Document:

ex10-4.htm

Exhibit 10.4

 

	RP® FINANCIAL, LC.	 
	Serving the Financial Services Industry since 1988	 
	 	 
	 	 
	 	 
	 	August 17, 2011
	 	AMENDED February 24, 2012

 

 

 

Matthew Mullet, Chief Financial Officer

1st Security Bank of Washington

6920 220th Street SW, Suite 300

Mountlake Terrace, Washington  98043-2172

 

Dear Mr. Mullet:

 

This letter sets forth the agreement between 1st Security Bank of Washington, Mountlake Terrace, Washington (the “Bank”), and RP® Financial, LC (“RP Financial”) for independent appraisal services in connection with the stock to be issued concurrent with the Bank’s proposed mutual-to-stock conversion transaction.  The specific appraisal services to be rendered by RP Financial are described below.

 

Description of Appraisal Services

 

Prior to preparing the valuation report, RP Financial will conduct a financial due diligence, including on-site interviews of senior management and reviews of financial and other documents and records, to gain insight into the Bank’s operations, financial condition, profitability, market area, risks and various internal and external factors which impact the pro forma value of the Bank.

 

RP Financial will prepare a written detailed valuation report of the Bank that will be fully consistent with applicable regulatory guidelines and standard pro forma valuation practices.  In this regard, the applicable regulatory guidelines are those set forth in the Office of Thrift Supervision’s (“OTS”) October 21, 1994 “Guidelines for Appraisal Reports for the Valuation of Savings and Loan Associations Converting from Mutual to Stock Form of Organization,” which have been endorsed by the Federal Deposit Insurance Corporation (“FDIC”) and various state banking agencies.

 

The appraisal report will include an in-depth analysis of the Bank’s financial condition and operating results, as well as an assessment of the Bank’s interest rate risk, credit risk and liquidity risk.  The appraisal report will describe the Bank’s business strategies, market area, prospects for the future and the intended use of proceeds both in the short term and over the longer term.  A peer group analysis relative to publicly-traded savings institutions will be conducted for the purpose of determining appropriate valuation adjustments relative to the group.

 

 

 

 

  

	Washington Headquarters	 
	1100 North Glebe Road, Suite 600	Direct:  (703) 647-6549
	Arlington, VA  22201	Telephone:  (703) 528-1700
	www.rpfinancial.com	 
Fax No.:  (703) 528-1788

	E-Mail:  joren@rpfinancial.com	 
Toll-Free No.:  (866) 723-0594

 

 

 

 

 

Matthew Mullet

February 24, 2012

Page 2

 

 

 

We will review pertinent sections of the applications and offering documents to obtain necessary data and information for the appraisal, including the impact of key deal elements on the appraised value, such as dividend policy, use of proceeds and reinvestment rate, tax rate, offering expenses, characteristics of stock plans and charitable foundation contribution (if applicable).  The appraisal report will conclude with a midpoint pro forma market value that will establish the range of value, and reflect the offering price per share determined by the Bank’s Board of Directors.  The appraisal report may be periodically updated prior to the commencement of the offering and the appraisal is required to be updated just prior to the closing of the offering.

 

RP Financial agrees to deliver the valuation appraisal and subsequent updates, in writing, to the Bank at the above address in conjunction with the filing of the regulatory application.  Subsequent updates will be filed promptly as certain events occur which would warrant the preparation and filing of such valuation updates.  Further, RP Financial agrees to perform such other services as are necessary or required in connection with the regulatory review of the appraisal and respond to the regulatory comments, if any, regarding the valuation appraisal and subsequent updates.  RP Financial will also prepare the pro forma presentations for inclusion in the prospectus, reflecting the original appraisal and subsequent updates, as appropriate.

 

Fee Structure and Payment Schedule

 

The Bank agrees to pay RP Financial a fixed fee of $37,500 for preparation and delivery of the original appraisal report, plus reimbursable expenses.  Payment of these fees shall be made according to the following schedule:

 

	
·  

	
$5,000 upon execution of this letter of agreement engaging RP Financial’s appraisal services;

 

	
·  

	
$32,500 upon delivery of the completed original appraisal report; and,

 

	
·  

	
$5,000 for each valuation update that may be required, provided that the transaction is not delayed for reasons described below; and,

 

	
·  

	
Should a new complete appraisal be required due to an excessive delay in the process, a new appraisal will be prepared for a fixed fee of $12,500, not including additional expenses.

 

The Bank will reimburse RP Financial for out-of-pocket expenses incurred in preparation of the valuation.  Such out-of-pocket expenses will likely include travel, printing, shipping, computer and data services.  RP Financial will agree to limit reimbursable expenses to $3,000 in conjunction with this engagement, exclusive of travel related expenses, which will be billed separately.  The reimbursable expenses will be subject to written authorization from the Bank to exceed such level.

 

In the event the Bank shall, for any reason, discontinue the proposed stock offering prior to delivery of the completed documents set forth above and payment of the respective progress payment fees, the Bank agrees to compensate RP Financial according to RP Financial’s standard billing rates for consulting services based on accumulated and verifiable time expenses, not to exceed the respective fee caps noted above, after giving full credit to the initial retainer fee.  RP Financial’s standard billing rates range from $75 per hour for research associates to $350 per hour for managing directors.

 

 

 

 

 

Matthew Mullet

February 24, 2012

Page 3 

 

 

 

If during the course of the proposed transaction, unforeseen events occur so as to materially change the nature or the work content of the services described in this contract, the terms of said contract shall be subject to renegotiation by the Bank and RP Financial.  Such unforeseen events shall include, but not be limited to, major changes in the conversion regulations, appraisal guidelines or processing procedures as they relate to appraisals, major changes in management or procedures, operating policies or philosophies, and excessive delays or suspension of processing of applications by the regulators such that completion of the transaction requires the preparation by RP Financial of a new appraisal.

 

Representations and Warranties

 

The Bank and RP Financial agree to the following:

 

1.       The Bank agrees to make available or to supply to RP Financial such information with respect to its business and financial condition as RP Financial may reasonably request in order to provide the aforesaid valuation.  Such information heretofore or hereafter supplied or made available to RP Financial shall include:  annual financial statements, periodic regulatory filings and material agreements, debt instruments, off balance sheet assets or liabilities, commitments and contingencies, unrealized gains or losses and corporate books and records.  All information provided by the Bank to RP Financial shall remain strictly confidential (unless such information is otherwise made available to the public), and if the stock offering is not consummated or the services of RP Financial are terminated hereunder, RP Financial shall upon request promptly return to the Bank the original and any copies of such information.

 

2.       The Bank hereby represents and warrants to RP Financial that any information provided to RP Financial does not and will not, to the best of the Bank’s knowledge, at the times it is provided to RP Financial, contain any untrue statement of a material fact or fail to state a material fact necessary to make the statements therein not false or misleading in light of the circumstances under which they were made.

 

3.         (a)  The Bank agrees that it will indemnify and hold harmless RP Financial, any affiliates of RP Financial, the respective directors, officers, agents and employees of RP Financial or their successors and assigns who act for or on behalf of RP Financial in connection with the services called for under this agreement (hereinafter referred to as “RP Financial”), from and against any and all losses, claims, damages and liabilities (including, but not limited to, all losses and expenses in connection with claims under the federal securities laws) attributable to (i) any untrue statement or alleged untrue statement of a material fact contained in the financial statements or other information furnished or otherwise provided by the Bank to RP Financial, either orally or in writing; (ii) the omission or alleged omission of a material fact from the financial statements or other information furnished or otherwise made available by the Bank to RP Financial; or (iii) any action or omission to act by the Bank, or the Bank’s respective officers, Directors, employees or agents which action or omission is willful or negligent.  The Bank will be under no obligation to indemnify RP Financial hereunder if a court determines that RP Financial was negligent or acted in bad faith with respect to any actions or omissions of RP Financial related to a matter for which indemnification is sought hereunder.  Any time devoted by employees of RP Financial to situations for which indemnification is provided hereunder, shall be an indemnifiable cost payable by the Bank at the normal hourly professional rate chargeable by such employee.

 

 

 

 

 

Matthew Mullet

February 24, 2012

Page 4 

 

(b)         RP Financial shall give written notice to the Bank of such claim or facts within thirty days of the assertion of any claim or discovery of material facts upon which RP Financial intends to base a claim for indemnification hereunder.  In the event the Bank elects, within ten business days of the receipt of the original notice thereof, to contest such claim by written notice to RP Financial, RP Financial will be entitled to be paid any amounts payable by the Bank hereunder within five days after the final determination of such contest either by written acknowledgement of the Bank or a final judgment (including all appeals therefrom) of a court of competent jurisdiction.  If the Bank does not so elect, RP Financial shall be paid promptly and in any event within thirty days after receipt by the Bank of the notice of the claim.

 

(c)         The Bank shall pay for or reimburse the reasonable expenses, including attorneys’ fees, incurred by RP Financial in advance of the final disposition of any proceeding within thirty days of the receipt of such request if RP Financial furnishes the Bank:  (1) a written statement of RP Financial’s good faith belief that it is entitled to indemnification hereunder; and (2) a written undertaking to repay the advance if it ultimately is determined in a final adjudication of such proceeding that it or he is not entitled to such indemnification.  The Bank may assume the defense of any claim (as to which notice is given in accordance with 3(b)) with counsel reasonably satisfactory to RP Financial, and after notice from the Bank to RP Financial of its election to assume the defense thereof, the Bank will not be liable to RP Financial for any legal or other expenses subsequently incurred by RP Financial (other than reasonable costs of investigation and assistance in discovery and document production matters).  Notwithstanding the foregoing, RP Financial shall have the right to employ their own counsel in any action or proceeding if RP Financial shall have concluded that a conflict of interest exists between the Bank and RP Financial which would materially impact the effective representation of RP Financial.  In the event that RP Financial concludes that a conflict of interest exists, RP Financial shall have the right to select counsel reasonably satisfactory to the Bank which will represent RP Financial in any such action or proceeding and the Bank shall reimburse RP Financial for the reasonable legal fees and expenses of such counsel and other expenses reasonably incurred by RP Financial.  In no event shall the Bank be liable for the fees and expenses of more than one counsel, separate from its own counsel, for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same allegations or circumstances.  The Bank will not be liable under the foregoing indemnification provision in respect of any compromise or settlement of any action or proceeding made without its consent, which consent shall not be unreasonably withheld.

 

(d)         In the event the Bank does not pay any indemnified loss or make advance reimbursements of expenses in accordance with the terms of this agreement, RP Financial shall have all remedies available at law or in equity to enforce such obligation.

 

It is understood that, in connection with RP Financial’s above-mentioned engagement, RP Financial may also be engaged to act for the Bank in one or more additional capacities, and that the terms of the original engagement may be incorporated by reference in one or more separate agreements.  The provisions of Paragraph 3 herein shall apply to the original engagement, any such additional engagement, any modification of the original engagement or such additional engagement and shall remain in full force and effect following the completion or termination of RP Financial’s engagement(s).  This agreement constitutes the entire understanding of the Bank and RP Financial concerning the subject matter addressed herein, and such contract shall be governed and construed in accordance with the laws of the Commonwealth of Virginia.  This agreement may not be modified, supplemented or amended except by written agreement executed by both parties.

 

 

 

 

 

Matthew Mullet

February 24, 2012

Page 5 

 

The Bank and RP Financial are not affiliated, and neither the Bank nor RP Financial has an economic interest in, or is held in common with, the other and has not derived a significant portion of its gross revenues, receipts or net income for any period from transactions with the other.

 

*  *  *  *  *  *  *  *  *  *  *

 

Please acknowledge your agreement to the foregoing by signing as indicated below and returning to RP Financial a signed copy of this letter, together with the initial retainer fee of $5,000.

 

	 	Sincerely,
	 	 
	 	/s/ James J. Oren
	 	James J. Oren
	 	Director

 

 

	Agreed To and Accepted By:	/s/Matthew Mullet	 
	 	Chief Financial Officer	 
	 	 	 
	Upon Authorization by the Board of Directors For:	
1st Security Bank of Washington

	 	 	Mountlake Terrace, Washington
	 	 	 
	 	 	 
	Date Executed:	February 24, 2012Supplemental Indenture

 Exhibit 4.1 
 SUPPLEMENTAL INDENTURE 
 SUPPLEMENTAL INDENTURE (this “Supplemental
Indenture”), dated as of February 29, 2012, among SPN Fairway Acquisition, Inc., a Delaware corporation, A&W Water Service, Inc., a Colorado corporation, AWS, Inc., a Delaware corporation, Hamm & Phillips Service Company,
Inc., a Delaware corporation, Integrated Production Services, Inc., a Delaware corporation, LEED Tool Corporation, a Colorado corporation, Monument Well Service Co., a Delaware corporation, Pumpco Energy Services, Inc., a Delaware corporation,
Rising Star Services, L.P., a Texas limited partnership and Texas CES, Inc., a Texas corporation, (the “Guaranteeing Subsidiaries”), all of which are subsidiaries of SESI, L.L.C., a Delaware limited liability company (the
“Company”), the Company, Superior Energy Services, Inc., a Delaware corporation, the other Guarantors (as defined in the Indenture referred to herein) and The Bank of New York Mellon Trust Company, N.A., as trustee under the
Indenture referred to below (the “Trustee”). 
 W I T N E S S E T H 

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of
May 22, 2006 providing for the issuance of 6.875% Senior Notes due 2014 (the “Notes”); 
 WHEREAS, the
Indenture provides that under certain circumstances the Guaranteeing Subsidiaries shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiaries shall unconditionally guarantee all of the
Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Note Guarantee”); and 
 WHEREAS, pursuant to Sections 4.18 and 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture. 

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Guaranteeing Subsidiaries and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows: 
 1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture. 
 2. AGREEMENT TO GUARANTEE. Each Guaranteeing Subsidiary hereby agrees, jointly and severally, to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Note
Guarantee and in the Indenture, including, but not limited to, Article 10 thereof. 
 3. NO RECOURSE AGAINST OTHERS. No past,
present or future director, officer, organizer, employee, manager, incorporator, stockholder, member or agent of each Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Company or

  
 1 

 
any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the SEC that such a waiver is against public policy. 
 4. NEW YORK LAW TO GOVERN. THE
INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY. 
 5. COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy
shall be an original, but all of them together represent the same agreement. 
 6. EFFECT OF HEADINGS. The Section headings
herein are for convenience only and shall not affect the construction hereof. 
 7. THE TRUSTEE. The Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiaries and
the Company. 
 [Signature pages follow.] 

  
 2 

 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed and attested, all as of the date first above written. 
  

			
	 SPN FAIRWAY ACQUISITION, INC.
 A&W WATER SERVICE, INC.
 AWS, INC.
 HAMM & PHILLIPS SERVICE COMPANY, INC.
 INTEGRATED PRODUCTION SERVICES, INC.

LEED TOOL CORPORATION
 MONUMENT WELL SERVICE
CO.
 PUMPCO ENERGY SERVICES, INC.

RISING STAR SERVICES, L.P.
 TEXAS CES,
INC.

		
	By: 	 	/s/ William B. Masters
		 	 Name:  William B. Masters
 Title:    Authorized Representative

	
	SESI, L.L.C.
		
	By: 	 	SUPERIOR ENERGY SERVICES, INC.,
		 	its Managing Member
		
	By: 	 	/s/ William B. Masters
		 	Name:  William B. Masters
		 	 Title:    Executive Vice President and General
             Counsel

	
	SUPERIOR ENERGY SERVICES, INC.
		
	By: 	 	/s/ William B. Masters
		 	Name:  William B. Masters
		 	 Title:    Executive Vice President and General
             Counsel

  
 [Signature
page to 6.875% Senior Notes 
 due 2014 Supplemental Indenture] 

  

			
	 1105 PETERS ROAD, L.L.C.
 ADVANCED OILWELL SERVICES, INC.
 BLOWOUT TOOLS, INC.

CONCENTRIC PIPE AND TOOL RENTALS, L.L.C.
 CONNECTION TECHNOLOGY, L.L.C.
 CSI TECHNOLOGIES, LLC

DRILLING LOGISTICS, L.L.C.
 FASTORQ,
L.L.C.
 H.B. RENTALS, L.C.

INTERNATIONAL SNUBBING SERVICES, L.L.C.

NON-MAGNETIC RENTAL TOOLS, L.L.C.

PRODUCTION MANAGEMENT INDUSTRIES, L.L.C.
 SEMO, L.L.C.
 SEMSE, L.L.C.
 STABIL DRILL SPECIALTIES, L.L.C.
 SUB-SURFACE TOOLS, L.L.C.

SUPERIOR HOLDING, INC.
 SUPERIOR ENERGY SERVICES,
L.L.C.
 SUPERIOR ENERGY SERVICES COLOMBIA, L.L.C.
 SUPERIOR INSPECTION SERVICES, L.L.C.
 WARRIOR ENERGY SERVICES CORPORATION

WILD WELL CONTROL, INC.
 WORKSTRINGS
INTERNATIONAL, L.L.C.

		
	By: 	 	/s/ William B. Masters
		 	Name:  William B. Masters
		 	Title:    Authorized Representative
	
	 THE BANK OF NEW YORK MELLON TRUST
 COMPANY, N.A., as Trustee

		
	By:	 	/s/ Craig Kaye
		 	Name:  Craig Kaye
		 	Title:    Vice President

  
 [Signature
page to 6.875% Senior Notes 
 due 2014 Supplemental Indenture]

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