EXHIBIT 10.15


 


[Execution
Copy]


 


WARRANT
CASH SUBSTITUTION AGREEMENT


 


This WARRANT CASH SUBSTITUTION AGREEMENT
(this “Agreement”) is made and
entered into as of January 10, 2006 by and among Wells Fargo Bank,
N.A., f/k/a Wells Fargo Bank Minnesota, National Association, as Trustee and
Disbursing Agent (the “Trustee and Disbursing Agent”) under the Trust
and Disbursing Agreement dated as of January 25, 2002 (the “Trust and
Disbursing Agreement”), entered into pursuant to the Second Amended Joint
Plan of Reorganization of Washington Group International, Inc., et al., dated July 24, 2001, as modified by the First
Modification, the Second Modification and the Third Modification (as so
modified, the “Plan”), confirmed in the bankruptcy cases (the “Reorganization”)
of Washington Group International, Inc. (the “Company”) and certain
of its affiliates, in the United States Bankruptcy Court for the District of
Nevada (the “Bankruptcy Court”), Chapter 11 Case No. BK-N-01-31627,
the Plan Committee established by the Plan (the “Plan Committee”), the
Company, a corporation organized under the laws of Delaware, and Wells Fargo
Bank, N.A., f/k/a Wells Fargo Bank Minnesota, National Association, as Warrant
Agent (the “Warrant Agent”) under the Warrant Agreement dated as of January 25,
2002 (the “Warrant Agreement”) between the Company and the Warrant
Agent.  Capitalized terms used herein but
not defined shall have the meaning given to them in the Trust and Disbursing
Agreement or the Plan.


 


RECITALS


 


A.  WHEREAS,
the Plan provides for distributions of cash, New Common Shares, Class 7
Warrants and the proceeds, if any, of the Transferred Avoidance Actions
(collectively, the ”Plan Consideration”) to holders of Allowed Class 7
Claims;


 


B.  WHEREAS,
the Trustee and Disbursing Agent holds the Class 7 Warrants not yet
distributed in an account for the benefit of the holders of Allowed Class 7
Claims (the ”Allowed Class 7 Claimants”) in connection with
the Reorganization in accordance with the terms of the Trust and Disbursing
Agreement;


 


C.  WHEREAS,
the Plan provides that the Plan Committee will take such actions as are set
forth in the Plan, the Confirmation Order or the Plan Committee Document or as
may be approved or ordered by the Bankruptcy Court;


 


D.  WHEREAS,
the Class 7 Warrants by their terms expire at 5:00 p.m., New York
City time, on January 25, 2006; and


 


E.  WHEREAS,
upon noticed joint motion of the Plan Committee and the Company and following
hearings and oral arguments held on December 8 and December 23, 2005,
the Bankruptcy Court entered an Order on January 10, 2006 (the “Enabling
Order”) approving the payment of certain fees and expenses by the Company
and the provision of $27,500,000 in cash


 

















 


by the Company (the “Consideration”)
in substitution, of the remaining Class 7 Warrants held by the Trustee and
Disbursing Agent, consisting of 634,974 Tranche A Warrants, 725,684 Tranche B
Warrants and 392,261 Tranche C Warrants (the “Remaining Warrants”) which
would otherwise expire on January 25, 2006 (the “Warrant Transaction”).


 


AGREEMENT


 


NOW, THEREFORE, in consideration of the
mutual promises set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Trustee and
Disbursing Agent, the Warrant Agent, the Plan Committee and the Company agree
as follows:


 


1.                                      Recitals.  The forgoing recitals are incorporated herein
by reference, and by this reference made a part hereof.


 


2.                                      Purchase
and Substitution of Warrants.


 


(a)                                  Subject to the
conditions set forth in the Enabling Order, the Trustee and Disbursing Agent,
the Company and the Plan Committee hereby agree that the Trust and Disbursing
Agreement is hereby amended such that the Plan Committee hereby authorizes and
directs the Trustee and Disbursing Agent on behalf of the Allowed Class 7
Claimants to enter into all necessary agreements and to perform all necessary
actions as the Trustee and Disbursing Agent deems to be necessary and
appropriate to: (i) assign, transfer and deliver to the Company the
Remaining Warrants free from any restrictions, liens, encumbrances, claims
(including any “adverse claim” as such term is defined in the Uniform
Commercial Code), options, calls, pledges, trusts and other commitments,
agreements or arrangements; (ii) to receive $27,500,000 in cash from the
Company (the “Cash Proceeds”); (iii) to deposit the Cash Proceeds
into the WGI Class 7 Disbursement Account established under the Trust and
Disbursing Agreement as a part of the Disputed Class 7 Claims Reserve and
to invest such cash as provided in Section 3 of the Trust and Disbursing
Agreement; (iv) to pay fees and expenses as contemplated by the Enabling
Order and Section 3 of this Agreement; (v) to make distributions of
the net Cash Proceeds and any Cash Investment Yield earned thereon to Allowed Class 7
Claimants in accordance with Section 5(a) and the other relevant
provisions of the Trust and Disbursing Agreement; and (vi) to perform all
other required actions to effectuate the intent of this Agreement and the
Enabling Order.


 


(b)                                 Subject to the
conditions set forth in the Enabling Order, the Trust and Disbursing Agreement
is hereby further amended to provide that each holder of an Allowed Class 7
Claim will be entitled to receive, in lieu of receipt of future distributions
of Class 7 Warrants, a Pro Rata share of the net Cash Proceeds derived
from the Warrant Transaction and any Cash Investment Yield earned thereon after
payment of any fees, costs and expenses in accordance with this Agreement.  Class 7 Claimants will not be entitled to
any further distributions of Class 7 Warrants.  The Trust and Disbursing Agent will
administer the distribution of such funds in accordance with the Trust and
Disbursing Agreement, as amended by this Agreement.


 

















 


(c)                                  In connection with
the cash substitution for the Remaining Warrants, the Plan Committee represents
and warrants to the Company, all of which representations and warranties shall
survive the Closing of the Warrant Transaction, that it has requested,
received, reviewed and considered all information it deems relevant in making
an informed decision to sell and substitute the Remaining Warrants.  The Plan Committee, together with its
financial advisor, has such business and financial experience as is required to
give it the capacity to utilize the information received, to evaluate the
merits and risks involved in selling and substituting the Class 7
Warrants.


 


(d)                                 Consistent with Section 11
of the Trust and Disbursing Agreement and its characterization of the Disputed Class 7
Claims Reserve as a grantor trust with the Company as grantor, the parties
shall treat the actions described in Sections 2(a)(i), (ii) and (iii) as
disregarded events for federal and applicable state income tax purposes.  The Company shall instruct the Trustee and
Disbursing Agent that no taxes shall be payable and no amounts shall be
remitted to the Company with respect to the substitution.


 


3.                                      Payment
of Fees and Expenses


 


(a)                                  For purposes of Section 8
of the Plan Committee Document, the Plan Committee and the Company agree that
the Plan Committee, its Members and any Professionals (as defined in the Plan
Committee Document) retained by the Plan Committee shall be reimbursed by the
Company for fees and expenses incurred in connection with or arising from the
Plan Committee’s efforts to capture the value of the Remaining Warrants
incurred prior to November 9, 2005 in accordance with the procedures for
payment of such fees and expenses as provided in the Plan Committee Document.


 


(b)                                 Fees and expenses of
the Plan Committee, its Members and any Professionals retained by the Plan
Committee incurred in connection with or arising from the Plan Committee’s
efforts to capture the value of the Remaining Warrants incurred on and after November 9,
2005 shall be paid out of the Cash Proceeds deposited into the WGI Class 7
Disbursement Account.  The amounts due to
the Plan Committee, its Members and any Professionals retained by the Plan
Committee shall be paid within thirty (30) days after the end of the month in
which the relevant expense request for reimbursement was presented to the Trust
and Disbursing Agent, provided, however,
that such monthly requests for reimbursement shall be subject to review and
approval by the Company, which approval shall not be unreasonably withheld, to
the extent that doing so does not compromise the Plan Committee attorney-client
privilege, provided, further, that in the event the
Company disputes any portions of such monthly requests for reimbursements, the
Company shall notify the counsel to the Plan Committee and the Trust and
Disbursing Agent shall withhold payment of the disputed amounts until the
Bankruptcy Court, upon application by the Plan Committee, reviews and approves
such disputed requests for reimbursement in whole or part.


 


(c)                                  If and to the extent
that fees and expenses of the Ad Hoc Committee of Washington Group
International Class 7 Claim Holders are allowed and approved by the
Bankruptcy Court, such fees and expenses shall be paid out of the Cash Proceeds
deposited into


 

















 


the WGI Class 7 Disbursement
Account in accordance with applicable final orders of the Bankruptcy Court.


 


(d)                                 Fees and expenses of
the Trustee and Disbursing Agent in connection with or arising from the Warrant
Transaction or any other action under the Trust and Disbursing Agreement shall
continue to be paid by the Company in accordance with the Trust and Disbursing
Agreement.


 


4.                                      Conditions.  The obligation of the Company to pay the fees
and expenses of the Plan Committee in accordance with Section 3(a) as
provided hereunder and to deliver cash for the Remaining Warrants is subject
only to the following conditions, which may be waived in writing by the
Company, in its sole and unfettered discretion, at any time:


 


(a)                                  The entry of an order
or judgment of the Bankruptcy Court or other court of competent jurisdiction
approving the Warrant Transaction which has not been stayed, reversed or
amended and as to which the time to appeal or seek review or rehearing has
expired and no petition for review or rehearing or appeal was filed or, if
filed, no longer remains pending.


 


(b)                                 The representations
and warranties of the Plan Committee contained in Section 2(c) shall
be true and correct in all material respects on and as of the date of this
Agreement and the date of the Closing.


 


5.                                      Indemnification.
 The Company acknowledges that it
will continue to indemnify and hold harmless the Trustee and Disbursing Agent
in accordance with the terms and conditions of Section 14 of the Trust and
Disbursing Agreement.  Furthermore, the
Company will indemnify and hold harmless the Trustee and Disbursing Agent in
accordance with the terms and conditions of Section 14 of the Trust and
Disbursing Agreement from and against any and all costs, losses, liabilities,
expenses (including reasonable counsel fees and disbursements) and claims
imposed upon or asserted against the Trustee and Disbursing Agent on account of
any action taken or omitted to be taken by them in connection with the
performance of its duties under this Agreement and the documents related hereto.


 


6.                                      The
Trust and Disbursing Agreement.  The
Trustee and Disbursing Agent hereby confirms that effective December 23,
2005, it withdrew its Notice of Termination, dated August 12, 2005, as
modified, and agrees to continue to be bound by the terms of the Trust and
Disbursing Agreement as amended by this Agreement. The first sentence of Section 15
of the Trust and Disbursing Agreement hereby is amended and restated to read as
follows: “This Agreement shall remain in full force and effect until the earlier
of: (a) 60 days after Notice of Termination has been given by the Company
to Wells Fargo or by Wells Fargo to the Company, or (b) the later of (i) the
disbursement of all of the Plan Consideration, or (ii) the completion of
all tax reporting requirements for distributions made under the Plan.”  The Parties hereby ratify and confirm the
terms and conditions of the Trust and Disbursing Agreement, as amended hereby,
in each and every respect.


 


7.                                      Closing.  If the condition specified in Section 4(a) shall
have been satisfied and provided that this Agreement has not been terminated
pursuant to Section 8, the delivery of cash


 

















 


Consideration for the Remaining
Warrants will take place on January 23, 2006 or at such other time as the
Parties shall agree (the “Closing”). 
At the Closing, the Remaining Warrants shall be cancelled by the Warrant
Agent in accordance with Section 16 of the Warrant Agreement against
payment by the Company by wire transfer of $27,500,000 to an account as
specified by the Trustee and Disbursing Agent. 
The Warrant Agent shall provide written notice of the cancellation of
the Remaining Warrants to the Company and the receipt of funds to the Plan
Committee.


 


8.                                      Termination
of Agreement.  If the condition
specified in Section 4(a) shall not have occurred by 5:00 p.m.
Reno, Nevada time on January 20, 2006, this Agreement shall terminate on
the later to occur of 5:00 p.m. Reno, Nevada time on January 21, 2006
or such later date as may be specified by the Company by written notice to the
other parties to this Agreement. 
Sections 2(c) (relating to representations and warranties of the
Plan Committee), 3(d) (relating to payment of fees and expenses of the
Trust and Disbursing Agent), 5 (relating to indemnification of the Trust and
Disbursing Agent), 6 (relating to the Trust and Disbursing Agreement), 9
(relating to Notices) and 10 (relating to governing law) shall survive
termination of this Agreement.


 


9.                                      Notices.  The executed copy of this Agreement and any
written notices should be provided to:


 

















 


If to the Trustee and Disbursing Agent, to:


 


Wells Fargo Bank, N.A.


Customized Fiduciary Services


Sixth and Marquette; N9303-120


Minneapolis, Minnesota 55479


Attn: Nicholas D. Tally


 


with a copy to:


 


Wendy Walker


Morgan, Lewis & Bockius LLP


101 Park Avenue


New York, New York 10178-0060


 


If to the Warrant Agent, to:


 


Wells Fargo Bank, N.A.


Customized Fiduciary Services


Sixth and Marquette; N9303-120


Minneapolis, Minnesota 55479


Attn: Nicholas D. Tally


 


with a copy to:


 


Wendy Walker


Morgan, Lewis & Bockius LLP


101 Park Avenue


New York, New York 10178-0060


 


If to the Plan Committee, to:


 


Todd J. Dressel


Winston & Strawn LLP


101 California Street, Suite 3900


San Francisco, CA 94111


 


If to the Company, to:


 


Washington Group International, Inc.


720 Park Boulevard


Boise, Idaho 83712


Attn: Earl Ward, Treasurer, 


and Richard D. Parry, General Counsel


 

















 


with a copy to:


 


Robert Dean Avery


Jones Day


77 West Wacker Drive


Chicago, Illinois 60601


 


10.                               Entire
Agreement.  This Agreement
constitutes the entire agreement of the parties, and fully supersedes any and
all prior and contemporaneous agreements or understandings between the parties
relating to the subject matter hereof. 
This Agreement may be amended or modified only by an agreement in
writing and signed by all of the parties hereto.  Each party has had a full and complete
opportunity to review this Agreement. 
Accordingly, the parties agree that the common law principles of
construing ambiguities against the drafter shall have no application
hereto.  This Agreement shall be
construed fairly and not in favor of or against one party as to the drafter
hereof.


 


11.                               Governing
Law.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to conflict of laws principles.


 


12.                               Counterparts.  This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same agreement.


 


[SIGNATURE PAGE FOLLOWS]


 

















 


IN WITNESS WHEREOF, the Parties have executed
this Agreement as of the day and year first written above.


 


	
   

  	
  WELLS FARGO BANK, N.A., as Trustee and
  Disbursing

  Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Nicholas D. Tally

  	
   

  
	
   

  	
   

  	
       Nicholas D.
  Tally, Vice President

  	
   

  
	
   

  	
  Date:

  	
       1/23/06

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, N.A., as Warrant Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Nicholas D. Tally

  	
   

  
	
   

  	
   

  	
      Nicholas D. Tally,
  Vice President

  	
   

  
	
   

  	
  Date:

  	
      1/23/06

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PLAN COMMITTEE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Sharon Manewitz

  	
   

  
	
   

  	
   

  	
  Sharon
  Manewitz, as Chairperson

  	
   

  
	
   

  	
   

  	
  of the Plan
  Committee

  	
   

  
	
   

  	
   

  	
  Managing
  Director

  	
   

  
	
   

  	
   

  	
  Teachers
  Insurance and Annuity

  	
   

  
	
   

  	
   

  	
  Association
  of America

  	
   

  
	
   

  	
  Date:

  	
  Jan. 18,
  2006

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WASHINGTON GROUP INTERNATIONAL, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Earl Ward

  	
   

  
	
   

  	
  Earl Ward, Vice President – Investor

  	
   

  
	
   

  	
  Relations and Treasurer

  	
   

  
	
   

  	
  Date:

  	
     January 18, 2006