EXHIBIT 2.1
SECOND AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
This Second Amendment (the "Amendment"), dated October 31, 2001 to
Agreement and Plan of Merger dated as of May 7, 2001, as amended (the
"Agreement"), is by and among Industrial Holdings, Inc., a Texas corporation
("IHI"), T-3 Energy Services, Inc., a Delaware corporation ("T-3"), and First
Reserve Fund VIII, Limited Partnership, a Delaware limited partnership (the
"Fund").
WHEREAS, IHI, T-3 and the Fund desire to amend the Agreement as provided
herein.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:
1. The third recital of the Agreement is deleted and replaced as
follows:
WHEREAS, immediately after the consummation of the Merger, IHI
will merge into a Delaware corporation which is a wholly-owned
subsidiary of IHI ("IHI Delaware"), on terms set forth in Appendix I
hereto (the "Reincorporation"); and
2. The following definitions are added to Section 1.1 of the
Agreement:
"Sale of Assets" means a sale, lease or exchange of all or
substantially all of the assets of an entity which is subject to the
IHI Dispositions.
"Sale of Stock" means (i) any sale in a single transaction or
in a series of related and substantially contemporaneous
transactions of shares of all of the capital stock of any entity
which is subject to the IHI Dispositions, or (ii) any merger,
consolidation or reorganization of an entity which is subject to the
IHI Dispositions, as a result of which all of the capital stock of
such entity is sold, transferred or exchanged pursuant to such
merger, consolidation or reorganization.
3. Appendix I to the Agreement is deleted and replaced with the
Reincorporation Merger Agreement set forth in Exhibit A hereto.
4. Section 6.19 of the IHI Disclosure Schedules is deleted and
replaced with Exhibit B hereto.
5. Subsection 3.1(b) of the Agreement is deleted and replaced with
the following:
(b) At the Effective Time, each share of T-3 Common Stock
issued and outstanding immediately prior to the Effective Time
(other than shares held by a holder that properly exercises
dissenters' rights in strict compliance with the DGCL), without any
action on the part of the holder thereof, shall automatically become
and be converted into (i) the right to receive certificates
evidencing a number of shares of IHI Common Stock equal to the
Exchange Factor plus (ii) 3.9074 Merger Warrants upon surrender, in
accordance with Subsection 3.1(c) hereof, of certificates
theretofore evidencing shares of T-3 Common Stock. Section 3.1 of
the T-3 Disclosure Schedules lists all T-3 Stockholders and the
number of shares of T-3 Common Stock owned by each such stockholder
as of the date hereof (including shares issuable upon conversion of
debt held by the Fund).
6. Section 6.19 is deleted and replaced with the following:
Section 6.19 Agreements with Respect to IHI Dispositions.
(a) IHI and/or one or more of its Affiliates shall have
entered into definitive agreements (the "Disposition Agreements")
with respect to each of the IHI Dispositions not later than November
15, 2001. The IHI Dispositions are set forth on Schedule 6.19 of the
IHI Disclosure Schedules.
(b) The Disposition Agreements may take the form of a merger,
sale of stock or sale of assets or such other form as may be
reasonably acceptable to T-3 and IHI. No Disposition Agreement shall
be entered into without the written consent of T-3, which consent
shall not be unreasonably withheld; however, T-3 shall have no
obligation to consent unless the Disposition Agreements provide for
an aggregate Net Proceeds of at least $33.3 million, of which not
greater than $6.1 million shall be represented by seller financing
or other deferred payment obligations to IHI or its Subsidiaries
with respect to non-competition agreements, consulting arrangements,
earnout payments or other similar arrangements. Notwithstanding the
foregoing, T-3 has consented to two of the Disposition Agreements as
indicated in Section 6.19 of the IHI Disclosure Schedules. IHI
agrees to keep T-3 informed regarding the status of all negotiations
relating to the IHI Dispositions and allow T-3 to participate (with
such legal or other advisors as it deems appropriate), at its
expense, in discussions and negotiations with the proposed
purchasers. Notwithstanding the foregoing, IHI shall remain solely
responsible for the IHI Dispositions, and T-3 shall have no
authority to negotiate such transactions or enter into any
agreements on IHI's part.
(c) All proceeds from the IHI Dispositions shall be used (i)
first to repay any capitalized leases that are owed by the entity
being sold, or borrowed money indebtedness secured by the assets of
the entity being sold in order of priority of their secured
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position and (ii) second to repay a portion of IHI's Senior Secured
Credit Facility satisfactory to IHI's senior secured lenders.
(d) The "Net Proceeds" from the IHI Dispositions shall be
determined as follows:
(i) If the IHI Disposition results from the Sale of Stock, the
amount of the consideration received by IHI or its Subsidiaries from
such sale, less all expenses incurred or estimated to be incurred by
IHI or its Subsidiaries in connection with the Sale of Stock,
including all Taxes resulting therefrom, fees of counsel,
accountants and other consultants, fees of any investment banking
firm acting as financial advisor to IHI or its Subsidiaries, and any
brokerage or finder's fee payable in connection with the Sale of
Stock.
(ii) If the IHI Disposition results from the Sale of Assets,
the amount of the consideration received by IHI or its Subsidiaries
for the assets sold by it in the Sale of Assets (exclusive of any
IHI or Subsidiary liabilities assumed by the purchaser of such
assets), less all expenses incurred or estimated to be incurred by
IHI or its Subsidiaries in connection with the Sale of Assets,
including all Taxes resulting therefrom, fees of counsel,
accountants and other consultants, fees of any investment banking
firm acting as financial advisor to IHI or its Subsidiaries, and any
brokerage or finder's fee payable in connection with the Sale of
Assets.
7. Subsection 7.1(g) is deleted and replaced with the following:
(g) The Reincorporated Company shall meet the initial listing
requirements (on a pro forma basis) for the shares of its common
stock to be approved for quotation on the Nasdaq National Market
based on the average closing price of IHI common stock on the Nasdaq
Stock Market for the ten trading days immediately prior to the
Closing Date or the shares of common stock of the Reincorporated
Company shall have been conditionally approved for listing on the
Nasdaq National Market subject to the requirement of meeting the $5
minimum bid price requirement.
8. The following subsection is added at the end of Section 8.1.
(i) notwithstanding Section 8.1(c) hereof, by T-3, if IHI
and/or one or more of its Affiliates has not entered into definitive
Disposition Agreements by November 15, 2001 with respect to each of
the IHI Dispositions in accordance with Section 6.19.
9. Capitalized terms used but not defined herein shall have the
meanings set forth in the Agreement.
10. Except as otherwise amended hereby, the Agreement remains in full
force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
signed by their respective duly authorized officers as of the date first written
above.
INDUSTRIAL HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇
President and Chief Executive Officer
T-3 ENERGY SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
FIRST RESERVE FUND VIII,
LIMITED PARTNERSHIP
By: First Reserve GP VIII, L.P.,
its General Partner
By: First Reserve Corporation,
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
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EXHIBIT B
Schedule 6.19
IHI Dispositions
T-3 Consent
Name Obtained
---- -----------
▇. ▇▇▇▇▇▇ Industries
B. Engineered Products Group:
(3 separate sales)
(1) ▇▇▇▇▇▇▇▇ Metal Forming, Inc.
(2) ▇▇▇ Machinery Movers, Inc. d/b/a Ideal Products;
OF Acquisition L.P.; and Philform, Inc. Yes
(3) American Rivet Company, Inc. Yes
C. GHX, Inc.