8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): September 29, 2010

NORTHWEST PIPE COMPANY

(Exact name of registrant as specified in its charter)

OREGON	0-27140	93-0557988
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

Northwest Pipe Company

5721 SE Columbia Way Suite 200

Vancouver WA 98661

(360) 397-6250

(Address, including zip code, and telephone number, including

area code, of registrant’s principal executive offices)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. ENTRY INTO MATERIAL DEFINITIVE AGREEMENT

On September 29, 2010, Northwest Pipe Company (the “Company”) and Bank of America, N.A., as Administrative Agent, entered into a Seventh Amendment to Amended and Restated Credit Agreement (the “Credit Agreement Amendment”). The Credit Agreement Amendment amends the Amended and Restated Credit Agreement dated May 31, 2007, as amended to date (the “Credit Agreement”). The Credit Agreement Amendment effects certain changes to the terms of the Credit Agreement, including: (i) waiving compliance with the financial covenants under the Credit Agreement for the quarter ended June 30, 2010, (ii) increasing the interest rates charged on outstanding balances; (iii) extending the dates by which the Company is required to deliver to the lenders audited consolidated financial statements for the year ended December 31, 2009, and unaudited consolidated financial statements for the quarters ended March 31, 2010 and June 30, 2010; (iv) requiring the Company to deliver to the lenders certain cash flow forecasts, bookings and backlog reports and variance reports with respect to the Company’s previously delivered financial forecast; (v) increasing the amount of the revolving loan, swing line loan and letters of credit available under the Credit Agreement from an aggregate of $110 million to $117.5 million, while continuing certain temporary limitations on certain additional amounts available under the Credit Agreement; and (vi) amending the definitions of Consolidated EBITDA, Consolidated Senior Leverage Ratio, Consolidated Total Leverage Ratio, and Temporary Availability Block, and making certain changes in the application, method of calculation and amounts of the covenants relating to the Consolidated Fixed Charge Coverage Ratio, Consolidated Senior Leverage Ratio, Consolidated Total Leverage Ratio, Consolidated Tangible Net Worth, Asset Coverage Ratio, Minimum Consolidated EBITDA, and Rental and Operating Lease Expense. The foregoing description of the Credit Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement Amendment, which is filed herewith as Exhibit No. 10.1 to this Report, and is incorporated herein by reference.

On September 29, 2010, the Company and Prudential Investment Management, Inc. and certain of its affiliates (“Prudential”) entered into a Seventh Amendment to Amended and Restated Note Purchase and Private Shelf Agreement (the “Note Purchase Agreement Amendment”). The Note Purchase Agreement Amendment amends the Amended and Restated Note Purchase and Private Shelf Agreement dated as of May 31, 2007, as amended to date (the “Note Purchase Agreement”). The Note Purchase Agreement Amendment effects certain changes to the terms of the Note Purchase Agreement, including: (i) waiving compliance with the financial covenants under the Note Purchase Agreement for the quarter ended June 30, 2010; (ii) increasing the interest rates charged on outstanding balances; (iii) extending the dates by which the Company is required to deliver to Prudential audited consolidated financial statements for the year ended December 31, 2009, and unaudited consolidated financial statements for the quarters ended March 31, 2010 and June 30, 2010; (iv) requiring the Company to deliver to Prudential certain cash flow forecasts, bookings and backlog reports and variance reports with respect to the Company’s previously delivered financial forecast; (v) amending the definition of Consolidated EBITDA, adding a definition of Consolidated Total Leverage Ratio, and making certain changes in the application, method of calculation and amounts of the covenants related to Consolidated Total Debt to EBITDA Ratio, Consolidated Tangible Net Worth, Consolidated Fixed Charge Coverage Ratio, Consolidated Senior Funded Debt to EBITDA Ratio, Minimum Consolidated EBITDA, Maximum Consolidated Rental and Operating Lease Expense, and Asset Coverage Ratio; and (vi) imposing certain temporary limitations on the incurrence of additional debt. The foregoing description of the Note Purchase Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Note Purchase Agreement Amendment, which is filed herewith as Exhibit No. 10.2 to this Report, and is incorporated herein by reference.

-2-

Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.

10.1	Seventh Amendment to Amended and Restated Credit Agreement by and among Northwest Pipe Company and Bank of America, N.A., as Administrative Agent
10.2	Seventh Amendment to Amended and Restated Note Purchase and Private Shelf Agreement by and among Northwest Pipe Company and Prudential Investment Management, Inc. and certain affiliates.

-3-

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on October 5, 2010.

NORTHWEST PIPE COMPANY
(Registrant)
By	/s/ Stephanie J. Welty
	Stephanie J. Welty, Senior Vice President
	and Chief Financial Officer

-4-

EX-10.1

Exhibit 10.1

SEVENTH AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

This SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (“Amendment”) is entered into effective as of September 16, 2010 (the “Effective Date”), among NORTHWEST PIPE COMPANY, an Oregon corporation (the “Borrower”), and BANK OF AMERICA, N.A., as Administrative Agent (the “Administrative Agent”).

RECITALS

Borrower, Administrative Agent and certain lenders party thereto from time to time are parties to that certain Amended and Restated Credit Agreement entered into as of May 31, 2007 (as amended, modified or supplemented from time to time, the “Credit Agreement”). Borrower and Administrative Agent desire to amend the Credit Agreement as set forth herein. The Required Lenders (as that term is defined in the Credit Agreement), and Bank of America, N.A., as Swing Line Lender and L/C Issuer, have consented to the amendments to the Credit Agreement set forth herein as indicated by their signatures below.

NOW THEREFORE, the parties agree as follows:

AGREEMENT

1. Recitals. The Recitals are true.

2. Definitions. Capitalized terms used herein and not otherwise defined shall have the meanings given in the Credit Agreement.

3. Waivers.

(a) Compliance with the financial covenants under Section 6.17 of the Credit Agreement (and any requirement that Borrower deliver any additional Compliance Certificate demonstrating compliance with such covenants for such period) is waived for Borrower’s fiscal quarter ending June 30, 2010.

(b) Borrower has advised Administrative Agent and Lenders that it expects to restate its financial statements for its fiscal years ending December 31 of each of 2007, 2008 and 2009 (the “Restatement”). Any Events of Default that may have occurred under the Credit Agreement by reason of any certification previously provided by any officer of Borrower in any Compliance Certificate with respect to financial statements of Borrower delivered under the Credit Agreement being rendered inaccurate or misleading as a result of such restatement, are hereby waived; the Restatements will not be used to retest compliance with any financial covenants for any period through June 30, 2010.

(c) The foregoing waivers are conditioned on the Restatement being consistent in all material respects with the draft restatement delivered by Borrower to

Page 1 – SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

Administrative Agent and Lenders on August 31, 2010. The foregoing waivers do not constitute waivers of any other Default now existing or hereafter arising, whether known or unknown by Administrative Agent. The foregoing waivers do not represent any amendment of any provision of the Credit Agreement.

4. Amendments to Definitions.

(a) The definition of “Annualized Consolidated EBITDA” is deleted from the Credit Agreement.

(b) The table contained in the definition of “Applicable Rate” in Section 1.01 of the Credit Agreement is amended in its entirety to read as follows:

Applicable Rate
Pricing Level	Consolidated Total Leverage Ratio	Eurocurrency Rate +		Standby Letters of Credit		Commercial Letters of Credit		Commitment Fee		Base Rate + or -
1	³4.50:1	4.50	%	4.50	%	2.00	%	0.875	%	3.50	%
2	³3.50:1 but <4.50:1	4.00	%	4.00	%	2.00	%	0.750	%	3.00	%
3	³3.00:1 but <3.50:1	3.75	%	3.75	%	1.875	%	0.625	%	2.75	%
4	³2.50: but <3.00:1	3.375	%	3.375	%	1.6875	%	0.50	%	2.375	%
5	³2.00 but <2.50:1	2.875	%	2.875	%	1.4375	%	0.40	%	1.875	%
6	<2.00:1	2.50	%	2.50	%	1.25	%	0.40	%	1.50	%

The Applicable Rate from the Effective Date through the delivery date of the Compliance Certificate required to be delivered together with the financial statements described in Section 6.1(b) of the Credit Agreement for Borrower’s fiscal quarter ending September 30, 2010, shall be determined based upon Pricing Level 1.

(c) The definition of “Consolidated EBITDA” in Section 1.01 of the Credit Agreement is amended in its entirety to read as follows:

“‘Consolidated EBITDA’” means for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income for such period plus (a) the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges for such period, (ii) the provision for federal, state, local and foreign income taxes payable by the Borrower and its Subsidiaries for such period, (iii) depreciation and amortization expense and (iv) other expenses in such period reducing Consolidated Net Income for such period which did not or will not require a cash settlement in such period or any future period (including but not limited to impairment charges, costs

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associated with exit or disposal activities and stock based compensation), minus (b) all items increasing Consolidated Net Income for such period which did not or will not result in a cash settlement in such period or any future period, including any gain from the sale of assets. For purposes of calculating Consolidated EBITDA, EBITDA for permitted acquisitions made by the Borrower, based on financial statements and information reported to the SEC shall be included in the calculation of Consolidated EBITDA. The permitted acquisitions’ EBITDA shall be incorporated on a decreasing pro-rata basis, with 100% of the permitted acquisitions’ EBITDA included in the calculation for the first calendar quarter end following the close of the acquisition, 75% included in the second quarter end, 50% included in the third quarter end and 25% included in the fourth quarter end. Beginning with the fifth quarter following the closing of the acquisition, the EBITDA for the acquisitions’ prior fiscal year shall no longer be incorporated in the calculation of Consolidated EBITDA.”

(d) The definition of “Consolidated Senior Leverage Ratio” in Section 1.01 of the Credit Agreement is amended in its entirety to read as follows:

“‘Consolidated Senior Leverage Ratio’ means, on any date of determination, the ratio of Consolidated Senior Funded Debt to Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower and its Subsidiaries then most recently ended.”

(e) The definition of “Consolidated Total Leverage Ratio” in Section 1.01 of the Credit Agreement is amended in its entirety to read as follows:

“‘Consolidated Total Leverage Ratio’ means, on any date of determination, the ratio of the Consolidated Total Debt to Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower and its Subsidiaries then most recently ended.”

(f) The definition of “Temporary Availability Block” in Section 1.01 of the Credit Agreement is amended in its entirety to read as follows:

“‘Temporary Availability Block’ means from September 17, 2010, until delivery by Borrower of the Compliance Certificate required to be delivered pursuant to Section 6.02(b) hereof with respect to the fiscal quarter of Borrower and its Subsidiaries ending March 31, 2011, the amount of $7,500,000, and thereafter $0.”

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5. Amendment to Section 6.01(a)(i) of the Credit Agreement. Section 6.01(a)(i) of the Credit Agreement is amended in its entirety to read as follows:

“(a)(i) as soon as available, but in any event within 288 days after the end of Borrower’s 2009 fiscal year, and within 105 days after the end of each other fiscal year of the Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, such consolidated statements to be audited and accompanied by a report and opinion of an independent certified public accountant of nationally recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit; and”

6. Amendment to Section 6.01(b)(i) of the Credit Agreement. Section 6.01(b)(i) of the Credit Agreement is amended in its entirety to read as follows:

“(b)(i) as soon as available, but in any event within (x) 212 days after the end of the first fiscal quarter of Borrower’s 2010 fiscal year, (y) 121 days after the end of the second fiscal quarter of Borrower’s 2010 fiscal year, and (z) 60 days after the end of each of the other first three fiscal quarters of each fiscal year of Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal quarter and for the portion of the Borrower’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and corresponding portion of the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, such consolidated statements to be certified by the chief executive officer, chief financial officer, treasurer or controller of the Borrower as fairly presenting the financial condition, results of operations, shareholders’ equity and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subject only to normal year end audit adjustments and the absence of footnotes; and”

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7. Amendment to Section 6.01(d) of the Credit Agreement. Section 6.01(d) of the Credit Agreement is amended in its entirety to read as follows:

“(d)(i) Not later than the fifteenth (15^th) and the thirtieth (30^th) day of each month, (i) a forecast prepared by management of the Borrower in form satisfactory to the Administrative Agent and the Required Lenders, of the weekly cash flows of the Borrower and its Subsidiaries for the periods commencing on Monday of the immediately succeeding week, and ending 13 weeks thereafter, together with a statement of the actual cash flows of the Borrower 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 (ii) not later than eighth (8^th) Business Day of each of each month, a report of the bookings and backlog of Borrower and its Subsidiaries, in a form and containing details satisfactory to the Administrative Agent and the Required Lenders, as of the last day of the immediately preceding month.”

8. Amendment to Section 6.01(e) of the Credit Agreement. Section 6.01(e) of the Credit Agreement is amended in its entirety to read as follows:

“(e) Not later than 60 days after the end of each fiscal quarter, an analysis of the material variances between the forecasts contained in the business plan delivered to Administrative Agent by Borrower in August 2010 for such fiscal quarter or other applicable reporting period and Borrower’s actual financial results for such fiscal quarter or reporting period, in form and substance satisfactory to the Administrative Agent and the Required Lenders.”

9. Amendment to Section 6.17 of the Credit Agreement. Section 6.17 of the Credit Agreement is amended in its entirety to read as follows:

“Section 6.17. Financial Covenants.

“(a) Consolidated Fixed Charge Coverage Ratio. The Borrower shall maintain a Consolidated Fixed Charge Coverage Ratio of (i) not less than 1.10:1.00 for the fiscal quarter ending June 30, 2011; and (ii) not less than 1.25:1.0 for each fiscal quarter thereafter.

“(b) Consolidated Senior Leverage Ratio. The Borrower shall maintain a Consolidated Senior Leverage Ratio of (i) not greater than 12.75:1.0 for the fiscal quarter ending September 30, 2010; (ii) not greater than 7.50:1.0 for the fiscal quarter ending December 31, 2010; (iii) not greater than 6.25:1.0 for the fiscal quarter ending March 31, 2011; (iv) not greater than 4.75:1.0 for the fiscal quarter ending June 30, 2011; (v) not greater than 4.00:1.0 for the fiscal quarter ending September 30, 2011; and (vi) not greater than 3.50:1.00 for each fiscal quarter thereafter.

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“(c) Consolidated Total Leverage Ratio. The Borrower shall maintain a Consolidated Total Leverage Ratio of (i) not greater than 12.75:1.0 for the fiscal quarter ending September 30, 2010; (ii) not greater than 7.50:1.0 for the fiscal quarter ending December 31, 2010; (iii) not greater than 6.25:1.0 for the fiscal quarter ending March 31, 2011; (iv) not greater than 4.75:1.0 for the fiscal quarter ending June 30, 2011; and (v) not greater than 4.00:1.0 for each fiscal quarter thereafter.

“(d) Consolidated Tangible Net Worth. The Borrower shall maintain at all times a Consolidated Tangible Net Worth of not less than the sum of (i) the greater of $193,000,000 or 85 percent of Borrower’s Consolidated Tangible Net Worth as of June 30, 2010, (ii) 50% of the Consolidated Net Income (but only if it is a positive number) for each fiscal quarter of the Borrower ended after June 30, 2010, and (iii) 100% of the net proceeds from any offering of the equity securities of the Borrower consummated after June 30, 2010.

“(e) Asset Coverage Ratio. The Borrower shall maintain at all times an Asset Coverage Ratio of not less than 1.00:1.00. If the Borrower is out of compliance with this covenant, the Borrower may cure the resulting Default by paying Committed Loans within two (2) Business Days of learning of such non-compliance in an amount sufficient to bring itself into compliance with this covenant. Any prepayment of a Eurocurrency Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with such additional amounts required pursuant to Section 3.05. Each such prepayment shall be applied to the Committed Loans of Lenders in accordance with their Applicable Percentages.

“(f) Minimum Consolidated EBITDA. The Borrower shall maintain a minimum Consolidated EBITDA equal to or greater than (i) $3,600,000 for the fiscal quarter ending on September 30, 2010, (ii) $9,400,000 for the cumulative two fiscal quarters ending on December 31, 2010, (iii) and $18,500,000 for the cumulative three fiscal quarters ending on March 31, 2011.

“(g) Rental and Operating Lease Expense. Beginning with the fiscal quarter ending December 31, 2010 and continuing with each fiscal quarter thereafter, the Borrower shall not permit the ratio of (i) the sum of rental and operating lease expense for

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Borrower and its Subsidiaries (determined on a consolidated basis in accordance with GAAP) to (ii) total revenue of the Borrower and its Subsidiaries (determined on a consolidated basis in accordance with GAAP), in each case for the period of four (4) consecutive fiscal quarters ended as of the end of such fiscal quarter, to exceed 6.00%.”

10. Amendment to Exhibit D to the Credit Agreement. The form of Compliance Certificate attached to the Credit Agreement as Exhibit D is amended in its entirety by substituting Exhibit D attached hereto for Exhibit D to the Credit Agreement.

11. Amendment Fees. Prior to this Amendment becoming effective, , Borrower shall pay to Administrative Agent and the Required Lenders consenting hereto an amendment fee of $937,500, such amendment fee to be allocated among such Required Lenders in proportion to the amounts of their respective Commitments.

12. Release. As a material part of the consideration of Administrative Agent entering into, and the Required Lenders consenting to, this Amendment, Borrower hereby releases and forever discharges Administrative Agent, the Lenders and each of their respective successors, assigns, officers, managers, directors, shareholders, employees, agents, attorneys, representatives, parent corporations, subsidiaries, and affiliates (all the foregoing, collectively, the “Releasees” and individually, a “Releasee”), jointly and severally from any and all claims, counterclaims, demands, damages, debts, agreements, covenants, suits, contracts, obligations, liabilities, accounts, offsets, rights, actions and causes of action of any nature whatsoever, including all claims, demands, and causes of action for contribution and indemnity, whether arising at law or in equity, whether presently possessed or possessed in the future, whether known or unknown, whether liability be direct or indirect, liquidated or unliquidated, whether presently accrued or to accrue hereafter, whether absolute or contingent, foreseen or unforeseen, and whether or not heretofore asserted, which Borrower may have or claim to have against Releasees (or any one or more of them); provided, however, that neither Administrative Agent nor any Lender nor any other Releasee shall be released hereby from: (i) any obligation to pay to Borrower any amounts that Borrower may have on deposit with Administrative Agent or any Lender, in accordance with applicable laws and the terms of the documents establishing any such deposit relationship; or (ii) any claim (including without limitation any claim for breach of the Credit Agreement or other Loan Document) arising from any action, inaction or conduct of Administrative Agent or the Lenders or the other Releasees after the effective date of this Amendment.

13. No Further Amendment, Expenses. Except as expressly modified by this Amendment, the Credit Agreement and the other Loan Documents shall remain unmodified in full force and effect and the parties hereby ratify their respective obligations thereunder. Without limiting the foregoing, Borrower expressly reaffirms and ratifies its obligation to pay or reimburse Administrative Agent and Lenders on request for all reasonable expenses, including legal fees actually incurred by Administrative Agent and Lenders in connection with the preparation of this Amendment, any other amendment documents and the closing of the transaction contemplated hereby and thereby.

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14. Miscellaneous.

(a) Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original, and all of which taken together shall constitute one and the same Amendment, it being understood that the Administrative Agent may rely on a facsimile counterpart signature page hereof for purpose of determining whether a party hereto has executed a counterpart hereof.

(b) Governing Law. This Amendment and the other agreements provided for herein and the rights and obligations of the parties hereto and thereto shall be construed and interpreted in accordance with the laws of the State of Oregon.

(c) Certain Agreements Not Enforceable. UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY THE LENDERS CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER’S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION, AND BE SIGNED BY THE LENDERS TO BE ENFORCEABLE.

[Signatures appear on the following page.]

Page 8 – SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

EXECUTED AND DELIVERED by the duly authorized officers of the parties as of the date first above written.

BORROWER:	NORTHWEST PIPE COMPANY
	By:
	Name:
	Title:
ADMINISTRATIVE AGENT:	BANK OF AMERICA, N.A., as Administrative Agent
	By:
	Name:
	Title:
CONSENTED TO BY THE REQUIRED LENDERS:	BANK OF AMERICA, N.A.
	By:
	Name:
	Title:

Page 9 – SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

UNION BANK, N.A., formerly known as

Union Bank of California, N.A.

By:

Name:

Title:

HSBC BANK USA, NATIONAL

ASSOCIATION

By:

Name:

Title:

U.S. BANK NATIONAL ASSOCIATION

By:

Name:

Title:

CONSENTED TO BY SWING LINE

              LENDER AND L/C ISSUER

BANK OF AMERICA, N.A., as Swing Line

Lender and L/C Issuer

By:

Name:

Title:

Page 10 – SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

EXHIBIT D

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date:                    ,

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Amended and Restated Credit Agreement, dated as of May 31, 2007 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Northwest Pipe Company, an Oregon corporation (the “Borrower”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the                              of the Borrower, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the Borrower, and that:

[Use following paragraph 1 for fiscal year-end financial statements]

1. The Borrower has delivered the year-end audited financial statements required by Section 6.01(a) of the Agreement for the fiscal year of the Borrower ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section.

[Use following paragraph 1 for fiscal quarter-end financial statements]

1. The Borrower has delivered the unaudited financial statements required by Section 6.01(b) of the Agreement for the fiscal quarter of the Borrower ended as of the above date. Such financial statements fairly present the financial condition, results of operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.

2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and condition (financial or otherwise) of the Borrower during the accounting period covered by such financial statements.

3. A review of the activities of the Borrower during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Borrower performed and observed all its Obligations under the Loan Documents, and

[select one:]

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[to the best knowledge of the undersigned, during such fiscal period the Borrower performed and observed each covenant and condition of the Loan Documents applicable to it, and no Default has occurred and is continuing.]

—or—

[to the best knowledge of the undersigned, during such fiscal period the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]

4. The representations and warranties of (i) the Borrower contained in Article V of the Agreement and (ii) each Loan Party contained in each other Loan Document or in any document furnished at any time under or in connection with the Loan Documents, are true and correct on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Compliance Certificate, the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Agreement, including the statements in connection with which this Compliance Certificate is delivered.

5. The financial covenant analyses and information set forth on Schedules 1 and 2 attached hereto are true and accurate on and as of the date of this Certificate.

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of                             ,                     .

NORTHWEST PIPE COMPANY

By:

Name:

Title:

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For the Quarter/Year ended                             (“Statement Date”)

SCHEDULE 1

to the Compliance Certificate

($ in 000’s)

I.	Section 6.17(a) –Consolidated Fixed Charge Coverage Ratio.
	A.	Consolidated EBITDA for the four consecutive quarters ending on Statement Date (“Subject Period”)
		1.	Consolidated Net Income for Subject Period:	$
		2.	plus Consolidated Interest Charges for Subject Period:	$
		3.	plus consolidated income taxes for Subject Period:	$
		4.	plus consolidated depreciation and amortization for Subject Period:	$
		5.	plus other expenses in the Subject Period reducing Consolidated Net Income for such period which did not or will not require a cash settlement in such period or any future period:	$
		6.	minus all items increasing Consolidated Net Income for the Subject Period which did not or will not result in a cash settlement in such period or any future period, including any gain from the sale of assets:	$
		7.	Consolidated EBITDA (total of lines 1-6):	$
	B.	Consolidated Maintenance Capital Expenditures for the Subject Period:		$
	C.	Consolidated Fixed Charges
		1.	Consolidated Interest Charges for Subject Period:	$
		2.	plus the consolidated current maturities of long-term debt as of Statement Date:	$
		3.	plus the consolidated current maturities of capital leases as of Statement Date:	$
		4.	Consolidated Fixed Charges (total of lines 1-3):	$

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	C.	Ratio ((Line I.A.7 less the greater of $4,000,000 or Line I.B) divided by Line I.C.4):			to 1.00
Minimum Required:				1.10 to 1.00 for fiscal quarter ending June 30, 2011
				1.25 to 1.00 for each fiscal quarter thereafter
II.	Section 6.17(b) – Consolidated Senior Leverage Ratio.
	A.	Consolidated Senior Funded Debt as of Statement Date
		1.	Consolidated Total Debt as of Statement Date as defined:		$
		2.	less Subordinated Debt as of Statement Date as defined:		$
		3.	Consolidated Senior Funded Debt as of Statement Date (line 1 less line 2):		$
	B.	Consolidated EBITDA for the Subject Period
		1.	line I.A.7 above:		$
	C.	Ratio (Line II.A.3 divided by Line II.B.1):			to 1.00
Maximum Permitted:				12.75 to 1.00 for fiscal quarter ending September 30, 2010
				7.50 to 1.00 for fiscal quarter ending December 31, 2010
				6.25 to 1.00 for fiscal quarter ending March 31, 2011
				4.75 to 1.00 for fiscal quarter ending June 30, 2011
				4.00 to 1.00 for fiscal quarter ending September 30, 2011
				3.50 to 1.00 for each fiscal quarter thereafter
III.	Section 6.17(c) – Consolidated Total Leverage Ratio
	A.	Consolidated Total Debt at Statement Date
		1.	as defined:		$
	B.	Consolidated EBITDA for Subject Period
		1.	line 1.A.7 above:		$
	C.	Ratio (Line III.A.1 divided by Line III.B.1):			to 1.00

Page 14 – SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

	Maximum Permitted:			12.75 to 1.00 for fiscal quarter ending September 30, 2010
				7.50 to 1.00 for fiscal quarter ending December 31, 2010
				6.25 to 1.00 for fiscal quarter ending March 31, 2011
				4.75 to 1.00 for fiscal quarter ending June 30, 2011
				4.00 to 1.00 for each fiscal quarter thereafter
IV.	Section 6.17(d) –Consolidated Tangible Net Worth.
	A.	Consolidated Tangible Net Worth at Statement Date:
		1.	total Shareholders’ Equity for Borrower and its Subsidiaries at Statement Date:		$
		2.	less Intangible Assets of Borrower and its Subsidiaries at Statement Date:		$
		3.	Tangible Net Worth (Line IV.A.1 less Line IV.A.2):		$
	B.	Consolidated Tangible Net Worth as of June 30, 2010:
		1.	total Shareholders’ Equity for Borrower and its Subsidiaries at June 30, 2010:		$
		2.	less Intangible Assets of Borrower and its Subsidiaries at June 30, 2010:		$
		3.	Tangible Net Worth (Line IV.B.1 less Line IV.B.2):		$
	C.	Minimum Required Consolidated Tangible Net Worth:
		1.	the greater of $193,000,000 or 85% of Line IV.B.3:		$
		2.	plus the sum of 50% of Consolidated Net Income (without subtracting losses) earned in each quarterly accounting period ended after June 30, 2010:		$
		3.	plus the net proceeds from any equity securities issued by Borrower after June 30, 2010:		$

Page 15 – SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

		4.	Minimum Required Consolidated Tangible Net Worth (Line IV.C.1 plus Line IV.C.2 plus Line IV.C.3):	$
	D.	Excess (deficiency) for covenant compliance
		(Line IV.A.3 less IV.C.4):		$
V.	Section 6.17(e) –Asset Coverage Ratio.
	A.	Eligible Assets at Statement Date
		1.	85% of Eligible Accounts Receivable at Statement Date:	$
		2.	plus 60% of Eligible Inventory at Statement Date:	$
		3.	plus 30% of Eligible Property, Plant and Equipment at Statement Date:	$
		4.	Total Eligible Assets at Statement Date:	$
	B.	Consolidated Total Debt at Statement Date		$
		1.	as defined:	$
	C.	Ratio (Line V.A.4 ÷ Line V.B.1):		to 1.00
	Minimum Required:			1.00 to 1.00
VI.	Section 6.17(f) - Minimum Consolidated EBITDA
	A.	Consolidated EBITDA for the one, two or three consecutive quarters ending on Statement Date, as applicable (“Cumulative Period”)
		1.	Consolidated Net Income for Cumulative Period:	$
		2.	plus Consolidated Interest Charges for Cumulative Period:	$
		3.	plus consolidated income taxes for Cumulative Period:	$
		4.	plus consolidated depreciation and amortization for Cumulative Period:	$
		5.	plus other expenses in such Cumulative Period reducing Consolidated Net Income for such period which did not or will not require a cash settlement in such period or any future period:	$

Page 16 – SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

		6.	minus all items increasing Consolidated Net Income for such Cumulative Period which did not or will not result in a cash settlement in such period or any future period, including any gain from the sale of assets:	$
		7.	Consolidated EBITDA (total of lines 1-6):	$
	Minimum Required:		$3,600,000 for the fiscal quarter ending on September 30, 2010
			$9,400,000 for the cumulative two fiscal quarters ending on December 31, 2010
			$18,500,000 for the cumulative three fiscal quarters ending on March 31, 2011
VII.	Section 6.17(g) – Rental and Operating Lease Expense
	A.	Rental and operating lease expense for the four consecutive fiscal quarters ending on the Statement Date:		$
	B.	Total revenue for the four consecutive fiscal quarters ending on the Statement Date:		$
	C.	Ratio (Line VII.A ÷ Line VII.B)
	Maximum Permitted:			6.00	%

Page 17 – SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

EX-10.2

Exhibit 10.2

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

September 16, 2010

NORTHWEST PIPE COMPANY

5721 SE Columbia Way, Suite 200

Vancouver, Washington 98661

Re: Seventh Amendment and Limited Waiver 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. Limited Waivers and Related Agreements. 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:

(a) The Purchasers hereby waive compliance by the Company with each of the financial covenants set forth in paragraphs 6A (Financial Covenants) and 6K (Compliance with Asset Coverage Ratio) of the Note Agreement (and any requirement that the Company deliver any additional Officer’s Certificate demonstrating compliance with such covenants for such period) for the Company’s fiscal quarter ending June 30, 2010.

(b) The Purchasers hereby waive compliance by the Company with the provisions set forth in the section 2 (“Agreement Regarding December 2009 Financial Covenants”) of each of the following letter agreements between the Company and the Purchasers: (i) Fourth Amendment to Amended and Restated Note Purchase and Private Shelf Agreement, dated April 15, 2010, (ii) Fifth Amendment and Limited Consent to Amended and Restated Note Purchase and Private Shelf Agreement, dated July 23, 2010, and (iii) Sixth Amendment and Temporary Waiver to Amended and Restated Note Purchase and Private Shelf Agreement, dated July 30, 2010.

Northwest Pipe Company

September 16, 2010

Page 2

(c) The Company has advised the Purchasers that it expects to restate its financial statements for its fiscal years ending December 31 of each of 2007, 2008 and 2009 (the “Restatement”). Any Events of Default that may have occurred under the Note Agreement by reason of any certification previously provided by any officer of the Company in any Officer’s Certificate with respect to financial statements of the Company delivered under the Note Agreement being rendered inaccurate or misleading as a result of such restatement, are hereby waived. The Company and Purchasers further agree that the Restatement will not be used to retest compliance with any of the financial covenants set forth in paragraphs 6A (Financial Covenants) and 6K (Compliance with Asset Coverage Ratio) of the Note Agreement for any prior period through June 30, 2010.

(d) The Purchasers and the Company agree that (i) the foregoing limited waivers and agreements by the Purchasers are conditioned on the Restatement being consistent in all material respects with the draft restatement delivered by the Company to the Purchasers on August 31, 2010, and (ii) the foregoing limited waivers do not constitute waivers of any other Default or Event of Default now existing or hereafter arising, whether known or unknown by any of the Purchasers.

2. 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) Paragraph 2C is hereby amended and restated in its entirety to read as follows:

2C. Interest Enhancement Payments.

The Company agrees that it will pay from time to time additional interest on each of the Notes outstanding (i) as of the Third Amendment Effective Date, through but excluding the Seventh Amendment Effective Date, equal to a per annum rate of 1.75% (the “Original Interest Enhancement Rate”), and (ii) as of the Seventh Amendment Effective Date, and thereafter, equal to a per annum rate of 2.00% (the “Second Interest Enhancement Rate”), in each case, computed on the principal amount outstanding from time to time of each such Note beginning on the Third Amendment Effective Date, and such additional interest with respect to any such Note will be payable (any payment from time to time of such additional interest being referred to as an “Interest Enhancement Payment”) from time to time on each interest payment date for such Note in the manner specified herein or in such Note, as applicable. Notwithstanding the foregoing, if the Company demonstrates after the Seventh Amendment Effective Date that the Consolidated Total Leverage Ratio is less than 4.50:1.00 at the time it delivers its financial statements and related Officer’s Certificate in accordance with paragraphs 5A(i) or 5A(ii), as the case may be, then the Second Interest Enhancement Rate shall be adjusted to 1.75% beginning on such date of delivery; provided, however, that (x) if the Consolidated Total Leverage Ratio at any time is equal to or greater than 4.50:1.00, then the rate shall be adjusted to the Second Interest Enhancement Rate immediately at such time, and (y) if the Company’s financial statements and related Officer’s Certificate are not delivered when due in accordance with paragraphs 5A(i) or 5A(ii), as the case may be, then the Second Interest Enhancement Rate shall apply as of the date such financial

Northwest Pipe Company

September 16, 2010

Page 3

statements and related Officer’s Certificate were due. Any failure by the Company in making any Interest Enhancement Payment (or any portion thereof) on any Note for more than five (5) Business Days after the same becomes due and payable shall constitute an “Event of Default” for purposes of paragraph 7A(ii).

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

“(i)(A) within (x) 212 days after the end of the first fiscal quarter of the Company’s 2010 fiscal year, (y) 121 days after the end of the second fiscal quarter of the Company’s 2010 fiscal year, and (z) 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;”

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

“(ii)(A) within 288 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;”

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

“(iii) Deliver to each holder of a Note, (A) not later than the fifteenth (15th) and thirtieth (30th) day of each month, 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 Monday of the immediately succeeding week, and ending 13 weeks thereafter,

Northwest Pipe Company

September 16, 2010

Page 4

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 (B) not later than the eighth (8th) Business Day of each of month, a report of the bookings and backlog of the Company and its Subsidiaries in a form and containing details satisfactory to the Required Holders, as of the last day of the immediately preceding month; and”

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

“(iv) No later than 60 days after the end of each fiscal quarter of the Company, deliver to each holder of a Note an analysis of the material variances between the forecasts contained in the business plan delivered to the Purchasers by the Company in August 2010 for such fiscal quarter or other applicable reporting period and the Company’s actual financial results for such fiscal quarter or reporting period, in form and substance satisfactory to the Required Holders.”

(f) Paragraph 6A is hereby amended and restated in its entirety to read as follows:

     “6A. Financial Covenants.

     6A(1). Consolidated Total Debt to EBITDA Ratio.

The Company will not, at any time during the measurement dates set forth below, permit the ratio of (i) Consolidated Total Debt at such time to (ii) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Company then most recently ended (“Consolidated Total Leverage Ratio”), to be greater than the amount set forth opposite such measurement date(s):

Period	Ratio
From 09/30/10 to 12/30/10	12.75:1.00
From 12/31/10 to 03/30/11	7.50:1.00
From 03/31/11 to 06/29/11	6.25:1.00
From 06/30/11 to 09/29/11	4.75:1.00
From 09/30/11 and at all times thereafter	4.00:1.00

     6A(2). Consolidated Tangible Net Worth.

The Company will not, at any time, permit Consolidated Tangible Net Worth to be less than the sum of (i) the greater of (A) $193,000,000 and (B) 85% of the Company’s Consolidated Tangible Net Worth as of June 30, 2010, plus (ii) 50% of the consolidated net income of the Company and its Subsidiaries (but only if a positive number) for each fiscal quarter of the Company ended after June 30, 2010 through and including the most recently ended fiscal quarter of the Company at such time, plus (iii) 100% of the net proceeds from any Equity Offering of the Company consummated after June 30, 2010.

Northwest Pipe Company

September 16, 2010

Page 5

     6A(3). Consolidated Fixed Charge Coverage Ratio.

The Company will not permit the Consolidated Fixed Charge Coverage Ratio calculated as of the end of each fiscal quarter to be less than the amount set forth opposite such measurement date(s):

Period	Ratio
At 6/30/11	1.10:1.00
At 09/30/11 and at the end of each fiscal quarter thereafter	1.25:1.00

     6A(4). Consolidated Senior Funded Debt to EBITDA Ratio.

The Company will not, at any time during the measurement dates set forth below, permit the ratio of (i) Consolidated Senior Funded Debt at such time to (ii) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Company then most recently ended, to be greater than the amount set forth opposite such measurement date(s):

Period	Ratio
From 09/30/10 to 12/30/10	12.75:1.00
From 12/31/10 to 03/30/11	7.50:1.00
From 03/31/11 to 06/29/11	6.25:1.00
From 06/30/11 to 09/29/11	4.75:1.00
From 09/30/11 to 12/30/11	4.00:1.00
From 12/31/11 and at all times thereafter	3.50:1.00

     6A(5). Minimum Consolidated EBITDA.

The Company shall maintain a minimum Consolidated EBITDA equal to or greater than (i) $3,600,000 for the fiscal quarter ending on September 30, 2010, (ii) $9,400,000 for the cumulative two fiscal quarters ending on December 31, 2010, and (iii) $18,500,000 for the cumulative three fiscal quarters ending on March 31, 2011.

     6A(6). Maximum Consolidated Rent and Lease Expense Ratio.

Beginning with the fiscal quarter ending December 31, 2010 and continuing with each fiscal quarter thereafter, the Company shall not permit the ratio of (i) Lease Rentals at the end of each such fiscal quarter to (ii) total revenue of the Company and its Subsidiaries (determined on a consolidated basis in accordance with GAAP), in each case for the period of four (4) consecutive fiscal quarters ended as of the end of such fiscal quarter, to exceed 6.00%.”

Northwest Pipe Company

September 16, 2010

Page 6

(g) Paragraph 6K is hereby amended and restated in its entirety to read as follows:

“ 6K. Compliance with Asset Coverage Ratio.

The Company will not permit at any time the Asset Coverage Ratio to be less than 1.00:1.00. If the Company is out of compliance with this covenant, the Company may cure the resulting default by repaying Debt of the Company within two Business Days of learning of such non-compliance in an amount at least sufficient to bring itself into compliance with this covenant (assuming that such amount repaid had been in fact repaid on the applicable date of measurement of this covenant).”

(h) The defined term “Annualized Consolidated EBITDA” appearing in paragraph 10B is hereby deleted therefrom.

(i) The defined term “Consolidated EBITDA” appearing in paragraph 10B is hereby amended and restated in its entirety to read 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) other expenses in such period reducing consolidated net income for such period which did not or will not require a cash settlement in such period or any future period (including but not limited to impairment charges, costs associated with exit or disposal activities and stock based compensation), and (v) one-time accounting fees, attorneys fees and similar costs and expenses actually incurred by the Company in connection with the internal accounting investigation and the related investigation by the U.S. Securities and Exchange Commission, as described in the Company’s Form 8-K filed with the U.S. Securities and Exchange Commission on March 16, 2010, (A) during its 2010 fiscal year of up to $7,000,000 in the aggregate, and (B) during its 2011 fiscal year of up to $3,500,000 in the aggregate. 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 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; (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

Northwest Pipe Company

September 16, 2010

Page 7

currency or repatriate such earnings to the Company or any other Domestic Subsidiary which is the parent corporation of such Foreign Subsidiary; and (i) all items increasing Consolidated Net Income for such period which did not or will not result in a cash settlement in such period or any future period, including any gain from the sale of assets. 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.”

(j) The following defined terms are hereby added to paragraph 10B in the proper alphabetical order to read as follows:

“ “Consolidated Total Leverage Ratio” shall have the meaning specified in paragraph 6A(1).

“Seventh Amendment Effective Date” shall mean September 16, 2010.”

3. Temporary Modification to Certain Covenants. The Purchasers and the Company hereby agree that the covenants set forth in paragraphs 5C (Inspection of Property), 6G (Merger and Consolidation; Transfer of Assets) other than clause (v) thereof, and 6L (Permitted Acquisitions) shall be construed and interpreted as if an Event of Default has occurred and is continuing (regardless of whether an Event of Default has actually occurred and is continuing) until such time as the Company has delivered an Officer’s Certificate for the fiscal period ended as of September 30, 2010 pursuant to paragraph 5A of the Note Agreement, demonstrating compliance with, among other things, the financial covenants contained in paragraphs 6A and 6K of the Note Agreement as of September 30, 2010 (as such paragraphs 6A and 6K have been modified by this letter agreement). Any breach of the agreements set forth in this section 3 by the Company or any of its Subsidiaries shall be an immediate Event of Default.

4. Temporary Modification to Permitted Debt. The Purchasers and the Company hereby agree that to the extent there is any availability for the incurrence of additional Debt by the Company or any of its Subsidiaries under clauses (iii), (vii) and (ix) of paragraph 6D (Other Indebtedness) of the Note Agreement as of the date hereof, such availability under the foregoing clauses shall be blocked (and the Company and its Subsidiaries shall not be permitted to avail themselves of such clauses for the purpose of incurring such additional Debt) until such time as the Company has delivered an Officer’s Certificate for the fiscal period ended as of September 30, 2010 pursuant to paragraph 5A of the Note Agreement, demonstrating compliance with, among other things, the financial covenants contained in paragraphs 6A and 6K of the Note Agreement as of September 30, 2010 (as such paragraphs 6A and 6K have been modified by this letter agreement). Any breach of the agreements set forth in this section 4 by the Company or any of its Subsidiaries shall be an immediate Event of Default.

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September 16, 2010

Page 8

5. Limitation of Modifications. Each amendment, consent, limited waiver and/or 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 agreement, the Note Agreement and the documents related to the Note Agreement shall continue in full force and effect.

6. 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).

7. 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 seventh 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 0.50% of the principal amount outstanding on the Notes; and (d) the Company shall have paid Bingham McCutchen LLP (“Bingham”) in immediately available funds its accrued and unpaid legal fees and expenses (it being understood and agreed that any amount held by Bingham from the retainer previously paid to Bingham by the Company shall be applied first to such accrued and unpaid legal fees, with the Company paying Bingham the balance, if any, in immediately available funds).

8. 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

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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.

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

10. 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.

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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