AMENDMENT NO. 1 TO THE STOCK PURCHASE AGREEMENT
Exhibit 2.3.2
Execution Version
AMENDMENT NO. 1 TO THE STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO THE STOCK PURCHASE AGREEMENT (this “Amendment”), is made and
entered into as of October 24, 2007, by and among West Oklahoma PVF Company, a Delaware corporation
(“Buyer”), Red Man Pipe & Supply Co., an Oklahoma corporation (the “Company) and
Xxxxx Xxxxxxx (the “Representative”), as Representative of the Shareholders. All
capitalized terms used in this Amendment which are not otherwise defined herein are used with the
same meaning attributed to such capitalized terms in the Stock Purchase Agreement (as defined
below).
WITNESSETH:
WHEREAS, Buyer, the Company and the holders of all outstanding shares of stock of the Company
listed on Schedule 1 thereto (each a “Shareholder” and, collectively, the
“Shareholders”), McJ Holding LLC, a Delaware limited liability company (for purposes of
Sections 2.3(c) and 10.4 only) and the Representative are parties to that certain Stock Purchase
Agreement dated July 6, 2007 (the “Stock Purchase Agreement”);
WHEREAS, pursuant to the letter attached hereto as Annex 1, the Company is giving
certain participants in the Company Retirement Plan the ability to elect to receive, prior to
Closing, a distribution (the “Distribution”) of shares of Company Stock from the Company
Retirement Plan (the participants who elect to receive a Distribution, the “Electing
Participants”);
WHEREAS, as a condition precedent to receiving the Distribution, each Electing Participant
will be required to sign a joinder agreement (a “Joinder Agreement”), in the form attached
hereto as Annex 2, whereby each Electing Participant will agree to become a party to the
Stock Purchase Agreement as a “Shareholder” and a “Plan Shareholder”; and
WHEREAS, Buyer and the Representative desire to amend and waive certain provisions of the
Stock Purchase Agreement, solely to the extent necessary to permit the Distribution and the
execution of the Joinder Agreement in connection therewith, as hereinafter more particularly set
forth.
NOW, THEREFORE, for and in consideration of the premises, the mutual covenants contained
herein and other good and valuable consideration, the receipt, adequacy and sufficiency of which
are hereby acknowledged, the parties hereby covenant and agree as follows:
1. Amendments to Stock Purchase Agreement.
1.1. Article I of the Stock Purchase Agreement is hereby amended as follows:
(a) The definition of “Ancillary Documents” is hereby amended and restated in its
entirety as follows:
“Ancillary Documents” means each agreement, certificate or
other instrument executed or to be executed by Buyer, the Company
and/or any Shareholder in connection with this Agreement, including
the Escrow Agreement, the Holdback Escrow Agreement, the Employment
Agreements, the Contribution Agreement, the Non-Compete Agreement
and the letter agreement dated on or about the date hereof between
the Xxxxxxx Entities and GS Capital Partners V Fund, L.P. and
affiliated funds.
(b) The following definition is hereby added immediately after the definition of “Debt
Financing Commitment”:
“Distribution” means the distribution of shares of Company
Stock to the Plan Shareholders from the Company Retirement Plan
pursuant to the election made by the Plan Shareholders in accordance
with the letter attached hereto as Annex 1.
(c) The following definitions are hereby added immediately after the definition of
“Hazardous Substances”:
“Holdback Escrow Account” means the escrow account
established pursuant to the Holdback Escrow Agreement.
“Holdback Escrow Agreement” means the escrow agreement to be
entered into on the Closing Date among the Representative, Buyer and
the Escrow Agent, to be mutually agreed upon between the
Representative and Buyer and which shall be substantially similar to
Escrow Agreement.
“Holdback Percentage” means, with respect to each Plan
Shareholder, 20%, plus the applicable state withholding tax rate.
(d) The definition of “Non-Plan Shareholders” is amended and restated in its entirety
as follows:
“Non-Plan Shareholders” means each of the Shareholders other
than the Company Retirement Plan, the Plan Shareholders and T. Xxxxx
Xxxxxxx.
(e) The following definitions are hereby added immediately after the definition of
“Person”:
“Plan Shareholder Holdback Release Date” means, with respect
to each Plan Shareholder, the later of (i) the expiration of all
applicable statutes of limitations for the Company Retirement Plan’s
taxable year ending December 31, 2007 and (ii) the expiration of all
applicable statutes of limitations for such Plan Shareholder’s 2007
taxable year; provided, however, that, if the
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Company agrees to extend the statute of limitations with respect to
the Company Retirement Plan’s taxable year ending December 31, 2007
without the consent of the Representative, such consent not to be
unreasonably withheld, or if the Company fails to timely file IRS
Form 945 (or other applicable form, if any such form is required to
be filed) for the 2007 taxable year, then the Plan Shareholder
Holdback Release Date with respect to each Plan Shareholder shall be
the later of (x) the expiration of all applicable statutes of
limitations for such Plan Shareholder’s 2007 taxable year and (y)
April 15, 2011. Notwithstanding the foregoing, if a Plan
Shareholder, the Company Retirement Plan, the Company, or McJ
Holding or any of its Subsidiaries has been notified by the IRS or
any other Governmental Entity that the tax treatment of the
Distribution to such Plan Shareholder may be subject to challenge by
the IRS or any other Governmental Entity, then the Plan Shareholder
Holdback Release Date shall not be prior to the date on which such
challenge has been finally resolved and any tax, interest or
penalties due and owing as a result of such challenge have been
fully paid to the appropriate Governmental Entity.
“Plan Shareholders” means each person who signs a Joinder
Agreement substantially in the form attached hereto as Annex
2. (For avoidance of doubt, T. Xxxxx Xxxxxxx is not a “Plan
Shareholder” as so defined.)
1.2. Section 6.12 of the Stock Purchase Agreement is hereby amended to add the following at
the end thereof:
On or prior to the Closing, the Plan Shareholders shall cause the
Representative to execute and deliver, and Buyer shall execute and deliver,
the Holdback Escrow Agreement.
1.3. The last sentence of Section 6.17 of the Stock Purchase Agreement is hereby amended and
restated in its entirety as follows:
“The Parties acknowledge and agree that Consolidated Investment Services,
Inc., the Company Retirement Plan, Xxxxx Xxxxxxx, T. Xxxxx Xxxxxxx and the
Plan Shareholders shall not be entitled to become Continuing Shareholders
and shall not be entitled to contribute any shares of Company Stock to McJ
Holding pursuant to the Contribution Agreement.”
1.4. The following is hereby added immediately after Section 6.18 of the Stock Purchase
Agreement:
“6.19. Plan Shareholder Holdback. Notwithstanding anything in this
Agreement to the contrary, including, without limitation, Article II and
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Section 6.17 for each Plan Shareholder: (a) at the Closing, an amount equal
to such Plan Shareholder’s respective Holdback Percentage multiplied by all
amounts to be paid to the Representative on behalf of such Plan Shareholder
pursuant to Section 2.3(a)(ii) and Section 2.3(c)(i)(A) shall instead be
deposited into the Holdback Escrow Account and not distributed to the Plan
Shareholders, (b) an amount equal to such Plan Shareholder’s respective
Holdback Percentage multiplied by all amounts to be paid to the
Representative on behalf of such Plan Shareholder out of the Escrow Account
pursuant to Section 2.3(c)(i)(B) or Section 2.3(c)(ii)(A) shall instead be
deposited into the Holdback Escrow Account and not distributed to the Plan
Shareholders and (c) an amount equal to such Plan Shareholder’s respective
Holdback Percentage multiplied by all amounts to be paid to the
Representative on behalf of such Plan Shareholder pursuant to Section 6.14
shall instead be deposited into the Holdback Escrow Account and not
distributed to the Plan Shareholders. Buyer and the Representative will
instruct the Escrow Agent to pay to Buyer or the Company (or any of their
Affiliates) the amounts held in the Holdback Escrow Account pursuant to this
Section 6.19 to the extent that Buyer or the Company (or any of their
Affiliates) becomes obligated to pay any applicable tax, interest and/or
penalties to the IRS or any other Governmental Entity in respect of the
distribution of shares of Common Stock to any Plan Shareholder in the
Distribution. On the applicable Plan Shareholder Holdback Release Date for
a Plan Shareholder, Buyer and the Representative shall instruct the Escrow
Agent to distribute to the Representative, on behalf of such Plan
Shareholder, an amount (if any) equal to the amount held in the Holdback
Escrow Account pursuant to this Section 6.19 with respect to such Plan
Shareholder, less any amounts distributed or required to be distributed from
the Holdback Escrow Account to Buyer, the Company (or any of their
Affiliates) pursuant to the immediately preceding sentence with respect to
the distribution of shares of Common Stock to such Plan Shareholder in the
Distribution.
1.5. Section 7.3 of the Stock Purchase Agreement is hereby amended by adding the following
immediately after clause (m) thereof:
(n) Holdback Escrow Agreement. The Holdback Escrow Agreement shall
have been executed and delivered by the Representative (on behalf of the
Shareholders) and the Escrow Agent.
1.6. Section 10.14(b) of the Stock Purchase Agreement is hereby amended by adding the
following at the end thereof:
Without limiting the generality of the foregoing, the Representative is
hereby authorized (i) to receive any payment owing to the Plan Shareholders
pursuant to Section 6.19, (ii) to execute the Holdback Escrow Agreement on
behalf of the Plan Shareholders, and (iii) to take all
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actions on behalf of the Plan Shareholders in connection with any actions
taken or to be taken under Section 6.19. The Representative and the Plan
Shareholders hereby agree that any amounts disbursed out of the Holdback
Escrow Account to the Representative pursuant to the terms of Section 6.19
and/or the Holdback Escrow Agreement shall be distributed by the
Representative to the Plan Shareholders in accordance with Schedule
1 and Exhibit B, as applicable.
1.7. Annex 1 and Annex 2 to this Amendment are hereby added as Annex 1 and Annex
2 to the Stock Purchase Agreement, respectively.
2. Schedule 1 and Exhibit B. Schedule 1 and Exhibit B to the Stock Purchase Agreement will
be amended to add, as Shareholders and Plan Shareholders, those persons who become Electing
Participants.
3. Acceptance of Joinder. Buyer, the Company and the Representative (on behalf of the
Shareholders) accept the Joinder Agreements to be entered into by each Electing Participant, and
agree that upon execution of a Joinder Agreement each Electing Participant shall become a
“Shareholder” and a “Plan Shareholder” under the Stock Purchase Agreement, in each case entitled to
all the rights and benefits of such a party under the Stock Purchase Agreement (and bound by and
subject to the terms and conditions thereof), as if a signatory directly thereto.
4. Limited Waiver; Full Force and Effect of the Stock Purchase Agreement. Buyer, the
Company and the Representative (on behalf of the Shareholders) hereby waive any and all breaches of
representation, warranty and covenant of the Shareholders or the Company set forth in the Stock
Purchase Agreement, in each case solely to the extent necessary to permit without breach the
Distribution and the execution and delivery of the Joinder Agreement and the Holdback Escrow
Agreement. The waiver set forth in the immediately preceding sentence shall not be deemed to
extend to any prior or subsequent default or breach or affect in any way any rights arising by
virtue of any such prior or subsequent occurrence and the parties hereto do not waive any right
that they may have under the Stock Purchase Agreement. Except as expressly set forth herein, the
parties make no amendment, alteration or modification of the Stock Purchase Agreement. Except as
expressly set forth herein, the Stock Purchase Agreement shall remain in full force and effect.
5. Applicability of Article X of the Stock Purchase Agreement. The provisions of Article X
of the Stock Purchase Agreement shall apply to this Amendment as if such provisions were part of
this Amendment.
[The next page is the signature page]
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above
written.
| RED MAN PIPE & SUPPLY CO. |
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| By: | /s/ XXXXX XXXXXXX | |||
| Name: | Xxxxx Xxxxxxx | |||
| Title: | President and CEO | |||
| WEST OKLAHOMA PVF COMPANY |
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| By: | /s/ F.T. XXXXX JR. | |||
| Name: | F.T. Xxxxx Jr. | |||
| Title: | Secretary | |||
XXXXX XXXXXXX, as Representative |
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| /s/ XXXXX XXXXXXX | ||||
