Exhibit 10.1

Prudential Investment Management, Inc. (“PIM”)

The Prudential Insurance Company of America (“Prudential”)

Prudential Retirement Insurance and Annuity Company (“PRIAC”)

Each Prudential Affiliate under the Note Agreement referred to below

c/o Prudential Capital Group

Four Embarcadero Center, Suite 2700

San Francisco, California 94111

July 23, 2010

NORTHWEST PIPE COMPANY

5721 SE Columbia Way, Suite 200

Vancouver, Washington 98661

 

  Re: Fifth Amendment and Limited Consent to Amended and Restated Note Purchase
and Private Shelf Agreement dated as of May 31, 2007

Ladies and Gentlemen:

Reference is made to the Amended and Restated Note Purchase and Private Shelf
Agreement, dated as of May 31, 2007 (as amended, restated, supplemented or
otherwise modified from time to time, the “Note Agreement”), by and between
Northwest Pipe Company, an Oregon corporation (the “Company”), on the one hand,
and PIM, Prudential, PRIAC and each Prudential Affiliate (as therein defined)
that becomes bound by certain provisions thereof (together with PIM, Prudential
and PRIAC and their respective successors and Transferees, collectively, the
“Purchasers”), on the other hand. Capitalized terms used and not otherwise
defined herein shall have the meanings provided in the Note Agreement (after
giving effect to any amendments of such terms in this letter agreement).

1. Amendments. Pursuant to the request of the Company and the provisions of
paragraph 11C of the Note Agreement, and subject to the terms and conditions of
this letter agreement, the Purchasers hereby agree with the Company that the
Note Agreement shall be amended as follows:

(a) Clause (i) of paragraph 5A is hereby amended and restated in its entirety to
read as follows:

“(i)(A) within 121 days after the end of the first fiscal quarter of the
Company’s 2010 fiscal year, and within 60 days after the end of each other
quarterly fiscal period in each fiscal year of the Company (other than the last
quarterly period), segment reporting, consolidated statements of income and cash
flows and a consolidated statement of shareholders’ equity of the Company and
its Subsidiaries for the period from the beginning of the current fiscal year to
the end of such quarterly period, and a consolidated balance sheet of the
Company and its Subsidiaries as at the end of such quarterly period, setting
forth in each case in comparative form figures for the corresponding period in
the preceding fiscal year, all in reasonable detail and prepared in accordance
with GAAP and certified by an authorized financial officer of the Company as
fairly presenting, in all material respects, the consolidated financial position
of the companies being reported on their consolidated results of operations and
changes in financial position, subject to changes resulting from year-end
adjustments and the absence of all required footnotes;

--------------------------------------------------------------------------------

Northwest Pipe Company

July 23, 2010

Page 2

 

(B) within 60 days after the end of the first fiscal quarter of the Company’s
2010 fiscal year, segment reporting and consolidated statements of income and
cash flows of the Company and its Subsidiaries as at the end of such fiscal
quarter, and a consolidated balance sheet of the Company and its Subsidiaries as
at the end of such fiscal quarter, setting forth in each case in comparative
form figures for the corresponding period in the preceding fiscal year, all in
reasonable detail, and certified by an authorized financial officer of the
Company as fairly presenting, in all material respects, the consolidated
financial position of the companies being reported on their consolidated results
of operations and changes in financial position in accordance with the Company’s
accounting practices used in the 2008 fiscal year end audited reports, without
regard to any conclusions arising out of the internal investigation being
conducted by the Audit Committee of the Company’s Board of Directors or any
year-end adjustments resulting from the 2009 audited financial information
provided under the clause (ii)(A) of this paragraph 5A;”

(b) Clause (ii) of paragraph 5A is hereby amended and restated in its entirety
to read as follows:

“(ii)(A) within 211 days after the end of the Company’s 2009 fiscal year, and
within 105 days after the end of each other fiscal year of the Company, segment
reporting, consolidated statements of income and cash flows and a consolidated
statement of shareholders’ equity of the Company and its Subsidiaries for such
year, and a consolidated balance sheet of the Company and its Subsidiaries as at
the end of such year, setting forth in each case in comparative form
corresponding consolidated figures from the preceding annual audit, all in
reasonable detail and prepared in accordance with GAAP and, as to the segment
reporting and consolidated statements, reported on by independent public
accountants of recognized national standing, selected by the Company whose
report shall be without a “going concern” or like qualification or exception and
without limitation as to scope of the audit;

(B) and within 105 days after the end of the Company’s 2009 fiscal year, segment
reporting (for revenue and gross margin only) and consolidated statements of
income and cash flows of the Company and its Subsidiaries for such fiscal year,
and a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such fiscal year, setting forth in each case in comparative form
corresponding consolidated figures from the preceding annual audit, all in
reasonable detail and, as to the segment reporting (for revenue and gross margin
only) and consolidated statements, certified by an authorized financial officer
of the Company as fairly presenting, in all material respects, the consolidated
financial position of the companies being reported on their consolidated results
of operations and changes in financial position in accordance with the Company’s
accounting practices used in the 2008 fiscal year end audited reports, without
regard to any conclusions arising out of the internal investigation being
conducted by the Audit Committee of the Company’s Board of Directors or any
year-end adjustments resulting from the 2009 audited financial information
provided under the preceding clause (ii)(A) of this paragraph 5A;”

--------------------------------------------------------------------------------

Northwest Pipe Company

July 23, 2010

Page 3

 

(c) Clause (iii) of paragraph 5B is hereby amended and restated in its entirety
to read as follows:

“(iii) On each of June 30, 2010, July 16, 2010 and July 30, 2010, deliver to
each holder of a Note a forecast prepared by management of the Company, in a
form satisfactory to the Required Holders, of the weekly cash flows of the
Company and its Subsidiaries for the periods commencing on July 5,
2010, July 19, 2010 and August 2, 2010, respectively, and ending 13 weeks
thereafter, together with a statement of the actual cash flows of the Company
and its Subsidiaries since the date of the then-most recently delivered cash
flow forecast and a description of material variances between forecast cash
flows and actual cash flows for such period; and”

(d) A new clause (iv) is hereby added to paragraph 5B in proper numeric order to
read as follows:

“(iv) No later than July 30, 2010, deliver to each holder of a Note a revised
financial projection model and business plan for the Company and its
Subsidiaries, in form and substance satisfactory to the Required Holders,
together with a written review and assessment thereof by an independent
certified public accountant or consultant acceptable to the Required Holders,
whose engagement arrangements (including engagement letter) shall also be
acceptable to the Required Holders.”

(e) Clause (v) of paragraph 7A is hereby amended and restated in its entirety to
read as follows:

“(v) the Company fails to perform or observe any agreement contained in
paragraphs 5A, 5B, 5J or paragraph 6; or”

(f) The defined term “Consolidated EBITDA” appearing in paragraph 10B is hereby
amended and restated in its entirety, as of March 30, 2010, as follows:

“ “Consolidated EBITDA” shall mean, for any period of determination, net income
(or loss) of the Company and its Subsidiaries on a consolidated basis for such
period as determined in accordance with GAAP, plus, to the extent deducted in
the calculation thereof, (i) consolidated interest expense, (ii) consolidated
depreciation and amortization expense, (iii) consolidated income tax expense of
the Company and its Subsidiaries, (iv) noncash expenses relating to stock
options, and (v) one-time accounting fees, attorneys fees and similar costs and
expenses of up to $1,700,000 in the aggregate incurred by the Company during the
first fiscal quarter of the Company’s 2010 fiscal year in connection with the
internal accounting investigation, and the related investigation by the U.S.
Securities and Exchange Commission, described in the Company’s Form 8-K filed
with the U.S. Securities and Exchange Commission on March 16, 2010. Consolidated
EBITDA shall not include (a) extraordinary gains; (b) expenses of up to
$1,500,000 arising from the sale of the Company’s Riverside, California

--------------------------------------------------------------------------------

Northwest Pipe Company

July 23, 2010

Page 4

 

facility and the consolidation of those operations with its Adelanto, California
facility and incurred within 12 months of the sale, so long as the net proceeds
received by the Company from such sale equal or exceed the amount of such
expenses; (c) any gains resulting from the sale or other disposition of capital
assets (other than gains on sales related to the sale-leaseback of equipment or
assets sold in the ordinary course of business); (d) undistributed earnings of
non-Subsidiary investments; (e) gains arising from changes in accounting
principals; (f) gains arising from the write-up of assets (except in the normal
course of business related to accounting reconciliation); (g) any gains
resulting from the early retirement or extinguishment of Debt; and (h) any
earnings of a Foreign Subsidiary of the Company to the extent that such Foreign
Subsidiary is not at the time permitted, whether by the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Foreign Subsidiary to convert such
earnings into United States currency or repatriate such earnings to the Company
or any other Domestic Subsidiary which is the parent corporation of such Foreign
Subsidiary. Notwithstanding anything to the contrary herein, if the Company or a
Subsidiary divests itself of a Subsidiary or a business unit (it being
understood and agreed that the sale of real property no longer used or useful in
the ongoing operations shall not be deemed to constitute the sale of a business
unit) or acquires a Person that becomes a Subsidiary or a group of assets
constituting a business unit, in either case during the relevant period of
computation for Consolidated EBITDA, then, solely for purpose of determining
Consolidated EBITDA, such divestiture or acquisition will be deemed to have been
consummated on the first day of the relevant period of computation; provided
that Consolidated EBITDA shall include the operating results of such a Person or
business unit prior to the date of its acquisition only if such operating
results are based on audited financial statements, pro forma financial reporting
for acquisitions or divestitures in accordance with the requirements of the SEC,
or financial statements that are otherwise reasonably satisfactory to the
Required Holders. Unless provided otherwise, Consolidated EBITDA shall be
calculated at any time of determination for the four consecutive fiscal quarters
ended immediately prior to such time. “

2. Agreement Regarding December 2009 Financial Covenants. The Purchasers hereby
agree with the Company that for purposes of determining compliance with the
financial covenants set forth in paragraph 6A of the Note Agreement which are to
be tested on, at or as of December 31, 2009, the Purchasers and the Company
shall use the financial data and other information set forth in the Company’s
audited financial statements for fiscal year 2009, which audited statements are
to be delivered to the Purchasers pursuant to clause (ii)(A) of paragraph 5A of
the Note Agreement, as amended and restated in Section 1(b) above.

3. Limited Consent Regarding Certain Financial Covenants. Pursuant to the
request of the Company and the provisions of paragraph 11C of the Note
Agreement, and subject to the terms and conditions of this letter agreement, the
Purchasers hereby consent to temporarily suspend the application of the
financial covenants set forth in each of paragraph 6A(1) (Consolidated Total
Debt to EBITDA Ratio), paragraph 6A(4) (Consolidated Senior Funded Debt to
EBITDA Ratio) and paragraph 6A(5) (Minimum Consolidated EBITDA) of the Note
Agreement, in each case, for the period from April 1, 2010 through, but
excluding, July 30, 2010; provided however, that nothing in this section 3 shall
be construed to suspend or waive the

--------------------------------------------------------------------------------

Northwest Pipe Company

July 23, 2010

Page 5

 

Company’s obligations (a) to be in compliance with the foregoing financial
covenants as of, and after, July 30, 2010, and (b) to deliver an Officer’s
Certificate no later than August 30, 2010 pursuant to paragraph 5A of the Note
Agreement, demonstrating compliance with, among other things, each of the
financial covenants set forth in paragraph 6A of the Note Agreement as of
June 30, 2010. Notwithstanding anything to the contrary in the Note Agreement,
the Company and the Purchasers hereby agree that any failure to deliver such
Officer’s Certificate (referred to in the preceding sentence) shall constitute
an immediate Event of Default.

4. Limitation of Modifications. Each amendment, consent and other modification
set forth in this letter agreement shall be limited precisely as written and
shall not be deemed to be (a) an amendment, consent or waiver of any other terms
or conditions of the Note Agreement or any other document related to the Note
Agreement or (b) a consent to any future amendment, consent or waiver. Except as
expressly set forth in this letter, the Note Agreement and the documents related
to the Note Agreement shall continue in full force and effect.

5. Representations and Warranties. The Company hereby represents and warrants as
follows: (a) no Default or Event of Default has occurred and is continuing
(other than the Defaults or Events of Default which may have existed prior to,
but not after, the effectiveness of this letter agreement), or would result from
the transactions contemplated by this letter agreement; (b) the Company’s
execution, delivery and performance of the Note Agreement, as modified by this
letter agreement, have been duly authorized by all necessary corporate and other
action and do not and will not require any registration with, consent or
approval of, or notice to or action by, any Person (including any governmental
authority) in order to be effective and enforceable; (c) the Note Agreement, as
modified by this letter agreement, constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency or other similar laws of general application relating to or affecting
the enforcement of creditors’ rights or by general principles of equity; and
(d) each of the representations and warranties set forth in paragraph 8 of the
Note Agreement is true, correct and complete as of the date hereof (except to
the extent such representations and warranties expressly relate to another date,
in which case such representations and warranties are true, correct and complete
as of such other date).

6. Conditions to Effectiveness. This letter agreement shall become effective on
the date on which: (a) the Purchasers shall have received a fully executed and
delivered counterpart of this letter agreement executed by the Company; (b) the
Purchasers shall have received a fully executed and delivered copy of the fifth
amendment to Bank Credit Agreement in form and substance satisfactory to the
Purchasers, and each of the conditions precedent in such amendment shall have
been previously or concurrently satisfied; (c) the Company shall have paid to,
or as directed by, PIM in immediately available funds an amendment fee equal to
0.114% of the principal amount outstanding on the Notes; and (d) the Company
shall have paid Bingham McCutchen LLP in immediately available funds its accrued
and unpaid legal fees and expenses.

--------------------------------------------------------------------------------

Northwest Pipe Company

July 23, 2010

Page 6

 

7. Release; Covenant Not to Sue.

(a) The Company hereby absolutely and unconditionally waives, releases, remises
and forever discharges the Purchasers, and any and all of their respective
participants, parent corporations, subsidiary corporations, affiliated
corporations, related funds, insurers, indemnitors, officers, directors,
shareholders, trustees, agents, employees, consultants, experts, advisors,
attorneys, and each of their respective successors and assigns (each a “Released
Party”), from any and all claims, suits, investigations, proceedings, demands,
obligations, liabilities, damages, losses, costs, expenses, or causes of action
of any kind, nature or description, whether based in law, equity, contract,
tort, implied or express warranty, strict liability, criminal or civil statute,
common law, or under any state or federal law or otherwise, of any kind or
character, known or unknown, past or present, liquidated or unliquidated,
suspected or unsuspected, which the Company has had, now has, or might hereafter
have, or has made claim to have against any such Released Party with respect to
the Note Agreement, the Notes or any other Transaction Document that, in each
case, involve events, acts or omissions that have taken place on or before the
date hereof, or with respect to the lender-borrower relationship evidenced by
the Transaction Documents with respect to acts, omissions or events that have
taken place on or before the date hereof. It is the intention of the Company in
providing this release that the same shall be effective as a bar to each and
every claim, demand and cause of action specified, and in furtherance of this
intention it waives and relinquishes all rights and benefits under Section 1542
of the Civil Code of the State of California (or any comparable provision of any
other applicable law), which provides:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

The Company acknowledges that it may hereafter discover facts different from or
in addition to those now known or believed to be true with respect to such
claims, demands, or causes of action and agrees that this instrument shall be
and remain effective in all respects notwithstanding any such differences or
additional facts. The Company understands, acknowledges and agrees that the
release set forth above may be pleaded as a full and complete defense and may be
used as a basis for an injunction against any action, suit or other proceeding
which may be instituted, prosecuted or attempted in breach of the provisions of
such release.

(b) The Company, on behalf of itself and its successors, assigns, and other
legal representatives, hereby absolutely, unconditionally and irrevocably,
covenants and agrees with and in favor of each Released Party above that it will
not sue (at law, in equity, in any regulatory proceeding or otherwise) any
Released Party on the basis of any claim released, remised and discharged by
such Person pursuant to the above release. The Company further agrees that it
shall not dispute the validity or enforceability of the Note Agreement, any of
the Notes or any of the other Transaction Documents or any of its obligations
thereunder. If the Company, or any of its successors, assigns or other legal
representations violates the foregoing covenant, such Person, for itself and its
successors, assigns and legal representatives, agrees to pay, in addition to
such other damages as any Released Party may sustain as a result of such
violation, all reasonable attorneys’ fees and costs incurred by such Released
Party as a result of such violation.

8. Counterparts. This document may be executed in multiple counterparts, which
together shall constitute a single document.

--------------------------------------------------------------------------------

Northwest Pipe Company

July 23, 2010

Page 7

 

9. Governing Law. This letter agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the
internal laws of the State of New York, excluding choice-of-law principles of
the law of such state that would require the application of the laws of a
jurisdiction other than such state.

[Remainder of the page intentionally left blank.]

--------------------------------------------------------------------------------

If you are in agreement with the foregoing, please sign the enclosed counterpart
of this letter in the space indicated below and return it to the Purchasers at
the above address whereupon, subject to the conditions expressed herein, it
shall become a binding agreement between the Company, on the one hand, and the
Purchasers, on the other hand.

 

Sincerely, PURCHASERS PRUDENTIAL INVESTMENT MANAGEMENT, INC. By:  

 

Title:   Vice President THE PRUDENTIAL INSURANCE COMPANY OF AMERICA By:  

 

Title:   Vice President

PRUDENTIAL RETIREMENT INSURANCE AND

ANNUITY COMPANY

By:   PRUDENTIAL INVESTMENT MANAGEMENT, INC., AS INVESTMENT MANAGER By:  

 

Title:   Vice President

--------------------------------------------------------------------------------

Accepted and agreed to as of the date first appearing above:

 

NORTHWEST PIPE COMPANY,

an Oregon corporation

By:  

 

Name:   Stephanie J. Welty Title:  
Senior Vice President and Chief Financial Officer