis
point.
Any change in the reference rate announced by Bank of America shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"Reference Rate Loan" means a Loan that bears interest based on the
-------------------
Reference Rate.
"Reimbursement Obligations" means in respect of any Letter of Credit
-------------------------
at any date of determination, the aggregate amount of all drawings under such
Letter of Credit honored by the Issuing Bank and not theretofore reimbursed by
the Borrowers.
"Reportable Event" means any of the events set forth in Section
----------------
4043(b) of ERISA or the regulations thereunder, withdrawal from a Plan
described in Section 4063 of ERISA, or a cessation of operations described in
Section 4062(e) of ERISA.
"Requirement of Law" means as to any Person, any law (statutory or
------------------
common), treaty, rule or regulation or determination of an arbitrator or a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Responsible Officer" means the Chief Executive Officer, the President
-------------------
or any Vice President of the Company, WII, WUSA, WESCO, WBEI, WECL, any
Designated Subsidiary or, with respect to financial matters, the Chief Financial
Officer or the Treasurer of the Company.
"Revolving Commitments" means the commitments of the Banks to make
---------------------
Loans pursuant to Article II in a maximum aggregate amount equal to the
difference between Seventy Five Million Dollars ($75,000,000) and the aggregate
sum of all Letter of Credit Obligations, as such amount may be reduced or
increased from time to time pursuant to the terms of this Agreement, and
"Revolving Commitment" shall mean for each Bank the commitment to make Loans in
an aggre-
-19-
<PAGE>
gate amount equal to its Commitment Percentage of the Revolving Commitments.
"Senior Debt" means, at a particular date, the aggregate outstanding
-----------
principal amount of all Indebtedness of the Company and its consolidated
Subsidiaries including any extensions, renewals or replacements thereof, other
than Subordinated Debt.
"Solvent" means, as to any Person at any time, that (a) the fair value
-------
of the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the United States Bankruptcy Code (12 U.S.C. (S)101 et seq.); (ii)
the present fair saleable value of the property of such Person is not less than
the amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured; (iii) such Person is able to
realize upon its property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business; (iv) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature; and (v) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute unreasonably
small capital.
"Standby Letter of Credit" means any Letter of Credit which is not a
------------------------
Commercial Letter of Credit.
"Subordinated Debt" means the Ten Million dollars ($10,000,000)
-----------------
aggregate amount of Subordinated Notes having an amortization schedule
commencing no earlier than March 31, 1996, and any additional Indebtedness of
the Company or any of its Subsidiaries which includes subordination and other
provisions acceptable to the Majority Banks.
"Subordinated Notes" means the 10 1/2% promissory notes of the Company
------------------
evidencing the indebtedness of the Company incurred pursuant to the Note and
Warrant Purchase Agreement and issued on April 9, 1992, as amended from time to
time.
"Subsidiary" of a Person means any corporation, association,
----------
partnership, joint venture or other business entity of which forty-nine percent
(49%) or more of the voting stock or other equity interests is owned or
controlled directly or indirectly by the Person or by one or more other
Subsidiaries of
-20-
<PAGE>
such Person except that the Tenneco SPV shall not be regarded as a Subsidiary of
the Company or any of its Subsidiaries, regardless of its ownership or control
attributes. For purposes of this Agreement, the Oman Construction Company
L.L.C., Willbros Kuwait S.A.K., Willbros Abu Dhabi WLL, Willbros Far East Sdn.
Bhd., Willbros (Nigeria) Limited and Willbros Al-Rushaid Limited will be treated
as wholly-owned Subsidiaries of WII.
"Subsidiary Guarantees" means the guarantees securing the Obligations
---------------------
executed by each of WESCO and WBEI, in substantially the form of Exhibit I.
"Syndicated L/C Bank" shall mean Bank of America or BankAmerica
-------------------
International.
"Tangible Net Worth" means the consolidated gross book value of the
------------------
assets of the Company and its Subsidiaries (exclusive of goodwill, patents,
trademarks, tradenames, organization expense, treasury stock, unamortized debt
discount and expense, deferred charges and other like intangibles) less (a)
consolidated reserves applicable thereto and (b) all consolidated liabilities
including accrued and deferred income taxes, as determined in accordance with
GAAP. Tangible Net Worth shall include Two Million Three Hundred Thousand
dollars ($2,300,000) in "deemed dividends" arising from the recapitalization
that occurred in April 1992.
"Taxes" has the meaning specified in Section 4.10(a).
-----
"Tenneco Financing Transactions" means the creation, purchase,
------------------------------
acquisition, acceptance, receipt, ownership, sale, transfer, assignment, pledge
or termination of any of the Tenneco Project Rights or any of the Tenneco
Project Obligations.
"Tenneco Project" means that certain project for the design, supply
---------------
and installation of gas pipeline additions, gas compression and related
facilities in the states of Massachusetts, New York and Pennsylvania under which
WUSA or one of its Subsidiaries and Tenneco Inc. or one of its Subsidiaries via
the Tenneco SPV would jointly own facilities for the purpose of supplying
natural gas throughput capacity to Boston Edison, either directly under a long
term service agreement, or indirectly through a lease to a Tenneco operating
entity.
"Tenneco Project Rights" means all contract rights, subcontract
----------------------
rights, ownership rights, lessor rights, guarantee rights, accounts receivable,
evidences of indebtedness, invoices, certifications, escrow account rights,
proceeds and payments
-21-
<PAGE>
created, arising from or otherwise related to the Tenneco Project, the provision
of goods and services in connection therewith or participations in the Tenneco
Financing Transactions.
"Tenneco Project Obligations" means all obligations arising under or
---------------------------
as a result of any agreements, undertakings, indemnities, and other commitments
created, arising from or otherwise relating to the Tenneco Project, the
provision of goods and services in connection therewith or participation in the
Tenneco Financing Transactions, all of such obligations to be non-recourse
funding obligations.
"Tenneco SPV" means a corporation, association, partnership, joint
-----------
venture or other business entity dedicated exclusively to participation in the
Tenneco Financing Transactions.
"Total Capitalization" means, at any date, the sum of (a) Funded
--------------------
Indebtedness of the Company, and (b) common equity and preferred stock of the
Company.
"Total Liabilities" means the total consolidated liabilities of the
-----------------
Company and its Subsidiaries determined in accordance with GAAP.
"Unfunded Pension Liabilities" means the excess of a Plan's accrued
----------------------------
benefits, as defined in Section 3(23) of ERISA, over the current value of that
Plan's assets, as defined in Section 3(26) of ERISA.
"WBEI" means Willbros Butler Engineers, Inc., a Delaware corporation.
----
"WECL Guaranty" means the guaranty securing the obligations of WGI
-------------
under the Parent Guaranty.
"WESCO" means Willbros Energy Services Company, a Delaware
-----
corporation.
"Withdrawal Liabilities" means, as of any determination date, the
----------------------
aggregate amount of the liabilities, if any, pursuant to Section 4201 of ERISA
if the Controlled Group made a complete withdrawal from all Multiemployer Plans
and any increase in contributions pursuant to Section 4243 of ERISA.
-22-
<PAGE>
1.02 Other Definitional Provisions.
-----------------------------
(a) Unless otherwise specified herein or therein, all terms defined
in this Agreement shall have the defined meanings when used in any certificate
or other document made or delivered pursuant hereto.
(b) All accounting terms not expressly defined herein shall be
construed, except where the context otherwise requires, and all financial
computations required under this Agreement shall be made, in accordance with
GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section, schedule and
exhibit references are to this Agreement unless otherwise specified. The meaning
of defined terms shall be equally applicable to the singular and plural forms of
the defined terms.
(d) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"; the words "to"
and "until" each mean "to but excluding" and the word "through" means "to and
including".
(e) References to agreements and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications thereto,
but only to the extent such amendments and other modifications are not
prohibited by the terms of any Loan Document.
(f) References to statutes or regulations are to be construed as
including all statutory and regulatory provisions consolidating, amending or
replacing the statute or regulation.
(g) The captions and headings of this Agreement are for convenience
of reference only and shall not affect the construction of this Agreement.
-23-
<PAGE>
ARTICLE II
AMOUNT AND TERMS OF COMMITMENTS
-------------------------------
2.01 The Revolving Credit.
--------------------
(a) Each Bank severally agrees, on the terms and subject to the
conditions hereinafter set forth, to make Loans to any Borrower from time to
time, on any Business Day during the period from the Closing Date to the
Commitment Termination Date, in an aggregate amount not to exceed at any time
outstanding the amount set forth opposite such Bank's name in Schedule 2.01
(such amount as the same may be reduced pursuant to Section 2.05 or as a result
of one or more assignments pursuant to Section 11.07 or increased pursuant to
Section 2.01(c), such Bank's "Revolving Commitment"); provided, however, that,
-------- -------
after giving effect to any Borrowing of Loans, the aggregate principal amount of
all Loans then outstanding shall not exceed the Revolving Commitments, and
provided further (i) that the aggregate amount of all Loans, together with all
- -------- -------
Letter of Credit Obligations, shall not exceed the Commitments and (ii) the
aggregate amount of all Loans, together with all financial Letters of Credit
issued under this Agreement, shall not exceed the Company's Tangible Net Worth.
Within the limits of each Bank's Revolving Commitment, the Borrowers may borrow
under this Section 2.01, prepay pursuant to Section 2.06 and reborrow pursuant
to this Section 2.01.
(b) Upon the written request of the Company, received by the Agent on
or about the first anniversary and/or the second anniversary of the Closing Date
and subject to the consent of each Bank willing to grant such request, the
Commitment Termination Date shall be extended for an additional one year period
commencing on the then current Commitment Termination Date. The Agent shall
transmit such request to each Bank promptly upon receipt. The Banks shall
respond through the Agent to any such request of the Company within thirty days
of the date of the Company's request. Any Bank not responding within thirty
days shall be deemed to have declined the request. At the option of the
Company, the Commitment of any Bank not consenting to the Company's request to
extend such Bank's Commitment may be assumed, in whole or in part, by one or
more existing Banks or other banks acceptable to the Company and the Agent, upon
compliance with Section 11.07; provided that, in such event, unless otherwise
--------
agreed by the assuming Bank or bank, the Company shall pay the $2,500 processing
fee required by Section 11.07(a). If any such Commitment is not so replaced
within 30 days of the Banks' response, then, at the Company's option, either (i)
the Commitments shall terminate on the then current Commitment Termination Date
or (ii) the Company shall give prompt notice of
-24-
<PAGE>
termination of the Commitment not so replaced to each and every Bank that has
not consented to the extension (to the extent its Commitment has not been
assumed), with a copy to the Agent, and shall prepay the Loans of such Banks on
five (5) Business Days' prior notice to such Banks and the Agent, which shall
reduce the Revolving Commitment accordingly (to the extent not assumed), and the
Commitment Termination Date shall be extended in accordance with this Section
2.01 for the remaining Commitments and Schedule 2.01 shall be amended
accordingly. Any declining Bank that has not been replaced as provided herein
will continue to be obligated pursuant to Article III and Section 10.07 with
respect to any Letters of Credit issued prior to the date its Commitment was
terminated.
(c) The Company may request the Banks through the Agent, no earlier
than February 28, 1994, to increase the Commitments. The Agent shall transmit
such request to each Bank promptly upon receipt. Each Bank will have the
option, in its sole discretion, to subscribe for its proportionate share of such
requested increase, according to the Banks' respective then existing
Commitments. The Banks shall respond to the Company's request through the Agent
within thirty days of the date of the request in the form of Exhibit K. Any Bank
not responding within thirty days shall be deemed to have declined the request.
At the option of the Company, any part of the increase not so subscribed may be
assumed, within thirty days of the declining Bank's response, by one or more
existing Banks or assumed by other banks meeting the qualifications of Eligible
Assignee acceptable to the Agent and the Company upon submission of a supplement
in form of Exhibit L and Schedule 2.01 shall be amended accordingly. After
giving effect to all increases [under this Section 2.01(c) and Section 3.02(e)]
by the Banks and by other banks which have become Banks pursuant to the
supplement, (i) no Bank shall have a Commitment Percentage greater than 49% of
the Commitments; and (ii) the Commitments shall not be increased by an amount
more than Twenty Five Million dollars ($25,000,000).
2.02 Loan Accounts. Each Bank, with respect to amounts payable to it
-------------
hereunder, and the Agent, with respect to all amounts payable hereunder, shall
maintain on its books in accordance with its usual practice, loan accounts and
control accounts, respectively, setting forth each Loan, the applicable interest
rate and the amounts of principal, interest and other sums paid and payable from
time to time hereunder with respect thereto; provided, however, that the
-------- -------
failure, error or omission by a Bank to maintain an account or ledger or to
record any information therein shall not diminish or otherwise affect the
Obligations of the Borrowers hereunder. In the case of any dispute, action or
proceeding
-25-
<PAGE>
relating to any amount payable hereunder, the entries in each such account shall
constitute conclusive evidence of the accuracy of the information so recorded in
the absence of manifest error. In case of a discrepancy between the entries in
the Agent's books and any Bank's books, such Bank's books shall be considered
correct in the absence of manifest error.
2.03 Procedure for Borrowing.
-----------------------
(a) Each Borrowing of Loans shall be made upon the written notice of
a Borrower in the form of a Notice of Borrowing (which notice must be received
by the Agent prior to 12:00 noon (New York time) (i) three (3) Business Days
prior to the requested borrowing date, in the case of Eurodollar Rate Loans,
(ii) three (3) Business Days prior to the requested borrowing date, in the case
of CD Rate Loans, and (iii) one (1) Business Day prior to the requested
borrowing date, in the case of Reference Rate Loans), specifying:
(A) the amount of the Borrowing, which shall be in an
aggregate minimum principal amount of One Million dollars
($1,000,000) or any multiple of Five Hundred Thousand dollars
($500,000) in excess thereof;
(B) the requested borrowing date, which shall be a
Business Day;
(C) whether the Borrowing is to be comprised of
Eurodollar Rate Loans, CD Rate Loans or Reference Rate Loans;
(D) the duration of the Interest Period applicable to
such Loans included in such notice, subject to the definition of
Interest Period. If the Notice of Borrowing shall fail to specify
the duration of the Interest Period for any Borrowing comprised
of CD Rate Loans or Eurodollar Rate Loans, such Interest Period
shall be ninety (90) days or three months, respectively.
(b) Upon receipt of the Notice of Borrowing, the Agent shall promptly
notify each Bank thereof and of the amount of such Bank's Commitment Percentage
of the Borrowing.
(c) Each Bank will make the amount of its Commitment Percentage of
the Borrowing available to the Agent for the account of the Borrower at the
office specified by the Agent in Section 11.02
-26-
<PAGE>
for payment by 2:00 p.m. (New York time) on the borrowing date requested by the
Borrower in funds immediately available to the Agent. Unless any applicable
condition specified in Article VI has not been satisfied, the proceeds of all
such Loans will then be made available to the Borrower by the Agent at such
office by crediting the account of the Borrower specified in the Notice of
Borrowing with the aggregate of the amounts made available to the Agent by the
Banks and in like funds as received by the Agent.
(d) The provisions of Section 2.03(a) notwithstanding, if the
Borrower shall not have given a timely notice of a Borrowing to be made on the
last day of any Interest Period for outstanding Loans, then unless the Agent
shall have received notice that the Borrower elects not to make a Borrowing on
such day (such notice to have been received at least two Business Days prior to
such day) the Agent shall be deemed to have received a Notice of Borrowing from
the Borrower requesting Reference Rate Loans to be made on such day in an amount
equal to the amount of such outstanding Loans (reduced to the extent necessary
to reflect any reductions of the Commitments on or prior to such day).
(e) The Borrowers may request that a maximum number of two (2)
Borrowings of Loans be made on the same date, provided that each Borrowing is in
--------
the minimum amount required under paragraph (A) of Section 2.03(a).
2.04 Conversion and Continuation Elections.
-------------------------------------
(a) Each Borrower may, upon irrevocable written notice to the Agent:
(i) elect to convert on any Business Day, any
Reference Rate Loans (or any part thereof in an amount not less
than One Million dollars ($1,000,000) or an integral multiple of
Five Hundred Thousand dollars ($500,000) in excess thereof) into
Eurodollar Rate Loans or CD Rate Loans;
(ii) elect to convert on any Interest Payment Date, any
CD Rate Loans or Eurodollar Rate Loans maturing on such Interest
Payment Date (or any part thereof in an amount not less than One
Million dollars ($1,000,000) or an integral multiple of Five
Hundred Thousand dollars ($500,000) in excess thereof), in the
case of CD Rate Loans, into Eurodollar Rate Loans or Reference
Rate Loans, and in the case of Eurodollar Rate Loans, into CD
Rate Loans or Reference Rate Loans; or
-27-
<PAGE>
(iii) elect to renew, on any Interest Payment Date
therefor, any CD Rate Loans or Eurodollar Rate Loans (or any part
thereof in an amount not less than One Million dollars
($1,000,000) or an integral multiple of Five Hundred Thousand
dollars ($500,000) in excess thereof);
provided, that if the aggregate amount of CD Rate Loans or Eurodollar Rate Loans
- --------
shall have been reduced, by payment, prepayment, or conversion of part thereof
to be less than One Million dollars ($1,000,000), the CD Rate Loans or
Eurodollar Rate Loans shall automatically convert into Reference Rate Loans, and
on and after such date the right of the Borrower to continue such Loans as
Eurodollar Rate Loans or CD Rate Loans, as the case may be, shall terminate.
(b) A Borrower shall deliver by telex, cable or facsimile, confirmed
immediately in writing, a Notice of Conversion/Continuation in substantially the
form of Exhibit B to be received by the Agent not later than 12:00 noon (New
York time) at least (i) three (3) Business Days in advance of the Conversion
Date or continuation date, if the Loans are to be converted into or continued as
Eurodollar Rate Loans; (ii) two (2) Business Days in advance of the Conversion
Date or continuation date, if the Loans are to be converted into or continued as
CD Rate Loans; and (iii) one (l) Business Day in advance of the Conversion Date
or continuation date, if the Loans are to be converted into or renewed as
Reference Rate Loans, specifying:
(A) the proposed Conversion Date or continuation date;
(B) the aggregate amount of Loans to be converted or
renewed;
(C) the nature of the proposed conversion or
continuation; and
(D) the duration of the requested Interest Period,
subject to the definition of Interest Period.
(c) If upon the expiration of any Interest Period applicable to CD
Rate Loans or Eurodollar Rate Loans, a Borrower has failed to select a new
Interest Period to be applicable to such CD Rate Loans or Eurodollar Rate Loans,
as the case may be, or if any Event of Default shall then have occurred and be
continuing, such Borrower shall be deemed to have elected to convert such CD
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Rate Loans or Eurodollar Rate Loans into Reference Rate Loans effective as of
the expiration date of such Interest Period.
(d) Upon receipt of a Notice of Conversion/Continuation, the Agent
shall promptly notify each Bank thereof. All conversions and continuations
shall be made pro rata according to the respective outstanding principal amounts
of the Loans held by each Bank with respect to which such notice was given.
(e) Notwithstanding any other provision contained in this Agreement,
after giving effect to any conversion or continuation of any Loans, there shall
not be more than five (5) different Interest Periods in effect.
2.05 Voluntary Termination or Reduction of Commitments. The Borrowers may,
-------------------------------------------------
upon not less than three (3) Business Days' prior notice to the Agent, terminate
the Commitments or permanently reduce the Commitments by an aggregate minimum
amount of One Million dollars ($1,000,000) or any multiple of Five Hundred
Thousand dollars ($500,000) in excess thereof; provided, that no such reduction
--------
or termination shall be permitted if, after giving effect thereto and to any
prepayments of the Loans made on the effective date thereof, the then
outstanding principal amount of the Loans and Letter of Credit Obligations would
exceed the amount of the Commitments then in effect; and provided further, that
-------- -------
once reduced in accordance with this Section 2.05, the Commitments may not be
increased. Any reduction of the Commitments shall be applied to each Bank's
Commitment in accordance with such Bank's Commitment Percentage. If the
Commitments are terminated in their entirety, all accrued commitment fees to,
but not including, the effective date of such termination shall be payable on
the effective date of such termination without any premium or penalty. Such
notice shall not thereafter be revocable by the Borrowers and the Agent shall
promptly notify each Bank thereof and of such Bank's Commitment Percentage of
such prepayment.
2.06 Optional Prepayments. Subject to Section 4.14, the Borrowers may, at
--------------------
any time or from time to time, upon at least two (2) Business Days' notice to
the Agent, ratably prepay Loans in whole or in part, in amounts of One Million
dollars ($1,000,000) or any multiple of Five Hundred Thousand dollars ($500,000)
in excess thereof. Such notice of prepayment shall specify the date and amount
of such prepayment and whether such prepayment is of Reference Rate Loans, CD
Rate Loans or Eurodollar Rate Loans, or any combination thereof. Such notice
shall not thereafter be revocable by the Borrowers and the Agent shall promptly
notify each Bank thereof and of such Bank's Commitment Percentage of such
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prepayment. If such notice is given, the Borrowers shall make such prepayment
and the payment amount specified in such notice shall be due and payable on the
date specified therein, together with accrued interest to each such date on the
amount prepaid and the amounts required pursuant to Section 4.14.
2.07 Mandatory Prepayments of Loans.
------------------------------
(a) If on any date, the aggregate amount of Loans exceed the
Company's Tangible Net Worth, the Borrowers shall prepay Loans in an aggregate
amount equal to such excess together with any amount required to be paid in
connection therewith pursuant to Section 4.14.
(b) Any prepayments pursuant to this Section 2.07 made on a day other
than an Interest Payment Date for any Loan shall be applied first to any
Reference Rate Loans then outstanding and then to CD Rate Loans and Eurodollar
Rate Loans with the shortest Interest Periods remaining; provided, however, that
-------- -------
if the amount of Reference Rate Loans then outstanding is not sufficient to
satisfy the entire prepayment requirement, the Borrowers may, at their option,
place any amounts which would otherwise be required to be used to prepay
Eurodollar Rate Loans or CD Rate Loans on a day other than the last day of the
Interest Period therefor in an interest-bearing account pledged to the Agent for
the benefit of the Banks until the end of such Interest Period at which time
such pledged amounts will be applied to prepay such Eurodollar Rate Loans or CD
Rate Loans.
2.08 Repayment. The Borrowers agree to repay to the Agent for the account
---------
of the Banks the principal amount of the Loans on the Commitment Termination
Date.
2.09 Interest.
--------
(a) Subject to Section 2.09(c), each Loan shall bear interest on the
outstanding principal amount thereof from the date when made until it becomes
due at a rate per annum equal to the CD Rate, the Eurodollar Rate or the
Reference Rate, as the case may be, plus the Applicable Margin.
----
(b) Interest on each Loan shall be payable in arrears on each
Interest Payment Date, and for Reference Rate Loans, on each Conversion Date in
respect thereof; provided, however, that as to any Loan with respect to which a
-------- -------
Borrower has requested an interest period of 180 days or six months, such
Borrower shall also pay interest at 90 days or three months, as the case may be.
Interest
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shall also be payable on the date of any prepayment of Loans pursuant to
Sections 2.05 and 2.06 for the portion of the Loans so prepaid and upon payment
(including prepayment) in full thereof and, after the occurrence and during the
continuance of any Event of Default, interest shall be payable on demand.
(c) During the continuation of any Event of Default or after
acceleration, the Borrowers shall pay interest (after as well as before judgment
to the extent permitted by law) on the principal amount of all Loans due and
unpaid, at a rate per annum which is determined by increasing the Applicable
Margin then in effect by two percent (2%) per annum; provided, however, that,
-------- -------
on and after the expiration of the Interest Period applicable to any Eurodollar
Rate Loan outstanding on the date of occurrence of such Event of Default or
acceleration, the principal amount of such Loan shall, during the continuation
of such Event of Default or after acceleration, bear interest at a rate per
annum equal to the Reference Rate plus three percent (3%).
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ARTICLE III
LETTERS OF CREDIT
-----------------
3.01 The Letter of Credit Commitment.
-------------------------------
(a) From time to time on any Business Day during the period from the
Closing Date to the Commitment Termination Date on the terms and subject to the
conditions hereinafter set forth, the Company may request any one of the Banks
to become the Issuing Bank with respect to a fronted Letter of Credit. If such
request is accepted by a Bank, and the Company agrees to such Bank's terms, then
that Bank shall become the Issuing Bank. The Issuing Bank shall issue, and each
Bank severally agrees to participate in, fronted Standby Letters of Credit and
Commercial Letters of Credit for the account of a Borrower in an aggregate
amount not to exceed at any time outstanding the amount set forth opposite such
Bank's name in Schedule 2.01 (such amount as the same may be reduced pursuant to
Section 2.05 or as a result of one or more assignments pursuant to Section 11.07
or increased pursuant to Section 2.01(c), such Bank's "Letter of Credit
----------------
Commitment"); provided, however, that the Issuing Bank shall not issue and the
- ---------- -------- -------
Banks shall not be required to issue or participate in any Letter of Credit, if,
after giving effect to such issuance and participation, the aggregate amount of
all Loans and Letter of Credit Obligations then outstanding, would exceed the
Commitments.
(b) Concurrently with the issuance of each Letter of Credit by the
Issuing Bank, each Bank (other than the Issuing Bank) shall be deemed to, and
hereby agrees to, irrevocably and unconditionally purchase from the Issuing
Bank, without recourse, an undivided interest and participation in such Letter
of Credit Obligation of the Borrowers in an amount equal to the product of (i)
its Commitment Percentage and (ii) the face amount of such Letter of Credit.
(c) If no Bank shall agree to become the Issuing Bank, or the
Borrowers shall elect not to request a fronted Letter of Credit, then the
Company may ask the Syndicated L/C Bank, with respect to Standby Letters of
Credit only, to issue the syndicated Standby Letter of Credit on behalf of the
Banks on a several basis, in substantially the form of Exhibit E, subject to the
terms and conditions set forth in Section 3.01(a).
(d) For purposes of Section 4.02, each issuance of a Letter of Credit
shall be deemed to utilize the Commitments for each Bank's percentage share of
the face amount of the Letter of Credit.
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(e) The Issuing Bank and the Syndicated L/C Bank shall not be
obligated to issue any Letter of Credit hereunder if such issuance would
conflict with, or cause the Issuing Bank, the Syndicated L/C Bank or any Bank
participating in a Letter of Credit to be in violation of any Requirements of
Law, including any prohibition of the Foreign Assets Control regulations of the
United States Treasury Department, or after any Bank has promptly notified the
Agent, the Issuing Bank or the Syndicated L/C Bank that it cannot, for any
reason, issue or participate in a Letter of Credit. If a Letter of Credit will
not be issued hereunder because of either of the reasons stated in the preceding
sentence and the failure to issue was not due to such issuance directly
resulting in any of the Borrowers' violation of any Requirements of Law, then
the Borrowers may obtain such Letter of Credit from a third party; provided,
--------
however, such Letters of Credit shall never at any one time exceed twenty
- -------
percent (20%) of Tangible Net Worth.
(f) The Banks acknowledge that the Existing Letters of Credit have
been issued for the account of the Borrowers prior to the Closing Date and agree
to participate in such Letters of Credit to the same extent and on the same
conditions as if such Letters of Credit had been issued pursuant to Section
3.01(a).
3.02 The Letters of Credit.
---------------------
(a) The Borrowers may request the Syndicated L/C Bank on behalf of
the Banks to issue or the Issuing Bank to issue, and the other Banks to
participate in, Standby Letters of Credit denominated in Dollars or any
Alternative Currency as follows: (i) to provide guarantees such as bid, advance
payment, retention release, customs, warranty and performance guarantees for a
maximum term of three (3) years, (ii) to provide counter guarantees in support
of bank guarantees issued outside the United States for the purposes set forth
in Section 3.02(a)(i), (iii) to support local currency borrowings outside the
United States for a maximum term of two (2) years, and (iv) for any other
purpose agreed to by the Majority Banks.
(b) The Borrowers may further request the Issuing Bank to issue, and
the other Banks to participate in, Commercial Letters of Credit denominated in
Dollars or any Alternative Currency in support of trade obligations incurred in
the ordinary course of business for a maximum term of one (1) year.
(c) No Letter of Credit shall have an expiration date (including all
rights of renewal) later than the applicable Letter of Credit Expiration Date.
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(d) For the purpose of ensuring compliance with the maximum amount of
the Letter of Credit Commitments, the Agent shall on each date of a voluntary
reduction of Commitments under Section 2.05, and on the last Business Day of
each quarter, determine the equivalent in Dollars of the face amount of each
Letter of Credit denominated in an Alternative Currency by using the quoted spot
rate at which the Agent's principal office in San Francisco offers to sell
Dollars for such Alternative Currency in San Francisco at 2:00 p.m. (New York
time) on such determination date; provided, however, at the request of the
-------- -------
Majority Banks and upon notice to the Company, the Agent shall at any other time
make the foregoing determination.
(e) In the event that the Agent determines, based on its computation
made in accordance with Section 3.02(d), that the Letter of Credit Obligations
exceed the Letter of Credit Commit ments, the Agent shall give notice to the
Borrowers of such fact and the amount by which the Letter of Credit Obligations
exceed the Letter of Credit Commitments. On the date which the last of the
Borrowers receives such notice, the Borrowers shall either (i) request the Banks
through the Agent to increase the Commitments in an amount equal to the amount
by which the Letter of Credit Obligations exceed the Letter of Credit
Commitments, or (ii) prepay Loans, both in the amount equal to such excess
together with any amount required to be paid in connection therewith pursuant to
Section 4.14. If the Company requests to increase the Commitments, the Agent
shall transmit such request to each Bank promptly upon receipt. Each Bank will
have the option, in its sole discretion, to subscribe for its proportionate
share of such requested increase, according to the Banks' respective then
existing Commitments. The Banks shall respond to the Company's request through
the Agent within five Business Days of the date of the request in the form of
Exhibit K. Any Bank not responding within five Business Days shall be deemed to
have declined the request. Borrowers shall prepay the Loans in the amount of
any part of the increase not so subscribed. After giving effect to all
increases [under this Section 3.02(e) and Section 2.01(c)] by the Banks and by
other banks which have become Banks pursuant to a supplement under Section
2.01(c), (i) no Bank shall have a Commitment Percentage greater than 49% of the
Commitments; and (ii) the Commitments shall not be increased by an amount more
than Twenty Five Million dollars ($25,000,000). Any prepayments pursuant to
this Section 3.02(e) shall be applied first to any Reference Rate Loans then
outstanding, second to CD Rate Loans and Eurodollar Rate Loans with an Interest
Payment Date on the date of such prepayment and third, to the extent that the
aggregate amount of Reference Rate Loans then outstanding plus the amount of CD
Rate Loans and
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Eurodollar Rate Loans with an Interest Payment Date on the date of such
prepayment is not sufficient to satisfy the entire prepayment requirement or
there are no Loans outstanding on the date such prepayment would be required,
then the remaining amount of such prepayment or the amount by which the Letter
of Credit Obligations still exceed the Letter of Credit Commitments shall be
deposited in the Cash Collateral Account (as that term is defined in Section
3.05) and shall become subject to the terms and provisions of Section 3.05(b),
(c), (d) and (e).
3.03 Issuance of the Letters of Credit.
---------------------------------
(a) Each Letter of Credit shall be issued upon the re quest of a
Borrower received by (i) the Issuing Bank or (ii) the Syndicated L/C Bank, each
with a copy to the Agent delivered by a Borrower, not later than 3:00 p.m. (New
York City time) three (3) Business Days prior to the date of issuance; provided,
----- -------------------------------------------- ---------
however that if a requested syndicated Letter of Credit is not substantially
- -------
identical to Exhibit E, then such notice shall require a minimum of eight (8)
Business Days' notice. Upon receipt of such request, the Issuing Bank or the
Syndicated L/C Bank will request the Agent to determine that after giving effect
to the issuance of the Letter of Credit being so requested, the aggregate amount
of all Loans and Letter of Credit Obligations then outstanding will not exceed
the Commitments and the Agent will promptly notify the Issuing Bank or the
Syndicated L/C Bank of such determination. The Agent will promptly notify each
Bank of the request for an issuance of a Letter of Credit.
(b) Each request for issuance of a Letter of Credit shall be made in
writing by telecopier and confirmed by delivery of the original executed Letter
of Credit Application, in the case of a Standby Letter of Credit, in the form of
Exhibit F-1, and, in the case of a Commercial Letter of Credit, in the form of
Exhibit F-2 (each, an "L/C Application"), not later than one (1) Business Day
---------------
thereafter. Each request for issuance of a Letter of Credit and each L/C
Application shall specify, among other things: (i) the proposed date of
issuance (which shall be a Business Day); (ii) the face amount of the Letter of
Credit; (iii) the date of expiration of the Letter of Credit; (iv) the name and
address of the beneficiary thereof; (v) the documents to be presented by the
beneficiary of the Letter of Credit in case of any drawing thereunder; and (vi)
the full text of any certificate to be presented by the beneficiary in case of
any drawing thereunder.
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(c) Each Bank shall provide the Agent with a power of attorney in
order to expedite the issuance of any syndicated Letter of Credit on behalf of
the Banks, in the form of Exhibit F-3.
(d) The Issuing Bank or the Syndicated L/C Bank shall notify the
Agent of each issuance of a Letter of Credit on the date such Letter of Credit
is issued and, on the date of such issuance inform the Agent by telecopier of
the type, amount and expiration date. The Agent shall promptly notify the Banks
of each issuance of a Letter of Credit by the Issuing Bank or by the Syndicated
L/C Bank.
(e) Any request for an amendment to any previously issued Letter of
Credit shall be received by the Agent and either the Syndicated L/C Bank or the
Issuing Bank not later than 3:00 p.m. (New York City time) two (2) Business Days
prior to the date of the proposed amendment in writing by telecopier and a copy
thereof shall be delivered by the Borrower to the Agent; provided that, for a
-------- ----
Syndicated Letter of Credit, the Borrower shall provide five (5) Business Day's
prior notice. Each written request for an amendment to a previously issued
Letter of Credit made by telecopier shall be in the form of the relevant L/C
Application signed by the Borrower and shall not request an extension beyond the
Letter of Credit Expiration Date. The Issuing Bank or the Syndicated L/C Bank
shall notify the Agent by telecopier of each amendment to any Letter of Credit
on the date of such amendment. The Agent shall notify the Banks, promptly, of
each such amendment. Any amendment that would require a vote of all the Banks
pursuant to Section 11.01 shall be approved by the Banks prior to the execution
of the amendment by the Issuing Bank or the Syndicated L/C Bank. If the Issuing
Bank or Syndicated L/C Bank does not execute the amendment on or before the date
specified in Borrowers' written request, then the request for such amendment
shall be deemed to have been denied.
(f) Notwithstanding any provision of any L/C Application to the
contrary, in the event of any conflict between the terms of any such L/C
Application and the terms of this Agreement, the terms of this Agreement shall
control with respect to events of default, representations and warranties, and
covenants, except that such L/C Application may provide for further warranties
relating specifically to the transaction or affairs underlying such Letter of
Credit.
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3.04 Drawings and Reimbursements.
---------------------------
(a) If, in accordance with its standard operating procedures, the
Syndicated L/C Bank or the Issuing Bank, respectively, determines that a demand
for payment under a Letter of Credit conforms to the terms and conditions of
such Letter of Credit, the Syndicated L/C Bank or the Issuing Bank,
respectively, shall, as soon as reasonably practicable, give notice to the
relevant Borrower and to the Agent of the date, the Issuing Bank or the Banks,
as the case may be, will make payment in connection with such Letter of Credit
in accordance with the terms thereof. The Agent shall promptly notify the Banks
thereof.
(b) Each Borrower hereby unconditionally and irrevocably agrees to
reimburse the Syndicated L/C Bank or the Issuing Bank for each payment made by
the Syndicated L/C Bank or the Issuing Bank under any Letter of Credit on the
date the Syndicated L/C Bank or the Issuing Bank is making such payment as
notified to such Borrower and the Agent in accordance with paragraph (a) above
(or, if the Syndicated L/C Bank's or the Issuing Bank's notice was given to such
Borrower after 11:00 a.m. (New York City time) on such date, on the Business Day
next following such date), together with, (i) if applicable, interest on the
amount paid by the Syndicated L/C Bank or the Issuing Bank from the date payment
was made until it becomes due at a rate per annum equal to the Reference Rate
plus one percent (1%) per annum and (ii) if such reimbursement is not made when
due (whether directly, by means of Loans as provided in paragraph (c) below or
by application of any funds then contained in the Cash Collateral Account)
interest on the amount so paid by the Syndicated L/C Bank or the Issuing Bank
from the date such payment became due to the date the Syndicated L/C Bank or the
Issuing Bank is reimbursed therefor at a rate per annum equal to the Reference
Rate plus three percent (3%) per annum.
(c) Unless an Event of Default shall have occurred, each Borrower may
satisfy its Reimbursement Obligation by borrowing Reference Rate Loans hereunder
in accordance with Section 2.03(a), the proceeds of which Loans will be used to
reimburse the Syndicated L/C Bank or the Issuing Bank for the amount of any
disbursement made by it under a Letter of Credit. If a Borrower shall fail to
deliver a timely Notice of Borrowing pursuant to Section 2.03(a) and shall fail
to otherwise reimburse or cause the Syndicated L/C Bank or the Issuing Bank to
be reimbursed directly or by request to the Agent to apply funds contained in
the Cash Collateral Account on the same day the Syndicated L/C Bank or the
Issuing Bank honors a drawing under a Letter of Credit (or, if the Issuing
Bank's notice was given to a Borrower after 11:00 a.m. (New
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York City time) on such date, on the Business Day next following the date of
notice), the Syndicated L/C Bank or the Issuing Bank shall promptly notify the
Agent and the Agent shall promptly notify the other Banks thereof. If on the
date of such notification there shall not exist any Event of Default, the
Borrowers shall be deemed to have requested that the Loans, which shall be
Reference Rate Loans, be made by the Banks to be disbursed on the date of
payment by the Issuing Bank or Syndicated L/C Bank under the Letter of Credit.
In the event that any Bank fails to make available to the Syndicated L/C Bank or
the Issuing Bank the amount of such Bank's Loan on the date payment is made
under the Letter of Credit, the Syndicated L/C Bank or the Issuing Bank shall be
entitled to recover such amount on demand from such Bank together with interest
thereon at the Federal Funds Rate.
(d) If any Reimbursement Obligation of the Borrowers is not repaid
directly by the Borrowers when due and cannot be repaid by means of a borrowing
under the Revolving Commitment and there shall not then be sufficient funds
available for the payment due to the Syndicated L/C Bank or the Issuing Bank in
the Cash Collateral Account, each Bank will, upon notice by the Agent, promptly
pay to the Syndicated L/C Bank or such Issuing Bank the amount of its
participation in such Reimbursement Obligation determined in accordance with
Section 3.01(c).
(e) Upon and only upon receipt by the Issuing Bank or the Syndicated
L/C Bank of funds from, or on behalf of, the Borrowers, (i) in reimbursement of
any payment made under any Letter of Credit with respect to which any Bank has
theretofore made a payment to the Syndicated L/C Bank or the Issuing Bank
pursuant to paragraph (c) or (d) above, or (ii) in payment of interest thereon,
the Issuing Bank or the Syndicated L/C Bank will pay to each Bank through the
Agent, in the same funds as those received by the Syndicated L/C Bank or the
Issuing Bank, such Bank's pro rata share of such funds.
(f) If the Syndicated L/C Bank or the Issuing Bank is required at any
time to return to a Borrower or to a trustee, receiver, liquidator, custodian or
other similar official any portion of the payments made by such Borrower to the
Issuing Bank or the Syndicated L/C Bank or the Issuing Bank in reimbursement of
a payment made under any Letter of Credit or interest thereon, each Bank shall,
on demand of the Agent, forthwith return to the Syndicated L/C Bank or the
Issuing Bank its Commitment Percentage of any amounts so returned by the
Syndicated L/C Bank or the Issuing Bank, plus interest thereon from the date
such demand is made to the date such amounts are returned by such Bank to the
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Syndicated L/C Bank or the Issuing Bank at a rate per annum equal to the Federal
Funds Rate.
3.05 Cash Collateral Account.
-----------------------
(a) Upon the occurrence of an Event of Default, the Borrowers shall,
at the request of the Agent, provide a letter of credit in form and substance
satisfactory to the Majority Banks or promptly pay to the Agent in immediately
available funds an amount equal to the maximum amount then available to be drawn
under all Letters of Credit then outstanding. Any amounts received by the Agent
shall be deposited by the Agent in one or more (at the request of the Majority
Banks) deposit accounts (the "Cash Collateral Account") maintained by Bank of
America for the benefit of the Issuing Bank, the Agent, the Syndicated L/C Bank
and the Banks.
(b) As security for the payment of all Letter of Credit Obligations
and for any other Obligations (including Loans), each Borrower hereby grants,
conveys, assigns, pledges, sets over and transfers to the Agent, and creates in
the Agent's favor a Lien on, and security interest in, all money, instruments
and securities at any time held in or acquired in connection with the Cash
Collateral Account, together with all proceeds thereof. The Cash Collateral
Account shall be under the sole dominion and control of the Agent and the
Borrowers shall have no right to withdraw or to cause the Agent to withdraw any
funds deposited in the Cash Collateral Account. At any time and from time to
time, upon the Agent's request, the Borrowers promptly shall execute and deliver
any and all such further instruments and documents as may be necessary,
appropriate or desirable in the Agent's judgment to obtain the full benefits
(including perfection and priority) of the security interest created or intended
to be created by this paragraph (b) and of the rights and powers herein granted.
The Borrowers shall not create or suffer to exist any Lien on any amounts or
investments held in the Cash Collateral Account other than the Lien granted
under this paragraph (b) and Liens permitted pursuant to Sections 8.01(a) and
(c).
(c) The Agent shall (A) apply any funds in the Cash Collateral
Account deposited pursuant to paragraph (a) above on account of Letter of Credit
Obligations when the same become due and payable if and to the extent that the
Borrowers shall fail directly to pay such Letter of Credit Obligations and (B)
after the date on which the Commitments shall have terminated, apply any such
funds remaining in the Cash Collateral Account first, to pay any
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unpaid Obligations then outstanding hereunder and then, to refund any remaining
amount to the Borrowers.
(d) (i) The Borrowers, no more than once in any calendar
month, may direct the Agent to invest the funds held in the Cash
Collateral Account (so long as the aggregate amount of such funds
exceeds any relevant minimum investment requirement as determined
by the Agent) in one or more types of Cash Equivalents with such
maturities no longer than thirty (30) days, pending application
of such funds on account of Letter of Credit Obligations or on
account of other Obligations, as the case may be. In the absence
of any such direction from the Borrowers, the Agent shall invest
the funds received from WUSA and its Subsidiaries in securities
issued or fully guaranteed by the U.S. Government. The balance of
the funds shall be invested in Eurodollar time deposits.
(ii) All investments of funds held in the Cash
Collateral Account shall be made in the Agent's name for the
account of the Issuing Bank, the Syndicated L/C Bank and the
Banks. The Borrowers recognize that any losses or taxes with
respect to such investments shall be borne solely by the
Borrowers, and each Borrower agrees to hold the Agent, the
Issuing Bank, the Syndicated L/C Bank and the Banks harmless from
any such losses or taxes other than losses arising from the gross
negligence or willful misconduct of the Agent, the Issuing Bank,
the Syndicated L/C Bank or any Bank. The Agent may liquidate any
investment held in the Cash Collateral Account in order to apply
the proceeds of such investment on account of Letter of Credit
Obligations (or on account of other Obligations then due and
payable, as the case may be) without regard to whether such
investment has matured and without liability for any penalties or
other fees incurred (with respect to which the Borrowers hereby
agree to reimburse the Agent) as a result of such application.
(iii) The Agent will advise the Borrowers on a monthly
basis of the results of the investments of the funds held in the
Cash Collateral Account based on the daily activity thereof.
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(e) The Borrowers shall pay to the Agent the fees customarily charged
by the Agent with respect to the maintenance of accounts similar to the Cash
Collateral Account.
3.06 Role of the Issuing Bank and the Syndicated L/C Bank.
----------------------------------------------------
(a) The Issuing Bank and the Syndicated L/C Bank will exercise and
give the same care and attention to the Letters of Credit issued by it as it
gives to its other letters of credit.
(b) Each Bank agrees that, in paying any drawing under any Letter of
Credit, the Issuing Bank and the Syndicated L/C Bank shall not have any
responsibility to obtain any document (other than the draft and certificates
required in the case of a Letter of Credit) or to ascertain or inquire as to the
validity or accuracy of any document or the authority of the Person delivering
any document. None of the Issuing Bank, the Syndicated L/C Bank or any of
their representatives, officers, employees or agents shall be liable to any Bank
for: (i) any action taken or omitted in connection herewith at the request or
with the approval of the Majority Banks; (ii) any action taken or omitted in the
absence of gross negligence or willful misconduct; or (iii) the execution,
effectiveness, genuineness, validity or enforceability of any Letter of Credit
or any other document contemplated hereby or thereby.
(c) All Letters of Credit issued by any Issuing Bank or the
Syndicated L/C Bank pursuant to this Agreement shall be evidenced by entries in
records maintained by the Issuing Bank or the Syndicated L/C Bank, respectively,
which records shall be conclusive evidence, absent manifest error, of all of the
Reimbursement Obligations. Failure by the Issuing Bank or the Syndicated L/C
Bank to record the issuance of any Letter of Credit or any payment with respect
thereto or any error in so recording any such fact, shall not, however, limit or
otherwise affect the Reimbursement Obligations.
3.07 Obligation to Reimburse for, or Participate in, Letters of Credit.
-----------------------------------------------------------------
The Borrowers' obligations to reimburse the Syndicated L/C Bank or any Issuing
Bank for payments and disbursements made by the Syndicated L/C Bank or such
Issuing Bank under any Letter of Credit honoring a demand for payment by the
beneficiary thereunder, and each Bank's obligation to participate in such
payments and disbursements in accordance with this Agreement, shall be
irrevocable, absolute and unconditional under any and all circumstances,
including the following circumstances:
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<PAGE>
(a) any lack of validity or enforceability of this Agreement, any
Letter of Credit, any L/C Application or any other agreement or instrument
relating thereto (collectively, the "L/C Related Documents");
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations of the Borrowers in respect of any
Letter of Credit or any other amendment or waiver of or any consent to or
departure from all or any of the L/C Related Documents;
(c) the existence of any claim, set-off, defense or other right that
the Borrowers may have at any time against any beneficiary or any transferee of
any Letter of Credit (or any Person for whom any such beneficiary or any such
transferee may be acting), the Agent, such Issuing Bank, the Syndicated L/C Bank
or any other Person, whether in connection with this Agreement, the transactions
contemplated by the L/C Related Documents or any unrelated transaction;
(d) any draft, certificate, statement or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect other than if such payment resulted from the gross negligence or
willful misconduct of the Agent, the Syndicated L/C Bank or the Issuing Bank;
(e) payment by the Agent, the Syndicated L/C Bank or the Issuing Bank
under any Letter of Credit against presentation of a draft or certificate that
does not comply with the terms of any Letter of Credit other than if such
payment resulted from the gross negligence or willful misconduct of the Agent,
the Syndicated L/C Bank or the Issuing Bank;
(f) any exchange, release or non-perfection of any Collateral
Security, or any release or amendment or waiver of or consent to departure from
any guaranty, for all or any of the obligations of the Borrowers, in respect of
any Letter of Credit; or
(g) any other circumstance or happening whatsoever whether or not
similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or a discharge of, any Borrower or
any account party other than a circumstance constituting gross negligence or
willful misconduct
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<PAGE>
on the part of the Agent, the Syndicated L/C Bank, or the Issuing Bank.
3.08 Indemnification by the Banks. The Banks severally agree to indemnify
----------------------------
the Agent, the Syndicated L/C Bank, the Issuing Bank and each officer, director,
employee, agent and Affiliate of the Agent, the Syndicated L/C Bank and the
Issuing Bank ratably according to their respective Commitment Percentages, to
the extent not reimbursed by the Borrowers, from and against any and all
actions, causes of action, suits, losses, liabilities, damages, and expenses
which may at any time (including, at any time following the payment of any of
the Reimbursement Obligations) be imposed on, incurred by or asserted against
such Person in any way relating to or arising out of the issuance of, transfer
of, or payment or failure to pay under any Letter of Credit issued in accordance
with the terms of this Agreement or the use of proceeds of any payment made
under any Letter of Credit issued in accordance with the terms of this
Agreement; provided, however, that no Bank shall be liable for the payment of
-------- -------
any portion of such actions, causes of action, suits, losses, liabilities,
damages and expenses which a court of competent jurisdiction finally shall have
determined in a final proceeding to have arisen solely by reason of such
Person's gross negligence or willful misconduct.
3.09 Special Provisions Relating to Commercial Letters of Credit.
-----------------------------------------------------------
(a) The Borrowers will obtain, or cause to be obtained, insurance on
all goods described in any Commercial Letter of Credit. The insurance will
cover fire and other usual risks, and any additional risks the Issuing Bank may
request. The Borrowers authorize and empower the Issuing Bank to collect the
proceeds of any insurance which would be payable to any of the Borrowers and
apply such proceeds against any of the Borrowers' Reimbursement Obligations to
the Banks with respect to the Commercial Letter of Credit to which such proceeds
relate.
(b) The Borrowers represent and warrant to the Banks that the
Borrowers have obtained all import and export licenses and other governmental
approvals required for the goods and the documents described in any Commercial
Letter of Credit.
(c) (i) The Borrowers hereby grant to the Agent for the
benefit of the Banks a security interest in the Borrowers' right,
title and interest in and to the following described property,
whether now owned or
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<PAGE>
hereafter acquired by the Borrowers (the "L/C Collateral"):
--------------
(A) All goods and documents described in any
Commercial Letter of Credit;
(B) All negotiable and nonnegotiable documents of
title covering any of the above-described property;
(C) All rights under contracts of insurance
covering any of the above-described property;
(D) All deposit accounts now or hereafter
maintained by the Borrowers with any Bank with respect
to any Commercial Letter of Credit; and
(E) All proceeds of any of the above-described
property.
(ii) The L/C Collateral secures and will secure all
obligations and liabilities of the Borrowers to the Banks with
respect to any Commercial Letter of Credit, whether now existing
or hereafter incurred or created, whether due or to become due,
and whether absolute or contingent.
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<PAGE>
ARTICLE IV
FEES; PAYMENTS; TAXES; CHANGES IN CIRCUMSTANCES
-----------------------------------------------
4.01 Arrangement Fee. The Borrowers agree to pay to the Agent an aggregate
---------------
arrangement fee for the Agent's own account in an amount and at the times set
forth in a letter agreement between WUSA and the Agent dated June 29, 1993.
4.02 Commitment Fees. The Borrowers further agree to pay to the Agent for
---------------
the benefit of each Bank an aggregate commitment fee on the average daily unused
portion of such Bank's Commitment equal to .375% per annum. Such commitment fee
shall accrue from Closing Date to the Commitment Termination Date and shall be
payable quarterly in arrears on the last day of each March, June, September and
December commencing on September 30, 1993 and ending on the Commitment
Termination Date.
4.03 Participation Fee. The Borrowers agree to pay to the Agent for the
-----------------
benefit of each Bank other than Bank of America a participation fee equal to
.25% of each such Bank's final allocated amount on Commitments of Twenty Five
Million dollars ($25,000,000) or more and .15% of each such Bank's final
allocated amount on Commitments of less than Twenty Five Million dollars
($25,000,000), payable on the Closing Date.
4.04 Agency Fee. The Borrowers agree to pay to the Agent for the Agent's
----------
own account on the last Business Day of each March following the Closing, an
aggregate agency fee in the amount set forth in a letter agreement between WUSA
and the Agent dated June 29, 1993.
4.05 Letter of Credit Fees.
---------------------
(a) The Borrowers agree to pay to the Agent for the pro-rata account
of each Bank a Letter of Credit fee as follows:
(i) in the case of a non-financial Standby Letter of
Credit, a fee equal to (A) .75% per annum of the face amount of
each Standby Letter of Credit having a maturity of two (2) years
or less and 1.25% per annum of the face amount of each Standby
Letter of Credit with a maturity of greater than two (2) years
or, (B) in the case of a financial Standby Letter of Credit, a
fee equal to 1.50% per annum of the face amount of each Standby
Letter of Credit. Such fee shall accrue on the outstanding amount
available under the Standby Letter of Credit from its issuance
until the date such Standby Letter of
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<PAGE>
Credit expires, taking into account any extensions of the
expiration date, beyond the initial expiration date and shall be
payable quarterly in advance on the last day of each March, June,
September and December and on the date such Letter of Credit
expires or is fully drawn;
(ii) in the case of each Commercial Letter of Credit, a
fee equal to .375% of the face amount of such Commercial Letter
of Credit, payable upon issuance of the Commercial Letter of
Credit.
(b) The Borrowers agree to pay to the Agent for the account of the
Issuing Bank, in connection with the issuance of any Standby Letter of Credit,
an issuance fee equal to .25% per annum of the face amount of the Standby Letter
of Credit issued by that Issuing Bank. Such issuance fee shall accrue on the
outstanding amount available under the Letter of Credit from the issuance date
of each Standby Letter of Credit to the date such Standby Letter of Credit
expires, taking into account any extensions of the expiration date beyond the
initial expiration date, and shall be payable quarterly in advance on the last
day of each March, June, September and December and on the date such Standby
Letter of Credit expires or is fully drawn;
(c) The Borrowers agree to pay to the Issuing Bank, in the case of
each Commercial Letter of Credit, a negotiation fee in an amount equal to .15%
of the value of drawings from such Commercial Letter of Credit, payable on the
day of negotiation of documents causing such drawings to be made.
(d) If at any time after the date of issuance thereof, the stated
amount of any Letter of Credit is increased, the Borrowers shall pay to the
Agent:
(i) in the case of a Standby Letter of Credit (A) an
additional fee for the account of each Bank equal to the
applicable percentage rate set forth in paragraph (a)(i) above
and (B) for the account of the Issuing Bank an additional
issuance fee equal to the applicable percentage rate set forth in
paragraph (b) above, each such fee computed on the amount of such
increase times the number of days included in the period from the
date of increase of the Standby Letter of Credit to the then
stated date of expiration, taking into account any extensions of
the expiration date beyond the then stated date of expiration,
and payable quarterly in advance on the last day of each March,
June, September and December
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<PAGE>
and on the date such Standby Letter of Credit expires or is fully
drawn;
(ii) in the case of a Commercial Letter of Credit, an
additional fee for the account of each Bank equal to the
applicable percentage rate set forth in paragraph (a)(ii) above,
each such fee computed on the amount of such increase in the
stated amount of such Commercial Letter of Credit, payable on the
date the stated amount of such Commercial Letter of Credit is
increased.
(e) On the date of any amendment to or transfer of any Letter of
Credit, the Borrower shall pay to the Agent for the account of the Syndicated
L/C Bank or the Issuing Bank, an amendment fee or transfer fee equal to the
Syndicated L/C Bank's or the Issuing Bank's standard amendment or transfer fee
on such date.
4.06 Computation of Fees and Interest.
--------------------------------
(a) All computations of interest payable in respect of Reference Rate
Loans and fees with respect to Standby Letters of Credit shall be made on the
basis of a year of three hundred sixty-five (365) or three hundred sixty-six
(366) days, as the case may be, and actual days elapsed. All other computations
of fees and interest under this Agreement shall be made on the basis of a three
hundred sixty (360) day year and actual days elapsed. Interest and fees shall
accrue during each period during which interest or such fees are computed from
and including the first day thereof to but excluding the last day thereof. For
the purposes of this Agreement whenever interest is calculated on the basis of a
year of 360 or 365 days, each rate of interest determined pursuant to such
calculation expressed as an annual nominal rate for the purposes of the Interest
--------
Act (Canada) is equivalent to such rate as so determined multiplied by the
- ---
number of days in the calendar year in which the same is to be ascertained and
divided by 360 or 365, as appropriate. The parties further agree that for the
purposes of the Interest Act (Canada), (i) the principle of deemed reinvestment
------------
of interest shall not apply to any interest calculation under this Agreement,
and (ii) the rates of interest stipulated in this Agreement are intended to be
nominal rates and not effective rates or yields.
(b) The Agent shall, as soon as practicable, notify the Borrowers and
the Banks of each determination of a Eurodollar Rate or of a CD Rate; provided,
--------
however, that any failure to do so shall not relieve the Borrowers of any
- -------
liability hereunder. Any change
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<PAGE>
in the interest rate on a Loan resulting from a change in the Eurodollar Reserve
Percentage, Eurocurrency Liabilities, the Assessment Rate or the Reference Rate
shall become effective as of the opening of business on the day on which such
change in the Reserve Percentage, Eurocurrency Liabilities, the Assessment Rate
or the Reference Rate shall become effective. The Agent shall, as soon as
practicable, notify the Borrowers and the Banks of the effective date and the
amount of each such change; provided, however, that any failure to do so shall
-------- -------
not relieve the Borrowers of any liability hereunder.
(c) Each determination of an interest rate by the Agent pursuant to
any provision of this Agreement shall be conclusive and binding on the Borrowers
and the Banks in the absence of manifest error.
(d) If any Reference Bank's Commitment shall terminate (otherwise
than on termination of all the Commitments), or, for any reason whatsoever, the
Reference Bank shall cease to be a Bank hereunder, that Reference Bank shall
thereupon cease to be a Reference Bank and the Eurodollar Rate shall be
determined on the basis of the rates as notified by the remaining Reference
Banks.
(e) Each Reference Bank shall use its best efforts to furnish
quotations of rates to the Agent as contemplated hereby. If any of the
Reference Banks shall be unable or otherwise fails to supply such rates to the
Agent upon its request, the rate of interest shall be determined on the basis of
the quotations of the remaining Reference Banks or Reference Bank.
(f) Fees with respect to existing Letters of Credit shall be
determined pursuant to Section 4.05 on and after the Closing Date.
4.07 Payments by the Borrowers.
-------------------------
(a) All payments (including prepayments) to be made by the Borrowers
on account of principal, interest and fees shall be made without set-off or
counterclaim and shall be made to the Agent, for the account of the Banks
(except as otherwise provided in Section 4.01, 4.04 or 4.11), at the Agent's
office set forth in Section 11.02, in Dollars and in immediately available funds
no later that 12:00 noon (New York time). The Agent shall distribute such
payments pro rata to each Bank in the amount of its Commitment Percentage of
--- ----
such principal, interest, fees or other amounts, promptly upon receipt in like
funds as received. Any payment which is received by the Agent later than 12:00
noon (New York time)
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<PAGE>
shall be deemed to have been received on the next succeeding Business Day.
(b) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be; provided, however, that if
-------- -------
such extension would cause payment of interest on or principal of Eurodollar
Rate Loans to be made in the next following calendar month, such payment shall
be made on the immediately preceding Business Day.
(c) Unless the Agent shall have received notice from the Borrowers,
prior to the date on which any payment is due to the Banks hereunder, that the
Borrowers will not make such payment in full, the Agent may assume that the
Borrowers have made such payment in full to the Agent on such date and the Agent
may, but shall not be so required, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to the amount then due
such Bank. If and to the extent the Borrowers shall not have made such payment
in full to the Agent, each Bank shall repay to the Agent forthwith on demand
such amount distributed to such Bank, together with interest thereon for each
day from the date such amount is distributed to such Bank until the date such
Bank repays such amount to the Agent, at the Federal Funds Rate as in effect on
such date.
4.08 Payments by the Banks to the Agent.
----------------------------------
(a) Each Bank shall make available to the Agent in immediately
available funds for the account of the Borrowers the amount of its Commitment
Percentage of any Borrowing.
(b) Unless the Agent shall have received notice from a Bank on the
Closing Date or, with respect to each Borrowing after the Closing Date, at least
one (1) Business Day prior to the date of any proposed Borrowing that each Bank
will not make available to the Agent for the account of the Borrowers the amount
of that Bank's Commitment Percentage of the Borrowing, the Agent may assume that
each Bank has made such amount available to the Agent on the borrowing date and
the Agent may (but it shall not be so required), in reliance upon such
assumption, make available to the Borrowers on such date a corresponding amount.
If and to the extent any Bank shall not have made its full amount available to
the Agent and the Agent in such circumstances has made available to the
Borrowers such amount, such Bank shall, within two (2) Business Days following
the date of such Borrowing, make such amount available to
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<PAGE>
the Agent, together with interest at the Federal Funds Rate for each day during
such period. A certificate of the Agent submitted to any Bank with respect to
amounts owing under this Section 4.08(b) shall be conclusive, absent manifest
error. If such amount is so made available, such payment to the Agent shall
constitute such Bank's Loan on the date of Borrowing for all purposes of this
Agreement. If such amount is not made available to the Agent within two (2)
Business Days following the date of such Borrowing, the Agent shall notify the
Borrowers of such failure to fund and, upon demand by the Agent, the Borrowers
shall pay to the Agent such amount, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Loans comprising such Borrowing.
(c) The failure of any Bank to make any Loan on any date of Borrowing
shall not relieve any other Bank of the obligation hereunder to make a Loan on
the date of such Borrowing but no Bank shall be responsible for the failure of
any other Bank to make the Loan to be made by such other Bank on the date of any
Borrowing.
4.09 Security and Guarantees.
-----------------------
(a) All Obligations of the Borrowers under this Agreement and all
other Loan Documents shall be secured in accordance with the Collateral
Documents.
(b) All Obligations of the Borrowers under this Agreement shall be
unconditionally guaranteed by the Guarantors (other than WECL), which shall be
secured in accordance with the Collateral Documents.
4.10 Taxes.
-----
(a) Subject to Section 4.10(g), any and all payments by any Borrower
to each Bank or the Agent under this Agreement shall be made free and clear of,
and without deduction or withholding for, any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Bank and the Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by
each Bank's net income by the jurisdiction under the laws of which such Bank or
the Agent, as the case may be, is organized or maintains a Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes").
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<PAGE>
(b) In addition, each Borrower shall pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Documents (hereinafter referred to as "Other Taxes").
(c) Subject to Section 4.10(g), each Borrower shall indemnify and
hold harmless each Bank and the Agent for the full amount of Taxes or Other
Taxes (including without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 4.10) paid by the Bank or the
Agent and any liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. Payment under this
indemnification shall be made within thirty (30) days from the date the Bank or
the Agent makes written demand therefor.
(d) If any Borrower shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to
any Bank or the Agent, then, subject to Section 4.10(g):
(i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions
applicable to additional sums payable under this Section 4.10
and, notwithstanding any exclusion from Taxes in Section 4.10(a)
for net income taxes of the Banks, including in the case of non-
U.S. withholding tax imposed at rates of 5% or greater, any U.S.
tax, including taxes on net income, attributable to such
increase) such Bank or the Agent, as the case may be, receives an
amount equal to the sum it would have received had no such
deductions been made;
(ii) the Borrower shall make such deductions; and
(iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance
with applicable law.
(e) Within thirty (30) days after the date of any payment by a
Borrower of Taxes or Other Taxes, such Borrower shall furnish to the Agent the
original or a certified copy of a receipt
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<PAGE>
evidencing payment thereof, or other evidence of payment satisfactory to the
Agent.
(f) Each Bank which is a foreign person (i.e., a person other than a
United States person for United States Federal income tax purposes) agrees that:
(i) it shall, no later than the Closing Date (or, in
the case of a Bank which becomes a party hereto pursuant to
Section 11.07 after the Closing Date, the date upon which the
Bank becomes a party hereto) deliver to the Borrowers through the
Agent:
(A) if any Lending Office is located in the
United States, two (2) accurate and complete signed
originals of Internal Revenue Service Form 4224 ("Form
4224") and Internal Revenue Service Form W-9 ("Form W-
9") or any successor thereto, and
(B) if any Lending Office is located outside
the United States, two (2) accurate and complete signed
originals of Internal Revenue Service Form 1001 ("Form
1001") and Internal Revenue Service Form W-8 ("Form W-
8") or any successor thereto,
in each case indicating that the Bank is on the date of delivery
thereof entitled to receive payments of principal, interest and
fees for the account of such Lending Office or Offices under this
Agreement free from withholding of United States Federal income
tax;
(ii) if at any time a Bank changes its Lending Office
or Offices or selects an additional Lending Office as herein
provided, it shall, at the same time or reasonably promptly
thereafter, deliver to the Borrowers through the Agent in
replacement for, or in addition to, the forms previously
delivered by it hereunder:
(A) if such changed or additional Lending
Office is located in the United States, two (2)
accurate and complete signed originals of Form 4224 and
Form W-9; or
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<PAGE>
(B) otherwise, two accurate and complete
signed originals of Form 1001 and Form W-8,
in each case indicating that the Bank is on the date of delivery
thereof entitled to receive payments of principal, interest and
fees for the account of such changed or additional Lending Office
under this Agreement free from withholding of United States
Federal income tax;
(iii) it shall, before or promptly after the occurrence
of any event (including the passing of time but excluding any
event mentioned in (ii) above) requiring a change in the most
recent Form 4224 and Form W-9 or Form 1001 and Form W-8
previously delivered by the Bank and if the delivery of the same
be lawful, deliver to the Borrowers through the Agent two (2)
accurate and complete original signed copies of Form 4224 and
Form W-9 or Form 1001 and Form W-8 in replacement for the forms
previously delivered by the Bank;
(iv) it shall, promptly upon the Borrowers' reasonable
request to that effect, deliver to the Borrowers such other forms
or similar documentation as may be required from time to time by
any applicable law, treaty, rule or regulation in order to
establish such Bank's tax status for withholding purposes;
(v) if such Bank claims exemption from with holding
tax under a United States tax treaty by providing a Form 1001 and
Form W-8 and such Bank sells or grants a participation of all or
part of its rights under this Agreement, such Bank shall notify
the Agent of the percentage amount in which it is no longer the
beneficial owner under this Agreement. To the extent of this
percentage amount, the Agent shall treat such Bank's Form 1001 as
no longer in compliance with this Section 4.10(f). In the event a
Bank claiming exemption from United States withholding tax by
filing Form 4224 and Form W-9 with the Agent, sells or grants a
participation in its rights under this Agreement, such Bank
agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of
the Code;
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<PAGE>
(vi) Without limiting or restricting any Bank's right
under Section 4.10(d) to increased amounts from the Borrower upon
satisfaction of such Bank's obligations under the provisions of
this Section 4.10(f), if such Bank is entitled to a reduction in
the applicable withholding tax, the Agent may withhold from any
interest to such Bank an amount equivalent to the applicable
withholding tax after taking into account such reduction. If the
forms or other documentation required by subparagraph (i) are not
delivered to the Agent, then the Agent may withhold from any
interest payment to the Bank not providing such forms or other
documentation, an amount equivalent to the applicable withholding
tax. In addition, the Agent may also withhold against periodic
payments other than interest payments to the extent United States
withholding tax is not eliminated by obtaining Form 4224 and Form
W-9 or Form 1001 and Form W-8; and
(vii) if the Internal Revenue Service or any authority
of the United States or other jurisdiction asserts a claim that
the Agent or the Borrowers did not properly withhold tax from
amounts paid to or for the account of any Bank (because the
appropriate form was not delivered, was not properly executed, or
because such Bank failed to notify the Agent of a change in
circumstances which rendered the exemption from withholding tax
ineffective), such Bank shall indemnify the Agent and/or the
Borrowers, fully for all amounts paid, directly or indirectly, by
the Agent and/or the Borrowers, as tax or otherwise, including
penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Agent or the Borrowers
under this Section 4.10(f), together with all costs, expenses and
attorneys' fees (including allocated costs for in-house staff
counsel).
(g) The Borrowers will not be required to pay any additional amounts
in respect of United States Federal income tax pursuant to Section 4.10(d) to
any Bank for the account of any Lending Office of such Bank:
(i) if the obligation to pay such additional amounts
would not have arisen but for a failure by such Bank to comply
with its obligations under Section 4.10(f) in respect of such
Lending Office;
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<PAGE>
(ii) if such Bank shall have delivered to the Borrowers
a Form 4224 in respect of such Lending Office pursuant to Section
4.10(f)(i)(A), and the Bank shall not at any time be entitled to
exemption from deduction or withholding of United States Federal
income tax in respect of payments by the Borrowers hereunder for
the account of such Lending Office for any reason other than a
change in United States law or regulations or in the official
interpretation of such law or regulations by any governmental
authority charged with the interpretation or administration
thereof (whether or not having the force of law) after the date
of delivery of such Form 4224 and Form W-9; or
(iii) if such Bank shall have delivered to the Borrowers
a Form 1001 and Form W-8 in respect of such Lending Office
pursuant to Section 4.10(f)(i)(B), and such Bank shall not at any
time be entitled to exemption from deduction or withholding of
United States Federal income tax in respect of payments by the
Borrowers hereunder for the account of such Lending Office for
any reason other than a change in United States law or
regulations or any applicable tax treaty or regulations or in the
official interpretation of any such law, treaty or regulations by
any governmental authority charged with the interpretation or
administration thereof (whether or not having the force of law)
after the date of delivery of such Form 1001 and Form W-8.
(h) If, at any time, the Borrowers request any Bank to deliver any
forms or other documentation pursuant to Section 4.10(f)(iv), then the Borrowers
shall, on demand of such Bank through the Agent, reimburse such Bank for any
costs or expenses reasonably incurred by such Bank in the preparation or
delivery of such forms or other documentation.
(i) If a Borrower is required to pay additional amounts to any Bank
or the Agent pursuant to Section 4.10(d), then such Bank shall use reasonable
efforts (consistent with legal and regulatory restrictions) to change the
jurisdiction of its Lending Office so as to eliminate any such additional
payment by the Borrowers which may thereafter accrue if such change in the
judgment of such Bank is not otherwise disadvantageous to such Bank.
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<PAGE>
(j) The agreements and obligations of the Borrowers contained in this
Section 4.10 shall survive the payment in full of all Obligations hereunder.
4.11 Sharing of Payments, Etc. If, other than as provided in Section 4.10,
-------------------------
4.12, or 4.13, any Bank shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of the Loans made by it or the Letter of Credit Obligations in excess of
its Commitment Percentage of payments on account of the Loans obtained by all
the Banks, such Bank shall forthwith purchase from the other Banks such
participations in the Loans or the Letter of Credit Obligations made by them as
shall be necessary to cause such purchasing Bank to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
-------- -------
excess payment is thereafter recovered from such purchasing Bank, such purchase
by such Bank from each other Bank shall be rescinded and each other Bank shall
repay to the purchasing Bank the purchase price paid thereto to the extent of
such recovery, together with an amount equal to such paying Bank's Commitment
Percentage (according to the proportion of (a) the amount of such paying Bank's
required repayment to (b) the total amount so recovered from the purchasing
Bank) of any interest or other amount paid or payable by the purchasing Bank in
respect of the total amount so recovered. Each Borrower agrees that any Bank so
purchasing a participation from another Bank pursuant to the provisions of this
Section 4.11 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Bank were the direct creditor of the Borrowers
in the amount of such participation.
4.12 Illegality.
----------
(a) If any Bank shall determine that any Requirement of Law or any
change therein or in the interpretation or administration thereof has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its Lending Office to make Eurodollar Rate
Loans, then, on notice thereof by such Bank to the Borrowers through the Agent,
the obligation of such Bank to make Eurodollar Rate Loans shall be suspended
until the notifying Bank shall have notified the Agent and the Borrowers that
the circumstances giving rise to such determination no longer exist, and during
such suspension period such Bank shall make Reference Rate Loans. Each
Reference Rate Loan made by a Bank as a result of the preceding sentence shall
have the same Interest Payment Date as the Eurodollar Rate Loans
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made by the other Banks on the date which such Bank makes such Reference Rate
Loan.
(b) If a Bank shall determine that it is unlawful to maintain any
Eurodollar Rate Loan, the Borrowers shall prepay in full all Eurodollar Rate
Loans of such Bank then outstanding, together with interest accrued thereon,
either on the last day of the Interest Period thereof if such Bank may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Bank may not lawfully continue to maintain such Eurodollar Rate Loans,
together with any amounts required to be paid in connection therewith pursuant
to Section 4.13.
(c) If a Borrower is required to prepay any Eurodollar Rate Loan
immediately as provided in Section 4.12(b), then, concurrently with such
prepayment, such Borrower shall borrow from the affected Bank, in the amount of
such repayment, a Reference Rate Loan having as its Interest Payment Date the
same Interest Payment Date as the Eurodollar Rate Loan which was prepaid.
(d) Before giving any notice to the Agent pursuant to this Section
4.12, the affected Bank shall designate a different Lending Office with respect
to its Eurodollar Rate Loans if such designation will avoid the need for giving
such notice or making such demand and will not, in the judgment of such Bank, be
illegal or otherwise disadvantageous to such Bank.
4.13 Increased Costs and Reduction of Return.
----------------------------------------
(a) If, any Bank shall determine that, due to either (i) the
introduction of or any change (other than any change by way of imposition of or
increase in reserve requirements included in the Eurodollar Reserve Percentage)
in or in the interpretation of any law or regulation or (ii) the compliance with
any guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to such Bank of agreeing to make or making, funding or maintaining any
Eurodollar Rate Loans, then the Borrowers shall be liable for, and shall from
time to time, upon demand therefor by such Bank (with a copy of such demand to
the Agent), pay to the Agent for the account of such Bank, additional amounts as
are sufficient to compensate such Bank for such increased costs.
(b) If, any Bank shall have determined that the introduction of any
applicable law, rule, regulation or guideline regarding capital adequacy, or any
change therein or any change in
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the interpretation or administration thereof by any central bank or other
Governmental Authority or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank (or its Lending Office) or any
corporation controlling such Bank with any request, guideline or directive
regarding capital adequacy (whether or not having the force of law) of any such
central bank or other authority, affects or would affect the amount of capital
required or expected to be maintained by such Bank or any corporation
controlling such Bank and such Bank (taking into consideration such Bank's or
such corporation's policies with respect to capital adequacy and such Bank's
desired return on capital) determines that the amount of such capital is
increased as a consequence of its obligation under this Agreement, then, upon
demand of such Bank, the Borrowers shall immediately pay to such Bank, from time
to time as specified by such Bank, additional amounts sufficient to compensate
such Bank for such increase.
4.14 Funding Losses. Each Borrower agrees to reimburse each Bank and to
--------------
hold each Bank harmless from any loss or expense which such Bank may sustain or
incur as a consequence of the following:
(a) the failure of the Borrowers to make any payment or prepayment of
principal of any Eurodollar Rate Loan or CD Rate Loan (including payments made
after any acceleration thereof);
(b) the failure of the Borrowers to borrow, continue or convert a
Loan after the Borrowers have given (or are deemed to have given) a Notice of
Borrowing or a Notice of Conversion/Continuation;
(c) the failure of the Borrowers to make any prepayment after the
Borrowers have given a notice in accordance with Section 2.06; or
(d) the prepayment of a Eurodollar Rate Loan or a CD Rate Loan on a
day which is not the last day of the Interest Period with respect thereto;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Eurodollar Rate Loans or CD Rate Loans
hereunder or from fees payable to terminate the deposits from which such funds
were obtained.
This covenant shall survive payment in full of all other Obligations.
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4.15 Eurodollar Rate Protection. In the event that (a) any two (2)
--------------------------
Reference Banks shall have determined (which determination shall be conclusive
and binding upon the Borrowers) that for any reason adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate or the CD Rate for any
requested Interest Period with respect to a proposed Loan that a Borrower has
requested be made as a Eurodollar Rate Loan or a CD Rate Loan, or (b) any two
(2) Reference Banks shall determine (which determination shall be conclusive and
binding upon the Borrowers) that the Eurodollar Rate or the CD Rate applicable
pursuant to Section 2.09 for any requested Interest Period with respect to a
proposed Loan that a Borrower has requested be made as a Eurodollar Rate Loan or
CD Rate Loan do not adequately and fairly reflect the cost to such Banks of
funding such Loan, the Agent shall forthwith give telex notice of such
determination to the Borrowers and each Bank at least one day prior to the
proposed borrowing date for such Eurodollar Rate Loan or CD Rate Loan. If such
notice is given, any requested Eurodollar Rate Loan or CD Rate Loan shall be
made as a Reference Rate Loans. Until such notice has been withdrawn by the
Agent, no further Eurodollar Rate Loans or CD Rate Loans may be requested by the
Borrowers and on the Interest Payment Date of any Eurodollar Rate Loan or CD
Rate Loan then outstanding and so affected, such outstanding Loan shall be
converted into a Reference Rate Loan.
4.16 Certificates of Banks. Any Bank claiming reimbursement or
---------------------
compensation pursuant to this Article IV shall deliver to the Borrowers a
certificate setting forth in reasonable detail the computation of the amount
payable to such Bank hereunder and such certificate shall be conclusive and
binding on the Borrowers in the absence of manifest error.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
WGI, WII, WECL and WUSA each represent and warrant to the Agent and
each Bank and each Designated Subsidiary shall be deemed by execution and
delivery of its Election to Participate to have represented as of the date of
such Election to Participate to the Agent and each Bank that:
5.01 Corporate Existence and Power. Each of WGI, WII, WUSA, WECL, WESCO,
-----------------------------
WBEI and the Designated Subsidiaries:
(a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation; provided
--------
however, with respect to WECL the concept of good standing is not applicable but
- -------
WECL maintains its status with the Governmental Authorities of the Province of
Ontario, Canada;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own, to pledge, mortgage and operate
its property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged;
(c) is duly qualified as a foreign corporation, licensed and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification; and
(d) is in compliance with all Requirements of Law;
except, in each case referred to in clause (c) or clause (d), to the extent that
the failure to do so could not have a Material Adverse Effect.
5.02 Corporate Authorization; No Contravention. The execution,
-----------------------------------------
delivery and performance by WGI, WII, WUSA, WECL or a Designated Subsidiary of
this Agreement, and any other Loan Document 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;
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(b) do not and will not contravene the terms of that Person's
certificate of incorporation or By-Laws, or any amendment thereof;
(c) will not conflict with, or result in any breach or contravention
of, or the creation of any Lien (other than Liens under this Agreement) under,
any indenture, agreement, lease, instrument, Contractual Obligation, injunction,
order, decree or undertaking to which such Person is a party; or
(d) violate any Requirement of Law.
5.03 Governmental Authorization. No approval, consent, exemption,
--------------------------
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for recordings or filings in connection with the
Liens granted to the Agent under the Collateral Documents or this Agreement) is
necessary or required in connection with the execution, delivery, performance or
enforcement against WGI, WII, WUSA, WESCO, WECL, WBEI or any Designated
Subsidiary of this Agreement or any other Loan Document or any other instrument
or agreement required hereunder to be made by WGI, WII, WUSA, WESCO, WECL, WBEI
or any Designated Subsidiary.
5.04 Binding Effect. This Agreement and each other Loan Document to which
--------------
WGI, WII, WUSA, WESCO, WECL, WBEI or any Designated Subsidiary is a party
constitute the legal, valid and binding obligations of WGI, WII, WUSA, WESCO,
WECL, WBEI or any Designated Subsidiary to the extent they are a party thereto,
enforceable against such Person in accordance with their respective 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.
5.05 Litigation. Except as set forth in Schedule 5.05 hereto, there are
----------
no actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of WGI, WII, WUSA, WESCO, WECL, WBEI or any Designated Subsidiary,
threatened or contemplated at law, in equity, in arbitration or before any
Governmental Authority against WGI, WII, WUSA, WESCO, WECL, WBEI or any
Designated Subsidiary or any of their respective properties:
(a) with respect to this Agreement, or any Loan Document, or any of
the transactions contemplated hereby or thereby; or
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(b) which, if determined adversely to WGI, WII, WUSA, WESCO, WECL,
WBEI or any Designated Subsidiary, might have a Material Adverse Effect.
No injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery and performance of this Agreement or any Loan
Document or directing that the transactions provided for herein or therein not
be consummated as herein or therein provided.
5.06 No Default. No Default or Event of Default exists or would result
----------
from the incurring of obligations by WGI, WII, WUSA, WESCO, WECL or WBEI or the
Designated Subsidiaries under this Agreement or any Loan Document. Neither WGI,
WII, WUSA, WECL or the Designated Subsidiaries, is in default under or with
respect to any Contractual Obligation in any respect which, individually or
together with all such defaults, could have a reasonable likelihood of having a
Material Adverse Effect.
5.07 ERISA Compliance.
----------------
(a) Schedule 5.07 lists all Plans maintained or sponsored by the
Company or any of its Subsidiaries (or to which the Company or any of its
Subsidiaries is obligated to contribute), and separately identifies Plans
intended to be Qualified Plans and Multiemployer Plans. Each of such Plans or
written descriptions thereof provided to the Agent are true and complete in all
material respects.
(b) Each such Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law,
including all requirements under the Code or ERISA for filing reports (which are
true and correct in all material respects as of the date filed), and benefits
have been paid in accordance with the provisions of each such Plan.
(c) Each such Qualified Plan has been determined by the Internal
Revenue Service to qualify under Section 401 of the Code, and the trusts created
thereunder have been determined to be exempt from tax under the provisions of
Section 501 of the Code, and to the best knowledge of the Company nothing has
occurred which would cause the loss of such qualification or tax-exempt status.
(d) Except as set forth in Schedule 5.07, there is no outstanding
liability under Title IV of ERISA with respect to any Plan maintained or
sponsored by the Company or any of its
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Subsidiaries or any ERISA Affiliate (as to which the Company is or may be
liable), nor with respect to any Plan to which the Company or any of its
Subsidiaries or any ERISA Affiliate (wherein the Company is or may be liable)
contributes or is obligated to contribute.
(e) Except as set forth on Schedule 5.07, none of the Qualified Plans
subject to Title IV of ERISA has any Unfunded Pension Liability (as to which the
Company or any of its Subsidiaries is or may be liable).
(f) Except as set forth in Schedule 5.07, no Plan maintained or
sponsored by the Company or any of its Subsidiaries provides medical or other
welfare benefits or extends coverage relating to such benefits beyond the date
of a participant's termination of employment with the Company or any of its
Subsidi aries, except to the extent required by Section 4980B of the Code and at
the sole expense of the participant or the beneficiary of the participant to the
fullest extent permissible under such Section of the Code. The Company and its
Subsidiaries have complied in all material respects with the notice and
continuation coverage requirements of Section 4980B of the Code.
(g) Except as set forth in Schedule 5.07, no ERISA Event has occurred
or is reasonably expected to occur with respect to any Plan maintained or
sponsored by the Company or any of its Subsidiaries or to which the Company or
any of its Subsidiaries is obligated to contribute.
(h) There are no pending or, to the best knowledge of the Company,
threatened claims, actions or lawsuits, other than routine claims for benefits
in the usual and ordinary course, asserted or instituted against (i) any Plan
maintained or sponsored by the Company or any of its Subsidiaries or its assets,
(ii) any member of the Controlled Group with respect to any Qualified Plan of
the Company or any of its Subsidiaries, or (iii) any fiduciary with respect to
any Plan for which the Company or any of its Subsidiaries may be directly or
indirectly liable, through indemnification obligations or otherwise.
(i) Except as set forth in Schedule 5.07, neither the Company nor any
of its Subsidiaries has incurred nor reasonably expects to incur (i) any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan or (ii) any liability under
Title
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IV of ERISA (other than premiums due and not delinquent under Section 4007 of
ERISA) with respect to a Plan.
(j) Except as set forth in Schedule 5.07, neither the Company nor any
of its Subsidiaries have transferred any Unfunded Pension Liability outside of
the Controlled Group or otherwise engaged in a transaction that could be subject
to Section 4069 or 4212(c) of ERISA.
(k) Neither the Company nor any of its Subsidiaries have engaged,
directly or indirectly, in a non-exempt prohibited transaction (as defined in
Section 4975 of the Code or Section 406 of ERISA) in connection with any Plan
which has a reasonable likelihood of having a Material Adverse Effect.
5.08 Use of Proceeds; Margin Regulations. The proceeds of the Loans shall
-----------------------------------
be used solely for the purposes set forth in Section 7.11. No portion of the
Loans will be used, directly or indirectly, (i) to purchase or carry margin
stock as defined in Regulation U of the Federal Reserve Board or (ii) to repay
or otherwise refinance indebtedness of the Company, WII, WECL or WUSA or others
incurred to purchase or carry margin stock, or (iii) to extend credit for the
purpose of purchasing or carrying any margin stock. No proceeds of any Loans
will be used to acquire any security in any transaction which is subject to
Section 13 or 14 of the Securities Exchange Act.
5.09 Title to Properties. Each of WGI, WII, WUSA, WESCO, WECL, WBEI and
-------------------
the Designated Subsidiaries, has good record and marketable title in fee simple
to or valid leasehold interests in all its property, except for such defects in
title as could not, individually or in the aggregate, have a Material Adverse
Effect. The property is free and clear of all security interests, Liens or
rights of others, except Permitted Liens.
5.10 Taxes. WGI, WII, WUSA, WESCO, WECL, WBEI and the Designated
-----
Subsidiaries have filed all Federal and other material tax returns and reports
required to be filed and have paid all Federal and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets otherwise due and payable except those which
are being contested in good faith by appropriate proceedings and for which
adequate reserves have been provided in accordance with GAAP and no notice of
tax lien has been filed or recorded (such proceedings, reserves and taxes being
described on Schedule 5.10). To the best knowledge of WGI, there is no proposed
tax assessment against WGI, WII, WUSA, WESCO, WECL, WBEI or any Designated
Subsidiary which
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would, if the assessment were made, have a Material Adverse Effect. The
proceedings described in Schedule 5.10 will not, if determined adversely to WGI,
WII, WUSA, WESCO, WECL, WBEI or any Designated Subsidiary, have a Material
Adverse Effect.
5.11 Financial Condition.
-------------------
(a) The audited consolidated financial statements of WGI and its
Subsidiaries dated December 31, 1992, and the related consolidated statements of
operations, stockholders' equity and cash flows for the fiscal year ended on
that date:
(i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as
otherwise expressly noted therein,
(ii) fairly present the financial condition of WGI and
its Subsidiaries as of the date thereof and results of operations
for the period covered thereby; and
(iii) show all material indebtedness and other
liabilities, direct or contingent, of the Company and its
consolidated Subsidiaries as of the date thereof (including,
without limitation, liabilities for taxes and material
commitments) that would be customarily included in a balance
sheet prepared in accordance with GAAP.
(b) Since December 31, 1992 there has been no Material Adverse
Effect.
5.12 Environmental Matters.
---------------------
(a) Except as specifically identified in Schedule 5.12, the
operations of the Company, WII, WUSA, WESCO, WECL, WBEI and the Designated
Subsidiaries comply in all respects with all Environmental Laws and all other
applicable Requirements of Law concerning environmental health and safety,
except such non-compliance which would not result in liability in excess of One
Million dollars ($1,000,000) in the aggregate.
(b) Except as specifically identified in Schedule 5.12, the Company,
WII, WUSA, WESCO, WECL, WBEI and the Designated Subsidiaries have obtained all
material environmental, health and safety permits necessary for their
operations, and all such permits are in effect, and the Company, WII, WUSA,
WESCO, WECL, WBEI and the Designated Subsidiaries are in material compliance
with all terms and conditions of such permits.
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(c) Except as identified in Schedule 5.12, neither the Company, WII,
WUSA, WESCO, WECL, WBEI or any Designated Subsidiary nor any of their present
property or operations is subject to any outstanding written order from or
agreement with any Governmental Authority or other Person nor subject to any
judicial or docketed administrative proceeding, respecting any Requirement of
Law, Environmental Claim or Hazardous Material which could have a Material
Adverse Effect.
(d) Except as specifically identified in Schedule 5.12, there are, to
the knowledge of the Company, no conditions or circumstances which may give rise
to any Environmental Claim arising from the operations of the Company, WII,
WUSA, WESCO, WECL, WBEI and the Designated Subsidiaries, including Environmental
Claims associated with any operations of the Company, WII, WUSA, WESCO, WECL,
WBEI or any Designated Subsidiary, with a potential liability in excess of One
Million dollars ($1,000,000) in the aggregate. Without limiting the generality
of the foregoing, (i) neither the Company, WII, WUSA, WESCO, WECL nor WBEI has
any underground storage tanks (x) that are not properly registered or permitted
under applicable Environmental Laws or (y) that are leaking or disposing of
Hazardous Materials off-site, and (ii) the Company, WII, WUSA, WESCO, WECL, WBEI
and the Designated Subsidiaries have met all notification requirements under
Title III of CERCLA or any other Environmental Law.
5.13 Collateral Documents.
--------------------
(a) The provisions of each of the Collateral Documents are effective
to create in favor of the Agent, for the benefit of the Banks, a legal, valid
and enforceable security interest in all right, title and interest of WGI,
Musketeer and WUSA in the Collateral described therein; and financing statements
have been filed (or will be filed within 10 days from the Closing Date) in the
offices in all of the jurisdictions listed in the schedules to the respective
Pledge Agreements. No other actions are necessary to perfect the security
interests created in the Collateral Documents other than this Agreement, except
for possession of the share certificates and letters of the Corporate Secretary;
and
(b) Assuming the filing or possession referred to in Section 5.13(a),
the provisions of the Pledge Agreements are effective to create, in favor of the
Agent, for the ratable benefit of the Banks, a legal, valid and enforceable Lien
on or security interest in all of the Collateral described therein, and the
Pledged Collateral was delivered to the Agent or its nominee. Upon such filing
or possession, each such Pledge Agreement will
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constitute a fully perfected first security interest in all right, title and
interest of WGI, Musketeer and WUSA, as the case may be, in the Collateral
described therein, prior and superior to all other Liens except for Permitted
Liens.
5.14 Investment Company. Neither WGI, WII, WUSA, WESCO, WECL, WBEI nor any
------------------
Designated Subsidiary, nor any Person controlling WGI, WII, WUSA, WESCO, WECL,
WBEI or any Designated Subsidiary is (a) an "Investment Company" within the
meaning of the Investment Company Act of 1940, as amended, or (b) subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any public utility or other federal,
state or other governmental statute or regulation limiting its ability to incur
indebtedness.
5.15 Full Disclosure. All factual information heretofore or
---------------
contemporaneously furnished in writing by or on behalf of WGI, WII, WECL, WUSA
and their Subsidiaries in writing to any Bank (including without limitation, all
information contained in the Loan Documents) for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all other
such factual information hereafter furnished in writing by or on behalf of WGI,
WII, WECL, WUSA and their Subsidiaries in writing to any Bank will be, true and
accurate in all material respects on the date as of which such information is
dated or certified and not made incomplete by omitting to state any fact
necessary to make such information not misleading at such time in light of the
circumstances under which such information was provided.
5.16 No Burdensome Restrictions. None of WGI, WII, WUSA, WECL, WESCO, WBEI
--------------------------
or any Designated Subsidiary is a party to or bound by any Contractual
Obligation or subject to any charter or corporate restriction or any Requirement
of Law which materially adversely affects, or insofar as WGI, WII, WUSA, WESCO,
WECL, WBEI or any Designated Subsidiary may reasonably foresee may so affect,
the rights of the Banks under any Loan Document, or may impair the ability of
WGI, WII, WUSA, WESCO, WECL, WBEI or any Designated Subsidiary to perform or
observe its obligations under this Agreement.
5.17 Solvency. On and as of the Closing Date, each of WGI (on a
--------
consolidated basis), WII (on a consolidated basis) combined with WECL, WUSA,
WESCO and WBEI is Solvent.
5.18 Labor Relations. Neither the Company, WII, WECL, WUSA, WESCO, WBEI
---------------
nor any Designated Subsidiary, nor any of their respective Subsidiaries is
engaged in any unfair labor practice
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that could have a material adverse effect on the Company, WII, WECL, WUSA,
WESCO, WBEI or any Designated Subsidiary taken as a whole. There is (i) no
significant unfair labor practice complaint pending against the Company, WII,
WECL, WUSA, WESCO, WBEI or any Designated Subsidiary, to the best knowledge of
the Company, threatened against any of them, before the National Labor Relations
Board, and no significant grievance or significant arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against the Company, WII, WECL, WUSA, WESCO, WBEI or any Designated Subsidiary
or, to the best knowledge of the Company, threatened against any of them, (ii)
no significant strike, labor dispute, slowdown or stoppage pending against the
Company, WII, WECL, WUSA, WESCO, WBEI or any Designated Subsidiary or, to the
best knowledge of the Company, threatened against the Company, WII, WECL, WUSA,
WESCO, WBEI or any Designated Subsidiary, and (iii) to the best knowledge of the
Company, no union representation question existing with respect to the employees
of the Company, WII, WECL, WUSA, WESCO, WBEI or any Designated Subsidiary and,
to the best knowledge of the Company, no union organizing activities are taking
place, except (with respect to any matter specified in clause (i), (ii) or (iii)
above, either individually or in the aggregate) such as could not have a
Material Adverse Effect.
5.19 Copyrights, Patents, Trademarks and Licenses, Patents, etc. Except as
----------------------------------------------------------
set forth in Schedule 5.19, the Company, WII, WECL, WUSA, WESCO, WBEI or any of
their respective Subsidiaries own or are licensed or otherwise have the right to
use all of the patents, trademarks, service marks, trade names, copyrights,
franchises, authorizations and other rights that are reasonably necessary for
the operations of their respective businesses, without conflict with the rights
of any other Person with respect thereto. To the best knowledge of the Company,
no slogan or other advertising device, product, process, method, substance, part
or other material now employed, or now contemplated to be employed by the
Company, WII, WECL, WUSA, WESCO, WBEI or any of their respective Subsidiaries
infringes upon any rights owned by any other Person, no claim or litigation
regarding any of the foregoing is pending or threatened, and no patent,
invention, device, application, principle or any statute, law, rule, regulation,
standard or code is pending or, to the knowledge of the Company, proposed,
which, in either case, would be likely to result in a Material Adverse Effect.
5.20 Subsidiaries. As of the Closing Date WGI has no Subsidiaries other
------------
than those listed on Schedule 5.20(a) hereto and has no equity investments in
any other corporation or entity other than those listed on Schedule 5.20(b)
hereto.
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5.21 Broker's; Transaction Fees. Neither the Company nor any of its
--------------------------
Subsidiaries has any obligation to any Person in respect of any finder's,
broker's or investment banker's fee in connection herewith.
5.22 Insurance. The properties of WGI, WII, WECL, WUSA, WESCO and WBEI are
---------
insured with financially sound and reputable insurance companies, in such
amounts and covering such risks as is customarily carried on by companies
engaged in similar businesses and owning similar properties in localities where
WGI, WESCO, WECL, WII, WUSA or WBEI operate.
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ARTICLE VI
CONDITIONS PRECEDENT
--------------------
6.01 Conditions of Initial Loans or Letter of Credit. The obligation of
-----------------------------------------------
each Bank to make the first Loan hereunder or of the Issuing Bank or the
Syndicated L/C Bank to issue the first Letter of Credit hereunder, whichever is
earlier requested, is subject to condition that the Agent shall have received on
or before the first borrowing date all of the following, in form and substance
satisfactory to the Agent and its counsel and the Banks and (except for the
certificates representing Pledged Shares as defined in the Pledge Agreement) in
sufficient copies for each Bank:
(a) Credit Agreement. This Agreement executed and delivered by a
----------------
Responsible Officer of WGI, WII, WECL and WUSA.
(b) Resolutions and Shareholder Approvals.
-------------------------------------
(i) Certified copies of the resolutions of the Boards
of Directors of WGI, WII, Musketeer, WUSA, WESCO, WECL and WBEI
approving and authorizing the execution, delivery and performance
by WGI, WII, WUSA, WESCO, WECL and WBEI of this Agreement and the
transactions contemplated thereby and the other Loan Documents to
be delivered hereunder authorizing the borrowing of the Loans and
the applications for Letters of Credit, and approving and
authorizing the execution, delivery and performance by Musketeer
of its Parent Pledge Agreement, certified as of the Closing Date
by the Secretary or an Assistant Secretary of each of WGI, WII,
Musketeer, WUSA, WESCO, WECL and WBEI; and
(ii) Certified copies of the resolutions of the
shareholders of WGI and WII for any Loan Document executed by WGI
and WII (other than this Agreement, as to WGI).
(c) Incumbency. A certificate of the Secretary or Assistant
----------
Secretary of each of WGI, WII, WUSA, WESCO, WECL and WBEI certifying the names
and true signatures of the officers of WGI, WII, WUSA, WECL, WESCO and WBEI
authorized to execute and deliver, as applicable, this Agreement, and all other
Loan Documents to be delivered hereunder.
(d) Articles of Incorporation; By-Laws and Good Standing. Each of
----------------------------------------------------
the following documents:
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(i) the articles or certificate of incorporation of
WGI, WII, WUSA, WESCO, WECL and WBEI, as in effect on the Closing
Date, certified by the appropriate authorities in the
jurisdiction of incorporation of WGI, WII, WUSA, WESCO, WECL and
WBEI as of a recent date; the bylaws of WGI, WII, WUSA, WESCO,
WECL and WBEI in effect on the Closing Date, certified by the
Secretary or Assistant Secretary of WGI, WII, WUSA, WESCO, WECL
and WBEI as of the Closing Date; and
(ii) a certificate of status for WECL from the
appropriate authorities of the Province of Ontario, Canada, a
good standing certificate for WGI, WII, WUSA, WESCO, and WBEI
from the appropriate authorities of its jurisdiction of
incorporation and the states of Oklahoma as to WUSA, WESCO and
WBEI and Oregon as to WESCO as of a recent date.
(e) Guarantees. (i) the Parent Guaranty duly executed by WGI, (ii)
-----------
the Subsidiary Guarantees duly executed by each of WESCO and WBEI, and (iii) the
WECL Guaranty duly executed by WECL.
(f) Pledge Agreements. The Parent Pledge Agreements and the Borrower
-----------------
Pledge Agreement, duly executed by WGI, Musketeer, and WUSA, respectively,
together with:
(i) certificates representing the Pledged Shares
referred to therein;
(ii) stock transfer powers executed in blank with
signatures guaranteed as the Agent may specify; and
(iii) evidence that all other actions necessary or, in
the opinion of the Agent, desirable to perfect and protect the
first priority security interest created by the Pledge Agreements
have been taken.
(g) Legal Opinions.
--------------
(i) an opinion of Arias, Fabrega & Fabrega, Panamanian
counsel to WII and WGI, and addressed to the Agent and the Banks,
substantially in the form of Exhibit N;
(ii) an opinion of Conner & Winters, U.S. counsel to
WUSA, WESCO and WBEI, in substantially the form of Exhibit O;
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(iii) an opinion of Blake, Cassels & Graydon, Ontario
counsel to WECL, in substantially the form of Exhibit P;
(iv) an opinion of Butler & Binion, special counsel to
the Agent and the Banks, substantially in the form of Exhibit Q;
and
(v) an opinion of Nauta Dutilh, special counsel to the
Agent and the Banks, in substantially the form of Exhibit S.
(h) Payment of Fees. The Borrowers shall have paid all costs, accrued
---------------
and unpaid fees and expenses (including, without limitation, legal fees and
expenses) referred to in Section 4.01, 4.02, 4.03, 4.04, 4.05 and 11.04 to the
extent due and payable on the Closing Date.
(i) Financial Statements. A copy of the audited financial statements
--------------------
of the Company and its Subsidiaries referred to in Section 5.11(a).
(j) Insurance Policies. Certificates of insurance with respect to
------------------
insurance policies or other instruments or documents evidencing insurance
coverage on the property of the Company, WII, WUSA, WESCO, WECL and WBEI in
accordance with Section 7.05.
(k) Solvency Certificate. A certificate from a Responsible Officer
--------------------
of the Company, in substantially the form of Exhibit T to the effect that, as of
the Closing Date, each of the Company and its Subsidiaries (on a consolidated
basis), WII and its Subsidiaries (on a consolidated basis) combined with WECL,
WUSA, WESCO and WBEI is Solvent.
(l) Termination of Existing Credit Facility. The Agent shall have
---------------------------------------
received notice from Bank of America stating that the commitments of Bank of
America set forth in the Credit Agreement dated April 9, 1992 have been
terminated and all obligations, other than Letters of Credit, have been repaid.
(m) Subordinated Notes. A list of all the current holders of the
------------------
Subordinated Notes.
(n) Other Documents. Such other approvals, opinions or documents as
---------------
any Bank through the Agent may reasonably request.
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6.02 Conditions to all Borrowings. The obligation of each Bank to make any
----------------------------
Loan or to issue or participate in any Letter of Credit to be made by it
hereunder (including its initial Loan or Letter of Credit) is subject to the
satisfaction of the following conditions precedent on the relevant borrowing
date:
(a) Notice of Borrowing. The Agent shall have received or be deemed
-------------------
to have received, with a counterpart for each Bank, a Notice of Borrowing, as
required by Section 2.03 or a request for issuance of a Letter of Credit as
required by Section 3.03.
(b) Continuation of Representations and Warranties. The
----------------------------------------------
representations and warranties made by WGI, WII, WUSA, WESCO, WECL and WBEI or
any Designated Subsidiary contained in Article V shall be true and correct on
and as of such borrowing date with the same effect as if made on and as of such
borrowing date.
(c) No Existing Default. No Default or Event of Default shall have
-------------------
occurred and be continuing hereunder on the borrowing date with respect to such
Loan or Letter of Credit or after giving effect to the Loans to be made or
Letter of Credit to be issued on such borrowing date.
6.03 Conditions for Participation by a Designated Subsidiary. The
-------------------------------------------------------
obligation of each Bank to accept a Designated Subsidiary as a participant in
this Agreement, is subject to the satisfaction of the following conditions
precedent before the effectiveness of such Election to Participate.
(a) Election to Participate. The Agent shall have received a duly
-----------------------
executed Election to Participate.
(b) Opinion of Counsel. The Agent shall have received an opinion of
------------------
counsel for such Designated Subsidiary acceptable to the Agent, substantially in
the form of Exhibit R hereto, and covering such additional matters relating to
the transactions contemplated hereby as the Majority Banks may reasonably
request.
(c) Documents; Authorizations. The Agent shall have received
-------------------------
documents evidencing the authority for and the validity of the Election to
Participate of such Designated Subsidiary and this Agreement, including, without
limitation, documents of the type listed in Section 6.01(b), (c), (d), and (i)
hereof, and any other documents it may reasonably request, all in form and
substance satisfactory to the Agent and the Banks.
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(d) Guaranty Agreement. A Guaranty Agreement of WII, WUSA or WECL, as
------------------
appropriate, and the Designated Subsidiary of the Obligations of the Designated
Subsidiary, in form and substance satisfactory to the Agent and the Banks in
substantially the form of Exhibit H (the "Guaranty Agreement").
(e) Evidence of Appointment of Agent for Service. Evidence
--------------------------------------------
satisfactory to the Agent and the Banks, that the Designated Subsidiary has
appointed the General Counsel of the Company as its agent for service of process
in connection with this Agreement or any Loan Document and that the General
Counsel of the Company has accepted such appointment.
(f) Continuation of Representations and Warranties. The
----------------------------------------------
representations and warranties made by such Designated Subsidiary contained in
Article V shall be true and correct on and as of such election date with the
same effect as if made on and as of such election date.
Each Borrowing by a Borrower hereunder shall constitute a representation and
warranty by WGI, WII, WESCO, WBEI, WECL and the Borrowers hereunder as of the
date of each such Borrowing that the conditions in Sections 6.01, 6.02 and 6.03
have been satisfied.
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ARTICLE VII
AFFIRMATIVE COVENANTS
---------------------
WGI, WII, WECL and WUSA hereby covenant and agree that, so long as any Bank
shall have any Commitment hereunder, or any Loan, Letter of Credit Obligation,
or other amount shall remain unpaid, unless the Majority Banks waive compliance
in writing:
7.01 Financial Statements. The Company shall deliver to the Agent in form
--------------------
and detail satisfactory to the Agent, with copies for each Bank in form and
substance satisfactory to them:
(a) as soon as available, but not later than ninety (90) days after
the end of each fiscal year of the Company, a copy of the audited consolidated
balance sheet of the Company and its consolidated Subsidiaries as at the end of
such year and the related consolidated statements of income, stockholders'
equity and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous year, accompanied by the opinion
of KPMG Peat Marwick or another nationally recognized independent public
accounting firm which report shall state that such consolidated financial
statements present fairly the consolidated financial position of the Company and
its consolidated Subsidiaries for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years;
(b) as soon as available, but in any event not later than ninety (90)
days after the end of each fiscal year of the Company an unaudited consolidating
balance sheet of the Company, WUSA, and WII/WECL (combined) as at the end of
such fiscal year and the related consolidating statement of income and
stockholders' equity (excluding cash flows) for such fiscal year, all in
reasonable detail certified by an appropriate Responsible Officer as having been
prepared in connection with the financial statements referred to in paragraph
(a) of this Section;
(c) as soon as available, but in any event not later than sixty (60)
days after the end of each of the first three fiscal quarters of each year, a
copy of the unaudited consolidated balance sheet of the Company and its
consolidated Subsidiaries as of the end of such quarter and the related
consolidated statements of income, stockholders' equity and cash flows for the
period commencing on the first day of the fiscal quarter and ending on the last
day of such quarter all in reasonable detail and certified by an appropriate
Responsible Officer as fairly presenting, in accordance with GAAP, except
without GAAP footnotes and year-end
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<PAGE>
adjustments, the financial position and the results of operations of the Company
and its consolidated Subsidiaries; and
(d) as soon as available, but in any event not later than sixty (60)
days after the end of each fiscal quarter the unaudited consolidating balance
sheets of the Company, WUSA, and WII/WECL (combined), and the related
consolidating statements of income and stockholders' equity, excluding cash
flows, for such quarter, all certified by an appropriate Responsible Officer of
the Company as having been prepared in connection with the financial statements
referred to in paragraph (c) of this Section.
7.02 Certificates; Other Information. WGI shall furnish to the Agent with
-------------------------------
sufficient copies for each Bank:
(a) concurrently with the delivery of the financial statements
referred to in Section 7.01(a) above, a certificate of the independent certified
public accountants reporting on such financial statements stating that in making
the examination necessary therefor no knowledge was obtained of any Default or
Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Section 7.01, a certificate of a Responsible Officer (i) stating
that, to the best of such officer's knowledge, each of WGI, WII, WUSA, and WECL,
during such period, has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement to be
observed, performed or satisfied by it, and that such officer has obtained no
knowledge of any Default or Event of Default except as specified in such
certificate, and (ii) showing in detail the calculations supporting such
statement in respect of Sections 8.01(j), 8.12, 8.13, 8.14, 8.15 and 8.16.
(c) if the Company becomes a public company subject to reporting
under the Securities Act of 1933 or the Securities Exchange Act of 1934, then
promptly after the same are sent, copies of all financial statements and reports
which the Company sends to its stockholders, and promptly after the same are
filed, copies of all financial statements and regular, periodical or special
reports which the Company may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental Authority;
(d) promptly, copies of any contract between the Company, any
Borrower, or any Guarantor and any third party that the Agent may reasonably
request;
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<PAGE>
(e) promptly, such additional financial and other information as the
Agent, at the request of any Bank may from time to time reasonably request;
(f) after August 31, 1994, upon request of the Majority Banks, and no
more often than once annually, an appraisal of all US-domiciled assets of the
Company and its Subsidiaries prepared by a firm acceptable to the Majority
Banks; and
(g) concurrently with the delivery of the financial statements
referred to in Section 7.01(c) and (d), a project status report.
7.03 Preservation of Corporate Existence. The Company shall and shall
-----------------------------------
cause each of WII, WUSA, WESCO, WECL, WBEI and any Designated Subsidiary to:
(a) preserve and maintain in full force and effect its corporate
existence and good standing under the laws of the State or jurisdiction of
incorporation;
(b) preserve and maintain in full force and effect all rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business except in connection with
transactions permitted by Section 8.02; and
(c) use its reasonable efforts, in the ordinary course and consistent
with past practice, to preserve its business organization and preserve the
goodwill and business with the customers, suppliers and others having business
relations with it.
7.04 Maintenance of Property. The Company shall maintain, and shall cause
-----------------------
each of its Subsidiaries to maintain, and preserve all its property which is
used or useful in its business in good working order and condition, ordinary
wear and tear typical in the industry excepted and make all necessary repairs
thereto and renewals and replacements thereof except where the failure to do so
would not have a Material Adverse Effect, except as permitted by Section 8.02.
The Company shall cause WESCO to use the standard of care typical in the
industry in the operation of its facilities.
7.05 Insurance. In addition to the insurance requirements set forth in the
---------
Collateral Documents, the Company shall maintain, and shall cause each
Subsidiary to maintain, with financially sound and reputable insurers, insurance
with respect to its properties and business against loss or damage of the kinds
customarily insured
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<PAGE>
against by Persons engaged in the same or similar business, of such types and in
such amounts as are customarily carried under similar circumstances by such
other Persons, including workers' compensation insurance, public liability and
property and casualty insurance, flood, and political risk insurance of which
the political risk insurance shall not be reduced by the Company or any
Subsidiary in the absence of thirty (30) days' prior notice to the Agent. Upon
request of the Agent, the Company shall furnish the Agent, with copies for each
Bank, at reasonable intervals (but not more than once per calendar year) a
certificate of a Responsible Officer of the Company (and, if requested by the
Agent, any insurance broker of the Company) setting forth the nature and extent
of all insurance maintained by the Company and its Subsidiaries in accordance
with this Section 7.05 or any Collateral Documents (and which, in the case of a
certificate of a broker, were placed through such broker).
7.06 Payment of Obligations. The Company shall, and shall cause each of
----------------------
its Subsidiaries to, pay and discharge as the same shall become due and payable,
all their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by the Company or such Subsidiary; and
(b) all lawful claims which, if unpaid, might by law become a Lien
upon its property except such as may be contested in good faith or as to which a
bona fide dispute may exist.
7.07 Compliance with Laws. The Company shall comply, and shall cause each
--------------------
of its Subsidiaries to comply, in all material respects, with all Requirements
of Law of any Governmental Authority having jurisdiction over it or its
business, except such as may be contested in good faith or as to which a bona
fide dispute may exist.
7.08 Inspection of Property and Books and Records. The Company shall
--------------------------------------------
maintain and shall cause each Subsidiary to maintain, proper books of record and
account, in which entries in conformity with GAAP consistently applied shall be
made of all financial transactions and matters involving the assets and business
of the Company and such Subsidiaries. The Company will permit, and will cause
each Subsidiary to permit, representatives of the Agent or any Bank to visit and
inspect any of their respective properties,
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<PAGE>
to examine their respective corporate, financial and operating records and make
copies thereof or abstracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective directors, officers employees and
independent public accountants, all at the reasonable expense of the Company and
at such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Company; provided,
--------
however, when an Event of Default exists, the Agent or any Bank may visit and
- -------
inspect at the expense of the Company such properties at any time during
business hours and without advance notice.
7.09 Environmental Laws.
-------------------
(a) The Company shall, and shall cause each of its Subsidiaries to,
conduct its operations and keep and maintain its property in compliance in all
material respects with all Environmental Laws.
(b) The Company shall conduct, and cause to be conducted, the ongoing
operations of the Company and its Subsidiaries in a manner that will not give
rise to the imposition of liability, or require expenditures, under or in
connection with any Environmental Law, except for any liabilities or
expenditures which, in the aggregate, would not have a reasonable likelihood of
having a Material Adverse Effect.
(c) Upon written request of the Agent or any Bank, the Company shall
submit and cause each of its Subsidiaries to submit, to the Agent and such Bank,
at the Company's sole cost and expense at reasonable intervals, a report
providing an update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any notice or report
required pursuant to this Section 7.09 and any other environmental, health or
safety compliance obligation, remedial obligation or liability, that could,
individually or in the aggregate, result in liability in excess of One Million
dollars ($1,000,000).
7.10 Notices. The Company shall promptly give notice to the Agent and each
-------
Bank:
(a) of the occurrence of any Default or Event of Default accompanied
by a certificate specifying the nature of such Default or Event of Default, the
period of existence thereof and the action that the Company or any Subsidiary
has taken or proposes to take with respect thereto;
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<PAGE>
(b) of any (i) breach or non-performance of, or any default under any
Contractual Obligation of the Company or any of its Subsidiaries which could
result in a Material Adverse Effect; or (ii) material dispute, litigation,
investigation, proceeding or suspension which may exist at any time between the
Company or any of its Subsidiaries and any Governmental Authority;
(c) of the commencement of, or any material development in, any
litigation or proceeding affecting the Company or any of its Subsidiaries (i) in
which the amount of damages claimed is Three Million dollars ($3,000,000) (or
its equivalent in another currency or currencies) or more; (ii) in which the
amount of damages claimed is greater than One Million dollars ($1,000,000) but
less than Three Million dollars ($3,000,000) and the Company or a Subsidiary, as
---
the case may be, will not be covered by insurance for the amount of such damages
claimed; (iii) in which injunctive or similar relief is sought and which, if
adversely determined, could have a Material Adverse Effect; or (iv) in which the
relief sought is an injunction or other stay of the performance of this
Agreement or any Loan Document or the operations of the Company or its
Subsidiaries;
(d) upon, but in no event later than ten (10) days after, becoming
aware of (i) any and all enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened against the Company or
any of its Subsidiaries or any of their properties pursuant to any applicable
Environmental Laws which could be reasonably anticipated to have a Material
Adverse Effect, (ii) all other Environmental Claims which could be reasonably
anticipated to have a Material Adverse Effect, and (iii) any environmental or
similar condition on any real property adjoining or in the vicinity of the
property of the Company or any of its Subsidiaries that could reasonably be
anticipated to cause such property or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use of such
property under any Environmental Laws which could be reasonably anticipated to
have a Material Adverse Effect;
(e) of any other litigation or proceeding affecting the Company or
any of its Subsidiaries which the Company would be required to report to the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, within four days after reporting the same to the Securities and Exchange
Commission;
(f) any ERISA Event affecting the Company or any member of its
Controlled Group (but in no event more than ten (10) days
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<PAGE>
after such ERISA Event) together with (i) a certificate of the Company setting
forth the details of such ERISA Event and the action which the Company or such
member proposes to take with respect thereto; or (ii) any notice delivered by
the PBGC to the Company or any member or its Controlled Group with respect to
such ERISA Event;
(g) promptly following any change in the holders of the Subordinated
Notes, the identities of the former holder and new holder of any of the
Subordinated Notes, and promptly following receipt by the Company of notice of
default from any holder of Subordinated Debt, a copy of such notice;
(h) promptly upon becoming aware of any Material Adverse Effect
subsequent to the date of the most recent audited financial statements of the
Company delivered to the Banks pursuant to Section 7.01(a), notice thereof;
(i) promptly following any change in accounting policies, notice
thereof and a reasonably detailed description of such change; and
(j) promptly upon becoming aware thereof, notice of any labor
controversy resulting in or threatening to result in any strike, work stoppage,
boycott, shutdown or other labor disruption against or involving the Company or
any of its Subsidiaries which could be reasonably anticipated to have a Material
Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement by
a Responsible Officer of the Company setting forth details of the occurrence
referred to therein and stating what action the Company or its Subsidiary
proposes to take with respect thereto.
7.11 Use of Proceeds. The Borrowers will use the proceeds of the Loans for
---------------
working capital and other general corporate purposes, including third party
financial support of bids for contracts as well as trade finance.
7.12 Further Assurances.
------------------
(a) The Company shall ensure that all written information, exhibits
and reports furnished to the Banks do not and will not contain any untrue
statement of a material fact and do not and will not omit to state any material
fact or any fact necessary to make the statements contained therein not
misleading in light of the circumstances in which made, and will promptly
disclose to the
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Banks and correct any defect or error that may be discovered therein or in any
Loan Document or in the execution, acknowledgment or recordation thereof.
(b) Promptly upon request by the Agent or the Majority Banks, the
Company shall, and shall cause any of its Subsidiaries to, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register, any and all
such further acts, deeds, conveyances, security agreements, mortgages,
assignments, estoppel certificates, financing statements and continuations
thereof, termination statements, notices of assignment, transfers, certificates,
assurances and other instruments as the Agent and the Banks may reasonably
require from time to time in order (i) to carry out more effectively the
purposes of this Agreement or any other Loan Document, (ii) to subject to the
Liens created by any of the Collateral Documents any of the Company's
properties, rights or interests covered by any of the Collateral Documents,
(iii) to perfect and maintain the validity, effectiveness and priority of any of
the Collateral Documents and the Liens intended to be created thereby, and (iv)
to better assure, convey, grant, assign, transfer, preserve, protect and confirm
to the Agent and the Banks the rights granted or now or hereafter intended to be
granted to the Agent and the Banks under any Loan Document or under any other
instrument executed in connection therewith.
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ARTICLE VIII
NEGATIVE COVENANTS
------------------
The Company, WII, WECL and WUSA, each hereby covenants and agrees that, so
long as any Bank shall have any Commitment hereunder, or any Loan, Letter of
Credit Obligation or other amount payable hereunder shall remain unpaid, unless
the Majority Banks waive compliance in writing:
8.01 Limitation on Liens. The Company shall not nor shall it permit any of
-------------------
its Subsidiaries to, directly or indirectly, make, create, incur, assume or
suffer to exist any Lien upon or with respect to any part of its property or
assets, including without limitation real estate, whether now owned or hereafter
acquired, or offer or agree to do so, other than the following ("Permitted
Liens"):
(a) any Lien created under any Loan Document;
(b) any Lien (other than Liens on the Collateral) existing on the
property of the Company or its Subsidiaries on the Closing Date and set forth in
Schedule 8.01 securing Indebtedness outstanding on such date;
(c) Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by Section 7.06, provided that no Notice
of Lien has been filed or recorded;
(d) Liens imposed by law such as carriers', warehousemen's,
mechanics', landlords', materialmen's, repairmen's or other similar Liens
arising in the ordinary course of business which are not delinquent or remain
payable without penalty or which are being contested in good faith and by
appropriate proceedings;
(e) Liens (other than any Lien imposed by ERISA) on the property of
the Company or any of its Subsidiaries incurred, or pledges or deposits
required, in connection with worker's compensation, unemployment insurance and
other social security legislation;
(f) Liens on the property of the Company or any of its Subsidiaries
securing (i) the performance of bids, trade contracts (other than for borrowed
money), leases, statutory obligations, (ii) obligations on surety and appeal
bonds, and (iii) other obligations of a like nature incurred in the ordinary
course of
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<PAGE>
business, provided all such Liens in the aggregate have no reasonable likelihood
of causing a Material Adverse Effect;
(g) Easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Company and its Subsidiaries;
(h) Purchase money Liens or purchase money security interests on any
property acquired or held by the Company or its Subsidiaries in the ordinary
course of business, other than the Collateral, securing Indebtedness incurred or
assumed for the purpose of financing all or any part of the cost of acquiring
such property, provided that any such Lien attaches to such property
concurrently with or within thirty (30) days after the acquisition thereof and
provided that the principal amount of the Indebtedness secured by any such
purchase money Liens or purchase money security interests shall not exceed One
Hundred Thousand dollars ($100,000);
(i) Liens on any property (other than the Collateral) securing
Indebtedness permitted pursuant to Section 8.09(c);
(j) Liens not otherwise permitted by the foregoing provisions of this
Section 8.01 securing Indebtedness or obligations not exceeding 10% of Company's
Tangible Net Worth in principal amount at any one time outstanding.
8.02 Consolidations and Mergers. The Company shall not, and shall not
--------------------------
permit any of its Subsidiaries to, merge, consolidate with or into, or enter
into any joint venture or partnership with, any Person except:
(a) any Subsidiary of the Company may merge, consolidate or combine
with or into, or transfer assets to the Company (provided that the Company shall
be the continuing or surviving corporation) or with or into any one or more
Subsidiaries of the Company (provided that if any transaction shall be between a
--------
partially-owned Subsidiary and a wholly-owned Subsidiary, the wholly-owned
Subsidiary shall be the continuing or surviving corporation);
(b) any Subsidiary of the Company may sell, lease, transfer,
distribute or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Company or
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<PAGE>
another wholly-owned Subsidiary of the Company, if immediately after giving
effect thereto, no Default or Event of Default would exist;
(c) the Company may merge, consolidate or combine with another entity
if (i) the Company is the corporation surviving the merger, and (ii) immediately
after giving effect thereto, no Default or Event of Default would exist;
(d) the Company or any of its Subsidiaries may enter into Project
Related Partnerships or Joint Ventures (i) where the project value is less than
One Hundred Million dollars ($100,000,000), (ii) which are described on Schedule
8.11, or (iii) with the prior written consent of the Majority Banks; provided,
however, that beginning January 1, 1995, the Company and its Subsidiaries may
enter into a Project Related Partnership or Joint Venture where the project
value is greater than One Hundred Million dollars ($100,000,000) so long as the
amount of such project value for any one calendar year is not in excess of 200%
of the Company's Consolidated Tangible Net Worth at the previous year end; and
(e) partnerships and joint ventures other than Project Related
Partnerships and Joint Ventures and only to the extent permitted under Section
8.03.
8.03 Acquisitions and Investments. The Company shall not, directly or
----------------------------
indirectly, and shall not permit any of its Subsidiaries to, purchase or
acquire, or make any commitment therefor, any capital stock of, equity interest
in, or a substantial portion of the assets of another Person, or make any
advance, loan, extension of credit or capital contribution to, or any other
investment in, any Person, including without limitation any Affiliates of the
Company, except for (i) repurchases, pursuant to the Company's, WII's and WUSA's
employee stock ownership plans, of stock beneficially owned by employees of the
Company and its Subsidiaries; (ii) repurchases, pursuant to the Management
Stockholders Agreement, of stock beneficially owned by employees of the Company
and its Subsidiaries, in the event of death or other termination of employment,
in a maximum aggregate amount, net of applicable life insurance proceeds, not
exceeding six percent (6%) of Tangible Net Worth; (iii) purchases or
acquisitions of, or commitments with respect to, interests in Project Related
Partnerships and Joint Ventures; (iv) investments in Cash Equivalents; (v)
advances to employees for business-related purposes in an aggregate amount not
greater
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than $500,000; (vi) loans to employees for the purposes of purchasing stock
pursuant to employee stock ownership plans in an aggregate amount not greater
than $3,000,000; (vii) investments in wholly-owned Subsidiaries of the Company,
so long as the Company does not reduce its ownership interest in the Subsidiary
in which any such investment is made; (viii) investments, in an aggregate amount
not greater than $500,000, in Subsidiaries of the Company which are controlled
by the Company but which are not wholly-owned Subsidiaries of the Company; (ix)
the investment in the Tenneco Project; and (x) investments and capital
contributions in Project Related Partnerships and Joint Ventures (the foregoing
exceptions are hereinafter referred to as "Permitted Acquisitions and
Investments"). Provided, however, that, notwithstanding any other provision of
-------- -------
this Section 8.03, in addition to Permitted Acquisitions and Investments, the
Company and its Subsidiaries may, during the twelve (12) month period ending on
the first anniversary of the Closing Date and during each twelve (12) month
period thereafter, make purchases, acquisitions, commitments, advances, loans,
extensions of credit, capital contributions and investments in an aggregate
amount not greater than twenty percent (20%) of Tangible Net Worth determined as
of the immediately preceding June 30.
8.04 Limitation on Indebtedness. The Company shall not, and shall not
--------------------------
permit its Subsidiaries to, create, incur, assume, guaranty, suffer to exist, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) the Subordinated Debt;
(c) Indebtedness existing on the Closing Date and set forth in
Schedule 8.04;
(d) Indebtedness not otherwise permitted under this Section 8.04, in
an aggregate amount not to exceed ten percent (10%) of the Company's Tangible
Net Worth;
(e) Indebtedness permitted pursuant to Section 8.09;
(f) Indebtedness in connection with hedging transactions for foreign
currency and interest rate exposures of the Company and its Subsidiaries, all as
incurred in the ordinary course of their business operations;
(g) Indebtedness incurred in connection with the Tenneco Financing
Transactions;
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(h) Indebtedness secured by Liens permitted by Section 8.01(h);
(i) Indebtedness incurred or assumed by the Company or any of its
Subsidiaries for the purpose of financing all or any part of the cost of
acquiring personal property in an aggregate amount not to exceed Three Million
dollars ($3,000,000); and
(j) Promissory notes issued by the Company in connection with
Permitted Repurchases of Stock, which, together with any cash paid to any
employees for such stock repurchases, in the aggregate will not exceed six
percent (6%) of the Company's Tangible Net Worth (net of applicable life
insurance proceeds as set forth in Section 8.03).
8.05 Transactions with Affiliates. The Company shall not and shall not
----------------------------
permit any of its Subsidiaries to enter into any transaction with any Affiliate
of the Company or of any such Subsidiary except as contemplated by this
Agreement or in the ordinary course of business and pursuant to the reasonable
requirements of the business of the Company or such Subsidiary and upon fair and
reasonable terms no less favorable to the Company or such Subsidiary than would
obtain in a comparable arm's-length transaction with a Person not an Affiliate
of the Company or such Subsidiary except for the Tenneco Financing Transactions.
For purposes of this Section 8.05 only, the term "Affiliate" shall not be deemed
to include wholly-owned Subsidiaries of the Company.
8.06 Contingent Obligations. The Company shall not, nor shall it permit
----------------------
any of its Subsidiaries to, create, incur, assume or suffer to exist any
Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary course of
business;
(b) Contingent Obligations with respect to Indebtedness permitted
under Section 8.04;
(c) the Subsidiary Guarantees, the WECL Guaranty and the Parent
Guaranty;
(d) Contingent Obligations of the Company and its Subsidiaries
existing as of the Closing Date and listed in Schedule 8.06;
(e) Guarantees of or surety bonds issued with respect to performance
by the Company's wholly-owned Subsidiaries of contracts
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entered into, or bids submitted, by or on behalf of such Subsidiaries in the
normal course of business;
(f) Contingent Obligations relating to the Tenneco Financing
Transactions; and
(g) joint ventures, to the extent and only to the extent permitted
under Section 8.02.
8.07 Compliance with ERISA. The Company shall not directly or indirectly
---------------------
and will not permit any ERISA Affiliate to directly or indirectly (i) terminate,
any Plan subject to Title IV of ERISA so as to result in any material (in the
opinion of the Majority Banks and greater than One Million dollars ($1,000,000))
liability to the Company or any ERISA Affiliate, (ii) permit to exist any ERISA
Event or any other event or condition, which presents the risk of a material (in
the opinion of the Majority Banks and greater than One Million dollars
($1,000,000)) liability of the Company, or any ERISA Affiliate, (iii) make a
complete or partial withdrawal (within the meaning of ERISA Section 4201) from
any Multiemployer Plan so as to result in any material (in the opinion of the
Majority Banks and greater than One Million dollars ($1,000,000)) liability to
the Company, or any ERISA Affiliate, (iv) enter into any new Plan or modify any
existing Plan so as to increase its obligations thereunder which could result in
any material (in the opinion of the Majority Banks and greater than One Million
dollars ($1,000,000)) liability to the Company, or any ERISA Affiliate except in
the ordinary course of business consistent with past practice and except that
the Company may establish and maintain employee stock ownership plans and Non-
Qualified Pension Benefit Restoration Plans, or (v) permit the present value of
all nonforfeitable accrued benefits under each Plan (using the actuarial
assumptions utilized by the PBGC upon termination of a Plan) to materially (in
the opinion of the Majority Banks and greater than One Million dollars
($1,000,000)) exceed the fair market value of Plan assets allocable to such
benefits, all determined as of the most recent valuation date for each such
Plan.
8.08 Use of Proceeds. No portion of the Loans will be used, directly or
---------------
indirectly, (i) to purchase or carry margin stock, as defined in Regulation U of
the Federal Reserve Board, (ii) to repay or otherwise refinance indebtedness of
the Company or others incurred to purchase or carry margin stock, or (iii) to
extend credit for the purpose of purchasing or carrying any margin stock. No
portion of the Loans will be used directly for repurchases of stock or
acquisitions or investments; provided, however, the Loans may be used for
-------- -------
repurchases of stock, acquisitions and investments
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permitted under Section 8.03(i), (ii), (iii), (v), (vii), (viii) and (x).
8.09 Lease Obligations. The Company shall not, nor shall it permit any of
-----------------
its Subsidiaries to, create or suffer to exist any obligations for the payment
of rent for any property under lease or agreement to lease, except for
(a) leases of the Company and its Subsidiaries in existence on the
Closing Date and any renewal, extension or refinancing thereof;
(b) after the Closing Date, any leases entered into by the Company or
any of its Subsidiaries in the ordinary course of business in a manner and to an
extent consistent with past practice;
(c) after the Closing Date, subject to the provisions of Section
8.01, any lease entered into by the Company or any of its Subsidiaries,
provided, that:
- --------
(i) immediately prior to giving effect to such lease, the
property or asset subject to such lease was sold by the Company or any such
Subsidiary to the lessor under such lease at a price not less than its fair
market value; and
(ii) no Default or Event of Default would occur as a result of
such sale and subsequent lease; and
(d) after the Closing Date, capital leases other than those permitted
under clauses (a), (b) and (c) of this Section 8.09 entered into by the Company
or any of its Subsidiaries to finance the acquisition of equipment;
provided that the aggregate amount of all long term operating lease payments per
- --------
annum (excluding any month to month equipment rentals) shall not exceed at any
one time ten percent (10%) of Tangible Net Worth.
8.10 Restricted Payments. The Company shall not declare, accrue or make
-------------------
any dividend payment or other distribution of assets, properties, cash, rights,
obligations or securities on account of any shares of any class of its capital
stock or purchase, redeem or otherwise acquire for value (or permit any of its
Subsidiaries to do so) any shares of its capital stock or any warrants, rights
or options to acquire such shares, now or
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hereafter outstanding, except as permitted under Section 8.03 and except that
------ ------
the Company may (a) declare and make dividend payments or other distributions
payable solely in its capital stock, (b) purchase, redeem or otherwise acquire
shares of its capital stock or warrants or options to acquire any such shares
with the proceeds received from the substantially concurrent issue of new shares
of its capital stock, or (c) repurchase stock beneficially owned by its
employees (including Affiliates) in connection with the Company's, WII's or
WUSA's non-qualified employee stock ownership plans or the Management
Stockholders Agreement, provided that, immediately after giving effect to such
--------
proposed actions described in clauses (a), (b) and (c), no Default or Event of
Default would exist.
8.11 Construction Contracts. The Company and its Subsidi aries will not
----------------------
enter into any contract to perform construction services, engineering services
and/or petroleum services if the amount of the initial estimated contract price
for the work to be performed by the Company or its Subsidiaries under the
contract during any one calendar year is in excess of One Hundred Million
dollars ($100,000,000), except for the projects described on Schedule 8.11 or
with the prior written consent of the Majority Banks; provided, however, that
-------- --------
beginning on January 1, 1995, the Company and its Subsidiaries may enter into
contracts to perform construction and/or engineering services where the amount
of the initial estimated contract price for the work to be performed during any
one calendar year is in excess of One Hundred Million dollars ($100,000,000) so
long as the amount of the contract price for the work to be performed during any
one calendar year is not in excess of 200% of the Company's Tangible Net Worth
at the previous year end.
8.12 Capital Expenditures. The Company shall not, and shall not permit
--------------------
its Subsidiaries to, make or commit to make Capital Expenditures (a) during the
fiscal year ending December 31, 1993, to exceed Twenty Million Dollars
($20,000,000); or (b) during any fiscal year thereafter, to exceed the greater
of (i) twenty percent (20%) of the Company's consolidated gross revenues and
(ii) Fifty Million Dollars ($50,000,000).
8.13 Funded Debt. The Company shall not permit the ratio of Funded
-----------
Indebtedness to Total Capitalization to exceed 0.5 to 1.0 as of the end of any
fiscal quarter.
8.14 Consolidated Tangible Net Worth. The Company shall not permit, at any
-------------------------------
time, its consolidated Tangible Net Worth to be less than the sum of (a) Forty
Million dollars ($40,000,000) plus (b)
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fifty percent (50%) of the Company's cumulative net income for the calendar
year-to-date (without deduction for net losses) starting with January 1, 1994.
8.15 Leverage Ratio. The Company will not permit the Leverage Ratio to be
--------------
greater than 2.0 to 1.0 as of the end of any fiscal year.
8.16 Interest Coverage Ratio. The Company shall not permit the ratio of
-----------------------
EBIT to Consolidated Net Interest Expense to be less than 4.75 to 1.00 as of the
end of any fiscal quarter.
8.17 Change in Business. WGI shall not and shall not permit any of its
------------------
Subsidiaries to engage in any material line of business substantially different
from those lines of business carried on by them on the date hereof.
8.18 Change in Structure. Except as permitted under Section 8.03, WGI
-------------------
shall not and shall not permit any of its Subsidiaries to, make any changes in
their capital structure (including, without limitation, in the terms of their
outstanding stock) or amend their certificates of incorporation or by-laws if,
as a result, there would be a reasonable likelihood of a Material Adverse
Effect.
8.19 Accounting Changes. WGI shall not, and shall not permit any of its
------------------
Subsidiaries to, make any significant change in accounting policies, except as
required or permitted by GAAP or change the fiscal year of WGI or any of its
Subsidiaries.
8.20 Other Contracts. WGI will not enter into any employment contracts or
---------------
other arrangements whose terms, including salaries, benefits and other
compensation, are not normal and customary in the industry.
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ARTICLE IX
EVENTS OF DEFAULT
-----------------
9.01 Events of Default. Any of the following events shall constitute an
-----------------
Event of Default:
(a) Non-Payment. Any Borrower shall (i) fail to pay when due any
-----------
amount of principal of any Loan or any Letter of Credit Obligation or fail to
make any mandatory prepayment hereunder when due; (ii) fail to pay any portion
of fees payable hereunder within five (5) days after the same shall become due
in accordance with the terms hereof; (iii) fail to pay any portion of interest
or any other amount payable hereunder or pursuant to any other Loan Document
(excluding fees) within the earlier of (A) three (3) days after the same shall
become due in accordance with the terms hereof or (B) in the case of the
Company, in the event that a principal or interest payment shall be due under
the terms of the Subordinated Debt within such three (3) day period, one (1) day
prior to such payment date in respect of the Subordinated Notes; or
(b) Representation or Warranty. Any representation or warranty made
--------------------------
or deemed made herein by WGI, Musketeer, WII, WUSA, WESCO, WBEI, WECL or any
Designated Subsidiary, in any Loan Document or which is contained in any
certificate, document or financial or other statement furnished at any time
under this Agreement, or in or under any Loan Document, shall prove to have been
incorrect in any material respect on or as of the date made or deemed made; or
(c) Specific Defaults. WGI, WII, Musketeer, WUSA, WESCO, WBEI, WECL
-----------------
or any Designated Subsidiary fails to perform or observe any term, covenant or
agreement contained in Sections 7.01, 7.10, 7.11 or Article VIII hereof; or
(d) Other Defaults. WGI, WII, Musketeer, WUSA, WESCO, WBEI, WECL or
--------------
any Designated Subsidiary fails to perform or observe any other term or covenant
contained in this Agreement or any Loan Document, and such default shall
continue unremedied for a period of twenty (20) days after the earlier of (i)
the date upon which a Responsible Officer of WGI, WII, Musketeer, WUSA, WESCO,
WBEI, WECL or any Designated Subsidiary knew or should have known of such
failure, or (ii) the date upon which written notice thereof has been given to
WGI, WII, Musketeer, WUSA, WESCO, WECL, WBEI or any Designated Subsidiary by the
Agent or any Bank; or
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(e) Cross-Default. WGI, WII, WUSA, WESCO, WBEI, WECL or any
-------------
Designated Subsidiary shall (i) fail to make any payment in respect of any
Indebtedness (including Subordinated Debt) or Contingent Obligation in excess of
an aggregate amount of One Million dollars ($1,000,000) when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise), or
(ii) fail to perform or observe any other condition or covenant or any other
event shall occur or condition exist under any agreement or instrument relating
to any such Indebtedness or Contingent Obligation, if the effect of such event
or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee
or agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Indebtedness to be declared
to be due and payable prior to its stated maturity or such Contingent Obligation
to become payable; or
(f) Bankruptcy or Insolvency. WGI, WUSA, WII, WESCO, WBEI, WECL or
------------------------
any Designated Subsidiary shall (i) become insolvent or generally fail to pay,
or admit in writing its inability to pay, its debts as they become due, subject
to applicable grace periods, if any, whether at stated maturity or otherwise,
(ii) voluntarily cease to conduct its business in the ordinary course
substantially as it is conducted on the date hereof or on the Closing Date,
(iii) commence any proceeding or file any petition or answer under any
liquidation or reorganization with creditors or any other relief under any
bankruptcy, reorganization, arrangement, insolvency, or other proceeding,
whether Federal or State, relating to the relief of debtors, (iv) acquiesce in
the appointment of a receiver, trustee, custodian or liquidator for itself or a
substantial portion of its property, assets or business or effect a plan or
other arrangement with its creditors, (v) admit the material allegations of a
petition filed against it in any bankruptcy, reorganization, arrangement,
insolvency or other proceeding, whether Federal or State, relating to the relief
of debtors, or (vi) take action to effectuate any of the foregoing; or
(g) Involuntary Proceedings. Involuntary proceedings or any
-----------------------
involuntary petition shall be commenced or filed against WGI, WUSA, WII, WESCO,
WBEI, WECL or any Designated Subsidiary under any bankruptcy, insolvency or
similar law or seeking the dissolution, liquidation or reorganization of WGI,
WUSA, WII, WESCO, WBEI, WECL or any Designated Subsidiary or the appointment of
a receiver, trustee, custodian or liquidator for WGI, WUSA, WII, WESCO, WBEI,
WECL or any Designated Subsidiary or any writ, judgment, warrant of attachment,
execution or similar process, shall be issued or levied against a substantial
part of WGI's, WUSA's, WII's, WESCO's,
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WBEI's, WECL's or any Designated Subsidiary's assets and any such proceedings or
petition shall not be dismissed, or such writ, judgment, warrant of attachment,
execution or similar process shall not be released, vacated or fully bonded
within sixty (60) days after commencement, filing or levy; or
(h) ERISA. The Company, any of its Subsidiaries or any ERISA
-----
Affiliate shall fail to pay when due an amount or amounts aggregating in excess
of One Million dollars ($1,000,000) which it shall have become liable to pay
under Title IV of ERISA; or notice of intent to terminate a Plan or Plans having
Unfunded Pension Liabilities in excess of One Million dollars ($1,000,000) shall
be filed under Title IV of ERISA; or the PBGC shall institute proceedings under
Title IV of ERISA, to terminate a Plan or Plans having aggregate Unfunded
Pension Liabilities in excess of One Million dollars ($1,000,000); or a
proceeding shall be instituted by a fiduciary of any such Plan or Plans against
any such Person to enforce Section 515 of ERISA to collect contributions in
excess of One Million dollars ($1,000,000); or a condition shall exist by reason
of which the PBGC would be entitled under Section 4042 of ERISA to obtain a
decree adjudicating that a Plan or Plans having aggregate Unfunded Pension
Liabilities in excess of One Million dollars ($1,000,000) must be terminated; or
(i) Monetary Judgments. One or more final judgments, orders or
------------------
decrees shall be entered against WGI, any Borrower or any of their Subsidiaries
involving in the aggregate a liability (to the extent not paid or fully covered
by insurance less any deductible) of One Million dollars ($1,000,000) or more
and the same shall not have been vacated, satisfied, discharged, stayed or
bonded pending appeal within ten (10) days from the entry thereof; or
(j) Non-Monetary Judgments. Any non-monetary judgment or order or
----------------------
decree that can reasonably be anticipated to have a Material Adverse Effect
shall be rendered against WGI, any Borrower or any of their Subsidiaries with
respect to which (i) enforcement proceedings shall have been commenced by any
Person upon such judgment or order or (ii) there shall be any period of ten (10)
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or
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<PAGE>
(k) Collateral.
----------
(i) any provision of any Collateral Document shall for any
reason cease to be valid and binding on or enforceable against WGI,
Musketeer, WII, WUSA, WESCO, WBEI or WECL, or WGI or any of its
Subsidiaries shall so state in writing or bring an action to limit its
obligations or liabilities thereunder; or
(ii) the Collateral Documents shall for any reason (other than
pursuant to the terms thereof) cease to create a valid security interest in
the Collateral purported to be covered thereby or such security interest
shall for any reason cease to be a perfected and first priority security
interest; or
(l) Management. More than two Senior Executives (as defined in the
----------
Preferred Stock Purchase Agreement dated April 9, 1992 between the Company and
the purchasers of its preferred stock) in any consecutive twelve month period
shall cease to serve in an executive capacity with the Company, WII, WUSA,
WESCO, WECL or WBEI except in the case of death.
(m) Guarantor Defaults. Any Guarantor shall fail in any material
------------------
respect to perform or observe any term, covenant or agreement in its Guaranty;
or its Guaranty shall for any reason be revoked or invalidated, or otherwise
cease to be in full force and effect; or any Guarantor or any other Person shall
contest in any manner the validity or enforceability thereof or deny that it has
any further liability or obligation thereunder; or any event described at
paragraphs (f) or (g) shall occur with respect to any Guarantor.
9.02 Remedies. If any Event of Default occurs,
--------
(a) the Agent shall, at the request of, or may, with the consent of,
the Banks holding at least fifty-one percent (51%) of the then aggregate unpaid
principal amount of the Loans or Letters of Credit, declare the Commitments of
each Bank to make Loans or of the Issuing Bank to issue Letters of Credit to be
terminated, whereupon such Commitments shall forthwith be terminated; and
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon and all other Obligations payable hereunder
or under any Loan Document (including all Reimbursement Obligations) to be
immediately due and payable, without presentment, demand, protest or other
notice of
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<PAGE>
any kind, all of which are hereby expressly waived by the Borrowers; and/or
(c) if any Letter of Credit shall be then outstanding, the Agent
shall at the request of, and may with the consent of the Banks holding at least
fifty-one percent (51%) of the then aggregate unpaid principal amount of the
Loans or Letters of Credit, make demand upon the Borrowers to, and forthwith
upon such demand, the Borrowers will, provide a letter of credit in form and
substance satisfactory to the Banks holding at least fifty-one percent (51%) of
the then aggregate unpaid principal amount of the Loans or Letters of Credit, or
pay to the Agent in same day funds at the office of the Agent designated in such
demand, for deposit in the Cash Collateral Account, an amount equal to the
maximum amount available to be drawn under the Letters of Credit then
outstanding; and/or
(d) the Agent may, in its sole discretion, without notice to the
Borrowers except as required by law and at any time and from time to time, apply
any proceeds of the Cash Collateral Account and all cash proceeds received in
respect of any sale of, collection from or other realization upon, all or any
part of the Cash Collateral Account in accordance with Section 3.05(c); and/or
(e) subject to the Collateral Documents, the Agent shall, at the
request of, and may, with the consent of, the Banks holding at least fifty-one
percent (51%) of the then aggregate unpaid principal amount of the Loans or
Letters of Credit, exercise all rights and remedies available to it as
Collateral Agent under the Collateral Documents or any other agreement;
provided, however, that upon the occurrence of any event specified in Section
- -------- -------
9.01(f) or (g) (in the case of Section 9.01(g), upon the expiration of the
sixty (60) day period mentioned therein), the obligation of each Bank to make
Loans and to issue Letters of Credit shall automatically terminate and the
unpaid principal amount of all outstanding Loans and all interest and other
Obligations (including Reimbursement Obligations) as aforesaid shall
automatically become due and payable without further act of the Agent or any
Bank.
9.03 Rights Not Exclusive. The rights provided for in this Agreement and
--------------------
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity or under any
other instrument, document or agreement.
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<PAGE>
ARTICLE X
THE AGENT
---------
10.01 Appointment and Authorization. Each Bank hereby irrevocably
-----------------------------
appoints, designates and authorizes the Agent to take such action on its behalf
under the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to it by
the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary contained elsewhere in this Agreement or in any other Loan
Document, the Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.
10.02 Delegation of Duties. The Agent may execute any of its duties under
--------------------
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
10.03 Liability of Agent. Neither the Agent nor any of its officers,
------------------
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement (except for its own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Banks for any
recital, statement, representation or warranty made by WGI, WII, Musketeer,
WUSA, WESCO, WECL or WBEI or any officer thereof contained in this Agreement or
in any other Loan Document or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document or for the value of
any Collateral or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or for any failure of
WGI, WII, Musketeer, WUSA, WESCO, WECL or WBEI or any other party to any Loan
Document to perform its obligations hereunder or thereunder. The Agent shall
not be under any obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to
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<PAGE>
inspect the properties, books or records of the Company, or any of its
Subsidiaries.
10.04 Reliance by Agent.
-----------------
(a) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telecopy, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Majority Banks as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the Majority
Banks and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Banks and all future holders of the Loans.
(b) For purposes of determining compliance with the conditions
specified in Sections 6.01 and 6.02, each Bank shall be deemed to have consented
to, approved or accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to the Banks unless an officer of the Agent responsible for the
transactions contemplated by the Loan Documents shall have received notice from
the Bank prior to the initial Borrowing specifying its objection thereto and
either such objection shall not have been withdrawn by notice to the Agent to
that effect or the Bank shall not have made available to the Agent the Bank's
ratable portion of such Borrowing.
10.05 Notice of Default. The Agent shall not be deemed to have knowledge
-----------------
or notice of the occurrence of any Default or Event of Default, except with
respect to defaults in the payment of principal, interest and fees payable to
the Agent for the account of the Banks, unless the Agent shall have received
written notice from a Bank or the Company or any Borrower referring to this
Agreement, describing such Default or Event of Default and stating
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that such notice is a "notice of default". In the event that the Agent receives
such a notice, the Agent shall give notice thereof to the Banks. The Agent shall
take such action with respect to such Default or Event of Default as shall be
requested by the Majority Banks in accordance with Article IX; provided,
--------
however, that unless and until the Agent shall have received any such request,
- -------
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Banks.
10.06 Credit Decision. Each Bank expressly acknowledges that neither the
---------------
Agent nor any of its affiliates nor any officer, director, employee, agent,
attorney-in-fact of any of them has made any representation or warranty to it
and that no act by the Agent hereafter taken, including any review of the
affairs of WGI and its Subsidiaries or any Borrower shall be deemed to
constitute any representation or warranty by the Agent to any Bank. Each Bank
represents to the Agent that it has, independently and without reliance upon the
Agent and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries and made its own decision to enter into this
Agreement and extend credit to the Borrowers and the Designated Subsidiaries
hereunder. Each Bank also represents that it will, independently and without
reliance upon the Agent and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of WGI and its Subsidiaries or any
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Banks by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of WGI and its Subsidiaries or any Borrower which
may come into the possession of the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
10.07 Indemnification. The Banks agree to indemnify the Agent (to the
---------------
extent not reimbursed by or on behalf of WGI, a Borrower or any Designated
Subsidiary and without limiting the obligation of WGI, a Borrower or any
Designated Subsidiary to do so), ratably
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according to the respective amounts of their outstanding Loans, or, if no Loans
are outstanding, their Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind whatsoever which may at any time
(including at any time following the repayment of the Loans) be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any document contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Agent under or in connection with any of the foregoing;
provided, however, that no Bank shall be liable for the payment to the Agent of
- -------- -------
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the Agent's gross negligence or willful misconduct. Without limitation of
the foregoing, each Bank shall reimburse the Agent promptly upon demand for its
ratable share of any costs or out-of-pocket expenses (including fees and
expenses of counsel and the allocated cost of in-house counsel) incurred by the
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein to the extent that the Agent is not
reimbursed for such expenses by or on behalf of WGI, any Borrower or any
Designated Subsidiary.
10.08 Agent in Individual Capacity. Bank of America and its Affiliates may
----------------------------
make loans to, issue letters of credit for the account of, accept deposits from
and generally engage in any kind of business with the Company and its
Subsidiaries as though Bank of America were not the Agent hereunder. With
respect to its Loans, Bank of America shall have the same rights and powers
under this Agreement as any other Bank and may exercise the same as though it
were not the Agent, and the terms "Bank" and "Banks" shall include Bank of
America in its individual capacity.
10.09 Successor Agent. The Agent may, and at the request of the Majority
---------------
Banks shall, resign as Agent upon thirty (30) days' notice to the Banks. If the
Agent shall resign as Agent under this Agreement, the Majority Banks shall
appoint from among the Banks a successor agent for the Banks which successor
agent shall be subject to approval by the Company, which approval will not
unreasonably be withheld. If no successor Agent is appointed prior to the
effective date of the resignation of the Agent, the Agent shall appoint, after
consulting with the Banks and the Company, a
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successor agent from among the Banks. Upon the acceptance of its appointment as
successor agent hereunder, such successor agent shall succeed to all the rights,
powers and duties of the retiring Agent and the term "Agent" shall mean such
successor agent and the retiring Agent's rights, powers and duties as Agent
shall be terminated. After any retiring Agent's resignation hereunder as Agent,
the provisions of this Article X and Sections 11.04 and 11.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement.
10.10 Collateral Matters.
------------------
(a) The Agent is authorized on behalf of all the Banks, without the
necessity of any notice to or further consent from the Banks, from time to time,
to take any action with respect to any Collateral or Collateral Documents which
may be necessary to perfect and maintain perfected the security interest in and
Liens upon the Collateral granted pursuant to the Collateral Documents.
(b) The Banks irrevocably authorize the Agent, at its option and in
its discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and payment in full of all
Loans and expiration of the Letters of Credit and all other Obligations payable
under this Agreement and under any other Loan Document; (ii) constituting
property sold or to be sold or disposed of as part of or in connection with any
disposition permitted hereunder; (iii) constituting property in which the
Company or any Subsidiary of the Company owned no interest at the time the Lien
was granted or at any time thereafter; (iv) constituting property leased to the
Company or any Subsidiary of the Company under a lease which has expired or been
terminated in a transaction permitted under this Agreement or is about to expire
and which has not been, and is not intended by the Company or such Subsidiary to
be, renewed or extended; (v) consisting of an instrument evidencing Indebtedness
or other debt instrument, if the indebtedness evidenced thereby has been paid in
full; or (vi) if approved, authorized or ratified in writing by the Majority
Banks or all the Banks, as the case may be, as provided in Section 11.01(f).
Upon request by the Agent at any time, the Banks will confirm in writing the
Agent's authority to release particular types or items of Collateral pursuant to
this Section 10.10(b).
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ARTICLE XI
MISCELLANEOUS
-------------
11.01 Amendments and Waivers. No amendment or waiver of any provision of
----------------------
this Agreement or any other Loan Document and no consent with respect to any
departure by WGI or any Borrower therefrom, shall be effective unless the same
shall be in writing and signed by the Majority Banks, and then such waiver shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such waiver, amendment, or consent
-------- -------
shall, unless in writing and signed by all the Banks, do any of the following:
(a) increase the Commitment of any Bank or subject any Bank to any
additional obligations;
(b) postpone or delay any date fixed for any payment of principal,
interest, fees or other amounts due hereunder or under any Loan Document;
(c) reduce the principal of, or the rate of interest on any Loan,
Letter of Credit Obligation or of any fees or other amounts payable hereunder or
under any Loan Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which shall be required for the Banks or
any of them to take any action hereunder;
(e) amend this Section 11.01 or Section 4.11; or
(f) release all or substantially all of the Collateral except as
otherwise provided in the Collateral Documents or except where the consent of
the Majority Banks only is specifically provided for;
and, provided further, that no amendment, waiver or consent shall, unless in
-------- -------
writing and signed by the Agent in addition to the Majority Banks, affect the
rights or duties of the Agent under this Agreement.
11.02 Notices. All notices, requests and other communications provided
-------
for hereunder shall be in writing (including telegraphic, telex, facsimile
transmission or cable communication and confirmed in original writing) and
mailed, telegraphed, telexed, telefaxed, cabled or delivered, if to the Company
to its address specified on the signature pages hereof; if to a Borrower to its
address specified on the signature pages hereof; or to a Designated Subsidiary,
at the address set forth in its Election to Participate; if to any Bank, to its
Domestic Lending Office; and if to the Agent, to its
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address specified on the signature pages hereof; or, if to the Company or the
Agent, to such other address as shall be designated by such party in a written
notice to the other parties, and as to each other party at such other address as
shall be designated by such party in a written notice to the Company and the
Borrowers and the Agent. All such notices and communications shall, when mailed
by overnight delivery, telegraphed, telexed, telefaxed, cabled, or delivered, be
effective when delivered for overnight delivery or to the telegraph company,
transmitted by telecopier, confirmed by telex answerback or delivered to the
cable company, respectively, or if delivered, upon delivery, except that notices
pursuant to Article II or IX shall not be effective until received by the Agent.
11.03 No Waiver; Cumulative Remedies. No failure to exercise and no delay
------------------------------
in exercising, on the part of any Agent or any Bank, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
11.04 Costs and Expenses. Each Borrower agrees
------------------
(a) to pay or reimburse the Agent on demand for all its reasonable
costs and expenses incurred in connection with the development, preparation,
delivery, administration and execution of, and any amendment, supplement, waiver
or modification to, this Agreement, any Loan Document and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable costs and expenses of counsel to the Agent (and the reasonable
allocated cost of internal counsel) with respect thereto;
(b) to pay or reimburse each Bank and the Agent on demand for all
reasonable costs and expenses incurred by them in connection with the
enforcement or preservation of any rights (including in connection with any
"workout" or restructuring regarding the Loans or Letters of Credit) under this
Agreement, any Loan Document, and any such other documents, including reasonable
fees and expenses of counsel (and the reasonable allocated cost of internal
counsel) to the Agent and to each of the several Banks; and
(c) to pay or reimburse the Agent on demand for all reasonable
appraisal, audit, search and filing fees, incurred or
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sustained by the Agent in connection with the matters referred to under
paragraphs (a) and (b) above.
11.05 Indemnity.
---------
(a) Each Borrower shall pay, indemnify, and hold each Bank and the
Agent and each of their respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and
------------------
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses or disbursements (including
reasonable fees and expenses of counsel and the reasonable allocated cost of
internal counsel) of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement and any other Loan Documents or the transactions contemplated herein,
and with respect to any investigation, litigation or proceeding related to this
Agreement or the Loans or the use of the proceeds thereof (whether or not any
Indemnified Person is a party thereto) (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that the Borrowers shall have no
--------
obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities arising from the gross negligence or willful misconduct of such
Indemnified Person. The agreements in this section shall survive repayment of
all other Obligations hereunder.
(b) No action taken by legal counsel chosen by the Agent or any
Bank in defending against any such investigation, litigation or proceeding or in
any requested remedial, removal or response action shall vitiate or any way
impair the Borrowers' obligation and duty hereunder to indemnify and hold
harmless the Agent and each Bank.
(c) In no event shall site visit, observation, or testing by the
Agent or any Bank be a representation that Hazardous Materials are or are not
present in, on, or under the real property owned by WESCO, or that there has
been or shall be compliance with any law, regulation, or ordinance pertaining to
Hazardous Materials or any other applicable governmental law. No Borrower nor
any other party is entitled to rely on any site visit, observation, or testing
by the Agent or any Bank. Neither the Agent nor any Bank owes any duty of care
to protect the Borrowers or any other party against, or to inform the Borrowers
or any other party of, any Hazardous Materials or any other adverse condition
affecting the real property owned by WESCO. Neither the Agent nor any Bank shall
be obligated to disclose to the Borrowers or any other party any report or
findings made as a result of, or in connection with, any site visit,
observation, or testing by the Agent or any Bank.
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11.06 Successors and Assigns. The provisions of this Agreement shall be
----------------------
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrowers may not assign or transfer any
of their rights or obligations under this Agreement without the prior written
consent of each Bank.
11.07 Assignments, Participations, Etc.
---------------------------------
(a) Any Bank may, with the written consent of the Borrowers, which
shall not be unreasonably withheld and the Agent, at any time assign and
delegate to one or more Eligible Assignees and, with notice to the Agent but
without the consent of the Borrowers or the Agent, may assign to any of its
wholly owned Affiliates (each an "Assignee") all or any part of the Loans, the
Letter of Credit Obligations or the Commitments or any other rights or
obligations of such Bank hereunder in a minimum amount of Ten Million dollars
($10,000,000); provided, however, that the Borrowers and the Agent shall be
-------- -------
entitled to continue to deal solely and directly with such Bank in connection
with the interests so assigned to an Assignee until (i) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Borrowers
and the Agent by such Bank and the Assignee and (ii) such Bank and its Assignee
shall have delivered to the Borrowers and the Agent an Assignment and Assumption
in the form of Exhibit U ("Assignment and Assumption"), together with any Note
-------------------------
or Notes subject to such assignment; and (iii) the processing fee of Two
Thousand Five Hundred dollars ($2,500) shall have been paid to the Agent.
(b) From and after the date that the Agent notifies the assignor
Bank that it has received the Assignment and Assumption, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Assumption, shall have the rights and obligations of a Bank under the Loan
Documents, and (ii) the assignor Bank shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Assumption, relinquish its rights and be released from its obligations under the
Loan Documents.
(c) Immediately upon each Assignee's making its payment under the
Assignment and Assumption, this Agreement, shall be deemed to be amended to the
extent, but only to the extent, necessary to reflect the addition of the
Assignee and the resulting adjustment of the Commitments arising therefrom. The
Commitment allocated to each Assignee shall reduce such Commitments of the
assigning Bank pro tanto.
--- -----
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<PAGE>
(d) Any Bank may, with the written consent of the Borrowers, which
shall not be unreasonably withheld, at any time sell to one or more banks or
other entities (a "Participant") participating interests in any Loans, any
Letter of Credit Obligations, the Commitment of that Bank or any other interest
of that Bank hereunder; provided, however, that (i) the Bank's obligations under
-------- -------
this Agreement shall remain unchanged, (ii) the Bank shall remain solely
responsible for the performance of such obligations, (iii) the Company and the
Borrowers and the Agent shall continue to deal solely and directly with the Bank
in connection with the Bank's rights and obligations under this Agreement and
(iv) no Bank shall transfer or grant any participating interest under which the
Participant shall have rights to approve any amendment to, or any consent or
waiver with respect to this Agreement except to the extent such amendment,
consent or waiver would require unanimous consent as described in the first
-----
proviso to Section 11.01. In the case of any such participation, the Participant
- -------
shall not have any rights under this Agreement, or any of the other documents in
connection herewith, and all amounts payable by the Borrowers hereunder shall be
determined as if such Bank had not sold such participation, except that the
Borrowers agree that if amounts outstanding under this Agreement are due and
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall be deemed to have
the right of set-off in respect of its participating interest in amounts owing
under this Agreement to the same extent as if the amount of its participating
interest were owing directly to it as a Bank under this Agreement.
(e) Each Bank agrees to take normal and reasonable precautions and
exercise due care to maintain the confidentiality of all non-public information
provided to it by WGI or any Subsidiary of WGI or by the Agent on WGI's or any
such Subsidiary's behalf in connection with this Agreement or any Collateral
Document and neither it nor any of its Affiliates shall use any such information
for any purpose or in any manner other than pursuant to the terms contemplated
by this Agreement, except to the extent such information (i) was or becomes
generally available to the public other than as a result of a disclosure by the
Bank, or (ii) was or becomes available on a non-confidential basis from a source
other than the Borrowers, provided that such source is not bound by a
--------
confidentiality agreement with WGI known to the Bank; provided further, however,
-------- -------
that any Bank may disclose such information (A) at the request of any bank
regulatory authority or in connection with an examination of such Bank by any
such authority; (B) pursuant to subpoena or other court process; (C) when
required to do so in accordance with the provisions of any applicable law; (D)
at the express direction of any other agency of any State of the
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United States of America or of any other jurisdiction in which such Bank
conducts its business; and (E) to such Bank's independent auditors and other
professional advisors. Notwithstanding the foregoing, the Company authorizes
each Bank to disclose to any Participant or Assignee (each, a "Transferee") and
any prospective Transferee such financial and other information in such Bank's
possession concerning WGI or its Subsidiaries which has been delivered to the
Banks pursuant to this Agreement or which has been delivered to the Banks by the
Company in connection with the Banks' credit evaluation of WGI or any Borrower
prior to entering into this Agreement; provided that such Transferee agrees in
--------
writing to such Bank to keep such information confidential to the same extent
required of the Banks hereunder.
(f) In the event of an assignment, the Agent shall request that
each beneficiary of a Letter of Credit issued by the Syndicated L/C Bank amend
such Letter of Credit to add the Assignee and to modify the percentage share of
the assignor Bank on such Letter of Credit. Until such time as all such
beneficiaries have consented to such amendment, the Assignee shall be deemed to
have purchased a percentage share in the assignor Bank's share of the Letter of
Credit to the extent of the Assignee's interest.
11.08 Set-off. In addition to any rights and remedies of the Banks
-------
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Bank is hereby authorized at any time and from time to time,
without prior notice to the Borrowers, any such notice being expressly waived by
the Borrowers to the fullest extent permitted by applicable law, to set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Bank to
or for the credit or the account of the Borrowers or any of them against any and
all obligations of the Borrowers or any of them now or hereafter existing under
this Agreement, or any other Loan Document and any Loan held by such Bank
irrespective of whether or not the Agent or such Bank shall have made demand
under this Agreement or any Loan Document and although such obligations may be
contingent or unmatured. Each Bank agrees promptly to notify the Company and the
Agent after any such set-off and application made by the Bank; provided,
--------
however, that the failure to give such notice shall not affect the validity of
- -------
such set-off and application. The rights of each Bank under this Section 11.08
are in addition to the other rights and remedies (including without limitation,
other rights of setoff) which the Bank may have.
11.09 Notification of Addresses, Lending Offices, Etc. Each Bank shall
------------------------------------------------
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of
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addresses of its Eurodollar Lending Office and its Domestic Lending Office, of
payment instructions in respect of all payments to be made to it hereunder and
of such other administrative information as the Agent shall reasonably request.
11.10 Counterparts. This Agreement may be executed by one or more of the
------------
parties to this Agreement in any number of separate counterparts, each of which,
when so executed, shall be deemed an original, and all of said counterparts
taken together shall be deemed to constitute but one and the same instrument. A
set of the copies of this Agreement signed by all the parties shall be lodged
with the Company, WII, WUSA and the Agent.
11.11 Severability. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
11.12 Governing Law and Jurisdiction.
------------------------------
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT
PROVIDED IN SECTION 11.12(b) HEREOF AND TO THE EXTENT THAT THE FEDERAL LAWS OF
THE UNITED STATES OF AMERICA MAY OTHERWISE APPLY.
(b) NOTWITHSTANDING ANYTHING IN SECTION 11.12(a) HEREOF TO THE
CONTRARY, NOTHING IN THIS AGREEMENT OR OTHER LOAN DOCUMENTS SHALL BE DEEMED TO
CONSTITUTE A WAIVER OF ANY RIGHT WHICH THE AGENT OR ANY OF THE BANKS MAY HAVE
UNDER THE NATIONAL BANK ACT OR OTHER APPLICABLE FEDERAL LAW.
(c) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH OF WGI, THE BORROWERS, THE AGENT, AND THE BANKS HEREBY
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE JURISDICTION OF
THOSE COURTS. EACH OF WGI, THE BORROWERS AND THE BANKS HEREBY IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
--------------------
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. WGI, THE BORROWERS, THE AGENT AND THE
BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS,
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
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(d) WGI, WII and WECL hereby irrevocably appoint the General
Counsel of WUSA (the "Process Agent"), with an office on the date hereof at 2431
East 61st Street, Suite 700 Tulsa, Oklahoma 74136, United States of America,
Attention: General Counsel, as their agent to receive on behalf of WGI, WII and
WECL and their property service of copies of any summons or complaint or any
other process which may be served in any action. Such service may be made by
mailing or delivering a copy of such process to WGI, WII and WECL in care of the
Process Agent at the Process Agent's above address, and WGI, WII and WECL hereby
irrevocably authorize and direct the Process Agent to accept such service on its
behalf. As an alternative method of service, WGI, WII and WECL also irrevocably
consent to the service of any and all process in any such action or proceeding
by the mailing of copies of such process to WGI, WII and WECL at the addresses
specified on the signature page hereof.
(e) Nothing in this Section shall affect the right of the Agent or
any other Bank to serve legal process in any other manner permitted by law or
affect the right of the Agent or any other Bank to bring any action or
proceeding against WGI, WII, WECL and the Designated Subsidiaries in the courts
of any other jurisdictions.
(f) To the extent WGI, WII, WECL, and the Designated Subsidiaries
have or hereafter may acquire any immunity from jurisdiction of any court or
from any legal process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) with respect
to itself or its property, WGI, WII, WECL, and the Designated Subsidiaries
hereby irrevocably waive such immunity in respect of their obligations under
this Agreement.
11.13 ENTIRE AGREEMENT. THIS AGREEMENT TOGETHER WITH THE OTHER LOAN
----------------
DOCUMENTS EMBODIES THE ENTIRE AGREEMENT AND UNDERSTANDING AMONG WGI, THE
BORROWERS, THE BANKS AND THE AGENT AND SUPERSEDES ALL PRIOR OR CONTEMPORANEOUS
AGREEMENTS AND UNDERSTANDINGS OF SUCH PERSONS, VERBAL OR WRITTEN, RELATING TO
THE SUBJECT MATTER HEREOF EXCEPT FOR THE FEE LETTER AND ANY PRIOR ARRANGEMENTS
MADE WITH RESPECT TO THE PAYMENT BY WGI OR 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.
11.14 Conflict with Collateral Documents. The benefits, rights and
----------------------------------
remedies of the Banks and Agent and the security contained in or provided for in
the Loan Documents are cumulative; provided, however, that if the provisions of
-------- -------
the other Loan Documents conflict with any provision of this Agreement, this
Agreement shall control to the extent of such conflict, unless the applicable
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provisions of the other Loan Documents increase the rights of the Banks and
Agent hereunder, in which event, the terms of the other Loan Documents shall
control.
11.15 Termination. In the event that the Commitments have been reduced to
-----------
zero, there are no Letters of Credit outstanding hereunder and there are no
Loans or other Obligations on the part of any of the Borrowers outstanding
hereunder or under any other Loan Document, then this Agreement shall be deemed
terminated (other than any indemnification obligations, which shall survive such
termination) and the Agent and the Banks shall, upon the request and at the cost
and expense of the Company, cause to be executed and delivered such releases of
Collateral, assignments or other documents or instruments to evidence such
termination as the Company shall reasonably request. For the purposes of this
Section 11.15, there shall be deemed to be no Letters of Credit outstanding if
the Company shall have caused the Letters of Credit to be cash collateralized
(other than in connection with a Default) or secured by another letter of credit
(issued by a financial institution reasonably satisfactory to the Majority
Banks).
11.16 Currency Conversion. If the sum due from the Borrowers under this
-------------------
Agreement or in connection herewith or any order or judgment given or made in
relation hereto has to be converted from the currency (the "first currency") in
which the same is payable hereunder or under such order or judgment into another
currency (the "second currency") for the purpose of (a) making or filing a claim
of proof against Borrowers with any Governmental Authority or in any court or
tribunal; (b) obtaining an order or judgment in any court or other tribunal; (c)
enforcing any order or judgment given or made in relation hereto, the equivalent
of such first currency amount in any second currency shall be calculated based
on the spot rate for the purchase of the first currency with the second currency
quoted by Bank of America in San Francisco, California at approximately 8:00
a.m. on the date for such determination. The Borrowers shall indemnify and hold
harmless each of the Persons to whom such sum is due from and against any loss
suffered as a result of any discrepancy between (i) the rate of exchange used
for such purpose to convert the sum in question from the first currency into the
second currency and (ii) the rate or rates of exchange at which such Person may
in the ordinary course of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in whole or in part,
of any such order, judgment, claim or proof. The foregoing indemnity shall
constitute a separate obligation of the Borrowers distinct from the Obligations
hereunder and shall survive the giving or making of any judgment or order in
relation to all or any of the Obligations.
-110-
<PAGE>
11.17 Limitation of WECL Liability. Notwithstanding any contrary
----------------------------
provision of this Agreement or any other Loan Document (other than the WECL
Guaranty), WECL shall be liable only for payment of:
(a) the principal amount of all Loans made to it and interest in
respect thereof;
(b) the amount to be reimbursed in respect of each Letter of Credit
issued at its request, for its account and in connection with its business and
all fees and expenses in respect of such Letters of Credit and the security
interest granted by WECL pursuant to Section 3.09(c) shall only secure such
amounts;
(c) all costs and expenses payable pursuant to this Agreement or
any other Loan Document (other than the WECL Guaranty) in connection with the
enforcement or preservation of any rights of the Agent or the Banks against WECL
under this Agreement or any other Loan Document (other than the WECL Guaranty)
or otherwise specifically applicable to WECL;
(d) any currency indemnity relating to an amount payable by WECL
pursuant to this Section 11.17; and
(e) WECL's pro rata share (as determined by the Borrowers, provided
that WECL's pro rata share shall not exceed the greater of (i) one-third (1/3)
or (ii) the percentage represented by the amount of all outstanding Loans and
Letter of Credit Obligations requested by WECL divided by all outstanding Loans
and Letter of Credit Obligations under this Agreement) of all other fees and
costs under this Agreement which cannot be specifically allocated to WECL.
The intention of this provision is to ensure that WECL does not contravene the
prohibition with respect to financial assistance in the Business Corporation Act
------------------------
(Ontario) by assuming joint liability with the other Borrowers.
-111-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
WILLBROS GROUP, INC.
/s/ Larry J. Bump
By:_______________________________
Larry J. Bump,
President
Edificio Plaza Bancomer
Calle 50, Apartado 6307
Panama 5, Republic of Panama
with a copy to:
John N. Hove, Esq., Suite 700
2431 East 61st Street
Tulsa, Oklahoma 74136
WILLBROS INTERNATIONAL, INC.
/s/ Melvin F. Spreitzer
By:_______________________________
Melvin F. Spreitzer,
Executive Vice President
Edificio Plaza Bancomer
Calle 50, Apartado 6307
Panama 5, Republic of Panama
with a copy to:
John N. Hove, Esq., Suite 700
2431 East 61st Street
Tulsa, Oklahoma 74136
WILLBROS ENGINEERING &
CONSTRUCTION LIMITED
/s/ Melvin Spreitzer
By:_______________________________
Melvin F. Spreitzer,
Executive Vice President
Commerce Court West
199 Bay Street, Box 25
Toronto, Ontario, Canada M5L 1A9
-112-
<PAGE>
with a copy to:
John N. Hove, Esq., Suite 700
2431 East 61st Street
Tulsa, Oklahoma 74136
WILLBROS USA, INC.
/s/ Melvin F. Spreitzer
By:_______________________________
Melvin F. Spreitzer,
Executive Vice President
2431 East 61st Street, Suite 700
Tulsa, Oklahoma 74136
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
As Agent
/s/ Alice Zane
By:_______________________________
Alice Zane,
Vice President
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn: Global Agency/Alice Zane
Tel: (415) 622-4469
Fax: (415) 622-4894
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
/s/ Melinda H. Nickens
By:_______________________________
Melinda H. Nickens,
Vice President
-113-
<PAGE>
Domestic and Eurodollar Lending
Office
1850 Gateway Boulevard
Concord, California 94520
Attn: Shashi Dosaj
with a copy to:
Three Allen Center
333 Clay Street
Houston, TX 77002-4103
Tel: (713) 651-4884
(713) 651-4841
Attn: Phyllis Tennard
ABN AMRO BANK N.V.
/s/ [signature illegible]
By: ______________________________
Group Vice President
Title: ___________________________
/s/ Brian J. Heagler
By: ______________________________
Vice President
Title: ___________________________
Domestic and Eurodollar Lending
Office
3 Riverway, Suite 1600
Houston, Texas 77056
CREDIT LYONNAIS
NEW YORK BRANCH
/s/ [signature illegible]
By: ______________________________
SVP
Title: ___________________________
CREDIT LYONNAIS CAYMAN
ISLAND BRANCH
/s/ [signature illegible]
By: ______________________________
SVP
Title: ___________________________
-114-
<PAGE>
Domestic Lending Office
1301 Avenue of the Americas
New York, New York 10019
Attention: Xavier Ratouis
Telephone: (212) 261-7000
Telecopy: (212) 459-3170
with a copy to:
Credit Lyonnais Houston Representative
Office
1000 Louisiana, Suite 5366
Houston, Texas 77002
Attention: Thierry F. Vincent
Telephone: (713) 751-0500
Telecopy: (713) 751-0307
Eurodollar Lending Office
c/o Credit Lyonnais New York Branch
1301 Avenue of the Americas
New York, New York 10019
With a copy to: Credit Lyonnais
Houston Representative Office
SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ [Signature Illegible]
------------------------------------
Title: V.P.
---------------------------------
Domestic and Eurodollar Lending Office
2001 Ross Avenue, Suite 4800
Trammel Crow Center
Dallas, Texas 75201
-115-
<PAGE>
BANKAMERICA INTERNATIONAL
By: /s/ [Signature Illegible]
-----------------------------------
Title: Assistant Vice President
--------------------------------
200 West Adams Street, 27th Floor
Chicago, Illinois 60606
Attention: Dennis DuBois
Telephone: (312) 269-4604
Telecopy: (312) 641-0962
-116-
<PAGE>
EXHIBIT G
---------
___________________________________________________________________
___________________________________________________________________
[FORM]
PARENT GUARANTY AGREEMENT
BY
WILLBROS GROUP, INC.
IN FAVOR OF
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
As Agent
___________________________________________________________________
___________________________________________________________________
Dated as of September 16, 1993
<PAGE>
EXHIBIT G
PARENT GUARANTY AGREEMENT
This PARENT GUARANTY AGREEMENT (this "Guaranty"), dated as of September 16,
1993, is made by Willbros Group, Inc. ("WGI"), a Republic of Panama corporation
(the "Guarantor"), in favor of BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as agent (in such capacity, the "Agent") for its benefit and for
the ratable benefit of the financial institutions (the "Banks") party to the
Credit Agreement (as defined below).
WHEREAS, WGI owns directly all of the issued and outstanding stock of
Willbros International, Inc. ("WII") and Willbros Engineering & Construction
Limited ("WECL"), and indirectly all of the issued and outstanding stock of
Willbros USA, Inc. ("WUSA") (collectively the "Borrowers");
WHEREAS, the Borrowers, WGI, the Agent, and the Banks are party to a Credit
Agreement dated as of September 16, 1993 (such Credit Agreement, as it may
hereafter be amended, restated, supplemented or otherwise modified from time to
time, being hereinafter referred to as the "Credit Agreement");
WHEREAS, pursuant to the terms of the Credit Agreement, the Banks have
agreed to make certain Loans to and issue or participate in Letters of Credit
for the benefit of the Borrowers;
WHEREAS, the obligation of the Banks to make the Loans and to issue or
participate in Letters of Credit is conditioned upon, among other things, the
execution and delivery by the Guarantor of this Guaranty;
NOW THEREFORE, in consideration of the premises and to induce the Banks to
enter into the Credit Agreement and make the Loans and to issue or participate
in the Letters of Credit, the Guarantor hereby agrees with and for the benefit
of the Agent and the Banks as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined
-------------
in the Credit Agreement are used herein as therein defined.
SECTION 2. Guaranty. The Guarantor hereby, unconditionally and
--------
irrevocably, guarantees the prompt performance and payment in full in U.S.
dollars by the Borrowers when due (whether at stated maturity, by acceleration
or otherwise) of the Obligations of the Borrowers under the Credit Agreement,
and the Guarantor further agrees to pay all reasonable costs, fees and expenses
(including, without limitation, reasonable counsel fees, including, without
<PAGE>
limitation, the allocated cost of in-house counsel) incurred by the Agent or any
Bank in enforcing any rights under this Guaranty. The word "Obligations" is
used hereunder in its most comprehensive sense and includes all obligations and
liabilities of the Borrowers to the Banks under the Credit Agreement, whether
absolute or contingent, liquidated or unliquidated, for principal, interest,
fees, indemnities, costs and expenses and all other amounts payable under or in
connection with the Credit Agreement, including the Obligations of the Borrowers
with respect to Designated Subsidiaries under their Guaranty Agreement.
SECTION 3. Guaranty Absolute.
-----------------
(a) The obligations of the Guarantor hereunder are those of a primary
obligor, and not merely a surety, and are independent of the Obligations. A
separate action or actions may be brought against the Guarantor whether or not
an action is brought against the Borrowers, any other guarantor or other obligor
in respect of the Obligations or whether the Borrowers, any other guarantor or
any other obligor in respect of the Obligations are joined in any such action or
actions.
(b) The Guarantor guarantees that the Obligations will be paid and
performed strictly in accordance with the terms of the Credit Agreement and the
other Loan Documents regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the
Agent or the Banks with respect thereto. Guarantor agrees that its guarantee
constitutes a guarantee of payment when due and not of collection. The
liability of the Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
(i) any lack of genuineness, validity, legality or
enforceability of the Credit Agreement any other Loan Document or any
other document, agreement or instrument relating thereto or any
assignment or transfer of any thereof;
(ii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligations (including,
without limitation, the possible extension of the Commitment
Termination Date and increase of the amount of the Commitments all on
the terms and conditions set forth in the Credit Agreement), or any
waiver, indulgence, compromise, renewal, extension, amendment,
modification of, or addition, consent, supplement to, or consent to
departure from, or any other
-2-
<PAGE>
action or inaction under or in respect of, the Credit Agreement or any
other Loan Document or any document, instrument or agreement relating
to the Obligations or any other instrument or agreement referred to
therein or any assignment or transfer of any thereof;
(iii) any release or partial release of any other guarantor
or other obligor in respect of the Obligations;
(iv) any exchange, release or non-perfection of any
collateral for all or any of the Obligations, or any release, or
amendment or waiver of, or consent to departure from, any guaranty or
security, for all or any of the Obligations;
(v) any furnishing of any additional security for any of
the Obligations;
(vi) the liquidation, bankruptcy, insolvency or
reorganization of the Borrowers, any other guarantor or other obligor
in respect of the Obligations or any action taken with respect to this
Guaranty by any trustee or receiver, or by any court, in any such
proceeding;
(vii) any modification or termination of any intercreditor or
subordination agreement pursuant to which the claims of other
creditors of the Borrowers or the Guarantor are subordinated to those
of the Banks; or
(viii) any other circumstance which might otherwise constitute
a defense available to, or a legal or equitable discharge of, the
Guarantor.
(c) This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time payment or performance of the Obligations, or
any part thereof, is, upon the insolvency, bankruptcy or reorganization of the
Borrowers or the Guarantor or otherwise pursuant to applicable law, rescinded or
reduced in amount or must otherwise be restored or returned by the Agent or any
Bank, all as though such payment or performance had not been made.
(d) If an event permitting the acceleration of any of the Obligations
shall at any time have occurred and be continuing and such acceleration shall at
such time be prevented by reason of the pendency against the Borrowers of a case
or proceeding under
-3-
<PAGE>
any bankruptcy or insolvency law, the Guarantor agrees that, for purposes of
this Guaranty and its obligations hereunder, the Obligations shall be deemed to
have accelerated and the Guarantor shall forthwith pay such Obligations
(including, without limitation, interest which but for the filing of a petition
in bankruptcy with respect to the Borrowers, would accrue on such Obligations),
and the other obligations hereunder, without any further notice or demand.
SECTION 4. Waivers. The Guarantor hereby waives promptness, diligence,
-------
notice of acceptance and any and all other notices with respect to any of the
Obligations and this Guaranty and any requirement that the Agent or any Bank
protect, secure, perfect or insure any security interest in or any Lien on any
property subject thereto or exhaust any right or take any action against the
Borrowers, any other guarantor or any other Person or any collateral or
security or to any balance of any deposit accounts or credit on the books of any
Bank in favor of the Borrowers or the Guarantor.
SECTION 5. Subrogation.
-----------
(a) The Guarantor expressly waives any and all rights of subrogation,
reimbursement and contribution (contractual, statutory or otherwise), against
the Agent and the Banks, individually or collectively, including without
limitation, any claim or right of subrogation under the Bankruptcy Code (Title
11 of the U.S. Code) or any successor statute, arising from the existence or
performance of this Guaranty and the Guarantor irrevocably waives any right to
enforce any remedy which the Agent and the Banks, or any one or more of them now
have or may hereafter have against the Borrowers, and waives any benefit of, and
any right to participate in, any security now or hereafter held by the Agent and
the Banks or any one or more of them.
(b) If, in the exercise of any of its rights and remedies, the Agent
or any Bank shall forfeit any of its rights or remedies, including its right to
enter a deficiency judgment against the Borrowers or any other Person, whether
because of any applicable laws pertaining to "election of remedies" or the like,
the Guarantor hereby consents to such action by the Agent or such Bank and
waives any claim based upon such action, even if such action by the Agent or
such Bank shall result in a full or partial loss of any rights of subrogation
which the Guarantor might otherwise have had but for such action by the Agent or
such Bank. Any election of remedies which results in the denial or impairment
-4-
<PAGE>
of the right of the Agent or such Bank to seek a deficiency judgment against the
Borrowers shall not impair the Guarantor's obligation to pay the full amount of
the Obligations. In the event the Agent or any Bank shall bid at any foreclosure
or trustee's sale or at any private sale permitted by law or under the Loan
Documents, the Agent or such Bank may bid all or less than the amount of the
Obligations and the amount of such bid need not be paid by the Agent or such
Bank but shall be credited against the Obligations. The amount of the successful
bid at any such sale, whether the Agent or such Bank or any other party is the
successful bidder, shall be conclusively deemed to be the fair market value of
the Collateral and the difference between such bid amount and the remaining
balance of the Obligations shall be conclusively deemed to be the amount of the
Obligations guaranteed under this Guaranty, notwithstanding that any present or
future law or court decision or ruling may have the effect of reducing the
amount of any deficiency claim to which the Agent or any Bank might otherwise be
entitled but for such bidding at any such sale.
SECTION 6. Further Assurances; Representations and Warranties.
--------------------------------------------------
(a) The Guarantor agrees that at any time and from time to time, at
the expense of the Guarantor, the Guarantor will promptly execute and deliver
all further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Agent may reasonably request, to enable the
Agent to pro tect and to exercise and enforce its rights and remedies hereunder.
(b) All representations and warranties including as to due
authorization and enforceability of this Guaranty set forth in the Credit
Agreement are incorporated herein by reference and shall have the same effect as
if fully stated herein.
SECTION 7. Application of Payments. Any payment received by the Agent
-----------------------
from the Guarantor (or from any Bank pursuant to Section 12 below) shall be
applied by the Agent as follows:
First, to the payment of the costs and expenses of
collection and all expenses (including, without limitation, any legal
fees and disbursements and the allocated cost of in-house counsel),
liabilities and advances made or incurred by the Agent in connection
therewith;
Next, to the Banks pro rata, based on the then outstanding
--------
amount of the Obligations owed to each in payment in full of the
Obligations; and
-5-
<PAGE>
Finally, after payment in full of all Obligations and the
termination of the Commitments and expiration of all outstanding
Letters of Credit, the payment to the Guarantor, or its successors or
assigns, or to whomsoever may be lawfully entitled to receive the same
or as a court of competent jurisdiction may direct, of any surplus
then remaining from such proceeds.
SECTION 8. Decisions Relating to Exercise of Remedies. Notwithstanding
------------------------------------------
anything in this Guaranty to the contrary, the Agent may exercise, and at the
request of the Majority Banks shall exercise or refrain from exercising, all
rights and remedies provided for herein and provided by law.
SECTION 9. No Waiver. No failure on the part of the Agent or any Bank to
---------
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 10. Amendments, Etc. No amendment or waiver of any provision of
----------------
this Guaranty, nor consent to any departure by the Guarantor herefrom, shall in
any event be effective unless the same shall be in writing and signed, in the
case of amendments, by the Guarantor and by the Agent and, in the case of
consent or waivers, by the Agent and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which made or given.
SECTION 11. Notices. All notices, requests and other communications
-------
provided for hereunder shall be in writing and given as provided in Section
11.02 of the Credit Agreement.
SECTION 12. Right to Set-off.
----------------
(a) Upon the occurrence and during the continuance of any Event of
Default under the Credit Agreement, each Bank is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Bank to
or for the credit or the account of the Guarantor against any and all of the
Obligations, irrespective of whether or not such Bank shall have made any demand
under this Guaranty and although such Obligations may be contingent and
unmatured. Each Bank which sets-
-6-
<PAGE>
off pursuant to this Section 12(a) shall give prompt notice to the Guarantor
following the occurrence thereof; provided that the failure to give such notice
--------
shall not affect the validity of the set-off.
(b) Any payment obtained pursuant to Section 12(a) above (or in any
other manner directly from the Guarantor) by any Bank shall be remitted to the
Agent and distributed among the Banks in accordance with the provisions of
Section 7 above.
SECTION 13. Continuing Guaranty. This Guaranty is a continuing guaranty
-------------------
and shall (a) remain in full force and effect until payment in full (after the
termination of the Commitments and expiration of all outstanding Letters of
Credit) of the Obligations and all other amounts payable under this Guaranty;
(b) be binding upon the Guarantor, its successors and assigns; and (c) inure,
together with the rights and remedies of the Agent hereunder, to the benefit of
the Agent, the Banks and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), any Bank may assign
or otherwise transfer its rights and obligations under the Credit Agreement to
any other Person or entity, and such other Person or entity shall thereupon
become vested with all the benefits in respect thereof granted to the Bank
herein or otherwise, all as provided in, and to the extent set forth in, Section
11.07 of the Credit Agreement.
SECTION 14. Subordination of the Borrowers' Obligations to the Guarantor.
------------------------------------------------------------
The Guarantor hereby expressly covenants and agrees for the benefit of the Agent
and the Banks that all obligations and liabilities of the Borrowers and their
Subsidiaries to the Guarantor of whatsoever description (including, without
limitation, all intercompany receivables of the Guarantor from the Borrowers)
shall be subordinated and junior in right of payment to the Obligations.
Following the occurrence of an Event of Default, any indebtedness of the
Borrowers to the Guarantor shall, if the Agent shall so request, be collected
and received by the Guarantor as trustee for the Agent and the Banks and paid
over to the Agent and the Banks on account of the Obligations but without
reducing or affecting in any manner the liability of the Guarantor under this
Guaranty.
SECTION 15. Severability. If for any reason any provision or provisions
------------
hereof are determined to be invalid and contrary to any existing or future law,
such invalidity shall not impair the operation of or affect those portions of
this Guaranty which are valid.
-7-
<PAGE>
SECTION 16. Waiver of Jury Trial. THE GUARANTOR WAIVES ANY RIGHT IT MAY
--------------------
HAVE TO A JURY TRIAL IN CONNECTION WITH ANY ACTION, SUIT OR PROCEEDING ARISING
OUT OF OR RELATED IN ANY WAY TO THIS GUARANTY, THE CREDIT AGREEMENT OR RELATING
TO ANY OF THE FOREGOING.
SECTION 17. Governing Law; Jurisdiction.
---------------------------
(a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) Any legal action or proceeding with respect to this Guaranty may
be brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and by execution and delivery of
this Guaranty, the Guarantor hereby consents, for itself and in respect of its
property, to the jurisdiction of the aforesaid courts. The Guarantor hereby
irrevocably waives any objection, including without limitation, any objection to
the laying of venue or based on the grounds of forum non conveniens, which it
--------------------
may now or hereafter have to the bringing of any action or proceeding in such
jurisdiction in respect of this Guaranty or any document related hereto.
(c) The Guarantor hereby irrevocably appoints the General Counsel of
WUSA (the "Process Agent"), with an office on the date hereof at 2431 East 61st
Street, Suite 700, Tulsa, Oklahoma 74136, United States of America, as its agent
to receive on behalf of the Guarantor and its property service of copies of the
summons and complaint and any other process which may be served in any action or
proceeding arising out of or relating to this Guaranty. Such service may be
made by mailing or delivering a copy of such process to the Guarantor in care of
the Process Agent at the Process Agent's above address, and the Guarantor hereby
irrevocably authorizes and directs the Process Agent to accept such service on
its behalf. As an alternative method of service the Guarantor also irrevocably
consents to the service of any and all process in any such action or proceeding
by the mailing of copies of such process to the Guarantor at its address
specified on the signature page hereof.
SECTION 18. Taxes.
-----
(a) Guarantor represents and warrants as of the date hereof that all
payments under or in respect of this Guaranty are exempt from tax other than
taxes on net income imposed by the country or any subdivision of the country in
which each of the Banks' principal office or actual lending office is located.
-8-
<PAGE>
(b) (i) If any taxes (other than taxes on net income (A)
imposed by the country or any subdivision of the country in which each
of the Banks' principal office or actual lending office is located and
(B) measured by the United States taxable income the Banks would have
received if all payments under or in respect of this Guaranty were
exempt from taxes levied by Guarantor's country), are at any time
imposed on any payments under or in respect of this Guaranty
including, but not limited to, payments made pursuant to this Section
18, Guarantor shall pay all such taxes and shall also pay to the
Banks, on demand, all additional amounts which the Banks specify as
necessary to preserve the after-tax yield the Banks would have
received if such taxes had not been imposed.
(ii) The additional amounts necessary to preserve the after-
tax yield the Banks would have received if such taxes had not been
imposed shall be calculated pursuant to the formula:
y = (w) (t) (i)
------------------
l-w-t
where the terms are defined as follows:
y = additional payment to be made to the Banks
w = withholding tax rate levied by foreign government
t = Banks' combined U.S. Federal and state tax rate
i = stated interest to be paid on Indebtedness (dollar amount calculated
with reference to base rate plus quoted spread)
1 = one
(c) Guarantor will provide Banks with original tax receipts,
notarized copies of tax receipts, or such other documentation as will prove
payment of tax in a court of law applying the United States Federal Rules of
Evidence, for all taxes paid by Guarantor pursuant to subparagraph (b) above.
Guarantor will deliver receipts to the Banks within 30 days after the due date
for the related tax.
SECTION 19. Currency Conversion. If any sum due from the Guarantor
-------------------
under this Guaranty or in connection herewith or any order or judgment given or
made in relation hereto has to be converted from the currency (the "first
currency") in which the same is payable hereunder or under such order or
judgment into another currency (the "second currency") for the purpose of (a)
making or filing a claim of proof against the Guarantor with any
-9-
<PAGE>
governmental authority or in any court or tribunal; (b) obtaining an order or
judgment in any court or other tribunal; (c) enforcing any order or judgment
given or made in relation hereto, the equivalent of such first currency amount
in any second currency shall be calculated based on the spot rate for the
purchase of the first currency with the second currency quoted by Bank of
America National Trust and Savings Association in San Francisco, California at
approximately 8:00 a.m. on the date for such determination. The Guarantor shall
indemnify and hold harmless each of the Persons to whom such sum is due from and
against any loss suffered as a result of any discrepancy between (i) the rate of
exchange used for such purpose to convert the sum in question from the first
currency into the second currency and (ii) the rate or rates of exchange at
which such Person may in the ordinary course of business purchase the first
currency with the second currency upon receipt of a sum paid to it in
satisfaction, in whole or in part, of any such order, judgment, claim or proof.
The foregoing indemnity shall constitute a separate obligation of the Guarantor
distinct from its other obligations hereunder and shall survive the giving or
making of any judgment or order in relation to all or any of such other
obligations.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
WILLBROS GROUP, INC.
By:____________________________
Name:_______________________
Title:______________________
With a copy to: Address:
- -------------- -------
John N. Hove, Esq. Edificio Plaza Bancomer
2431 E. 61st St. Calle 50, Apartado 6307
Suite 700 Panama 5, Republic of Panama
Tulsa, Oklahoma 74136 Attention: Dr. Fernando Cardoze
U.S.A. Telex: 2120
Telecopier: 918/748-7026 Answerback: ARIFA PA
Telecopier: 011-507-63-8919
<PAGE>
EXHIBIT H
---------
___________________________________________________________________
___________________________________________________________________
[FORM]
GUARANTY AGREEMENT
BY
[WILLBROS INTERNATIONAL, INC.]
[WILLBROS USA, INC.]
[WILLBROS ENGINEERING & CONSTRUCTION LIMITED]
IN FAVOR OF
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
As Agent
___________________________________________________________________
___________________________________________________________________
Dated as of ____________________, 19__
<PAGE>
EXHIBIT H
GUARANTY AGREEMENT
This Guaranty Agreement (this "Guaranty") is made as of the _____ day of
_______________, 19__, among [NAME OF DESIGNATED SUBSIDIARY], a _______________
(the "Corporation"), and [WILLBROS INTERNATIONAL, INC.] [WILLBROS USA, INC.]
[WILLBROS ENGINEERING & CONSTRUCTION LIMITED] (the "Guarantor"), in favor of
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent (the "Agent"),
for its benefit and for the ratable benefit of the several financial
institutions (the "Banks") party to the Credit Agreement (as defined below).
WHEREAS, by a Credit Agreement, dated as of September 16, 1993 (such Credit
Agreement, as it may hereafter be amended, restated, supplemented or otherwise
modified from time to time being hereinafter referred to as the "Credit
Agreement"), among Willbros Group, Inc., the Guarantor [Willbros USA, Inc.,]
[Willbros International, Inc.,] [Willbros Engineering & Construction Limited,]
the Designated Subsidiaries of the Guarantor, the Agent and the Banks, the Banks
agreed, inter alia, to make Loans to, and to issue or participate in Letters of
-----------
Credit on behalf of, the Designated Subsidiaries of the Guarantor;
WHEREAS, the Corporation desires to be one of the Designated Subsidiaries
under the Credit Agreement who may request Loans or Letters of Credit thereunder
from the Banks;
WHEREAS, the Guarantor is [a direct] [an indirect] parent of the Designated
Subsidiary and will derive substantial benefit from the extension of credit to
the Designated Subsidiary;
WHEREAS, the Guarantor proposes to designate the Corporation as a
Designated Subsidiary under the Credit Agreement and to guarantee the
obligations of the Corporation under the Credit Agreement and the other Loan
Documents;
NOW, THEREFORE, IT IS HEREBY AGREED by the parties hereto, in consideration
of the terms, covenants and conditions hereinafter set forth, as follows:
SECTION 1. Definitions.
-----------
Terms defined in the Credit Agreement shall, unless otherwise defined
herein, bear the same meaning herein.
<PAGE>
SECTION 2. Designation of Subsidiary.
-------------------------
(a) The Guarantor hereby names and designates the Corporation to act
as a "Designated Subsidiary" under the Credit Agreement with all of the rights
and obligations of a Designated Subsidiary thereunder.
(b) The Corporation confirms that it has received a copy of the
Credit Agreement and such other documents and agreements as it has required in
connection herewith.
(c) The Corporation hereby undertakes with the Guarantor and each of
the parties to the Credit Agreement that it will perform in accordance with its
terms all those obligations which by the terms of the Credit Agreement are
required to be performed by itself as a Designated Subsidiary thereunder and
agrees to abide by all of the terms, covenants, conditions and obligations
applicable to itself as a Designated Subsidiary under the Credit Agreement.
(d) The Corporation agrees that the Agent and the Banks have the same
rights against the Corporation as a Designated Subsidiary under the Credit
Agreement that they would have had if the Corporation had been an original party
and signatory thereto.
(e) The Guarantor confirms that it has obtained the consent of each
of the Banks to the designation of the Corporation as a "Designated Subsidiary"
under the Credit Agreement.
SECTION 3. Conditions Precedent to Requesting Loans or Letters of Credit.
-------------------------------------------------------------
The Corporation may not request a Loan or Letter of Credit under the Credit
Agreement unless the Agent has confirmed to the Corporation that it has received
all of the documents listed in Section 6.03 of the Credit Agreement and that
each is, in form and substance, satisfactory to the Agent and the Banks.
SECTION 4. Representations and Warranties of the Corporation.
-------------------------------------------------
In order to induce the Banks to agree to include the Corporation as a
Designated Subsidiary under the Credit Agreement, the Corporation represents and
warrants to the Agent and each Bank that:
(a) The Corporation is duly organized, validly existing and in good
standing or its equivalent under the laws of the jurisdiction of its
organization, has the power to own its assets
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<PAGE>
and to transact the business in which it is now engaged and is duly qualified as
a foreign organization and in good standing or its equivalent under the laws of
each jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification except for failures to be so qualified,
authorized or licensed that would not in the aggregate be likely to have a
material adverse effect on the business, operations, assets or financial
condition of the Corporation;
(b) The Corporation has the power, authority and legal right to
execute, deliver and perform this Agreement and to perform its obligations under
(including, without limitation, to borrow Loans or apply for Letters of Credit
pursuant to the terms of) the Credit Agreement and each document, instrument or
obligation required of it hereunder or thereunder and has taken all necessary
action to authorize its borrowings of Loans or applications for Letters of
Credit on the terms and conditions thereof and its execution, delivery and
performance of this Agreement, the other Loan Documents and each instrument or
obligation required of it hereunder or thereunder; no consent of any other
person including, without limitation, its creditors, and no license, permit,
approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any Governmental Authority is required
by it in connection with the borrowing of Loans or applications for Letters of
Credit under the Credit Agreement or the other Loan Documents and each
instrument required of it thereunder or the execution, delivery, performance,
validity or enforceability of this Agreement or, if required, such consent,
license, permit, approval, authorization or exemption has been received and such
notice, report, registration, filing or declaration has been made, as the case
may be;
(c) The execution, delivery and performance by the Corporation of
this Agreement and the performance of its obligations under the Credit Agreement
do not contravene its charter (or other organizational documents) or any
indenture, agreement or instrument to which it is a party or by which any of its
assets or properties may be bound or affected and this Agreement has been, and
each agreement, instrument or document required of it under the Credit Agreement
will be, executed and delivered by its duly authorized representative;
(d) This Agreement constitutes the legal, valid and binding
obligation of the Corporation enforceable against the Corporation in accordance
with its terms, except to the extent limited by bankruptcy, reorganization,
insolvency, moratorium or other similar laws of general application relating to
or affecting
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<PAGE>
the enforcement of creditors' rights or by general equitable principles
regardless whether enforcement is in a proceeding under law or equity;
(e) All information and other data furnished by or on behalf of the
Corporation to the Agents and the Banks in connection herewith are, in all
material respects, accurate and correct;
(f) The Corporation has all material rights, permits, privileges,
franchises, licenses, certifications and accreditations required for the conduct
of its businesses;
(g) The Corporation is not in default in the performance, observance
or fulfillment of any obligations, covenants or conditions in any agreement or
instrument to which it is a party which would materially adversely affect its
ability to perform its obligations under the Loan Documents;
(h) The Corporation is not an "investment company" or a company
"controlled" by an investment company within the meaning of the Investment
Company Act of 1940, as amended;
(i) No part of the proceeds of any Loan will be used in a manner
which would violate, or result in the violation of Regulations G, T, U or X of
the Board of Governors of the Federal Reserve System; the Corporation is not
principally engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System); and
(j) [Such other representations and warranties applicable to the
Corporation as the Agent may reasonably request.]
SECTION 5. Guaranty from the Guarantor.
---------------------------
(a) In order to induce the Banks to agree to include the Corporation
as a Designated Subsidiary under the Credit Agreement, the Guarantor, having
financial interest in the Corporation, hereby unconditionally and irrevocably
guarantees (as primary obligor and not merely as surety) the prompt payment in
full in U.S. dollars by the Corporation when due (whether at stated maturity, by
acceleration or otherwise) any and every Obligation which the Corporation may
be liable to pay under or pursuant to the Credit Agreement and the Guarantor
further agrees to pay all reasonable costs, fees and expenses (including,
without limitation, reasonable counsel fees, including, without limitation, the
allocated cost of in-house
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<PAGE>
counsel) incurred by the Agent or any Bank in enforcing any rights under this
Guaranty.
(b) The obligations of the Guarantor hereunder are those of a primary
obligor, and not merely a surety, and are independent of the Obligations. A
separate action or actions may be brought against the Guarantor whether or not
an action is brought against the Borrowers, any other guarantor or other obligor
in respect of the Obligations or whether the Borrowers, any other guarantor or
any other obligor in respect of the Obligations are joined in any such action or
actions.
(c) The Guarantor guarantees that the Obligations will be paid and
performed strictly in accordance with the terms of the Credit Agreement and the
other Loan Documents regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the
Agent or the Banks with respect thereto. Guarantor agrees that its guarantee
constitutes a guarantee of payment when due and not of collection. The
liability of the Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
(i) any lack of genuineness, validity, legality or
enforceability of the Credit Agreement any other Loan Document or any
other document, agreement or instrument relating thereto or any
assignment or transfer of any thereof;
(ii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligations (including,
without limitation, the possible extension of the Commitment
Termination Date and increase of the amount of the Commitments all on
the terms and conditions set forth in the Credit Agreement), or any
waiver, indulgence, compromise, renewal, extension, amendment,
modification of, or addition, consent, supplement to, or consent to
departure from, or any other action or inaction under or in respect
of, the Credit Agreement or any other Loan Document or any document,
instrument or agreement relating to the Obligations or any other
instrument or agreement referred to therein or any assignment or
transfer of any thereof;
(iii) any release or partial release of any other guarantor
or other obligor in respect of the Obligations;
-5-
<PAGE>
(iv) any exchange, release or non-perfection of any
collateral for all or any of the Obligations, or any release, or
amendment or waiver of, or consent to departure from, any guaranty or
security, for all or any of the Obligations;
(v) any furnishing of any additional security for any of
the Obligations;
(vi) the liquidation, bankruptcy, insolvency or
reorganization of the Borrowers, any other guarantor or other obligor
in respect of the Obligations or any action taken with respect to this
Guaranty by any trustee or receiver, or by any court, in any such
proceeding;
(vii) any modification or termination of any intercreditor or
subordination agreement pursuant to which the claims of other
creditors of the Borrowers or the Guarantor are subordinated to those
of the Banks; or
(viii) any other circumstance which might otherwise constitute
a defense available to, or a legal or equitable discharge of, the
Guarantor.
(d) This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time payment or performance of the Obligations, or
any part thereof, is, upon the insolvency, bankruptcy or reorganization of the
Borrowers or the Guarantor or otherwise pursuant to applicable law, rescinded or
reduced in amount or must otherwise be restored or returned by the Agent or any
Bank, all as though such payment or performance had not been made.
(e) If an event permitting the acceleration of any of the Obligations
shall at any time have occurred and be continuing and such acceleration shall at
such time be prevented by reason of the pendency against the Borrowers of a case
or proceeding under any bankruptcy or insolvency law, the Guarantor agrees that,
for purposes of this Guaranty and its obligations hereunder, the Obligations
shall be deemed to have been accelerated and the Guarantor shall forthwith pay
such Obligations (including, without limitation, interest which but for the
filing of a petition in bankruptcy with respect to the Borrowers, would accrue
on such Obligations), and the other obligations hereunder, without any further
notice or demand.
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<PAGE>
SECTION 6. Waivers.
-------
The Guarantor hereby waives promptness, diligence, notice of acceptance and
any and all other notices with respect to any of the Obligations and this
Guaranty and any requirement that the Agent or any Bank protect, secure, perfect
or insure any security interest in or any Lien on any property subject thereto
or exhaust any right or take any action against the Borrowers, any other
guarantor or any other Person or any collateral or security or to any balance of
any deposit accounts or credit on the books of any Bank in favor of the
Borrowers or the Guarantor.
SECTION 7. Subrogation.
-----------
(a) The Guarantor expressly waives any and all rights of subrogation,
reimbursement and contribution (contractual, statutory or otherwise), against
the Agent and the Banks, individually and collectively, including without
limitation, any claim or right of subrogation under the Bankruptcy Code (Title
11 of the U.S. Code) or any successor statute, arising from the existence or
performance of this Guaranty and the Guarantor irrevocably waives any right to
enforce any remedy which the Agent and the Banks, or any one or more of them now
have or may hereafter have against the Borrowers, and waives any benefit of, and
any right to participate in, any security now or hereafter held by the Agent and
the Banks or any one of them.
(b) If, in the exercise of any of its rights and remedies, the Agent
or any Bank shall forfeit any of its rights or remedies, including its right to
enter a deficiency judgment against the Borrowers or any other Person, whether
because of any applicable laws pertaining to "election of remedies" or the like,
the Guarantor hereby consents to such action by the Agent or such Bank and
waives any claim based upon such action, even if such action by the Agent or
such Bank shall result in a full or partial loss of any rights of subrogation
which the Guarantor might otherwise have had but for such action by the Agent or
such Bank. Any election of remedies which results in the denial or impairment
of the right of the Agent or such Bank to seek a deficiency judgment against the
Borrowers shall not impair the Guarantor's obligation to pay the full amount of
the Obligations. In the event the Agent or any Bank shall bid at any
foreclosure or trustee's sale or at any private sale permitted by law or under
the Loan Documents, the Agent or such Bank may bid all or less than the amount
of the Obligations and the amount of such bid need not be
-7-
<PAGE>
paid by the Agent or such Bank but shall be credited against the Obligations.
The amount of the successful bid at any such sale, whether the Agent or such
Bank or any other party is the successful bidder, shall be conclusively deemed
to be the fair market value of the Collateral and the difference between such
bid amount and the remaining balance of the Obligations shall be conclusively
deemed to be the amount of the Obligations guaranteed under this Guaranty,
notwithstanding that any present or future law or court decision or ruling may
have the effect of reducing the amount of any deficiency claim to which the
Agent or any Bank might otherwise be entitled but for such bidding at any such
sale.
SECTION 8. Further Assurances; Representations and Warranties.
--------------------------------------------------
(a) The Guarantor agrees that at any time and from time to time, at
the expense of the Guarantor, the Guarantor will promptly execute and deliver
all further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Agent may reasonably request, to enable the
Agent to protect and to exercise and enforce its rights and remedies hereunder.
(b) All representations and warranties including as to due
authorization and enforceability of this Guaranty set forth in the Credit
Agreement are incorporated herein by reference and shall have the same effect as
if fully stated herein. [In addition, the Guarantor hereby represents and
warrants that it has obtained all shareholder approval required to execute this
Guaranty.]/*/
SECTION 9. Application of Payments.
-----------------------
Any payment received by the Agent from the Guarantor (or from any Bank
pursuant to Section 14 below) shall be applied by the Agent as follows:
First, to the payment of the costs and expenses of collection and all
expenses (including, without limitation, any legal fees and disbursements and
the allocated cost of in-house counsel), liabilities and advances made or
incurred by the Agent in connection therewith;
____________________
/*/ Applicable only to WII.
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<PAGE>
Next, to the Banks pro rata, based on the then outstanding amount of the
--------
Obligations owed to each in payment in full of the Obligations; and
Finally, after payment in full of all Obligations and the termination of
the Commitments and expiration of all outstanding Letters of Credit, the payment
to the Guarantor, or its successors or assigns, or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may direct,
of any surplus then remaining from such proceeds.
SECTION 10. Decisions Relating to Exercise of Remedies.
------------------------------------------
Notwithstanding anything in this Guaranty to the contrary, the Agent may
exercise, and at the request of the Majority Banks shall exercise or refrain
from exercising, all rights and remedies provided for herein and provided by
law.
SECTION 11. No Waiver.
---------
No failure on the part of the Agent or any Bank to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
SECTION 12. Amendments, Etc.
---------------
No amendment or waiver of any provision of this Guaranty, nor consent to
any departure by the Guarantor herefrom, shall in any event be effective unless
the same shall be in writing and signed, in the case of amendments, by the
Guarantor and by the Agent and, in the case of consents or waivers, by the
Agent, and then such amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which made or given.
SECTION 13. Notices.
-------
All notices, requests and other communications provided for hereunder shall
be in writing and given as provided in Section 11.02 of the Credit Agreement.
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<PAGE>
SECTION 14. Right of Set-off.
----------------
(a) Upon the occurrence and during the continuance of any Event of
Default under the Credit Agreement, each Bank is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Bank to
or for the credit or the account of the Guarantor against any and all of the
Obligations, irrespective of whether or not such Bank shall have made any demand
under this Guaranty and although such Obligations may be contingent and
unmatured. Each Bank which sets-off pursuant to this Section 14(a) shall give
prompt notice to the Guarantor following the occurrence thereof; provided that
--------
the failure to give such notice shall not affect the validity of the set-off.
(b) Any payment obtained pursuant to Section 14(a) above (or in any
other manner directly from the Guarantor) by any Bank shall be remitted to the
Agent and distributed among the Banks in accordance with the provisions of
Section 9 above.
SECTION 15. Continuing Guaranty.
-------------------
This Guaranty is a continuing guaranty and shall (a) remain in full force
and effect until payment in full (after the termination of the Commitments and
expiration of all outstanding Letters of Credit) of the Obligations and all
other amounts payable under this Guaranty; (b) be binding upon the Guarantor,
its successors and assigns; and (c) inure, together with the rights and remedies
of the Agent hereunder, to the benefit of the Agent, the Banks and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (c), any Bank may assign or otherwise transfer its
rights and obligations under the Credit Agreement to any other Person or entity,
and such other Person or entity shall thereupon become vested with all the
benefits in respect thereof granted to the Bank herein or otherwise, all as
provided in, and to the extent set forth in, Section 11.07 of the Credit
Agreement.
SECTION 16. Subordination of the Borrowers' Obligations to the Guarantor.
------------------------------------------------------------
The Guarantor hereby expressly covenants and agrees for the benefit of the
Agent and the Banks that all obligations and liabilities of the Borrowers and
their Subsidiaries to the Guarantor of whatsoever description (including,
without limitation,
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<PAGE>
all intercompany receivables of the Guarantor from the Borrowers) shall be
subordinated and junior in right of payment to the Obligations. Following the
occurrence of an Event of Default, any indebtedness of the Borrowers to the
Guarantor shall, if the Agent shall so request, be collected and received by the
Guarantor as trustee for the Agent and the Banks and paid over to the Agent and
the Banks on account of the Obligations but without reducing or affecting in any
manner the liability of the Guarantor under this Guaranty.
SECTION 17. Severability.
------------
If for any reason any provision or provisions hereof are determined to be
invalid and contrary to any existing or future law, such invalidity shall not
impair the operation of or affect those portions of this Guaranty which are
valid.
SECTION 18. Waiver of Jury Trial.
--------------------
THE GUARANTOR WAIVES ANY RIGHT IT MAY HAVE TO A JURY TRIAL IN CONNECTION
WITH ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATED IN ANY WAY TO THIS
GUARANTY, THE CREDIT AGREEMENT OR RELATING TO ANY OF THE FOREGOING.
SECTION 19. Governing Law; Jurisdiction.
---------------------------
(a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) Any legal action or proceeding with respect to this Guaranty may
be brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and by execution and delivery of
this Guaranty, the Guarantor hereby consents, for itself and in respect of its
property, to the jurisdiction of the aforesaid courts. The Guarantor hereby
irrevocably waives any objection, including without limitation, any objection to
the laying of venue or based on the grounds of forum non conveniens, which it
--------------------
may now or hereafter have to the bringing of any action or proceeding in such
jurisdiction in respect of this Guaranty or any document related hereto.
(c) The Guarantor hereby irrevocably appoints the General Counsel of
Willbros USA, Inc. (the "Process Agent"), with an office on the date hereof at
2431 East 61st Street, Suite 700, Tulsa, Oklahoma 74136, United States of
America, as its agent to receive on behalf of the Guarantor and its property
service of copies of the summons and complaint and any other process which may
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<PAGE>
be served in any action or proceeding arising out of or relating to this
Guaranty. Such service may be made by mailing or delivering a copy of such
process to the Guarantor in care of the Process Agent at the Process Agent's
above address, and the Guarantor hereby irrevocably authorizes and directs the
Process Agent to accept such service on its behalf. As an alternative method of
service the Guarantor also irrevocably consents to the service of any and all
process in any such action or proceeding by the mailing of copies of such
process to the Guarantor at its address specified on the signature page hereof.
SECTION 20. Taxes.
-----
(a) Guarantor represents and warrants as of the date hereof that all
payments under or in respect of this Guaranty are exempt from tax other than
taxes on net income imposed by the country or any subdivision of the country in
which each of the Banks' principal office or actual lending office is located.
(b) (i) If any taxes (other than taxes on net income (A)
imposed by the country or any subdivision of the country in which each
of the Banks' principal office or actual lending office is located and
(B) measured by the United States taxable income the Banks would have
received if all payments under or in respect of this Guaranty were
exempt from taxes levied by Guarantor's country), are at any time
imposed on any payments under or in respect of this Guaranty
including, but not limited to, payments made pursuant to this Section
20, Guarantor shall pay all such taxes and shall also pay to the
Banks, on demand, all additional amounts which the Banks specify as
necessary to preserve the after-tax yield the Banks would have
received if such taxes had not been imposed.
(ii) The additional amounts necessary to preserve the
after-tax yield the Banks would have received if such taxes had not
been imposed shall be calculated pursuant to the formula:
y = (w) (t) (i)
------------------
l-w-t/
where the terms are defined as follows:
y = additional payment to be made to the Banks
w = withholding tax rate levied by foreign government
t = Banks' combined U.S. Federal and state tax rate
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<PAGE>
i = stated interest to be paid on Indebtedness (dollar amount
calculated with reference to base rate plus quoted spread)
1 = one
(c) Guarantor will provide Banks with original tax receipts,
notarized copies of tax receipts, or such other documentation as will prove
payment of tax in a court of law applying the United States Federal Rules of
Evidence, for all taxes paid by Guarantor pursuant to subparagraph (b) above.
Guarantor will deliver receipts to the Banks within 30 days after the due date
for the related tax .
SECTION 21. Currency Conversion.
-------------------
If any sum due from the Guarantor under this Guaranty or in connection
herewith or any order or judgment given or made in relation hereto has to be
converted from the currency (the "first currency") in which the same is payable
hereunder or under such order or judgment into another currency (the "the second
currency") for the purpose of (a) making or filing a claim of proof against the
Guarantor with any governmental authority or in any court or tribunal; (b)
obtaining an order or judgment in any court or other tribunal; (c) enforcing any
order or judgment given or made in relation hereto, the equivalent of such first
currency amount in any second currency shall be calculated based on the spot
rate for the purchase of the first currency with the second currency quoted by
Bank of America National Trust and Savings Association in San Francisco,
California at approximately 8:00 a.m. on the date for such determination. The
Guarantor shall indemnify and hold harmless each of the Persons to whom such sum
is due from and against any loss suffered as a result of any discrepancy between
(i) the rate of exchange used for such purpose to convert the sum in question
from the first currency into the second currency and (ii) the rate or rates of
exchange at which such Person may in the ordinary course of business purchase
the first currency with the second currency upon receipt of a sum paid to it in
satisfaction, in whole or in part, of any such order, judgment, claim or proof.
The foregoing indemnity shall constitute a separate obligation of the Guarantor
distinct from its other obligations hereunder and shall survive the giving or
making of any judgment or order in relation to all or any of such other
obligations.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
[NAME OF CORPORATION]
By:____________________________
Title:_________________________
Address:
_______________________________
_______________________________
_______________________________
Attn: _________________________
Tel. No.: _____________________
Rapifax: ______________________
Telex: ________________________
[WILLBROS INTERNATIONAL, INC.]
[WILLBROS USA, INC.]
[WILLBROS ENGINEERING &
CONSTRUCTION LIMITED]
By:____________________________
Title:_________________________
Address:
_______________________________
_______________________________
_______________________________
Attn: _________________________
Tel. No.: _____________________
Rapifax: ______________________
Telex: ________________________
*[With a Copy to:
John N. Hove, Esq.
2431 East 61 Street, Suite 700
Tulsa, OK 74136]
_______________________
* Use only when WII or WECL is the Guarantor.
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<PAGE>
EXHIBIT I
---------
___________________________________________________________________
___________________________________________________________________
[FORM]
SUBSIDIARY GUARANTY AGREEMENT
BY
[WILLBROS ENERGY SERVICES COMPANY]
[WILLBROS BUTLER ENGINEERS, INC.]
IN FAVOR OF
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
As Agent
___________________________________________________________________
___________________________________________________________________
Dated as of September 16, 1993
<PAGE>
EXHIBIT I
SUBSIDIARY GUARANTY AGREEMENT
This SUBSIDIARY GUARANTY AGREEMENT (this "Guaranty"), dated as of September
16, 1993, is made by [WILLBROS ENERGY SERVICES COMPANY,] [WILLBROS BUTLER
ENGINEERS, INC.,] a Delaware corporation (the "Guarantor"), in favor of BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as agent (in such capacity, the
"Agent") for its benefit and for the ratable benefit of the financial
institutions (the "Banks") party to the Credit Agreement (as hereinafter
defined).
WHEREAS, Willbros International, Inc., Willbros USA, Inc. and Willbros
Engineering & Construction Limited (the "Borrowers"), Willbros Group, Inc., the
Agent and the Banks are party to a Credit Agreement dated as of September 16,
1993 (such Credit Agreement, as it may hereafter be amended, restated,
supplemented or otherwise modified from time to time, being hereinafter referred
to as the "Credit Agreement");
WHEREAS, pursuant to the terms of the Credit Agreement, the Banks have
agreed to make certain Loans and to issue or participate in Letters of Credit to
or for the benefit of the Borrowers;
WHEREAS, the obligation of the Banks to make the Loans and to issue or
participate in Letters of Credit is conditioned upon, among other things, the
execution and delivery by the Guarantor of this Guaranty;
WHEREAS, the Guarantor is a wholly-owned subsidiary of Willbros USA, Inc.
and the Borrowers are members of the same consolidated group of companies and
are engaged in related businesses and the Guarantor may receive a portion of the
Loans or the benefit of the issuances of the Letters of Credit and will derive
other substantial direct and indirect economic benefit therefrom;
NOW, THEREFORE, in consideration of the premises and to induce the Banks to
enter into the Credit Agreement and to make the Loans and to issue or
participate in the Letters of Credit, the Guarantor hereby agrees with and for
the benefit of the Agent and the Banks as follows:
Section 1. Defined Terms. Unless otherwise defined herein, terms defined
-------------
in the Credit Agreement are used herein as therein defined.
<PAGE>
Section 2. Guaranty. The Guarantor hereby, unconditionally and
--------
irrevocably, guarantees the prompt performance and payment in full in U.S.
dollars by the Borrowers when due (whether at stated maturity, by acceleration
or otherwise) of the Obligations of the Borrowers, and the Guarantor further
agrees to pay all reasonable costs, fees and expenses (including, without
limitation, reasonable counsel fees, and the allocated cost of in-house counsel)
incurred by the Agent or any Bank in enforcing any rights under this Guaranty.
Section 3. Limitation of Guaranty.
----------------------
(a) Anything to the contrary in this Guaranty notwithstanding, the
maximum liability of the Guarantor hereunder (the "Maximum Liability") shall not
at any time exceed the sum of (i) the amount of the economic benefit which the
Guarantor received as a result of the Loans or Letters of Credit plus (ii) the
----
greater of (A) the Adjusted Net Worth (as hereinafter defined) of the Guarantor
at the date the Loans were made or Letters of Credit were issued; or (B) the
Adjusted Net Worth of the Guarantor (determined without giving effect to any
economic benefit received as a result of the Loans or Letters of Credit) at the
earlier of the date of the commencement of a case under Title 11 of the United
States Code involving the Borrowers or the Guarantor and the date enforcement
hereunder is sought; provided, however, that when the Obligations (after giving
-------- -------
effect to any payment by the Guarantor or otherwise) are less than the amount
set forth in clause (ii), this Guaranty in respect of the Loans or Letters of
Credit (but not the other Obligations) shall be limited to the sum of (A) the
amount of the economic benefit received by the Guarantor from the Loans and
Letters of Credit and (B) the greater of (1) the Adjusted Net Worth of the
Guarantor on the date the last Borrowing of Loans were made or Letters of Credit
were issued (determined without giving effect to any economic benefit as a
result thereof) and (2) the Adjusted Net Worth of the Guarantor (determined
without giving effect to any economic benefit received as a result of Loans
theretofore made or Letters of Credit issued) at the earlier of the date of the
commencement of a case under Title 11 of the United States Code involving the
Borrowers or the Guarantor and the date enforcement hereunder is sought. As
used in this Section 3, "Adjusted Net Worth" of the Guarantor means, as of any
date of determination thereof, the difference between (x) the aggregate fair
saleable value of the assets of the Guarantor as of such date (including the
fair saleable value of the amounts received or receivable by the Guarantor
pursuant to its right to contribution pursuant to clause (b) below), and (y) the
amount of all liabilities of the Guarantor, contingent or otherwise, as of such
date (but excluding all
-2-
<PAGE>
contingent liabilities under this Guaranty) minus One dollar ($1.00). Any
-----
payment hereunder by the Guarantor shall reduce pro tanto any intercompany
--- -----
obligation of the Guarantor to the Borrowers.
(b) The Guarantor agrees that the Obligations guaranteed hereunder
may at any time and from time to time exceed the Maximum Liability of the
Guarantor and may exceed the aggregate Maximum Liability of the Guarantor and
the liability of [Willbros Energy Services Company] [Willbros Butler Engineers,
Inc.] under the other Subsidiary Guaranty.
Section 4. Guaranty Absolute.
-----------------
(a) The obligations of the Guarantor hereunder are those of a primary
obligor, and not merely a surety, and are independent of the Obligations. A
separate action or actions may be brought against the Guarantor whether or not
an action is brought against the Borrowers, any other guarantor or other obligor
in respect of the Obligations or whether the Borrowers, any other guarantor or
any other obligor in respect of the Obligations are joined in any such action or
actions.
(b) The Guarantor guarantees that the Obligations will be paid and
performed strictly in accordance with the terms of the Credit Agreement and the
other Loan Documents regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the
Agent or the Banks with respect thereto. Guarantor agrees that its guarantee
constitutes a guarantee of payment when due and not of collection. The liability
of the Guarantor under this Guaranty shall be absolute and unconditional
irrespective of:
(i) any lack of genuineness, validity, legality or
enforceability of the Credit Agreement, any other Loan Document or any
other document, agreement or instrument relating thereto or any
assignment or transfer of any thereof;
(ii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligations (including,
without limitation, the possible extension of the Commitment
Termination Date and increase of the amount of the Commitments all on
the terms and conditions set forth in the Credit Agreement), or any
waiver, indulgence, compromise, renewal, extension, amendment,
modification of, or addition, consent,
-3-
<PAGE>
supplement to, or consent to departure from, or any other action or
inaction under or in respect of, the Credit Agreement or any other
Loan Document or any document, instrument or agreement relating to the
Obligations or any other instrument or agreement referred to therein
or any assignment or transfer of any thereof;
(iii) any release or partial release of any other guarantor
or other obligor in respect of the Obligations;
(iv) any exchange, release or non-perfection of any
collateral for all or any of the Obligations, or any release, or
amendment or waiver of, or consent to departure from, any guaranty or
security, for all or any of the Obligations;
(v) any furnishing of any additional security for any of
the Obligations;
(vi) the liquidation, bankruptcy, insolvency or
reorganization of the Borrowers, any other guarantor or other obligor
in respect of the Obligations or any action taken with respect to this
Guaranty by any trustee or receiver, or by any court, in any such
proceeding;
(vii) any modification or termination of any intercreditor or
subordination agreement pursuant to which the claims of other
creditors of the Borrowers or the Guarantor are subordinated to those
of the Banks; or
(viii) any other circumstance which might otherwise constitute
a defense available to, or a legal or equitable discharge of, the
Guarantor.
(c) This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time payment or performance of the Obligations, or
any part thereof, is, upon the insolvency, bankruptcy or reorganization of the
Borrowers or the Guarantor or otherwise pursuant to applicable law, rescinded or
reduced in amount or must otherwise be restored or returned by the Agent or any
Bank, all as though such payment or performance had not been made.
(d) If an event permitting the acceleration of any of the Obligations
shall at any time have occurred and be continuing and such acceleration shall at
such time be prevented by reason of
-4-
<PAGE>
the pendency against the Borrowers of a case or proceeding under any bankruptcy
or insolvency law, the Guarantor agrees that, for purposes of this Guaranty and
its obligations hereunder, the Obligations shall be deemed to have been
accelerated and the Guarantor shall forthwith pay such Obligations (including,
without limitation, interest which but for the filing of a petition in
bankruptcy with respect to the Borrowers, would accrue on such Obligations), and
the other obligations hereunder, without any further notice or demand.
Section 5. Waivers. To the extent permitted by applicable law, the
-------
Guarantor hereby waives promptness, diligence, notice of acceptance and any and
all other notices with respect to any of the Obligations and this Guaranty and
any requirement that the Agent or any Bank protect, secure, perfect or insure
any security interest in or any Lien on any property subject thereto or exhaust
any right or take any action against the Borrowers, any other guarantor or any
other Person or any collateral or security or to any balance of any deposit
accounts or credit on the books of any Bank in favor of the Borrowers or the
Guarantor.
Section 6. Subrogation.
-----------
(a) The Guarantor expressly waives any and all rights of subrogation,
reimbursement and contribution, contractual statutory or otherwise), against the
Agent and the Banks individually and collectively, including without limitation,
any claim or right of subrogation under the Bankruptcy Code (Title 11 of the
U.S. Code), or any successor statute arising from the existence or performance
of this Guaranty and the Guarantor irrevocably waives any right to enforce any
remedy which the Agent and the Banks or any one or more of them now have or may
hereafter have against the Borrowers and waives the benefit of and any right to
participate in, any security now or hereafter held by the Banks or any one or
more of them.
(b) If, in the exercise of any of its rights and remedies, the Agent
or any Bank shall forfeit any of its rights or remedies, including its right to
enter a deficiency judgment against the Borrowers or any other Person, whether
because of any applicable laws pertaining to "election of remedies" or the like,
the Guarantor hereby consents to such action by the Agent or such Bank and
waives any claim based upon such action, even if such action by the Agent or
such Bank shall result in a full or partial loss of any rights of subrogation
which the Guarantor might
-5-
<PAGE>
otherwise have had but for such action by the Agent or such Bank. Any election
of remedies which results in the denial or impairment of the right of the Agent
or such Bank to seek a deficiency judgment against the Borrowers shall not
impair the Guarantor's obligation to pay the full amount of the Obligations. In
the event the Agent or any Bank shall bid at any foreclosure or trustee's sale
or at any private sale permitted by law or under the Loan Documents, the Agent
or such Bank may bid all or less than the amount of the Obligations and the
amount of such bid need not be paid by the Agent or such Bank but shall be
credited against the Obligations. The amount of the successful bid at any such
sale, whether the Agent or such Bank or any other party is the successful
bidder, shall be conclusively deemed to be the fair market value of the
Collateral and the difference between such bid amount and the remaining balance
of the Obligations shall be conclusively deemed to be the amount of the
Obligations guaranteed under this Guaranty, notwithstanding that any present or
future law or court decision or ruling may have the effect of reducing the
amount of any deficiency claim to which the Agent or any Bank might otherwise be
entitled but for such bidding at any such sale.
Section 7. Representations and Warranties. The Guarantor represents and
------------------------------
warrants to the Agent and the Banks as follows:
(a) The Guarantor (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware; (ii) is
duly qualified as a foreign corporation and in good standing under the laws of
each jurisdiction where qualification or licensing is required by the nature of
its business except where the absence of such qualification has no reasonable
likelihood of having a material adverse effect on the business, properties,
assets or condition (financial or otherwise) of the Guarantor; (iii) has all
requisite corporate power and authority and the legal right to own, pledge,
mortgage and operate its properties, and to conduct its business as now or
currently proposed to be conducted; (iv) is in compliance with its certificate
of incorporation and bylaws; (v) is not in default under any material agreement;
and (vi) is in compliance with all applicable law except if such non-compliance
has no reasonable likelihood of having a material adverse effect on the
business, operations, properties, assets or condition (financial or otherwise)
of the Guarantor or the ability of the Guarantor to perform its obligations
under this Guaranty.
(b) The execution, delivery, and performance by the Guarantor of this
Guaranty (i) are within the Guarantor's corporate powers; (ii) have been duly
authorized by all necessary corporate
-6-
<PAGE>
action; (iii) do not contravene the Guarantor's certificate of incorporation or
bylaws; and (iv) do not result in or require the creation of any Lien upon or
with respect to any of its properties.
(c) No authorization or approval or any other action by, and no
notice to or filing with, any Governmental Authority is required for the due
execution, delivery and performance by the Guarantor of this Guaranty.
(d) This Guaranty is a legal, valid and binding obligation of the
Guarantor enforceable against the Guarantor in accordance with its terms except
as enforcement may be limited by applicable bankruptcy, insolvency or similar
laws relating to creditors' rights generally, as such laws would apply in the
event of bankruptcy, insolvency or other similar occurrence with respect to the
Guarantor.
(e) There is no pending or, to the best knowledge of the Company,
threatened action or proceeding affecting the Guarantor before any Governmental
Authority which has any reasonable likelihood of having a material adverse
effect on the business, operations, properties, assets or condition (financial
or otherwise) of the Guarantor, the Liens created by any Loan Document or the
ability of the Guarantor to perform its obligations under this Guaranty.
(f) The Guarantor is not (i) a party to any contractual obligation
which has any reasonable likelihood of having a material adverse effect on its
business, operations, properties, assets or condition (financial or otherwise)
or the performance of which either unconditionally or upon the happening of an
event, will result in the creation of a Lien on the Guarantor's property or
assets; or (ii) subject to any charter or corporate restriction which has a
reasonable likelihood of having a material adverse effect on its business,
operations, properties, assets or condition (financial or otherwise), the Liens
created by any Loan Document or the ability of the Guarantor to perform its
obligations under this Guaranty.
(g) On the Closing Date, after giving effect to all the transactions
contemplated by the Credit Agreement, including, without limitation, the
incurrence by the Guarantor of liabilities under this Guaranty, (i) the assets
of the Guarantor, at a fair valuation, will exceed its liabilities, including
contingent liabilities, (ii) the remaining capital of the Guarantor will not be
unreasonably small to conduct its business, and (iii) the Guarantor has not
incurred debts, and does not intend to incur
-7-
<PAGE>
debts, beyond its ability to pay such debts as they mature. For purposes of
this Section 7, "debt" means any liability on a claim, and "claim" means (x)
right to payment, whether or not such right is reduced to judgment,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured, or (y) right to an equitable remedy for
breach of performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or unsecured.
The representations and warranties set forth in this Section 7 shall survive the
execution and delivery of this Guaranty.
Section 8. Further Assurances.
------------------
(a) As long as any of the Obligations remain outstanding, the
Commitments have not expired and there are Letters of Credit outstanding, the
Guarantor shall, unless the Majority Banks waive compliance in writing, comply
with all the covenants related to the Guarantor contained in the Credit
Agreement.
(b) The Guarantor agrees that at any time and from time to time, at
the expense of the Guarantor, the Guarantor will promptly execute and delivery
all further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Agent may reasonably request, to enable the
Agent to protect and to exercise and enforce its rights and remedies hereunder.
Section 9. Application of Payments. Any payment received by the Agent
-----------------------
from the Guarantor (or from any Bank pursuant to Section 14 below), shall be
applied by the Agent as follows:
First, to the payment of costs and expenses of collection and all
expenses (including, without limitation, any legal fees and
disbursements and the allocated cost of in-house counsel), liabilities
and advances made or incurred by the Agent in connection therewith;
Next, to the Banks pro rata, based on the then outstanding amount
--- ----
of the Obligations owed to each in payment in full of the Obligations;
and
Finally, after payment in full of all Obligations and the
termination of the Commitments and expiration of
-8-
<PAGE>
all outstanding Letters of Credit, the payment to the Guarantor, or
its successors and assigns, or to whomsoever may be lawfully entitled
to receive the same or as a court of competent jurisdiction may
direct, of any surplus then remaining from such proceeds.
Section 10. Decisions Relating to Exercise of Remedies. Notwithstanding
------------------------------------------
anything in this Guaranty to the contrary, the Agent may exercise, and at the
request of the Majority Banks shall exercise or refrain from exercising, all
rights and remedies provided for herein and provided by law.
Section 11. No Waiver. No failure on the part of the Agent or any Bank to
---------
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 12. Amendments, Etc. No amendment or waiver of any provision of
----------------
this Guaranty, nor consent to any departure by the Guarantor herefrom, shall in
any event be effective unless the same shall be in writing and signed, in the
case of amendments, by the Guarantor and by the Agent and, in the case of
consent or waivers, by the Agent and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which made or given.
Section 13. Notices. All notices, requests and other communications
-------
provided for hereunder shall be in writing and given as provided in Section
11.02 of the Credit Agreement. All communications and notices hereunder to
Guarantor shall be given to the General Counsel of Willbros USA, Inc. at 2431
East 61st Street, Suite 700, Tulsa, Oklahoma 74136, Telex: 79-6660, Answerback:
WILLBRO TUL, Telecopier: (918) 748-7026; or, at such other address as shall be
designated by Guarantor in a written notice to Agent.
Section 14. Right to Set-off.
----------------
(a) Upon the occurrence and during the continuance of any Event of
Default under the Credit Agreement, each Bank is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Bank to
-9-
<PAGE>
or for the credit or the account of the Guarantor against any and all of the
Obligations, irrespective of whether or not such Bank shall have made any demand
under this Guaranty and although such Obligations may be contingent and
unmatured. Each Bank which sets-off pursuant to this Section 14(a) shall give
prompt notice to the Guarantor following the occurrence thereof; provided that
--------
the failure to give such notice shall not affect the validity of the set-off.
(b) Any payment obtained pursuant to Section 14(a) above (or in any
other manner directly from the Guarantor) by any Bank shall be remitted to the
Agent and distributed among the Banks in accordance with the provisions of
Section 9 above.
Section 15. Continuing Guaranty. This Guaranty is a continuing guaranty
-------------------
and shall (a) remain in full force and effect until payment in full (after the
termination of the Commitments and expiration of all outstanding Letters of
Credit) of the Obligations and all other amounts payable under this Guaranty;
(b) be binding upon the Guarantor, its successors and assigns; and (c) inure,
together with the rights and remedies of the Agent hereunder, to the benefit of
the Agent, the Banks and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), any Bank may assign
or otherwise transfer its rights and obligations under the Credit Agreement to
any other Person or entity, and such other Person or entity shall thereupon
become vested with all the benefits in respect thereof granted to the Bank
herein or otherwise, all as provided in, and to the extent set forth in, Section
11.07 of the Credit Agreement.
Section 16. Subordination of the Borrowers' Obligations to the Guarantor.
------------------------------------------------------------
The Guarantor hereby expressly covenants and agrees for the benefit of the Agent
and the Banks that all obligations and liabilities of the Borrowers and their
Subsidiaries to the Guarantor of whatsoever description (including, without
limitation, all intercompany receivables of the Guarantor from the Borrowers)
shall be subordinated and junior in right of payment to the Obligations.
Following the occurrence of an Event of Default, any indebtedness of the
Borrowers to the Guarantor shall, if the Agent shall so request, be collected
and received by the Guarantor as trustee for the Agent and the Banks and paid
over to the Agent and the Banks on account of the Obligations but without
reducing or affecting in any manner the liability of the Guarantor under this
Guaranty.
-10-
<PAGE>
Section 17. Severability. If for any reason any provision or provisions
------------
hereof are determined to be invalid and contrary to any existing or future law,
such invalidity shall not impair the operation of or affect those portions of
this Guaranty which are valid.
Section 18. Waiver of Jury Trial. THE GUARANTOR WAIVES ANY RIGHT IT MAY
--------------------
HAVE TO A JURY TRIAL IN CONNECTION WITH ANY ACTION, SUIT OR PROCEEDING ARISING
OUT OF OR RELATED IN ANY WAY TO THIS GUARANTY, THE CREDIT AGREEMENT OR RELATING
TO ANY OF THE FOREGOING.
Section 19. Governing Law; Jurisdiction.
---------------------------
(a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) Any legal action or proceeding with respect to this Guaranty may
be brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and by execution and delivery of
this Guaranty, the Guarantor hereby consents, for itself and in respect of its
property, to the jurisdiction of the aforesaid courts. The Guarantor hereby
irrevocably waives any objection, including without limitation, any objection to
the laying of venue or based on the grounds of forum non conveniens, which it
--------------------
may now or hereafter have to the bringing of any action or proceeding in such
jurisdiction in respect of this Guaranty or any document related hereto.
Section 20. Taxes.
-----
(a) Guarantor represents and warrants as of the date hereof that all
payments under or in respect of this Guaranty are exempt from tax other than
taxes on net income imposed by the country or any subdivision of the country in
which each of the Banks' principal office or actual lending office is located.
(b) (i) If any taxes (other than taxes on net income (A)
imposed by the country or any subdivision of the country in which each
of the Banks' principal office or actual lending office is located and
(B) measured by the United States taxable income the Banks would have
received if all payments under or in respect of this Guaranty were
exempt from taxes levied by Guarantor's country), are at any time
imposed on any payments under or in respect of this Guaranty
including, but not limited to, payments made pursuant to this Section
20, Guarantor shall pay all such taxes and shall also pay to the
Banks,
-11-
<PAGE>
on demand, all additional amounts which the Banks specify as necessary
to preserve the after-tax yield the Banks would have received if such
taxes had not been imposed.
(ii) The additional amounts necessary to preserve the
after-tax yield the Banks would have received if such taxes had not
been imposed shall be calculated pursuant to the formula:
y = (w) (t) (i)
------------------
l-w-t
where the terms are defined as follows:
y = additional payment to be made to the Banks
w = withholding tax rate levied by foreign government
t = Banks' combined U.S. Federal and state tax rate
i = stated interest to be paid on Indebtedness (dollar amount calculated
with reference to base rate plus quoted spread)
1 = one
(c) Guarantor will provide Banks with original tax receipts,
notarized copies of tax receipts, or such other documentation as will prove
payment of tax in a court of law applying the United States Federal Rules of
Evidence, for all taxes paid by Guarantor pursuant to subparagraph (b) above.
Guarantor will deliver receipts to the Banks within 30 days after the due date
for the related tax.
[Section 21. Currency Conversion. If any sum due from the Guarantor under
-------------------
this Guaranty or in connection herewith or any order or judgment given or made
in relation hereto has to be converted from the currency (the "first currency")
in which the same is payable hereunder or under such order or judgment into
another currency (the "second currency") for the purpose of (a) making or filing
a claim of proof against the Guarantor with any governmental authority or in any
court or tribunal; (b) obtaining an order or judgment in any court or other
tribunal; (c) enforcing any order or judgment given or made in relation hereto,
the Guarantor shall indemnify and hold harmless each of the Persons to whom such
sum is due from and against any loss suffered as a result of any discrepancy
between (i) the rate of exchange used for such purpose to convert the sum in
question from the first currency into the second currency and (ii) the rate or
rates of exchange at which such Person may in the ordinary course of business
purchase the first currency with the second currency upon receipt of a sum paid
to it in satisfaction, in whole or in part, of any such order,
-12-
<PAGE>
judgment, claim or proof. The foregoing indemnity shall constitute a separate
obligation of the Guarantor distinct from its other obligations hereunder and
shall survive the giving or making of any judgment or order in relation to all
or any of such other obligations.]
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
[WILLBROS ENERGY SERVICES COMPANY]
[WILLBROS BUTLER ENGINEERS, INC.]
By:____________________________
Name:
Title:
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<PAGE>
EXHIBIT J-1
________________________________________________________________________________
________________________________________________________________________________
[FORM]
PARENT PLEDGE AGREEMENT
BY
WILLBROS GROUP, INC.
IN FAVOR OF
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS AGENT
________________________________________________________________________________
________________________________________________________________________________
Dated As Of September 16, 1993
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. Pledge.......................................... 1
SECTION 2. Security for Obligations........................ 2
SECTION 3. Delivery of Pledged Collateral.................. 3
SECTION 4. Representations, Warranties and Covenants....... 3
SECTION 5. Further Assurances.............................. 6
SECTION 6. Voting Rights; Dividends; Etc................... 7
SECTION 7. Agent Appointed Attorney-in-Fact................ 9
SECTION 8. Agent May Perform............................... 9
SECTION 9. No Responsibility for Certain Actions........... 9
SECTION 10. Remedies upon Default.......................... 9
SECTION 11. Expenses....................................... 12
SECTION 12. Amendments, Etc................................ 12
SECTION 13. Address for Notices............................ 12
SECTION 14. Continuing Security Interest................... 12
SECTION 15. Security Interest Absolute..................... 13
SECTION 16. Use of Copies.................................. 14
SECTION 17. Right of Set-off............................... 14
SECTION 18. Severability................................... 14
SECTION 19. Waiver of Jury Trial........................... 14
SECTION 20. Governing Law; Jurisdiction.................... 15
SECTION 21. Counterparts................................... 16
SECTION 22. Waiver of Subrogation.......................... 16
SECTION 23. Subordination.................................. 16
</TABLE>
Schedule I Schedule of Pledged Shares
Schedule II Stock Assignment Separate From Certificate
Schedule III Pledge Agreement Supplement
-i-
<PAGE>
Schedule IV Schedule of UCC Filings
-ii-
<PAGE>
PARENT PLEDGE AGREEMENT
This PARENT PLEDGE AGREEMENT (this "Agreement"), dated as of September 16,
1993, is made by WILLBROS GROUP, INC., a Republic of Panama corporation (the
"Company"), in favor of BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as agent (in such capacity, the "Agent"), for its benefit and for the ratable
benefit of the financial institutions (the "Banks") from time to time a party to
the Credit Agreement (as hereinafter defined).
Willbros International, Inc., a Republic of Panama corporation ("WII"),
Willbros USA, Inc., a Delaware corporation ("WUSA"), Willbros Engineering &
Construction Limited, an Ontario, Canada, corporation ("WECL"), the Designated
Subsidiaries (as defined in the Credit Agreement) (WII, WUSA, WECL and the
Designated Subsidiaries are collectively referred to as the "Borrowers"), the
Company, the Agent and the Banks are party to a Credit Agreement of even date
herewith (such Credit Agreement, as it may hereafter be amended, restated,
supplemented or otherwise modified from time to time, being hereinafter referred
to as the "Credit Agreement"; unless otherwise defined herein, terms defined in
the Credit Agreement are used herein as therein defined);
Pursuant to the terms of the Credit Agreement, the Banks have agreed to
make available to the Borrowers a revolving credit facility and a standby and
commercial letter of credit facility;
The Company is a direct or indirect parent of all of the Borrowers and a
guarantor of the Obligations, and the Company will derive substantial benefit
from the extension of credit to the Borrowers by the Banks under the Credit
Agreement;
The obligation of the Banks to make the Loans and to issue or participate
in the Letters of Credit is conditioned upon, among other things, the execution
and delivery by the Company of this Agreement;
In consideration of the premises and in order to induce the Banks to enter
into the Credit Agreement and make the Loans and issue or participate in the
Letters of Credit, the Company hereby agrees with the Agent, for its benefit and
for the ratable benefit of the Banks (the Agent and the Banks being hereinafter
collectively referred to as the "Secured Parties"), as follows:
SECTION 1. Pledge. The Company hereby transfers, grants, bargains, sells,
------
conveys, hypothecates, sets over, delivers and pledges to the Agent, for the
benefit of the Secured Parties, and
-1-
<PAGE>
grants to the Agent, for the benefit of the Secured Parties, a security interest
in the following (the "Pledged Collateral"):
(a) all shares described in SCHEDULE I attached hereto (collectively,
----------
the "Pledged Shares");
(b) all shares of capital stock acquired, received or owned by the
Company of any Person, other than Vintondale Corporation N.V., a Netherlands
Antilles corporation, who, after the date of this Agreement, becomes, as a
result of any occurrence, a direct Subsidiary of the Company;
(c) the certificates representing the Pledged Shares;
(d) all cash and stock dividends, cash, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged Shares or
the shares acquired, received or owned under Section 1(b) above; and
(e) all proceeds of any or all of the foregoing.
TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto Agent, its successors and assigns, for the benefit of the Secured Parties,
forever; subject, however, to the terms, covenants and conditions set forth
herein.
SECTION 2. Security for Obligations. This Agreement secures, and the
------------------------
Pledged Collateral is security for, the prompt performance and payment in full
in cash when due, whether at stated maturity, by acceleration or otherwise of
the following (the "Secured Obligations"):
(a) all Obligations; and
(b) all obligations, now existing or hereafter arising, of the
Company under the Parent Guaranty executed by the Company; and
(c) all obligations, now existing or hereafter arising, of the
Company under this Agreement.
The Parent Guaranty executed by the Company guarantees, among other things,
the prompt performance and payment in full of the Obligations. The Obligations
include, among other things, (i) a revolving credit facility under which funds
may be advanced by the Banks, repaid and subsequently readvanced by the Banks,
and (ii) a
-2-
<PAGE>
standby and commercial letter of credit facility under which Letters of Credit
may from time to time be issued. Notwithstanding that the balance of the
revolving line of credit may at certain times be zero and that no Letters of
Credit may at certain times be outstanding, the Liens granted hereunder to the
Agent shall remain in full force and effect at all times and with the same
priority until the payment in full in cash of the Secured Obligations, the
termination of the Commitments and the expiration or termination of all
outstanding Letters of Credit.
SECTION 3. Delivery of Pledged Collateral. All certificates or
------------------------------
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of the Agent pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Agent. The Agent shall have the right, at any time in its
discretion and without notice to the Company, to transfer to or to register in
its name or any of its nominees any or all of the Pledged Collateral, subject
only to the revocable rights specified in Section 6(a) below. In addition, the
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Pledged Collateral for certificates or instruments of
smaller or larger denominations.
SECTION 4. Representations, Warranties and Covenants. The Company
-----------------------------------------
represents, warrants and covenants as follows:
(a) The Company (i) is a corporation duly organized, validly existing
and in good standing under the laws of the Republic of Panama; (ii) is not
qualified as a foreign corporation under the laws of any jurisdiction, and there
is no jurisdiction in which qualification or licensing is required by the nature
of its business and where the absence of such qualification has a reasonable
likelihood of having a material adverse effect on its business, properties,
assets or condition (financial or otherwise); (iii) has all requisite corporate
power and authority and the legal right to own, pledge, mortgage and operate its
properties, and to conduct its business as now or currently proposed to be
conducted; (iv) is in compliance with its certificate or articles of
incorporation and by-laws; (v) is not in default under any material agreement
such that there is a reasonable likelihood of such default having a material
adverse effect on its business, properties, assets or condition (financial or
otherwise); and (vi) is in compliance with all applicable law except if such
non-compliance has no reasonable likelihood of having a material adverse effect
on its business, operations, properties, assets or
-3-
<PAGE>
condition (financial or otherwise) or its ability to perform its obligations
under this Agreement.
(b) The execution, delivery, and performance by the Company of this
Agreement (i) are within the Company's corporate power; (ii) have been duly
authorized by all necessary corporate action; (iii) do not contravene the
Company's certificate or articles of incorporation or by-laws; and (iv) do not
result in or require the creation of any Lien upon or with respect to any of its
properties.
(c) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority is required for the due execution,
delivery and performance by the Company of this Agreement.
(d) This Agreement is a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency or similar laws
relating to creditors' rights generally, as such laws would apply in the event
of bankruptcy, insolvency or other similar occurrence with respect to the
Company.
(e) There is no pending or, to the best knowledge of the Company,
threatened action or proceeding affecting the Company before any Governmental
Authority which has any reasonable likelihood of having a material adverse
effect on the business, operations, properties, assets or condition (financial
or otherwise) of the Company, the Liens created by any Loan Document or the
ability of the Company to perform its obligations under this Agreement.
(f) The Company is not (i) a party to any contractual obligation the
performance of which either unconditionally or upon the happening of an event,
will result in the creation of a Lien on the Company's property or assets (other
than in favor of the Secured Parties); or (ii) subject to any charter or
corporate restriction which has a reasonable likelihood of having a material
adverse effect on its business, operations, properties, assets or condition
(financial or otherwise), the Liens created by any Loan Document or the ability
of the Company to perform its obligations under this Agreement.
(g) The representations and warranties made by the Company and the
Borrowers in Article V of the Credit Agreement concerning the Company are true
and correct.
-4-
<PAGE>
(h) The Pledged Shares constitute all of the authorized, issued and
outstanding shares of capital stock of the companies listed on SCHEDULE I hereto
----------
(the "Pledged Stock Companies"). The Company is the sole legal and equitable
owner and holder of record of the Pledged Shares free and clear of all Liens, or
rights or interests of any other Person, of every kind and nature except for the
Lien created by this Agreement. The shares of stock described in the first
sentence of this paragraph are duly authorized, validly issued, fully paid and
non-assessable, and none of such shares has been issued or transferred in
violation of the securities registration, securities disclosure or similar laws
of any jurisdiction to which such issuance or transfer may be subject. There are
no options, warrants, calls or commitments of any character relating to the
Pledged Shares, nor are there any rights of first refusal, voting trusts, voting
agreements or similar agreements relating to the Pledged Shares. The pledge,
assignment and delivery of the Pledged Collateral pursuant to this Agreement
will create a valid first priority lien on and a first priority perfected
security interest in the Pledged Collateral and the proceeds thereof.
Appropriate financing statements will be filed in favor of the Agent in the
jurisdictions set forth in SCHEDULE IV attached hereto.
-----------
(i) When additional Pledged Collateral is delivered to the Agent in
accordance with Section 1 hereof, the Company will be the legal and equitable
owner of such Pledged Collateral free and clear of all Liens, or rights or
interests of any other Person, of every kind and nature including any state or
federal tax liens, except for the Lien created by this Agreement; each share of
stock comprising such Pledged Collateral will have been duly authorized, validly
issued and be fully paid and non-assessable; and the Company will have legal
title to such Pledged Collateral and power to pledge, assign and deliver such
Pledged Collateral in the manner hereby contemplated.
(j) The Company agrees that it will (i) cause each issuer of shares
of stock comprising Pledged Collateral not to issue any stock or other
securities in addition to or in substitution for the shares of stock comprising
Pledged Collateral issued by such issuer, except to the Company, (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof,
any and all additional shares of stock or other securities of each issuer of
Pledged Collateral, and (iii) pledge hereunder, immediately upon its acquisition
(directly or indirectly) thereof, any and all shares of stock covered by Section
1(b) above.
-5-
<PAGE>
(k) Without the prior written consent of the Agent having been first
obtained, the Company (i) shall not sell, assign, transfer, pledge, mortgage,
hypothecate, dispose of or encumber, or grant any option or warrant with respect
to, any of its rights in or to the Pledged Collateral or any portion thereof,
except for the pledge thereof provided for in this Agreement; and (ii) shall not
permit any issuer of shares of stock comprising Pledged Collateral to terminate
its corporate existence, to be a party to any merger or consolidation, or to
sell, lease or dispose of all or substantially all of its assets and properties
in a single transaction or series of related transactions, except as permitted
by the Credit Agreement.
(l) The Company has and will defend the title to the Pledged
Collateral and the Liens created hereby against the claim of any Person and will
maintain and preserve such Liens until the termination of this Agreement.
SECTION 5. Further Assurances.
------------------
(a) The Company agrees that, at any time and from time to time, at
the expense of the Company, the Company will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Agent may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted
hereby or to enable the Agent to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.
(b) The Company further agrees that it will, upon obtaining any
additional shares of any issuer of the Pledged Collateral or shares covered by
Section 1(b) above or any other securities constituting Pledged Collateral,
promptly (and in any event within three (3) Business Days) deliver to the Agent
(i) such shares, (ii) a duly executed but blank stock power in the form of
SCHEDULE II attached hereto for each certificate representing such additional
- -----------
Pledged Collateral, and (iii) a duly executed Pledge Agreement Supplement in
substantially the form of SCHEDULE III attached hereto (a "Pledge Agreement
------------
Supplement") identifying the additional shares which are pledged pursuant to
Section 1(b) of this Agreement. The Company hereby authorizes the Agent to
attach each Pledge Agreement Supplement to this Agreement and agrees that all
shares listed on any Pledge Agreement Supplement delivered to the Agent shall
for all purposes hereunder constitute Pledged Collateral.
-6-
<PAGE>
SECTION 6. Voting Rights; Dividends; Etc.
-----------------------------
(a) So long as no Event of Default shall have occurred and be
continuing (and, in the case of clause (i) below, so long as written notice has
not been given by the Agent to the Company):
(i) The Company shall be entitled to exercise any and all
voting and/or other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose consistent with the
terms of this Agreement or the Credit Agreement; provided, however,
that the Company shall not exercise or refrain from exercising any
such right if, in the Agent's reasonable judgment, such action would
have a material adverse effect on the value of the Pledged Collateral
or any part thereof.
(ii) The Company shall be entitled to receive and retain any
and all dividends paid in respect of the Pledged Collateral, other
than any and all
(A) dividends paid or payable other than in cash in
respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in
exchange for, any Pledged Collateral,
(B) dividends and other distributions paid or payable
in cash in respect of any Pledged Collateral in connection
with a partial or total liquidation or dissolution or in
connection with a return of capital, capital surplus or
paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Collateral,
all of which shall be, and all of which shall be forthwith delivered
to the Agent to hold as, Pledged Collateral and shall, if received by
the Company, be received in trust for the benefit of the Agent, be
segregated from the other property or funds of the Company, and be
forthwith delivered to the Agent as Pledged Collateral in the same
form as so received (with any necessary endorsement).
(iii) The Agent shall execute and deliver (or cause to be
executed and delivered) to the Company all
-7-
<PAGE>
such proxies and other instruments as the Company may reasonably
request for the purpose of enabling the Company to exercise the voting
and other rights which it is entitled to exercise pursuant to clause
(i) above and to receive the dividends which it is authorized to
receive and retain pursuant to clause (ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) All rights of the Company to exercise the voting and
other consensual rights which it would otherwise be entitled to
exercise pursuant to Section 6(a)(i) above and the obligations of the
Agent under Section 6(a)(iii) above, shall cease upon written notice
thereof from the Agent, and all such rights shall thereupon become
vested in the Agent who shall thereupon have the sole right to
exercise such voting and other consensual rights.
(ii) All rights of the Company to receive the dividends
which it would otherwise be authorized to receive and retain pursuant
to Section 6(a)(ii) above shall cease, and all such rights shall
thereupon become vested in the Agent who shall thereupon have the sole
right to receive and hold as Pledged Collateral such dividends.
(iii) All dividends which are received by the Company
contrary to the provisions of clause (ii) of this Section 6(b) shall
be received in trust for the benefit of the Agent, shall be segregated
from other funds of the Company and shall be forthwith paid over to
the Agent as Pledged Collateral in the same form as so received (with
any necessary endorsement).
(c) In order to permit the Agent to exercise the voting and other
rights which it may be entitled to exercise pursuant to Section 6(b)(i) above,
and to receive all dividends and distributions which it may be entitled to
receive under Section 6(b)(ii) above, the Company shall, if necessary, upon
written notice from the Agent, from time to time execute and deliver to the
Agent appropriate dividend payment orders and other instruments as the Agent may
reasonably request. To this end, the Company hereby irrevocably constitutes and
appoints the Agent the proxy and attorney-in-fact of the Company, with full
power of substitution, to vote, and to act with respect to, any and all Pledged
Collateral that is securities standing in the name of the Company or with
-8-
<PAGE>
respect to which the Company is entitled to vote and act, subject to the
understanding that such proxy may not be exercised unless an Event of Default
has occurred and is continuing. The proxy herein granted is coupled with an
interest, is irrevocable, and shall continue until payment in full in cash of
the Secured Obligations, the termination of the Commitments and the expiration
or termination of all outstanding Letters of Credit.
SECTION 7. Agent Appointed Attorney-in-Fact. The Company hereby appoints
--------------------------------
the Agent the Company's true and lawful attorney-in-fact, with full authority in
the place and stead of the Company and in the name of the Company or otherwise,
from time to time in the Agent's discretion, subject to Section 6 above, to take
any action and to execute any document or instrument which the Agent may
reasonably deem necessary or desirable to accomplish the purposes of this
Agreement, including, without limitation, to receive, endorse and collect all
instruments made payable to the Company representing any dividend, interest
payment or other distribution in respect of the Pledged Collateral or any part
thereof and to give full discharge for the same. The Agent shall be accountable
only for amounts actually received as a result of the exercise of the powers
granted to it herein, and neither it nor its officers, directors, employees or
agents shall be responsible to the Company for any act or failure to act
hereunder, except for its or its officers, directors, employees or agents gross
negligence or willful misconduct.
SECTION 8. Agent May Perform. If the Company fails to perform any
-----------------
agreement contained herein, the Agent may itself perform, or cause performance
of, such agreement, and the reasonable expenses of the Agent incurred in
connection therewith shall be payable by the Company under Section 11 below.
SECTION 9. No Responsibility for Certain Actions. Neither the Agent nor
-------------------------------------
any other Secured Party shall have responsibility for (i) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Collateral, whether or not the Agent or
any other Secured Party has or is deemed to have knowledge of such matters, or
(ii) taking any necessary steps to preserve any rights against any parties with
respect to any Pledged Collateral.
SECTION 10. Remedies upon Default. If any Event of Default shall have
---------------------
occurred and be continuing:
(a) The Agent may exercise in respect of the Pledged Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of
-9-
<PAGE>
a secured party in default under the Uniform Commercial Code (the "Code") in
effect in the State of New York at that time, and, subject to applicable
regulatory and legal requirements, the Agent may also, without notice except as
specified below, sell the Pledged Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange, broker's board or at any of
the Agent's offices or elsewhere, for cash, on credit or for future delivery,
and upon such other terms as the Agent may deem commercially reasonable. Upon
consummation of any such sale, the Agent shall have the right to assign,
transfer and deliver to the purchaser or purchasers thereof the Pledged
Collateral so sold. Each such purchaser at any such sale shall hold the property
sold absolutely free from any claim or right on the part of the Company, and the
Company hereby waives all rights of redemption, stay, valuation and appraisal
the Company now has or may at any time in the future have under any rule of law
or statute now existing or hereafter enacted. The Company agrees that, to the
extent notice of sale shall be required by law, at least ten (10) days' notice
to the Company of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification. The
Agent shall not be obligated to make any sale of Pledged Collateral regardless
of notice of sale having been given. The Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned. The Company hereby waives any claims against the Agent arising
by reason of the fact that the price at which any Pledged Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale, even if the Agent accepts the first offer received
and does not offer such Pledged Collateral to more than one offeree. At any
public sale made pursuant to this Section 10, any Secured Party may bid for or
purchase, free from any right of redemption, stay or appraisal on the part of
the Company (all said rights being also hereby waived and released), the Pledged
Collateral or any part thereof offered for sale and may make payment on account
thereof by using any claim then due and payable to it from any Borrower, any
Guarantor and/or the Company as a credit against the purchase price, and it may,
upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to the Company therefor. For purposes
hereof, (i) a written agreement to purchase the Pledged Collateral or any
portion thereof shall be treated as a sale thereof, (ii) the Agent shall be free
to carry out such sale pursuant to such agreement and (iii) the Company shall
not be entitled to the return of the Pledged Collateral or any portion thereof
subject thereto, notwithstanding the fact that after the Agent shall have
entered into such an agreement all Events of
-10-
<PAGE>
Default shall have been remedied and the Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon it, the Agent
may proceed by a suit or suits of law or in equity to foreclose upon the Pledged
Collateral and to sell the Pledged Collateral or any portion thereof pursuant to
a judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the
provisions of this Section 10 shall be deemed to conform to the commercially
reasonable standards as provided in the Code.
(b) The Company recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933 and applicable state securities laws,
the Agent may be compelled, with respect to any sale of all or any part of the
Pledged Collateral, to limit purchasers to those who will agree, among other
things, to acquire such securities for their own account, for investment, and
not with a view to the distribution or resale thereof. The Company acknowledges
and agrees that any such sale may result in prices and other terms less
favorable to the seller than if such sale were a public sale without such
restrictions and agrees that such circumstances shall not be a factor in
determining whether such sale has been made in a commercially reasonable manner.
The Agent shall be under no obligation to delay the sale of any of the Pledged
Collateral for the period of time necessary to permit the Company to register
such securities for public sale under the Securities Act of 1933, or under
applicable state securities laws, even if the Company would agree to do so.
(c) If the Agent determines to exercise its right to sell any or all
of the Pledged Collateral, upon written request, the Company shall and shall
cause, each of its direct Subsidiaries, other than Vintondale Corporation N.V.,
to, from time to time, furnish to the Agent all such information as the Agent
may reasonably request in order to determine the number of shares and other
instruments included in the Pledged Collateral which may be sold by the Agent as
exempt transactions under the Securities Act of 1933 and rules of the Securities
and Exchange Commission thereunder, as the same are from time to time in effect.
(d) Any cash held by the Agent as Pledged Collateral and all cash
proceeds received by the Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Pledged Collateral shall be
applied by the Agent (unless otherwise required by law):
First, to the payment of the costs and expenses of such sale,
including all expenses (including, without
-11-
<PAGE>
limitation, any legal fees and disbursements and the allocated cost of
in-house counsel), liabilities and advances made or incurred by the
Agent in connection therewith;
Next, to the Agent and the other Secured Parties, pro rata, based
--- ----
on the then outstanding principal amounts of the Secured Obligations
owed to each in payment in full of the Secured Obligations; and
Finally, after payment in full in cash of all Secured
Obligations, termination of the Commitments and expiration or
termination of all outstanding Letters of Credit, to the payment to
the Company, or its successors or assigns, or to whomsoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct, of any surplus then remaining from such
Proceeds.
SECTION 11. Expenses. The Company will upon demand pay to the Agent the
--------
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel (including the reasonable allocated cost of in-house
counsel) and of any experts, which the Agent may incur in connection with (a)
the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (b) the exercise or enforcement
of any of the rights of the Agent or any other Secured Party hereunder, or (c)
the failure by the Company to perform or observe any of the provisions hereof.
SECTION 12. Amendments, Etc. No amendment or waiver of any provision of
----------------
this Agreement nor consent to any departure by the Company herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Agent, and, in the case of amendment, by the Company and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 13. Address for Notices. All notices, requests and other
-------------------
communications provided for hereunder shall be in writing and given as provided
in Section 11.02 of the Credit Agreement.
SECTION 14. Continuing Security Interest. This Agreement shall create a
----------------------------
continuing security interest in the Pledged Collateral and shall (a) remain in
full force and effect until payment in full in cash (after the termination of
the Commitments and the expiration or termination of all outstanding Letters of
Credit) of the Secured Obligations; (b) continue to be effective if
-12-
<PAGE>
at any time payment and performance of the Secured Obligations is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored by
the Agent or any other Secured Party; (c) be binding upon the Company, its
successors and assigns; and (d) inure, together with the rights and remedies of
the Agent hereunder, to the benefit of the Agent, the other Secured Parties and
their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (d), any Bank may assign or otherwise
transfer its rights and obligations under the Credit Agreement to any other
Person or entity, and such other Person or entity shall thereupon become vested
with all the benefits in respect thereof granted to such Bank herein or
otherwise, all as provided in, and to the extent set forth in, Section 11.07 of
the Credit Agreement. Upon the payment in full in cash (after the termination of
the Commitments and the expiration or termination of all outstanding Letters of
Credit) of the Secured Obligations, the Company shall be entitled to the return,
upon its request and at its expense, of such of the Pledged Collateral as shall
not have been sold or otherwise applied pursuant to the terms hereof.
SECTION 15. Security Interest Absolute. All rights and security interests
--------------------------
of the Secured Parties hereunder, and all obligations of the Company hereunder,
shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Credit
Agreement, the Parent Guaranty executed by the Company or any other
agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Secured Obligations
(including, without limitation, the possible extension of the
Commitment Termination Date and increase of the amount of the
Commitments all on the terms and conditions set forth in the Credit
Agreement), or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, the Parent Guaranty executed by
the Company or any other Loan Document;
(iii) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured
Obligations; or
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<PAGE>
(iv) any other circumstance which might otherwise constitute
a defense available to, or a discharge of, the Company or a third
party pledgor.
SECTION 16. Use of Copies. Any carbon, photographic or other reproduction
-------------
of this Agreement or any financing statement signed by the Company is sufficient
as a financing statement for all purposes, including without limitation, filing
in any state as may be permitted by the provisions of the Uniform Commercial
Code of such state.
SECTION 17. Right of Set-off.
----------------
(a) Upon the occurrence and during the continuance of any Event of
Default under the Credit Agreement, each Bank is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Bank to
or for the credit or the account of the Company against any and all of the
Secured Obligations, irrespective of whether or not such Bank shall have made
any demand under this Agreement and although such Secured Obligations may be
contingent and unmatured. Each Bank which sets-off pursuant to this Section
17(a) shall give prompt notice to the Company following the occurrence thereof;
provided that the failure to give such notice shall not affect the validity of
- --------
the set-off.
(b) Any payment obtained pursuant to Section 17(a) above (or in any
other manner directly from the Company) by any Bank shall be remitted to the
Agent and distributed among the Secured Parties in accordance with the
provisions of Section 10(d) above.
SECTION 18. Severability. If for any reason any provision or provisions
------------
hereof are determined to be invalid and contrary to any existing or future law,
such invalidity shall not impair the operation of or affect those portions of
this Agreement which are valid.
SECTION 19. Waiver of Jury Trial. THE COMPANY HEREBY AGREES TO WAIVE ANY
--------------------
RIGHT IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY ACTION, SUIT OR
PROCEEDING ARISING OUT OF OR RELATED IN ANY WAY TO THIS AGREEMENT, THE PARENT
GUARANTY OR THE CREDIT AGREEMENT.
-14-
<PAGE>
SECTION 20. Governing Law; Jurisdiction.
---------------------------
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT (i) PROCEDURAL AND
SUBSTANTIVE MATTERS RELATING ONLY TO THE PERFECTION, FORECLOSURE OF LIENS AND
ENFORCEMENT OF RIGHTS AND REMEDIES AGAINST THE COLLATERAL ARE GOVERNED BY THE
LAWS OF ANY APPLICABLE JURISDICTION OTHER THAN THE STATE OF NEW YORK, AND (ii)
THAT THE LAWS OF THE UNITED STATES OF AMERICA INCLUDING, WITHOUT LIMITATION, THE
NATIONAL BANK ACT, AND ANY RULES, REGULATIONS OR ORDERS ISSUED OR PROMULGATED
UNDER SUCH LAWS APPLICABLE TO THE AFFAIRS AND TRANSACTIONS ENTERED INTO BY THE
AGENT AND THE BANKS, OTHERWISE PREEMPT NEW YORK OR OTHER STATE LAW, IN WHICH
EVENT SUCH FEDERAL LAW SHALL CONTROL. Unless otherwise defined herein or in the
Credit Agreement, terms defined in Article 9 of the Uniform Commercial Code in
the State of New York are used herein as therein defined.
(b) Any legal action or proceeding with respect to this Agreement may
be brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and by execution and delivery of
this Agreement, the Company hereby consents, for itself and in respect of its
property, to the jurisdiction of the aforesaid courts. The Company hereby
irrevocably waives any objection, including without limitation, any objection to
the laying of venue or based on the grounds of forum non conveniens, which it
----- --- ----------
may now or hereafter have to the bringing of any action or proceeding in such
jurisdiction in respect of this Agreement or any document related hereto. The
Company agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in any other jurisdictions by suit on the
judgment or in any other manner provided by law.
(c) The Company hereby irrevocably appoints the General Counsel of
Willbros USA, Inc., a Delaware corporation (the "Process Agent"), with an office
on the date hereof at 2431 East 61st Street, Suite 700, Tulsa, Oklahoma 74136,
United States of America, as its agent to receive on behalf of the Company and
its property service of copies of the summons and complaint and any other
process which may be served in any action or proceeding arising out of or
relating to this Agreement. Such service may be made by mailing or delivering a
copy of such process to the Company in care of the Process Agent at the Process
Agent's above address, and the Company hereby irrevocably authorizes and directs
the Process Agent to accept such service on its behalf. As an alternative method
of service, the Company also irrevocably consents to the service of any and all
process in any such action or proceeding by the mailing
-15-
<PAGE>
of copies of such process to the Company at its address specified on the
signature page hereof.
(d) Nothing in this Section shall affect the right of the Agent or
any other Secured Party to serve legal process in any other manner permitted by
law or affect the right of the Agent or any other Secured Party to bring any
action or proceeding against the Company in the courts of any other
jurisdictions.
(e) To the extent the Company has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
Company hereby irrevocably waives such immunity in respect of its obligations
under this Agreement.
SECTION 21. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original for all purposes;
but such counterparts shall be deemed to constitute but one and the same
instrument.
SECTION 22. Waiver of Subrogation. The Company expressly waives any and
---------------------
all rights of subrogation, reimbursement and contribution (contractual,
statutory or otherwise) against the Secured Parties, individually and
collectively, including without limitation, any claim or right of subrogation
under the Bankruptcy Code (Title 11 of the U.S. Code) or any successor statute,
arising from the existence or performance of this Agreement and the Company
irrevocably waives any right to enforce any remedy which the Secured Parties, or
any one or more of them, now have or may hereafter have against Borrowers and
waives any benefit of, and any right to participate in, any security now or
hereafter held by the Secured Parties, or any one or more of them, until the
Secured Obligations have been paid and performed in full (after the termination
of the Commitments and the expiration or termination of all outstanding Letters
of Credit).
SECTION 23. Subordination. The Company hereby expressly covenants and
-------------
agrees for the benefit of the Secured Parties that all obligations and
liabilities of Borrowers to the Company of whatsoever description (including,
without limitation, all intercompany receivables of the Company from Borrowers)
shall be subordinated and junior in right of payment to the Secured Obligations.
Following the occurrence of an Event of Default, any indebtedness of Borrowers
to the Company shall, if the Agent shall so request, be collected and received
by the Company as trustee for the Secured Parties and paid over to the Secured
Parties, or any
-16-
<PAGE>
one or more of them, as the case may be, on account of the Secured Obligations,
but without reducing or affecting in any manner the obligations of the Company
under this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
WILLBROS GROUP, INC.
By:______________________________
Larry J. Bump, President
With a Copy to: Address:
- -------------- -------
John N. Hove, Esq. Edificio Plaza Bancomer
2431 E. 61st St. Calle 50, Apartado 6307
Suite 700 Panama 5, Republic of Panama
Tulsa, Oklahoma 74136 Attention: Dr. Fernando Cardoze
U.S.A. Telex: 2120
Telecopier: 918/748-7026 Answerback: ARIFA PA
Telecopier: 011-507-63-8919
Agreed to:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By:______________________________
ALICE ZANE, Vice President
-17-
<PAGE>
SCHEDULE I
TO
PLEDGE AGREEMENT
Attached to and forming a part of that certain Pledge Agreement dated as of
September 16, 1993, by WILLBROS GROUP, INC. to Bank of America National Trust
and Savings Association, as Agent
SCHEDULE OF PLEDGED SHARES
--------------------------
<TABLE>
<CAPTION>
State or
Name of Country of Class of Stock Par Number
Subsidiary Organization Stock Certificate No. Value of Shares
- -------------- ------------ -------- ---------------- ------- ---------
<S> <C> <C> <C> <C> <C>
Willbros Republic Common 5 $1.00 25,000
Interna- of Panama
tional, Inc.
Willbros Ontario, Common 2 N/A 6
Engineering Canada
& Construction
Limited
</TABLE>
<PAGE>
SCHEDULE II
TO
PLEDGE AGREEMENT
STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE
------------------------------------------
For Value Received, the undersigned does hereby sell, assign and transfer unto:
________________________________________________________________________________
_________________ (_____________) Shares of the ______________ Stock of
____________________________________________ standing in
__________________________________ name on the books of said Corporation
represented by certificate No. ______________________ herewith and does hereby
irrevocably constitute and appoint
_____________________________________________________ attorney to transfer the
said stock on the books of the within named Corporation with full power of
substitution.
Dated:______________________ WILLBROS GROUP, INC.
By:___________________________
Name:______________________
Title:_____________________
Signature Attested to by:
________________________________
(Name)
________________________________
(Title)
________________________________
(Date)
[ADD NOTARIZATION OF SIGNATURE WITH PANAMANIAN AUTHENTICATION]
<PAGE>
SCHEDULE III
TO
PLEDGE AGREEMENT
PLEDGE AGREEMENT SUPPLEMENT
---------------------------
This Pledge Agreement Supplement, dated as of ___________, 199_, is
delivered pursuant to Section 5 of the Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Agreement Supplement may be attached
to the Pledge Agreement dated as of September 16, 1993 (the "Pledge Agreement",
the terms defined therein and not otherwise defined herein being used herein as
therein defined), made by the undersigned to Bank of America National Trust and
Savings Association, as Agent for the Banks party to the Credit Agreement dated
as of September 16, 1993, among Willbros International, Inc., Willbros USA,
Inc., the Designated Subsidiaries, Willbros Group, Inc., Willbros Engineering &
Construction Limited, the several financial institutions from time to time a
party thereto and the Agent.
The undersigned agrees that the securities listed below shall for all
purposes constitute Pledged Collateral and shall be subject to the security
interest created by the Pledge Agreement.
The undersigned hereby certifies that the representations and warranties
set forth in Section 4 of the Pledge Agreement are true and correct as to the
Pledged Collateral listed herein on and as of the date hereof.
WILLBROS GROUP, INC.
By:________________________________
Name:___________________________
Title:__________________________
<TABLE>
<CAPTION>
State or Class Stock Percentage Number
Stock Country of of Certifi- of Par of
Issuer Organization Stock cate No(s). Ownership Value Shares
- ------ ------------ ----- ----------- --------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
SCHEDULE IV
TO
PLEDGE AGREEMENT
SCHEDULE OF UCC FILINGS IN FAVOR OF THE AGENT
---------------------------------------------
<TABLE>
<CAPTION>
State Filing Offices
- ----- --------------
<S> <C>
Oklahoma County Clerk of Oklahoma County
</TABLE>
<PAGE>
EXHIBIT J-2
________________________________________________________________________________
________________________________________________________________________________
[FORM]
PLEDGE AGREEMENT
BY
MUSKETEER OIL B. V.
IN FAVOR OF
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS AGENT
________________________________________________________________________________
________________________________________________________________________________
Dated As Of September 16, 1993
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1. Pledge....................................................... 1
SECTION 2. Security for Obligations..................................... 2
SECTION 3. Delivery of Pledged Collateral............................... 3
SECTION 4. Representations, Warranties and Covenants.................... 3
SECTION 5. Further Assurances........................................... 6
SECTION 6. Voting Rights; Dividends; Etc................................ 6
SECTION 7. Agent Appointed Attorney-in-Fact............................. 8
SECTION 8. Agent May Perform............................................ 9
SECTION 9. No Responsibility for Certain Actions........................ 9
SECTION 10. Remedies upon Default....................................... 9
SECTION 11. Expenses.................................................... 12
SECTION 12. Amendments, Etc............................................. 12
SECTION 13. Address for Notices......................................... 12
SECTION 14. Continuing Security Interest................................ 12
SECTION 15. Security Interest Absolute.................................. 13
SECTION 16. Use of Copies............................................... 13
SECTION 17. Right of Set-off............................................ 14
SECTION 18. Severability................................................ 14
SECTION 19. Waiver of Jury Trial........................................ 14
SECTION 20. Governing Law; Jurisdiction................................. 14
SECTION 21. Counterparts................................................ 16
SECTION 22. Waiver of Subrogation....................................... 16
SECTION 23. Subordination............................................... 16
</TABLE>
Schedule I Schedule of Pledged Shares
Schedule II Stock Assignment Separate From Certificate
Schedule III Pledge Agreement Supplement
Schedule IV Schedule of UCC Filings
<PAGE>
PLEDGE AGREEMENT
This PLEDGE AGREEMENT (this "Agreement"), dated as of September 16, 1993,
is made by MUSKETEER OIL B.V., a Netherlands limited liability company (the
"Company"), in favor of BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as agent (in such capacity, the "Agent"), for its benefit and for the ratable
benefit of the financial institutions (the "Banks") from time to time a party to
the Credit Agreement (as hereinafter defined).
Willbros International, Inc., a Republic of Panama corporation ("WII"),
Willbros USA, Inc., a Delaware corporation ("WUSA"), Willbros Engineering &
Construction Limited, an Ontario, Canada, corporation ("WECL"), the Designated
Subsidiaries (as defined in the Credit Agreement) (WII, WUSA, WECL and the
Designated Subsidiaries are collectively referred to as the "Borrowers"),
Willbros Group, Inc., a Republic of Panama corporation ("WGI"), the Agent and
the Banks are party to a Credit Agreement of even date herewith (such Credit
Agreement, as it may hereafter be amended, restated, supplemented or otherwise
modified from time to time, being hereinafter referred to as the "Credit
Agreement"; unless otherwise defined herein, terms defined in the Credit
Agreement are used herein as therein defined);
Pursuant to the terms of the Credit Agreement, the Banks have agreed to
make available to the Borrowers a revolving credit facility and a standby and
commercial letter of credit facility;
The Company is a direct or indirect parent of one or more of the Borrowers,
and the Company will derive substantial benefit from the extension of credit to
the Borrowers by the Banks under the Credit Agreement;
The obligation of the Banks to make the Loans and to issue or participate
in the Letters of Credit is conditioned upon, among other things, the execution
and delivery by the Company of this Agreement;
In consideration of the premises and in order to induce the Banks to enter
into the Credit Agreement and make the Loans and issue or participate in the
Letters of Credit, the Company hereby agrees with the Agent, for its benefit and
for the ratable benefit of the Banks (the Agent and the Banks being hereinafter
collectively referred to as the "Secured Parties"), as follows:
SECTION 1. Pledge. The Company hereby transfers, grants, bargains, sells,
------
conveys, hypothecates, sets over, delivers and
-1-
<PAGE>
pledges to the Agent, for the benefit of the Secured Parties, and grants to the
Agent, for the benefit of the Secured Parties, a security interest in the
following (the "Pledged Collateral"):
(a) all shares described in SCHEDULE I attached hereto (collectively,
----------
the "Pledged Shares");
(b) all shares of capital stock acquired, received or owned by the
Company of any Person who, after the date of this Agreement, becomes, as a
result of any occurrence, a direct Subsidiary of the Company;
(c) the certificates representing the Pledged Shares;
(d) all cash and stock dividends, cash, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged Shares or
the shares acquired, received or owned under Section 1(b) above; and
(e) all proceeds of any or all of the foregoing.
TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto Agent, its successors and assigns, for the benefit of the Secured Parties,
forever; subject, however, to the terms, covenants and conditions set forth
herein.
SECTION 2. Security for Obligations. This Agreement secures, and the
------------------------
Pledged Collateral is security for, the prompt performance and payment in full
in cash when due, whether at stated maturity, by acceleration or otherwise of
the following (the "Secured Obligations"):
(a) all Obligations; and
(b) all obligations, now existing or hereafter arising, of the
Company under this Agreement.
The Obligations include, among other things, (i) a revolving credit
facility under which funds may be advanced by the Banks, repaid and subsequently
readvanced by the Banks, and (ii) a standby and commercial letter of credit
facility under which Letters of Credit may from time to time be issued.
Notwithstanding that the balance of the revolving line of credit may at certain
times be zero and that no Letters of Credit may at certain times be outstanding,
the Liens granted hereunder to the Agent shall remain in full force and effect
at all times and with the same priority
-2-
<PAGE>
until the payment in full in cash of the Secured Obligations, the termination of
the Commitments and the expiration or termination of all outstanding Letters of
Credit.
SECTION 3. Delivery of Pledged Collateral. All certificates or
------------------------------
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of the Agent pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Agent. The Agent shall have the right, at any time in its
discretion and without notice to the Company, to transfer to or to register in
its name or any of its nominees any or all of the Pledged Collateral, subject
only to the revocable rights specified in Section 6(a) below. In addition, the
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Pledged Collateral for certificates or instruments of
smaller or larger denominations.
SECTION 4. Representations, Warranties and Covenants. The Company
-----------------------------------------
represents, warrants and covenants as follows:
(a) The Company (i) is a close limited liability company duly
organized and validly existing under the laws of the Netherlands; (ii) is not
qualified as a foreign corporation under the laws of any jurisdiction, and there
is no jurisdiction in which qualification or licensing is required by the nature
of its business and where the absence of such qualification has a reason able
likelihood of having a material adverse effect on its busi ness, properties,
assets or condition (financial or otherwise); (iii) has all requisite corporate
power and authority and the legal right to own, pledge, mortgage and operate its
properties, and to conduct its business as now or currently proposed to be
conducted; (iv) is in compliance with its articles of association; (v) is not in
default under any material agreement such that there is a reasonable likelihood
of such default having a material adverse effect on its business properties,
assets or condition (financial or otherwise); and (vi) is in compliance with all
applicable law except if such non-compliance has no reasonable likelihood of
having a material adverse effect on its business, operations, properties, assets
or condition (financial or otherwise) or its ability to perform its obligations
under this Agreement.
(b) The execution, delivery, and performance by the Company of this
Agreement (i) are within the Company's corporate power; (ii) have been duly
authorized by all necessary corporate action; (iii) do not contravene the
Company's certificate or articles of incorporation or by-laws; and (iv) do not
result in or require the creation of any Lien upon or with respect to any of its
properties.
(c) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority is required
-3-
<PAGE>
for the due execution, delivery and performance by the Company of this
Agreement.
(d) This Agreement is a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency or similar laws
relating to creditors' rights generally, as such laws would apply in the event
of bankruptcy, insolvency or other similar occurrence with respect to the
Company.
(e) There is no pending or, to the best knowledge of the Company,
threatened action or proceeding affecting the Company before any Governmental
Authority which has any reasonable likelihood of having a material adverse
effect on the business, operations, properties, assets or condition (financial
or otherwise) of the Company, the Liens created by any Loan Document or the
ability of the Company to perform its obligations under this Agreement.
(f) The Company is not (i) a party to any contractual obligation the
performance of which either unconditionally or upon the happening of an event,
will result in the creation of a Lien on the Company's property or assets (other
than in favor of the Secured Parties); or (ii) subject to any charter or
corporate restriction which has a reasonable likelihood of having a material
adverse effect on its business, operations, properties, assets or condition
(financial or otherwise), the Liens created by any Loan Document or the ability
of the Company to perform its obligations under this Agreement.
(g) The representations and warranties made by WGI and the Borrowers
in Article V of the Credit Agreement concerning the Company are true and
correct.
(h) The Pledged Shares constitute all of the authorized, issued and
outstanding shares of capital stock of the companies listed on SCHEDULE I hereto
----------
(the "Pledged Stock Companies"). The Company is the sole legal and equitable
owner and holder of record of the Pledged Shares free and clear of all Liens, or
rights or interests of any other Person, of every kind and nature except for the
Lien created by this Agreement. The shares of stock described in the first
sentence of this paragraph are duly authorized, validly issued, fully paid and
non-assessable, and none of such shares has been issued or transferred in
violation of the securities registration, securities disclosure or similar
-4-
<PAGE>
laws of any jurisdiction to which such issuance or transfer may be subject.
There are no options, warrants, calls or commitments of any character relating
to the Pledged Shares, nor are there any rights of first refusal, voting trusts,
voting agreements or similar agreements relating to the Pledged Shares. The
pledge, assignment and delivery of the Pledged Collateral pursuant to this
Agreement will create a valid first priority lien on and a first priority
perfected security interest in the Pledged Collateral and the proceeds thereof.
Appropriate financing statements will be filed in favor of the Agent in the
jurisdictions set forth in SCHEDULE IV attached hereto.
-----------
(i) When additional Pledged Collateral is delivered to the Agent in
accordance with Section 1 hereof, the Company will be the legal and equitable
owner of such Pledged Collateral free and clear of all Liens, or rights or
interests of any other Person, of every kind and nature including any state or
federal tax liens, except for the Lien created by this Agreement; each share of
stock comprising such Pledged Collateral will have been duly authorized, validly
issued and be fully paid and non-assessable; and the Company will have legal
title to such Pledged Collateral and power to pledge, assign and deliver such
Pledged Collateral in the manner hereby contemplated.
(j) The Company agrees that it will (i) cause each issuer of shares
of stock comprising Pledged Collateral not to issue any stock or other
securities in addition to or in substitution for the shares of stock comprising
Pledged Collateral issued by such issuer, except to the Company, (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof,
any and all additional shares of stock or other securities of each issuer of
Pledged Collateral, and (iii) pledge hereunder, immediately upon its acquisition
(directly or indirectly) thereof, any and all shares of stock covered by Section
1(b) above.
(k) Without the prior written consent of the Agent having been first
obtained, the Company (i) shall not sell, assign, transfer, pledge, mortgage,
hypothecate, dispose of or encumber, or grant any option or warrant with respect
to, any of its rights in or to the Pledged Collateral or any portion thereof,
except for the pledge thereof provided for and perfected pursuant to this
Agreement; and (ii) shall not permit any issuer of shares of stock comprising
Pledged Collateral to terminate its corporate existence, to be a party to any
merger or consolidation, or to sell, lease or dispose of all or substantially
all of its assets and properties in a single
-5-
<PAGE>
transaction or series of related transactions, except as permitted by the Credit
Agreement.
(l) The Company has and will defend the title to the Pledged
Collateral and the Liens created hereby against the claim of any Person and will
maintain and preserve such Liens until the termination of this Agreement.
SECTION 5. Further Assurances.
------------------
(a) The Company agrees that, at any time and from time to time, at
the expense of the Company, the Company will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Agent may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted
hereby or to enable the Agent to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.
(b) The Company further agrees that it will, upon obtaining any
additional shares of any issuer of the Pledged Collateral or shares covered by
Section 1(b) above or any other securities constituting Pledged Collateral,
promptly (and in any event within three (3) Business Days) deliver to the Agent
(i) such shares, (ii) a duly executed but blank stock power in the form of
SCHEDULE II attached hereto for each certificate representing such additional
- -----------
Pledged Collateral, and (iii) a duly executed Pledge Agreement Supplement in
substantially the form of SCHEDULE III attached hereto (a "Pledge Agreement
------------
Supplement") identifying the additional shares which are pledged pursuant to
Section 1(b) of this Agreement. The Company hereby authorizes the Agent to
attach each Pledge Agreement Supplement to this Agreement and agrees that all
shares listed on any Pledge Agreement Supplement delivered to the Agent shall
for all purposes hereunder constitute Pledged Collateral.
SECTION 6. Voting Rights; Dividends; Etc.
-----------------------------
(a) So long as no Event of Default shall have occurred and be
continuing (and, in the case of clause (i) below, so long as written notice has
not been given by the Agent to the Company):
(i) The Company shall be entitled to exercise any and all
voting and/or other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose consistent with the
terms of this Agreement or the Credit Agreement; provided, however,
-------- -------
that the Company shall not exercise or refrain from
-6-
<PAGE>
exercising any such right if, in the Agent's reasonable judgment, such
action would have a material adverse effect on the value of the
Pledged Collateral or any part thereof.
(ii) The Company shall be entitled to receive and retain any
and all dividends paid in respect of the Pledged Collateral, other
than any and all
(A) dividends paid or payable other than in cash in
respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in
exchange for, any Pledged Collateral,
(B) dividends and other distributions paid or payable
in cash in respect of any Pledged Collateral in connection
with a partial or total liquidation or dissolution or in
connection with a return of capital, capital surplus or
paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Collateral,
all of which shall be, and all of which shall be forthwith delivered
to the Agent to hold as, Pledged Collateral and shall, if received by
the Company, be received in trust for the benefit of the Agent, be
segregated from the other property or funds of the Company, and be
forthwith delivered to the Agent as Pledged Collateral in the same
form as so received (with any necessary endorsement).
(iii) The Agent shall execute and deliver (or cause to be
executed and delivered) to the Company all such proxies and other
instruments as the Company may reasonably request for the purpose of
enabling the Company to exercise the voting and other rights which it
is entitled to exercise pursuant to clause (i) above and to receive
the dividends which it is authorized to receive and retain pursuant to
clause (ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default:
-7-
<PAGE>
(i) All rights of the Company to exercise the voting and
other consensual rights which it would otherwise be entitled to
exercise pursuant to Section 6(a)(i) above and the obligations of the
Agent under Section 6(a)(iii) above, shall cease upon written notice
thereof from the Agent, and all such rights shall thereupon become
vested in the Agent who shall thereupon have the sole right to
exercise such voting and other consensual rights.
(ii) All rights of the Company to receive the dividends which
it would otherwise be authorized to receive and retain pursuant to
Section 6(a)(ii) above shall cease, and all such rights shall
thereupon become vested in the Agent who shall thereupon have the sole
right to receive and hold as Pledged Collateral such dividends.
(iii) All dividends which are received by the Company contrary
to the provisions of clause (ii) of this Section 6(b) shall be
received in trust for the benefit of the Agent, shall be segregated
from other funds of the Company and shall be forthwith paid over to
the Agent as Pledged Collateral in the same form as so received (with
any necessary endorsement).
(c) In order to permit the Agent to exercise the voting and other
rights which it may be entitled to exercise pursuant to Section 6(b)(i) above,
and to receive all dividends and distributions which it may be entitled to
receive under Section 6(b)(ii) above, the Company shall, if necessary, upon
written notice from the Agent, from time to time execute and deliver to the
Agent appropriate dividend payment orders and other instruments as the Agent may
reasonably request. To this end, the Company hereby irrevocably constitutes and
appoints the Agent the proxy and attorney-in-fact of the Company, with full
power of substitution, to vote, and to act with respect to, any and all Pledged
Collateral that is securities standing in the name of the Company or with
respect to which the Company is entitled to vote and act, subject to the
understanding that such proxy may not be exercised unless an Event of Default
has occurred and is continuing. The proxy herein granted is coupled with an
interest, is irrevocable, and shall continue until payment in full in cash of
the Secured Obligations, the termination of the Commitments and the expiration
or termination of all outstanding Letters of Credit.
-8-
<PAGE>
SECTION 7. Agent Appointed Attorney-in-Fact. The Company hereby appoints
--------------------------------
the Agent the Company's true and lawful attorney-in-fact, with full authority in
the place and stead of the Company and in the name of the Company or otherwise,
from time to time in the Agent's discretion, subject to Section 6 above, to take
any action and to execute any document or instrument which the Agent may
reasonably deem necessary or desirable to accomplish the purposes of this
Agreement, including, without limitation, to receive, endorse and collect all
instruments made payable to the Company representing any dividend, interest
payment or other distribution in respect of the Pledged Collateral or any part
thereof and to give full discharge for the same. The Agent shall be accountable
only for amounts actually received as a result of the exercise of the powers
granted to it herein, and neither it nor its officers, directors, employees or
agents shall be responsible to the Company for any act or failure to act
hereunder except for its or its officers, directors, employees or agents gross
negligence or willful misconduct.
SECTION 8. Agent May Perform. If the Company fails to perform any
-----------------
agreement contained herein, the Agent may itself perform, or cause performance
of, such agreement, and the reasonable expenses of the Agent incurred in
connection therewith shall be payable by the Company under Section 11 below.
SECTION 9. No Responsibility for Certain Actions. Neither the Agent nor
-------------------------------------
any other Secured Party shall have responsibility for (i) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Collateral, whether or not the Agent or
any other Secured Party has or is deemed to have knowledge of such matters, or
(ii) taking any necessary steps to preserve any rights against any parties with
respect to any Pledged Collateral.
SECTION 10. Remedies upon Default. If any Event of Default shall have
---------------------
occurred and be continuing:
(a) The Agent may exercise in respect of the Pledged Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party in default under the
Uniform Commercial Code (the "Code") in effect in the State of New York at that
time, and, subject to applicable regulatory and legal requirements, the Agent
may also, without notice except as specified below, sell the Pledged Collateral
or any part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at any of the Agent's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the Agent
may deem
-9-
<PAGE>
commercially reasonable. Upon consummation of any such sale, the Agent shall
have the right to assign, transfer and deliver to the purchaser or purchasers
thereof the Pledged Collateral so sold. Each such purchaser at any such sale
shall hold the property sold absolutely free from any claim or right on the part
of the Company, and the Company hereby waives all rights of redemption, stay,
valuation and appraisal the Company now has or may at any time in the future
have under any rule of law or statute now existing or hereafter enacted. The
Company agrees that, to the extent notice of sale shall be required by law, at
least ten (10) days' notice to the Company of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. The Agent shall not be obligated to make any sale of
Pledged Collateral regardless of notice of sale having been given. The Agent may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. The Company hereby waives any
claims against the Agent arising by reason of the fact that the price at which
any Pledged Collateral may have been sold at such a private sale was less than
the price which might have been obtained at a public sale, even if the Agent
accepts the first offer received and does not offer such Pledged Collateral to
more than one offeree. At any public sale made pursuant to this Section 10, any
Secured Party may bid for or purchase, free from any right of redemption, stay
or appraisal on the part of the Company (all said rights being also hereby
waived and released), the Pledged Collateral or any part thereof offered for
sale and may make payment on account thereof by using any claim then due and
payable to it from any Borrower, any Guarantor and/or the Company as a credit
against the purchase price, and it may, upon compliance with the terms of sale,
hold, retain and dispose of such property without further accountability to the
Company therefor. For purposes hereof, (i) a written agreement to purchase the
Pledged Collateral or any portion thereof shall be treated as a sale thereof,
(ii) the Agent shall be free to carry out such sale pursuant to such agreement
and (iii) the Company shall not be entitled to the return of the Pledged
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Agent shall have entered into such an agreement all Events of Default
shall have been remedied and the Obligations paid in full. As an alternative to
exercising the power of sale herein conferred upon it, the Agent may proceed by
a suit or suits of law or in equity to foreclose upon the Pledged Collateral and
to sell the Pledged Collateral or any portion thereof pursuant to a judgment or
decree of a court or courts having competent jurisdiction or pursuant to a
proceeding by a court-appointed receiver. Any sale pursuant to the provisions of
this Section 10 shall be deemed to
-10-
<PAGE>
conform to the commercially reasonable standards as provided in the Code.
(b) The Company recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933 and applicable state securities laws,
the Agent may be compelled, with respect to any sale of all or any part of the
Pledged Collateral, to limit purchasers to those who will agree, among other
things, to acquire such securities for their own account, for investment, and
not with a view to the distribution or resale thereof. The Company acknowledges
and agrees that any such sale may result in prices and other terms less
favorable to the seller than if such sale were a public sale without such
restrictions and agrees that such circumstances shall not be a factor in
determining whether such sale has been made in a commercially reasonable manner.
The Agent shall be under no obligation to delay the sale of any of the Pledged
Collateral for the period of time necessary to permit the Company to register
such securities for public sale under the Securities Act of 1933, or under
applicable state securities laws, even if the Company would agree to do so.
(c) If the Agent determines to exercise its right to sell any or all
of the Pledged Collateral, upon written request, the Company shall and shall
cause, each of its direct Subsidiaries to, from time to time, furnish to the
Agent all such information as the Agent may reasonably request in order to
determine the number of shares and other instruments included in the Pledged
Collateral which may be sold by the Agent as exempt transactions under the
Securities Act of 1933 and rules of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.
(d) Any cash held by the Agent as Pledged Collateral and all cash
proceeds received by the Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Pledged Collateral shall be
applied by the Agent (unless otherwise required by law):
First, to the payment of the costs and expenses of such sale,
including all expenses (including, without limitation, any legal fees
and disbursements and the allocated cost of in-house counsel),
liabilities and advances made or incurred by the Agent in connection
therewith;
Next, to the Agent and the other Secured Parties pro rata, based
--- ----
on the then outstanding principal amounts of the Secured Obligations
owed to each in payment in full of the Secured Obligations; and
-11-
<PAGE>
Finally, after payment in full in cash of all Secured
Obligations, termination of the Commitments and expiration or
termination of all outstanding Letters of Credit, to the payment to
the Company, or its successors or assigns, or to whomsoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct, of any surplus then remaining from such
Proceeds.
SECTION 11. Expenses. The Company will upon demand pay to the Agent the
--------
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel (including the reasonable allocated cost of in-house
counsel) and of any experts, which the Agent may incur in connection with (a)
the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (b) the exercise or enforcement
of any of the rights of the Agent or any other Secured Party hereunder, or (c)
the failure by the Company to perform or observe any of the provisions hereof.
SECTION 12. Amendments, Etc. No amendment or waiver of any provision of
----------------
this Agreement nor consent to any departure by the Company herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Agent, and, in the case of amendment, by the Company and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 13. Address for Notices. All notices, requests and other
-------------------
communications provided for hereunder shall be in writing and given as provided
in Section 11.02 of the Credit Agreement. All communications and notices
hereunder to the Company shall be given to its address specified on the
signature page hereof.
SECTION 14. Continuing Security Interest. This Agreement shall create a
----------------------------
continuing security interest in the Pledged Collateral and shall (a) remain in
full force and effect until payment in full in cash (after the termination of
the Commitments and the expiration or termination of all outstanding Letters of
Credit) of the Secured Obligations; (b) continue to be effective if at any time
payment and performance of the Secured Obligations is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored by the Agent
or any other Secured Party; (c) be binding upon the Company, its successors and
assigns; and (d) inure, together with the rights and remedies of the Agent
hereunder, to the benefit of the Agent, the other Secured Parties and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (d), any Bank may assign or otherwise transfer its
rights and obligations under the Credit Agreement to any other Person or entity,
and such other
-12-
<PAGE>
Person or entity shall thereupon become vested with all the benefits in respect
thereof granted to such Bank herein or otherwise, all as provided in, and to the
extent set forth in, Section 11.07 of the Credit Agreement. Upon the payment in
full in cash (after the termination of the Commitments and the expiration or
termination of all outstanding Letters of Credit) of the Secured Obligations,
the Company shall be entitled to the return, upon its request and at its
expense, of such of the Pledged Collateral as shall not have been sold or
otherwise applied pursuant to the terms hereof.
SECTION 15. Security Interest Absolute. All rights and security interests
--------------------------
of the Secured Parties hereunder, and all obligations of the Company hereunder,
shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Credit
Agreement or any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Secured Obligations
(including, without limitation, the possible extension of the
Commitment Termination Date and increase of the amount of the
Commitments all on the terms and conditions set forth in the Credit
Agreement), or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, or any other Loan Document;
(iii) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured
Obligations; or
(iv) any other circumstance which might otherwise constitute
a defense available to, or a discharge of, the Company or a third
party pledgor.
SECTION 16. Use of Copies. Any carbon, photographic or other reproduction
-------------
of this Agreement or any financing statement signed by the Company is sufficient
as a financing statement for all purposes, including without limitation, filing
in any state as may be permitted by the provisions of the Uniform Commercial
Code of such state.
-13-
<PAGE>
SECTION 17. Right of Set-off.
----------------
(a) Upon the occurrence and during the continuance of any Event of
Default under the Credit Agreement, each Bank is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Bank to
or for the credit or the account of the Company against any and all of the
Secured Obligations, irrespective of whether or not such Bank shall have made
any demand under this Agreement and although such Secured Obligations may be
contingent and unmatured. Each Bank which sets-off pursuant to this Section
17(a) shall give prompt notice to the Company following the occurrence thereof;
provided that the failure to give such notice shall not affect the validity of
- --------
the set-off.
(b) Any payment obtained pursuant to Section 17(a) above (or in any
other manner directly from the Company) by any Bank shall be remitted to the
Agent and distributed among the Secured Parties in accordance with the
provisions of Section 10(d) above.
SECTION 18. Severability. If for any reason any provision or provisions
------------
hereof are determined to be invalid and contrary to any existing or future law,
such invalidity shall not impair the operation of or affect those portions of
this Agreement which are valid.
SECTION 19. Waiver of Jury Trial. THE COMPANY HEREBY AGREES TO WAIVE ANY
--------------------
RIGHT IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY ACTION, SUIT OR
PROCEEDING ARISING OUT OF OR RELATED IN ANY WAY TO THIS AGREEMENT OR THE CREDIT
AGREEMENT.
SECTION 20. Governing Law; Jurisdiction.
---------------------------
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT (i) PROCEDURAL AND
SUBSTANTIVE MATTERS RELATING ONLY TO THE PERFECTION, FORECLOSURE OF LIENS AND
ENFORCEMENT OF RIGHTS AND REMEDIES AGAINST THE COLLATERAL ARE GOVERNED BY THE
LAWS OF ANY APPLICABLE JURISDICTION OTHER THAN THE STATE OF NEW YORK, AND (ii)
THAT THE LAWS OF THE UNITED STATES OF AMERICA INCLUDING, WITHOUT LIMITATION, THE
NATIONAL BANK ACT, AND ANY RULES, REGULATIONS OR ORDERS ISSUED OR PROMULGATED
UNDER SUCH LAWS APPLICABLE TO THE AFFAIRS AND TRANSACTIONS ENTERED INTO BY THE
AGENT AND THE BANKS, OTHERWISE PREEMPT NEW YORK OR OTHER STATE LAW, IN WHICH
EVENT SUCH FEDERAL LAW SHALL CONTROL. Unless otherwise defined herein or in the
Credit Agreement, terms defined in Article 9 of the Uniform
-14-
<PAGE>
Commercial Code in the State of New York are used herein as therein defined.
(b) Any legal action or proceeding with respect to this Agreement may
be brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and by execution and delivery of
this Agreement, the Company hereby consents, for itself and in respect of its
property, to the jurisdiction of the aforesaid courts. The Company hereby
irrevocably waives any objection, including without limitation, any objection to
the laying of venue or based on the grounds of forum non conveniens, which it
----- --- ----------
may now or hereafter have to the bringing of any action or proceeding in such
jurisdiction in respect of this Agreement or any document related hereto. The
Company agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in any other jurisdictions by suit on the
judgment or in any other manner provided by law.
(c) The Company hereby irrevocably appoints the General Counsel of
Willbros USA, Inc., a Delaware corporation (the "Process Agent"), with an office
on the date hereof at 2431 East 61st Street, Suite 700, Tulsa, Oklahoma 74136,
United States of America, as its agent to receive on behalf of the Company and
its property service of copies of the summons and complaint and any other
process which may be served in any action or proceeding arising out of or
relating to this Agreement. Such service may be made by mailing or delivering a
copy of such process to the Company in care of the Process Agent at the Process
Agent's above address, and the Company hereby irrevocably authorizes and directs
the Process Agent to accept such service on its behalf. As an alternative
method of service, the Company also irrevocably consents to the service of any
and all process in any such action or proceeding by the mailing of copies of
such process to the Company at its address specified on the signature page
hereof.
(d) Nothing in this Section shall affect the right of the Agent or
any other Secured Party to serve legal process in any other manner permitted by
law or affect the right of the Agent or any other Secured Party to bring any
action or proceeding against the Company in the courts of any other
jurisdictions.
(e) To the extent the Company has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
Company hereby irrevocably waives such immunity in respect of its obligations
under this Agreement.
SECTION 21. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original for all purposes;
but such counterparts shall be deemed to constitute but one and the same
instrument.
SECTION 22. Waiver of Subrogation. The Company expressly waives any and
---------------------
all rights of subrogation, reimbursement and contribution (contractual,
statutory or otherwise) against the Secured Parties, individually and
collectively, including without limitation, any claim or right of subrogation
under the Bankruptcy Code (Title 11 of the U.S. Code) or any successor statute,
arising from the existence or performance of this Agreement and the Company
irrevocably waives any right to enforce any remedy which the Secured Parties, or
any one or more of them, now have or may hereafter have against Borrowers and
waives any benefit of, and any right to participate in, any security now or
hereafter held by the Secured Parties, or any one or more of them.
SECTION 23. Subordination. The Company hereby expressly covenants and
-------------
agrees for the benefit of the Secured Parties that all obligations and
liabilities of Borrowers to the Company of whatsoever description (including,
without limitation, all intercompany receivables of the Company from Borrowers)
shall be subordinated and junior in right of payment to the Secured Obligations.
Following the occurrence of an Event of Default, any indebtedness of Borrowers
to the Company shall, if the Agent shall so request, be collected and received
by the Company as trustee for the Secured Parties and paid over to the Secured
Parties, or any one or more of them, as the case may be, on account of the
Secured
-15-
<PAGE>
Obligations, but without reducing or affecting in any manner the obligations of
the Company under this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
WILLBROS USA, INC.
By:_________________________________
Larry J. Bump, President
Address:
-------
2431 East 61st St., Suite 700
Tulsa, Oklahoma 74136
Attention: Melvin F. Spreitzer
Telex: 79-6660
Answerback: WILLBRO TUL
Telecopier: 918/748-7027
Agreed to:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By:__________________________________
Alice Zane, Vice President
-16-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
MUSKETEER OIL B.V.
By:______________________________
Name:____________________________
Title:___________________________
With a copy to: Address:
- -------------- -------
John N. Hove, Esq. Museumplein 11, 1071 DJ
2431 E. 61st St. Amsterdam
Suite 700 The Netherlands
Tulsa, Oklahoma 74136 Attention: Floris van der Rhee
U.S.A. Telex: 18709
Telecopier: 918/748-7026 Answerback: HOLD NL
Telecopier: 011-31-20-6647747
Agreed to:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By:______________________________
ALICE ZANE, Vice President
-17-
<PAGE>
By signing below, Willbros USA, Inc. confirms that an executed copy of the
Pledge Agreement dated as of September 16, 1993 between Musketeer Oil B.V. and
Bank of America National Trust and Savings Association, as Agent (the "Agent")
has been submitted to it and acknowledges the above pledge of the Pledged
Collateral.
WILLBROS USA, INC.
By:_______________________________
Name:________________________
Title:_______________________
-18-
<PAGE>
SCHEDULE I
TO
PLEDGE AGREEMENT
Attached to and forming a part of that certain Pledge Agreement dated as of
September 16, 1993, by MUSKETEER OIL B.V. to Bank of America National Trust and
Savings Association, as Agent
SCHEDULE OF PLEDGED SHARES
--------------------------
<TABLE>
<CAPTION>
State or
Name of Country of Class of Stock Par Number
Subsidiary Organization Stock Certificate No. Value of Shares
- ------------ ------------ ---------- --------------- ------- ---------
<S> <C> <C> <C> <C> <C>
Willbros Delaware Common 2 $1.00 167
USA, Inc. Common 5 $1.00 1,137
Common 7 $1.00 3,863
</TABLE>
SCHEDULE I - 1
<PAGE>
SCHEDULE II
TO
PLEDGE AGREEMENT
STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE
------------------------------------------
For Value Received, the undersigned does hereby sell, assign and transfer unto:
________________________________________________________________________________
_________________ (_____________) Shares of the ______________ Stock of ________
____________________________________________ standing in _______________________
___________________________ name on the books of said Corporation represented by
certificate No. ______________________ herewith and does hereby irrevocably
constitute and appoint _____________________________________________________
attorney to transfer the said stock on the books of the within named Corporation
with full power of substitution.
Dated:______________________ MUSKETEER OIL B.V.
By:___________________________
Name:______________________
Title:_____________________
Signature Attested to by:
________________________________
(Name)
________________________________
(Title)
________________________________
(Date)
SCHEDULE II - 1
<PAGE>
SCHEDULE III
TO
PLEDGE AGREEMENT
PLEDGE AGREEMENT SUPPLEMENT
---------------------------
This Pledge Agreement Supplement, dated as of ___________, 199_, is
delivered pursuant to Section 5 of the Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Agreement Supplement may be attached
to the Pledge Agreement dated as of September 16, 1993 (the "Pledge Agreement",
the terms defined therein and not otherwise defined herein being used herein as
therein defined), made by the undersigned to Bank of America National Trust and
Savings Association, as Agent for the Banks party to the Credit Agreement dated
as of September 16, 1993, among Willbros International, Inc., Willbros USA,
Inc., the Designated Subsidiaries, Willbros Group, Inc., Willbros Engineering &
Construction Limited, the several financial institutions from time to time a
party thereto and the Agent.
The undersigned agrees that the securities listed below shall for all
purposes constitute Pledged Collateral and shall be subject to the security
interest created by the Pledge Agreement.
The undersigned hereby certifies that the representations and warranties
set forth in Section 4 of the Pledge Agreement are true and correct as to the
Pledged Collateral listed herein on and as of the date hereof.
MUSKETEER OIL B.V.
By:________________________________
Name:___________________________
Title:__________________________
State or Class Stock Percentage Number
Stock Country of of Certifi- of Par of
Issuer Organization Stock cate No(s). Ownership Value Shares
- ------ ------------ ----- ----------- --------- ----- ------
SCHEDULE III - 1
<PAGE>
By signing below, Willbros USA, Inc. confirms that an executed copy of the
Pledge Agreement Supplement dated as of ___________________ between Musketeer
Oil B.V. and Bank of America National Trust and Savings Association, as Agent
(the "Agent") has been submitted to it and acknowledges the above pledge of the
Pledged Collateral.
WILLBROS USA, INC.
By:_______________________________
Name:________________________
Title:_______________________
SCHEDULE III - 2
<PAGE>
SCHEDULE IV
TO
PLEDGE AGREEMENT
SCHEDULE OF UCC FILINGS IN FAVOR OF THE AGENT
---------------------------------------------
State Filing Offices
----- --------------
Oklahoma County Clerk of
Oklahoma County
SCHEDULE IV - 1
<PAGE>
EXHIBIT M
________________________________________________________________________________
________________________________________________________________________________
[FORM]
BORROWER PLEDGE AGREEMENT
BY
WILLBROS USA, INC.
IN FAVOR OF
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS AGENT
________________________________________________________________________________
________________________________________________________________________________
Dated As Of September 16, 1993
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. Pledge.......................................... 1
SECTION 2. Security for Obligations........................ 2
SECTION 3. Delivery of Pledged Collateral.................. 2
SECTION 4. Representations, Warranties and Covenants....... 3
SECTION 5. Further Assurances.............................. 6
SECTION 6. Voting Rights; Dividends; Etc................... 6
SECTION 7. Agent Appointed Attorney-in-Fact................ 9
SECTION 8. Agent May Perform............................... 9
SECTION 9. No Responsibility for Certain Actions........... 9
SECTION 10. Remedies upon Default.......................... 9
SECTION 11. Expenses....................................... 12
SECTION 12. Amendments, Etc................................ 12
SECTION 13. Address for Notices............................ 12
SECTION 14. Continuing Security Interest................... 12
SECTION 15. Security Interest Absolute..................... 13
SECTION 16. Use of Copies.................................. 13
SECTION 17. Right of Set-off............................... 14
SECTION 18. Severability................................... 14
SECTION 19. Waiver of Jury Trial........................... 14
SECTION 20. Governing Law; Jurisdiction.................... 14
SECTION 21. Counterparts................................... 15
SECTION 22. Waiver of Subrogation.......................... 15
SECTION 23. Subordination.................................. 15
</TABLE>
Schedule I Schedule of Pledged Shares
Schedule II Stock Assignment Separate From Certificate
Schedule III Pledge Agreement Supplement
Schedule IV Schedule of UCC Filings
-i-
<PAGE>
BORROWER PLEDGE AGREEMENT
This BORROWER PLEDGE AGREEMENT (this "Agreement"), dated as of September
16, 1993, is made by WILLBROS USA, INC., a Delaware corporation (the "Company"),
in favor of BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as agent (in
such capacity, the "Agent"), for its benefit and for the ratable benefit of the
financial institutions (the "Banks") from time to time a party to the Credit
Agreement (as hereinafter defined).
Willbros International, Inc., a Republic of Panama corporation ("WII"),
Willbros Engineering & Construction Limited, an Ontario, Canada, corporation
("WECL"), the Designated Subsidiaries (as defined in the Credit Agreement) (WII,
WECL, the Company and the Designated Subsidiaries are collectively referred to
as the "Borrowers"), Willbros Group, Inc., a Republic of Panama corporation
("WGI"), the Agent and the Banks are party to a Credit Agreement of even date
herewith (such Credit Agreement, as it may hereafter be amended, restated,
supplemented or otherwise modified from time to time, being hereinafter referred
to as the "Credit Agreement"; unless otherwise defined herein, terms defined in
the Credit Agreement are used herein as therein defined);
Pursuant to the terms of the Credit Agreement, the Banks have agreed to
make available to the Borrowers a revolving credit facility and a standby and
commercial letter of credit facility;
The obligation of the Banks to make the Loans and to issue or participate
in the Letters of Credit is conditioned upon, among other things, the execution
and delivery by the Company of this Agreement;
In consideration of the premises and in order to induce the Banks to enter
into the Credit Agreement and make the Loans and issue or participate in the
Letters of Credit, the Company hereby agrees with the Agent, for its benefit and
for the ratable benefit of the Banks (the Agent and the Banks being hereinafter
collectively referred to as the "Secured Parties"), as follows:
SECTION 1. Pledge. The Company hereby transfers, grants, bargains, sells,
------
conveys, hypothecates, sets over, delivers and pledges to the Agent, for the
benefit of the Secured Parties, a security interest in the following (the
"Pledged Collateral"):
(a) all shares described in SCHEDULE I attached hereto (collectively,
----------
the "Pledged Shares");
-1-
<PAGE>
(b) all shares of capital stock acquired, received or owned by the
Company of any Person who, after the date of this Agreement, becomes, as a
result of any occurrence, a direct Subsidiary of the Company;
(c) the certificates representing the Pledged Shares;
(d) all cash and stock dividends, cash, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged Shares or
the shares acquired, received or owned under Section 1(b) above; and
(e) all proceeds of any or all of the foregoing.
TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto Agent, its successors and assigns, for the benefit of the Secured Parties,
forever; subject, however, to the terms, covenants and conditions set forth
herein.
SECTION 2. Security for Obligations. This Agreement secures, and the
------------------------
Pledged Collateral is security for, the prompt performance and payment in full
in cash when due, whether at stated maturity, by acceleration or otherwise of
the following (the "Secured Obligations"):
(a) all Obligations; and
(b) all obligations, now existing or hereafter arising, of the
Company under this Agreement.
The Obligations include, among other things, (i) a revolving credit
facility under which funds may be advanced by the Banks, repaid and subsequently
readvanced by the Banks, and (ii) a standby and commercial letter of credit
facility under which Letters of Credit may from time to time be issued.
Notwithstanding that the balance of the revolving line of credit may at certain
times be zero and that no Letters of Credit may at certain times be outstanding,
the Liens granted hereunder to the Agent shall remain in full force and effect
at all times and with the same priority until the payment in full in cash of the
Secured Obligations, the termination of the Commitments and the expiration or
termination of all outstanding Letters of Credit.
SECTION 3. Delivery of Pledged Collateral. All certificates or
------------------------------
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of the Agent
-2-
<PAGE>
pursuant hereto and shall be in suitable form for transfer by delivery, or shall
be accompanied by duly executed instruments of transfer or assignment in blank,
all in form and substance satisfactory to the Agent. The Agent shall have the
right, at any time in its discretion and without notice to the Company, to
transfer to or to register in its name or any of its nominees any or all of the
Pledged Collateral, subject only to the revocable rights specified in Section
6(a) below. In addition, the Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger denominations.
SECTION 4. Representations, Warranties and Covenants. The Company
-----------------------------------------
represents, warrants and covenants as follows:
(a) The Company (i) is a corporation duly organized, validly existing
and in good standing under the laws of Delaware; (ii) is not qualified as a
foreign corporation under the laws of any jurisdiction other than Oklahoma and
Texas (in which it is in good standing), and there is no jurisdiction other than
Oklahoma and Texas in which qualification or licensing is required by the nature
of its business and where the absence of such qualification has a reasonable
likelihood of having a material adverse effect on its business, properties,
assets or condition (financial or otherwise); (iii) has all requisite corporate
power and authority and the legal right to own, pledge, mortgage and operate its
properties, and to conduct its business as now or currently proposed to be
conducted; (iv) is in compliance with its certificate or articles of
incorporation and by-laws; (v) is not in default under any material agreement
such that there is a reasonable likelihood of such default having a material
adverse effect on its business, properties, assets or condition (financial or
otherwise); and (vi) is in compliance with all applicable law except if such
non-compliance has no reasonable likelihood of having a material adverse effect
on its business, operations, properties, assets or condition (financial or
otherwise) or its ability to perform its obligations under this Agreement.
(b) The execution, delivery, and performance by the Company of this
Agreement (i) are within the Company's corporate power; (ii) have been duly
authorized by all necessary corporate action; (iii) do not contravene the
Company's certificate or articles of incorporation or by-laws; and (iv) do not
result in or require the creation of any Lien upon or with respect to any of its
properties.
(c) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority is required
-3-
<PAGE>
for the due execution, delivery and performance by the Company of this
Agreement.
(d) This Agreement is a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency or similar laws
relating to creditors' rights generally, as such laws would apply in the event
of bankruptcy, insolvency or other similar occurrence with respect to the
Company.
(e) There is no pending or, to the best knowledge of the Company,
threatened action or proceeding affecting the Company before any Governmental
Authority which has any reasonable likelihood of having a material adverse
effect on the business, operations, properties, assets or condition (financial
or otherwise) of the Company, the Liens created by any Loan Document or the
ability of the Company to perform its obligations under this Agreement.
(f) The Company is not (i) a party to any contractual obligation the
performance of which either unconditionally or upon the happening of an event,
will result in the creation of a Lien on the Company's property or assets (other
than in favor of the Secured Parties); or (ii) subject to any charter or
corporate restriction which has a reasonable likelihood of having a material
adverse effect on its business, operations, properties, assets or condition
(financial or otherwise), the Liens created by any Loan Document or the ability
of the Company to perform its obligations under this Agreement.
(g) The Pledged Shares constitute all of the authorized, issued and
outstanding shares of capital stock of the companies listed on SCHEDULE I hereto
----------
(the "Pledged Stock Companies"). The Company is the sole legal and equitable
owner and holder of record of the Pledged Shares free and clear of all Liens, or
rights or interests of any other Person, of every kind and nature except for (i)
the Lien created by this Agreement and (ii) with respect to the shares of stock
of Willbros Butler Engineers, Inc., a Delaware corporation ("WBEI"), pledged
hereunder, that certain Proxy Agreement With Respect to Capital Stock of
Willbros Butler Engineers, Inc. dated January 7, 1985, as amended by Amendment
dated effective January 1, 1988, and the other documents related thereto (as
amended to date, the "WBEI Proxy Agreement"). The shares of stock described in
the first sentence of this paragraph are duly authorized, validly issued, fully
paid and non-assessable, and none of such shares has been issued or transferred
in violation of the securities registration, securities disclosure or similar
-4-
<PAGE>
laws of any jurisdiction to which such issuance or transfer may be subject.
There are no options, warrants, calls or commitments of any character relating
to the Pledged Shares, nor are there any rights of first refusal, voting trusts,
voting agreements or similar agreements relating to the Pledged Shares, except
for the WBEI Proxy Agreement. The pledge, assignment and delivery of the
Pledged Collateral pursuant to this Agreement will create a valid first priority
lien on and a first priority perfected security interest in the Pledged
Collateral and the proceeds thereof, but subject to, with respect to the shares
of stock of WBEI pledged hereunder, the WBEI Proxy Agreement. Appropriate
financing statements will be filed in favor of the Agent in the jurisdictions
set forth in SCHEDULE IV attached hereto.
-----------
(h) When additional Pledged Collateral is delivered to the Agent in
accordance with Section 1 hereof, the Company will be the legal and equitable
owner of such Pledged Collateral free and clear of all Liens, or rights or
interests of any other Person, of every kind and nature including any state or
federal tax liens, except for the Lien created by this Agreement; each share of
stock comprising such Pledged Collateral will have been duly authorized, validly
issued and be fully paid and non-assessable; and the Company will have legal
title to such Pledged Collateral and power to pledge, assign and deliver such
Pledged Collateral in the manner hereby contemplated.
(i) The Company agrees that it will (i) cause each issuer of shares
of stock comprising Pledged Collateral not to issue any stock or other
securities in addition to or in substitution for the shares of stock comprising
Pledged Collateral issued by such issuer, except to the Company, (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof,
any and all additional shares of stock or other securities of each issuer of
Pledged Collateral, and (iii) pledge hereunder, immediately upon its acquisition
(directly or indirectly) thereof, any and all shares of stock covered by Section
1(b) above.
(j) Without the prior written consent of the Agent having been first
obtained, the Company (i) shall not sell, assign, transfer, pledge, mortgage,
hypothecate, dispose of or encumber, or grant any option or warrant with respect
to, any of its rights in or to the Pledged Collateral or any portion thereof,
except for the pledge thereof provided for in this Agreement; and (ii) shall not
permit any issuer of shares of stock comprising Pledged Collateral to terminate
its corporate existence, to be a party to any merger or consolidation, or to
sell, lease or dispose of all or substantially all of its assets and properties
in a single
-5-
<PAGE>
transaction or series of related transactions, except as permitted by the Credit
Agreement.
(k) The Company has and will defend the title to the Pledged
Collateral and the Liens created hereby against the claim of any Person and will
maintain and preserve such Liens until the termination of this Agreement.
SECTION 5. Further Assurances.
------------------
(a) The Company agrees that, at any time and from time to time, at
the expense of the Company, the Company will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Agent may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted
hereby or to enable the Agent to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.
(b) The Company further agrees that it will, upon obtaining any
additional shares of any issuer of the Pledged Collateral or shares covered by
Section 1(b) above or any other securities constituting Pledged Collateral,
promptly (and in any event within three (3) Business Days) deliver to the Agent
(i) such shares, (ii) a duly executed but blank stock power in the form of
SCHEDULE II attached hereto for each certificate representing such additional
- -----------
Pledged Collateral, and (iii) a duly executed Pledge Agreement Supplement in
substantially the form of SCHEDULE III attached hereto (a "Pledge Agreement
------------
Supplement") identifying the additional shares which are pledged pursuant to
Section 1(b) of this Agreement. The Company hereby authorizes the Agent to
attach each Pledge Agreement Supplement to this Agreement and agrees that all
shares listed on any Pledge Agreement Supplement delivered to the Agent shall
for all purposes hereunder constitute Pledged Collateral.
SECTION 6. Voting Rights; Dividends; Etc.
-----------------------------
(a) So long as no Event of Default shall have occurred and be
continuing (and, in the case of clause (i) below, so long as written notice has
not been given by the Agent to the Company):
(i) The Company shall be entitled to exercise any and all
voting and/or other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose consistent with the
terms of this Agreement or the Credit Agreement; provided, however,
-------- -------
that the Company shall not exercise or refrain from
-6-
<PAGE>
exercising any such right if, in the Agent's reasonable judgment, such
action would have a material adverse effect on the value of the
Pledged Collateral or any part thereof.
(ii) The Company shall be entitled to receive and retain any
and all dividends paid in respect of the Pledged Collateral, other
than any and all
(A) dividends paid or payable other than in cash in
respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in
exchange for, any Pledged Collateral ,
(B) dividends and other distributions paid or payable
in cash in respect of any Pledged Collateral in connection
with a partial or total liquidation or dissolution or in
connection with a return of capital, capital surplus or paid-
in-surplus, and
(C) cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Collateral,
all of which shall be, and all of which shall be forthwith delivered
to the Agent to hold as, Pledged Collateral and shall, if received by
the Company, be received in trust for the benefit of the Agent, be
segregated from the other property or funds of the Company, and be
forthwith delivered to the Agent as Pledged Collateral in the same
form as so received (with any necessary endorsement).
(iii) The Agent shall execute and deliver (or cause to be
executed and delivered) to the Company all such proxies and other
instruments as the Company may reasonably request for the purpose of
enabling the Company to exercise the voting and other rights which it
is entitled to exercise pursuant to clause (i) above and to receive
the dividends which it is authorized to receive and retain pursuant to
clause (ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default:
-7-
<PAGE>
(i) All rights of the Company to exercise the voting and
other consensual rights which it would otherwise be entitled to
exercise pursuant to Section 6(a)(i) above and the obligations of the
Agent under Section 6(a)(iii) above, shall cease upon written notice
thereof from the Agent, and all such rights shall thereupon become
vested in the Agent who shall thereupon have the sole right to
exercise such voting and other consensual rights subject to, with
respect to the shares of stock pledged of WBEI, the WBEI Proxy
Agreement.
(ii) All rights of the Company to receive the dividends
which it would otherwise be authorized to receive and retain pursuant
to Section 6(a)(ii) above shall cease, and all such rights shall
thereupon become vested in the Agent who shall thereupon have the sole
right to receive and hold as Pledged Collateral such dividends.
(iii) All dividends which are received by the Company
contrary to the provisions of clause (ii) of this Section 6(b) shall
be received in trust for the benefit of the Agent, shall be segregated
from other funds of the Company and shall be forthwith paid over to
the Agent as Pledged Collateral in the same form as so received (with
any necessary endorsement).
(c) In order to permit the Agent to exercise the voting and other
rights which it may be entitled to exercise pursuant to Section 6(b)(i) above,
and to receive all dividends and distributions which it may be entitled to
receive under Section 6(b)(ii) above, the Company shall, if necessary, upon
written notice from the Agent, from time to time execute and deliver to the
Agent appropriate dividend payment orders and other instruments as the Agent may
reasonably request. To this end, the Company hereby irrevocably constitutes and
appoints the Agent the proxy and attorney-in-fact of the Company, with full
power of substitution, to vote, and to act with respect to, any and all Pledged
Collateral that is securities standing in the name of the Company or with
respect to which the Company is entitled to vote and act, subject to the
understanding that such proxy may not be exercised unless an Event of Default
has occurred and is continuing. The proxy herein granted is coupled with an
interest, is irrevocable, and shall continue until payment in full in cash of
the Secured Obligations, the termination of the Commitments and the expiration
or termination of all outstanding Letters of Credit.
-8-
<PAGE>
SECTION 7. Agent Appointed Attorney-in-Fact. The Company hereby appoints
--------------------------------
the Agent the Company's true and lawful attorney-in-fact, with full authority in
the place and stead of the Company and in the name of the Company or otherwise,
from time to time in the Agent's discretion, subject to Section 6 above, to take
any action and to execute any document or instrument which the Agent may
reasonably deem necessary or desirable to accomplish the purposes of this
Agreement, including, without limitation, to receive, endorse and collect all
instruments made payable to the Company representing any dividend, interest
payment or other distribution in respect of the Pledged Collateral or any part
thereof and to give full discharge for the same. The Agent shall be accountable
only for amounts actually received as a result of the exercise of the powers
granted to it herein, and neither it not its officers, directors, employees or
agents shall be responsible to the Company for any act or failure to act
hereunder except for its or its officers, directors, employees or agents gross
negligence or willful misconduct.
SECTION 8. Agent May Perform. If the Company fails to perform any
-----------------
agreement contained herein, the Agent may itself perform, or cause performance
of, such agreement, and the reasonable expenses of the Agent incurred in
connection therewith shall be payable by the Company under Section 11 below.
SECTION 9. No Responsibility for Certain Actions. Neither the Agent nor
-------------------------------------
any other Secured Party shall have responsibility for (i) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Collateral, whether or not the Agent or
any other Secured Party has or is deemed to have knowledge of such matters, or
(ii) taking any necessary steps to preserve any rights against any parties with
respect to any Pledged Collateral.
SECTION 10. Remedies upon Default. If any Event of Default shall have
---------------------
occurred and be continuing:
(a) The Agent may exercise in respect of the Pledged Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party in default under the
Uniform Commercial Code (the "Code") in effect in the State of New York at that
time, and, subject to applicable regulatory and legal requirements, the Agent
may also, without notice except as specified below, sell the Pledged Collateral
or any part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at any of the Agent's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the Agent
may deem
-9-
<PAGE>
commercially reasonable. Upon consummation of any such sale, the Agent shall
have the right to assign, transfer and deliver to the purchaser or purchasers
thereof the Pledged Collateral so sold. Each such purchaser at any such sale
shall hold the property sold absolutely free from any claim or right on the part
of the Company, and the Company hereby waives all rights of redemption, stay,
valuation and appraisal the Company now has or may at any time in the future
have under any rule of law or statute now existing or hereafter enacted. The
Company agrees that, to the extent notice of sale shall be required by law, at
least ten (10) days' notice to the Company of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. The Agent shall not be obligated to make any sale of
Pledged Collateral regardless of notice of sale having been given. The Agent
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. The Company hereby
waives any claims against the Agent arising by reason of the fact that the price
at which any Pledged Collateral may have been sold at such a private sale was
less than the price which might have been obtained at a public sale, even if the
Agent accepts the first offer received and does not offer such Pledged
Collateral to more than one offeree. At any public sale made pursuant to this
Section 10, any Secured Party may bid for or purchase, free from any right of
redemption, stay or appraisal on the part of the Company (all said rights being
also hereby waived and released), the Pledged Collateral or any part thereof
offered for sale and may make payment on account thereof by using any claim then
due and payable to it from any Borrower, any Guarantor and/or the Company as a
credit against the purchase price, and it may, upon compliance with the terms of
sale, hold, retain and dispose of such property without further accountability
to the Company therefor. For purposes hereof, (i) a written agreement to
purchase the Pledged Collateral or any portion thereof shall be treated as a
sale thereof, (ii) the Agent shall be free to carry out such sale pursuant to
such agreement and (iii) the Company shall not be entitled to the return of the
Pledged Collateral or any portion thereof subject thereto, notwithstanding the
fact that after the Agent shall have entered into such an agreement all Events
of Default shall have been remedied and the Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon it, the Agent
may proceed by a suit or suits of law or in equity to foreclose upon the Pledged
Collateral and to sell the Pledged Collateral or any portion thereof pursuant to
a judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to
the provisions of this Section 10 shall be deemed to
-10-
<PAGE>
conform to the commercially reasonable standards as provided in the Code.
(b) The Company recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933 and applicable state securities laws,
the Agent may be compelled, with respect to any sale of all or any part of the
Pledged Collateral, to limit purchasers to those who will agree, among other
things, to acquire such securities for their own account, for investment, and
not with a view to the distribution or resale thereof. The Company acknowledges
and agrees that any such sale may result in prices and other terms less
favorable to the seller than if such sale were a public sale without such
restrictions and agrees that such circumstances shall not be a factor in
determining whether such sale has been made in a commercially reasonable manner.
The Agent shall be under no obligation to delay the sale of any of the Pledged
Collateral for the period of time necessary to permit the Company to register
such securities for public sale under the Securities Act of 1933, or under
applicable state securities laws, even if the Company would agree to do so.
(c) If the Agent determines to exercise its right to sell any or all
of the Pledged Collateral, upon written request, the Company shall and shall
cause, each of its direct Subsidiaries to, from time to time, furnish to the
Agent all such information as the Agent may reasonably request in order to
determine the number of shares and other instruments included in the Pledged
Collateral which may be sold by the Agent as exempt transactions under the
Securities Act of 1933 and rules of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.
(d) Any cash held by the Agent as Pledged Collateral and all cash
proceeds received by the Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Pledged Collateral shall be
applied by the Agent (unless otherwise required by law):
First, to the payment of the costs and expenses of such sale,
including all expenses (including, without limitation, any legal fees
and disbursements and the allocated cost of in-house counsel),
liabilities and advances made or incurred by the Agent in connection
therewith;
Next, to the Agent and the other Secured Parties, pro rata, based
--- ----
on the then outstanding principal amounts of the Secured Obligations
owed to each in payment in full of the Secured Obligations; and
-11-
<PAGE>
Finally, after payment in full in cash of all Secured Obligations,
termination of the Commitments and expiration or termination of all
outstanding Letters of Credit, to the payment to the Company, or its
successors or assigns, or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct,
of any surplus then remaining from such Proceeds.
SECTION 11. Expenses. The Company will upon demand pay to the Agent the
--------
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel (including the reasonable allocated cost of in-house
counsel) and of any experts, which the Agent may incur in connection with (a)
the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (b) the exercise or enforcement
of any of the rights of the Agent or any other Secured Party hereunder, or (c)
the failure by the Company to perform or observe any of the provisions hereof.
SECTION 12. Amendments, Etc. No amendment or waiver of any provision of
----------------
this Agreement nor consent to any departure by the Company herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Agent, and, in the case of amendment, by the Company and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 13. Address for Notices. All notices, requests and other
-------------------
communications provided for hereunder shall be in writing and given as provided
in Section 11.02 of the Credit Agreement.
SECTION 14. Continuing Security Interest. This Agreement shall create a
----------------------------
continuing security interest in the Pledged Collateral and shall (a) remain in
full force and effect until payment in full in cash (after the termination of
the Commitments and the expiration or termination of all outstanding Letters of
Credit) of the Secured Obligations; (b) continue to be effective if at any time
payment and performance of the Secured Obligations is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored by the Agent
or any other Secured Party; (c) be binding upon the Company, its successors and
assigns; and (d) inure, together with the rights and remedies of the Agent
hereunder, to the benefit of the Agent, the other Secured Parties and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (d), any Bank may assign or otherwise transfer its
rights and obligations under the Credit Agreement to any other Person or entity,
and such other
-12-
<PAGE>
Person or entity shall thereupon become vested with all the benefits in respect
thereof granted to such Bank herein or otherwise, all as provided in, and to the
extent set forth in, Section 11.07 of the Credit Agreement. Upon the payment in
full in cash (after the termination of the Commitments and the expiration or
termination of all outstanding Letters of Credit) of the Secured Obligations,
the Company shall be entitled to the return, upon its request and at its
expense, of such of the Pledged Collateral as shall not have been sold or
otherwise applied pursuant to the terms hereof.
SECTION 15. Security Interest Absolute. All rights and security interests
--------------------------
of the Secured Parties hereunder, and all obligations of the Company hereunder,
shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Credit
Agreement or any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Secured Obligations
(including, without limitation, the possible extension of the
Commitment Termination Date and increase of the amount of the
Commitments all on the terms and conditions set forth in the Credit
Agreement), or any other amendment or waiver of or any consent to any
departure from the Credit Agreement or any other Loan Document;
(iii) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured
Obligations; or
(iv) any other circumstance which might otherwise constitute
a defense available to, or a discharge of, the Company or a third
party pledgor.
SECTION 16. Use of Copies. Any carbon, photographic or other reproduction
-------------
of this Agreement or any financing statement signed by the Company is sufficient
as a financing statement for all purposes, including without limitation, filing
in any state as may be permitted by the provisions of the Uniform Commercial
Code of such state.
-13-
<PAGE>
SECTION 17. Right of Set-off.
----------------
(a) Upon the occurrence and during the continuance of any Event of
Default under the Credit Agreement, each Bank is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Bank to
or for the credit or the account of the Company against any and all of the
Secured Obligations, irrespective of whether or not such Bank shall have made
any demand under this Agreement and although such Secured Obligations may be
contingent and unmatured. Each Bank which sets-off pursuant to this Section
17(a) shall give prompt notice to the Company following the occurrence thereof;
provided that the failure to give such notice shall not affect the validity of
- --------
the set-off.
(b) Any payment obtained pursuant to Section 17(a) above (or in any
other manner directly from the Company) by any Bank shall be remitted to the
Agent and distributed among the Secured Parties in accordance with the
provisions of Section 10(d) above.
SECTION 18. Severability. If for any reason any provision or provisions
------------
hereof are determined to be invalid and contrary to any existing or future law,
such invalidity shall not impair the operation of or affect those portions of
this Agreement which are valid.
SECTION 19. Waiver of Jury Trial. THE COMPANY HEREBY AGREES TO WAIVE ANY
--------------------
RIGHT IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY ACTION, SUIT OR
PROCEEDING ARISING OUT OF OR RELATED IN ANY WAY TO THIS AGREEMENT OR THE CREDIT
AGREEMENT.
SECTION 20. Governing Law; Jurisdiction.
---------------------------
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT (i) PROCEDURAL AND
SUBSTANTIVE MATTERS RELATING ONLY TO THE PERFECTION, FORECLOSURE OF LIENS AND
ENFORCEMENT OF RIGHTS AND REMEDIES AGAINST THE COLLATERAL ARE GOVERNED BY THE
LAWS OF ANY APPLICABLE JURISDICTION OTHER THAN THE STATE OF NEW YORK, AND (ii)
THAT THE LAWS OF THE UNITED STATES OF AMERICA INCLUDING, WITHOUT LIMITATION, THE
NATIONAL BANK ACT, AND ANY RULES, REGULATIONS OR ORDERS ISSUED OR PROMULGATED
UNDER SUCH LAWS APPLICABLE TO THE AFFAIRS AND TRANSACTIONS ENTERED INTO BY THE
AGENT AND THE BANKS, OTHERWISE PREEMPT NEW YORK OR OTHER STATE LAW, IN WHICH
EVENT SUCH FEDERAL LAW SHALL CONTROL. Unless otherwise defined herein or in the
Credit Agreement, terms defined in Article 9 of the Uniform
-14-
<PAGE>
Commercial Code in the State of New York are used herein as therein defined.
(b) Any legal action or proceeding with respect to this Agreement may
be brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and by execution and delivery of
this Agreement, the Company hereby consents, for itself and in respect of its
property, to the jurisdiction of the aforesaid courts. The Company hereby
irrevocably waives any objection, including without limitation, any objection to
the laying of venue or based on the grounds of forum non conveniens, which it
----- --- ----------
may now or hereafter have to the bringing of any action or proceeding in such
jurisdiction in respect of this Agreement or any document related hereto.
SECTION 21. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original for all purposes;
but such counterparts shall be deemed to constitute but one and the same
instrument.
SECTION 22. Waiver of Subrogation. The Company expressly waives any and
---------------------
all rights of subrogation, reimbursement and contribution (contractual,
statutory or otherwise) against the Secured Parties, individually and
collectively, including without limitation, any claim or right of subrogation
under the Bankruptcy Code (Title 11 of the U.S. Code) or any successor statute,
arising from the existence or performance of this Agreement and the Company
irrevocably waives any right to enforce any remedy which the Secured Parties, or
any one or more of them, now have or may hereafter have against Borrowers and
waives any benefit of, and any right to participate in, any security now or
hereafter held by the Secured Parties, or any one or more of them.
SECTION 23. Subordination. The Company hereby expressly covenants and
-------------
agrees for the benefit of the Secured Parties that all obligations and
liabilities of Borrowers to the Company of whatsoever description (including,
without limitation, all intercompany receivables of the Company from Borrowers)
shall be subordinated and junior in right of payment to the Secured Obligations.
Following the occurrence of an Event of Default, any indebtedness of Borrowers
to the Company shall, if the Agent shall so request, be collected and received
by the Company as trustee for the Secured Parties and paid over to the Secured
Parties, or any one or more of them, as the case may be, on account of the
Secured
-15-
<PAGE>
Obligations, but without reducing or affecting in any manner the obligations of
the Company under this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
WILLBROS USA, INC.
By:___________________________________
Larry J. Bump, President
Address:
-------
2431 East 61st St., Suite 700
Tulsa, Oklahoma 74136
Attention: Melvin F. Spreitzer
Telex: 79-6660
Answerback: WILLBRO TUL
Telecopier: 918/748-7027
Agreed to:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By:______________________________
Alice Zane, Vice President
-16-
<PAGE>
SCHEDULE I
TO
PLEDGE AGREEMENT
Attached to and forming a part of that certain Pledge Agreement dated as of
September 16, 1993, by Willbros USA, Inc. to Bank of America National Trust and
Savings Association, as Agent
SCHEDULE OF PLEDGED SHARES
--------------------------
<TABLE>
<CAPTION>
State or
Name of Country of Class of Stock Par Number
Subsidiary Organization Stock Certificate No. Value of Shares
- ------------ ------------ -------- --------------- ----- ---------
<S> <C> <C> <C> <C> <C>
Willbros Delaware Common 10 $1.00 10,000
Energy Common 12 $1.00 308
Services
Company
Willbros Delaware Common 104 $1.00 1,000
Butler
Engineers,
Inc.
</TABLE>
<PAGE>
SCHEDULE II
TO
PLEDGE AGREEMENT
STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE
------------------------------------------
For Value Received, the undersigned does hereby sell, assign and transfer unto:
________________________________________________________________________________
______________________ (_________________) Shares of the _______________________
Stock of ___________________________________________________________ standing in
__________________________________ name on the books of said Corporation
represented by certificate No. ______________________ herewith and does hereby
irrevocably constitute and appoint______________________________________________
attorney to transfer the said stock on the books of the within named Corporation
with full power of substitution.
Dated:______________________ WILLBROS USA, INC.
By:___________________________
Name:_______________________
Title:______________________
Signature Attested to by:
___________________________________
(Name)
___________________________________
(Title)
___________________________________
(Date)
<PAGE>
SCHEDULE III
TO
PLEDGE AGREEMENT
PLEDGE AGREEMENT SUPPLEMENT
---------------------------
This Pledge Agreement Supplement, dated as of _________, 199_, is delivered
pursuant to Section 5 of the Pledge Agreement referred to below. The undersigned
hereby agrees that this Pledge Agreement Supplement may be attached to the
Pledge Agreement dated as of September 16, 1993 (the "Pledge Agreement", the
terms defined therein and not otherwise defined herein being used herein as
therein defined), made by the undersigned to Bank of America National Trust and
Savings Association, as Agent for the Banks party to the Credit Agreement dated
as of September 16, 1993, among Willbros International, Inc., Willbros USA,
Inc., the Designated Subsidiaries, Willbros Group, Inc., Willbros Engineering &
Construction Limited, the several financial institutions from time to time a
party thereto and the Agent.
The undersigned agrees that the securities listed below shall for all
purposes constitute Pledged Collateral and shall be subject to the security
interest created by the Pledge Agreement.
The undersigned hereby certifies that the representations and warranties
set forth in Section 4 of the Pledge Agreement are true and correct as to the
Pledged Collateral listed herein on and as of the date hereof.
WILLBROS USA, INC.
By:________________________________
Name:___________________________
Title:__________________________
State or Class Stock Percentage Number
Stock Country of of Certifi- of Par of
Issuer Organization Stock cate No(s). Ownership Value Shares
- ------ ------------ ----- ----------- --------- ----- ------
<PAGE>
SCHEDULE IV
TO
PLEDGE AGREEMENT
SCHEDULE OF UCC FILINGS IN FAVOR OF THE AGENT
---------------------------------------------
<TABLE>
<CAPTION>
State Filing Offices
----- --------------
<S> <C>
Oklahoma County Clerk of Oklahoma
County
</TABLE>
<PAGE>
EXHIBIT 10.2
FIRST AMENDMENT TO CREDIT AGREEMENT
This Agreement, dated as of November 30, 1994 (this "Amendment"), is
---------
entered into by and among Willbros Group, Inc., Willbros International, Inc.,
Willbros Engineering & Construction Limited, Willbros USA, Inc., the Designated
Subsidiaries, the financial institutions parties to this Agreement
(collectively, the "Banks"; individually, a "Bank") and Bank of America National
Trust and Savings Association, as Agent (the "Agent").
RECITALS
--------
The Company, Willbros International, Inc., Willbros Engineering &
Construction Limited, Willbros USA, Inc., the Designated Subsidiaries, the Agent
and the Banks are parties to a Credit Agreement dated as of September 16, 1993
(the "Credit Agreement"), pursuant to which the Banks extended a revolving
----------------
facility and made revolving loans. Capitalized terms used and not otherwise
defined or amended in this Amendment shall have the meanings respectively
assigned to them in the Credit Agreement.
The Company has requested that the Banks extend the Commitment Termination
Date, increase the amount of the Commitments and modify certain covenants. In
order to induce the Banks to agree to the foregoing, the Banks have requested,
and the Company has agreed, to pay an upfront fee in the amount of $100,000, to
be allocated as provided in Section "B" below. The Company has requested that
the Banks enter into this Amendment in order to approve and reflect the
foregoing, and the Banks have agreed to do so, all upon the terms and provisions
and subject to the conditions hereinafter set forth.
AGREEMENT
---------
In consideration of the foregoing and the mutual covenants and agreements
hereinafter set forth, the parties hereto mutually agree as follows:
A. AMENDMENTS
----------
1. Amendment of Section 1.01
-------------------------
(a) Section 1.01 of the Credit Agreement is hereby amended by
amending and restating the definition of "Commitment Termination Date" as
follows:
"Commitment Termination Date" means the earlier to occur of (a)
---------------------------
October 31, 1996, and (b) the date on which the Commitments shall
terminate in accordance with the provisions of this Agreement.
1
<PAGE>
(b) Section 1.01 of the Credit Agreement is hereby further amended by
deleting the amount "Seventy Five Million dollars ($100,000,00)" in the
definitions of "Commitments", "Revolving Commitments" and "Letter of Credit
Commitments" and replacing it with the amount "One Hundred Million dollars
($100,000,000)".
(c) Section 1.01 of the Credit Agreement is hereby further amended by
adding, at the end of the second sentence of the definition of "Tangible
Net Worth", the following:
"and the Two Million Eight Hundred Thousand dollars ($2,800,000) in
deemed dividends arising from the acquisition of certain operations in
Venezuela that occurred in May 1994."
(d) Section 1.01 of the Credit Agreement is hereby further amended by
adding, at the end of clause "(d)" of the definition of "Cash Equivalent",
the following:
"or Bank of Oklahoma, National Association";
(e) Section 1.01 of the Credit Agreement is hereby further amended by
adding, at the end of the definition of "Issuing Bank", "or Bank of America
Illinois".
2. Amendment of Section 3.02(d)
----------------------------
Section 3.02(d) is hereby amended by deleting the text "2:00 p.m.
(New York time) on" and replacing such text with "the close of business on the
Business Day immediately preceding".
3. Amendment of Section 7.01(b)
----------------------------
Section 7.01(b) is hereby amended by deleting the text "certified by a
responsible Officer as having been prepared in connection with financial
statements referred to in paragraph (a) of this Section" and replacing such text
with "accompanied by the opinion of KPMG Peat Marwick or another nationally
recognized independent public accounting firm which report shall state that such
consolidating information has been subjected to the auditing procedures applied
in the audits of the consolidated financial statements and, in our opinion, is
fairly stated in all material respects in relation to the consolidated financial
statements taken as a whole."
2
<PAGE>
4. Amendment of Section 7.01(d)
----------------------------
Section 7.01(d) is hereby amended by deleting the text "after the end
of each fiscal quarter" and replace such text with "after the end of each of the
first three fiscal quarters".
5. Amendment of Section 8.03
-------------------------
Section 8.03 is hereby amended by deleting clause "(ix)" thereof in its
entirety and substituting the following therefor:
"(ix) the investment of up to $35,000,000 in the operating company in
connection with the Trans-Ecuadorian Pipeline System Expansion
Project, as described in Schedule 8.11, and as further described in
the Company's letter dated September 9, 1994, to the Agent;".
6. Amendment of Section 8.04(d)
----------------------------
Section 8.04(d) of the Credit Agreement is hereby amended by deleting the
percentage "ten percent (10%)" and replacing it with "twenty percent (20%)".
7. Amendment of Section 8.10
-------------------------
Section 8.10 of the Credit Agreement is hereby amended by adding the
following to the end of subparagraph "(a)" thereof:
"and the Company may make quarterly preferred dividend payments from
and after March 31, 1996, in an amount not to exceed $724,000 per
quarter,".
8. Amendment of Section 8.16
-------------------------
Section 8.16 of the Credit Agreement is hereby amended by deleting the
ratio "4.75 to 1.00" and replacing it with the ratio "2.50 to 1.00" and by
adding the following proviso to the end of said Section:
"; provided, however, that, with respect to the fourth fiscal quarter
-------- --------
of 1995 only, the ratio shall be "2.25 to 1.00."
9. Amendment of Section 11.07(a)
-----------------------------
Section 11.07(a) is hereby amended by deleting the amount "Ten Million
dollars ($10,000,000) and substituting the amount "Five Million dollars
($5,000,000).
3
<PAGE>
10. Amendment of Schedule 2.01
--------------------------
Schedule 2.01 is hereby amended in its entirety by replacing Schedule 2.01
with the new Schedule 2.01 which is attached hereto.
B. FEES
----
In consideration of the foregoing, the Company agrees to pay, on the
effective date of this Amendment, a fee in the amount of $100,000, payable to
the Agent for the account of the Banks, to be allocated as follows: (1) $32,500
flat, payable to Bank of America NT&SA; (2) $10,000 flat, payable to each of the
other Banks (except for Bank Austria); and (3) a fee payable to each of the
Banks, including Bank of America NT&SA but not Bank Austria, equal to .15% times
the amount by which each Bank's commitment has been increased by its acceptance
of this Amendment; and (4) $15,000 flat, payable to Bank Austria.
C. JOINT VENTURE
-------------
The Banks hereby confirm that the investment in the Ecuador operating
company in an amount not to exceed $35 million, as described in the Company's
letter dated September 9, 1994 to the Agent is approved as a joint venture
project set forth on Schedule 8.11.
D. REPRESENTATIONS AND WARRANTIES
------------------------------
WGI, WII, WECL, and WUSA each hereby represent and warrant to the Agent
and the Banks that:
1. No Event of Default specified in the Credit Agreement and no event
which with notice or lapse of time or both would become such an Event of Default
has occurred and is continuing;
2. The representations and warranties of the Company and each Borrower
pursuant to the Credit Agreement are true on and as of the date hereof as if
made on and as of said date;
3. The making and performance of this Amendment have been duly authorized
by all necessary corporate action; and
4. No consent, approval, authorization, permit or license from any
federal or state regulatory authority is required in connection with the making
or performance of the Credit Agreement as amended hereby.
4
<PAGE>
E. CONDITIONS PRECEDENT
--------------------
This Amendment will become effective as of November 30, 1994, upon
execution by all of the Banks, provided that the Agent shall have received not
later than December 9, 1994, in form and substance satisfactory to the Agent and
the Banks, all of the following:
1. A copy of a resolution passed by the Board of Directors of the
Company, certified by the Secretary or an Assistant Secretary of the Company as
being in full force and effect on the date hereof, authorizing the execution and
delivery of this Amendment and the performance of the Credit Agreement, as
hereby amended.
2. A certificate of incumbency certifying the names of the officers of
the Company authorized to sign this Amendment, together with the true signatures
of such officers.
3. Executed counterparts of this Amendment.
4. Payment of fees due under Section B. hereunder.
F. MISCELLANEOUS
-------------
1. This Amendment may be signed in any number of counterparts, each of
which shall be an original, with same effect as if the signatures thereon and
hereon were upon the same instrument. The Agent may accept signature pages by
facsimile provided that any party sending its signature page by facsimile
promptly sends its original to the Agent by hand delivery or overnight courier.
2. Except as herein specifically amended, all terms, covenants and
provisions of the Credit Agreement shall remain in full force and effect and
shall be performed by the parties hereto according to its terms and provisions
and all references therein or in the Exhibits or Schedules thereto shall
henceforth refer to the Credit Agreement as amended by this Amendment.
3. This Amendment shall be governed by and construed in accordance with
the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first written.
5
<PAGE>
WILLBROS GROUP, INC.
By: /s/ Melvin F. Spreitzer
---------------------------------------------
Title: Executive Vice President
------------------------------------------
WILLBROS INTERNATIONAL, INC.
By: /s/ Melvin F. Spreitzer
---------------------------------------------
Title: Executive Vice President
------------------------------------------
WILLBROS ENGINEERING &
CONSTRUCTION LIMITED
By: /s/ Melvin F. Spreitzer
---------------------------------------------
Title: Executive Vice President
------------------------------------------
WILLBROS USA, INC.
By: /s/ Melvin F. Spreitzer
---------------------------------------------
Title: Executive Vice President
------------------------------------------
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION,
As Agent
By: /s/ Daniel G. Farthing
----------------------------------------------
Title: Vice President
-------------------------------------------
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
By: /s/ [Signature Illegible]
----------------------------------------------
Title: Vice President
-------------------------------------------
ABN AMRO BANK N.V.
By: /s/ David P. Orr
----------------------------------------------
Title: Vice President
-------------------------------------------
By: /s/ Ronald A. Mahle
----------------------------------------------
Title: Group Vice President
-------------------------------------------
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ [Signature Illegible]
----------------------------------------------
Title: Senior Vice President
-------------------------------------------
6
<PAGE>
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By: /s/ [Signature Illegible]
-----------------------------------------------------
Title: AUTHORIZED SIGNATURE
--------------------------------------------------
SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ [Signature Illegible] /s/ [Signature Illegible]
------------------------------------------------------
Title: AVP PVP
---------------------------------------------------
BANK AUSTRIA AKTIENGESELLSCHAFT
GRAND CAYMAN BRANCH
By: /s/ [Signature Illegible]
------------------------------------------------------
Title: (Title Illegible)
---------------------------------------------------
By: /s/ [Signature Illegible]
------------------------------------------------------
Title: V.P.
---------------------------------------------------
BANKAMERICA INTERNATIONAL
By: /s/ [Signature Illegible]
------------------------------------------------------
Title: Vice President
---------------------------------------------------
BANK OF AMERICA ILLINOIS
By: /s/ [Signature Illegible]
------------------------------------------------------
Title: Vice President
---------------------------------------------------
7
<PAGE>
SCHEDULE 2.01
<TABLE>
<CAPTION>
COMMITMENTS:
<S> <C>
Bank of America National
Trust and Savings Association $40,000,000
ABN/AMRO Bank N.V. $20,000,000
Credit Lyonnais $10,000,000
Societe Generale, Southwest Agency $20,000,000
Bank Austria $10,000,000
</TABLE>
8
<PAGE>
EXHIBIT 10.7
INDEMNIFICATION AGREEMENT
--------------------------
THIS INDEMNIFICATION AGREEMENT (hereinafter referred to as the
"Agreement") is made and entered into this/as of the ___ day of __________,
199__, by and between WILLBROS GROUP, INC., a Panama corporation (hereinafter
referred to as the "Company"), and ____________________, an individual
(hereinafter referred to as the "Indemnitee").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;
WHEREAS, Indemnitee is an officer or director of the Company or of an
entity in which the Company directly or indirectly owns an interest;
WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors and officers of
companies in today's environment;
WHEREAS, the Articles of Incorporation and/or By-laws of the Company
(hereinafter referred to as the "Charter Documents") require the Company to
indemnify its officers and directors, and persons who serve at its request as
officers or directors of other companies, and Indemnitee has served and
continues to serve in such capacity, in part in reliance on the Charter
Documents; and
WHEREAS, in recognition of Indemnitee's need for substantial
protection against personal liability in order to enhance Indemnitee's continued
service to the Company in an effective manner, the absence of director and
officer liability insurance coverage, and Indemnitee's reliance on the Charter
Documents, and in part to provide Indemnitee with specific contractual assurance
that the protection promised by the Charter Documents will be available to
Indemnitee (regardless of, among other things, any amendment to or revocation of
the Charter Documents or any change in the composition of the Company's Board of
Directors or acquisition transaction relating to the Company), the Company
wishes to provide in this Agreement for the indemnification of and the advancing
of expenses to Indemnitee to the fullest extent (whether partial or complete)
permitted by law and as set forth in this Agreement, and, if insurance is
obtained, for the coverage of Indemnitee under the Company's directors' and
officers' liability insurance policies.
<PAGE>
NOW, THEREFORE, in consideration of the premises and of Indemnitee's
continuing to serve the Company directly, or at its request another enterprise,
and intending to be legally bound hereby, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS:
--------------------
(a) CHANGE IN CONTROL: shall be deemed to have occurred if (i) any
------------------
"person" (as defined in Section 1(e) below) becomes, after the date hereof, the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended [hereinafter referred to as the "1934 Act"]), directly or
indirectly, of securities of the Company representing 50% or more of the total
voting power represented by the Company's then outstanding Voting Securities; or
(ii) during any period of two (2) consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company and
any new director whose election by the Company's Board of Directors or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or (iii) a merger or consolidation of the Company with any
other corporation is approved, other than a merger or consolidation which would
result in the Voting Securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into Voting Securities of the surviving entity) at least eighty
percent (80%) of the total voting power represented by the Voting Securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation; or (iv) a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets is approved.
(b) CLAIM: any threatened, pending or completed action, suit or
------
proceeding, or any inquiry or investigation, whether conducted by the Company or
any other party, that Indemnitee in good faith believes might lead to the
institution of any such action, suit or proceeding, whether civil, criminal,
administrative, investigative or other.
(c) EXPENSES: include attorneys' fees and all other costs, expenses
---------
and obligations paid or incurred in connection with investigating, defending,
being a witness in, participating in (including on appeal), or preparing to
defend, be a witness in or participate in any Claim relating to any
Indemnifiable Event.
-2-
<PAGE>
(d) INDEMNIFIABLE EVENT: any event or occurrence related to the fact
--------------------
that Indemnitee is or was a director, officer, employee, agent or fiduciary of
the Company, or is or was serving at the request (expressed or implied) of the
Company as a director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, or by reason of anything done or not done by Indemnitee in any such
capacity.
(e) PERSON: any person, as such term is used in Sections 13(d) and
-------
14(d) of the 1934 Act, but excluding therefrom a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or a
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.
(f) POTENTIAL CHANGE IN CONTROL: shall be deemed to have occurred
----------------------------
if (i) the Company enters into an agreement the consummation of which would
result in the occurrence of a Change in Control; (ii) any person (including the
Company) publicly announces an intention to take or to consider taking actions
which if consummated would constitute a Change in Control; or (iii) the Board of
Directors of the Company adopts a resolution to the effect that, for purposes of
this Agreement, a Potential Change in Control has occurred.
(g) REVIEWING PARTY: any appropriate person or body consisting of
----------------
a member or members of the Company's Board of Directors or any other person or
body appointed by the Company's Board of Directors (including the special,
independent counsel referred to in Section 3 below) who is not a party to the
particular Claim for which Indemnitee is seeking indemnification.
(h) VOTING SECURITIES: any securities of the Company which vote
------------------
generally in the election of directors.
2. BASIC INDEMNIFICATION ARRANGEMENT.
----------------------------------
(a) In the event Indemnitee was, is or becomes a party to or witness
or other participant in, or is threatened to be made a party to or witness or
other participant in, a Claim by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall indemnify Indemnitee to the fullest
extent permitted by law, as the same exists or hereafter may be amended,
promptly upon the receipt of written demand, against any and all Expenses,
judgments, fines, penalties and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in connection with or in
respect of such Expenses, judgments, fines, penalties or amounts paid in
settlement) of such Claim. If so requested by Indemnitee, the Company shall
advance (within two [2] business days after the Company's receipt of such
request) any and all
-3-
<PAGE>
Expenses to Indemnitee (hereinafter referred to as an "Expense Advance").
Notwithstanding anything in this Agreement to the contrary, prior to a Change in
Control, Indemnitee shall not be entitled to indemnification pursuant to this
Agreement in connection with any claim initiated by Indemnitee against the
Company or any director or officer of the Company unless the Company has joined
in or consented to the initiation of such Claim.
(b) Notwithstanding the foregoing, (i) the obligations of the Company
under Section 2(a) shall be subject to the condition that the Reviewing Party
shall not have determined (in a written legal opinion if the special,
independent counsel referred to in Section 3 below is involved) that
indemnification of Indemnitee would not be permitted under applicable law,
provided, that to be effective any such denial of indemnity must be in writing,
delivered to the Indemnitee, stating with particularity the reason for such
denial; and (ii) the obligation of the Company to make an Expense Advance
pursuant to Section 2(a) above shall be subject to the condition that if, when
and to the extent that the Reviewing Party determines that indemnification of
Indemnitee would not be permitted under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced legal proceedings in a court of competent jurisdiction
to secure a determination that Indemnitee should be indemnified under applicable
law, any determination made by the Reviewing Party that indemnification of
Indemnitee would not be permitted under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto (as to
which all rights of appeal therefrom have been exhausted or lapsed).
(c) If there has not been a Change in Control, the Reviewing Party
shall be selected by the Board of Directors of the Company, and if there has
been such a Change in Control, the Reviewing Party shall be the special,
independent counsel referred to in Section 3 below. If there has been no
determination by the Reviewing Party or if the Reviewing Party determines that
indemnification of Indemnitee would not be permitted in whole or in part under
applicable law, Indemnitee shall have the right to commence litigation, in any
court in the state of Oklahoma or Delaware or the Republic of Panama having
subject matter jurisdiction thereof and in which venue is proper, seeking an
initial determination by the court or challenging any such determination by the
Reviewing Party or any aspect thereof, and the Company hereby consents to
service of process and to appear in any such proceeding. Any determination by
the Reviewing Party otherwise shall be conclusive and binding on the Company and
Indemnitee.
-4-
<PAGE>
3. CHANGE IN CONTROL. The Company agrees that if there is a Change
------------------
in Control, then, with respect to all matters thereafter arising concerning the
rights of Indemnitee to indemnity payments and Expense Advances under this
Agreement or any other agreement or the Charter Documents now or hereafter in
effect relating to Claims for Indemnifiable Events, the Company shall seek legal
advice only from special, independent counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld),
which counsel has not otherwise performed services for the Company or Indemnitee
within the last five (5) years (other than in connection with such matters).
Such counsel, among other things, shall render its written opinion to the
Company and Indemnitee as to whether and to what extent the Indemnitee would be
permitted to be indemnified under applicable law. The Company agrees to pay the
reasonable fees of the special, independent counsel referred to above and to
fully indemnify such counsel against any and all expenses (including attorneys'
fees), claims, liabilities and damages arising out of or relating to this
Agreement or such counsel's engagement pursuant hereto.
4. ESTABLISHMENT OF TRUST. In the event of a Potential Change in
-----------------------
Control, the Company shall promptly, upon written request by Indemnitee, create
a trust for the benefit of Indemnitee (hereinafter referred to as the "Trust")
and, from time to time upon written request by Indemnitee, shall fund the Trust
in an amount sufficient to satisfy (a) any and all Expenses reasonably
anticipated at the time of each such request to be incurred in connection with
investigating, preparing for and defending any Claim relating to an
Indemnifiable Event, and (b) any and all judgments, fines, penalties and
settlement amounts of any and all Claims relating to an Indemnifiable Event from
time to time actually paid or claimed, reasonably anticipated or proposed to be
paid. The terms of the Trust shall provide that, upon a Change in Control, (i)
the Trust shall not be revoked or the principal thereof invaded, without the
written consent of Indemnitee; (ii) the trustee of the Trust (hereinafter
referred to as the "Trustee"), shall advance to Indemnitee, within two (2)
business days of a request by Indemnitee, any and all Expenses (and Indemnitee
hereby agrees to reimburse the Trust under the circumstances under which
Indemnitee would be required to reimburse the Company under Section 2(b) above);
(iii) the Trust shall continue to be funded by the Company in accordance with
the funding obligation set forth above; (iv) the Trustee shall promptly pay to
Indemnitee all amounts for which Indemnitee shall be entitled to indemnification
pursuant to this Agreement or otherwise; and (v) all unexpended funds in the
Trust shall revert to the Company upon a final determination by the Reviewing
Party or a court of competent jurisdiction, as the case may be, that Indemnitee
has been fully indemnified under the terms of this Agreement. The Trustee shall
be chosen by Indemnitee, with the approval of the Company (which approval shall
not be unreasonably withheld), and all reasonable expenses, fees and other
disbursements of the Trustee in connection with the establishment and
administration of the Trust shall
-5-
<PAGE>
be paid by the Company. Nothing in this Section 4 shall relieve the Company of
any of its obligations under this Agreement or any provision of the Charter
Documents or other agreement now or hereafter in effect.
5. INDEMNIFICATION FOR ADDITIONAL EXPENSES. The Company shall
----------------------------------------
indemnify Indemnitee against any and all expenses (including attorneys' fees)
and, if requested by Indemnitee, shall (within two [2] business days after
receipt of such request) advance such expenses to Indemnitee, which are incurred
by Indemnitee in connection with any claim asserted against or action brought by
Indemnitee for (a) indemnification or advance payment of Expenses by the Company
under this Agreement or any other agreement or any provision of the Charter
Documents now or hereafter in effect relating to Claims for Indemnifiable
Events; and/or (b) recovery under any directors' and officers' liability
insurance policies maintained by the Company, provided that in either case,
Indemnitee ultimately is determined to be entitled in whole or in part, to such
indemnification, advance expense payment or insurance recovery, as the case may
be. The Company shall be entitled to be reimbursed by Indemnitee (who hereby
agrees to reimburse the Company) for all such amounts theretofore paid
Indemnitee under this Section 5 if Indemnitee ultimately is determined not to be
entitled to such indemnification, advance expense payment or insurance recovery,
as the case may be.
6. PARTIAL INDEMNITY, ETC. If Indemnitee is entitled under any
-----------------------
provision of this Agreement to indemnification by the Company for a portion, but
not all, of the Expenses, judgments, fines, penalties and amounts paid in
settlement of a Claim, the Company shall nevertheless indemnify Indemnitee for
the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding
any other provision of this Agreement, to the extent that Indemnitee has been
successful on the merits or otherwise in defense of any or all Claims relating
in whole or in part to an Indemnifiable Event or in defense of any issue or
matter therein, including without limitation dismissal without prejudice,
Indemnitee shall be indemnified against all Expenses incurred in connection
therewith.
7. BURDEN OF PROOF. In connection with any determination by the
----------------
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder the burden of proof shall be on the Company to establish
that Indemnitee is not so entitled.
8. NO PRESUMPTION. For purposes of this Agreement, the termination
---------------
of any claim, action, suit or proceeding, by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea
-6-
<PAGE>
of nolo contendere, or its equivalent, shall not create a presumption that
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law.
9. NON-EXCLUSIVITY, ETC. The rights of Indemnitee hereunder shall
---------------------
be in addition to any other rights Indemnitee may have under the Charter
Documents or the corporate law of the Republic of Panama or otherwise. To the
extent that a change in the corporate law of the Republic of Panama (whether by
statute or judicial decision) permits greater indemnification by agreement than
would be afforded currently under the Charter Documents and this Agreement, it
is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits so afforded by such change.
10. LIABILITY INSURANCE. To the extent the Company maintains an
--------------------
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by such policy or policies, in accordance
with its or their terms, to the maximum extent of the coverage available for any
Company director or officer.
11. AMENDMENTS, ETC. No supplement, modification or amendment of
----------------
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
12. SUBROGATION. In the event of payment under this Agreement, the
------------
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including without
limitation the execution of such documents as may be necessary to enable the
Company effectively to bring suit to enforce such rights.
13. NO DUPLICATION OF PAYMENT. The Company shall not be liable under
--------------------------
this Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, the Charter Documents or otherwise) of the amounts
otherwise indemnifiable hereunder.
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<PAGE>
14. BINDING EFFECT, ETC. This Agreement shall be binding upon and
--------------------
inure to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns (including without limitation any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company), spouse, heirs,
and personal and legal representatives. This Agreement shall continue in effect
regardless of whether Indemnitee continues to serve as an officer or director of
the Company or of any other enterprise at the Company's request.
15. SEVERABILITY. The provisions of this Agreement shall be
-------------
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) are held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable, and the
remaining provisions shall remain enforceable to the fullest extent permitted by
law.
16. GOVERNING LAW. This Agreement shall be governed by and construed
--------------
and enforced in accordance with the laws of the Republic of Panama applicable to
contracts made and to be performed in such country without giving effect to the
principles of conflicts of laws.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by Indemnitee and a duly authorized representative of the Company
on/as of the date first above written.
WILLBROS GROUP, INC.
By: __________________________________
Title:__________________________________
________________________________________
(Indemnitee's typed name below line)
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EXHIBIT 10.8
WILLBROS GROUP, INC.
1996 STOCK PLAN
1. PURPOSE. The Willbros Group, Inc. 1996 Stock Plan (the "Plan") is
intended as an employment incentive and to encourage stock ownership by key
employees, consultants and advisors, or individuals who may become key
employees, consultants or advisors, of Willbros Group, Inc., a Republic of
Panama corporation (the "Corporation"), or the Subsidiaries (as hereinafter
defined), in order to increase their proprietary interest in the Corporation's
success and to provide them with additional motivation to continue in the
Corporation's employ and to further its profitable growth.
2. DEFINITIONS. In addition to the terms defined elsewhere in the Plan,
the following terms, as used in the Plan, shall have the meanings indicated
below:
"Award" means any Option, Stock Appreciation Right or Restricted Stock
granted under the Plan.
"Award Agreement" means any written agreement, contract or other
instrument or document evidencing an Award.
"Board" means the Corporation's Board of Directors.
"Code" means the U.S. Internal Revenue Code of 1986, as amended from
time to time. References to any provision of the Code include regulations
thereunder and successor provisions and regulations.
"Commission" means the U.S. Securities and Exchange Commission.
"Committee" means such Committee of the Board as may be designated by
the Board to administer the Plan; provided, however, that the Committee
shall be so constituted as to permit the Plan to comply with Rule 16b-3.
"Common Stock" means common stock, par value U.S.$.05 per share, of
the Corporation.
"Disability" has the meaning set forth in that certain Willbros USA,
Inc. Long Term Disability Plan as of January 1, 1995, and any successor
plan.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended from time to time. References to any provision of the Exchange Act
include rules thereunder and successor provisions and rules.
"Fair Market Value" means, as of any given date, (a) at any time that
Shares are listed on the NYSE, the closing sales price of a Share reported
in the table entitled "New York Stock Exchange Composite Transactions"
contained in The Wall Street Journal (or an equivalent successor table) for
such date or, if no such closing sales price was reported
<PAGE>
for such date, for the most recent trading day prior to such date for which
a closing sales price was reported, and (b) at any time that Shares are not
listed on the NYSE, the value determined by such methods or procedures as
shall be established from time to time by the Committee.
"Incentive Stock Option" means an Option that is intended to meet the
requirements of Section 422 of the Code.
"Non-qualified Stock Option" means an Option which is not intended to
be an Incentive Stock Option.
"NYSE" means the New York Stock Exchange, Inc.
"Option" means a right, granted under Section 5 hereof, to purchase
Shares at a specified price during specified time periods. An Option may be
either an Incentive Stock Option or a Non-qualified Stock Option.
"Participant" means a key employee, consultant or advisor of the
Corporation or any of its Subsidiaries who is eligible, under Section 3
hereof, for and receives a grant of an Award under the Plan.
"Person" has the meaning assigned in the Exchange Act.
"Restricted Stock" means Shares, granted under Section 6 hereof, that
are subject to certain restrictions and to a risk of forfeiture.
"Retirement" means retirement from employment with the Corporation and
the Subsidiaries in accordance with the terms of a Corporation or
Subsidiary retirement plan.
"Rule 16a-1(c)(3)" means Rule 16a-1(c)(3), as amended from time to
time, or any successor to such Rule, promulgated by the Commission under
Section 16 of the Exchange Act.
"Rule 16b-3" means Rule 16b-3, as amended from time to time, or any
successor to such Rule, promulgated by the Commission under Section 16 of
the Exchange Act.
"Securities Act" means the U.S. Securities Act of 1933, as amended
from time to time. References to any provision of the Securities Act
include rules thereunder and successor provisions and rules.
"Share" means a share of Common Stock and such other securities of the
Corporation as may be substituted or resubstituted for such Share pursuant
to Section 12 hereof.
"Stock Appreciation Right" means a right, granted under Section 7
hereof, to be paid an amount measured by the appreciation in the Fair
Market Value of Shares from the date of grant of the Award (except as
provided in Section 18 hereof) to the date of exercise
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of the Award (except as provided in Section 7 hereof) with payment to be
made in cash, Shares or other Awards as specified in the Award or by the
Committee.
"Subsidiary(ies)" means one or more corporations in which the
Corporation owns, directly or indirectly, not less than 50 percent of the
total combined voting power of all classes of stock.
Definitions of the terms "Change of Control," "Related Party" and "Voting
Security(ies)" are set forth in Section 17 hereof.
3. ELIGIBILITY. The individuals who shall be eligible to participate in
the Plan shall be (a) key or potential key employees (including without
limitation officers and directors who are employees) of the Corporation or any
of the Subsidiaries, and (b) consultants and advisors of the Corporation or any
of the Subsidiaries who devote substantially all of their time and efforts on
behalf of the Corporation and the Subsidiaries; provided, however, that no Award
shall be granted to any member of the Committee or to any individual who has
served as a member of the Committee at any time during the one-year period prior
to the date an Award is to be granted to such individual.
4. COMMON STOCK. Subject to adjustment in accordance with the provisions
of Section 13 hereof, the total number of Shares reserved and available for
distribution pursuant to Awards granted under the Plan (including without
limitation notional Shares used for measuring Stock Appreciation Rights) shall
not exceed in the aggregate 1,125,000 Shares; provided, however, that the number
of Shares issued as Awards other than Options and Stock Appreciation Rights
shall not exceed 25 percent of the total number of Shares issuable under the
Plan.
For purposes of this Section 4, the number of Shares to which an Award
relates (including without limitation notional Shares with respect to an Award
of Stock Appreciation Rights) shall be counted against the number of Shares
reserved and available under the Plan at the time of grant of the Award, unless
such number of Shares cannot be determined at that time, in which case the
number of Shares actually distributed pursuant to the Award shall be counted
against the number of Shares reserved and available under the Plan at the time
of distribution; provided, however, that Awards related to or retroactively
added to, or granted in tandem with, substituted for or converted into, other
Awards shall be counted or not counted against the number of Shares reserved and
available under the Plan in accordance with procedures adopted by the Committee
so as to ensure appropriate counting but avoid double counting; and provided
further, that the number of Shares deemed to be issued under the Plan upon
exercise or settlement of any Award shall be reduced by the number of Shares
surrendered by the Participant or withheld by the Corporation in payment of the
exercise or purchase price of the Award and withholding taxes relating to the
Award.
If any Shares to which an Award relates are forfeited, or payment is made
to the Participant in the form of cash, cash equivalents or other property other
than Shares (including without limitation cash paid with respect to Stock
Appreciation Rights), or the Award otherwise terminates without payment being
made to the Participant in the form of Shares, any Shares counted against the
number of Shares reserved and available under the Plan with respect to such
Award shall, to the extent of any such forfeiture, alternative payment or
termination, again be
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<PAGE>
available for Awards under the Plan. Any Shares distributed pursuant to an Award
may consist, in whole or in part, of authorized and unissued Shares or of
treasury Shares, including without limitation Shares repurchased by the
Corporation for purposes of the Plan.
During any calendar year, no Participant may be granted Awards under the
Plan with respect to more than 150,000 Shares, subject to adjustment as provided
in Section 13 hereof. For purposes of this Section 4, unless more restrictive
counting is required in order for Awards to comply with the requirements of Code
Section 162(m), this provision will limit the maximum number of Shares that
potentially can be issued to a Participant under Awards (taking into
consideration the terms of the Awards, including tandem exercise or settlement
provisions).
5. TERMS AND CONDITIONS OF OPTIONS. Options granted pursuant to the Plan
shall be evidenced by Award Agreements in such form as the Committee shall, from
time to time, approve, which Award Agreements shall comply with and be subject
to the terms and conditions set forth in this Section 5. In addition, the
Committee may impose on any Award or the exercise or settlement thereof, at the
date of grant or thereafter (subject to the terms of Section 15 hereof), such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall determine. Except as may be required under the
Panama General Corporation Law or as provided in Section 8 or 18 hereof, Awards
shall be granted for no consideration other than prior and future services.
(a) EXERCISE PRICE. The exercise price per Share for each Option
granted under the Plan shall be determined by the Committee; provided,
however, except as provided in Section 18 hereof, such exercise price shall
not be less than (i) in the case of a Non-qualified Stock Option, 85
percent of the Fair Market Value of a Share on the day such Option is
granted; or (ii) in the case of an Incentive Stock Option, (A) 100 percent
of the Fair Market Value of a Share on the day such Option is granted, or
(B) in the event that such Option is granted to a Participant who possesses
more than 10 percent of the combined voting power of all classes of stock
of the Corporation or any Subsidiary (as determined in accordance with
Sections 422 and 424(f) of the Code), 110 percent of such Fair Market
Value.
(b) NUMBER OF SHARES. Each such Award Agreement shall state the
total number of Shares (subject to adjustment as provided herein) to which
it pertains.
(c) TERMS OF OPTIONS. The term of each Option shall be determined by
the Committee; provided, however, that each Incentive Stock Option shall be
for a term not in excess of 10 years from the date such Option is granted.
In the case of an Incentive Stock Option which is granted to a Participant
who possesses more than 10 percent of the combined voting power of all
classes of stock of the Corporation or a Subsidiary (as determined in
accordance with Sections 422A and 424(f) of the Code), such Option shall be
for a term not in excess of five years from the date the Option is granted.
(d) INCENTIVE STOCK OPTIONS. All Incentive Stock Options must be
granted within 10 years from the date the Plan is adopted by the Board. The
terms of any Incentive Stock Option granted under the Plan shall comply in
all material respects with the provisions of Section 422 of the Code.
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<PAGE>
(e) METHODS OF EXERCISE. The Committee shall determine the time or
times at which an Option may be exercised in whole or in part, the methods
by which such exercise price may be paid or deemed to be paid, and the form
of such payment, including without limitation cash, Shares, other
outstanding Awards or other property (including without limitation notes or
other contractual obligations of Participants to make payment on a deferred
basis, to the extent permitted by law).
(f) ADDITION LIMITATION ON INCENTIVE STOCK OPTIONS. An Option
designated by the Committee to be an Incentive Stock Option shall be
subject to the following additional limitation: if, for any calendar year,
the sum of (i) plus (ii) exceeds $100,000, where (i) equals the Fair Market
Value (determined as of the date of the grant) of Shares subject to an
Option intended to be an Incentive Stock Option which first become
available for purchase during such calendar year, and (ii) equals the Fair
Market Value determined as of the date of grant) of Shares subject to any
other Options intended to be Incentive Stock Options and previously granted
to the same Participant which first become exercisable in such calendar
year, then that portion of the Shares granted pursuant to such Options
which cause the sum of (i) and (ii) to exceed $100,000 shall be deemed to
be Shares granted pursuant to Non-qualified Stock Options, with the same
terms as the Option or Options intended to be an Incentive Stock Option.
6. TERMS AND CONDITIONS OF RESTRICTED STOCK. The Committee is authorized
to grant Restricted Stock, pursuant to Award Agreements in such form as the
Committee shall, from time to time, approve, on the following terms and
conditions:
(a) NUMBER OF SHARES. Each such Award Agreement shall state the
number of Shares (subject to adjustment as provided herein) to which it
pertains.
(b) RESTRICTIONS. Restricted Stock shall be subject to such
restrictions on transferability and other restrictions as the Committee may
impose (including without limitation the vesting or lapse of forfeiture
thereof, limitations on the right to vote Shares of Restricted Stock or the
right to receive dividends thereon), which restrictions may lapse
separately or in combination at such times, in such installments or
otherwise, as the Committee shall determine.
(c) FORFEITURE. Except as otherwise determined by the Committee,
upon termination of employment (as determined under criteria established by
the Committee) during the applicable restriction period, Restricted Stock
that is at that time subject to a risk of forfeiture shall be forfeited and
reacquired by the Corporation; provided, however, that the Committee may
provide, by rule or regulation or in any Award Agreement, that forfeiture
restrictions on Restricted Stock shall be waived in whole or in part in the
event of terminations resulting from specified causes, and the Committee
may in other cases waive in whole or in part forfeiture restrictions on
Restricted Stock.
(d) CERTIFICATES FOR SHARES. Restricted Stock granted under the Plan
may be evidenced in such manner as the Committee shall determine, including
without limitation issuance of certificates representing Shares.
Certificates representing Shares of Restricted Stock shall be registered in
the name of the Participant and shall bear an appropriate
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legend referring to the terms, conditions and restrictions applicable to
such Restricted Stock.
7. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. The Committee is
authorized to grant Stock Appreciation Rights, pursuant to Award Agreements in
such form as the Committee shall, from time to time, approve, on the following
terms and conditions:
(a) NUMBER OF SHARES. Each such Award Agreement shall state the
number of notional Shares (subject to adjustment as provided herein) to
which it pertains.
(b) RIGHT TO PAYMENT. Subject to the terms of the Plan and any
applicable Award Agreement, a Stock Appreciation Right shall confer on the
Participant to whom it is granted a right to receive, upon exercise
thereof, the excess of (i) the Fair Market Value of a Share on the date of
exercise or, if the Committee shall so determine, in the case of any such
right other than one related to any Incentive Stock Option, and so specify
in the Award Agreement, at any time during a specified period before or
after the date of exercise, over (ii) the grant price of the Stock
Appreciation Right as determined by the Committee as of the date of grant
of the Stock Appreciation Right, which, except as provided in Section 18
hereof, shall not be less than the Fair Market Value of a Share on the date
of grant.
(c) OTHER TERMS. Subject to the terms of the Plan and any applicable
Award Agreement, at the time of grant, the Committee shall determine the
term, methods of exercise, methods of settlement and any other terms and
conditions of any Stock Appreciation Right; provided, however, that each
Stock Appreciation Right granted in tandem with any Incentive Stock Option
shall be for a term not in excess of 10 years from the date such Stock
Appreciation Right is granted.
8. OTHER PROVISIONS OF AWARDS GENERALLY. Awards, and the Award
Agreements relating thereto, may be issued on such additional terms and
conditions, not inconsistent with the provisions of the Plan, as the Committee
shall determine, including, subject to the provisions of Section 10 hereof,
terms requiring forfeiture of Awards in the event of termination of employment
by the Participant. The Committee may at any time offer to exchange or buy out
any previously granted Award for a payment in cash, Shares or another Award,
based on such terms and conditions as the Committee shall determine and
communicate to the Participant at the time that such offer is made.
9. COMPLIANCE WITH RULE 16B-3.
(a) SIX-MONTH HOLDING PERIOD. Unless a Participant could otherwise
dispose of or exercise a derivative security or dispose of Shares issued
under the Plan without incurring liability under Section 16(b) of the
Exchange Act, (i) at least six months shall elapse from the date of
acquisition of a derivative security under the Plan to the date of
disposition of the derivative security (other than upon exercise or
conversion) or its underlying equity security, and (ii) Shares granted or
awarded under the Plan other than upon exercise or conversion of a
derivative security, shall be held for at least six months from the date of
grant or Award.
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(b) REFORMATION TO COMPLY WITH EXCHANGE ACT RULES. It is the intent
of the Corporation that this Plan comply in all respects with applicable
provisions of Rule 16b-3 or Rule 16a-1(c)(3) in connection with any grant
of Awards to or other transaction by a Participant who is subject to
Section 16 of the Exchange Act (except for transactions exempted under
alternative Exchange Act rules relating to such Participant). Accordingly,
if any provision of the Plan or any Award Agreement relating to a given
Award does not comply with the requirements of Rule 16b-3 or Rule 16a-
1(c)(3) as then applicable to any such transaction, such provision will be
construed or deemed amended to the extent necessary to conform to the then-
applicable requirements of Rule 16b-3 or Rule 16a-1(c)(3) to the extent
necessary so that such Participant shall avoid liability under Section
16(b) of the Exchange Act.
(c) DECISIONS REQUIRED TO BE MADE BY THE COMMITTEE. Other provisions
of the Plan and any Award Agreement notwithstanding, if any decision
regarding an Award or the exercise of any right by a Participant, at any
time such Participant is subject to Section 16 of the Exchange Act, is
required to be made or approved by the Committee in order that the Plan
will continue to meet the requirements of Rule 16b-3 or in order that a
transaction by such Participant will be exempt under Rule 16b-3, then the
Committee shall retain full and exclusive power and authority to make such
decision or to approve or disapprove any such decision by the Participant.
10. TERMINATION OF EMPLOYMENT. If a Participant's employment with the
Corporation terminates, the following rules shall apply:
(a) DEATH. In the event of a Participant's death during employment
with the Corporation or any of the Subsidiaries (i) except in the case of
Incentive Stock Options and Stock Appreciation Rights granted in tandem
therewith, the Participant's estate or beneficiaries shall have a period of
up to the later of one year after the Participant's death or the expiration
date specified in the Award Agreement within which to exercise Options or
Stock Appreciation Rights, unless the Committee, in its sole discretion
(subject to Section 10(e) below), extends such period; (ii) in the case of
Incentive Stock Options and Stock Appreciation Rights granted in tandem
therewith, the Participant's estate (personal representative) or
beneficiaries may exercise such Option and/or Stock Appreciation Rights
only until the earlier of one year after the Participant's death or the
expiration date specified in the Award Agreement, unless the Committee, in
its sole discretion (subject to Section 10(e) below), extends such period;
(iii) any Award which is exercisable may be immediately exercised in full
by the Participant's estate or beneficiaries; and (iv) the forfeiture
restrictions on an Award of Restricted Stock shall be waived. In the event
the Participant's estate is closed with exercisable Awards then
unexercised, the rights under this paragraph (a) shall pass by will or the
laws of descent and distribution.
(b) DISABILITY. In the event of a Participant's Disability during
employment with the Corporation or any of the Subsidiaries, the forfeiture
restrictions on an Award of Restricted Stock shall be waived and (i) except
in the case of Incentive Stock Options and Stock Appreciation Rights
granted in tandem therewith, the Participant, or his or her guardian or
legal representative, shall have a period of up to the later of one year
after commencement of the Participant's Disability or the expiration date
specified in the
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Award Agreement within which to exercise an exercisable award, unless the
Committee, in its sole discretion, extends such period; and (ii) in the
case of Incentive Stock Options and Stock Appreciation Rights granted in
tandem therewith, the Participant, or his or her guardian or legal
representative, shall have a period of up to the earlier of one year after
commencement of the Participant's Disability or the expiration date
specified in the Award Agreement within which to exercise an exercisable
Award, unless the Committee, in its sole discretion (subject to Section
10(e) below), extends such period.
(c) RETIREMENT. If the Participant's employment terminates as a
result of Retirement, the forfeiture restrictions on an Award of Restricted
Stock held by the Participant at the time of his or her Retirement shall be
waived and any Awards exercisable at the time of such Retirement may be
exercised for a period of up to five years from the date of Retirement, but
not beyond the date the Award otherwise would have expired in accordance
with the Award Agreement establishing the term of the original grant. The
Committee, in its sole discretion (subject to Section 10(e) below), may
extend the five-year period following commencement of retirement within
which any particular Award may be exercised but not beyond the original
expiration date of the Award.
(d) OTHER REASONS. In the event of termination of a Participant's
employment with the Corporation and the Subsidiaries for any reason other
than death, Disability or Retirement, as described in paragraph (a), (b) or
(c) of this Section 10, any Award granted to such Participant may be
exercised for a period of three months from the date of termination, but
not beyond the date the Award otherwise would have expired in accordance
with the Award Agreement establishing the term of the original grant.
(e) INCENTIVE STOCK OPTIONS. To the extent the Plan or the Committee
authorizes the exercise of Awards which would otherwise qualify as
Incentive Stock Options after the period within which Incentive Stock
Options must be exercised to so qualify as Incentive Stock Options, then
such authorization shall only be valid if the Participant (or the
Participant's personal representative, as appropriate) acknowledges and
consents in writing to the conversion of such Incentive Stock Options into
Non-qualified Stock Options at or before such conversion. Notwithstanding
anything to the contrary contained in this Section 10, at termination of
employment for any reason, the Committee may, in its sole discretion, (i)
authorize the continuation of Awards granted prior to termination,
including without limitation Awards granted less than one year prior to
such termination, as if the Participant were still employed by the
Corporation, and (ii) permit the exercise of exercisable Awards during
periods after such termination of employment but not beyond the original
expiration date of the Award. Such actions will not be authorized to the
extent they would cause outstanding Incentive Stock Options to be
considered to have been modified for purposes of Section 424(h) of the Code
unless the Participant acknowledges and consents in writing to the
conversion of such Incentive Stock Options into non-qualified Awards.
11. LIMITATIONS ON TRANSFERABILITY. Awards and other rights under the
Plan, including without limitation any Award or right which constitutes a
derivative security will not be transferable by a Participant except by will or
the laws of descent and distribution (or, in the event of
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the Participant's death, to a designated beneficiary), and, if exercisable,
shall be exercisable during a Participant's lifetime only by such Participant or
his guardian or legal representative; provided, however, that the Committee may
determine that these restrictions on transferability shall not apply (with
respect to Awards other than Incentive Stock Options and Stock Appreciation
Rights in tandem therewith) (a) to an Award granted to any Participant who, at
the time of the initial grant and the transfer, is not subject to Section 16 of
the Exchange Act, or (b) to the extent Rule 16b-3 permits, or is amended to
permit, the transfer of an Award by a Participant who is subject to Section 16
of the Exchange Act; and provided further, that such Awards and other rights
(other than Incentive Stock Options and Stock Appreciation Rights in tandem
therewith) may be transferred to one or more Persons during the lifetime of the
Participant in connection with the Participant's estate planning, and may be
exercised by such transferees in accordance with the terms of such Award, but
only if and to the extent then permitted under Rule 16b-3, consistent with the
registration of the offer and sale of Shares on Form S-8 or Form S-3 or such
other registration form of the Commission as may then be filed and effective
with respect to the Plan, and permitted by the Committee. Awards and other
rights under the Plan may not be pledged, mortgaged, hypothecated or otherwise
encumbered to or in favor of any Person other than the Corporation or a
Subsidiary, and shall not be subject to any lien, obligation or liability of a
Participant or transferee to any Person other than the Corporation or a
Subsidiary. If so determined by the Committee, a Participant may, in the manner
established by the Committee, designate a beneficiary or beneficiaries to
exercise the rights of the Participant, and to receive any distribution with
respect to any Award upon the death of the Participant. A transferee,
beneficiary, guardian, legal representative or other Person claiming any rights
under the Plan from or through any Participant shall be subject to all the terms
and conditions of the Plan and any Award Agreement applicable to such
Participant, except to the extent the Plan and Award Agreement otherwise provide
with respect to such Persons, and to any additional restrictions or limitations
deemed necessary or appropriate by the Committee.
12. ADMINISTRATION. The Plan shall be administered by the Committee. The
Committee shall have full and final authority to take the following actions, in
each case subject to and consistent with the provisions of the Plan:
(a) To designate Participants;
(b) To determine the type or types of Awards to be granted to each
Participant;
(c) To determine the number of Awards to be granted, the number of
Shares to which an Award will relate, the terms and conditions of any Award
granted under the Plan (including without limitation any exercise price,
grant price or purchase price, any limitation or restriction, any schedule
for lapse of limitations, forfeiture restrictions or restrictions on
exercisability or transferability, and accelerations or waivers thereof, in
each case based on such considerations as the Committee shall determine),
and all other matters to be determined in connection with an Award;
(d) To determine whether, to what extent and under what circumstances
an Award may be settled, or the exercise price of an Award may be paid, in
cash, Shares, other Awards or other property, or an Award may be
accelerated, vested, canceled, forfeited, exchanged or surrendered;
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(e) To determine whether, to what extent and under what circumstances
cash, Shares, other Awards, other property and other amounts payable with
respect to an Award shall be deferred either automatically, at the election
of the Committee or at the election of the Participant;
(f) To prescribe the form of each Award Agreement, which need not be
identical for each Participant;
(g) To adopt, amend, suspend, waive and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary or
advisable to administer the Plan;
(h) To correct any defect or supply any omission or reconcile any
inconsistency, and to construe and interpret the Plan, the rules and
regulations, any Award Agreement or any other instrument entered into
relating to an Award made under the Plan; and
(i) To make all other decisions and determinations as may be required
under the terms of the Plan or as the Committee may deem necessary or
advisable for the administration of the Plan.
Any action of the Committee with respect to the Plan shall be final, conclusive
and binding on all Persons, including without limitation the Corporation,
Subsidiaries, Participants, any Person claiming any rights under the Plan from
or through any Participant, and stockholders of the Corporation, except to the
extent the Committee may subsequently modify, or take further action not
consistent with, its prior action. The Committee may delegate to officers or
managers of the Corporation or any Subsidiary the authority, subject to such
terms as the Committee shall determine, to perform specified functions under the
Plan; provided, however, that any function relating to a Participant then
subject to Section 16 of the Exchange Act shall be performed solely by the
Committee if necessary to ensure compliance with applicable requirements of Rule
16b-3 or Rule 16a-1(c)(3). Each member of the Committee or Person acting on
behalf of the Committee shall be entitled to, in good faith, rely or act upon
any report or other information furnished to him or her by any officer, manager
or other employee of the Corporation or any Subsidiary, the Corporation's
independent certified public accountants or any executive compensation
consultant or other professional retained by the Corporation to assist in the
administration of the Plan. Any and all powers, authorizations and discretions
granted by the Plan to the Committee shall likewise be exercisable at any time
by the Board, except to the extent any such exercise by the Board relating to a
Participant then subject to Section 16 of the Exchange Act would fail to comply
with applicable requirements of Rule 16b-3 or Rule 16a-1(c)(3).
13. ADJUSTMENT PROVISIONS. In the event that the Committee shall
determine that any dividend or other distribution (whether in the form of cash,
Shares, other securities or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, exchange of Shares or other securities of the
Corporation, or other similar corporate transaction or event affects the Shares
such that an adjustment is determined by the Committee to be appropriate in
order to prevent dilution or enlargement of the rights of Participants under the
Plan or under any Award Agreement, then
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the Committee shall, in such manner as it may deem equitable, adjust any or all
of (a) the number and kind of Shares which may thereafter be issued in
connection with Awards; (b) the number and kind of Shares issued or issuable in
respect of outstanding Awards; (c) the number and kind of Shares of outstanding
Restricted Stock or relating to any other outstanding Award in connection with
which Shares have been issued; (d) the number of Shares with respect to which
Awards may be granted to a Participant in any calendar year, as set forth in
Section 4 hereof; and (e) the exercise price, grant price or purchase price
relating to any Award or, if deemed appropriate, make provision for a cash
payment with respect to any outstanding Award; provided, however, in each case,
with respect to Incentive Stock Options, no such adjustment shall be authorized
to the extent that such authority would cause the Plan to violate Section
422(b)(l) of the Code without the written consent of the Participant. In
addition, the Committee is authorized to make adjustments in the terms and
conditions of, and the criteria for, Awards in recognition of unusual or
nonrecurring events (including without limitation events described in the
preceding sentence) affecting the Corporation or any of the Subsidiaries or the
financial statements of the Corporation or any of the Subsidiaries, or in
response to changes in applicable laws, regulations or accounting principles.
Upon the occurrence of each event for which an adjustment with respect to
an Award has been made as provided in this Section 13, the Corporation shall
mail forthwith to each Participant a copy of its computation of such adjustment
which shall be conclusive and binding upon each Participant.
14. RECORD DATES, ETC. If at any time after the date of grant of an
Award, the Corporation shall:
(a) take a record of the holders of the Common Stock for the purpose
of entitling them to receive a dividend payable otherwise than in cash, or
any distribution in respect of the Common Stock (including cash), pursuant
to, without limitation, any spin-off, split-off or distribution of the
Corporation's assets; or
(b) engage, or propose to engage, in the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation;
then the Corporation shall mail to each Participant, at least 30 days prior
thereto, a notice stating the date or expected date on which a record is to be
taken for the purpose of such dividend, distribution or rights, or the date on
which such classification, reclassification, reorganization, consolidation,
merger, conveyance, dissolution, liquidation or winding up is to take place, as
the case may be. Such notice shall also specify the date or expected date, if
any is to be fixed, as of which holders of Common Stock of record shall be
entitled to participate in said dividend, distribution or rights, or shall be
entitled to exchange their Shares for securities or other property deliverable
upon such classification, reclassification, reorganization, consolidation,
merger, conveyance, dissolution, liquidation or winding up, as the case may be.
15. AMENDMENTS. The Board may amend, alter, suspend, discontinue or
terminate the Plan without the consent of stockholders or Participants, except
that, without the approval of the stockholders of the Corporation, no amendment,
alteration, suspension, discontinuation or termination shall be made if
stockholder approval is required by any federal or state law or
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regulation or the rules of any stock exchange or automated quotation system on
which the Stock may then be listed or quoted, or if the Board in its discretion
determines that obtaining such stockholder approval is for any reason advisable;
provided, however, that, without the consent of a Participant, no amendment,
alteration, suspension, discontinuation or termination of the Plan may
materially and adversely affect the rights of such Participant under any Award
theretofore granted to such Participant. The Committee may waive any conditions
or rights under, or amend, alter, suspend, discontinue or terminate, any Award
theretofore granted, prospectively or retrospectively; provided, however, that,
without the consent of a Participant, no amendment, alteration, suspension,
discontinuation or termination of any Award may materially and adversely affect
the rights of such Participant under any Award theretofore granted to such
Participant.
16. SECURITIES LAWS AND OTHER LAWS AND REGULATIONS. The Corporation may
require that there be presented to and filed with it by any Participant under
the Plan, such evidence as it may deem necessary to establish that the Awards
granted or the Shares to be issued or transferred are being acquired for
investment and not with a view to their distribution.
The Corporation shall not be obligated to issue or deliver Shares in
connection with any Award or take any other action under the Plan in a
transaction subject to the registration requirements of the Securities Act, or
any other federal or state securities law, any requirement under any listing
agreement between the Corporation and any national securities exchange or
automated quotation system, or any other law, regulation or contractual
obligation of the Corporation, until the Corporation is satisfied that such
laws, regulations and other obligations of the Corporation have been complied
with in full.
All certificates for Shares delivered under the terms of the Plan shall be
subject to such stop-transfer orders and other restrictions as the Committee may
deem advisable under applicable securities laws, the rules and regulations
thereunder, and the rules of the NYSE or any other national securities exchange
or automated quotation system on which Shares are listed or quoted. The
Committee may cause a legend or legends to be placed on any such certificates to
make appropriate reference to such restrictions or any other restrictions or
limitations that may be applicable to Shares. In addition, during any period in
which Awards or Shares are subject to restrictions or limitations under the
terms of the Plan or any Award Agreement, or during any period during which
delivery or receipt of an Award or Shares has been deferred by the Committee or
a Participant, the Committee may require any Participant to enter into an
agreement providing that certificates representing Shares issuable or issued
pursuant to an Award shall remain in the physical custody of the Corporation or
such other Person as the Committee may designate.
17. CHANGE OF CONTROL. In the event of a Change of Control, the following
acceleration provisions shall apply (except that, prior to the occurrence of a
Change of Control, the Board may, without the consent of Participants, waive the
application of this Section 17 with respect to any transaction that would
otherwise constitute a Change of Control):
(a) All outstanding Awards pursuant to which a Participant may have
rights, the exercise of which are restricted or limited, shall become fully
vested and fully exercisable, except to the extent otherwise provided in
Section 9(a) hereof.
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(b) In the event that any Award is subject to limitations under
Section 9(a) hereof at the time of a Change of Control, then, solely for
the purpose of determining the rights of the Participant with respect to
such Award, a Change of Control shall be deemed to occur at the close of
business on the first business day following the date on which the
limitations on such Award under Section 9(a) hereof have expired.
In no event will an Award be automatically surrendered (i) if such
Participant is subject to Section 16 of the Exchange Act and at least six months
shall not have elapsed from the date on which such Participant was granted the
Award before the date of the Change of Control (unless this restriction is not
at such time required under Rule 16b-3), or (ii) if such Participant had the
power to control the occurrence or timing of the Change of Control.
"Change of Control" means and will be deemed to have occurred if (a) any
Person other than the Corporation or a Related Party, becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of Voting Securities representing 20 percent or more of the total
voting power of all the then outstanding Voting Securities; or (b) a Person,
other than the Corporation or a Related Party, purchases or otherwise acquires,
under a tender offer, securities representing, when combined with other
securities owned by such Person, 20 percent or more of the total voting power of
all the then outstanding Voting Securities; or (c) the individuals (i) who as of
the effective date of the Plan constitute the Board or (ii) who thereafter are
elected to the Board and whose election, or nomination for election, to the
Board was approved by a vote of at least two-thirds of the directors then still
in office who either were directors as of the effective date of the Plan or
whose election or nomination for election was previously so approved, cease for
any reason to constitute a majority of the members of the Board; or (d) the
stockholders of the Corporation approve a merger, consolidation,
recapitalization or reorganization of the Corporation or an acquisition of
securities or assets by the Corporation, or consummation of any such transaction
if stockholder approval is not obtained (other than any such transaction which
would result in the Voting Securities outstanding immediately prior thereto
continuing to represent, either by remaining outstanding or by being converted
into voting securities of the surviving entity, at least 80 percent of the total
voting power represented by the voting securities of such surviving entity
outstanding immediately after such transaction and in or as a result of which
the voting rights of each Voting Security relative to the voting rights of all
other Voting Securities are not altered); or (e) the stockholders of the
Corporation approve a plan of complete liquidation of the Corporation or an
agreement for the sale or disposition by the Corporation of all or substantially
all of the Corporation's assets other than any such transaction which would
result in a Related Party owning or acquiring more than 50 percent of the assets
owned by the Corporation immediately prior to the transaction; or (f) the Board
adopts a resolution to the effect that a Change of Control has occurred and the
transaction giving rise to such resolution has been thereafter approved by the
stockholders of the Corporation or been consummated if such approval is not
sought.
"Related Party" means (a) a Subsidiary; or (b) an employee or group of
employees of the Corporation or any Subsidiary; or (c) a trustee or other
fiduciary holding securities under an employee benefit plan of the Corporation
or any Subsidiary; or (d) a corporation owned directly or indirectly by the
stockholders of the Corporation in substantially the same proportion as their
ownership of Voting Securities.
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"Voting Security(ies)" means any securities of the Corporation which carry
the right to vote generally in the election of directors.
18. STAND-ALONE, TANDEM AND SUBSTITUTE AWARDS. Awards granted under the
Plan may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with or in substitution for, any other Award granted
under the Plan or any other plan of the Corporation or any Subsidiary (subject
to the terms of Section 15 hereof). If an Award is granted in substitution for
another Award or award, the Committee shall require the surrender of such other
Award or award in consideration for the grant of the new Award. Awards granted
in addition to or in tandem with other Awards or awards may be granted either at
the same time as or at a different time from the grant of such other Awards or
awards. The exercise price of any Option, the grant price of any Stock
Appreciation Right or the purchase price of any other Award conferring a right
to purchase Shares:
(a) granted in substitution for an outstanding Award or award shall
be either (i) not less than the Fair Market Value of Shares at the date
such substitute Award is granted, or (ii) not less than such Fair Market
Value at that date reduced to reflect the Fair Market Value of the Award or
award required to be surrendered by the Participant as a condition to
receipt of a substitute Award; or
(b) retroactively granted in tandem with an outstanding Award or
award shall be either (i) not less than the Fair Market Value of Shares at
the date of grant of the later Award, or (ii) not less than the Fair Market
Value of Shares at the date of grant of the earlier Award or award.
19. GENERAL PROVISIONS.
(a) TERMINATION OF THE PLAN. Unless earlier terminated by the Board,
the Plan shall terminate when no Shares remain reserved and available for
issuance and the Corporation has no further obligation with respect to any
Award granted under the Plan.
(b) NO RIGHTS TO AWARDS; NO STOCKHOLDER RIGHTS. No Participant or
employee of the Corporation shall have any claim to be granted any Award
under the Plan, and there is no obligation for uniformity or treatment of
Participants and employees, except as provided in any other compensation
arrangement. The holders of Awards other than Awards of Restricted Stock
shall not be, or have any of the rights or privileges of, a stockholder of
the Corporation in respect of any Shares to be acquired pursuant to such
Award unless and until certificates representing such Shares shall have
been issued by the Corporation to such holders.
(c) WITHHOLDING. The Corporation or any Subsidiary is authorized to
withhold from any Award granted or any payment due under the Plan,
including without limitation from a distribution of Shares, amounts of
withholding taxes due with respect to an Award, its exercise or any payment
thereunder, and to take such other action as the Committee may deem
necessary or advisable to enable the Corporation and Participants to
satisfy obligations for the payment of such taxes. This authority shall
include authority
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to withhold or receive Shares, Awards or other property and to make cash
payments in respect thereof in satisfaction of such tax obligations.
(d) NO RIGHT TO CONTINUED EMPLOYMENT. Nothing contained in the Plan
or any Award Agreement shall confer, and no grant of an Award shall be
construed as conferring, upon any Participant any right to continue in the
employ of the Corporation or any Subsidiary or to interfere in any way with
the right of the Corporation or any Subsidiary to terminate such
Participant's employment at any time or increase or decrease such
Participant's compensation from the rate in existence at the time of
granting of an Award.
(e) UNFUNDED STATUS OF AWARDS. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to
any payments not yet made to a Participant pursuant to an Award, nothing
contained in the Plan or any Award shall give any such Participant any
rights that are greater than those of a general creditor of the
Corporation; provided, however, that the Committee may authorize the
creation of trusts or make other arrangements to meet the Corporation's
obligations under the Plan to deliver cash, Shares or other property
pursuant to any Award, which trusts or other arrangements shall be
consistent with the "unfunded" status of the Plan unless the Committee
otherwise determines.
(f) NO LIMIT ON OTHER COMPENSATORY ARRANGEMENTS. Nothing contained
in the Plan shall prevent the Corporation or any Subsidiary from adopting
other or additional compensation arrangements (which may include, without
limitation, employment agreements with executives and arrangements which
relate to Awards under the Plan), and such arrangements may be either
generally applicable or applicable only in specific cases. Notwithstanding
anything in the Plan to the contrary (other than the provisions of Section
9 hereof), the terms of each Award shall be construed so as to be
consistent with such other arrangements in effect at the time of the Award.
(g) NO FRACTIONAL SHARES. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards or other property shall be issued or paid in
lieu of fractional Shares or whether such fractional Shares or any rights
thereto shall be forfeited or otherwise eliminated.
(h) GOVERNING LAW. The validity, interpretation, construction and
effect of the Plan and any rules and regulations relating to the Plan shall
be governed by the laws of the Republic of Panama (without regard to the
conflicts of laws rules thereof) and applicable U.S. federal law.
(i) SEVERABILITY. If any provision of the Plan is or becomes or is
deemed invalid, illegal or unenforceable in any jurisdiction, or would
disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform
to applicable laws or if it cannot be construed or deemed amended without,
in the determination of the Committee, materially altering the intent of
the Plan, it shall be deleted and the remainder of the Plan shall remain in
full force and effect; provided, however, that, unless otherwise determined
by the Committee, the
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provisions shall not be construed or deemed amended or deleted with respect
to any Participant whose rights and obligations under the Plan are not
subject to the law of such jurisdiction or the law deemed applicable by the
Committee.
(j) STATUS AS AN EMPLOYEE BENEFIT PLAN. The Plan is not intended to
satisfy the requirements for qualification under Section 401(a) of the Code
or to satisfy the definitional requirements for an "employee benefit plan"
under Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"). It is intended to be an incentive compensation
program that is exempt from the regulatory requirements of ERISA. The Plan
shall be construed and administered so as to effectuate this intent.
20. EFFECTIVE DATE. The Plan shall become effective at such time as it is
approved by the affirmative vote of holders of a majority of Shares present in
Person or represented by proxy at a meeting of the stockholders of the
Corporation.
* * * * * * *
Adopted by the Board of Directors of Willbros Group, Inc. on April 16,
1996.
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EXHIBIT 10.9
WILLBROS GROUP, INC.
DIRECTOR STOCK PLAN
1. PURPOSE. The purpose of the Willbros Group, Inc. Director Stock Plan
(the "Plan") is to advance the interests of Willbros Group, Inc., a Republic of
Panama corporation (the "Corporation"), and its stockholders by providing a
means to attract and retain highly qualified persons to serve as non-employee
members of the Board of Directors of the Corporation and to promote ownership by
such directors of a greater proprietary interest in the Corporation, thereby
aligning such directors' interests more closely with the interests of
stockholders of the Corporation.
2. DEFINITIONS. In addition to the terms defined elsewhere in the Plan,
the following terms, as used in the Plan, shall have the meanings indicated
below:
"Board" means the Corporation's Board of Directors.
"Code" means the U.S. Internal Revenue Code of 1986, as amended from
time to time. References to any provision of the Code include regulations
thereunder and successor provisions and regulations.
"Commission" means the U.S. Securities and Exchange Commission.
"Common Stock" means common stock, par value U.S.$.05 per share, of
the Corporation.
"Eligible Director" or "Participant" means each member of the Board
who, on the date on which an Option is to be granted under Section 6
hereof, is not a salaried officer or employee of the Corporation or any of
the Subsidiaries.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended from time to time. References to any provision of the Exchange Act
include rules thereunder and successor provisions and rules.
"Fair Market Value" means, as of any given date, (a) at any time that
Shares are listed on the NYSE, the closing sales price of a Share reported
in the table entitled "New York Stock Exchange Composite Transactions"
contained in The Wall Street Journal (or an equivalent successor table) for
such date or, if no such closing sales price was reported for such date,
for the most recent trading day prior to such date for which a closing
sales price was reported, and (b) at any time that Shares are not listed on
the NYSE, the value determined by such methods or procedures as shall be
established from time to time by those members of the Board who are not
eligible to receive and have not received Options under the Plan. For
Options granted on the Initial Public Offering Date, the Fair Market Value
shall be the price to the public for the Initial Public Offering.
"Initial Grant Date" means (a) the Initial Public Offering Date or (b)
if later, the date an Eligible Director is initially elected or appointed
to the Board.
<PAGE>
"Initial Public Offering" means the initial public offering of Shares
pursuant to a registration statement filed under the Securities Act.
"Initial Public Offering Date" means the date on which a registration
statement providing for the registration of the Initial Public Offering of
the Common Stock under the Securities Act becomes effective.
"NYSE" means the New York Stock Exchange, Inc.
"Option" means a right, granted under Section 6 hereof, to purchase a
specified number of Shares at a specified exercise price during a specified
time period. All Options shall be non-qualified stock options (i.e., stock
options which are not intended to meet the requirements of Section 422 of
the Code).
"Retirement" means an Eligible Director's retirement from the Board at
the end of any full term to which such Eligible Director was elected or an
Eligible Director's retirement from the Board at any time at or after age
70.
"Rule 16b-3" means Rule 16b-3, as applicable to the Plan and
Participants, promulgated by the Commission under Section 16 of the
Exchange Act.
"Securities Act" means the U.S. Securities Act of 1933, as amended
from time to time. References to any provision of the Securities Act
include rules thereunder and successor provisions and rules.
"Share" means a share of Common Stock and such other securities as may
be substituted or resubstituted for such Share pursuant to Section 14
hereof.
"Subsidiary(ies)" means one or more corporations in which the
Corporation owns, directly or indirectly, not less than 50 percent of the
total combined voting power of all classes of stock.
3. SHARES AVAILABLE UNDER THE PLAN. Subject to adjustment as provided in
Section 14 hereof, the total number of Shares reserved and available for
issuance under the Plan is 125,000. Such Shares may be authorized but unissued
Shares, treasury Shares, or Shares acquired in the market for the account of the
Participant. For purposes of the Plan, Shares that may be purchased upon
exercise of an Option shall not be considered to be available after such Option
has been granted, except for purposes of issuance in connection with such
Option; provided, however, that, if an Option expires for any reason without
having been exercised in full, the Shares subject to the unexercised portion of
such Option shall again be available for issuance under the Plan; and provided
further, that the number of Shares to be issued under the Plan upon exercise of
an Option shall be reduced by the number of Shares surrendered by the
Participant or withheld by the Corporation in payment of the exercise price of
the Option.
4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Board; provided, however, that any action by the Board relating to the Plan
shall be taken only if, in addition to
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any other required vote, such action is approved by the affirmative vote of a
majority of the members of the Board, even if not a quorum, who are not then
eligible to participate in the Plan.
5. ELIGIBILITY. Each Eligible Director shall be eligible to participate
under the Plan; provided, however, any Eligible Director may decline any option
which would otherwise be granted hereunder.
6. OPTION GRANTS. Without further action by the Board or the
stockholders of the Corporation, Participants under the Plan shall be
automatically granted Options to purchase Common Stock, as follows:
(a) INITIAL OPTIONS. On the Initial Grant Date, each Eligible
Director shall be granted an option entitling him or her to purchase 5,000
Shares, plus 1,000 Shares for each full year of prior service by such
Eligible Director as a member of the Board, subject to the limitations set
forth in Section 8 below and at an exercise price determined in accordance
with Section 7 below.
(b) ANNUAL OPTIONS. On each anniversary of the Initial Grant Date on
which an Eligible Director continues to be an Eligible Director, such
Eligible Director shall be granted an option entitling him or her to
purchase 1,000 Shares subject to the limitations set forth in Section 8
below and at an exercise price determined in accordance with Section 7
below.
7. OPTION EXERCISE PRICE. Each option granted under the Plan shall be
exercisable at an option price per share equal to 100 percent of the Fair Market
Value on the date the Option is granted in accordance with Section 6 above.
8. LIMITATIONS ON EXERCISE. Any Option granted under the Plan may be
exercised (in accordance with Section 9 below), in whole or in part, from time
to time after the date granted, subject to the following limitations:
(a) No Option granted hereunder may be exercised before the
expiration of six months after the date such Option was granted. Upon the
expiration of such six-month period, each Option may be exercised for all
of the total Shares covered by the Option or any portion thereof.
(b) Subject to Section 11 below and to the limitations of Section
8(a) above, any Option granted under the Plan (or any unexercised portion
thereof) may not be exercised:
(i) more than six months after termination of any Eligible
Director's service as a member of the Board for any reason other than
death or Retirement, and then only to the extent that the Eligible
Director could have exercised such Option on the date his or her
service terminated in accordance with Section 8(a) above;
(ii) more than 12 months after an Eligible Director's
Retirement; or
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(iii) more than 12 months after the death of an Eligible
Director, if such death occurs while serving as a member of the Board
or during the six-month period referred to in subparagraph (i) above
or the 12-month period referred to in subparagraph (ii) above (and
then only to the extent that the Eligible Director could have
exercised such Option on the date of death in accordance with Section
8(a) above);
provided, however, that no Option granted hereunder may be exercised more
than 10 years from the date the Option is granted.
9. METHOD AND TIME OF EXERCISE; DELIVERY OF CERTIFICATES. Any Option
granted under the Plan may only be exercised to purchase a minimum of 100 Shares
at any one time. Any Option granted under the Plan shall be deemed exercised on
the date written notice of the intent to exercise all or part of such Option is
received by the Secretary of the Corporation at the Corporation's corporate
headquarters. Such notice shall be either: (a) accompanied by a check payable
to the order of the Corporation for the full purchase price of the Shares to be
purchased pursuant to the terms of the Option; or (b) followed by prompt
remittance of certificates representing Shares, either duly endorsed in blank or
accompanied by a duly endorsed stock power, representing a sufficient number of
Shares held by the Participant for at least six months whose value, based on the
Fair Market Value on the date of exercise, equals the full purchase price of the
Shares to be purchased; or (c) any combination of the foregoing. An Eligible
Director shall have no interest in any Shares covered by any Option granted
under the Plan until certificates for such Shares are issued and any Shares
surrendered in payment pursuant to subsection (b) or (c) above shall be deemed
outstanding until new certificates representing the Shares purchased upon the
exercise of any Option are issued.
10. TAX WITHHOLDING. Upon the exercise of an Option requiring tax
withholding, the Participant will be required to pay to the Corporation for
remittance to the appropriate taxing authorities an amount necessary to satisfy
the Participant's portion of federal, state and local taxes, if any, incurred by
reason of the exercise of an Option. In lieu of delivering cash to satisfy such
withholding obligation, the Participant may elect to have Shares withheld from
the Shares deliverable upon such exercise if such election is delivered to the
Corporation in writing either (a) at least six months prior to the date the
amount of the tax to be withheld is determined (the "Tax Date"), or (b) prior to
the Tax Date and in any 10 business day period beginning on the third business
day following the release of the Corporation's quarterly or annual summary
statement of sales and earnings. The number of Shares so withheld shall have an
aggregate Fair Market Value on the date of exercise sufficient to satisfy the
applicable tax withholding requirements.
11. NONTRANSFERABILITY. No Option granted under the Plan shall be
transferable other than by will or the laws of descent and distribution, and
each Option shall be exercisable during the Participant's lifetime only by the
Participant or the Participant's guardian or legal representative; provided,
however, that the Committee may determine that these restrictions on
transferability shall not apply to the extent Rule 16b-3 permits, or is amended
to permit, the transfer of an Award by a Participant who is subject to Section
16 of the Exchange Act. If a Participant dies during the Option period, any
Option granted to such Participant may be exercised by his or her estate or the
person to whom the Option passes by will or the laws of
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descent and distribution, but only to the extent that the Participant could have
exercised such Option on the date of death in accordance with Section 8 above.
12. OTHER PROVISIONS; SECURITIES REGISTRATION. The grant of any Option
under the Plan may also be subject to such other provisions as counsel to the
Corporation deems appropriate, including without limitation, provisions imposing
restrictions on resale or other disposition of the Shares issuable upon exercise
of any Option and such provisions as may be appropriate to comply with
applicable securities laws and stock exchange requirements. The Corporation
shall not be required to issue or deliver any certificate for Shares purchased
upon the exercise of any Option granted under the Plan prior to the admission of
such Shares to listing on any stock exchange on which Common Stock at that time
may be listed. If, at any time during the period any Option granted under the
Plan is outstanding, the Corporation shall be advised by its counsel that the
Shares deliverable upon an exercise of such Option are required to be registered
under the Securities Act or any other securities law, or that delivery of such
Shares must be accompanied or preceded by a prospectus meeting the requirements
of the Securities Act, the Corporation will use its best efforts to effect such
registration or provide such prospectus not later than a reasonable time
following each exercise of such Option, but delivery of certificates for such
Shares may be deferred until such registration is effected or such prospectus is
available.
All certificates for Shares delivered under the terms of the Plan shall be
subject to such stop-transfer orders and other restrictions as counsel to the
Corporation may deem advisable under applicable securities laws, rules and
regulations thereunder, and the rules of any stock exchange on which Common
Stock may be listed. The Corporation may cause a legend or legends to be placed
on any such certificates to make appropriate reference to such restrictions or
any other restrictions or limitations that may be applicable to such Shares.
13. TERM OF PLAN. No Option shall be granted under the Plan more than 10
years after April 16, 1996, the date the Plan was approved by the Board.
14. ADJUSTMENTS.
(a) CORPORATE TRANSACTIONS AND EVENTS. In the event any
recapitalization, reorganization, merger, consolidation, spinoff,
combination, repurchase, exchange of Shares or other securities of the
Corporation, stock split or reverse split, extraordinary dividend (whether
in the form of cash, Shares, or other property), liquidation, dissolution,
or other similar corporate transaction or event affects the Shares such
that an adjustment is appropriate in order to prevent dilution or
enlargement of each Participant's rights under the Plan, then an adjustment
shall be made, in a manner that is proportionate to the change to the
Shares and otherwise equitable, in (i) the number and kind of Shares
reserved and available for issuance under Section 3 hereof, (ii) the number
and kind of Shares to be subject to each automatic grant of an Option under
Section 6 hereof, and (iii) the number and kind of Shares issuable upon
exercise of outstanding Options, and/or the exercise price per Share
thereof (provided that no fractional Shares shall be issued upon exercise
of any Option). The foregoing notwithstanding, no adjustment may be made
hereunder except as shall be necessary to maintain the proportionate
interest of the
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<PAGE>
Participant under the Plan and to preserve, without exceeding, the value of
outstanding Options and potential grants of Options.
(b) INSUFFICIENT NUMBER OF SHARES. If at any date an insufficient
number of Shares are available under the Plan for the automatic grant of
Options at that date, Options under Section 6 hereof shall be automatically
granted proportionately to each Eligible Director, to the extent Shares are
then available (provided that no fractional Shares shall be issued upon
exercise of any Option) and otherwise as provided under Section 6 hereof.
(c) NOTICE OF ADJUSTMENT. Upon the occurrence of each event for which
an adjustment with respect to an outstanding Option has been made as
provided in this Section 14, the Corporation shall mail forthwith to each
Participant a copy of its computation of such adjustment which shall be
conclusive and binding upon each Participant.
15. AMENDMENT AND TERMINATION OF PLAN. The Board may amend, alter,
suspend, discontinue, or terminate the Plan or authority to grant Options under
the Plan without the consent of stockholders or Participants, except that any
amendment or alteration shall be subject to the approval of the Corporation's
stockholders at or before the next annual meeting of stockholders of the
Corporation for which the record date is after the date of such Board action if
such stockholder approval is required by any federal or state law or regulation
or the rules of any stock exchange or automated quotation system then in effect,
and the Board may otherwise determine to submit other such amendments or
alterations to stockholders for approval; provided, however, that, without the
consent of an affected Participant, no such action may materially impair the
rights of such Participant with respect to any outstanding Options; and provided
further, that any Plan provision that specifies the directors who may receive
grants of Options, the amount and price of Shares that may be purchased upon the
exercise of Options granted to such directors, and the timing of such grants of
Options to such directors, or is otherwise a "plan provision" referred to in
Rule 16b-3(c)(2)(ii)(B) under the Exchange Act, shall not be amended more than
once every six months, other than to comport with changes in the Code, if such
limitation on the frequency of Plan amendments is then required under Rule 16b-3
as a condition in order that any Plan transactions be exempt from Section 16(b)
of the Exchange Act.
16. GOVERNMENT REGULATIONS. The Corporation's obligation to sell and
deliver Shares under Options granted under the Plan is subject to the
requirements of any governmental authority with jurisdiction over the
authorization, issuance or sale of such Shares.
17. NOTICE. Any written notice to the Corporation required or permitted
by any of the provisions of the Plan shall be addressed to the President of the
Corporation at the principal offices of the Corporation and shall become
effective only when it is received by the office of the President. Any written
notice to a Participant required or permitted by any of the provisions of the
Plan shall be addressed to such Participant at his or her address as reflected
in the records of the Corporation and shall become effective only when it is
received by such Participant.
18. UNFUNDED PLAN. Insofar as it provides for grants of Options to
acquire Shares in the future, the Plan shall be unfunded. Although bookkeeping
accounts may be established with respect to Participants who are entitled to
Shares upon exercise of Options under the Plan, any
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<PAGE>
such accounts shall be used merely as a bookkeeping convenience. The
Corporation shall not be required to segregate any assets that may at any time
be represented by Shares purchasable under the Plan, and the Plan shall not be
construed as providing for such segregation. Neither the Corporation nor the
Board shall be deemed to be a trustee of any Common Stock purchasable under the
Plan. Any liability of the Corporation to a Participant with respect to a grant
under the Plan shall be based solely upon any contractual obligations that may
be created by the Plan and any Option agreement; no such obligation of the
Corporation shall be deemed to be secured by any pledge or other encumbrance on
any property of the Corporation. Neither the Corporation nor the Board shall be
required to give any security or bond for the performance of any obligation that
may be created by the Plan.
19. GENERAL PROVISIONS.
(a) GOVERNING LAW. The validity, interpretation, construction and
effect of the Plan and any rules and regulations relating to the Plan, to
the extent not otherwise governed by the Code, the Securities Act or the
Exchange Act, shall be governed by the laws of the Republic of Panama
(without regard to the conflicts of laws rules thereof).
(b) SEVERABILITY. If any provision of the Plan is or becomes or is
deemed invalid, illegal or unenforceable in any jurisdiction, or would
disqualify the Plan or any Option under any law deemed applicable by the
Corporation, such provision shall be construed or deemed amended to conform
to applicable laws, or if it cannot be construed or deemed amended without,
in the determination of the Corporation, materially altering the intent of
the Plan, it shall be deleted and the remainder of the Plan shall remain in
full force and effect; provided, however, that, unless otherwise determined
by the Corporation, the provisions shall not be construed or deemed amended
or deleted with respect to any Participant whose rights and obligations
under the Plan are not subject to the law of such jurisdiction or the law
deemed applicable by the Corporation.
(c) AGREEMENTS. Options may be evidenced by agreements or other
documents executed by the Corporation and the Participant incorporating the
terms and conditions set forth in the Plan, together with such other terms
and conditions not inconsistent with the Plan as the Board may from time to
time approve.
(d) COMPLIANCE WITH LAWS AND OBLIGATIONS. The Corporation shall not
be obligated to issue or deliver Shares under the Plan in a transaction
subject to the registration requirements of the Securities Act or any other
federal or state securities law, any requirement under any listing
agreement between the Corporation and any stock exchange or automated
quotation system, or any other law, regulation or contractual obligation of
the Corporation, until the Corporation is satisfied that such laws,
regulations and other obligations of the Corporation have been complied
with in full. Certificates representing Shares issued under the Plan shall
be subject to such stop-transfer orders and other restrictions as may be
applicable under such laws, regulations and other obligations of the
Corporation, including without limitation any requirement that a legend or
legends be placed thereon.
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<PAGE>
(e) COMPLIANCE WITH RULE 16B-3. It is the intent of the Corporation
that this Plan comply in all respects with applicable provisions of Rule
16b-3. Accordingly, if any provision of this Plan or any agreement
hereunder does not comply with the requirements of Rule 16b-3 as then
applicable to a Participant, or would preclude a director of the
Corporation from being deemed a "disinterested person" under then-
applicable provisions of Rule 16b-3, such provision shall be construed or
deemed amended to the extent necessary to conform to the applicable
requirements with respect to such Participant and to ensure the director's
status as a "disinterested person" is unaffected.
(f) NO RIGHT TO CONTINUE AS A DIRECTOR. Nothing contained in the Plan
or any agreement hereunder shall confer upon any Participant any right to
continue to serve as a member of the Board.
(g) NO STOCKHOLDER RIGHTS CONFERRED. Nothing contained in the Plan or
any agreement hereunder shall confer upon any Participant (or any person or
entity claiming rights by or through a Participant) any rights of a
stockholder of the Corporation unless and until an Option is validly
exercised in accordance with Section 9 hereof.
(h) NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by
the Board nor its submission to the stockholders of the Corporation for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other compensatory arrangements for directors as it may
deem desirable.
(i) NONFORFEITABILITY. The interest of each Participant in Options
under the Plan shall at all times be nonforfeitable.
20. STOCKHOLDER APPROVAL, EFFECTIVE DATE AND PLAN TERMINATION. The Plan
shall be effective if, and at such time as, the stockholders of the Corporation
have approved it by the affirmative votes of the holders of a majority of the
voting securities of the Corporation present, or represented, and entitled to
vote on the subject matter at a duly held meeting of stockholders. Unless
earlier terminated by action of the Board, the Plan shall remain in effect until
such time as no Shares remain available for issuance under the Plan and the
Corporation and Participants have no further rights or obligations under the
Plan.
* * * * * * *
Adopted by the Board of Directors of Willbros Group, Inc. on April 16,
1996.
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<PAGE>
EXHIBIT 10.10
WILLBROS USA, INC.
EXECUTIVE BENEFIT RESTORATION PLAN
ARTICLE 1. ESTABLISHMENT OF THE PLAN
WHEREAS, Willbros USA Inc. and/or certain of its subsidiaries or affiliates
("Employers") maintain the Basic Pension Plan for the benefit of eligible
employees of the Employers;
WHEREAS, Sections 401(a)(17) and 415 of the Internal Revenue Code establish
limitations as to the amount of pension benefit which may be accrued under or
payable from the Basic Pension Plan on behalf of any participant therein; and
WHEREAS, Willbros USA Inc. desires to establish a plan under which a
portion of the pension benefit (and certain death benefits) of an Eligible
Executive of an Employer which becomes subject to such limitations of the
Internal Revenue Code shall be payable from general corporate assets.
NOW, THEREFORE, Willbros USA Inc. hereby adopts, effective as of January 1,
1994, the Willbros USA Inc. Executive Benefit Restoration Plan ("Restoration
Plan") as set forth hereinafter.
ARTICLE 2. DEFINITIONS
In this Plan, unless the context clearly implies otherwise, the singular
includes the plural, the masculine includes the feminine, and initially
capitalized words have the following meaning:
2.1 ACTUARIAL EQUIVALENT means, in comparing benefits payable in different
forms or at different times, a value under one set of circumstances which
is the same as the value under a different set of circumstances. Such
value shall be computed and determined by use of an interest rate of 7-
1/2% and by use of the mortality assumptions and other actuarial factors
and assumptions (other than interest rates) then in effect under the Basic
Pension Plan. If the Basic Pension Plan is terminated, the interest rate
to be used shall be 7-1/2% and the mortality assumptions and other
actuarial factors and assumptions (other than interest rates) shall be
those used under the Basic Pension Plan in the calendar year prior to the
year in which the Basic Pension Plan is terminated.
2.2 AGREEMENT means the written agreement, in the form prescribed by the
Company, executed by the Company and the Eligible Executive, pursuant to
which, among other things, the Eligible Executive elects to become a
Participant in the Plan, and agrees to be bound by the terms and conditions
thereof. (See Exhibit A.)
<PAGE>
2.3 BASIC PENSION PLAN means the Willbros USA, Inc. Pension Plan and/or the
Willbros Butler Engineers, Inc. Pension Plan.
2.4 BENEFICIARY means the person, persons or trust designated by a Participant,
on a form provided by the Company, to receive any amount payable upon the
death of a Participant, and if no such person is so designated, the
Participant's estate.
2.5 BOARD means the Board of Directors of the Willbros Group, Inc.
2.6 CODE means the Internal Revenue Code of 1986, as amended.
2.7 RABBI TRUST means the irrevocable trust established by the Company on
behalf of the Employers and a trustee selected by the Company under which
Plan benefits are paid pursuant to Section 7.1 hereof.
2.8 COMPANY means Willbros USA, Inc.
2.9 COMMITTEE means the Willbros Retirement Plans Committee.
2.10 CONSIDERED COMPENSATION means the lesser of: (i) the Participant's
"Compensation" as defined in the Basic Pension Plan without regard to the
exclusion of amounts in excess of the Code Section 401(a)(17) limits, or
(ii) one hundred and fifty percent (150%) of the Participant's base salary.
2.11 DISABILITY means a physical or mental disability as defined in the Basic
Pension Plan.
2.12 EMPLOYER means an "Employer" as such term is defined under the Basic
Pension Plan.
2.13 EFFECTIVE DATE means January 1, 1994.
2.14 ELIGIBLE EXECUTIVE means an executive who meets the requirements of Section
4.1 and who has been recommended by the Committee to the Board for Plan
participation.
2.15 NORMAL RETIREMENT DATE means age 65.
2.16 PLAN means the Willbros USA, Inc. Executive Benefit Restoration Plan.
2.17 PARTICIPANT means an Eligible Executive who has been approved by the Board
for participation in the Plan and has executed a participation Agreement in
accordance with Section 3.1.
2.18 COMPENSATION COMMITTEE means the Willbros Group, Inc. Compensation
Committee.
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<PAGE>
ARTICLE 3. PARTICIPANT
3.1 The Board will, from time-to-time, approve the selection of an Eligible
Executive for participation in this Plan. Upon execution of a participation
Agreement containing such provisions as the Company deems necessary, such
Eligible Executive will become a Participant effective as of the date
specified in the participation Agreement.
ARTICLE 4. ELIGIBILITY
4.1 Before an Eligible Executive can be selected for participation in the Plan,
such Eligible Executive must be vested in the Basic Pension Plan, be an
officer of an Employer and have a minimum of ten (10) years of service.
ARTICLE 5. BENEFITS
5.1 The benefits payable to a Participant under this Plan due to a termination
of employment for reasons other than death or Disability, shall be equal to
the excess, if any, of:
(a) The benefits that would have been paid to such Participant, under the
Basic Pension Plan, if (1) the provisions of the Basic Pension Plan
were administered without regard to the limitations imposed by Code
401(a)(17) and 415, and (2) the benefits provided under the Basic
Pension Plan were determined based on Considered Compensation as that
term is defined in this Plan; and
(b) The employer-provided accrued benefit that is actually payable to such
Participant under the Basic Pension Plan.
If a Participant terminates service with the Employers and affiliated
companies prior to his Normal Retirement Date, the benefit payable to the
Participant under this Plan shall be calculated based upon his years of
service to the date of such termination.
5.2 If a Participant dies prior to receiving any benefit under Section 5.1, his
Beneficiary shall be entitled to receive the benefit, if any, that the
Participant would have received pursuant to Section 5.1 if he had
terminated employment on the date of his death.
5.3 If a Participant's employment is terminated before his Normal Retirement
Date because of Disability, he shall be eligible to receive a benefit under
the Plan beginning on his Normal Retirement Date. The amount of benefit
payable under the Plan to such Participant shall be determined in
accordance with Section 5.1. For benefit computation,
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<PAGE>
the Participant's service shall include the period of Disability determined
in the same manner as for purposes of the Basic Pension Plan.
ARTICLE 6. FORMS OF PAYMENT
6.1 The benefit which is determined under Article 5 shall be paid in a single
lump sum which is the Actuarial Equivalent of the monthly benefit
determined under Section 5.1. No early retirement subsidies under the Basic
Pension Plan shall be taken into account in determining the lump sum
amount.
6.2 Benefits payable under Section 5.1 of the Plan shall be paid to a
Participant in the form of a lump sum payment within thirty (30) days of
the later of: (i) the date on which the Participant terminates employment
with the Employers and all affiliated companies; or (ii) the date on which
the Participant attains age fifty-five (55).
6.3 Benefits payable under Section 5.2 of the Plan shall be paid to the
Participant's Beneficiary in the form of a lump sum payment within one
hundred and twenty (120) days of the Participant's death.
6.4 Benefits payable under Section 5.3 of the Plan shall be paid to the
disabled Participant in the form of a lump sum payment within thirty (30)
days after such Participant reaches his Normal Retirement Date. If a
disabled Participant recovers from his Disability prior to his Normal
Retirement Date, his benefits shall be paid pursuant to Section 6.1.
ARTICLE 7. SOURCE OF PAYMENT OF BENEFITS
7.1 The Employers will pay all benefits owing under this Plan out of their
general assets through the use of a Rabbi Trust. Each Participant is an
unsecured creditor of their respective Employer and the Plan constitutes a
mere promise by the Employers to pay benefits as provided hereunder.
However, the Employers shall establish an irrevocable Rabbi Trust for the
payment of benefits under the Plan and may make such investments in the
Rabbi Trust as are desirable to assist the Employers in meeting such
obligations. The Rabbi Trust and all assets held by the trust will conform
to the terms of the model trust, as described in Revenue Procedure 92-64.
In this regard, any investments of the Rabbi Trust shall be assets of the
Employers subject to claims of their general creditors. No person eligible
for a benefit under this Plan shall have any right, title or interest in
any such investments.
7.2 It is the intention of each Employer and each Participant that the Plan and
the Rabbi Trust be considered unfunded for tax purposes and for purposes of
Title I of ERISA.
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<PAGE>
ARTICLE 8. ADMINISTRATION
8.1 The Committee shall act as the administrator of the Plan in accordance with
its terms and purpose.
8.2 The Committee may authorize one or more of its members or any agent to act
on its behalf and may contract for legal, accounting, clerical and other
services to carry out the Plan. All expenses of the Committee shall be paid
by the Employers.
8.3 The Committee shall be generally responsible for the operation and
administration of the Plan. To the extent that powers are not delegated to
others pursuant to provisions of this Plan, the Committee shall have such
powers as may be necessary to carry out the provisions of the Plan and to
perform its duties hereunder, including, without limiting the generality of
the foregoing, the power:
(a) To appoint, retain and terminate such persons as it deems
necessary or advisable to assist in the administration of the Plan or to
render advice with respect to the responsibilities of the Committee under
the Plan, including accountants, actuaries, administrators, attorneys and
physicians .
(b) To make use of the services of the employees of the Employers in
administrative matters.
(c) To obtain and act on the basis of all tables, valuations,
certificates, opinions, and reports furnished by the persons described in
paragraph (a) or (b) above. Any determination of Actuarial Equivalent
benefits by the actuary selected by the Committee shall be conclusive and
binding on the Employers, the Committee and all Participants and
Beneficiaries.
(d) To review the manner in which benefit claims and other aspects of
the Plan administration have been handled by the employees of the
Employers.
(e) To determine all benefits and resolve all questions pertaining to
the administration and interpretation of the Plan provisions, either by
rules of general applicability or by particular decisions. To the maximum
extent permitted by law, all interpretations of the Plan and other
decisions of the Committee shall be conclusive and binding on all parties.
(f) To adopt such forms, rules and regulations as it shall deem
necessary or appropriate for the administration of the Plan and the conduct
of its affairs, provided that any such forms, rules and regulations shall
not be inconsistent with the provisions of the Plan.
-5-
<PAGE>
(g) To remedy any inequity resulting from incorrect information
received or communicated or from administrative error.
(h) To commence or defend any litigation arising from the operation
of the Plan in any legal or administrative proceeding.
(i) To amend the Plan in accordance with Section 9.1.
8.4 Any Participant and any Beneficiary eligible to receive benefits under the
Plan shall furnish to the Committee any information or proof requested by
the Committee and reasonably required for the proper administration of the
Plan. Failure on the part of the Participant or Beneficiary to comply with
any such request within a reasonable period of time shall be sufficient
grounds for delay in the payment of benefits under the Plan until such
information or proof is received by the Committee.
8.5 The Compensation Committee shall select and recommend the appropriate
Eligible Executives for participation in the Plan. The Board will make the
final determination on participation.
8.6 The Committee shall keep records reflecting the administration of the Plan
which shall be subject to audit by the Employers.
8.7 Unless resulting from his own fraud or willful misconduct, no member of the
Committee shall be liable for any loss arising out of any action taken or
failure to act by the Committee or a member thereof in connection with this
Plan. The Committee and any individual member of the Committee and any
agent thereof will be fully protected in relying upon the advice of
professional consultants or advisers employed by the Employers or the
Committee.
8.8 The Employers hereby jointly and severally indemnify and agree to hold
harmless the members of the Committee and all directors, officers and
employees of the Employers against any loss, claim, cost, expense
(including attorneys' fees), judgment or liability arising out of any
action taken or failure to act by the Committee or such individual in
connection with this Plan; provided, however, that this indemnity will not
apply to an individual if such loss, claim, cost, expense, judgment, or
liability is due to such individual's fraud or willful misconduct.
ARTICLE 9. MISCELLANEOUS
9.1 Amendment and Termination. The Committee may amend the Plan at any time to
-------------------------
the extent such amendment does not affect the value or level of benefits
under the Plan and the Board may amend, curtail or terminate the Plan at
any time. However, no such
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<PAGE>
action shall, without the consent of the Participant, reduce or impair the
accumulated benefits then currently due a Participant or his Beneficiary
under the Plan; nor divest a Participant of any benefits he would have
received had he resigned from employment immediately prior to the effective
date of the amendment or termination.
9.2 Assignability. The right of any person to any benefit or payment under the
-------------
Plan shall not be subject to voluntary or involuntary transfer, alienation
or assignment, and, to the fullest extent permitted by law, shall not be
subject to attachment, execution, garnishment, sequestration or other legal
or equitable process. In the event a person who is receiving or is
entitled to receive benefits under the Plan attempts to assign, transfer or
dispose of such right, or if an attempt is made to subject said right to
such process, such assignment, transfer or disposition shall be null and
void.
9.3 Employment Rights. The provisions of the Plan shall not give a Participant
-----------------
the right to be retained in the service of the Employer, nor shall the
Plan, or any action taken under the Plan, be construed as a contract of
employment.
9.4 Effect of the Code and ERISA. The Plan is not intended to meet the
----------------------------
qualification requirements of Section 401 of the Code, as amended; nor is
it intended to comply with either the requirements of Part 2 (participation
and vesting), Part 3 (funding) and Part 4 (fiduciary responsibility) of
Title I, or the requirements of Title IV of ERISA.
9.5 Claims Procedure and Review.
---------------------------
(a) Claims for benefits under the Plan shall be filed in writing by a
claimant with the Committee. Within 60 days after receipt of such claim,
the Committee shall act on the claim and shall notify the claimant in
writing as to whether the claim has been granted in whole or in part;
provided, however, if the claimant has not received written notice of such
decision within such 60-day period, the claimant shall, for the purpose of
subsection (c) of this Section 9.5, regard his claim as having been denied.
(b) Any notice of denial of a claim in whole or in part shall set
forth, in a manner calculated to be understood by the claimant, (i) the
specific reason or reasons for the denial, (ii) specific reference to
pertinent Plan provisions on which the denial is based, (iii) a description
of any additional material or information necessary for the claimant to
perfect the claim, and (iv) an explanation of the Plan's claim and review
procedure.
(c) Any claimant (or his duly authorized representative) who has been
denied a claim in whole or in part under the Plan shall be entitled, upon
the filing of a written request for review with the Committee within 60
days after receipt by the claimant of written notice of denial of his claim
(or, if the claimant had not received written notice of decision within the
60-day Period described in subsection (a) of this Section 9.5,
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<PAGE>
within 120 days of receipt of the claim form by the Committee), to appeal
the denial of his claim to the Committee.
(d) The claimant or his duly authorized representative shall be
entitled in connection with such appeal to examine pertinent documents and
submit issues and comments in writing to the Committee. Any decision on
review by the Committee shall be in writing, shall include specific reasons
for the decision (including reference to the pertinent Plan provisions on
which the decision is based) and shall be written in a manner calculated to
be understood by the claimant. Such decision shall be made by the
Committee not later than 60 days after receipt by it of the claimant's or
his duly authorized representative's request for review.
9.6 Payments to Minors and Incompetents. If a Participant or Beneficiary
-----------------------------------
entitled to receive any benefits hereunder is a minor or is deemed by the
Committee or is adjudged to be legally incapable of giving a valid receipt
and discharge for such benefits, they will be paid to the duly appointed
guardian of such minor or incompetent or to such other person or entity as
the Committee may designate. Such payment shall, to the extent made, be
deemed a complete discharge of any liability for such payment under the
Plan.
9.7 Qualified Domestic Relations Orders. If a qualified domestic relations
-----------------------------------
order is applicable to a Participant's Basic Pension Plan benefit, such
Participant's Basic Pension Plan benefit shall be deemed to be the amount
which would have otherwise been payable to the Participant from the Basic
Pension Plan if such qualified domestic relations order never existed.
9.8 Procedure for Adoption. Any corporation which is an Employer under the
----------------------
Basic Pension Plan may, by resolution of such corporation's board of
directors, adopt the Plan subject to such terms and conditions as may be
required by the Committee consistent with the provisions of the Plan.
9.9 Governing Law. The Plan shall be construed, regulated and administered
-------------
under the laws of the State of Oklahoma to the extent that such laws are
not preempted by the laws of the United States of America.
IN WITNESS WHEREOF, Willbros USA, Inc. has caused this instrument to be
executed by its duly authorized officers on this 28th day of November , 1994
---- --------
ATTEST: WILLBROS USA, INC.
/s/ L. W. Carpenter By: /s/ Larry J. Bump
- -------------------------------- ------------------------------------
Secretary Larry J. Bump
Chairman and President
-8-
<PAGE>
EXHIBIT 10.11
SECURED PROMISSORY NOTE
-----------------------
U.S.$________ __________, 199_
FOR VALUE RECEIVED, the undersigned, _________________ ("Maker"), promises
to pay to the order of WILLBROS _________, a ________ corporation ("Payee"), at
the principal office of Payee or at such other place as Payee may designate in
writing to Maker, the principal sum of ______________________ and ____/100ths
U.S. Dollars (U.S. $__________________), without interest.
The principal amount of this Note shall be paid in three (3) equal
installments of ________________________________________ and ___/100ths U.S.
Dollars each which are due on ________, ____, ________, ____, and ________,
____, respectively, and are payable on or before ________, ____, ________, ____,
and ________, ____, respectively.
Notwithstanding the foregoing payment schedule, upon the termination of
Maker's employment or service with Payee and its affiliates for any reason
whatsoever (at Payee's option, in the case of termination because of retirement
or disability, or automatically, in the case of termination for any other
reason) the entire unpaid principal balance shall become due and payable on the
earlier of (a) the date on which Maker's shares of stock in Willbros Group, Inc.
("Willbros") are sold to Willbros under paragraph 9 of that certain Stock Option
Agreement dated _____, 199_, among Maker, Payee and Willbros (the "Stock Option
Agreement"); or (b) the next succeeding March 31 following termination.
If this Note or any installment of principal hereunder is not paid when
due, then Payee may, at its option, declare this Note immediately due and
payable in full. If Maker should make an assignment for the benefit of
creditors, or institute or have instituted against him or her any insolvency or
bankruptcy proceedings, this Note shall become immediately due and payable,
without any action on the part of the holder.
Maker hereby waives presentment, demand, notice of nonpayment, protest,
notice of protest, notice of dishonor, bringing of suit and diligence in taking
any action to collect amounts called for hereunder. If a default occurs
hereunder or if this Note or any portion of the principal hereof is not paid
when due, and this Note is placed in the hands of an attorney for collection,
and/or suit is filed hereon, and as often as any of such events occur, Maker
agrees to pay, in addition to the unpaid principal, all reasonable collection
costs, including without limitation the holder's reasonable attorneys' fees and
expenses incurred in connection with such collection activities and/or suit.
In order to secure Maker's obligations hereunder, the undersigned hereby
pledges and grants to Payee a security interest in and to (a) _____________
(_______) shares of
<PAGE>
common stock of Willbros, represented by stock certificate number _____, and
_____________ (_______) shares of convertible, preferred stock of Willbros,
represented by stock certificate number _____ (collectively, the "Pledged
Shares"), physical possession of which has been heretofore delivered to Payee,
irrevocably authorizing Payee to arrange for the transfer of the Pledged Shares
on the books of Willbros, in the name and for the benefit of Payee upon the
occurrence and continuation of any event of default by Maker in accordance with
the terms of this Note; and (b) all proceeds from the sale, exchange or
disposition of the Pledged Shares. This pledge of the Pledged Shares shall
remain in effect until, and shall automatically terminate without any action on
the part of any person upon, the discharge of all of Maker's obligation to pay
money hereunder.
Prior to any foreclosure against the Pledged Shares pursuant to this Note,
Maker shall be entitled to exercise all rights and incidents of ownership with
respect to the Pledged Shares, including without limitation, the right to:
(a) Vote the Pledged Shares in Maker's sole discretion;
(b) Receive all dividends payable with respect to the Pledged
Shares; provided, however, that all stock issuable upon any
-------- -------
dividend, split, revision or reclassification on or of the Pledged
Shares, or any part thereof or as shall be received in exchange for
the Pledged Shares as a result of a merger, consolidation or other
corporate reorganization, shall be transferred directly to Payee and
held by Payee as additional collateral under the terms of this Note;
and
(c) Exercise all other rights afforded a stockholder of Willbros
under applicable law.
Upon the occurrence of any default in any payment of principal hereunder or
in the event this Note is accelerated as a result of any dissolution,
assignment, insolvency or bankruptcy of Maker, Payee shall be entitled to
exercise all rights of foreclosure upon the Pledged Shares (and the proceeds
therefrom) under applicable law and equity. Such powers shall include, without
limitation, the full power and authority of Payee, to the extent not prohibited
by applicable law, to transfer to Payee or its assignee the Pledged Shares
without foreclosure, auction or sale and thereafter exercise all the rights
incident to ownership of the Pledged Shares as referred to in subparagraphs (a),
(b) and (c) in the preceding paragraph. In the event of such transfer, Payee
shall credit against amounts owed by Maker hereunder, with respect to the
Pledged Shares, an amount equal to the lower of (i) U.S.$______ per share or
(ii) 100% of the per share book value of Willbros common stock on the last
December 31 prior to the occurrence of the default, less Distributions, if any,
----
since such last December 31 and the amount of reasonable attorney fees and other
costs incurred by Payee in transferring the Pledged Shares.
It is further agreed that, upon any transfer of this Note, the holder may
deliver the Pledged Shares or any part thereof to the transferee, who shall
thereupon become vested
<PAGE>
with all the powers and rights hereinabove given to Payee in respect of this
Note and the Pledged Shares.
Maker hereby represents and warrants to Payee as follows: (a) Maker has
good and marketable title to the Pledged Shares, free and clear of any and all
liens, claims and encumbrances (except the pledge and security interest granted
herein and as may be set forth in the Stock Option Agreement; (b) Maker has full
right and authority to execute, deliver and perform Maker's obligations under
this Note and to pledge and grant a security interest in the Pledged Shares
hereunder; and (c) this Note is binding and enforceable against Maker in
accordance with its terms.
The outstanding principal balance of this Note may be prepaid in whole or
in part on any regular principal payment date without penalty or premium
whatsoever.
In the event that any clause or provision of this Note is determined to be
invalid or unenforceable for any reason, this Note shall continue to be
enforceable to the maximum extent permitted by applicable law; and in
particular, if any remedy is determined to be in excess of that permitted by
applicable law, the excessive remedy shall be reduced to the maximum enforceable
level and, as so reduced and modified, this Note shall be enforced to the
maximum extent permitted by applicable law.
"Maker"
Name:
<PAGE>
EXHIBIT 10.12
SECURED PROMISSORY NOTE
-----------------------
U.S. $__________ _____________, 199_
FOR VALUE RECEIVED, the undersigned, ______________ ("Maker"), promises to
pay to the order of WILLBROS ______________, a ________ corporation ("Payee"),
at the principal office of Payee or at such other place as Payee may designate
in writing to Maker, the principal sum of ___________________________________
and ___/100ths U.S. Dollars (U.S. $_____________), without interest.
The principal amount of this Note shall be paid in three (3) equal
installments of _____________________________ and ___/100ths U.S. Dollars each
which are due on ________, ____, ________, ____, and ________, ____,
respectively, and are payable on or before ________, ____, ________, ____, and
________, ____, respectively.
Notwithstanding the foregoing payment schedule, upon the termination of
Maker's employment with Payee and its affiliates for any reason whatsoever (at
Payee's option, in the case of termination because of retirement or disability,
or automatically, in the case of termination for any other reason) the entire
unpaid principal balance shall become due and payable on the earlier of (a) the
date on which Maker's shares of stock in Willbros Group, Inc. ("Willbros") are
sold to Willbros under paragraph 9 of that certain Stock Option Agreement dated
____________, 199_, among Maker, Payee and Willbros (the "Stock Option
Agreement"); or (b) the next succeeding March 31 following termination.
If this Note or any installment of principal hereunder is not paid when
due, then Payee may, at its option, declare this Note immediately due and
payable in full. If Maker should make an assignment for the benefit of
creditors, or institute or have instituted against him or her any insolvency or
bankruptcy proceedings, this Note shall become immediately due and payable,
without any action on the part of the holder.
Maker hereby waives presentment, demand, notice of nonpayment, protest,
notice of protest, notice of dishonor, bringing of suit and diligence in taking
any action to collect amounts called for hereunder. If a default occurs
hereunder or if this Note or any portion of the principal hereof is not paid
when due, and this Note is placed in the hands of an attorney for collection,
and/or suit is filed hereon, and as often as any of such events occur, Maker
agrees to pay, in addition to the unpaid principal, all reasonable collection
costs, including without limitation the holder's reasonable attorneys' fees and
expenses incurred in connection with such collection activities and/or suit.
In order to secure Maker's obligations hereunder, the undersigned hereby
pledges and grants to Payee a security interest in and to (a) ________________
shares of common stock of Willbros, represented by stock certificate number
_________ (the "Pledged
<PAGE>
Shares"), physical possession of which has been heretofore delivered to Payee,
irrevocably authorizing Payee to arrange for the transfer of the Pledged Shares
on the books of Willbros, in the name and for the benefit of Payee upon the
occurrence and continuation of any event of default by Maker in accordance with
the terms of this Note; and (b) all proceeds from the sale, exchange or
disposition of the Pledged Shares. This pledge of the Pledged Shares shall
remain in effect until, and shall automatically terminate without any action on
the part of any person upon, the discharge of all of Maker's obligation to pay
money hereunder.
Prior to any foreclosure against the Pledged Shares pursuant to this Note,
Maker shall be entitled to exercise all rights and incidents of ownership with
respect to the Pledged Shares, including without limitation, the right to:
(a) Vote the Pledged Shares in Maker's sole discretion;
(b) Receive all dividends payable with respect to the Pledged
Shares; provided, however, that all stock issuable upon any
-------- -------
dividend, split, revision or reclassification on or of the Pledged
Shares, or any part thereof or as shall be received in exchange for
the Pledged Shares as a result of a merger, consolidation or other
corporate reorganization, shall be transferred directly to Payee and
held by Payee as additional collateral under the terms of this Note;
and
(c) Exercise all other rights afforded a stockholder of Willbros
under applicable law.
Upon the occurrence of any default in any payment of principal hereunder or
in the event this Note is accelerated as a result of any dissolution,
assignment, insolvency or bankruptcy of Maker, Payee shall be entitled to
exercise all rights of foreclosure upon the Pledged Shares (and the proceeds
therefrom) under applicable law and equity. Such powers shall include, without
limitation, the full power and authority of Payee, to the extent not prohibited
by applicable law, to transfer to Payee or its assignee the Pledged Shares
without foreclosure, auction or sale and thereafter exercise all the rights
incident to ownership of the Pledged Shares as referred to in subparagraphs (a),
(b) and (c) in the preceding paragraph. In the event of such transfer, Payee
shall credit against amounts owed by Maker hereunder, with respect to the
Pledged Shares, an amount equal to the lower of (i) U.S.$______ per share or
(ii) 100% of the per share book value of Willbros common stock on the last
December 31 prior to the occurrence of the default, less Distributions, if any,
----
since such last December 31 and the amount of reasonable attorney fees and other
costs incurred by Payee in transferring the Pledged Shares.
It is further agreed that, upon any transfer of this Note, the holder may
deliver the Pledged Shares or any part thereof to the transferee, who shall
thereupon become vested with all the powers and rights hereinabove given to
Payee in respect of this Note and the Pledged Shares.
<PAGE>
Maker hereby represents and warrants to Payee as follows: (a) Maker has
good and marketable title to the Pledged Shares, free and clear of any and all
liens, claims and encumbrances (except the pledge and security interest granted
herein and as may be set forth in the Stock Option Agreement; (b) Maker has full
right and authority to execute, deliver and perform Maker's obligations under
this Note and to pledge and grant a security interest in the Pledged Shares
hereunder; and (c) this Note is binding and enforceable against Maker in
accordance with its terms.
The outstanding principal balance of this Note may be prepaid in whole or
in part on any regular principal payment date without penalty or premium
whatsoever.
In the event that any clause or provision of this Note is determined to be
invalid or unenforceable for any reason, this Note shall continue to be
enforceable to the maximum extent permitted by applicable law; and in
particular, if any remedy is determined to be in excess of that permitted by
applicable law, the excessive remedy shall be reduced to the maximum enforceable
level and, as so reduced and modified, this Note shall be enforced to the
maximum extent permitted by applicable law.
"Maker"
Name:
<PAGE>
EXHIBIT 10.13
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into this 9th day of April, 1992, by and between Willbros Acquisition Corp., a
Republic of Panama corporation (the "Company"); and Heerema Holding
Construction, Inc., Yorktown Energy Partners, L.P. ("Yorktown"), Concord
Partners II, L.P. ("Concord"), Concord Partners Japan Limited ("Concord Japan"),
and the individuals and trusts whose names are set forth on the signature
page(s) hereof (collectively, the "Stockholders").
Background. The Company has entered into a Preferred Stock Purchase
----------
Agreement of even date herewith (as amended, the "Stock Purchase Agreement"),
with the Stockholders pursuant to which the Company will issue to the
Stockholders an aggregate of 350,000 shares of Convertible Preferred Stock,
liquidation value U.S.$100 per share, of the Company (the "Preferred Stock"), in
the amounts set forth on Schedule A hereto, in order to finance, in part, the
Company's acquisition of all of the issued and outstanding capital stock of
Willbros Group, Inc., a Republic of Panama corporation (the "Acquisition"). The
Company has entered into a Note and Warrant Purchase Agreement of even date
herewith, with certain of the Stockholders pursuant to which the Company will
issue to such Stockholders an aggregate of U.S.$10,000,000 in principal amount
of subordinated notes of the Company and warrants to purchase an aggregate of
12,000 shares of the Preferred Stock (the "Warrants"), in the amounts set forth
on Schedule A hereto, in order to finance, in part, the Acquisition. An
aggregate of 12,000 authorized but unissued shares of Preferred Stock are or
will be reserved for issuance upon exercise of the Warrants ("Warrant Shares").
An aggregate of 350,000 authorized but unissued shares of Common Stock, par
value U.S.$1.00 per share, of the Company ("Common Stock") are or will be
reserved for issuance upon conversion of the Preferred Stock to be issued to the
Stockholders under the Stock Purchase Agreement, and an aggregate of 12,000
authorized but unissued shares of Common Stock are or will be reserved for
issuance upon conversion of the Preferred Stock to be issued upon conversion of
the Warrant Shares. The Company has heretofore issued or will issue 50,000
shares of Common Stock to certain of the Stockholders, in the amounts set forth
on Schedule A hereto.
In consideration of the background transactions and the mutual covenants
and agreements herein set forth, the parties to this Agreement hereby agree,
effective at the Effective Date (as defined below), subject to the terms and
conditions hereinafter set forth, as follows:
1. Definitions. As used herein, unless the context otherwise requires,
-----------
the following terms have the following respective meanings:
Acquisition: As defined in the paragraph of this Agreement entitled
-----------
"Background."
Agreement: As defined in the introductory paragraph of this Agreement.
---------
Commission: The U.S. Securities and Exchange Commission or any other
----------
governmental authority at the time administering the Securities Act or the
Exchange Act.
<PAGE>
Common Stock: As defined in the paragraph of this Agreement entitled
------------
"Background."
Company: As defined in the introductory paragraph of this Agreement.
-------
Concord: As defined in the introductory paragraph of this Agreement.
-------
Concord Japan: As defined in the introductory paragraph of this Agreement.
-------------
Effective Date: The date on which Preferred Stock is issued to the
--------------
Stockholders in connection with the financing of the Acquisition.
Exchange Act: The U.S. Securities Exchange Act of 1934, as amended, or any
------------
similar or successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Exchange Act shall include a reference
to the comparable section, if any, of any such similar or successor federal
statute.
Initial Public Offering: As defined in Section 2.1(j) of this Agreement.
-----------------------
Person: A corporation, an association, a partnership, an individual, a
------
joint venture, a trust or estate, an unincorporated organization, or a
government or any department or agency thereof.
Preferred Stock: As defined in the paragraph of this Agreement entitled
---------------
"Background."
Registrable Securities: (a) Any shares of Common Stock issued or issuable
----------------------
upon conversion of any shares of Preferred Stock issued to the Stockholders
pursuant to the Stock Purchase Agreement or upon conversion of the Warrant
Shares, (b) any shares of Common Stock issued and outstanding on the Effective
Date, and (c) any securities issued or issuable with respect to any Common Stock
referred to in the foregoing clauses by way of stock dividend or stock split or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise. As to any particular
Registrable Securities, once issued, such securities shall cease to be
Registrable Securities when (w) a registration statement with respect to the
sale of such securities in the United States shall have become effective under
the Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (x) they shall have been transferred pursuant
to Rule 144 or Rule 144A (or any successor provision) under the Securities Act,
(y) they shall have been otherwise transferred, new certificates for them not
bearing a legend restricting further transfer shall have been delivered by the
Company and subsequent disposition of them shall not require registration or
qualification under the Securities Act or any similar state law then in force,
or (z) they shall have ceased to be outstanding. While the shares of Preferred
Stock and the Warrants outstanding from time to time are not Registrable
Securities for the purpose of registration, holders of shares of Preferred Stock
and Warrants shall, for purposes of giving of notices or the calculation of
percentages of Registrable Securities, be treated as the holders of the
Registrable Securities issuable upon conversion of their shares of Preferred
Stock or upon exercise of their
-2-
<PAGE>
Warrants and conversion of their Warrant Shares. In addition, for purposes of
calculation of percentages of Registrable Securities, all shares of Preferred
Stock shall be treated as the same number of shares of Common Stock into which
they are then convertible and all Warrants shall be treated as the same number
of shares of Common Stock into which their Warrant Shares are then convertible.
Registration Expenses: All expenses incident to the Company's performance
---------------------
of or compliance with Section 2 of this Agreement, including, without
limitation, all registration, filing and listing or NASDAQ fees, all fees and
expenses of complying with securities or blue sky laws, all word processing,
duplicating and printing expenses, all messenger and delivery expenses, the fees
and disbursements of counsel for the Company and of its independent public
accountants, including without limitation the expenses of any special audits or
"cold comfort" letters required by or incident to such performance and
compliance, premiums and other costs of policies of insurance, if any, against
liabilities arising out of the public offering of the Registrable Securities
being registered, and any fees and disbursements of underwriters customarily
paid by issuers or sellers of securities, but excluding underwriting discounts
--- ---------
and commissions, transfer taxes, if any, and the fees and disbursements of any
counsel and accountants retained by the holder or holders of the Registrable
Securities being registered.
Securities Act: The U.S. Securities Act of 1933, as amended, or any
--------------
similar or successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
References to a particular section of the Securities Act shall include a
reference to the comparable section, if any, of any such similar or successor
federal statute.
Stock Purchase Agreement: As defined in the paragraph of this Agreement
------------------------
entitled "Background."
Stockholders: As defined in the introductory paragraph of this Agreement.
------------
Warrants: As defined in the paragraph of this Agreement entitled
--------
"Background."
Warrant Shares: As defined in the paragraph of this Agreement entitled
--------------
"Background."
Yorktown: As defined in the introductory paragraph of this Agreement.
--------
2. Registration under Securities Act
---------------------------------
2.1 Registration on Request. (a) Request. Upon the written request of
----------------------- -------
the holder or holders of ten percent (10%) or more of the Registrable Securities
that the Company effect the registration under the Securities Act in connection
with a sale of such shares in the United States of all or part of such holders'
Registrable Securities (provided that the Registrable Securities to be
registered represent not less than five percent (5%) of all Registrable
Securities) and specifying the intended method of disposition thereof (including
whether or not such disposition is intended to be effected as an underwritten
offering), the Company will promptly
-3-
<PAGE>
give written notice of such requested registration to all other holders of
Registrable Securities and thereupon the Company will use its best efforts to
effect the registration under the Securities Act of:
(i) the Registrable Securities which the Company has been so
requested to register by the holder or holders submitting the request, and
(ii) all other Registrable Securities which the Company has been
requested to register by the holder or holders thereof by written request
given to the Company within fifteen (15) days after the giving of such
written notice by the Company (which request shall specify the intended
method of disposition of such Registrable Securities), all to the extent
requisite to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities so to be
registered.
(b) Registration of Other Securities. Whenever the Company shall
--------------------------------
effect a registration pursuant to this Section 2.1 in connection with an
underwritten offering by one or more holders of Registrable Securities, no
securities other than Registrable Securities shall be included among the
securities covered by such registration unless (i) the managing underwriter of
such offering shall have advised each holder of Registrable Securities to be
covered by such registration that the inclusion of such other securities would
not adversely affect such offering and (ii) the requirements of paragraph (g) of
this Section 2.1 are satisfied.
(c) Registration Statement Form. Registrations under this Section 2.1
---------------------------
shall be on such appropriate registration form of the Commission (i) for which
the Company qualifies, and which the Company's counsel (after consultation with
counsel or counsels for the holders of the Registrable Securities) deems
appropriate, and (ii) as shall permit the disposition of such Registrable
Securities in accordance with the intended method or methods of disposition
specified in the request for such registration. The Company agrees to include in
any such registration statement all information as to the holders of the
Registrable Securities to be registered which the holders of the Registrable
Securities being registered shall reasonably request or which shall be required
by applicable law.
(d) Expenses. Except as provided in paragraph (h) of this Section
--------
2.1, the Company will pay all Registration Expenses incurred in connection with
any registration requested pursuant to this Section 2.1 which the Company is
obligated to effect, whether or not such registration is effected.
(e) Effected Registration Statement. A registration requested
-------------------------------
pursuant to this Section 2.1 shall not be deemed to have been effected (i)
unless a registration statement with respect thereto has become effective, (ii)
if the registration statement is withdrawn prior to its effectiveness pursuant
to the request of all of the holders of Registrable Securities who have
requested the inclusion in such registration statement of some or all of their
Registrable Securities and one or more of the holders of Registrable Securities
have elected to pay (and shall actually have paid) the Registration Expenses
relating thereto in accordance with paragraph (h) of this Section 2.1, (iii) if,
after the registration statement has become effective, such registration
-4-
<PAGE>
is interfered with by any stop order, injunction or other order or requirement
of the Commission or other governmental agency or court for any reason, unless
such stop order, injunction or other order or requirement results from any
action or inaction of a holder or holders of Registrable Securities, or (iv) if
the conditions to closing specified in the purchase agreement or underwriting
agreement entered into in connection with such registration are not satisfied or
waived and, if the conditions are not satisfied due to a failure by a holder of
Registrable Securities to satisfy a condition required to be satisfied by such
holder pursuant to the purchase agreement or underwriting agreement, one or more
of the holders of Registrable Securities have elected to pay (and shall actually
have paid) the Registration Expenses relating thereto in accordance with
paragraph (h) of this Section 2.1.
(f) Selection of Underwriters. If a requested registration pursuant
-------------------------
to this Section 2.1 involves an underwritten offering, the underwriter or
underwriters thereof shall be, at the discretion of the Company, either Dillon,
Read & Co. Inc. or another underwriter of national reputation, subject to the
approval of the holders of a majority of the Registrable Securities to be so
registered.
(g) Priority in Requested Registrations. If a requested registration
-----------------------------------
pursuant to this Section 2.1 involves an underwritten offering, and the managing
underwriter shall advise the Company in writing (with a copy to each holder of
Registrable Securities requesting registration) that, in its opinion, the number
of Registrable Securities and other securities of the Company held by any other
party requested to be included in such registration exceeds the number which can
be sold in (or during the time of) such offering within a price range acceptable
to the holders of a majority (by number of shares) of the Registrable Securities
requested to be included in such registration, the Company will include in such
registration all Registrable Securities requested to be included in such
registration (unless the provisions of the following sentence apply) and will
include in such registration other securities of the Company (including any
securities proposed to be issued and sold by the Company) held by any other
party only to the extent that the number of shares which the Company is advised
can be so sold in (or during the time of) such offering exceeds the number of
Registrable Securities to be included in such registration. If a requested
registration pursuant to this Section 2.1 involves an underwritten offering, and
the managing underwriter shall advise the Company in writing (with a copy to
each holder of Registrable Securities requesting registration) that, in its
opinion, the number of Registrable Securities requested to be included in such
registration exceeds the number which can be sold in (or during the time of)
such offering within a price range acceptable to the holders of a majority (by
number of shares) of the Registrable Securities requested to be included in such
registration, the Company will include in such registration only Registrable
Securities requested to be included in such registration. In such event, such
Registrable Securities will be included in such registration only to the extent
of the number of shares which the Company is advised can be so sold in (or
during the time of) such offering; the Registrable Securities to be included in
such registration shall be taken up pro rata from the holders of Registrable
Securities requesting such registration on the basis of the percentage of
Registrable Securities requested to be included in such registration; it being
understood that all shares proposed to be sold by the Company shall be deleted
from such registration prior to effecting any reduction of Registrable
Securities by the holders thereof under this paragraph (g).
-5-
<PAGE>
(h) Limitation on Registrations. The Company's obligations under this
---------------------------
Section 2.1 shall be limited to effecting four (4) registrations within the
meaning of paragraph (e) of this Section 2.1 other than an Initial Public
Offering; provided, however, that (i) if all of the holders who have requested
the inclusion of Registrable Securities held by them in a registration requested
under this Section 2.1 withdraw such request prior to the time the registration
statement has become effective and any or all of such persons pay all
Registration Expenses relating thereto, such proposed registration shall not
count as one of the registrations provided for by this Section 2.1; and (ii) if
a registration is deemed to be effected pursuant to paragraph (e) of this
Section 2.1 because a condition to closing specified in the purchase agreement
or underwriting agreement entered into in connection with such registration is
not satisfied due to a failure by a holder of Registrable Securities to satisfy
a condition required to be satisfied by such holder pursuant to such agreement
and one or more of the holders of Registrable Securities elects to pay (and
shall actually have paid) all Registration Expenses relating thereto, such
registration shall not count as one of the registrations provided for by this
Section 2.1.
(i) Company's Right to Delay Registration. Notwith-standing the
-------------------------------------
foregoing provisions of this Section 2.1, the Company shall not be obligated to
effect a registration pursuant to this Section 2.1 within a period of one (1)
year after the effective date of a registration statement previously filed as a
result of a request pursuant to this Section 2.1. In addition, if the Company
has issued and sold to the public, pursuant to a registration statement filed
under the Securities Act, any of its securities within three (3) months prior to
the date of its receipt of a request for registration pursuant to this Section
2.1 and the Company's investment banker has advised the Company in writing that
the registration of Registrable Securities would adversely affect the market for
the Common Stock, the Company shall have the right to delay the requested
registration of Registrable Securities for such period as the investment banker
may so advise, but no more than one hundred twenty (120) days after the date on
which such request was made.
(j) Initial Public Offering. Notwithstanding the other provisions of
-----------------------
this Agreement, except as set forth in this paragraph (j), the Company shall not
be required to effect a registration under this Section 2.1 if a distribution of
shares of any class of the Company's equity securities in the United States has
not previously been effected pursuant to a registration statement filed and
declared effective under the Securities Act; any such registration required to
be effected pursuant to this paragraph (j) is herein referred to as an "Initial
Public Offering." On or after March 31, 1996, the holder or holders of ten
percent (10%) or more of the Registrable Securities shall have the right to
request an Initial Public Offering under the demand registration provisions of
this Section 2.1 whereupon the Company shall be required to use its best efforts
to effect such registration in accordance with this Section 2.1.
2.2 Incidental Registration. (a) Right to Include Registrable
----------------------- ----------------------------
Securities. If the Company at any time proposes to register any of its
securities under the Securities Act (other than by a registration on Form S-8 or
Form S-4 or any successor or similar form and other than pursuant to Section 2.1
of this Agreement), whether or not for sale for its own account, it will each
such time give prompt written notice to all holders of Registrable Securities of
its intention
-6-
<PAGE>
to do so and of such holders' rights under this Section 2.2. Upon the written
request of any such holder made within fifteen (15) days after the receipt of
any such notice (which request shall specify the Registrable Securities intended
to be disposed of by such holder and the intended method of disposition
thereof), the Company will use its best efforts to effect the registration under
the Securities Act in connection with a sale of such shares in the United States
of all Registrable Securities which the Company has been so requested to
register by the holders of Registrable Securities, to the extent requisite to
permit the disposition (in accordance with the intended methods thereof as
aforesaid) of the Registrable Securities so to be registered, provided that if,
at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any
reason, after consultation with the holders of Registrable Securities which have
requested inclusion in such registration, not to register or to delay
registration of such securities, the Company may, at its election, give written
notice of such determination to each holder of Registrable Securities and,
thereupon, (i) in the case of a determination not to register, shall be relieved
of its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith), without prejudice, however, to the rights of any holder
or holders of Registrable Securities entitled to do so to request that such
registration be effected as a registration under Section 2.1 above, and (ii) in
the case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities for the same period as the delay in
registering such other securities. No registration effected under this Section
2.2 shall relieve the Company of its obligation to effect any registration upon
request under Section 2.1 above. The Company will pay all Registration Expenses
in connection with each registration of Registrable Securities requested
pursuant to this Section 2.2.
(b) Priority in Incidental Registrations. If (i) a registration
------------------------------------
pursuant to this Section 2.2 involves an underwritten offering of the securities
so being registered, whether or not for sale for the account of the Company, to
be distributed by or through, at the discretion of the Company, either Dillon,
Read & Co. Inc. or another underwriter of national reputation, under
underwriting terms appropriate for such a transaction, (ii) the Registrable
Securities so requested to be registered for sale for the account of holders of
Registrable Securities are not also to be included in such underwritten offering
(because the Company has not been requested so to include such Registrable
Securities pursuant to Section 2.4(b) below), and (iii) the managing underwriter
of such underwritten offering shall inform the Company and the holders of the
Registrable Securities requesting such registration by letter of its belief that
the number of securities requested to be included in such registration exceeds
the number which can be sold in (or during the time of) such offering, then the
Company shall include in such registration only securities proposed to be sold
by the Company for its own account and Registrable Securities. If the
registration was initiated by the Company without a requested registration
having been initiated within the prior one hundred twenty (120) day period, the
Company may include all securities proposed by the Company to be sold for its
own account and may decrease the number of Registrable Securities so proposed to
be sold and so requested to be included in such registration (pro rata on the
basis of the percentage of the securities of the Company, by number of shares,
requested to be included in the registration by the holders of such Registrable
Securities) to the extent necessary to reduce the number of securities to be
included in the
-7-
<PAGE>
registration to the level recommended by the managing underwriter. If, however,
the registration was initiated by the Company within one hundred twenty (120)
days of a requested registration and is in response thereto or in lieu thereof,
then the Company shall include in the registration all Registrable Securities
requested to be included in such registration and shall decrease the number of
securities proposed to be sold by the Company and to be included in such
registration to the extent necessary to reduce the number of securities to be
included in the registration to the level recommended by the managing
underwriter.
2.3 Registration Procedures. If and whenever the Company is required to
-----------------------
use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Section 2.1 or 2.2 above, the Company
will, as expeditiously as possible:
(i) prepare and (as soon thereafter as possible or in any event
no later than seventy-five (75) days after the end of the period within
which requests for registration may be given to the Company or such longer
period as the Company shall in good faith require to produce the financial
statements required in connection with such registration) file with the
Commission the requisite registration statement to effect such registration
and thereafter use its best efforts to cause such registration statement to
become effective, provided that the Company may discontinue any
registration of its securities which are not Registrable Securities (and,
under the circumstances specified in Section 2.2(a) above, its securities
which are Registrable Securities) at any time prior to the effective date
of the registration statement relating thereto;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
registration statement until such time as all of such securities have been
disposed of in accordance with the intended methods of disposition by the
seller or sellers thereof as set forth in such registration statement but
in no event for a period which would exceed one hundred twenty (120) days
from the date on which the registration statement became effective;
(iii) furnish to each seller of Registrable Securities covered
by such registration statement such number of conformed copies of such
registration statement and of each amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary
prospectus and any summary prospectus) and any other prospectus filed under
Rule 424 under the Securities Act, in conformity with the requirements of
the Securities Act, and such other documents, as such seller may reasonably
request;
(iv) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement
under such other securities or blue sky laws of such jurisdictions in the
United States as each seller thereof shall reasonably request, to keep such
registration or qualification in effect for so long as such registration
-8-
<PAGE>
statement remains in effect, and take any other action which may be
reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the securities owned by such seller,
except that the Company shall not for any such purpose be required to
either qualify generally to do business as a foreign corporation, or
subject itself to taxation in any jurisdiction wherein it would not, but
for the requirements of this clause (iv), be obligated to be so qualified
or subject to taxation or to consent to general service of process in any
such jurisdiction or to any material restrictions on the conduct of its
business, or any restrictions on payments to any of its stockholders;
(v) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by
such other United States governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities;
(vi) furnish to each seller of Registrable Securities a copy of
each of the following, if any, addressed to the underwriters:
(A) an opinion of counsel for the Company, dated the
effective date of such registration statement (and, if such
registration includes an underwritten public offering, dated the
date of the closing under the underwriting agreement) reasonably
satisfactory in form and substance to such seller, and
(B) a "comfort" letter, dated the effective date of
such registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under
the underwriting agreement), signed by the independent public
accountants who have certified the Company's financial statements
included in such registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriters in
underwritten public offerings of securities and, in the case of the
accountants' letter, such other financial matters, and, in the case of the
legal opinion, such other legal matters, as such seller or such holder (or
the underwriters, if any) may reasonably request;
(vii) notify each seller of Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, upon discovery that,
or upon the happening of any event as a result of which, the prospectus
included in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein
not
-9-
<PAGE>
misleading in the light of the circumstances under which they were made,
and at the request of any such seller or holder promptly prepare and
furnish to such seller or holder a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary (and a
post-effective amendment to such registration statement as may be necessary
in connection therewith) so that, as thereafter delivered to the purchasers
of such securities, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made;
(viii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to
its security holders, as soon as reasonably practicable, a historical
earnings statement covering the period of at least twelve (12) months, but
not more than eighteen (18) months, beginning with the first month of the
first full fiscal quarter after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act, and will furnish to each such seller at least
five business days prior to the filing thereof a copy of any amendment or
supplement to such registration statement or prospectus and shall not file
any thereof to which any such seller shall have reasonably objected on the
grounds that such amendment or supplement does not comply in all material
respects with the requirements of the Securities Act or the rules or
regulations thereunder;
(ix) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of such
registration statement; and
(x) use its best efforts to list all Registrable Securities
covered by such registration statement on any securities exchange on which
any of the Common Stock is then listed.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information regarding
such seller and the distribution of such securities as the Company may from time
to time reasonably request in writing.
Each holder of Registrable Securities agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
clause (vii) of this Section 2.3, such holder will forthwith discontinue such
holder's disposition of Registrable Securities pursuant to the registration
statement relating to such Registrable Securities until such holder's receipt of
the copies of the supplemented or amended prospectus contemplated by clause
(vii) of this Section 2.3 and, if so directed by the Company, will deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies, then in such holder's possession of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice.
-10-
<PAGE>
2.4 Underwritten Offerings. (a) Requested Underwritten Offerings. If
---------------------- --------------------------------
requested by the underwriters for any underwritten offering by holders of
Registrable Securities pursuant to a registration requested under Section 2.1
above, the Company will enter into an underwriting agreement with such
underwriters for such offering, such agreement to contain such representations
and warranties by the Company and such other terms as are generally prevailing
in agreements of this type, including, without limitation, indemnities to the
effect and to the extent provided in Section 2.6 below. The holders of the
Registrable Securities will reasonably cooperate with the Company in the
negotiation of the underwriting agreement, provided that nothing herein
contained shall diminish the foregoing obligations of the Company. The holders
of Registrable Securities to be distributed by such underwriters shall be
parties to such underwriting agreement and any necessary or appropriate custody
agreements and execute appropriate powers of attorney, and may, at their option,
require that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders of
Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such holders of Registrable Securities. Any
such holder of Registrable Securities shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
holder, such holder's Registrable Securities and such holder's intended method
of distribution and any other representation required by law.
(b) Incidental Underwritten Offerings. If the Company at any time
---------------------------------
proposes to register any of its securities under the Securities Act, as
contemplated by Section 2.2 above, and such securities are to be distributed by
or through one or more underwriters, the Company will, if requested by any
holder of Registrable Securities as provided in said Section 2.2 and subject to
the provisions of this Section 2.4(b), arrange for such underwriters to include
all the Registrable Securities to be offered and sold by such holder among the
securities to be distributed by such underwriters. In the event that the
managing underwriter of any underwritten offering shall inform the Company and
the holders of the Registrable Securities requesting the inclusion of their
securities in such offering by letter of its belief that the number of
securities requested to be sold in such offering exceeds the number which can be
sold in such offering, then the Company shall include in such offering only
securities proposed to be sold by the Company for its own account and
Registrable Securities. If the registration was initiated by the Company
without a requested registration having been initiated within the prior one
hundred twenty (120) day period, the Company may include in such offering all
securities proposed by the Company to be sold for its own account and may
decrease the number of Registrable Securities so proposed to be sold and so
requested to be included in such offering (pro rata on the basis of the
percentage of the securities, by number of shares, of the Company requested to
be included in the offering by the holders of such Registrable Securities) to
the extent necessary to reduce the number of securities to be included in such
offering to the level recommended by the managing underwriter. If, however, the
registration was initiated by the Company within one hundred twenty (120) days
of a requested registration and is in response thereto or in lieu thereof, then
the Company shall include in the registration all Registrable Securities
requested to be included in such registration and shall decrease the number of
securities proposed to be
-11-
<PAGE>
sold by the Company and to be included in such registration to the extent
necessary to reduce the number of securities to be included in the registration
to the level recommended by the managing underwriter. The holders of
Registrable Securities to be distributed by such underwriters shall be parties
to the underwriting agreement between the Company and such underwriters and any
necessary or appropriate custody agreements and execute appropriate powers of
attorney, and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. Any such holder of Registrable Securities
shall not be required to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements regarding such holder, such holder's Registrable Securities and such
holder's intended method of distribution and any other representation required
by law.
2.5 Preparation; Reasonable Investigation. In connection with the
-------------------------------------
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement, the underwriters, if
any, and their respective counsel and accountants, the opportunity to
participate in the preparation of such registration statement, each prospectus
included therein or filed with the Commission, and each amendment thereof or
supplement thereto, and will give each of them such access to its books and
records and such opportunities to discuss the business of the Company with its
officers and the independent public accountants who have certified its financial
statements as shall be necessary, in the opinion of such holders' and such
underwriters' respective counsel, to conduct a reasonable investigation within
the meaning of the Securities Act.
2.6 Indemnification. (a) Indemnification by the Company. In the event
--------------- ------------------------------
of any registration of any securities of the Company under the Securities Act,
the Company will, and hereby does, indemnify and hold harmless the seller of any
Registrable Securities covered by such registration statement, its directors and
officers, each other Person who participates as an underwriter in the offering
or sale of such securities and each other Person, if any, who controls such
seller or any such underwriter within the meaning of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, to which such
seller or any such director or officer or underwriter or controlling Person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Company will reimburse such seller and each such director, officer,
underwriter and controlling Person for any legal or any other expenses incurred
by them in connection with investigating or
-12-
<PAGE>
defending any such loss, claim, liability, action or proceeding; provided that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon an untrue statement or omission made in
such registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company through an instrument duly
executed by such seller specifically stating that it is for use in the
preparation thereof and, provided further that the Company shall not be liable
to any Person who participates as an underwriter in the offering or sale of
Registrable Securities or any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of such Person's failure to send or give
a copy of the final prospectus, as the same may be then supplemented or amended,
to the Person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the sale
of Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such seller
or any such director, officer, underwriter or controlling Person and shall
survive the transfer of such securities by such seller and the termination or
expiration of this Agreement.
(b) Indemnification by the Sellers. The Company may require, as a
------------------------------
condition to including any Registrable Securities in any registration statement
filed pursuant to Section 2.3 above, that the Company shall have received an
undertaking reasonably satisfactory to it from the prospective seller of such
securities, to indemnify and hold harmless (in the same manner and to the same
extent as set forth in subparagraph (a) of this Section 2.6) the Company, each
director of the Company, each officer of the Company and each other Person, if
any, who controls the Company within the meaning of the Securities Act, with
respect to any statement or alleged statement in or omission or alleged omission
from such registration statement, any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment or supplement thereto,
if such statement or alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such seller specifically stating
that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. Such indemnity shall remain in full force and effect, regardless of
any investigation made by or on behalf of the Company or any such director,
officer or controlling Person and shall survive the transfer of such securities
by such seller and the termination or expiration of this Agreement.
(c) Notices of Claims and Procedures. Promptly after receipt by an
--------------------------------
indemnified Person of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subparagraphs of this Section
2.6, such indemnified Person will, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action, provided that the failure of any indemnified Person
to give notice as provided herein shall not relieve the indemnifying party of
his, her or its obligations under the preceding subparagraphs of this Section
2.6, except to the
-13-
<PAGE>
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified Person,
unless in such indemnified Person's reasonable judgment a conflict of interest
between such indemnified Person and such indemnifying party may exist in respect
of such claim, the indemnifying party shall be entitled to participate in and to
assume the defense thereof, jointly with any other indemnifying party similarly
notified to the extent that it may wish, with counsel reasonably satisfactory to
such indemnified Person, and after notice from the indemnifying party to such
indemnified Person of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified Person for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the consent of the indemnified Person, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified Person of a release from all liability in respect to such claim or
litigation and otherwise in form and substance reasonably satisfactory to the
indemnified Person.
(d) Indemnification Payments. The indemnification required by this
------------------------
Section 2.6 shall be made by prompt payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
2.7 Adjustments Affecting Registrable Securities. The Company will not
--------------------------------------------
effect or permit to occur any combination or subdivision of shares which would
materially adversely affect the ability of the holders of Registrable Securities
to include such Registrable Securities in any registration of its securities
contemplated by this Section 2 or the marketability of such Registrable
Securities under any such registration.
3. Rules 144 and 144A. If a registration statement pursuant to the
------------------
requirements of Section 12 of the Exchange Act or a registration statement
pursuant to the requirements of the Securities Act has been filed with respect
to the Company's securities, the Company will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder (or, if the Company is not
required to file such reports, the Company will, upon the request of any holder
of Registrable Securities, make publicly available other information) and will
take such further action as any holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rules 144 and 144A under the
Securities Act, as such Rules may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission. Upon the
request of any holder of Registrable Securities, the Company will deliver to
such holder a written statement as to whether it has complied with such
requirements.
4. Amendments and Waivers. This Agreement may be amended and the
----------------------
Company may take any action herein prohibited or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such
-14-
<PAGE>
amendment, action or omission to act, of the holder or holders of eighty percent
(80%) or more of the Registrable Securities at the time outstanding. Each
holder of Registrable Securities at the time or thereafter outstanding shall be
bound by a consent authorized by this Section 4, whether or not such Registrable
Securities shall have been marked to indicate such consent.
5. Nominees for Beneficial Owners. In the event that any Registrable
------------------------------
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at his, her or its election, be treated as the
holder of such Registrable Securities for purposes of any request or other
action by any holder or holders of Registrable Securities pursuant to this
Agreement or any determination of any number or percentage of shares of
Registrable Securities held by any holder or holders of Registrable Securities
contemplated by this Agreement. If the beneficial owner of any Registrable
Securities so elects, the Company may require assurances reasonably satisfactory
to it of such owner's beneficial ownership of such Registrable Securities.
6. Notices. All notices and other communications required or permitted
-------
hereunder shall be in writing, and shall be deemed to have been delivered on the
date delivered by hand, telegram, facsimile or by similar means, on the third
(3rd) day following the day when sent by recognized courier or overnight
delivery service (fees prepaid), or on the fifth (5th) day following the day
when deposited in the mail, registered or certified (postage prepaid), addressed
(a) if to Stockholders, to the attention of each Person at the address set forth
in the stock records of the Company or such address, or to the attention of such
other Person or Persons, as a Stockholder shall have furnished to the Company in
writing, or (b) if to the Company, Edificio Plaza Bancomer, Calle 50, Apartado
6307, Panama 5, Republic of Panama, with a copy to John N. Hove, Esq., Suite
200, 2431 East 61st Street, Tulsa, Oklahoma 74136, U.S.A., or such other
address, or to the attention of such other Person or Persons, as the Company
shall have furnished to each holder of Registrable Securities at the time
outstanding; provided, however, that any such communication to the Company may
also, at the option of Stockholders, be delivered to any officer of the Company.
7. Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of and be enforceable by the parties hereto and their respective
successors and assigns. In addition, and whether or not any express assignment
shall have been made, the provisions of this Agreement which are for the benefit
of Stockholders shall also be for the benefit of and enforceable by any
subsequent holder of any Registrable Securities who has executed a copy of this
Agreement or otherwise indicated its agreement to be bound hereby, subject to
the provisions respecting the minimum numbers or percentages of shares of
Registrable Securities required in order to be entitled to certain rights or
take certain actions contained herein. The Company acknowledges that Yorktown,
Concord, and Concord Japan may, at any time, transfer any of the Registrable
Securities which they may own, beneficially or of record, to (a) their
Affiliates, or (b) their partner(s), investor(s), security holder(s) or
beneficial holder(s) pursuant to their organization documents or other
agreements, and that, upon the consummation of any such transfer, the provisions
of this Agreement shall be binding upon and inure to the benefit of each
transferee of such Registrable Securities.
-15-
<PAGE>
8. Descriptive Headings. The descriptive headings of the several
--------------------
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
9. Governing Law. This Agreement shall be construed and enforced in
-------------
accordance with, and the rights of the parties shall be governed by, the laws of
the State of New York, U.S.A., without regard to principles of conflicts of
laws.
10. Counterparts. This Agreement may be executed simultaneously in any
------------
number of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
11. Termination. This Agreement shall terminate only (a) upon unanimous
-----------
written consent of the Company and the Stockholders, or (b) on April 10, 1992,
if the Effective Date has not occurred on or before such date.
12. Other Registration Rights. The Company shall not at any time grant
-------------------------
registration rights to any holder of shares of the Company's Preferred or Common
Stock (other than the rights granted to the Stockholders under this Agreement)
which are equal to or more favorable to such holders than the rights set forth
in this Agreement.
-16-
<PAGE>
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement,
or have caused this Agreement to be executed and delivered by their respective
duly authorized officers, on the date first above written.
YORKTOWN ENERGY PARTNERS, L.P.
By: DR Associates III, L.P.,
its General Partner
By: Dillon, Read & Co. Inc., its
General Partner
By: /s/ Peter A. Leidel
--------------------------------
Name: Peter A. Leidel
-------------------------
Title: Vice President
-------------------------
CONCORD PARTNERS II, L.P.
By: Venture Associates II, L.P., its
General Partner
By: Dillon, Read, Inc.,
its General Partner
By: /s/ Peter A. Leidel
-------------------------------
Name: Peter A. Leidel
--------------------------
Title: Attorney-in-Fact
--------------------------
CONCORD PARTNERS JAPAN LIMITED
By: /s/ Peter A. Leidel
------------------------------------
Name: Peter A. Leidel
-----------------------------
Title: Attorney-in-Fact
LEXINGTON PARTNERS IV, L.P.
By: DRMC Inc., its General Partner
By: /s/ Peter A. Leidel
--------------------------------
Name: Peter A. Leidel
-------------------------
Title: Attorney-in-Fact
-------------------------
WILLBROS ACQUISITION CORP.
By: /s/ Larry J. Bump
------------------------------------
Larry J. Bump
President
HEEREMA HOLDING CONSTRUCTION, INC.
By: /s/ Pieter H. Heerema
------------------------------------
Name: Pieter H. Heerema
-----------------------------
Title: President
-----------------------------
/s/ Larry J. Bump
- -----------------------------------------
Larry J. Bump, as Trustee of
the Larry J. Bump Trust dated
April 24, 1991, as amended or
restated
/s/ Melvin F. Spreitzer
- -----------------------------------------
Melvin F. Spreitzer, as Trustee
of the Melvin F. Spreitzer
Revocable Trust dated
September 20, 1989, as
amended or restated
/s/ John N. Hove
- -----------------------------------------
John N. Hove
-17-
<PAGE>
BROWN UNIVERSITY THIRD CENTURY
FUND
By: /s/ Peter A. Liedel
--------------------------
Name: Peter A. Liedel
--------------------
Title: Attorney-in-Fact
--------------------
Charles A. Ballard*
John P. Birkelund*
Charles P. Durkin, Jr.*
Peter M. Flanigan*
Gerald Greenwald*
Franklin W. Hobbs, IV*
Bryan H. Lawrence*
John H. Mullin, III*
Robert A. Pilkington*
H. C. Bowen Smith*
Wayne D. Thornbrough*
Edward B. Whitney*
George A. Wiegers*
Richard C. Yancey*
Douglas A. Darby*
Glenn D. Hall*
W. Howard Keenan, Jr.*
James F. Reilly*
Bret E. Russell*
Stuart L. Sindell*
James D. Treco*
*By: DILLON, READ & CO. INC.,
as Agent
By: /s/ Peter A. Leidel
-------------------------
Name: Peter A. Leidel
------------------
Title: Vice President
------------------
Monica Mary Bagguley**
Gordon D. M. Bishop**
Gary L. Bracken, as Trustee of
the Gary L. Bracken Trust
dated April 24, 1987, as
amended or restated**
Vincent E. Butler, as Trustee
of the Vincent E. Butler
Revocable Trust dated May 4,
1982, as amended or
restated**
James E. Dittus, as Trustee of
the James E. Dittus Revocable
Trust dated February 20,
1987, as amended or
restated**
J. F. Furrh, Jr.**
Joel M. Gall**
Bank of Oklahoma, N.A., as
Trustee for the John N. Hove
Individual Retirement Account
dated January 24, 1991**
David L. Kavanaugh**
Bobby S. Moseley**
M. Kieth Phillips, as Trustee
of the M. Kieth Phillips
Revocable Trust dated
July 17, 1987, as amended
or restated**
Abdel Latif Abdel Razek**
Gerald J. Riga**
B. L. Smith**
William George Spencer**
R. L. Walker**
Arthur J. West**
Neil J. White**
A. P. Wright**
**By: /s/ Robert A. Curry
----------------------------
Name: Robert A. Curry
------------------------
Title: Attorney-in-Fact
-18-
<PAGE>
SCHEDULE A
----------
REGISTRABLE SECURITIES
----------------------
<TABLE>
<CAPTION>
No. of No. of
Shares of Shares of No. of
Common Preferred Warrant
Stockholder Stock Stock Shares
- --------------- --------- --------- -------
<S> <C> <C> <C>
Heerema Holding Construction, Inc. -0- 160,000 5,484
Dillon Read Stockholders:
Yorktown Energy Partners, L.P. -0- 107,530 3,691
Concord Partners II, L.P. -0- 21,000 720
Concord Partners Japan Limited -0- 3,100 108
Lexington Partners IV, L.P. -0- 160 5
Brown University Third Century Fund -0- 3,900 132
Dillon, Read & Co. Inc. as Agent for: -0- 4,310 161
Charles A. Ballard
John P. Birkelund
Charles P. Durkin, Jr.
Peter M. Flanigan
Gerald Greenwald
Franklin W. Hobbs, IV
Bryan H. Lawrence
John H. Mullin, III
Robert A. Pilkington
H. C. Bowen Smith
Wayne D. Thornbrough
Edward B. Whitney
George A. Wiegers
Richard C. Yancey
Douglas A. Darby
Glenn D. Hall
W. Howard Keenan, Jr.
James F. Reilly
Bret E. Russell
Stuart L. Sindell
James D. Treco
Management Stockholders:
Monica Mary Bagguley 250 250 -0-
Gordon D. M. Bishop 1,500 1,500 -0-
Gary L. Bracken, as Trustee 3,500 3,500 120
of the Gary L. Bracken Trust
dated April 24, 1987, as
amended or restated
Larry J. Bump, as Trustee 14,000 14,000 936
of the Larry J. Bump Trust
dated April 24, 1991, as
amended or restated
</TABLE>
A-1
<PAGE>
<TABLE>
<S> <C> <C> <C>
Vincent E. Butler, as Trustee 1,000 1,000 36
of the Vincent E. Butler
Revocable Trust dated May 4,
1982, as amended or restated
James E. Dittus, as Trustee of 1,000 1,000 36
the James E. Dittus Revocable
Trust dated February 20,
1987, as amended or restated
J. F. Furrh, Jr. 1,000 1,000 -0-
Joel M. Gall 1,500 1,500 -0-
John N. Hove 1,500 -0- 12
Bank of Oklahoma, N.A., as -0- 1,500 12
Trustee for the John N. Hove
Individual Retirement Account
dated January 24, 1991
David L. Kavanaugh 1,500 1,500 -0-
Bobby S. Moseley 2,000 2,000 36
M. Kieth Phillips, as Trustee 3,500 3,500 60
of the M. Kieth Phillips
Revocable Trust dated July 17,
1987, as amended or restated
Abdel Latif Abdel Razek 1,000 1,000 12
Gerald J. Riga 3,000 3,000 120
B. L. Smith 2,000 2,000 -0-
William George Spencer 1,000 1,000 -0-
Melvin F. Spreitzer, as Trustee 3,500 3,500 120
of the Melvin F. Spreitzer
Revocable Trust dated
September 20, 1989, as
amended or restated
R. L. Walker 1,250 1,250 24
Arthur J. West 2,500 2,500 120
Neil J. White 1,000 1,000 -0-
A. P. Wright 2,500 2,500 72
------ ------- ------
Total 50,000 350,000 12,000
====== ======= ======
</TABLE>
A-2
<PAGE>
EXHIBIT 10.14
STOCK PURCHASE AGREEMENT
------------------------
This Stock Purchase Agreement is dated as of May 1, 1994, by and between
Willbros Suramerica, S.A., a Panamanian corporation (the "Buyer") and
Inversiones 252-28, C.A., a Venezuelan corporation (the "Stockholder"). The
Buyer and Stockholder are hereinafter sometimes referred to individually as a
"Party" or collectively as the "Parties".
W i t n e s s e t h :
- - - - - - - - - -
Whereas, Construcciones Acuaticas Mundiales, S.A. (the "Company") holds
various Subsidiaries which collectively have been engaged in the provision of
marine support services to the petroleum industry in and around the Republic of
Venezuela as the "Heerema Venezuela Group"; and
Whereas, for various reasons unrelated to the historical performance or
future business prospects of the Heerema Venezuela Group, the Stockholder
desires to sell all of the issued and outstanding Shares of the Company; and
Whereas, based upon the goodwill and future business prospects of the
Heerema Venezuela Group as a going concern, the Buyer desires to buy all of the
Shares;
Now, Therefore, in consideration of the premises and of the mutual
covenants and agreements contained herein, the Parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
-----------
1.1 Defined Terms The following defined terms have the following meanings
-------------
when used in this Agreement:
(a) "Agreement" means this Stock Purchase Agreement by and between the
Buyer and the Stockholder, including all Schedules and Exhibits.
(b) "Bolivars" means the currency and legal tender of Venezuela.
(c) "Claim" means any pending or threatened claim, liability, obligation,
action, suit, litigation, dispute, controversy, investigation, audit, inquiry,
review or proceeding
<PAGE>
affecting any company in the Heerema Venezuela Group and arising out of
operations prior to the Closing.
(d) "Closing" and "Closing Date" have the meanings set forth in Section
2.2.
(e) "Company Agreements" means all contracts, agreements, leases,
licenses, promises, obligations, bank accounts, financial instruments and other
commitments, arrangements and understandings of a material nature, whether
written or oral, between any member of the Heerema Venezuela Group and any other
person or persons.
(f) "Company Balance Sheet" means the balance sheet as of December 31,
1993, and related financial information of the Company and the Subsidiaries on a
consolidated basis as described in Section 3.5(iii) and attached as Schedule
3.6.
(g) "Company Financial Statements" has the meaning set forth in Section
3.5.
(h) "Dollars" means the currency and legal tender of the United States of
America.
(i) "Hazardous Substance" means any substance that is listed, defined,
designated, classified or otherwise known to be hazardous, toxic, radioactive,
dangerous or polluting, or is otherwise regulated as such under any Legal
Requirement whether by type or by quantity, including any toxic substance or
waste, pollutant, contaminant, hazardous substance or waste, industrial
substance or waste, petroleum or petroleum-derived substance or waste, gas,
radon, radioactive materials, asbestos, asbestos-containing materials, urea
formaldehyde foam insulation, lead or polychlorinated biphenyls.
(j) "Heerema Guarantee" means the guarantee of the Stockholder's
obligations provided in favor of the Buyer attached as Exhibit A.
(k) "Heerema Venezuela Group" means the Company and each of the
Subsidiaries.
(l) "Intellectual Property" means any patent, tradeservice, tradename,
logo, service mark, service name, copyright and all applications in respect
thereof described on Schedule 3.13.
(m) "Judgment" means any judgment, writ, injunction, ruling or order of
any governmental, administrative or judicial authority affecting any company in
the Heerema Venezuela Group and arising out of operations prior to the Closing.
2
<PAGE>
(n) "Legal Expenses" means any and all fees, costs and expenses of any
kind reasonably incurred by a person or its counsel in investigating, preparing
for, defending against or taking other action with respect to any Claim or
Judgment.
(o) "Legal Requirements" means all applicable laws, ordinances, codes,
rules, Permits, regulations, standards, orders, Judgments and other requirements
in Venezuela of any governmental, administrative or judicial entity having
jurisdiction.
(p) "Material Adverse Effect" means any change in, or effect on, the
Company or any Subsidiary which is, or with reasonable probability might be,
materially adverse to the business, operations, Property, condition or prospects
of the Heerema Venezuela Group, taken as a whole.
(q) "Permits" means all franchises, licenses, permits, registrations,
certificates, consents, approvals or authorizations required to operate
lawfully.
(r) "Property" means all real property, personal property and all other
tangible and intangible assets of the Company and its Subsidiaries, whether
owned or leased, including all improvements and/or modifications.
(s) "Purchase Price" has the meaning set forth in Section 2.1(b).
(t) "Security Interest" means any security interest, pledge, lien, charge,
claim, option, equity, right, restriction on transfer or encumbrance of any kind
or character.
(u) "Shares" has the meaning set forth in Section 3.3 and Schedule 3.3.
(v) "Subsidiary" or "Subsidiaries" means any or all of the four companies
described in Schedule 3.2.
(w) "Taxes" means any tax, charge, fee, duty, levy or other assessment
imposed by any governmental authority, including any income, withholding,
capital gain, alternative minimum, gross receipts, environmental, excess
profits, value added, excise, ad valorem, property, asset revaluation, sales,
stamp, documentary, production, import or export of equipment or materials,
windfall profits, occupation, use, service, transportation, power generation,
transfer, payroll, franchise, royalty, severance or bonus tax, or any similar
tax, charge or assessment, including any interest, penalties or additions to the
tax.
(x) "Venezuela" means the Republic of Venezuela.
3
<PAGE>
ARTICLE 2
---------
PURCHASE AND SALE OF SHARES
2.1 Purchase and Sale. Upon the terms and conditions set forth in this
-----------------
Agreement, the Stockholder shall sell to the Buyer, and the Buyer shall purchase
from the Stockholder, all of the Shares. At the Closing:
(a) The Stockholder shall (i) sell, assign, transfer and deliver to
the Buyer the certificates evidencing the Shares by endorsement and
delivery of the Shares, in conjunction with a corresponding entry in the
stock registry book of the Company duly signed by the Stockholder, the
Buyer and the authorized officer(s) of the Company if required, and (ii)
deliver to the Buyer the Heerema Guarantee executed in the form set forth
on Exhibit A; and
(b) The Buyer shall purchase and receive the Shares and the Heerema
Guarantee from the Stockholder and, in payment therefor, shall deliver to
the Stockholder by wire transfer to a bank in Venezuela Seven Million Three
Hundred Thousand Dollars ($7,300,000), less the amount, if any, by which
the consolidated net book value of the Company in Bolivars, stated at cost
in accordance with generally accepted accounting principles in the United
States, is less than Three Hundred Seventy-Seven Million Three Hundred
Thousand Bolivars (B377,300,000), converting the Bolivar difference using
an exchange rate of 103 Bolivars to 1 Dollar (the "Purchase Price").
2.2 Closing. Subject to the conditions set forth in this Agreement, the
-------
closing of the purchase and sale of the Shares (the "Closing") shall take place
in the offices of Baker & McKenzie, Caracas, Venezuela on or before May 27,
1994, or such other date and location agreed to by the Buyer and the Stockholder
(the "Closing Date").
ARTICLE 3
---------
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDER
The Stockholder, as the sole and true owner of one hundred percent (100%)
of the shares of capital stock of the Company acknowledges that it has, and
shall for all purposes of this Agreement shall be deemed to have, complete and
exact knowledge of all facts and circumstances relating to the Company and each
Subsidiary and, with this depth of knowledge, hereby represents and warrants
that the statements of fact and representations and warranties that follow in
this Agreement are true and correct and shall remain true and correct through
the Closing:
4
<PAGE>
3.1 Organization and Good Standing. The Company is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of Venezuela,
and has the corporate power and authority to own, lease and operate the Property
used in its business and to carry on its business as now being conducted. The
Company is duly qualified to do business and is in good standing in the
jurisdictions where it currently operates. The Company will deliver to the Buyer
prior to Closing complete and correct copies of its articles of incorporation
and by-laws, as amended and presently in effect.
3.2 Subsidiaries. Set forth on Schedule 3.2 is a true and complete list
------------
of all Subsidiaries of the Company, stating, with respect to each Subsidiary,
its place of incorporation, capitalization, equity ownership and authorized
business jurisdictions. Each of the Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the corporate power and authority to
own, lease and operate the Property used in its business and to carry on its
business as now being conducted. The Subsidiaries are duly qualified to do
business and are in good standing in the jurisdictions where they currently
operate. All of the outstanding shares of capital stock of each of the
Subsidiaries have been validly authorized and issued, are fully paid and
nonassessable, have not been issued in violation of any preemptive right or any
Legal Requirement, and are owned by the Company or a Subsidiary, and are free
and clear of any Security Interest. The Company will deliver to the Buyer prior
to Closing complete and correct copies of the articles of incorporation and the
by-laws of each Subsidiary, as amended and presently in effect.
3.3 Capitalization. Set forth on Schedule 3.3 is a description of the
--------------
Shares. The Shares constitute all the issued and outstanding shares of capital
stock of the Company and all have been validly authorized and issued, are fully
paid and nonassessable and have not been issued in violation of any preemptive
right or any Legal Requirement. There is no Security Interest, preemptive right
or other agreement, commitment or understanding of any kind or character, fixed
or contingent, that directly or indirectly encumbers the Shares. There are no
outstanding options, warrants, convertible securities or other instruments which
could entitle the holder to acquire shares of capital stock in the Company or
any Subsidiary.
3.4 Authority, Approvals and Consents. The Stockholder has the corporate
---------------------------------
power and authority to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement have been duly authorized and approved by the
Board of Directors of the Stockholder and no other corporate proceedings on the
part of the Stockholder are necessary to authorize and approve this Agreement
and the transactions contemplated hereby. This Agreement has been duly executed
and delivered by the Stockholder, and constitutes a valid and binding obligation
of the Stockholder, enforceable against the
5
<PAGE>
Stockholder and Heerema Holding Construction, Inc. in accordance with its terms.
The execution, delivery and performance of this Agreement by the Stockholder,
and the consummation of the transactions contemplated hereby, do not and will
not:
(i) contravene any provisions of the articles of incorporation or
by-laws of the Stockholder, the Company or any Subsidiary;
(ii) conflict with, result in a breach of any provision of,
constitute a default under, result in the modification or cancellation of,
or give rise to any right of termination or acceleration in respect of any
Company Agreement;
(iii) violate or conflict with any Legal Requirement applicable to
the Stockholder, the Company or any Subsidiary, or any of their respective
businesses or Property; or
(iv) require any authorization, consent, order, permit, approval of,
or notice to, or filing, registration or qualification with, any
governmental, administrative or judicial authority.
Except as described on Schedule 3.9, no authorization, consent, order, permit,
approval of, or notice to, or filing, registration or qualification with, any
governmental administrative or judicial authority is necessary to enable the
Company or any Subsidiary to continue to conduct its business and operations and
use its Property after the Closing in a manner which is in all material respects
consistent with that in which they are presently conducted.
3.5 Financial Statements. (a) The Company previously has delivered to
--------------------
the Buyer true and complete copies of:
(i) the audited balance sheet of the Company and each of the
Subsidiaries, as of December 31 in each of the calendar years 1988 through
1992, and the related statements of income, stockholders' equity and
changes in financial position for the fiscal years ended on such dates,
together with the notes thereto, in each case certified and accompanied by
a report of Briner & Asociados, independent certified public accountants;
(ii) comparative audited balance sheets prepared by Briner &
Asociados for the Company and each of the Subsidiaries, separately and on a
consolidated basis, as of December 31, 1992 and 1993, and the related
audited statements of income, stockholders' equity and changes in financial
position for the calendar years 1992 and 1993, together with the notes
thereto, all in English and stated in Bolivars; and
6
<PAGE>
(iii) comparative audited balance sheets prepared by Briner &
Asociados for the Company and the Subsidiaries on a consolidated basis as
of December 31, 1992 and 1993, stated at cost in Bolivars, including also
related audited statements of income, stockholders' equity and changes in
financial position, together with notes thereto, all in English and in
accordance with generally accepted accounting principles as applied in the
United States of America.
All the foregoing financial statements, including the notes thereto, are
referred to herein collectively as the "Company Financial Statements."
(b) The books and accounts of the Company and the Subsidiaries are
complete and correct and fully and fairly reflect all of the transactions of the
Company and the Subsidiaries.
3.6 Absence of Undisclosed Liabilities. Set forth on Schedule 3.6 is the
----------------------------------
Company Balance Sheet. Neither the Company nor any Subsidiary has any liability
of any kind or character, due or to become due, accrued, absolute, contingent or
otherwise, including any condition that may give rise to any Claim or unfunded
obligation, except for (i) liabilities expressly reflected or reserved against
in the Company Balance Sheet, (ii) current liabilities incurred in the ordinary
course of business and consistent with past practice after the date of the
Company Balance Sheet, and (iii) liabilities described in this Agreement but not
required to be accrued on the Company Balance Sheet.
3.7 Absence of Material Adverse Effect. Except as described on Schedule
----------------------------------
3.7, since December 31, 1993, there has been no Material Adverse Effect and
there is no condition, development or contingency of any kind, including any
Claim, which so far as reasonably can be foreseen, may result in any Material
Adverse Effect.
3.8 Taxes. Except as described on Schedule 3.8 and reserves therefor
-----
reflected expressly on the Company Balance Sheet, neither the Company nor any
Subsidiary is liable, or will become liable, for any Taxes for any period ended
on or prior to December 31, 1993. Audits of all income tax returns in which the
Company or any Subsidiary is included have been completed for all fiscal years
through the fiscal year ended December 31, 1992, and all adjustments proposed
for such years have been fully satisfied. No adjustment has been proposed by the
tax authorities in Venezuela with respect to any return for any subsequent year.
The statute of limitations on assessment with respect to the income tax returns
in which the Company or any Subsidiary is included has expired for all fiscal
years through the fiscal year ended December 31,1989. Neither the Company, any
Subsidiary, nor any corporation authorized to act as agent for the Company or
any Subsidiary has given or been requested to give any waiver of any statutes of
limitations relating to the payment of Taxes. Neither the Company nor the
Stockholder
7
<PAGE>
knows of any basis for an assertion of a deficiency for Taxes against the
Company or any Subsidiary. The Stockholder will cooperate, and will cause each
of their affiliates to cooperate, with the Company and the Subsidiaries in the
filing of any returns and in any audit or refund claim proceedings involving
Taxes for which the Company or any Subsidiary may be liable or with respect to
which the Company or any Subsidiary may be entitled to a refund corresponding to
periods ending on or prior to December 31, 1993.
3.9 Legal Matters. (a) Except as set forth on Schedule 3.9, (i) there is
-------------
no Claim against or affecting the Company, any Subsidiary or any Property, (ii)
there is no fact, condition or circumstance which may give rise to any Claim
being asserted against the Company, any Subsidiary or any Property and (iii)
neither the Company nor any Subsidiary nor any Property is subject to any
Judgment.
(b) Except as set forth on Schedule 3.9, the businesses of the
Company and the Subsidiaries are being conducted in compliance with all Legal
Requirements and no event has occurred or is continuing which could result in
the termination of any Permit.
(c) Neither the Stockholder, the Company nor any Subsidiary has taken
any action that would violate the provisions of the Foreign Corrupt Practices
Act of 1977, as amended, of the United States of America.
3.10 Property. (a) Set forth on Schedule 3.10 is a list of Property
--------
owned by or leased to the Company or any of the Subsidiaries. The Property is
adequate for the conduct of the respective businesses of the Company and the
Subsidiaries. The Company and one or more of the Subsidiaries have good and
marketable title to all Property and such Property is held free and clear of all
Security Interests, except those set forth on Schedule 3.10.
(b) All Property used in operations is insurable and is otherwise in
good repair. Except as set forth on Schedule 3.10, the Property conforms with
all Legal Requirements. All written notices of violations of Legal Requirements
affecting any Property have been complied with. All Property has access to such
public roads and waterways, including those presently in use, and such utilities
and other services as are necessary for the present and contemplated uses
thereof.
(c) Except as described on Schedule 3.9, neither the Company nor any
Subsidiary (i) is under any obligation under any Legal Requirement to perform
reclamation on or off the Property arising out of past or present operating
activities, or (ii) is otherwise out of compliance with Legal Requirements
pertaining to the environment, presuming that the Property will continue to be
used for industrial purposes. The Property is not now the site for any surface
or underground storage or dumping of Hazardous Substances. Hazardous Substances
have not been used for landfill purposes.
8
<PAGE>
3.11 Inventories. The value of inventories carried on the Company Balance
-----------
Sheet are stated at the lower of cost or market in accordance with the normal
inventory valuation policies of the Company, and such values are in conformity
with generally accepted accounting principles consistently applied. All
inventories reflected on the Company Balance Sheet or arising since the date
thereof are currently marketable, except for spare parts inventory which
inventory is good and usable.
3.12 Accounts Receivable. All accounts receivable reflected on the
-------------------
Company Balance Sheet are good and collectable, except for those fully
reserved, and all accounts receivable arising since the date thereof should be
collectable without resort to litigation or extraordinary collection activity.
3.13 The Heerema Name and Other Intellectual Property. Set forth on
------------------------------------------------
Schedule 3.13 is a complete list of Intellectual Property held by Heerema
Holding Construction Inc. in Venezuela, including the Heerema tradeservice,
tradename and logo. Applications for such Intellectual Property have been duly
filed with the relevant authorities. The Stockholder acknowledges that the
"Heerema" tradeservice, tradename and logo have long been utilized by the
Heerema Venezuela Group and that continued use of the tradeservice and logo by
the Buyer is necessary if the Buyer is to enjoy prospectively the "goodwill" of
the Company and the Subsidiaries. Accordingly, the Stockholder shall cause its
authorized affiliate to issue a nonexclusive license authorizing the free and
unrestricted use of the "Heerema" tradeservice, tradename and logo by the Buyer
and the Heerema Venezuela Group in and around Venezuela and the Caribbean Sea
generally, such license to be executed substantially in the form set forth in
Exhibit B.
3.14 Insurance. Set forth on Schedule 3.14 is a list of all insurance
---------
policies held by the Company and the Subsidiaries insuring Property and insuring
against third party liability, with limits sufficient to cover Claims and
potential Claims resulting from acts or events prior to the Closing. All
Property of an insurable character is insured against loss or damage by fire and
other risks to the extent and in the manner customary for companies engaged in
similar businesses or owning similar assets. The Company will furnish to the
Buyer true and complete copies of all such policies. All such policies have been
placed with reputable underwriters and are in full force and effect, and neither
the Company nor any Subsidiary has received any notice of cancellation with
respect thereto. In order to avoid any lapse in insurance coverage, all such
policies shall remain in full force and effect after the Closing for the account
of the Buyer.
3.15 Company Agreements. Set forth on Schedule 3.15 is a complete and
------------------
accurate list of (a) each Company Agreement which is material to the business of
the Company and the Subsidiaries and (b) without regard to materiality, each of
the following Company Agreements:
9
<PAGE>
(i) any guaranty, direct or indirect, of any obligation;
(ii) any grant of any preferential right to purchase or lease any of
its assets;
(iii) any agreement with any labor union;
(iv) any account with any bank or other type of financial
institution;
(v) any containing noncompetition or other limitations restricting
the conduct of the business;
(vi) any containing any obligation to rehabilitate or restore any
Property, including the obligation to pay money in lieu thereof;
(vii) any partnership, joint venture or similar agreement;
(viii) any license or agreement relative to the use of proprietary
technology; and
(ix) any contract with a value in excess of Bolivars 100,000,000
which was in force but not yet complete as of December 31, 1993.
True and complete copies of all written Company Agreements referred to on
Schedule 3.15 will be delivered to the Buyer at least ten (10) days prior to the
Closing. Neither the Company nor any Subsidiary nor, to the best knowledge of
the Company and the Stockholder, any other party thereto is in breach of or
default under any Company Agreement, and no event has occurred which, with
notice or lapse of time or both, would become a breach or default under, or
would permit modification, cancellation, acceleration or termination of, any
Company Agreement. There are no unresolved disputes involving the Company or any
of the Subsidiaries under any Company Agreement.
3.16 Labor Relations. Except as set forth in Schedule 3.16, no union or
---------------
other collective bargaining unit has been certified or recognized at any time by
the Company or any Subsidiary as representing any of their respective employees.
The Company and each of the Subsidiaries has paid or made provision for the
payment of all salaries, accrued wages and termination benefits, as required by
Venezuelan law, and has complied in all respects with all Legal Requirements
concerning the employment of labor, including those relating to wages, hours,
collective bargaining and the payment and withholding of taxes, and has withheld
and paid to the appropriate governmental authority, or is holding for payment
not yet due to such authority, all amounts required to be withheld from the
wages or salaries of its employees. There are no controversies of a material
nature pending or
10
<PAGE>
threatened between the Company or any of the Subsidiaries and any labor union or
other collective bargaining unit representing any employees.
3.17 Employee Matters. Set forth on Schedule 3.17 is a true and complete
----------------
list of:
(a) the name, salary, service date and vested termination benefit
accumulated by each employee of the Company or any Subsidiary, identifying
in each case whether the termination benefit is based upon a single or
double indemnity calculation; and
(b) each employee pension plan and/or welfare plan maintained
voluntarily by the Company or any Subsidiary or to which contributions are
made to comply with Legal Requirements.
The Company Balance Sheet reflects in the aggregate an accrual for all
accumulated employee termination benefits, and all amounts of employer
contributions accrued but unpaid by the Company and the Subsidiaries under
termination policies, pension plans and welfare plans of the Company and the
Subsidiaries as of December 31, 1993. The Company and the Subsidiaries have no
special employment agreements, agency agreements, or powers of attorney which
are not capable of being terminated immediately without penalty or further
obligation except as set forth on Schedule 3.17.
3.18 Current Backlog. There is a reasonable expectation of making a
---------------
profit on all contracts in the backlog of the Company and the Subsidiaries as of
December 31, 1993.
3.19 Incorporation of the Stockholder. The Stockholder is a corporation
--------------------------------
duly organized, validly existing and in good standing under the laws of the
Republic of Venezuela.
3.20 Ownership of Shares; Title. The Stockholder is the owner of the
--------------------------
Shares and the information set forth on Schedule 3.3 is accurate and complete.
The Stockholder has, and shall transfer to the Buyer at the Closing, good and
marketable title to the Shares, free and clear or any Security Interest.
3.21 Disclosure. The Stockholder has not made any misrepresentation to
----------
the Buyer relating to this Agreement or the Shares and the Stockholder has not
omitted to state to the Buyer any material fact relating to this Agreement or
the Shares which, if disclosed, would reasonably affect the decision of a person
considering the acquisition of the Shares. Likewise, the Stockholder has
instructed the officers, directors, employees and advisors of the Company to
disclose to the Buyer all events which, to their knowledge, could result in a
Claim against the Company or any Subsidiary, or against their stockholders,
officers, directors or employees. The Parties agree that the specific
11
<PAGE>
disclosure of an item in this Agreement or on one Schedule shall be deemed to be
a disclosure for the purpose of all Schedules even if not cross referenced.
ARTICLE 4
---------
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
The Buyer hereby represents and warrants to the Company and the Stockholder
as follows:
4.1 Incorporation of the Buyer. The Buyer is a corporation duly
--------------------------
organized, validly existing and in good standing under the laws of the Republic
of Panama.
4.2 Power; Authorization; Consents. The Buyer has the corporate power and
------------------------------
authority to enter into this Agreement and to perform its obligations hereunder.
The execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized and approved
by the Board of Directors of the Buyer and no other corporate proceedings on the
part of the Buyer are necessary to authorize and approve this Agreement and the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Buyer, and constitutes a valid and binding obligation of the
Buyer, enforceable against the Buyer in accordance with its terms. The
execution, delivery and performance of this Agreement by the Buyer and the
consummation of the transactions contemplated hereby and thereby do not and will
not:
(i) contravene any provisions of the articles of incorporation or by-
laws of the Buyer;
(ii) conflict with, result in a breach of any provision of,
constitute a default under, result in the modification or cancellation of,
or give rise to any right of termination or acceleration in respect of, any
contract, agreement, commitment, understanding, arrangement or restriction
of any kind to which the Buyer is a Party to or which the Buyer or any of
the Buyer's property is subject;
(iii) violate or conflict with any Legal Requirements applicable to
the Buyer or any of its respective businesses or properties; or
(iv) require any authorization, consent, order, permit or approval
of, or notice to, or filing, registration or qualification with, any
governmental, administrative or judicial authority, except as set forth on
Schedule 3.9.
12
<PAGE>
4.3 Acquisition of Stock for Investment. The Buyer is acquiring the
-----------------------------------
Shares for investment and not with a view toward, or for sale in connection
with, any distribution thereof, nor with any present intention of distributing
or selling the Shares.
ARTICLE 5
---------
COVENANTS
---------
5.1 Access. Between the date hereof and the Closing Date, the Company
------
will, and will cause each Subsidiary (i) to provide to the authorized
representatives of the Buyer full access, during normal business hours, to any
and all premises, Property, files, books, records, documents, and other
information of the Company and each Subsidiary and will cause their respective
officers to furnish to the Buyer any and all financial, technical and operating
data and other information pertaining to the businesses and Property of the
Company and the Subsidiaries and (ii) to make available for inspection and
copying by the Buyer true and complete copies of any documents relating to the
foregoing.
5.2 Announcements. The Company and the Stockholder shall not issue any
-------------
press releases or otherwise make any public statement with respect to the
transactions contemplated hereby, without the prior written consent of the
Buyer, except as may be required by law.
5.3 Conduct of Business of the Company Prior to the Closing. The Company
-------------------------------------------------------
and the Stockholder agree that from the date hereof to the Closing, (i) the
business and operations of the Company and the Subsidiaries shall be conducted
only in the ordinary course of business and consistent with past practice, and
(ii) the Company will use, and will cause each of the Subsidiaries to use, its
best efforts to preserve its business organization intact, to keep available to
itself, including following the Closing, the present services of its key
employees, and to preserve for itself the goodwill of its suppliers, customers
and others with whom business relationships exist.
5.4 Cooperation. The Company and the Stockholder agree to use their best
-----------
efforts at their own expense to take, or cause to be taken, all action and to
do, or cause to be done, all things necessary, proper or helpful under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement. If at any time after the Closing
further action is necessary to carry out the purposes of this Agreement, the
Stockholder shall assist the Buyer in taking such action.
5.5 Interim Financial Statements. At least ten (10) days prior to the
----------------------------
Closing, the Company shall use its best efforts to deliver to the Buyer
preliminary unaudited balance sheets of the Company and the Subsidiaries for the
calendar month last ended prior to the
13
<PAGE>
Closing, together with the related statements of income and changes in financial
position since the preparation of the Company Balance Sheet. All such financial
statements shall fairly present the financial position, results of operations
and changes in consolidated financial position of the Company and the
Subsidiaries as at the date or for the periods indicated and shall be prepared
in accordance with generally accepted accounting principles consistently
applied.
5.6 Notification of Certain Matters. Between the date hereof and the
-------------------------------
Closing, the Company and the Stockholder will give prompt notice in writing to
the Buyer of: (i) any information that indicates that any representation and
warranty contained herein was not true and correct as of the date hereof or will
not be true and correct as of the Closing, (ii) the occurrence of any event
which will result, or has a reasonable prospect of resulting, in the failure of
a condition specified in Article 7 hereof to be satisfied, (iii) any notice or
other communication from any third person alleging that the consent of such
third person is or may be required in connection with the transactions
contemplated by this Agreement, (iv) any notice of, or other communication
relating to, any default or event which, with notice or lapse of time or both,
would become a default under any Company Agreement or a violation of any Legal
Requirement, (v) any event that has, or could in the future have, a Material
Adverse Effect, and (vi) any emergency or other change in the normal course of
the business or in the Property. The Company and the Stockholder shall confer on
a regular and frequent basis with representatives of the Buyer to report
operational matters and to report the general status of ongoing operations.
5.7 Covenant Not to Compete. In furtherance of the sale of the Shares and
-----------------------
the business represented thereby to the Buyer, for a period of five years from
the Closing, neither the Stockholder nor Heerema Holding Construction, Inc.
shall, directly or indirectly, through equity ownership or otherwise, for
themselves or any affiliated entity, compete with the Buyer or the Heerema
Venezuela Group anywhere in and around Venezuela specifically, or the Caribbean
Sea generally, in the business of the Heerema Venezuela Group as conducted and
proposed to be conducted after the Closing.
ARTICLE 6
---------
CONDITIONS TO THE OBLIGATIONS
OF THE BUYER TO CLOSE
---------------------
The obligations of the Buyer required to be performed at the Closing shall
be subject to the satisfaction, at or prior to the Closing, of each of the
following conditions, each of which may be waived by the Buyer:
6.1 Representations and Warranties. Each of the representations and
------------------------------
warranties of the Stockholder contained in this Agreement shall be true and
correct in all material
14
<PAGE>
respects as of the date hereof and, having been deemed to have been made again
as of the Closing, shall be true and correct in all material respects as of the
Closing. All of the obligations of the Stockholder required by this Agreement to
be performed by them at or prior to the Closing shall have been duly performed
and complied with in all material respects as of the Closing.
6.2 Authorization. All corporate action necessary to authorize the
-------------
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby shall have been duly and validly taken by
the Stockholder and the Company.
6.3 Absence of Litigation. No order, stay, injunction or decree of any
---------------------
court of competent jurisdiction shall be pending or threatened that prevents or
delays the consummation of any of the transactions contemplated hereby or would
impose any material limitation on the ability of the Buyer effectively to
exercise full rights of ownership of the Shares.
6.4 Resignations. The Buyer shall have received from all officers and
------------
directors of the Company and the Subsidiaries signed but undated letters of
resignation.
6.5 Transactions with Affiliated Entities. The Buyer shall have received
-------------------------------------
confirmation from the Stockholder and the Company that all intercompany accounts
have been settled, and all intercompany contracts between the Heerema Venezuela
Group and related persons or affiliated entities outside the Heerema Venezuela
Group have been terminated, without cost or further obligation to the Company or
the Subsidiaries.
6.6 Opinion of the Company Counsel and Special Counsel to the Stockholder.
---------------------------------------------------------------------
The Buyer shall have been furnished with the opinion of Dr. Saul Crespo, counsel
for the Company and Special Counsel to the Stockholder, dated the Closing Date,
substantially in form and substance as set forth on Exhibit C. In rendering such
opinion, Dr. Saul Crespo may rely as to factual matters upon certificates or
other documents furnished by officers and directors of the Stockholder or the
Company and upon such other documents and data as such counsel may deem
appropriate.
6.7 Guarantee. The Buyer shall have received the Heerema Guarantee from
---------
Heerema Holding Construction, Inc.
6.8 Certificates. The Company and the Stockholder shall have furnished to
------------
the Buyer such certificates of its officers and others as the Buyer may
reasonably request in writing at least five (5) days prior to Closing to
evidence compliance with the conditions set forth in this Article 6.
15
<PAGE>
ARTICLE 7
---------
CONDITIONS TO THE OBLIGATIONS OF
THE STOCKHOLDER TO CLOSE
------------------------
The obligations of the Stockholder required to be performed at the Closing
shall be subject to the satisfaction, at or prior to the Closing, of each of the
following conditions, each of which may be waived by the Stockholder:
7.1 Representations and Warranties. Each of the representations and
------------------------------
warranties of the Buyer contained in this Agreement shall be true and correct in
all material respects as of the date hereof and, having been deemed to have been
made again at and as of the Closing, shall be true and correct in all material
respects as of the Closing. All of the obligations of the Buyer required by this
Agreement to be performed by it at or prior to the Closing shall have been duly
performed and complied with in all material respects as of the Closing.
7.2 Authorization. All corporate action necessary to authorize the
-------------
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby shall have been duly and validly taken by
the Buyer.
7.3 Absence of Litigation. No order, stay, judgment or decree shall have
---------------------
been issued by any court and be in effect restraining or prohibiting the
consummation of the transactions contemplated hereby.
7.4 Certificates. The Buyer shall have furnished to the Stockholder such
------------
certificates of its officers and others as the Stockholder may reasonably
request in writing five (5) days prior to Closing to evidence compliance with
the conditions set forth in this Article 7.
ARTICLE 8
---------
TERMINATION
-----------
8.1 Termination. This Agreement may be terminated at any time prior to
-----------
the Closing:
(i) by mutual consent of the Buyer and the Stockholder;
(ii) by the Buyer if, through no fault of its own, the Closing has
not occurred on or before May 31, 1994, or such later date as may be agreed
by the Buyer and the Stockholder;
16
<PAGE>
(iii) by the Buyer, if there has been any material violation or
breach by the Company or the Stockholder of any representation, warranty,
covenant or obligation contained in this Agreement, and such violation or
breach has not been waived by the Buyer or cured to the satisfaction of the
Buyer;
(iv) by the Stockholder if there has been any material violation or
breach by the Buyer of any representation, warranty, covenant or obligation
contained in this Agreement, and such violation or breach has not been
waived by the Stockholder, or cured to the satisfaction of the Stockholder.
If the Buyer or the Stockholder terminates this Agreement pursuant to the
provisions hereof, such termination shall be effected by written notice to the
other Party specifying the provision applicable to such termination.
8.2 Effect of Termination Except in the event this Agreement is
---------------------
terminated for breach, upon the termination of this Agreement pursuant to
Section 8.1, this Agreement shall forthwith become null and void and none of the
Parties hereto or any of their respective officers, directors, employees,
agents, consultants, stockholders or principals shall have any liability or
obligation hereunder or with respect hereto.
ARTICLE 9
---------
SURVIVAL AND INDEMNIFICATION
----------------------------
9.1 Survival. The indemnities contained in this Agreement, including
--------
specifically those contained in this Article 9, and the Heerema Guarantee shall
survive through the term of the indemnity described in Section 9.4.
9.2 Indemnification. (a) The Stockholder shall indemnify and hold
---------------
harmless the Buyer, its parent, subsidiary and affiliated companies, and their
respective directors, officers, employees and advisors, up to a global maximum
amount of Two Million Five Hundred Thousand Dollars ($2,500,000) from and
against any and all losses, damages, liabilities and Claims arising out of,
based upon or resulting from:
(i) liabilities of the Company and of any Subsidiary that are not
fully provided for on the Company Balance Sheet;
(ii) Taxes levied on the Company or any Subsidiary for years prior to
1994 to the extent not specifically provided for on the Company Balance
Sheet, and Taxes, if any, arising out of or related to the purchase and
sale of Shares under this Agreement;
17
<PAGE>
(iii) Claims by or Judgments in favor of (a) former employees of the
Company or any Subsidiary alleged to have arisen out of the employment
relationship which existed prior to Closing, including persons not listed
on Schedule 3.17, and (b) those arising out of the employment relationship
or otherwise by Mr. Willem Den Blanken and/or Mr. Stefan Den Blanken
insofar as such Claim or Judgment is attributable, in whole or in part, to
the period prior to Closing.
(iv) presuming that the Property will continue to be used for
industrial purposes, the cost to clean up Property and to reclaim real
Property if necessary to comply with any Legal Requirement;
(v) the cost to the Company and the Subsidiaries to comply with
Decreto No. 2.222 concerning the discharge of liquids from operations and
otherwise in and around Lake Maracaibo, as published in the Official
Gazette No. 4.418 of April 27, 1992, including the cost to upgrade, modify
or otherwise change any item of Property;
(vi) the costs to the Company or any Subsidiary, resulting from
incomplete, incorrect, expired or otherwise invalid vessel documentation or
Property registrations, that may arise out of the post Closing efforts of
the Buyer and the Company to comply with the law for the Protection and
Development of the National Merchant Marine, as published in the Official
Gazette No. 31.161 of July 25, 1973;
(vii) fifty percent (50%) of all bank transaction costs, including
exchange expenses and transaction taxes, arising out of the payment of the
Purchase Price in Venezuela as described in Section 2.1, assuming that the
proceeds of the wire transfer will be converted to Bolivars and back to
Dollars on the Closing Date for repatriation by the Stockholder to its
parent company outside Venezuela;
(viii) any inaccuracy of any representation or warranty of the
Stockholder described in Article 3 or elsewhere in this Agreement;
(ix) any breach by the Stockholder of any of its obligations under
this Agreement; and
(x) any and all fees, costs and expenses of any kind related to items
(i) through (ix) including Legal Expenses.
(b) Separate from the indemnity and hold harmless given by the Stockholder
in favor of the Buyer under Section 9.2(a), and independent of the Two Million
Five
18
<PAGE>
Hundred Thousand Dollar ($2,500,000) global maximum cap on events of indemnity
under Section 9.2(a), the Stockholder shall indemnify and hold harmless the
Buyer, its parent, subsidiary and affiliated companies, and their respective
directors, officers, employees and advisors from and against any and all losses,
damages, liabilities and Claims without limitation arising out of, based upon or
resulting from:
(i) the entire cost, and the performance of all obligations, to restore,
renovate or recertify to class the "WS-1 Wijsmuller Barge" now under
charter to the Company or any Subsidiary; and the payment of charter hire
while such barge is unavailable for use by the Company or any Subsidiary;
(ii) any Claim or Judgment of any kind or character for legal or other
action taken, directly or indirectly, by Corporacion Corpeli de Venezuela,
C.A. Phoenix International Holdings, Inc., Carlos Gallina, Salvador
Salvatierra, Alberto Finol and/or Guido Gomez, one or more having been
parties previously to a letter of intent to purchase the Heerema Venezuela
Group.
9.3 Procedure. (a) For the purpose of administering the indemnification
---------
provisions herein, the Buyer shall give to the Stockholder notice, as soon as
reasonably possible after the Buyer becomes aware, of any written communication
regarding any Claim, or the occurrence of any damage, loss, expense, obligation
or liability, in excess of One Hundred Thousand Dollars ($100,000) for which
indemnification is provided for hereunder; provided, however, that failure to
give such notice shall not relieve the Stockholder of any obligation under this
Agreement.
(b) For events of indemnity with a cost exposure in excess of Two Hundred
Fifty Thousand Dollars ($250,000), the Stockholder shall have the right to
participate along with the Buyer in the defense or settlement of such matter;
provided, however, the entire cost and expense of such participation by the
Stockholder, including all of its Legal Expenses, shall be solely for the
account of the Stockholder and shall not be included in any cost calculation
relative to the cap on the indemnity set forth in Section 9.2(a). The Buyer
shall obtain the Stockholder's consent to settle or compromise any Claim for an
amount in excess of Two Hundred Fifty Thousand Dollars ($250,000), which consent
shall not be unreasonably withheld by the Stockholder.
9.4 Payments. In addition to the notice provided for under Section
--------
9.3(a), upon the conclusion of the year end audit of the Company and the
Subsidiaries for each of the years 1994, 1995, 1996 and 1997 the Buyer shall
advise the Stockholder, in writing, concerning all Claims or the actual or
potential occurrence of any damage, loss, expense, obligation or liability
subject to indemnification under the Agreement, including related Legal
Expenses. The Buyer's annual notice to the Stockholder shall describe such
event(s) of indemnity in reasonable detail, including amounts expended other
than expenditures by
19
<PAGE>
or on behalf of the Stockholder. Not more 30 days following receipt by the
Stockholder of such annual indemnity notice, the Stockholder shall pay to the
Buyer, in equivalent Dollars, all amounts in excess of Seventy Five Thousand
Dollars ($75,000) actually expended during the year under review related to any
event of indemnity arising under Section 9.2(a), and all amounts actually
expended during the year under review related to any event of indemnity under
Section 9.2(b). Pending and potential events of indemnity noticed by the Buyer
but not fully quantifiable upon the conclusion of the 1997 year end review shall
be reimbursed to the Buyer Dollar for Dollar by the Stockholder as and when
incurred through the year 2000.
9.5 Mitigation. The Buyer and the Stockholder shall communicate and
----------
cooperate in respect of the administration of these indemnity provisions in an
effort to mitigate, to the extent reasonably practicable without compromising
operations, the amounts required to be paid by Stockholder under this Article 9.
9.6 Remedies. The rights of the Buyer under this Article 9 are in
--------
addition to other rights and remedies of the Buyer under this Agreement and the
law of Venezuela.
ARTICLE 10
----------
MISCELLANEOUS
-------------
10.1 Expenses. The Stockholder and the Buyer shall each pay their own
--------
fees and expenses in connection with this Agreement and the transactions
contemplated hereby. Neither the Company nor the Subsidiaries shall bear any
legal or other expenses arising out of this Agreement including, specifically,
any and all expenses of Baker & McKenzie, Dr. Saul Crespo and Briner & Asociados
which shall be assumed by and paid for entirely by the Stockholder.
10.2 Headings The section headings herein are for convenience of
--------
reference only, do not constitute part of this Agreement and shall not be deemed
to limit or otherwise affect any of the provisions hereof.
10.3 Notices. All notices, requests, demands, claims and other
-------
communications hereunder shall be in writing. All communications provided for
hereunder shall be sufficiently given if delivered personally, by confirmed
facsimile transmission or by prepaid, internationally recognized overnight
courier, or sent by first-class mail, postage prepaid, return receipt requested,
to the Parties and the Company as follows:
20
<PAGE>
If to the Company: Construcciones Acuaticas Mundiales, S.A.
Codigo Postal 4001-A
Apartado No. 637
Maracaibo, Venezuela
Telephone: 58 61 613144
Facsimile 58 61 613008
If to the Stockholder: Inversiones 252-28, C.A.
Avenida 3Y entre Calles 74 y75
Edificio San Martin
Oficina No.2
Maracaibo, Venezuela
---------
Telephone: (061) 923278
Facsimile: (061) 923278
If to the Buyer: Willbros Suramerica, S.A.
Edificio Torre Banco Germanico
Calle 50 y 55 Este, 8th Floor
Panama 1, Republic of Panama
Telephone: (507) 63-9282
Copy to: Willbros Suramerica, S.A.
c/o The General Counsel
Willbros USA, Inc.
2431 East 61st Street
Tulsa, Oklahoma 74136
Telephone: (918) 748-7468
Facsimile: (918) 748-7026
or such other address as shall be furnished in writing by such Party or the
Company, and any such notice or communication shall be effective and be deemed
to have been given as of the date so delivered or three days after the date so
mailed; provided, however, that any notice or communication changing any of the
-------- -------
addresses set forth above shall be effective and deemed given only upon its
receipt.
10.4 Assignment. This Agreement and all of the provisions hereof shall be
----------
binding upon and inure to the benefit of the Parties and their respective
successors and permitted assigns, and the provisions of Article 9 hereof shall
inure to the benefit of the indemnified parties referred to therein; provided,
--------
however, that neither this Agreement nor any of the rights, interests, or
- -------
obligations hereunder may be assigned by any Party hereto without the prior
written consent of the other Party.
21
<PAGE>
10.5 Entire Agreement. This Agreement, including the Schedules and
----------------
Exhibits hereto which by this reference are incorporated herein and made an
integral part of the Agreement, embodies the entire agreement and understanding
of the Parties with respect to the transactions contemplated hereby and
supersedes all prior written or oral commitments, letters of intent and other
arrangements or understandings with respect thereto. There are no restrictions,
agreements, promises, warranties, covenants or undertakings with respect to the
transactions contemplated hereby other than those expressly set forth herein.
10.6 Modifications, Amendments and Waivers. At any time prior to the
-------------------------------------
Closing, the Parties may, by written agreement, modify, amend or supplement any
term or provision of this Agreement. Any term or provision of this Agreement may
be waived in writing by the Party which is entitled to the benefits thereof.
10.7 Counterparts. This Agreement may be executed in two or more
------------
counterparts, all of which shall be considered one and the same agreement and
each of which shall be deemed an original.
10.8 Governing Law. This Agreement shall be governed by the laws of
-------------
Venezuela as to all matters, including matters of validity, construction, effect
and performance, regardless of the laws that might be applicable under
principles of conflicts of law. The Buyer, the Stockholder, and Heerema Holding
Construction, Inc. hereby submit to the jurisdiction of Venezuela, designating
Maracaibo as the special and exclusive domicile for all purposes of this
Agreement, covenanting hereby to lay venue in the courts of said city.
10.9 Accounting Terms. All accounting terms used herein which are not
----------------
expressly defined in this Agreement shall have the respective meanings given to
them in accordance with generally accepted accounting principles on the date
hereof.
10.10 Severability. If any one or more of the provisions of this Agreement
------------
shall be held to be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions of this Agreement shall not be
affected thereby. To the extent permitted by applicable law, each Party waives
any provision of law which renders any provision of this Agreement invalid,
illegal or unenforceable in any respect.
10.11 Construction. (a) The Parties have participated jointly in the
------------
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement.
22
<PAGE>
(b) The word "including" shall mean including without limitation. The
words "hereof", "herein", "hereunder" and "hereto" refer to this Agreement as a
whole and not to any particular provision of this Agreement unless expressly
indicated. Section references are to this Agreement unless otherwise specified.
Unless the context otherwise clearly requires, references to the plural include
the singular and the singular the plural.
In Witness Whereof, the Parties hereto have caused this Agreement to be
duly executed at Caracas, Venezuela this 24th day of May, 1994, by their duly
----
authorized representatives.
Willbros Suramerica, S.A.
By:/s/ Thomas B. Reilly
-----------------------------------
Name: Thomas B. Reilly
-------------------------------
Title: Chief Financial Officer
-----------------------------
/s/ L.W. Carpenter
- -----------------------------
Witness - L.W. Carpenter
Inversiones 252-28, C.A.
By:/s/ Saul Crespo Lozada
-----------------------------------
Name: Saul Crespo Lozada
-------------------------------
Title: Manager
------------------------------
/s/ F.G. van de Werff
- ------------------------------
Witness - F. G. van de Werff
23
<PAGE>
The following schedules and exhibits to the Stock Purchase Agreement dated
as of May 1, 1994, by and between Willbros Suramerica, S.A. and Inversiones
252-28, C.A. have been omitted, and the Registrant agrees to furnish
supplementally a copy of any such omitted schedules and exhibits to the
Securities and Exchange Commission upon its request:
Schedules
---------
Schedule 3.2 - Subsidiaries
Schedule 3.3 - Shares
Schedule 3.6 - Company Balance Sheet
Schedule 3.7 - Material Adverse Effect
Schedule 3.8 - Taxes
Schedule 3.9 - Legal Matters
Schedule 3.10 - Property
Schedule 3.13 - The Heerema Name and Other Intellectual Property
Schedule 3.14 - Insurance
Schedule 3.15 - Company Agreements
Schedule 3.16 - Labor Relations
Schedule 3.17 - Employee Matters
Exhibits
--------
Exhibit A - Heerema Guarantee
Exhibit B - Tradeservices License Agreement
Exhibit C - Opinion of Dr. Saul Crespo, Attorney at Law
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
------------------------------
<TABLE>
<CAPTION>
JURISDICTION
OF
INCORPORATION OR
NAME ORGANIZATION
- ---- ------------
<S> <C>
Arctic Constructors Limited Canada
Associated Contractors Equipment Corporation Panama
Construcciones Acuaticas Mundiales, S.A. Venezuela
Constructora CAMSA, C.A. Venezuela
Contratistas Transandinos, S.A. d/b/a COTRA Colombia
"ESCA" Equipment Service Compania Anonima Venezuela
International Pipeline Equipment, Inc. Panama
Interproject Engineers Limited Cayman Islands
Inversiones CAMSA, C.A. Venezuela
Inversiones Willbros del Ecuador, S.A. Panama
Kompaniya Willbros A/O Russia
Monastere Inc. Delaware, USA
Musketeer Oil B.V. Netherlands
The Oman Construction Company, LLC Oman
Pipeline Contractors Inc. Panama
Pipelines & Logistics, Inc. Delaware, USA
Pretensado S.A. Venezuela
Shield Constructors, Inc. Panama
Shield International Engineering, Inc. Panama
Vessel MWB 403, Inc. Delaware, USA
Vintondale Corporation N.V. Netherlands Antilles
Willbros Al-Rushaid Limited Saudi Arabia
Willbros Alaska, Inc. Delaware, USA
Willbros Azerbaijan Limited Cayman Islands
Willbros Bolivia, S.A. Panama
Willbros Butler International, Inc. Panama
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
JURISDICTION
OF
INCORPORATION OR
NAME ORGANIZATION
- ---- ------------
<S> <C>
Willbros Chile, S.A. Chile
Willbros Construction & Engineering -Egypt, LLC Egypt
Willbros Constructors, Inc. Cayman Islands
Willbros Constructors, Inc. Panama
Willbros Contracting Limited Cyprus
Willbros Energy Services Company Delaware, USA
Willbros Engineering & Construction Limited Canada
Willbros Engineers, Inc. Delaware, USA
Willbros Far East, Inc. Panama
Willbros Far East (PNG) Pty Ltd. Papua New Guinea
Willbros Far East Sdn. Bhd. Malaysia
Willbros Gabon, S.A. Panama
Willbros, Inc. Delaware, USA
Willbros International (Germany) G.m.b.H. Germany
Willbros International, Inc. Panama
Willbros International Pty Limited Australia
Willbros Iran, Inc. Panama
Willbros Kuwait Oil & Gas Field Services (S.A.K.) Kuwait
Willbros (Malaysia) Sdn. Bhd. Malaysia
Willbros Middle East, Inc. Panama
Willbros (Nigeria) Limited Nigeria
Willbros (Overseas) Limited United Kingdom
Willbros Suramerica, S.A. Panama
Willbros (U.K.) Limited United Kingdom
Willbros USA, Inc. Delaware, USA
Willbros West Africa, Inc. Panama
</TABLE>
-2-
<PAGE>
EXHIBIT 23.1
When the conversion of the Preferred Stock described in Note 15 in the
accompanying consolidated financial statements has been consummated, we will
be in a position to render the following consent.
KPMG PEAT MARWICK
INDEPENDENT AUDITORS' CONSENT
The Stockholders and Board of Directors
Willbros Group, Inc.:
We consent to the use of our reports included herein and to the references
to our firm under the headings "Selected Consolidated Financial and Other
Data" and "Experts" in the prospectus.
Panama City, Panama
June , 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1996
<PERIOD-START> JAN-01-1995 JAN-01-1996
<PERIOD-END> DEC-31-1995 MAR-31-1996
<CASH> 19,859 22,288
<SECURITIES> 0 0
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<ALLOWANCES> 2,992 1,963
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<PP&E> 80,331 80,902
<DEPRECIATION> 36,013 37,813
<TOTAL-ASSETS> 149,954 143,712
<CURRENT-LIABILITIES> 60,251 52,791
<BONDS> 0 0
0 0
0 0
<COMMON> 693 693
<OTHER-SE> 82,698 83,730
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<SALES> 220,506 53,479
<TOTAL-REVENUES> 220,506 53,479
<CGS> 161,584 41,204
<TOTAL-COSTS> 204,961 51,092
<OTHER-EXPENSES> 1,826 60
<LOSS-PROVISION> 694 233
<INTEREST-EXPENSE> 1,719 354
<INCOME-PRETAX> 13,719 2,327
<INCOME-TAX> (75) 283
<INCOME-CONTINUING> 13,794 2,044
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<EXTRAORDINARY> 0 0
<CHANGES> 0 0
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<EPS-PRIMARY> .97 .09
<EPS-DILUTED> .97 .09
</TABLE>
