EXHIBIT 10.2
EXECUTION COPY
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "AGREEMENT") is made as of December 22,
2005 by and among Willbros Group, Inc., a corporation organized under the laws
of the Republic of Panama (the "COMPANY"), Willbros USA, Inc., a Delaware
corporation ("WUSA")and the purchasers set forth on Schedule I hereto (each a
"PURCHASER" and collectively, the "PURCHASERS").
RECITALS
WHEREAS, the Company has authorized the issuance and sale of up to
$84.5 million in aggregate principal amount of its 6.50% Senior Convertible
Notes due 2012 (the "NOTES");
WHEREAS, the Company proposes, subject to the terms and conditions
stated herein, to issue and sell on the Closing Date (as defined below)
$65,000,000 in aggregate principal amount of the Notes to the Purchasers in the
respective amounts set forth opposite each Purchaser's name in column (1) on
Schedule I hereto (the "FIRM NOTES");
WHEREAS, the Company also proposes to issue and sell to the Purchasers
up to an additional $19,500,000 in aggregate principal amount of the Notes (the
"ADDITIONAL NOTES") in the respective principal amounts set forth opposite each
Purchaser's name in column (2) on Schedule I hereto, if and to the extent that
the Purchasers shall have determined to exercise the right to purchase such
Additional Notes granted to the Purchasers in Section 1(b) below;
WHEREAS, the Firm Notes and the Additional Notes will be issued
pursuant to an indenture substantially in the form attached as Exhibit A hereto
(the "INDENTURE") to be dated as of the Closing Date by and among the Company,
as issuer, WUSA, and The Bank of New York, a New York banking corporation, as
Trustee (the "TRUSTEE"), and the Notes will be convertible into shares (the
"UNDERLYING SECURITIES") of common stock of the Company, par value $0.05 per
share (the "COMMON STOCK"), and WUSA will guaranty the Company's obligations
under the Firm Notes and the Additional Notes in accordance with the Subsidiary
Guarantee (as defined in the Indenture), all on the terms, and subject to the
conditions, set forth in the Indenture;
WHEREAS, the Firm Notes, the Additional Notes and the Underlying
Securities, collectively, are referred to herein as the "SECURITIES."
WHEREAS, the offer and sale of the Securities will not be registered
under the Securities Act of 1933, as amended (together with the rules and
regulations promulgated thereunder, the "SECURITIES ACT"), in reliance on an
exemption therefrom; and
WHEREAS, the Purchasers will be entitled to the benefits of a
Registration Rights Agreement substantially in the form attached as Exhibit B
hereto covering the Underlying Securities to be dated as of the Closing Date by
and among the Company and the Purchasers (the "REGISTRATION RIGHTS AGREEMENT"
and, together with this Agreement, the Indenture, the Firm Notes and the
Additional Notes, the "TRANSACTION DOCUMENTS").
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
promises and covenants set forth herein and certain other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Agreement to Sell and Purchase.
(a) Firm Notes. On the basis of the representations and
warranties contained in this Agreement, and subject to the terms and conditions
of this Agreement, the Company agrees to issue and sell to each Purchaser the
respective principal amounts of Firm Notes set forth opposite such Purchaser's
name in column (1) on Schedule I hereto, and each Purchaser, upon the basis of
the representations and warranties herein contained, but subject to the
conditions hereinafter stated, severally and not jointly agrees to purchase from
the Company such respective principal amount of the Firm Notes at a purchase
price of one hundred percent (100%) of the principal amount of the Firm Notes to
be purchased by each such Purchaser hereunder (the "PURCHASE PRICE").
(b) Additional Notes. On the basis of the representations and
warranties contained in this Agreement, and subject to the terms and conditions
of this Agreement, the Company agrees to sell to each Purchaser, and each
Purchaser shall have the right to purchase, up to the principal amount of the
Additional Notes set forth opposite such Purchaser's name in column (2) on
Schedule I hereto, with respect to each Purchaser (the "OPTION"). If purchased
by a Purchaser, the Additional Notes shall be sold at the Purchase Price plus
accrued interest, if any, from the Closing Date to the date of payment and
delivery. To exercise the Option, a Purchaser must so notify the Company in
writing (the "OPTION EXERCISE NOTICE") on or before the ninetieth (90th) day
after the Closing Date (the "OPTION EXPIRATION DATE") which Option Exercise
Notice shall specify the principal amount of the Additional Notes such Purchaser
is purchasing pursuant to the Option and the date on which the Additional Notes
are to be purchased. Such date may be the same as the Closing Date but not
earlier than the Closing Date. If such date is not the Closing Date, such date
may not be earlier than three (3) business days following the date of receipt by
the Company of such Option Exercise Notice nor later than five (5) business days
following the date of receipt by the Company of such Option Exercise Notice.
2. Closing.
2
(a) Firm Notes. Payment for the Firm Notes shall be made
severally by the Purchasers to the Company to an account specified in writing by
the Company to the Purchasers on or prior to the date hereof in United States
dollars in cash or other funds immediately available in New York City against
delivery to each Purchaser of the Firm Notes purchased by such Purchaser at
10:00 a.m., New York City time, on December 23, 2005, or at such other time on
the same or such other date as shall be mutually agreed upon by the Company and
the Purchasers purchasing more than fifty percent (50%) of the aggregate
principal amount of the Firm Notes to be purchased hereunder. The time and date
of such payment and delivery are hereinafter referred to as the "CLOSING DATE."
(b) Additional Notes. Payment for the Additional Notes to be
purchased pursuant to any exercise of the Option shall be made by the
Purchaser(s) purchasing the Additional Notes to the Company by wire transfer of
United States dollars in cash or other funds immediately available in New York
City, to an account previously specified in writing by the Company to such
Purchaser(s) at least one (1) Business Day prior to the Option Closing Date (as
defined below), against delivery of such Additional Notes in the form specified
by the applicable Purchaser(s) in the applicable Option Exercise Notice at 10:00
a.m., New York City time, on the date set forth in the Option Exercise Notice,
or at such other time on the same or on such other date, as may be mutually
agreed upon by the Company and such Purchaser(s). The time and date of each such
payment and delivery are hereinafter referred to as an "OPTION CLOSING DATE."
3. Representations and Warranties. The Company represents and warrant
to the Purchasers as of the Closing Date and each Option Closing Date, the
following:
(a) Exchange Act Documents. The Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2004 (the "2004 10-K") and all
other documents filed by the Company with the Securities and Exchange Commission
(the "SEC") pursuant to the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC thereunder (collectively, the "EXCHANGE ACT")
since January 1, 2004 (as amended or supplemented from time to time prior to the
date hereof, including the exhibits thereto, the "EXCHANGE ACT DOCUMENTS"), when
taken together, do not contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(b) Financial Statements. Except as disclosed in the Exchange
Act Documents, (i) the financial statements included in the Exchange Act
Documents present fairly, in all material respects, the consolidated financial
position of the Company and its consolidated subsidiaries as of the dates
indicated and the results of their operations and the changes in their
consolidated cash flows for the periods specified therein and (ii) said
financial statements have been prepared in conformity with generally accepted
accounting principles and practices ("GAAP") applied on a consistent basis,
except as indicated in the notes thereto or, in the case of unaudited
statements, as permitted by Rule 10-01 of Regulation S-X promulgated by the SEC.
3
(c) Absence of Material Adverse Effect. Since the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 filed with the
SEC on November 22, 2005 (the "LATEST 10-Q"), there has not been any Material
Adverse Change. As used in this Agreement, "MATERIAL ADVERSE CHANGE" or
"MATERIAL ADVERSE EFFECT" means any change or effect that would be materially
adverse to the business, properties, condition (financial or otherwise) or
results of operations of the Company and its consolidated subsidiaries
considered as a single enterprise, or to the ability or authority of the Company
to consummate the transactions contemplated hereby and by the other Transaction
Documents on the terms set forth herein or therein, provided, that any reduction
in the market price or trading volume of the Company's publicly traded common
stock shall not, in any event, be deemed to constitute a Material Adverse Change
or a Material Adverse Effect (it being understood that the foregoing shall not
prevent a person from asserting that any underlying cause of such reduction
independently constitutes such a Material Adverse Change or Material Adverse
Effect).
(d) Absence of Certain Changes. Since the Latest 10-Q, there
has not been any (i) material change in the capital stock or long-term debt of
the Company, other than borrowings under the Company's Amended and Restated
Credit Agreement, dated as of March 12, 2004, by and among the Company, the
financial institutions parties thereto and Calyon New York Branch, as
administrative agent (the "AMENDED AND RESTATED CREDIT AGREEMENT"), that will be
repaid with a portion of the net proceeds from the sale of the Notes or (ii)
issuance of any options or warrants for the purchase of capital stock of the
Company, securities convertible into or exercisable or exchangeable for capital
stock of the Company or rights to purchase capital stock of the Company, except
for changes or issuances occurring in the ordinary course of business and
changes in outstanding Common Stock resulting from grants of Common Stock made
pursuant to the Company's 401(k) Plan and to give effect to grants of restricted
stock and stock option awards under the Company's employee benefit plans and the
exercise of options to purchase Common Stock granted under the Company's
employee benefit plans, in each case in existence on the date hereof. Since the
Latest 10-Q, the Company has not entered into any transaction or agreement that
has or would be reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect. Since the Latest 10-Q, the Company has not declared or
paid any dividends or made any distribution of any kind with respect to its
capital stock. Neither the Company nor any of its subsidiaries has taken any
steps to seek protection pursuant to any bankruptcy law nor does the Company
have knowledge that its creditors or its subsidiaries' creditors intend to
initiate involuntary bankruptcy proceedings or knowledge of any fact which would
reasonably lead a creditor to do so. The Company is not as of the date hereof,
and after giving effect to the transactions contemplated hereby will not be,
Insolvent (as defined below). For purposes of this Section 3(d), "Insolvent"
means (i) the present fair saleable value of the Company's assets is less than
the amount required to pay the Company's known liabilities and identified
contingent liabilities, (ii) the Company is unable to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured or (iii) the Company has unreasonably
small capital with which to conduct the business in which it is engaged as such
business is now conducted.
4
(e) Organization and Qualification. The Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the Republic of Panama, with corporate power and authority to own or
lease its properties and conduct its business as described in the Exchange Act
Documents, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts its business in
a manner or to an extent that would require such qualification, other than such
failures to be so qualified or in good standing as, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
(f) Subsidiaries. Each Subsidiary of the Company has been duly
organized and is validly existing as a corporation, partnership or limited
liability company in good standing under the laws of the jurisdiction in which
it is chartered or organized with full power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business as
currently operated and conducted, and is duly qualified to do business as a
foreign corporation, partnership or limited liability company and is in good
standing under the laws of each jurisdiction which requires such qualification,
except where the failure so to qualify or to be in good standing would not,
individually or in the aggregate, result in a Material Adverse Effect; all the
issued and outstanding shares of capital stock of or other ownership interests
in each such Subsidiary have been duly authorized and validly issued, are fully
paid and non-assessable and are owned, directly or indirectly, by the Company.
As used herein, "SUBSIDIARY" means any entity of which the Company (either alone
or through or together with one or more of its Subsidiaries) owns or holds,
directly or indirectly, through one or more intermediaries, more than 50% of the
stock or other equity interests of such entity, (B) any entity of which stock or
other equity interests having the power to elect a majority of that entity's
board of directors or similar governing body, or otherwise having the power to
direct the business and policies of such entity, are held or owned, directly or
indirectly, through one or more intermediaries, by the Company (either alone or
through or together with one or more of its Subsidiaries), or (C) any entity,
the operations of which are consolidated or combined with the Company, pursuant
to GAAP, for financial reporting purposes.
(g) Authorization; Enforcement; Validity. The Company has full
corporate power and authority to enter into the Transaction Documents and to
perform and discharge its obligations thereunder, including, without limitation,
issuance of the Firm Notes and the Additional Notes and the reservation for
issuance and the issuance of the Underlying Securities; each Transaction
Document has been duly authorized by the Company's Board of Directors, and no
further consent or authorization is required by the Company, its board of
directors or its stockholders, other than such consents or authorizations as
have been obtained prior to the execution of this Agreement; each Transaction
Document has been duly executed and delivered by or on behalf of the Company and
constitutes the legal, valid and binding obligations of the Company, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance or transfer, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and to general
principles of equity, including principles of materiality, commercial
reasonableness, good faith
5
and fair dealing (regardless of whether enforcement is sought in a proceeding at
law or in equity) and except that rights to indemnification and contribution
thereunder may be limited by federal or state securities laws or public policy
relating thereto that have not been previously waived. WUSA has full corporate
power and authority to enter into the Transaction Documents to which it is a
party and to perform and discharge its obligations thereunder; each Transaction
Document to which it is a party has been duly authorized by WUSA's Board of
Directors, and no further consent or authorization is required by the Company,
its board of directors or its stockholders, other than such consents or
authorizations as have been obtained prior to the execution of this Agreement;
each Transaction Document to which it is a party has been duly executed and
delivered by or on behalf of the Company and constitutes the legal, valid and
binding obligations of WUSA, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance or
transfer, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and to general principles of equity, including
principles of materiality, commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity) and except that rights to indemnification and contribution thereunder
may be limited by federal or state securities laws or public policy relating
thereto that have not been previously waived.
(h) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Latest 10-Q, except as such
outstanding capital stock may be increased to give effect to grants of Common
Stock made pursuant to the Company's 401(k) Plan and to give effect to grants of
restricted stock and stock option awards under the Company's employee benefit
plans and the exercise of options to purchase Common Stock granted under the
Company's employee benefit plans, in each case in existence on the date hereof.
Except for (i) that certain registration rights agreement dated April 9, 1992,
by and among the Company and the parties set forth on the signature pages
thereto, (ii) that certain registration rights agreement dated March 15, 2004
(the "2004 RRA") by and among the Company and the initial purchasers of the
Company's 2.75% Convertible Senior Notes due 2024 (the "2.75% NOTES"), and (iii)
this Agreement and the Registration Rights Agreement or stock purchase plans,
there are no contracts, commitments, agreements, arrangements, understandings or
undertakings of any kind to which the Company is a party, or by which it is
bound, granting to any person the right to require the Company to file a
registration statement under the Securities Act with respect to the Common Stock
or requiring the Company to include any Common Stock with the Underlying
Securities registered pursuant to any registration statement that have not been
previously waived. The 2004 RRA does not grant to any of the holders of the
2.75% Notes the right to require the Company to include any Common Stock
underlying such notes in any registration statement to be filed with respect to
the Underlying Securities. The shares of Common Stock outstanding on the date
hereof have been duly authorized and are validly issued, fully paid and
non-assessable.
(i) Issuance of Firm Notes and Additional Notes. The Firm
Notes and the Additional Notes have been duly authorized by the Company, and
when duly executed, authenticated, issued and delivered as provided in the
Indenture and the other Transaction Documents (assuming due authentication of
the Firm Notes and the Additional Notes by the
6
Trustee) and paid for as provided herein and therein will be free from all
taxes, liens and charges with respect to the issuance thereof and will
constitute legal, valid and binding obligations of the Company, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance or transfer, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and to general
principles of equity, including principles of materiality, commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement
is sought in a proceeding at law or in equity).
(j) Issuance of Underlying Securities. Upon issuance and
delivery of the Firm Notes and the Additional Notes in accordance with this
Agreement and the Indenture, the Firm Notes and the Additional Notes will be
convertible at the option of the holder thereof into the Underlying Securities
in accordance with the terms of the Indenture; the Underlying Securities
initially issuable upon conversion of the Notes have been duly authorized and
reserved for issuance and, when issued upon conversion of the Notes in
accordance with the terms of the Indenture, will be validly issued, fully paid
and non assessable, and the issuance of the Underlying Securities will not be
subject to any preemptive or similar rights and will be free from all taxes,
liens or charges with respect to the issuance thereof.
(k) No Conflicts. The issuance and sale of the Firm Notes and
the Additional Notes and the issuance by the Company of the Underlying
Securities upon conversion of the Securities, the execution and delivery by the
Company of the Transaction Documents and the performance by the Company of all
its obligations and the consummation of the transactions herein and therein
contemplated, will not (i) result in a breach of any of the terms or provisions
of, constitute a default (with or without the giving of notice or the passage of
time or otherwise) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is bound or
to which any of the property or assets of the Company is subject except, in each
case, for such conflicts, breaches, defaults, liens, charges or encumbrances
which would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect, (ii) result in any violation of the provisions
of the Amended and Restated Certificate of Incorporation, as amended, or the
Restated Bylaws of the Company, each as in effect on the date hereof, or (iii)
result in any violation of any material applicable law or statute or any order,
rule or regulation of any court or governmental agency or of any self-regulatory
agency or body having jurisdiction over the Company or any of its properties;
and no consent, approval, authorization, order, license, registration or
qualification of or with any such court or governmental agency or of any
self-regulatory agency or body is required for the issuance and sale of the
Securities or the consummation by the Company of the transactions contemplated
by any of the Transaction Documents, except such consents, approvals,
authorizations, orders, licenses, registrations or qualifications as may be
required under (A) state securities or Blue Sky Laws in connection with the
purchase of and any distribution of the Securities by the Purchasers, (B) the
Securities Act with respect to the registration of the Underlying Securities
pursuant to the terms of the Registration Rights Agreement and (C) the Trust
Indenture Act of 1939, as amended (the "TIA"), with respect to the qualification
of the Indenture. The issuance of the Subsidiary
7
Guarantee (as defined in the Indenture), the execution and delivery by WUSA of
the Transaction Documents to which it is a party and the performance by WUSA of
all its obligations and the consummation of the transactions herein and therein
contemplated, will not (i) result in a breach of any of the terms or provisions
of, constitute a default (with or without the giving of notice or the passage of
time or otherwise) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of WUSA under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which WUSA is a party or by which WUSA is bound or to which any of the property
or assets of WUSA is subject except, in each case, for such conflicts, breaches,
defaults, liens, charges or encumbrances which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, (ii) result
in any violation of the provisions of the Certificate of Incorporation or the
Bylaws of WUSA, each as in effect on the date hereof, or (iii) result in any
violation of any material applicable law or statute or any order, rule or
regulation of any court or governmental agency or of any self-regulatory agency
or body having jurisdiction over WUSA or any of its properties; and no consent,
approval, authorization, order, license, registration or qualification of or
with any such court or governmental agency or of any self-regulatory agency or
body is required for the issuance of the Subsidiary Guarantee or the
consummation by WUSA of the transactions contemplated by any of the Transaction
Documents to which its is a party.
(l) Absence of Litigation. Except as described in Item 3,
"Legal Proceedings" of the 2004 10-K and Note 11 of the Notes to Consolidated
Financial Statements in Item 1 of Part I of the Latest 10-Q, there are no legal
or governmental investigations, actions, suits or proceedings pending or, to the
Company's knowledge, threatened against or affecting the Company, its
Subsidiaries or any of its properties or to which the Company or its
Subsidiaries is or may be a party or to which any property of the Company is or
may be the subject that, if determined adversely to the Company, would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(m) No Integrated Offering. Neither the Company, nor any
affiliate (as defined in Rule 501(b) of Regulation D under the Securities Act)
of the Company or any person acting on its or their behalf, has directly, or
through any agent, sold, offered for sale, solicited offers to buy, or otherwise
approached or negotiated with, any person in respect of, any security (as
defined in the Securities Act) that is or will be integrated with the sale of
the Securities in a manner that would require (i) the registration under the
Securities Act of the issuance of any of the Securities contemplated hereby or
(ii) the approval of the stockholders of the Company in accordance with the
rules and regulations of the New York Stock Exchange (the "PRINCIPAL MARKET").
(n) No General Solicitation. None of the Company, any
affiliate of the Company or any person acting on its or their behalf has offered
or sold any of the Securities by means of any general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act,
including (i) any advertisement, article, notice or other communication
published in any newspaper, magazine or similar medium or broadcast over
television or radio,
8
or (ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising in the United States.
(o) Securities Act and Trust Indenture Act. Assuming the
accuracy of the representations and warranties of the Purchasers contained in
Section 4 hereof and the Purchasers' compliance with the agreements set forth
therein, it is not necessary in connection with the offer, issuance, sale and
delivery of the Securities in the manner contemplated by this Agreement and the
other Transaction Documents to register the offer or initial sale of any of the
Securities to the Purchasers under the Securities Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended.
(p) Placement Agent. Except for its engagement letter with
J.P. Morgan Securities Inc. dated November 28, 2005, neither the Company nor its
subsidiaries is a party to any contract, agreement or understanding with any
person that would reasonably be expected to give rise to a valid claim against
the Company or the Purchasers for a brokerage commission, finder's fee or like
payment in connection with the offering and sale of the Securities.
(q) Manipulation of Price. Neither the Company, nor any of its
subsidiaries nor any of their officers or directors or any of their affiliates
has taken or will take, directly or indirectly, any action designed or intended
to stabilize or manipulate the price of any security of the Company, or that
caused or resulted in, or that might in the future reasonably be expected to
cause or result in, stabilization or manipulation of the price of any security
of the Company in violation of the Securities Act, the Exchange Act or any other
applicable securities laws.
(r) Listing. The Common Stock is registered pursuant to
Section 12(b) of the Exchange Act and is listed on the Principal Market, and the
Company has not taken any action designed to or reasonably likely to result in
the termination of the registration of the Common Stock under the Exchange Act
or delisting of the Common Stock from the Principal Market. Since August 15,
1996 (i) the Common Stock has been designated for quotation on the Principal
Market, (ii) trading in the Common Stock has not been suspended by the SEC or
the Principal Market, other than temporary trading halts effected by the
Principal Market following the Company's public release of material news and
(iii) except with respect to the Company's failure to timely file the 2004 10-K,
no executive officer of the Company has received any communication, written or
oral, from the SEC or the Principal Market threatening the suspension or
delisting of the Common Stock from the Principal Market.
(s) Tax Status. Except as described in Note 2 of the Notes to
Consolidated Financial Statements in the 2004 10-K, each of the Company and the
Subsidiaries has accurately prepared and timely filed all material federal,
state, foreign and other tax returns that are required to be filed by it and has
paid or made provision for the payment of all taxes, assessments, governmental
or other similar charges that are material in amount, with respect to the
periods covered by such tax returns (whether or not such amounts are shown as
due on any tax return) and there is no tax deficiency in any material amount
which has been or, to the
9
Company's knowledge, might reasonably be expected to be asserted or threatened
against the Company and the Company is not aware of any reasonable basis for any
such claim.
(t) Labor Relations. (i) No labor disputes exist with
employees of the Company except for such disputes as would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect and
the Company is not aware that any key employee or significant group of employees
of the Company plans to terminate employment with the Company and (ii) the
Company and its subsidiaries are in compliance with all federal, state, local
and foreign laws and regulations respecting labor, employment and employment
practices and benefits, terms and conditions of employment and wages and hours,
except where failure to be in compliance would not, either individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect.
(u) Environmental Laws. To the Company's knowledge, the
Company is in compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health or the
environment or imposing liability or standards of conduct concerning any
Hazardous Material (collectively, "ENVIRONMENTAL LAWS"), except where such
non-compliance with Environmental Laws would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The term
"HAZARDOUS MATERIAL" means (1) any "HAZARDOUS SUBSTANCE" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, (2) any "HAZARDOUS WASTE" as defined by the Resource Conservation and
Recovery Act, as amended, (3) any petroleum or petroleum product, (4) any
polychlorinated biphenyl, and (5) any pollutant or contaminant or hazardous,
dangerous, or toxic chemical, material, waste or substance regulated under or
within the meaning of any other Environmental Law.
(v) Intellectual Property. (i) The Company or its subsidiaries
own or possess the right to use the patents, patent licenses, trademarks,
service marks, trade names, copyrights and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) (collectively, the "INTELLECTUAL PROPERTY") reasonably
necessary to carry on the business conducted by the Company and its
subsidiaries, taken as a whole, as described in the Exchange Act Documents,
except to the extent that the failure to own or possess the right to use such
Intellectual Property would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, (ii) all of such patents, registered
trademarks and registered copyrights owned by the Company or its subsidiaries
have been duly registered in, filed in or issued by the United States Patent and
Trademark Office, the United States Registrar of Copyrights or the corresponding
offices of other jurisdictions, except where the failure to do so would not
reasonably be expected to have a Material Adverse Effect, (iii) all material
licenses or other material agreements under which (1) the Company or any of its
subsidiaries is granted rights in Intellectual Property, other than Intellectual
Property generally available on commercial terms from other sources, and (2) the
Company or any of its subsidiaries has granted rights to others in Intellectual
Property owned or licensed by the Company, are in full force and effect and
there is no default by the Company or its subsidiaries or, to the Company's
knowledge, the other parties thereto, except for such
10
failures to be in full force and effect and such defaults as would not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect, (iv) the Company has not received any notice of infringement of
or conflict with asserted rights of others with respect to any Intellectual
Property, except for notices the content of which if accurate would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect and (v) the Company and its subsidiaries do not have and, to the
Company's knowledge, none of its and their employees have any agreements or
arrangements with any persons other than the Company or its subsidiaries related
to confidential information or trade secrets of such persons other than such
agreements that would not restrict the Company and its subsidiaries from
conducting their business as described in the Exchange Act Documents to an
extent that would reasonably be expected to result in a Material Adverse Effect.
(w) Permits. The Company and each of its subsidiaries, taken
together, have (i) made all filings, applications and submissions required by,
and possesses all approvals, licenses, certificates, clearances, consents,
exemptions, orders, permits and other authorizations required to be issued by,
the appropriate federal, state or foreign regulatory authorities (collectively,
"PERMITS") in order for the Company and its subsidiaries to conduct their
business, except for such Permits for which the failure to obtain would not
reasonably be expected to have a Material Adverse Effect, and are in compliance
in all material respects with the terms and conditions of all such Permits; all
such Permits held by the Company and its subsidiaries are valid and in full
force and effect; there is no pending or, to the Company's knowledge, threatened
action, suit, claim or proceeding that may cause any such Permit to be limited,
revoked, cancelled, suspended, modified or not renewed and neither the Company
nor its subsidiaries has received any notice of proceedings relating to the
limitation, revocation, cancellation, suspension, modification or non-renewal of
any such Permit that, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding would reasonably be expected to have a
Material Adverse Effect and (ii) such licenses, franchises, permits,
authorizations, approvals and orders of and from governmental and regulatory
officials and bodies as are, to the Company's knowledge, reasonably necessary to
own or lease and operate the properties and conduct the business of the Company
and its subsidiaries, taken as a whole, on the date hereof, except for such
licenses, franchises, permits, authorizations, approvals and orders for which
the failure to obtain would not reasonably be expected to have a Material
Adverse Effect.
(x) Title. (i) The Company has good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by it that is material to the business of the Company and its
subsidiaries, in each case free and clear of all liens, encumbrances and
defects, except for liens and encumbrances which secure the Company's
obligations under its Amended and Restated Credit Agreement or such as do not
materially affect the value of such property, do not materially interfere with
the use made and proposed to be made of such property by the Company and its
subsidiaries or would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; and (ii) any real property and
buildings held under lease by the Company and its subsidiaries are held by it
under valid, subsisting and enforceable leases with such exceptions as do not
interfere with the use made and
11
proposed to be made of such property and buildings by the Company or as would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(y) ERISA. (i) The Company is in compliance with all presently
applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder
("ERISA"), except where the failure to be in such compliance would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; (ii) no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
is required to provide notice under Section 4043 of ERISA and would have any
liability, except where such liability would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; (iii)
except for matters that would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect, (a) with respect to any "pension
plan" (other than a "multiemployer plan" (as defined in ERISA)), the Company has
not incurred and does not expect to incur liability under Title IV of ERISA with
respect to termination of, or withdrawal from, such "pension plan," or under
Section 412 or 4971 of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (the "CODE"), and (b)
with respect to any "pension plan" that is a "multiemployer plan," the Company
has not received notice that the Company has incurred liability under Title IV
of ERISA with respect to termination of, or withdrawal from, such "pension
plan," or under Section 412 or 4971 of the Code; (iv) except where the failure
to be in such compliance would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect, each "pension plan" (other than a
"multiemployer plan") for which the Company would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which would reasonably be expected cause the loss of such qualification;
and (v) except where the failure to be in such compliance would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, no non-exempt "prohibited transaction" (as defined in Section
406 of ERISA or Section 4975 of the Code) or "accumulated funding deficiency"
(as defined in section 302 of ERISA) has occurred with respect to any "pension
plan" (other than a "multiemployer plan") for which the Company would have any
liability.
(z) OSHA. To the Company's knowledge, the Company and each of
its subsidiaries is in compliance with any and all applicable Occupational
Safety and Health Administration standards and requirements (the "OSHA LAWS"),
except where such non-compliance with OSHA Laws would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(aa) Investment Company. Neither the Company nor any of its
subsidiaries is, and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof, will not be, required to
register as an "investment company" or an entity controlled by an investment
company as such term is defined in the Investment Company Act of 1940, as
amended.
12
(bb) Regulation U. The Company does not own, and has no
present intention to acquire, and the proceeds of the sale of the Securities
will not be used to buy or carry, any margin stock (as defined in Regulation U
of the Board of Governors of the Federal Reserve System (12 CFR 207).
(cc) Independent Accountants. KPMG LLP ("KPMG"), who have
audited the consolidated financial statements of the Company as of December 31,
2004, is an independent registered public accounting firm within the meaning of
the Securities Act. As described in the Company's Current Report on Form 8-K
filed on November 17, 2005 (the "NOVEMBER 8-K"), effective upon the completion
of the audit of the Company's consolidated financial statements as of and for
the year ended December 31, 2004, and the issuance of their report thereon, and
the filing of the Company's Form 10-Q's for the three-month period ended March
31, 2005 and the six-month period ended June 30, 2005, KPMG resigned as the
Company's independent auditors, and, as of the date of this Agreement, the
Company has not yet engaged a replacement independent registered public
accounting firm. As described in the November 8-K, in connection with the audit
of the 2003 and 2004 fiscal years and the subsequent interim period through
November 10, 2005, there were no disagreements with KPMG on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure, which disagreements if not resolved to the satisfaction of
KPMG, would have caused KPMG to make reference to the subject matter of the
disagreements in connection with its report on the financial statements for such
years.
(dd) Internal Controls. Except as described under Item 9A
"Controls and Procedures" of the 2004 10-K and under Part I, Item 4 of the
Company's Quarterly Reports on Form 10-Q for the quarters ended March 31 and
June 30, 2005, the Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with management's general or
specific authorization; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences, and the Company maintains a system of "disclosure
controls and procedures" (as such term is defined in Rule 13a-15(e) under the
Exchange Act).
(ee) Sarbanes-Oxley Act. The Company and its executive
officers and directors, in their capacities as such, are in compliance in all
material respects with the applicable provisions of the Sarbanes-Oxley Act of
2002, including Section 402 related to loans and Sections 302 and 906 related to
certifications.
(ff) Ranking of Firm Notes and Additional Notes. None of the
existing indebtedness of the Company for borrowed money is or will rank senior
to the Firm Notes or the Additional Notes in right of payment, whether in
respect of payment of interest or upon liquidation or dissolution or otherwise.
None of the existing indebtedness of the Company for
13
borrowed money is or will rank pari passu to the Firm Notes or the Additional
Notes in right of payment, whether in respect of payment of interest or upon
liquidation or dissolution or otherwise, except (i) for the 2.75% Notes and (ii)
to the extent that the Notes will be pari passu to the obligations of the
Company owing pursuant (A) to the Amended and Restated Credit Agreement, as the
same may be amended, refinanced and/or extended from time to time, (B) capital
leases and (C) the financing of insurance premiums, except to the extent that
such obligations are secured by certain assets of the Company.
(gg) Rule 144A. The Notes satisfy the requirements set forth
in Rule 144A(d)(3) under the Securities Act.
(hh) Rights Agreement. Except for (i) that certain Rights
Agreement, dated as of April 1, 1999, between the Company and Mellon Investor
Services LLC (the "RIGHTS AGREEMENT"), and (ii) provisions in the Company's
articles of incorporation on the transfer of any shares of Common Stock in order
to prevent the Company from becoming a "controlled foreign corporation" under
United States tax law (the "CFC PROVISIONS"), the Company has not adopted a
stockholder rights plan or similar arrangement relating to accumulations of
beneficial ownership of Common Stock or a change in control of the Company. The
purchase of Notes and the subsequent conversion of Notes into Common Stock by
the Purchasers in accordance with and subject to the terms and limitations set
forth in Transaction Documents (x) will not cause any provision of the Rights
Agreement to be triggered and (y) will not subject any Purchaser to the
restrictions on transfer set forth in the CFC Provisions.
(ii) Insurance. The Company and each of its subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its
subsidiaries are engaged, except where the failure to do so would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect. Neither the Company nor any such subsidiary believes that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(jj) Foreign Corrupt Practices Act. Since at least December
21, 2000 and until June 30, 2005, except as described in the 2004 10-K, neither
the Company, nor any of its subsidiaries, nor any director, officer, agent,
employee or other Person acting on behalf of the Company or any of its
subsidiaries, has, in the course of its actions for, or on behalf of, the
Company, violated or is in violation of any provision of the U.S. Foreign
Corrupt Practices Act of 1977, as amended, except to the extent such violations
would not have or would not reasonably be expected to have, individually or in
the aggregate a Material Adverse Effect. Since at least July 1, 2005, neither
the Company, nor any of its subsidiaries, nor, to the Company's knowledge, any
director, officer, agent, employee or other Person acting on behalf of the
14
Company or any of its subsidiaries, has, in the course of its actions for, or on
behalf of, the Company, violated or is in violation of, in any material respect,
any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended.
(kk) No General Solicitation in the Republic of Panama. None
of the Company, any affiliate of the Company or any person acting on its or
their behalf has offered or sold any of the Securities publicly or by means of
any general solicitation or general advertising (including but not limited to
any advertisement, article, notice or other communication published in any
newspaper, magazine or similar medium or broadcast over television or radio) in
the Republic of Panama or to persons domiciled in the Republic of Panama. The
Securities are to be offered or sold outside the Republic of Panama or to
persons domiciled outside the Republic of Panama.
(ll) PATRIOT Act/OFAC. Since at least December 21, 2000 and
except for the potentially improper facilitation and export activities reported
to the U.S. Department of the Treasury's Office Foreign Assets Control ("OFAC")
as described in Item 1, "Business" of the 2004 10-K under the caption "Risk
Factors--Governmental investigations into the activities of the Company, J.
Kenneth Tillery, the former President of our principal international subsidiary,
and other current and former employees of the Company could adversely affect
us," neither the Company nor any of its subsidiaries (i) is a Person whose
property or interest in property is blocked or subject to blocking pursuant to
Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support
Terrorism (66 Fed. Reg. 49079 (2001)), ("EXECUTIVE ORDER 13224") (ii) to the
Company's knowledge, engages in any dealings or transactions prohibited by
Section 2 of such Executive Order 13224, or is otherwise associated with any
such Person in any manner violative of Section 2 of Executive Order 13224, (iii)
is a Person on the Specially Designated Nationals and Blocked Persons List
administered by OFAC, or (iv) has failed to comply, in any material respects,
with the (a) Trading with the Enemy Act, as amended, and each of the rules,
regulations and Executive Orders administered by OFAC (including but not limited
to 31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation
or executive order relating thereto, and (b) Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
Patriot Act of 2001).
(mm) Controlled Foreign Corporation. As of the date hereof,
the Company is not a "controlled foreign corporation" for U.S. federal income
tax purposes under Section 957 of the U.S. Internal Revenue Code of 1986, as
amended.
Each Purchaser acknowledges and agrees that the Company has not made and does
not make any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 3.
4. Representations and Warranties of the Purchasers. Each Purchaser
severally represents and warrants to the Company only as to itself, as of the
Closing Date and each Option Closing Date for such Purchaser, the following:
15
(a) Accredited Investor Status. Such Purchaser is
knowledgeable, sophisticated and experienced in business and financial matters
and qualifies as an "accredited investor" as defined in Rule 501(a) of
Regulation D and as a "qualified institutional buyer" under Regulation 144A.
Such Purchaser is experienced in evaluating investments in companies such as the
Company.
(b) Information. Such Purchaser has been afforded access to
information about the Company and the financial condition, results of
operations, business, property and management of the Company sufficient to
enable it to evaluate its investment in the Securities; such Purchaser and its
advisors, if any, have been afforded the opportunity to ask questions of the
Company; such Purchaser has sought such accounting, legal and tax advice as it
has considered necessary to make an informed investment decision with respect to
its acquisition of the Securities. Neither such inquiries nor any other due
diligence investigations conducted by such Purchaser, its advisors or
representatives, if any, shall modify, amend or affect such Purchaser's right to
rely on the Company's representations and warranties contained herein.
(c) Investment Risk. Such Purchaser understands that its
investment in the Securities involves a high degree of risk. Such Purchaser is
able to bear the economic risk of its investment in the Securities for an
indefinite period of time, and is presently able to afford the complete loss of
such investment.
(d) No Public Sale or Distribution. Such Purchaser is
acquiring the Securities in the ordinary course of business solely for its own
account and not as a nominee or agent for any other person and not with a view
to any distribution thereof that violates the Securities Act or the securities
laws of any State of the United States or any applicable jurisdiction; provided,
however, that by making the representations herein, such Purchaser does not
agree to hold any of the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in accordance with
or pursuant to a registration statement or an exemption under the Securities
Act. Such Purchaser does not presently have any intention, or any agreement or
understanding, directly or indirectly, with any person, to distribute any of the
Securities.
(e) Validity; Enforcement. Such Purchaser was duly organized
or formed and is a validly existing organization in good standing under the laws
of its jurisdiction of organization, with power and authority to execute and
deliver this Agreement and the Registration Rights Agreement and perform its
obligations hereunder and thereunder; and this Agreement and the Registration
Rights Agreement and the transactions contemplated hereby and thereby have been
duly authorized by such Purchaser. Assuming due authorization, execution and
delivery by the Company, each of this Agreement and the Registration Rights
Agreement constitutes a legally valid and binding agreement of such Purchaser,
enforceable against the Purchaser in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and to general principles of equity, including principles of
materiality,
16
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(f) Residency. Such Purchaser is a resident of that
jurisdiction specified in its address for notices set forth below the signature
of the Purchaser where it appears on the signature page of this Agreement. Such
Purchaser was not formed for the specific purpose of acquiring the Securities.
(g) Source of Funds. Such Purchaser is not acquiring the
Securities with assets of any "employee benefit plan" (within the meaning of
Section 3(3) of ERISA) that is subject to Title I of ERISA or Section 4975 of
the Code.
(h) Beneficial Ownership. Assuming the capitalization of the
Company set forth in its most recent Exchange Act Document, such Purchaser,
together with its "affiliates" (as defined in Rule 13d-3 promulgated under the
Securities Act), is the beneficial owner (as defined in Rule 13d-3 promulgated
under the Exchange Act) of not more than 4.99% of the outstanding shares of
Common Stock immediately after the purchase of the Securities hereunder.
(i) Broker/Dealer Status. Such Purchaser is not a registered
broker-dealer under Section 15 of the Exchange Act.
(j) Independent Evaluation. Such Purchaser has independently
evaluated the merits of its decision to purchase the Securities pursuant to the
Transaction Documents, and the Purchaser confirms that it has not relied on the
advice of any other Purchaser's business and/or legal counsel in making such
decision.
(k) No Short Sales. Such Purchaser has not purchased any
shares of Common Stock, engaged in any short selling of the Company's
securities, or established or increased any "put equivalent position" as defined
in Rule 16(a)-1(h) under the Exchange Act, with respect to the Common Stock
(collectively, a "SHORT SALE"), since the date and time that it was contacted by
J.P. Morgan Securities Inc. with respect to the transactions contemplated by
this Agreement. Such Purchaser agrees that it will not effect any Short Sale
until the 8-K Filing (as defined below) has been made.
(l) Financing. Such Purchaser has, and will have at Closing,
immediately available funds in U.S. dollars (through cash or cash equivalents
and existing committed credit arrangements) sufficient to pay the Purchase Price
for the Firm Notes to be purchased by such Purchaser and any other amounts
payable pursuant to this Agreement and to consummate the transactions
contemplated by, and otherwise satisfy the obligations of such Purchaser under,
this Agreement.
(m) Certain Exemptions. Such Purchaser understands that the
Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of the Securities Act and state securities
and Blue Sky laws and that the
17
Company is relying upon the truth and accuracy of, and such Purchaser's
compliance with, the representations, warranties, agreements, acknowledgements
and understandings of such Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of such Purchaser to acquire
the Securities.
(n) Legends. Such Purchaser understands that the certificates
or other instruments representing the Notes and, until such time as the resale
of the Underlying Securities has been registered under the Securities Act as
contemplated by the Registration Rights Agreement, the stock certificates
representing the Underlying Securities, except as set forth below, shall bear
any legend as required by the "blue sky" laws of any state and a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of such stock certificates, certificates or other
instruments):
THIS SECURITY [AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION]
OF THIS SECURITY [HAVE/HAS] NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
LAWS. NEITHER THIS SECURITY[, THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS SECURITY] NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. EACH
PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS
SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH
WILLBROS GROUP, INC. OR ANY AFFILIATE OF WILLBROS GROUP, INC. WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A)
TO WILLBROS GROUP, INC. OR ANY PARENT OR SUBSIDIARY THEREOF, (B) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A,
TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A UNDER THE
18
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO WILLBROS
GROUP, INC.'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT
TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION REASONABLY SATISFACTORY TO IT.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A
REGISTRATION RIGHTS AGREEMENT AND, BY ITS ACCEPTANCE HEREOF, AGREES TO
BE BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION
RIGHTS AGREEMENT.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped, unless otherwise required by state securities laws, (i) while a
registration statement covering the resale of such Securities under the
Securities Act is effective, (ii) in connection with a sale, assignment or other
transfer, provided such holder provides the Company with an opinion of counsel,
reasonably acceptable to the Company, the form and substance of which shall be
reasonably satisfactory to the Company, to the effect that such sale, assignment
or transfer of the Securities may be made without registration under the
applicable requirements of the Securities Act , (iii) if such holder provides
the Company with reasonable assurance that the Securities can be sold, assigned
or transferred pursuant to paragraph (k) of Rule 144 or (iv) following any sale
of such Securities pursuant to Rule 144.
(o) No Brokers. Such Purchaser is not a party to any contract,
agreement or understanding with any person that would reasonably be expected to
give rise to a valid claim against the Company or the Purchasers for a brokerage
commission, finder's fee or like payment in connection with the offering and
sale of the Securities.
The Company acknowledges and agrees that the Purchasers have not made, and do
not make, any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 4.
5. Covenants of the Company. The Company covenants and agrees with the
Purchasers as follows:
19
(a) Listing. The Company shall promptly secure the listing of
all of the Underlying Securities upon each national securities exchange and
automated quotation system, if any, upon which the Common Stock is then listed
(subject to official notice of issuance) and shall maintain such listing of all
Underlying Securities from time to time issuable under the terms of the
Transaction Documents. The Company shall use reasonable best efforts to maintain
the Common Stock's authorization for quotation on the Principal Market. Neither
the Company nor any of its subsidiaries shall take any action which would be
reasonably expected to result in the delisting or suspension of the Common Stock
on the Principal Market.
(b) Blue Sky. The Company shall qualify the Securities for
offering and sale under the applicable securities laws of such states as any
Purchaser may reasonably designate and will continue such qualifications in
effect so long as required for the resale of the Securities; provided that the
Company will not be required to qualify as a foreign corporation or file a
general consent to service of process in any such state.
(c) Fees and Expenses. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated,
the Company shall pay or cause to be paid all fees, costs and expenses incident
to the performance of its obligations hereunder, including without limiting the
generality of the foregoing, all fees, costs and expenses (i) incident to the
preparation, issuance, execution, authentication and delivery of the Securities,
including any expenses of the Trustee, (ii) payable to rating agencies in
connection with any rating of the Notes, (iii) incurred in connection with the
qualification of the Securities for sale under state securities laws, (iv) in
connection with the approval of the Underlying Securities for listing on the
Principal Market, (v) in connection with the admission for trading of the Notes
on any securities exchange or inter-dealer quotation system (as well as in
connection with the admission of the Notes for trading in the Private Offering,
Resales and Trading through Automatic Linkages ("PORTAL") system of the National
Association of Securities Dealers, Inc. ("NASD") or any appropriate market
system), (vi) related to any filing with the Principal Market and (vii) in
connection with satisfying its obligations under Section 5(a). In addition to
the foregoing, the Company agrees to reimburse certain Purchasers for the
expenses of Schulte Roth & Zabel LLP, which amount may be withheld by such
Purchaser(s) from its Purchase Price at the Closing. Except as expressly set
forth in Section 8 hereof, the Company shall have no obligation to pay any costs
and expenses of the Purchasers (except as set forth in the Registration Rights
Agreement).
(d) Regulation M. The Company shall not take any action
prohibited by Regulation M under the Exchange Act in connection with the
issuance of the Securities contemplated hereby.
(e) General Solicitation. None of the Company, any of its
affiliates (as defined in Rule 501(b) under the Securities Act) or any person
acting on behalf of the Company or such affiliate will solicit any offer to buy
or offer or sell the Securities by means of any form of general solicitation or
general advertising within the meaning of Regulation D, including: (i) any
advertisement, article, notice or other communication published in any
20
newspaper, magazine or similar medium or broadcast over television or radio; and
(ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
(f) Integration. None of the Company, any of its affiliates
(as defined in Rule 501(b) under the Securities Act) or any person acting on
behalf of the Company or such affiliate will sell, offer for sale or solicit
offers to buy, or otherwise approach or negotiate with, any person in respect of
any security (as defined in the Securities Act) which will be integrated with
the sale of the Securities in a manner which would require the registration
under the Securities Act of the Securities or require stockholder approval under
the rules and regulations of the Principal Market, and the Company will take all
action that is appropriate or necessary to assure that its offerings of other
securities will not be integrated for purposes of the Securities Act or the
rules and regulations of the Principal Market with the issuance of Securities
contemplated hereby.
(g) Reservation of Shares. The Company shall reserve and keep
available at all times, free of pre-emptive rights, a sufficient number of
shares of Common Stock for the purpose of enabling the Company to satisfy all
obligations to issue the Underlying Securities upon conversion of the Firm Notes
or the Additional Notes, as applicable.
(h) Use of Proceeds. The Company shall use the proceeds from
the sale of the Securities for working capital purposes, including the repayment
of outstanding indebtedness of the Company. No part of the proceeds from the
sale of the Securities hereunder will be used, directly or indirectly, for the
purpose of buying or carrying any margin stock within the meaning of Regulation
U of the Board of Governors of the Federal Reserve System (12 CFR 207), or for
the purpose of buying or carrying or trading in any securities under such
circumstances as to involve the Company in a violation of Regulation X of said
Board (12 CFR 224) or to involve any broker or dealer in a violation of
Regulation T of said Board (12 CFR 220). As used in this Section, the terms
"margin stock" and "purpose of buying or carrying" shall have the meanings
assigned to them in said Regulation U. No part of the proceeds from the sale of
the Notes will be used, directly or indirectly, for any payments to: (a) any
person, entity or country on the SDN List or the Blocked Persons List
administered by the OFAC and/or any other similar lists administered by OFAC
pursuant to any authorizing statute, Executive Order or regulation; (b) the
government of any country currently subject to an OFAC Sanctions Program; or (c)
any governmental official or employee, political party, official of a political
party, candidate for political office, anyone else acting in an official
capacity, or any agent of any such individual or entity, in order to obtain,
retain or direct business or obtain any improper advantage, in violation of the
United States Foreign Corrupt Practices Act of 1977, as amended.
(i) Disclosure of Transactions and Other Material Information.
The Company shall file a current report on Form 8-K (the "8-K FILING") on or
before 8:30 a.m., New York City time, on the first business day following the
date hereof, in the form required by the Exchange Act, relating to the
transactions contemplated by the Transaction Documents and attaching the
material Transaction Documents, or forms thereof, as exhibits to such filing. At
the
21
time of the 8-K Filing, the Company shall not have provided any Purchaser with
any material, nonpublic information that is not disclosed in the 8-K Filing.
(j) Material Non Public Information. Other than as set forth
in the 8-K Filing, the Company covenants and agrees that neither it nor any
other person or entity acting on its behalf has provided or will provide any
Purchaser or its agents or counsel with any information that constitutes
material non-public information, unless prior thereto such Purchaser shall have
executed a written agreement regarding the confidentiality and use of such
information. The Company understands and confirms that the Purchasers shall be
relying on the foregoing representations in effecting transactions in securities
of the Company.
(k) Listing. The Company agrees that (i) if the Company
applies to have the Common Stock traded on any other national or regional
securities exchange other than the Principal Market (a "TRADING MARKET"), it
will include in such application the Underlying Securities and will take such
other action as is necessary or desirable to cause the Underlying Securities to
be listed on such other Trading Market as promptly as possible, and (ii) it will
take all action reasonably necessary to continue the listing and trading of its
Common Stock on a Trading Market and will use its reasonable best efforts to
comply in all material respects with the Company's reporting, filing and other
obligations under the bylaws or rules of the Trading Market.
(l) PORTAL. The Company will cause the Notes to be eligible
for trading on PORTAL.
(m) Certified Copy of Articles. Within ten (10) business days
after the Closing Date, the Company shall deliver to the Purchasers (i) a true,
correct and complete copy of the Restated Articles of Incorporation of the
Company and all amendments thereto certified by an appropriate official of the
Republic of Panama together with an English translation thereof and (ii) a
certificate issued by the Public Registry Office of the Republic of Panama as of
a date within ten (10) business days of the Closing Date certifying the due
incorporation, formation or organization of the Company, its existence and that
it has not been dissolved.
(n) General Solicitation in the Republic of Panama. None of
the Company, any of its affiliates or any person acting on behalf of the Company
or such affiliate will solicit any offer to buy or offer or sell the Securities
publicly or by means of any form of general solicitation or general advertising
(including but not limited to any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or
broadcast over television or radio) in the Republic of Panama or to persons
domiciled in the Republic of Panama. The Company, any of its affiliates or any
person acting on behalf of the Company or such affiliate will exclusively offer
or sell the Securities outside the Republic of Panama or to persons domiciled
outside the Republic of Panama.
22
6. Conditions to the Purchasers' Obligations. The obligation of each
Purchaser hereunder to purchase the Firm Notes on the Closing Date is subject to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) the representations and warranties of the Company set
forth in Section 3 above are true and correct in all material respects (except
for those representations and warranties already qualified by materiality, which
such representations and warranties shall be true and correct in all respects)
on and as of the Closing Date as if made on and as of the Closing Date and the
Company shall have complied in all material respects with all agreements and all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date;
(b) the Purchasers shall have received on and as of the
Closing Date a certificate of an executive officer of the Company, with specific
knowledge about the Company's financial matters, reasonably satisfactory to the
Purchasers, to the effect set forth in Section 6(a) above and to the further
effect that except as disclosed in the Exchange Act Documents filed as of the
date hereof, there has not occurred any Material Adverse Change since the date
of the Latest 10-Q;
(c) Conner & Winters, LLP, counsel for the Company, shall have
furnished to the Purchasers their written opinion, dated the Closing Date, in
substantially the form attached hereto as Exhibit C;
(d) Arias, Fabrega & Fabrega, counsel for the Company, shall
have furnished to the Purchasers their written opinion, dated the Closing Date,
in substantially the form attached hereto as Exhibit D;
(e) subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have occurred any downgrading,
nor shall any public notice have been given of (i) any intended downgrading or
(ii) any review or possible change that does not indicate an improvement in the
rating accorded any securities of or guaranteed by the Company by any
"nationally recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act;
(f) subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall have been no suspension or material
limitation of trading in the Common Stock on the Principal Market;
(g) the Company shall have duly executed each of the other
Transaction Documents;
(h) the Company shall have delivered to the Purchasers a true,
correct and complete copy of the Restated Articles of Incorporation of the
Company and all amendments thereto certified by the Company's Secretary as of
the Closing Date;
23
(i) the Company shall have delivered to the Purchasers
certificates of the Secretary of State of the state or jurisdiction of
incorporation, formation or organization of each of the Company's significant
subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X)
incorporated, formed or organized in the United States certifying the due
incorporation, formation or organization and the good standing of such entities
as of a date within ten (10) business days of the Closing Date;
(j) the Notes shall have been approved for trading on PORTAL,
subject only to notice of issuance at or prior to the time of purchase;
(k) the Company shall have obtained all governmental,
regulatory or third-party consents and approvals, if any, necessary to be
obtained prior to the Closing Date for the sale of the Securities;
(l) the Company shall have delivered to the Purchaser such
other documents relating to the transactions contemplated by this Agreement as
the Purchaser or its counsel may reasonably request;
(m) each other Purchaser shall have purchased from the Company
the Firm Notes in the aggregate principal amounts set forth opposite each such
Purchaser's name in column (1) on Schedule I hereto; and
(n) the Company shall have delivered to such Purchasers a
certificate, executed by the Secretary of the Company dated as of the Closing
Date, as to (i) the resolutions consistent with Section 3(g) as adopted by the
Company's Board of Directors in a form reasonably acceptable to such Purchaser,
(ii) the Restated Articles of Incorporation, as in effect at the Closing, and
(iii) the Bylaws, as in effect at the Closing.
If it elects to exercise the Option, the obligation of a Purchaser to purchase
the Additional Notes hereunder on an Option Closing Date is subject to the same
conditions as are set forth above in clauses (a)-(n) with respect to the Firm
Notes, provided that each reference to the Closing Date in this Section 6 shall,
with respect to the closing of the sale of any of the Additional Notes, be
deemed to be a reference to the applicable Option Closing Date.
7. Conditions to the Company's Obligations. The obligations of the
Company hereunder to issue and sell the Firm Notes to each Purchaser on the
Closing Date, or the Additional Notes to any Purchaser on its Option Closing
Date, as applicable, are subject to the performance by the Purchasers of all of
their obligations hereunder, the accuracy in all material respects of the
representations and warranties of the Purchasers contained herein on and as of
the Closing Date, or such Option Closing Date, as applicable, as if made on and
as of the Closing Date, or the Option Closing Date, as applicable, and the due
execution by the Purchasers of all other Transaction Documents to which the
Purchasers are parties.
8. Indemnity and Contribution. The Company and WUSA jointly and
severally agree to indemnify and hold harmless each Purchaser and each of their
respective
24
directors, officers, employees, members, representatives and agents and each
person, if any, who controls each Purchaser within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act (each, an
"INDEMNIFIED PERSON"), from and against any and all losses, claims, damages,
penalties, fees and liabilities (collectively, "LOSSES"), as incurred,
including, without limitation, the reasonable legal fees and other reasonable
expenses of one counsel (in addition to any local counsel) incurred
(irrespective of whether any such Indemnified Person is a party to the action
for which indemnification hereunder is sought) in connection with any suit,
action or proceeding or any claim, as incurred, as a result of, or arising out
of or relating to (a) any misrepresentation or breach of any representation or
warranty made by the Company in the Transaction Documents, (b) any breach of any
covenant, agreement or obligation of the Company contained in the Transaction
Documents or (c) any cause of action, suit or claim brought or made against such
Indemnified Person by a third party (including for these purposes a derivative
action brought on behalf of the Company) and arising out of or resulting from
the execution, delivery or performance by the Company of the Transaction
Documents or any other certificate, instrument or document contemplated hereby
or thereby; provided that the Company and WUSA shall not be required to
indemnify any of the Indemnified Persons to the extent Losses arise or result
from a material misrepresentation or material breach of any representation or
warranty made by such Purchaser or Indemnified Person contained in the
Transaction Documents, or a material breach of any covenant, agreement or
obligation by such Purchaser or Indemnified Person contained in the Transaction
Documents.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Indemnified Person, such Indemnified Person shall promptly notify the person
or persons against whom such indemnity may be sought (the "INDEMNIFYING PERSON")
in writing, and the Indemnifying Person, upon request of the Indemnified Person,
shall retain one counsel (in addition to any local counsel) reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person and
any others the Indemnifying Person may designate in such proceeding and shall
pay the reasonable fees and expenses of such counsel related to such proceeding;
provided, however, that failure to so notify the Indemnifying Person shall not
relieve such Indemnifying Person from any liability hereunder except to the
extent the Indemnifying Person is prejudiced as a result thereof. In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary, (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person, the Indemnifying Person proposes to have the same counsel
represent it and the Indemnified Person, and representation of both parties by
the same counsel would, in the opinion of counsel, be inappropriate due to
actual or potential differing interests between them. In no event shall the
Indemnifying Person be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. It is understood that the
25
Indemnifying Person shall reimburse all such reasonable fees and expenses
actually incurred upon delivery to the Indemnifying Person of reasonable
documentation therefor setting forth such expenses in reasonable detail unless a
bona fide dispute exists with respect to such expenses. The Indemnifying Person
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final,
non-appealable judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any Losses by reason of such
settlement or judgment. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is a party,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding and no admission of fault on the part of the Indemnified Person.
Payments made by any Indemnifying Person under this Section 8 shall be
limited to the amount of any liability or damage that remains after deducting
therefrom any insurance proceeds and any indemnity, contribution or other
similar payment recovered by the Indemnified Person from any third party with
respect thereto.
Notwithstanding anything to the contrary set forth herein, no
Indemnified Person shall be entitled to be indemnified pursuant to this Section
8 for any Loss to the extent such Loss arises as a result of the Indemnified
Person's gross negligence or willful misconduct; provided, however, that the
Indemnifying Person shall pay the expenses incurred by any such Indemnified
Person hereunder, as such expenses are incurred, in connection with any
proceeding in advance of the final disposition, so long as the Indemnifying
Person receives an undertaking by such Indemnified Person to repay the full
amount advanced if there is a final determination that such Indemnified Person
failed the standards set forth above or that such Indemnified Person is not
entitled to indemnification as provided herein for other reasons; and provided,
further, that the termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that such Indemnified Person was
either grossly negligent or engaged in willful misconduct.
The remedies provided for in this Section 8 are not exclusive and shall
not limit any rights or remedies that may otherwise be available to any
Indemnified Person at law or in equity.
In circumstances in which the indemnity agreement provided for in the
preceding paragraphs of this Section 8 is unavailable to, or insufficient to
hold harmless, an Indemnified Person in respect of any Losses, each Indemnifying
Person, in order to provide for just and equitable contribution, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such Losses, including reasonable legal or other expenses incurred, as
incurred, in such proportion as is appropriate to reflect (i) the relative
benefits received by the Indemnifying Person on the one hand and the Indemnified
Person on the other from the offering of the Securities or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by applicable
law, not only such relative benefits but also the relative fault of the
Indemnifying
26
Person on the one hand and the Indemnified Person on the other in connection
with the breach that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative fault of the parties shall be
determined by reference to, among other things, any equitable considerations
appropriate in the circumstances. The Company and the Purchasers agree that it
would not be equitable if the amount of such contribution were determined by pro
rata or per capita allocation or by any other method of allocation that does not
take into account the equitable considerations referred to in the first sentence
of this paragraph. For purposes of this paragraph, each person, if any, who
controls any of the Purchasers within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Purchaser. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The indemnity agreements and contribution provisions contained in this
Section 8 and the representations and warranties of the Company, and the
Purchasers set forth in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Purchaser or any person controlling
any Purchaser or by or on behalf of the Company, its officers or directors or
any other person controlling the Company and (iii) acceptance of and payment for
any of the Securities.
9. Lock-Up. The Company hereby agrees that, without the prior written
consent of the holders of a majority in aggregate principal amount of the Notes
then outstanding ("MAJORITY HOLDERS"), it will not, (x) during the period ending
ninety (90) days after the initial Closing Date, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise, and (y) during the period ending on the later of the date
sixty (60) days after the Closing Date and the date the Shelf Registration
Statement (as defined in and required under the Registration Rights Agreement)
is initially filed, file with the SEC a registration statement under the
Securities Act relating to any additional shares of its Common Stock or
securities convertible into, or exchangeable or exercisable for, any shares of
its Common Stock; provided, that the Company shall not cause any other
registration statement to be declared effective prior to the time that the Shelf
Registration Statement is declared effective. The foregoing sentence shall not
apply to the following issuances ("EXCLUDED ISSUANCES"), or to the filing and
declaration of effectiveness or automatic effectiveness of registration
statements with respect thereto: (i) the sale or issuance of the Securities
under the Transaction Documents; (ii) the grant by the Company of equity
issuances under its equity incentive and stock option plans, including any such
plans approved by the Company's Board of Directors and stockholders in the
future and any equity issuances in exchange for any existing employee stock
27
options for the purpose of repricing such employee stock options; (iii) the
grant or issuance by the Company of Common Stock options or warrants as full or
partial payment of a customary advisory fee payable to a nationally recognized
bank or investment bank in connection with a strategic transaction or financing;
(iv) the issuance by the Company of any shares of Common Stock upon the exercise
of an option or warrant or the conversion of a security (including, for the
avoidance of doubt, the 2.75% Notes) outstanding on the date hereof (provided
that the terms of such options or warrants or securities are not amended or
modified in any manner after the date hereof) or an option or warrant issued or
granted in compliance with this paragraph; (v) shares issued pursuant to the
Company's employee stock plans or 401(k) plan, including any such plans approved
by the Company's Board of Directors and stockholders in the future; (vi) shares
of Common Stock issued in connection with any stock split or subdivision, stock
dividend or recapitalization of the Company; (vii) shares of Common Stock or
warrants issued in connection with acquisitions by or of the Company, whether by
merger, consolidation, sale of assets, sale or exchange of stock or otherwise,
occurring after the Closing Date, the primary purpose of which is not to raise
capital; and (viii) shares of Common Stock or warrants issued in connection with
a joint venture, strategic alliance or other commercial relationship, the
primary purpose of which is not to raise capital.
In addition, the Company agrees to use its best efforts during the
period ending ninety (90) days after the Closing Date to prevent its executive
officers and directors, in the aggregate, from taking any of the actions set
forth in clauses (i) and (ii) in the immediately preceding paragraph with
respect to in excess of 250,000 shares of Common Stock in the aggregate for all
executive officers and directors without the prior written consent of the
Majority Holders; provided, however, that the foregoing covenant shall not apply
to (i) any bona fide gift and (ii) sales of shares by such persons of Common
Stock purchased under the Company's employee stock plans and 401(k) plan
approved by the Company's Board of Directors and stockholders now or in the
future.
10. Termination. The Purchasers may terminate this Agreement by notice
given to the Company executed by the Purchasers purchasing more than fifty
percent (50%) of the aggregate principal amount of the Firm Notes hereunder as
set forth on Schedule I hereto, (except in the case of clauses (i) and (v),
which termination right may be exercised by each Purchaser as to itself but not
the other Purchasers), if prior to the Closing Date (i) in the sole discretion
of a Purchaser a Material Adverse Effect shall have occurred between the date
hereof and the Closing Date, (ii) trading in any securities of or guaranteed by
the Company or securities generally on the New York Stock Exchange, Inc. shall
have been suspended or materially limited, (iii) a material disruption in
securities settlement, payment or clearance services in the United States shall
have occurred, (iv) any moratorium on commercial banking activities shall have
been declared by United States or New York State authorities, (v) there shall
have been (A) an outbreak or escalation of hostilities between the United States
and any foreign power, or (B) an outbreak or escalation of any other
insurrection or armed conflict involving the United States or any other national
or international calamity or emergency, or (C) any material change in the
financial markets of the United States which, in the case of (A), (B) or (C)
above and in the sole judgment of a Purchaser, makes it impracticable or
inadvisable to proceed with the transactions
28
contemplated by this Agreement or (vi) the failure of the Company to satisfy the
conditions set forth in Section 6 of this Agreement on or before the date that
is ten (10) calendar days after the date of this Agreement; provided, in each
case, that the party seeking to terminate this Agreement is not then in material
breach of this Agreement.
11. Effectiveness. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
12. Parties. This Agreement shall inure to the benefit of and be
binding upon the Company and the Purchasers, any controlling persons referred to
herein and their respective successors and, with respect to the Purchasers,
their Permitted Assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person, firm or corporation any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. No purchaser of Securities from the
Purchasers shall be deemed to be a successor by reason merely of such purchase,
and rights under this Agreement may be assigned by the Purchasers only to
Permitted Assigns. For purposes of this Section 12, "PERMITTED ASSIGNS" shall
mean: (i) an "affiliate" (as defined in Rule 501(b) of Regulation D) of the
Purchaser to whom Securities are assigned and (ii) a pledgee (or a transferee of
such pledgee) that succeeds to the Securities in connection with a bona fide
margin account or other loan or financing arrangement secured by the Securities.
13. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed by registered or
certified mail, postage prepaid, return receipt requested, or otherwise
delivered by hand or by messenger or by facsimile transmission.
Notices to the Purchasers shall be given at the address as set forth on
Schedule I hereto, with a copy to (solely for informational purposes):
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Telephone: (212) 756-2000
Facsimile: (212) 593-5955
Attention: Eleazer Klein, Esq.
Notices to the Company shall be given to the Company at:
Willbros Group, Inc.
c/o Willbros USA, Inc.
4400 Post Oak Parkway
Suite 1000
Houston, Texas 77027
Attention: General Counsel
Telephone: (713) 403-8000
Facsimile: (713) 403-8068
29
with a copy to (solely for informational purposes):
Conner & Winters, LLP
4000 One Williams Center
Tulsa, Oklahoma 74172
Telephone: (918) 586-5711
Facsimile: (918) 586-8548
Attention: Mark D. Berman, Esq.
14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. To the fullest extent
permitted by applicable law, the Company hereby irrevocably submits to the
non-exclusive jurisdiction of any New York State court or Federal court sitting
in the County of New York in respect of any suit, action or proceeding arising
out of or relating to the provisions of this Agreement and irrevocably agree
that all claims in respect of any such suit, action or proceeding may be heard
and determined in any such court. The parties hereto hereby waive, to the
fullest extent permitted by applicable law, any objection that they may now or
hereafter have to the laying of venue of any such suit, action or proceeding
brought in any such court, and any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
15. Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original and all of which together shall constitute one and
the same instrument; provided that a signature provided by facsimile or other
electronic transmission shall be considered due execution and shall be binding
upon the signatory thereto with the same force and effect as if the signature
were an original, not a facsimile signature.
16. Severability. If any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, portions of such provision, or such provision in its entirety, to the
extent necessary, shall be severed from this Agreement and the balance of this
Agreement shall be enforceable in accordance with its terms.
17. Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
18. Amendments and Waivers. Any term of this Agreement may be amended,
modified or supplemented only with the written consent of the Company and the
Majority
30
Holders. Neither this Agreement nor any term hereof may be waived, discharged or
terminated (either generally or in a particular instance and either
retroactively or prospectively) other than by a written instrument signed by the
party against whom enforcement of any such waiver, discharge or termination is
sought.
19. Entire Agreement. This Agreement and the documents referenced
herein constitutes the full and entire understanding and agreement among the
parties with regard to the subject matters hereof.
20. Survival. The respective representations, warranties, covenants and
agreements of the Company and the Purchasers set forth in or made pursuant to
this Agreement will remain in full force and effect and will survive delivery of
and payment for the Securities sold hereunder and any termination of this
Agreement.
21. Independence of Purchasers. The obligations of each Purchaser under
any Transaction Document are several and not joint with the obligations of any
other Purchaser, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser under any Transaction
Document. Nothing contained herein or in any other Transaction Document, and no
action taken by the Purchasers pursuant hereto or thereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Purchasers are in any
way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents, and the Company
acknowledges that the Purchasers are not acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction
Documents. The Purchasers represent and warrant that they are not acting in
concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents and confirm that they have or legal
counsel has on their behalf independently participated in the negotiation of the
transaction contemplated hereby. Each Purchaser shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any Purchaser to be joined as an additional
party in any proceeding for such purpose.
22. Transfers. Each Purchaser agrees to offer, sell or otherwise
transfer the Securities, prior to the date which is two (2) years after the
original issue date of the Securities, only (a) to the Company or any parent or
subsidiary thereof, (b) for so long as the Securities are eligible for resale
pursuant to Rule 144A, to a person it reasonably believes is a "Qualified
Institutional Buyer" (as defined in Rule 144A) that purchases for its own
account or for the account of a Qualified Institutional Buyer to which notice is
given that the transfer is being made in reliance on Rule 144A, (c) pursuant to
a registration statement which has been declared effective under the Securities
Act or (d) pursuant to another available exemption from the registration
requirements of the Securities Act, subject to the Company's and the Trustee's
right prior to any such offer, sale or transfer pursuant to clause (d) to
require the delivery of an opinion of counsel, certification and/or other
information reasonably satisfactory to each of them, and in
31
each of the foregoing cases, a certificate of transfer in the form specified in
the Indenture and the Notes is completed and delivered by the transferor to the
Trustee.
23. Submission to Jurisdiction; Appointment of Agent for Service.Each
party hereto submits to the exclusive jurisdiction of the competent courts of
the State of New York and the courts of the United States of America, in each
case located in The City of New York, New York over any suit, action or
proceeding arising under or in connection with this Agreement or the
transactions contemplated hereby. Each party hereto waives any objection that it
may have to the venue of any suit, action or proceeding arising under or in
connection with this Agreement or the transactions contemplated hereby in the
courts of the State of New York or the courts of the United States of America,
in each case located in The City of New York, New York, or that such suit,
action or proceeding brought in the courts of the State of New York or the
courts of the United States of America, in each case located in The City of New
York, New York, was brought in an inconvenient court and agrees not to plead or
claim the same. In furtherance of the foregoing, the Company hereby irrevocably
designates and appoints CT Corporation, 111 Eighth Avenue, New York, New York
10011, as the agent of the Company to receive service of all process brought
against the Company with respect to any such suit, action or proceeding in any
such court in The City of New York, New York, such service being hereby
acknowledged by the Company to be effective and binding service in every
respect. Copies of any such process so served shall also be given to the Company
in accordance with Section 13 hereof, but the failure of the Company to receive
such copies shall not affect in any way the service of such process as
aforesaid. If for any reason CT Corporation shall resign or otherwise cease to
act as such agent, the Company hereby irrevocably agrees to promptly designate
and appoint a new agent.
24. Judgment Currency. The Company agrees to pay the Purchasers for any
loss incurred, as incurred, as a result of any judgment or award in connection
with this Agreement being expressed in a currency (the "JUDGMENT CURRENCY")
other than the currency in which such loss or damage is denominated or in which
the Purchasers' obligation is denominated, as the case may be (the "OBLIGATION
CURRENCY") and as a result of any variations as between (i) the spot rate of
exchange in New York at which the Judgment Currency could have been converted
into the Obligation Currency as of the date such judgment or award is entered
and (ii) the spot rate of exchange in New York on the date on which such
judgment or award is paid. The foregoing agreement shall constitute a separate
and independent obligation of the Company and shall continue in full force and
effect notwithstanding any such judgment or order as aforesaid. The term "spot
rate of exchange" shall include any premiums and costs of exchange payable in
connection with the purchase of, or conversion into, the relevant currency.
[SIGNATURE PAGE FOLLOWS]
32
If the foregoing is in accordance with your understanding, please sign and
return four counterparts hereof.
Very truly yours,
WILLBROS GROUP, INC.
By: /s/ WARREN L. WILLIAMS
-----------------------------------------
Name: Warren L. Williams
Title: Senior Vice President,
Chief Financial Officer and
Treasurer
WILLBROS USA, INC.
By: /s/ WARREN L. WILLIAMS
-----------------------------------------
Name: Warren L. Williams
Title: Senior Vice President,
Chief Financial Officer and
Treasurer
PURCHASERS:
HIGHBRIDGE INTERNATIONAL LLC
By: HIGHBRIDGE CAPITAL MANAGEMENT, LLC
By: /s/ ADAM J. CHILL
-----------------------------------------
Name: Adam J. Chill
Title: Managing Director
PURCHASERS:
PORTSIDE GROWTH & OPPORTUNITY FUND
By: /s/ JEFFREY SOLOMON
-----------------------------------------
Name: Jeffrey Solomon
Title: Managing Member
PURCHASERS:
SHEPHERD INVESTMENTS INTERNATIONAL, LTD.
By: Stark Offshore Management, LLC
Its: Investment Manager
By: /s/ MICHAEL A. ROTH
-----------------------------------------
Name: Michael A. Roth
Title: Managing Member
PURCHASERS:
KAMUNTING STREET MASTER FUND
By: /s/ GEORGE MARINOPOULOS
-----------------------------------------
Name: George Marinopoulos
Title: Director
PURCHASERS:
CITADEL EQUITY FUND, LTD.
By: Citadel Limited Partnership, Portfolio Manager
By: Citadel Investment Group, L.L.C., its General
Partner
By: /s/ ADAM C. COOPER
----------------------------------------------
Name: Adam C. Cooper
Title: Senior Managing Director
& General Counsel
PURCHASERS:
SUTTONBROOK CAPITAL MANAGEMENT LP
By: /s/ BRETT SPECTOR
-----------------------------------------
Name: Brett Spector
Title: Chief Operating Officer
PURCHASERS:
KINGS ROAD INVESTMENTS LTD.
By: /s/ ERIK M. W. CASPERSEN
-----------------------------------------
Name: Erik M. W. Caspersen
Title: Authorized Signatory
PURCHASERS:
CAPITAL VENTURES INTERNATIONAL
By: Heights Capital Management, Inc.,
its authorized agent
By: /s/ MARTIN KOBINGER
-----------------------------------------
Name: Martin Kobinger
Title: Investment Manager
Schedule I
Schedule of Purchasers
(1) (2) (3) (4)
NAME AND ADDRESS OF PRINCIPAL PRINCIPAL PURCHASE LEGAL REPRESENTATIVE'S
PURCHASER AMOUNT AMOUNT OF PRICE NAME, ADDRESS AND
OF FIRM ADDITIONAL FACSIMILE NUMBER
NOTES NOTES
Portside Growth & Opportunity Fund $15,000,000 $4,500,000 $15,000,000 Schulte Roth & Zabel LLP,
c/o Ramius Capital Group, L.L.C. 919 Third Avenue,
666 Third Avenue, 26th Flr. New York, NY 10022
New York, NY 10017 Telephone: (212) 756-2000
Attention: Jeffrey Smith Facsimile: (212) 593-5955
Owen Littman Attention: Eleazer Klein, Esq.
Facsimile (212) 845-7999
Telephone: (212) 845-7955
Residence: Cayman Islands
Highbridge International LLC $15,000,000 $4,500,000 $15,000,000 Schulte Roth & Zabel LLP,
c/o Highbridge Capital Management, LLC 919 Third Avenue,
9 West 57th Street, 27th Floor New York, NY 10022
New York, NY 10019 Telephone: (212) 756-2000
Attention: Ari J. Storch Facsimile: (212) 593-5955
Adam J. Chill Attention: Eleazer Klein, Esq.
Facsimile: (212) 751-0755
Telephone: (212) 287-4720
Residence: Cayman Islands
Kamunting Street Master Fund, Ltd. $10,000,000 $3,000,000 $10,000,000
c/o Kamunting Street Capital, L.P.
140 East 45th Street, 15th Fl.
New York, NY 10017
Attention: Christopher Falsetta
Joe Lu
Facsimile: (212) 490-4360
Telephone: (212) 490-4343
Residence: Cayman Islands
SuttonBrook Capital Management LP $4,000,000 $1,200,000 $4,000,000
598 Madison Avenue, 6th Fl.
New York, NY 10022
Attention: Chris Casey
Facsimile: (212) 308-2597
Telephone: (212) 588-6646
Residence: Cayman Islands
(1) (2) (3) (4)
NAME AND ADDRESS OF PRINCIPAL PRINCIPAL PURCHASE LEGAL REPRESENTATIVE'S
PURCHASER AMOUNT AMOUNT OF PRICE NAME, ADDRESS AND
OF FIRM ADDITIONAL FACSIMILE NUMBER
NOTES NOTES
Citadel Equity Fund, Ltd. $10,000,000 $3,000,000 $10,000,000
c/o Citadel Limited Partnership
131 South Dearborn Street
Chicago, IL 60603
Attention: David Grossman
Facsimile: (312) 267-7745
Telephone: (212) 395-2632
Residence: Cayman Islands
Shepherd Investments International, Ltd. $3,500,000 $1,050,000 $3,500,000
c/o Stark Offshore Management, LLC
3600 South Lake Drive
St. Francis, WI 53235
Attention: Brian Davidson
Facsimile: (414) 294-7700
Telephone: (414) 294-7000
Residence: British Virgin Islands
Capital Ventures International $4,000,000 $1,200,000 $4,000,000
c/o Heights Capital Management, Inc.
101 California Street, Suite 3250
San Francisco, California 94111
Attention: Martin Kobinger
Sam Winer
Facsimile: (413) 403-6525
Telephone: (413) 403-6500
Residence: Cayman Islands
Kings Road Investments $3,500,000 $1,050,000 $3,500,000
598 Madison Avenue
New York, New York 10022
Attn: Erik Caspersen and Brandon Jones
Telephone (212) 359-7300
Facsimile (212) 359-7303
Residence: Cayman Islands
---------------- ---------------- ----------------
$65,000,000 $19,500,000 $65,000,000
================ ================ ================
Exhibit A
FORM OF INDENTURE
Exhibit B
FORM OF REGISTRATION RIGHTS AGREEMENT
Exhibit C
FORM OF OPINION
CONNER & WINTERS, LLP
Exhibit D
FORM OF OPINION
ARIAS, FABREGA & FABREGA