ASSUMPTION AND AMENDMENT AGREEMENT
ASSUMPTION AND AMENDMENT AGREEMENT (this "AGREEMENT") dated as
of November 3, 1999 (the "EFFECTIVE DATE") among the Existing
Subsidiaries signatory hereto; SUPERIOR ENERGY SERVICES, INC., a Delaware
corporation ("HOLDINGS"); GENERAL ELECTRIC CAPITAL CORPORATION, a New
York corporation, for itself as a Lender, and as Administrative Agent for
Lenders, under the Credit Agreement defined below; the other Lenders
signatory hereto; PMI Acquisition Company, Inc., a Louisiana corporation
and wholly-owned subsidiary of Holdings ("PMI ACQUISITION"); Production
Management Industries, Inc., a Louisiana corporation ("PMII") and wholly-
owned subsidiary of Production Management Companies, Inc., a Louisiana
corporation ("PMCI"); Production Management Control Systems, Inc., a
Louisiana corporation and wholly-owned subsidiary of PMCI, ("PMCSI"); and
Production Management Equities, Inc., a Louisiana corporation and
majority-owned subsidiary of PMCI ("PMEI", and together with PMI
Acquisition, PMII and PMCSI, the "NEW SUBSIDIARIES").
W I T N E S S E T H :
WHEREAS, Holdings, the Existing Subsidiaries, Lenders and
Administrative Agent are parties to a Credit Agreement dated as of July
15, 1999 (as heretofore and hereafter amended, modified or supplemented
from time to time, the "CREDIT AGREEMENT"); and
WHEREAS, the Existing Subsidiaries and Administrative Agent are
parties to a Security Agreement dated as of July 15, 1999 (as heretofore
and hereafter amended, modified or supplemented from time to time, the
"SECURITY AGREEMENT"); and
WHEREAS, Holdings, Cardinal Holding Corp., Cardinal Services,
Inc., Superior Well Service, Inc. and the Administrative Agent are
parties to a Pledge Agreement dated as of July 15, 1999 (as heretofore
and hereafter amended, modified or supplemented from time to time, the
"PLEDGE AGREEMENT"); and
WHEREAS, simultaneously herewith, pursuant to a Merger
Agreement dated as of September 7, 1999 (as heretofore and hereafter
amended, modified or supplemented from time to time, the "MERGER
AGREEMENT") among Holdings, PMI Acquisition, PMCI and Xxxxxxx X. Sport (a
shareholder of PMCI), PMCI will merge with and into PMI Acquisition as a
result of which the separate existence of PMCI will cease and PMI
Acquisition will be the surviving corporation (the "MERGER"), and
immediately thereafter PMI Acquisition will change its name to
"Production Management Companies, Inc."; and
WHEREAS, subject to the terms and conditions contained herein,
the parties hereto desire (i) to amend certain provisions of the Credit
Agreement to provide additional financing so as to permit the Merger to
be consummated, (ii) for each New Subsidiary to become a Borrower under
the Credit Agreement, (iii) for each New Subsidiary to become a Grantor
under the Security Agreement, and (iv) for PMI Acquisition to become a
Pledgor under the Pledge Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereto agree as follows:
1. DEFINED TERMS. Unless otherwise specifically defined
herein, all capitalized terms used herein shall have the respective
meanings ascribed to such terms in the Credit Agreement.
2. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is
hereby amended as follows:
(a) The aggregate Term Loan A Commitment of all of the Lenders
is hereby increased by $1,824,000 from $20,000,000 to $21,824,000,
apportioned among the Lenders as set forth on Annex A hereto.
(b) The aggregate Term Loan B Commitment of all of the Lenders
is hereby increased by $8,176,000 from $90,000,000 to $98,176,000,
apportioned among the Lenders as set forth on Annex A hereto.
(c) Section 1.1(b)(ii) of the Credit Agreement is hereby
amended in its entirety to read as follows:
"(ii) Borrowers shall pay the principal amount of the Term
Loan A in twenty-four (24) consecutive quarterly installments on the last
day of March, June, September and December of each year, commencing
December 31, 1999, as follows:
Installment
Payment Date Amount
------------------ -----------
December 31, 1999 $273,000
March 31, 2000 $273,000
June 30, 2000 $273,000
September 30, 2000 $273,000
December 31, 2000 $546,000
March 31, 2001 $546,000
June 30, 2001 $546,000
September 30, 2001 $546,000
December 31, 2001 $818,000
March 31, 2002 $818,000
June 30, 2002 $818,000
September 30, 2002 $818,000
December 31, 2002 $1,091,000
March 31, 2003 $1,091,000
June 30, 2003 $1,091,000
September 30, 2003 $1,091,000
December 31, 2003 $1,364,000
March 31, 2004 $1,364,000
June 30, 2004 $1,364,000
September 30, 2004 $1,364,000
December 31, 2004 $1,364,000
March 31, 2005 $1,364,000
June 30, 2005 $1,364,000
September 30, 2005 $1,364,000
Notwithstanding the foregoing, the aggregate outstanding principal
balance of Term Loan A shall be due and payable in full in immediately
available funds on the Commitment Termination Date, if not sooner paid in
full."
(d) Section 1.1(b)(v) of the Credit Agreement is hereby
amended in its entirety to read as follows:
"(v) Borrowers shall pay the principal amount of the Term
Loan B in twenty-six (26) installments, as follows:
Installment
Payment Date Amount
------------------ -----------
December 31, 1999 $246,000
March 31, 2000 $246,000
June 30, 2000 $246,000
September 30, 2000 $246,000
December 31, 2000 $246,000
March 31, 2001 $246,000
June 30, 2001 $246,000
September 30, 2001 $246,000
December 31, 2001 $246,000
March 31, 2002 $246,000
June 30, 2002 $246,000
September 30, 2002 $246,000
December 31, 2002 $246,000
March 31, 2003 $246,000
June 30, 2003 $246,000
September 30, 2003 $246,000
December 31, 2003 $246,000
March 31, 2004 $246,000
June 30, 2004 $246,000
September 30, 2004 $246,000
December 31, 2004 $246,000
March 31, 2005 $246,000
June 30, 2005 $246,000
September 30, 2005 $246,000
December 31, 2005 $0
March 31, 2006 $46,136,000
June 30, 2006 $46,136,000
Notwithstanding the foregoing, if the Commitment Termination Date
occurs prior to September 30, 2005, the aggregate outstanding principal balance
of Term Loan B shall be due and payable in full in immediately available
funds on the Commitment Termination Date, if not sooner paid in full."
(e) Notwithstanding anything contained in the Credit Agreement
to the contrary, upon the effectiveness of this Agreement as provided in
Section 7 hereof, the Merger shall be a "Permitted Acquisition" under the
Credit Agreement.
(f) The definition of "Leverage Ratio" in Annex A to the
Credit Agreement is hereby amended by adding the following after the term
"EBITDA":
"; PROVIDED that in calculating the Leverage Ratio for
determining compliance with Annex G on any date, an amount
shall be added to EBITDA in respect of each acquisition by
Holdings or any Borrower consummated on or after the date
hereof (including the acquisition of PMCI pursuant to the
Merger) to account for the portion of the period for which
EBITDA is calculated, if any, occurring prior to each such
acquisition."
(g) Schedule 6.7 to the Credit Agreement is hereby
supplemented with the Liens listed on Annex B hereto.
3. ADDITION OF BORROWERS TO THE CREDIT AGREEMENT. Each New
Subsidiary hereby agrees to be, and hereby becomes, a Borrower under and
as defined in the Credit Agreement, and accordingly hereby assumes all of
the joint and several obligations of the Borrowers under the Credit
Agreement, and accordingly hereby agrees to be bound, and hereby is
bound, jointly and severally with all other Borrowers, by all of the
terms of the Loan Documents binding upon Borrowers.
4. ADDITION OF GRANTORS TO THE SECURITY AGREEMENT.
(a) Each New Subsidiary hereby agrees to be, and hereby
becomes, a Grantor under and as defined in the Security Agreement, and
accordingly hereby assumes all of the obligations of a Grantor under the
Security Agreement, and accordingly hereby agrees to be bound, and hereby
is bound, by all of the terms of the Loan Documents binding upon
Grantors.
(b) Without limiting Section 4(a) hereof in any respect, to
secure the prompt and complete payment, performance and observance of all
of the Obligations, each New Subsidiary hereby grants, assigns, conveys,
mortgages, pledges, hypothecates, transfers and grants a continuing
security interest to Administrative Agent, for the benefit of
Administrative Agent and Lenders, a Lien upon all of its right, title and
interest in, to and under its Collateral (as defined in the Security
Agreement). In addition, to secure the prompt and complete payment,
performance and observance of the Obligations, each New Subsidiary hereby
grants to Administrative Agent, for the benefit of Administrative Agent
and Lenders, a right of setoff against the property of such New
Subsidiary held by Administrative Agent or any Lender, consisting of its
Collateral (as defined in the Security Agreement) now or hereafter in the
possession or custody of or in transit to Administrative Agent or any
Lender, for any purpose, including safekeeping, collection or pledge, for
the account of such New Subsidiary, or as to which such New Subsidiary
may have any right or power.
(c) The schedules to the Security Agreement are hereby
supplemented with the information contained in Annex C hereto pertaining
to the New Subsidiaries.
5. ADDITION OF PLEDGOR TO THE PLEDGE AGREEMENT.
(a) PMI Acquisition hereby agrees to be, and hereby becomes, a
Pledgor under and as defined in the Pledge Agreement, and accordingly
hereby assumes all of the obligations of a Pledgor under the Pledge
Agreement, and accordingly hereby agrees to be bound, and hereby is
bound, by all of the terms of the Loan Documents binding upon Pledgors.
(b) Without limiting Section 5(a) hereof in any respect, PMI
Acquisition hereby pledges to Administrative Agent, and grants to
Administrative Agent for the benefit of Administrative Agent and Lenders,
a first priority security interest in all of its Pledged Collateral (as
defined in the Pledge Agreement).
(c) Schedule I to the Pledge Agreement is hereby supplemented
with the information contained in Annex D hereto pertaining to PMI
Acquisition after the consummation of the Merger simultaneously herewith.
6. REPRESENTATIONS AND WARRANTIES. Each of Holdings, each
Existing Subsidiary and each New Subsidiary represents and warrants as
follows (which representations and warranties shall survive the execution
and delivery of this Agreement):
(a) It has taken all necessary action to authorize the
execution, delivery and performance of this Agreement.
(b) It has duly executed and delivered this Agreement. This
Agreement, and the Credit Agreement, Security Agreement and Pledge
Agreement as amended or supplemented hereby, constitute its legal, valid
and binding obligation, enforceable against it in accordance with their
respective terms, subject to applicable bankruptcy, reorganization,
insolvency, moratorium and similar laws affecting the enforcement of
creditors' rights generally and by general equity principles.
(c) No consent or approval of any person, firm, corporation or
entity, and no consent, license, approval or authorization of any
governmental authority is or will be required in connection with the
execution, delivery, performance, validity or enforcement of this
Agreement by it, other than any such consent, approval, license or
authorization which has been obtained and remains in full force and
effect, and except where the failure to obtain such consent, approval,
license or authorization would not result in a Material Adverse Effect.
(d) After giving effect to this Agreement, it is in compliance
with all of the various covenants and agreements set forth in the Credit
Agreement and each of the other Loan Documents.
(e) After giving effect to this Agreement, no event has
occurred and is continuing which constitutes a Default or an Event of
Default.
(f) All representations and warranties contained in the Credit
Agreement and each of the other Loan Documents are true and correct in
all material respects as of the date hereof, except to the extent that
any representation or warranty relates to a specified date, in which case
they are true and correct in all material respects as of the date or
dates specified.
7. CONDITIONS PRECEDENT. The Administrative Agent shall have
received on or prior to the Effective Date, each in form and substance
satisfactory to it and its counsel (facsimile copies being acceptable so
long as the originals thereof are sent to Administrative Agent or its
counsel via overnight courier on or prior to the Effective Date):
(a) SECURITY INTERESTS AND CODE FILINGS. Evidence that
Administrative Agent (for the benefit of itself and Lenders) has a valid
and perfected first priority security interest in the Collateral of the
New Subsidiaries (other than motor vehicles and except as set forth on
Annex B), including such documents duly executed by each New Subsidiary
(including financing statements under the Code and other applicable
documents under the laws of any jurisdiction with respect to the
perfection of Liens) as Administrative Agent may request in order to
perfect its security interests in the Collateral of the New Subsidiaries
(other than motor vehicles and except as set forth on Annex B).
(b) PAYOFF LETTER; TERMINATION STATEMENTS. Copies of a duly
executed payoff letter by and between all parties to the credit agreement
pursuant to which the New Subsidiaries received financing from Bank One
(formerly The First National Bank of Commerce) (the "PRIOR LENDER"),
evidencing repayment in full of all obligations owing thereunder to the
Prior Lender (the "PRIOR LENDER OBLIGATIONS"), together with (i) UCC-3,
mortgage releases or other appropriate termination statements, manually
signed by the Prior Lender releasing all liens of the Prior Lender upon
any of the personal property of the New Subsidiaries, and (ii)
termination of all blocked account agreements, bank agency agreements or
other similar agreements or arrangements or arrangements in favor of the
Prior Lender or relating to the Prior Lender Obligations.
(c) CORPORATE DOCUMENTS.
(i) CHARTER AND GOOD STANDING. For each New Subsidiary,
its (x) charter (or analogous document) and all amendments thereto,
(y) good standing certificate (including verification of tax status)
in its state of organization and (z) good standing certificates
(including verification of tax status) and certificates of
qualification to conduct business in each jurisdiction where its
ownership or lease of property or the conduct of its business
requires such qualification, each dated a recent date prior to the
Effective Date and certified by the applicable Secretary of State or
other authorized Governmental Authority.
(ii) BYLAWS AND RESOLUTIONS. For each New Subsidiary, (x)
its bylaws (or operating agreement), together with all amendments
thereto and (y) resolutions of its Board of Directors (or analogous
governing body) and stockholders (or members), approving and
authorizing the execution, delivery and performance of this
Agreement and the transactions to be consummated in connection
therewith, each certified as of the Effective Date by its secretary
or an assistant secretary as being in full force and effect without
any modification or amendment.
(iii) INCUMBENCY CERTIFICATES. For each New Subsidiary,
signature and incumbency certificates of each of its officers
executing any of the Loan Documents, certified as of the Effective
Date by its secretary or an assistant secretary as being true,
accurate, correct and complete.
(iv) MERGER RESOLUTIONS. For each of Holdings, PMI
Acquisition and PMCI, resolutions of its Board of Directors (or
analogous governing body) and stockholders (or members), approving
and authorizing the execution, delivery and performance of the
Merger Agreement and the transactions to be consummated in
connection therewith, each certified as of the Effective Date by its
secretary or an assistant secretary as being in full force and
effect without any modification or amendment.
(d) OPINION OF COUNSEL. A duly executed original of an
opinion of Jones, Walker, Xxxxxxxx, Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P.,
counsel for the Credit Parties, dated the Effective Date.
(e) OFFICER'S CERTIFICATE. An officer's certificate of
Holdings with respect to the matters contained in Section 6.1 of the
Credit Agreement.
(f) CASH MANAGEMENT AGREEMENTS. Agreements evidencing and
documenting the establishment of cash management systems for each New
Subsidiary, including lockbox agreements, lockbox account agreements and
pledged account agreements.
(g) ACQUISITION PRO FORMA AND ACQUISITION PROJECTIONS. The
Acquisition Pro Forma and the Acquisition Projections defined in Section
6.1 of the Credit Agreement.
(h) VESSEL MORTGAGE. A duly executed original of a first
preferred ship mortgage dated the Effective Date, delivered by the New
Subsidiaries to a vessel mortgagee acting on behalf of the Administrative
Agent and the Lenders, with respect to each of the vessels owned or
leased to any New Subsidiary, and all documents, instruments and
agreements executed pursuant thereto or in connection therewith,
including, without limitation, releases of any existing Liens on any such
vessels.
(i) OTHER DOCUMENTS. Such other certificates, documents and
agreements as Administrative Agent may reasonably request.
8. EXPENSES. Holdings, the Existing Subsidiaries and the New
Subsidiaries agree, jointly and severally, to pay or cause to be paid on
demand all costs and expenses, including reasonable attorneys' fees, of
the Administrative Agent incurred in connection with this Agreement.
9. CONTINUED EFFECTIVENESS. The term "Agreement," "hereof,"
"herein" and similar terms as used in the Credit Agreement, and
references in the other Loan Documents to the Credit Agreement, shall
mean and refer to, from and after the Effective Date, the Credit
Agreement as amended by this Agreement. Each of Holdings, each Existing
Subsidiary and each New Subsidiary hereby agrees that all of the
covenants and agreements contained in the Credit Agreement and the Loan
Documents are hereby ratified and confirmed in all respects.
10. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be an original, and all of which, taken
together, shall constitute a single instrument. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be
effective as delivery of a manually executed counterpart of this
Agreement.
11. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without
giving effect to the conflict of laws provisions thereof.
* * *
IN WITNESS WHEREOF the parties hereto have caused this Assumption and
Amendment Agreement to be duly executed by their respective officers as
of the date first written above.
EXISTING SUBSIDIARIES
CARDINAL HOLDING CORP.
By:
Name:
Title:
CARDINAL SERVICES, INC.
By:
Name:
Title:
SUB-SURFACE TOOLS, INC.
By:
Name:
Title:
STABIL DRILL SPECIALTIES, INC.
By:
Name:
Title:
SUPERIOR WELL SERVICE, INC.
By:
Name:
Title:
NAUTILUS PIPE & TOOL RENTAL, INC.
By:
Name:
Title:
ACE RENTAL TOOLS, INC.
By:
Name:
Title:
CONNECTION TECHNOLOGY, LTD.
By:
Name:
Title:
FASTORQ, INC.
By:
Name:
Title:
F. & F. WIRELINE SERVICE, INC.
By:
Name:
Title:
OIL STOP, INC.
By:
Name:
Title:
STEERABLE ROTARY TOOLS, L.L.C.
By:
Name:
Title:
HYDRO-DYNAMICS OILFIELD CONTRACTORS, INC.
By:
Name:
Title:
0000 XXXXXX XXXX, INC.
By:
Name:
Title:
0000 XXXXXX XXXX, INC.
By:
Name:
Title:
DIMENSIONAL OIL FIELD SERVICES, INC.
By:
Name:
Title:
SUPERIOR BAREBOAT CHARTERS, INC.
By:
Name:
Title:
TONG RENTALS AND SUPPLY COMPANY, INC.
By:
Name:
Title:
HOLDINGS
SUPERIOR ENERGY SERVICES, INC.
By:
Name:
Title:
ADMINISTRATIVE AGENT
GENERAL ELECTRIC CAPITAL CORPORATION
By:
Name:
Title:
LENDERS
GENERAL ELECTRIC CAPITAL CORPORATION
By:
Name:
Title:
XXXXX FARGO BANK (TEXAS), N.A.
By:
Name:
Title:
HIBERNIA NATIONAL BANK
By:
Name:
Title:
PILGRIM AMERICA HIGH INCOME INVESTMENTS LTD.
By:
Name:
Title:
ML CLO XX PILGRIM AMERICA (CAYMAN) LTD.
By:
Name:
Title:
ML CLO XV PILGRIM AMERICA (CAYMAN) LTD.
By:
Name:
Title:
PILGRIM PRIME RATE TRUST
By:
Name:
Title:
BANK ONE, LOUISIANA, N.A.
By:
Name:
Title:
CIBC, INC.
By:
Name:
Title:
XXXXXX FINANCIAL, INC.
By:
Name:
Title:
ELF FUNDING TRUST I
By:
Name:
Title:
KZH HIGHLAND-2 LLC
By:
Name:
Title:
SAFECO CREDIT COMPANY, INC.
By:
Name:
Title:
AVALON CAPITAL LTD.
By:
Name:
Title:
AERIES FINANCE-II, LTD.
By:
Name:
Title:
NATEXIS BANQUE-BFCE
By:
Name:
Title:
CAPTIVA III FINANCE LTD.
By:
Name:
Title:
CAPTIVA IV FINANCE LTD.
By:
Name:
Title:
DELANO COMPANY
By:
Name:
Title:
TRIGON HEALTHCARE INC.
By:
Name:
Title:
CATELINA CDO LTD.
By:
Name:
Title:
XXX XXXXXX SENIOR FLOATING RATE FUND
By:
Name:
Title:
NEW SUBSIDIARIES
PMI ACQUISITION COMPANY, INC.
By:
Name:
Title:
PRODUCTION MANAGEMENT INDUSTRIES, INC.
By:
Name:
Title:
PRODUCTION MANAGEMENT CONTROL SYSTEMS, INC.
By:
Name:
Title:
PRODUCTION MANAGEMENT EQUITIES, INC.
By:
Name:
