Document:

EX-10.24

Exhibit 10.24

Execution Verson

PHANTOM SHARES SURRENDER AGREEMENT, RELEASE AND WAIVER

     THIS PHANTOM SHARE SURRENDER AGREEMENT, RELEASE AND WAIVER (this “Agreement”) is made as of
October 30, 2007 by and between Red Man Pipe & Supply Co., an Oklahoma corporation (“Red Man”),
McJ Holding LLC, a Delaware limited liability company (the “Company”) and Dee Paige (the
“Employee”), in connection with the closing of the transactions contemplated by the Stock Purchase
Agreement, dated as of July 6, 2007 (the “Purchase Agreement”), between West Oklahoma PVF Company,
a Delaware corporation (“Buyer”), Red Man, the Company, and the holders of all outstanding shares
of stock of the Company who are signatories thereto (the “Shareholders”). Capitalized terms not
otherwise defined herein shall have the same meaning as in the Purchase Agreement.

PRELIMINARY STATEMENT

     The Employee has been awarded phantom shares related to Red Man (the “Phantom Shares”)
pursuant to the Red Man Pipe & Supply Co. Phantom Stock Plan (the “Plan”) and the Grant of Phantom
Shares dated as of April 15, 2003 (the “Award Agreement”). The Employee desires to surrender all
the Phantom Shares in exchange for the cash consideration set forth below.

     NOW THEREFORE, in consideration of the premises, the mutual agreements and covenants
contained herein and other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, and intending to be legally bound hereby, the parties hereto hereby
covenant and agree as follows:

ARTICLE I

SURRENDER OF PHANTOM SHARES

     Section 1.1 Surrender of Phantom Shares. Effective as of the Closing, the Employee hereby
irrevocably relinquishes, waives, disclaims and surrenders any and all rights, title and interest
he may have with respect to all the Phantom Shares and any other options, warrants or other rights
to acquire shares of capital stock of or equity interests in Red Man or similar securities or
contractual obligations the value of which is derived from the value of an equity interest in Red
Man (collectively, “Derivative Securities”), whether vested or unvested, and, except as provided
herein, the Employee acknowledges that Red Man shall not have any further liability whatsoever
after the Closing to the Employee with respect to the Phantom Shares or any such Derivative
Securities or pursuant to the Plan or any Award Agreement.

     Section 1.2 Phantom Share Surrender Payments.

(a) The Company agrees to pay the Employee the following payments (the “Surrender
Payments”), less any withholding that the Company may be required to make, provided
that the Employee remains continuously employed with the Company or its Affiliates
until the relevant payment date:

(i) On January 1, 2008, $433,333.33, plus interest for the period from
November 1, 2007 until the payment date, calculated at a rate equal to

 

 

4.88%, which is 120% of the short-term applicable Federal rate (determined under Section
1274(d) of the Internal Revenue Code and the regulations thereunder), compounded
semi-annually, as published by the Internal Revenue Service for November 2007 (the
“Applicable Rate”).

(ii) On October 31, 2008, $433,333.33, plus interest for the period from November 1, 2007
until the payment date, calculated at the Applicable Rate.

(iii) On October 31, 2009, $433.333.33, plus interest for the period from November 1,
2007 until the payment date, calculated at the Applicable Rate.

(b) Notwithstanding the foregoing, in the event that the Employee’s
employment is terminated prior to the payment of all of the Surrender Payments
and such termination is due to (i) a termination by the Company without Cause,
(ii) a termination by the Employee due to Good Reason or (iii) the Employee’s
death, any then unpaid Surrender Payments shall be immediately paid in full to
the Employee; provided, however, that in no event shall the Surrender Payments
be made prior to January 1, 2008.

(i) “Cause” shall mean the Employee’s (A) continuing failure, for more than 10 days after
the Company’s written notice to the Employee thereof, to perform such duties as are
reasonably requested by the Company; (B) failure to observe material policies generally
applicable to officers or employees of the Company unless such failure is capable of
being cured and is cured within 10 days of the Employee receiving written notice of such
failure; (C) failure to cooperate with any internal investigation of the Company; (D)
commission of any act of fraud, theft or financial dishonesty with respect to the Company
or indictment or conviction of any felony; (E) material violation of the provisions of
the Employment Agreement between the Company and the Employee dated as of the Closing
Date unless such violation is capable of being cured and is cured within 10 days of the
Employee receiving written notice of such violation; (F) chronic absenteeism; or (G)
abuse of alcohol or another controlled substance.

(ii) “Good Reason” shall mean (A) a material and adverse change in the Employee’s duties
or responsibilities, (B) a reduction in the Employee’s base salary or target annual bonus
or (C) a relocation of the Employee’s principal place of employment by more than 50
miles.

(c) If the Employee is a “specified employee” for purposes of Section 409A of
the United States Internal Revenue Code of 1986, as amended (the “Code”), and
the regulations thereunder, to the extent required to comply with Section 409A of
the Code, any payments required to be made pursuant to Section 1.2(b) which are

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subject to Section 409A of the Code shall not commence until one day after the day
which is 6 months from the date of termination of employment.

(d) In the event that the Employee’s employment is terminated prior to the payment
of all of the Surrender Payments and such payments are not accelerated pursuant to
Section 1.2(b), then the Employee shall forfeit any then unpaid Surrender Payments
(the “Forfeited Payments”) and the Forfeited Payments shall be paid to the
Shareholders within 30 days of the termination of Employee’s employment in
accordance with their respective Cash Proceeds Percentages as set forth on Exhibit
B of the Purchase Agreement. The parties agree that the Shareholders are intended
third party beneficiaries of this Section 1.2(d) and are entitled to enforce this
section as if a party thereto.

          Section 1.3 Representations and Warranties of Employee. The Employee hereby represents,
warrants and acknowledges that as of the Closing the Employee will surrender the Phantom Shares
free and clear of all liens or other encumbrances, except those liens that may arise as a result of
(a) any actions taken by or on behalf of the Company and its Affiliates or (b) applicable
securities laws.

          Section 1.4 Conditions to Surrender. The surrender of the Phantom Shares and payment of the
related surrender payment under this Agreement is contingent on (i) the occurrence of the Closing
and (ii) approval of this Agreement by 75% of the shareholders of the Company in accordance with
Section 280G(b)(5) of the Code. If the Purchase Agreement is terminated or if the requisite
shareholder approval is not obtained, this Agreement will be void and of no effect.

ARTICLE II

GENERAL PROVISIONS

          Section 2.1 Acknowledgement. The Employee, on behalf of himself and on behalf of his spouse
and all his heirs, predecessors, successors, assigns, representatives or agents (including,
without limitation, any trust of which the Employee is the trustee or which is for the benefit of
the Employee or a member of his family), to the fullest extent applicable law permits, hereby
acknowledges that the payments made pursuant to this Agreement are in full satisfaction of any and
all rights the Employee may have under the Phantom Shares.

          Section 2.2 Additional Deliveries. The Employee, upon request, will execute and deliver any
additional documents deemed by Red Man or the Company to be reasonably necessary or desirable to
complete the surrender of the Phantom Shares contemplated hereby.

          Section 2.3 Parties in Interest. This Agreement shall be binding upon and inure solely to the
benefit of each party hereto and Buyer, the successors and assigns of Red Man, the Company and
Buyer and the heirs and legal representatives of the Employee. Except for the Shareholders’
potential right to payments pursuant to Section 1.2(d), nothing in this Agreement is intended to
confer upon any other person any rights or remedies of any nature whatsoever under or by reason of
this Agreement except as expressly set forth herein.

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     Section 2.4 Amendment and Waivers. This Agreement and any of the provisions hereof may be
amended, waived (either generally or in a particular instance and either retroactively or
prospectively), modified or supplemented, in whole or in part, only by written agreement signed by
the parties hereto; provided, that, the observance of any provision of this Agreement may be waived
in writing by the party that will lose the benefit of such provision as a result of such waiver.
The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or
be construed as a further or continuing waiver of such breach or as a waiver of any other or
subsequent breach, except as otherwise explicitly provided for in such waiver. Except as otherwise
expressly provided herein, no failure on the part of any party to exercise, and no delay in
exercising, any right, power or remedy hereunder, or otherwise available in respect hereof at law
or in equity, shall operate as a waiver thereof, nor shall any single or partial exercise of such
right, power or remedy by such party preclude any other or further exercise thereof or the exercise
of any other right, power or remedy.

     Section 2.5 Notices. Unless otherwise provided herein, all notices, requests, demands, claims
and other communications provided for under the terms of this Agreement shall be in writing. Any
notice, request, demand, claim or other communication hereunder shall be sent by (i) personal
delivery (including receipted courier service) or overnight delivery service, (ii) facsimile
during normal business hours, with confirmation of receipt, to the number indicated, (iii)
reputable commercial overnight delivery service courier or (iv) registered or certified mail,
return receipt requested, postage prepaid and addressed to the intended recipient as set forth
below:

	 	 	 	 	 	 	 
	 

	 	If to the Company:
	 	McJ Holding LLC
	 	 
	 

	 	 	 	835 Hillcrest Drive	 	 
	 

	 	 	 	Charleston, WV 25311	 	 
	 

	 	 	 	Attention: General Counsel	 	 
	 

	 	 	 	Facsimile: 304-348-1557	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	                  and	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	8023 East 63rd Place, Suite 800	 	 
	 

	 	 	 	Tulsa, Oklahoma 74133	 	 
	 

	 	 	 	Attention: General Counsel	 	 
	 

	 	 	 	Facsimile: 918-461-5375	 	 
	 
	 	 	 	 	 	 
	 

	 	with a copy to:
	 	GS Capital Partners V Fund, L.P.	 	 
	 

	 	 	 	85 Broad Street	 	 
	 

	 	 	 	New York, NY 10004	 	 
	 

	 	 	 	Attention: Jack Daly	 	 
	 

	 	 	 	Facsimile: 212-357-5505	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	                  and	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Fried, Frank, Harris, Shriver & Jacobson LLP	 	 
	 

	 	 	 	One New York Plaza	 	 
	 

	 	 	 	New York, NY 10004	 	 

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	 	 	 	Attention: Robert C. Schwenkel, Esq.	 	 
	 

	 	 	 	Facsimile: 212-859-4000	 	 
	 
	 	 	 	 	 	 
	 

	 	If to the Employee:
	 	Dee Paige, during his employment	 	 
	 

	 	 	 	at his principal office at the Company, and	 	 
	 

	 	 	 	at all times to his principal residence as	 	 
	 

	 	 	 	reflected in the records of the Company.	 	 

     All such notices, requests, consents and other communications shall be deemed to have been
given when received. Either party may change its facsimile number or its address to which notices,
requests, demands, claims and other communications hereunder are to be delivered by giving the
other parties hereto notice in the manner then set forth.

     Section 2.6 General Interpretive Principles. The name assigned this Agreement and headings of
the sections, paragraphs, subparagraphs, clauses, and subclauses of this Agreement are for
convenience of reference only and shall not in any way affect the meaning or interpretation of any
of the provisions hereof. Words of inclusion shall not be construed as terms of limitation herein,
so that references to “include,” “includes” and “including” shall not be limiting and shall be
regarded as references to non-exclusive and non-characterizing illustrations.

     Section 2.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF OKLAHOMA, WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAW PROVISIONS.

     Section 2.8 Severability. Whenever possible, each provision or portion of any provision of
this Agreement will be interpreted in such manner as to be effective and valid under applicable
law but the invalidity or unenforceability of any provision or portion of any provision of this
Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of
this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including
that provision or portion of any provision, in any other jurisdiction.

     Section 2.9 Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all such counterparts shall together constitute one and
the same instrument.

     Section 2.10 Entire Agreement. From and after the date first written above, this Agreement
constitutes the entire agreement between the parties hereto, and supersedes all prior
representations, agreements and understandings (including any prior course of dealings), both
written and oral, between the parties hereto with respect to the subject matter hereof.

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     Section 2.11 Section 409A Compliance. This Agreement is intended to comply with Section 409A
of the Code (to the extent applicable) and, to the extent it would not adversely impact the
Company, the Company agrees to interpret, apply and administer this Agreement in the least
restrictive manner necessary to comply with such requirements and without resulting in any
diminution in the value of payments or benefits to Employee.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 	 	 	 	 
	 	 	RED MAN PIPE & SUPPLY COMPANY	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By: 	/s/ Craig Ketchum	 	 
	 	 	 	 	 	 
	 

	 	 	Name: CRAIG KETCHUM
	 
	 

	 	 	Title: PRESIDENT & CEO
	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	MCJ HOLDING LLC	 	 
	 
	 	 	By: /s/ Tom Graff	 	 
	 	 	 	 	 	 
	 

	 	 	Name:	 	 
	 	 	 	 
 	 	 
	 

	 	 	Title:	 	 
	 	 	 	 
 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	EMPLOYEE	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	/s/ Dee Paige	 
	 	 	 	 	 
	 	 	Dee PaigeEX-10.27

Exhibit
10.27

Execution Copy

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

OF

RED MAN DISTRIBUTORS LLC

 

 

Table of Contents

	 	 	 	 	 
	 	 	 	 	Page
	 
	ARTICLE I 

	 
	 	 	 	 
	FORMATION OF THE COMPANY 

	 
	 	 	 	 
	Section 1.1
	 	Formation	 	1
	Section 1.2
	 	Company Name	 	1
	Section 1.3
	 	The Articles, etc.	 	1
	Section 1.4
	 	Term of Company	 	1
	Section 1.5
	 	Registered Agent and Office	 	2
	Section 1.6
	 	Principal Place of Business	 	2
	Section 1.7
	 	Qualification in Other Jurisdictions	 	2
	Section 1.8
	 	Fiscal Year	 	2
	 
	 	 	 	 
	ARTICLE II 

	 
	 	 	 	 
	PURPOSE AND POWERS OF THE COMPANY 

	 
	 	 	 	 
	Section 2.1
	 	Purpose	 	2
	Section 2.2
	 	Powers of the Company	 	2
	Section 2.3
	 	Certain Tax Matters	 	2
	 
	 	 	 	 
	ARTICLE III 

	 
	 	 	 	 
	MANAGEMENT 

	 
	 	 	 	 
	Section 3.1
	 	Board	 	3
	Section 3.2
	 	Directors as Agents	 	4
	Section 3.3
	 	Officers	 	4
	Section 3.4
	 	Affiliate Transactions	 	5
	 
	 	 	 	 
	ARTICLE IV

	 
	 	 	 	 
	MEMBERS AND INTERESTS GENERALLY

	 
	 	 	 	 
	Section 4.1
	 	Powers of Members	 	5
	Section 4.2
	 	Interests Generally	 	5
	Section 4.3
	 	Meetings of Members	 	6
	Section 4.4
	 	Business Transactions of a Member with the Company	 	7
	Section 4.5
	 	No Cessation of Membership upon Bankruptcy	 	7
	Section 4.6
	 	Confidentiality	 	7
	Section 4.7
	 	Other Business for MRM	 	7

i

 

Table of Contents

(continued)

	 	 	 	 	 
	 	 	 	 	Page
	 
	Section 4.8
	 	Preemptive Rights.	 	8
	 
	 	 	 	 
	ARTICLE V 

	 
	 	 	 	 
	REPRESENTATIONS, WARRANTIES AND COVENANTS 

	 
	 	 	 	 
	Section 5.1
	 	Investment Representations,
Warranties and Covenants of Members	 	9
	Section 5.2
	 	Covenant Not to Compete	 	10
	Section 5.3
	 	Independent Accountants	 	10
	 
	 	 	 	 
	ARTICLE VI	 	10
	 
	 	 	 	 
	CAPITAL ACCOUNTS; CAPITAL CONTRIBUTIONS 

	 
	 	 	 	 
	Section 6.1
	 	Capital Accounts	 	10
	Section 6.2
	 	Adjustments	 	10
	Section 6.3
	 	Additional Capital Contributions	 	11
	Section 6.4
	 	Negative Capital Accounts	 	11
	 
	 	 	 	 
	ARTICLE VII 

	 
	 	 	 	 
	ALLOCATIONS 

	 
	 	 	 	 
	Section 7.1
	 	Book Allocations of Income and Loss	 	11
	Section 7.2
	 	Special Book Allocations	 	11
	Section 7.3
	 	Tax Allocations	 	12
	 
	 	 	 	 
	ARTICLE VIII 

	 
	 	 	 	 
	DISTRIBUTIONS 

	 
	 	 	 	 
	Section 8.1
	 	Distributions Generally	 	12
	Section 8.2
	 	Distributions In Kind	 	12
	Section 8.3
	 	No Withdrawal of Capital	 	12
	Section 8.4
	 	Withholding	 	12
	Section 8.5
	 	Restricted Distributions	 	13
	Section 8.6
	 	Tax Distributions	 	13
	 
	 	 	 	 
	ARTICLE IX 

	 
	 	 	 	 
	BOOKS AND RECORDS 

	 
	 	 	 	 
	Section 9.1
	 	Books, Records and Financial Statements	 	14

ii

 

Table of Contents

(continued)

	 	 	 	 	 
	 	 	 	 	Page
	 
	Section 9.2
	 	Filings of Returns and Other
Writings; Tax Matters Partner	 	14
	Section 9.3
	 	Accounting Method	 	15
	 
	 	 	 	 
	ARTICLE X 

	 
	 	 	 	 
	LIABILITY, EXCULPATION AND INDEMNIFICATION 

	 
	 	 	 	 
	Section 10.1
	 	Liability	 	15
	Section 10.2
	 	Exculpation	 	15
	Section 10.3
	 	Fiduciary Duty	 	15
	Section 10.4
	 	Indemnification	 	15
	Section 10.5
	 	Expenses	 	16
	Section 10.6
	 	Severability	 	16
	 
	 	 	 	 
	ARTICLE XI 

	 
	 	 	 	 
	TRANSFERS OF INTERESTS 

	 
	 	 	 	 
	Section 11.1
	 	Restrictions on Transfers of Interests by Members	 	17
	Section 11.2
	 	Overriding Provisions	 	17
	Section 11.3
	 	Successors and Assigns	 	17
	Section 11.4
	 	Substitute Members	 	18
	Section 11.5
	 	Release of Liability	 	18
	Section 11.6
	 	MRM Call Right	 	18
	 
	 	 	 	 
	ARTICLE XII 

	 
	 	 	 	 
	DISSOLUTION, LIQUIDATION AND TERMINATION 

	 
	 	 	 	 
	Section 12.1
	 	Dissolving Events	 	19
	Section 12.2
	 	Dissolution and Winding-Up	 	19
	Section 12.3
	 	Distributions in Cash or in Kind	 	19
	Section 12.4
	 	Termination	 	20
	Section 12.5
	 	Claims of the Members	 	20
	 
	 	 	 	 
	ARTICLE XIII 

	 
	 	 	 	 
	MISCELLANEOUS 

	 
	 	 	 	 
	Section 13.1
	 	Notices	 	20
	Section 13.2
	 	Interpretation, Construction	 	20
	Section 13.3
	 	Entire Agreement	 	21
	Section 13.4
	 	Counterparts	 	21

iii

 

Table of Contents

(continued)

	 	 	 	 	 
	 	 	 	 	Page
	 
	Section 13.5
	 	Governing Law; Waiver of Jury Trial	 	21
	Section 13.6
	 	Specific Performance	 	22
	Section 13.7
	 	Invalidity of Provision	 	22
	Section 13.8
	 	Further Actions	 	22
	Section 13.9
	 	Legend	 	23
	Section 13.10
	 	Expenses	 	23
	Section 13.11
	 	Amendment and Waiver	 	23
	Section 13.12
	 	Severability	 	24
	Section 13.13
	 	No Third Party Beneficiaries	 	24
	Section 13.14
	 	Survival of Representations and Warranties	 	24
	Section 13.15
	 	Conflicting Agreements	 	24
	Section 13.16
	 	Each Interest in the Company is a Security	 	24
	Section 13.17
	 	Additional Credit Agreement Obligations	 	24
	 
	 	 	 	 
	ARTICLE XIV 

	 
	 	 	 	 
	DEFINED TERMS 

	 
	 	 	 	 
	Section 14.1
	 	Definitions	 	25
	 
	Schedule A
	 	Members	 	 

iv

 

AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING

AGREEMENT OF

RED MAN DISTRIBUTORS LLC

     This Amended and Restated Limited Liability Company Operating Agreement of Red Man
Distributors LLC (the “Company”), is dated as of September 18, 2008, between Craig Ketchum,
Kevin Ketchum, Brian Ketchum and Kent Ketchum (each, a “Ketchum Member” and, collectively,
the “Ketchum Members”), McJunkin Red Man Corporation, a West Virginia corporation
(“MRM”), and the Company. The Ketchum Members and MRM each may be referred to individually
as a “Member,” or collectively as the “Members.” Any capitalized term used herein without
definition shall have the meaning set forth in Article XIV.

WITNESSETH:

          WHEREAS, on November 1, 2007 the Members entered into an agreement establishing and setting
forth their agreement with respect to certain rights and obligations associated with their
interests in the Company (the “Original Agreement”).

          NOW, THEREFORE, in consideration of the premises and of the mutual covenants and obligations
hereinafter set forth, the parties hereto hereby agree to amend and restate the Original Agreement
as follows:

ARTICLE I

FORMATION OF THE COMPANY

     Section 1.1 Formation. The Company was formed by the filing of Articles of
Organization with the Secretary of the State of Oklahoma on November 1, 2007.

     Section 1.2 Company Name. The name of the Company is “Red Man Distributors LLC”. The
business of the Company may be conducted under such other names as the Board may from time to time
designate, provided that the Company complies with all relevant state laws relating to the
use of fictitious and assumed names.

     Section 1.3 The Articles, etc. Each Director is hereby authorized to execute,
deliver, file and record all such other certificates and documents, including amendments to or
restatements of the Articles, and to do such other acts as may be appropriate to comply with all
requirements for the formation, continuation and operation of a limited liability company, the
ownership of property, and the conduct of business under the laws of the State of Oklahoma and any
other jurisdiction in which the Company may own property or conduct business.

     Section 1.4 Term of Company. The term of the Company commenced on the date of the
initial filing of the Articles with the Secretary of State of the State of Oklahoma. The Company
may be terminated in accordance with the terms and provisions hereof, and shall continue unless and
until dissolved as provided in Article XII. The existence of the Company as

 

 

a separate legal entity shall continue until the cancellation of the Articles as provided in
the Oklahoma Act.

     Section 1.5 Registered Agent and Office. The Company’s registered agent and office in
the State of Oklahoma is Kevin Ketchum, 8023 E. 63rd Place, Suite 800, Tulsa, Oklahoma
74133. The Board may designate another registered agent and/or registered office from time to time
in accordance with the then applicable provisions of the Oklahoma Act and any other applicable
laws.

     Section 1.6 Principal Place of Business. The principal place of business of the
Company is located at 8023 East 63rd Place, Suite 600, Tulsa, Oklahoma 74133. The
location of the Company’s principal place of business may be changed by the Board from time to time
in accordance with the then applicable provisions of the Oklahoma Act and any other applicable
laws.

     Section 1.7 Qualification in Other Jurisdictions. Any authorized person of the
Company shall execute, deliver and file any certificates (and any amendments and/or restatements
thereof) necessary for the Company to qualify to do business in a jurisdiction in which the Company
may wish to conduct business.

     Section 1.8 Fiscal Year. The fiscal year of the Company for financial accounting
purposes shall end on December 31.

ARTICLE II

PURPOSE AND POWERS OF THE COMPANY

     Section 2.1 Purpose. The purposes of the Company are, and the nature of the business
to be conducted and promoted by the Company is, engaging in any lawful act or activity for which
limited liability companies may be formed under the Oklahoma Act and engaging in all acts or
activities as the Company deems necessary, advisable or incidental to the furtherance of the
foregoing.

     Section 2.2 Powers of the Company. The Company shall have the power and authority to
take any and all actions that are necessary, appropriate, advisable, convenient or incidental to or
for the furtherance of the purposes set forth in Section 2.1; provided that without the
consent of MRM, the Company shall not have the power or authority to take any action that would
result in any Member of the Company having (a) “unrelated business taxable income” (as that term is
defined in Section 512(a) of the Code) or (b) income which is “effectively connected with the
conduct of a trade or business within the United States” (within the meaning of the Code).

     Section 2.3 Certain Tax Matters. The Company shall not elect, and the Board shall not
permit the Company to elect, to be treated as an association taxable as a corporation for U.S.
federal, state or local income tax purposes under Treasury Regulations section 301.7701-3 or under
any corresponding provision of state or local law. The Company and the Board shall not

2

 

permit the registration or listing of the Interests on an “established securities market,” as
such term is used in Treasury Regulations section 1.7704-1.

ARTICLE III

MANAGEMENT

     Section 3.1 Board.

     (a) Generally. The business and affairs of the Company shall be managed by or under
the direction of a Board of Directors (the “Board”) consisting of such number of natural
persons (each a “Director”) as shall be established in accordance with this Section 3.1.
Directors need not be Members. Subject to the provisions of this Article IV, the Board shall have
full, exclusive and complete discretion to manage and control the business and affairs of the
Company, including to delegate to agents, officers and employees of the Company, and to make all
decisions affecting the business and affairs of the Company and to take all such actions as it
deems necessary or appropriate to accomplish the purposes of the Company as set forth herein,
including, without limitation, to exercise all of the powers of the Company set forth in Section
2.2 of this Agreement.

     (b) Board Composition.

          (i) The Board shall be comprised of five (5) Directors.

          (ii) Subject to Section 3.1(c), (A) Ketchum Members holding greater than 50% of the number of
Units held by all Ketchum Members shall have the right to designate three (3) Directors (the
persons from time to time designated by the Ketchum Members in accordance with the foregoing being
referred to herein as the “Ketchum Directors”), and (B) MRM shall have the right to
designate two (2) Directors (the persons from time to time designated by MRM in accordance with the
foregoing being referred to herein as the “MRM Directors”). As of the date hereof, (i) the
Ketchum Directors shall be Craig Ketchum, Kent Ketchum, and Brian Ketchum, and (ii) the MRM
Directors shall initially be Stephen W. Lake and Dee Paige.

          (iii) Each person named as a Director herein or subsequently appointed as a Director is hereby
designated as a “manager” (within the meaning of the Oklahoma Act) of the Company. Except as
otherwise provided herein, and notwithstanding the first sentence of Section 2019 of the Oklahoma
Act, no single Director shall have the authority to bind the Company, and the Board shall have the
power to act only collectively in accordance with the provisions and in the manner specified
herein.

     (c) Board Vacancies; Resignation; Removal.

          (i) Subject to Section 3.1(c)(ii), each Director shall hold his office until his death or
until his successor shall have been duly elected and qualified in accordance with this Section 3.1.
If any Ketchum Director shall cease for any reason to serve as a Director (including for Director
Cause pursuant to Section 3.1(c)(ii)), the vacancy resulting thereby shall be filled by another
person designated by Ketchum Members holding greater than 50% of the number of

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Units held by all Ketchum Members. If any MRM Director shall cease for any reason to serve as
a Director (including for Director Cause pursuant to Section 3.1(c)(ii)), the vacancy resulting
thereby shall be filled by another person designated by MRM.

          (ii) (A) The removal from the Board of any Ketchum Director shall be only at the written
request of Ketchum Members holding greater than 50% of the number of Units held by all Ketchum
Members, and (B) the removal from the Board of any MRM Director shall be only at the written
request of MRM. Upon receipt of any such written request, the Board and the Members shall promptly
take all such action necessary or desirable to cause the removal of such Director from office.
Notwithstanding the foregoing, any Ketchum Director may be removed for Director Cause by MRM, and
any MRM Director may be removed for Director Cause by Ketchum Members holding greater than 50% of
the number of Units held by all Ketchum Members. Upon removal from the Board, such Director shall
cease to be a “manager” (within the meaning of the Oklahoma Act).

     (d) Meetings of the Board. The Board shall meet at least once every quarter, at such
time as determined by the Board to discuss the business of the Company. The Board may hold
meetings either within or without the State of Oklahoma. The Company and the Board shall give all
Directors at least two days’ prior notice of all meetings of the Board. Special meetings of the
Board may be called by any Director.

     (e) Quorum and Acts of the Board. At all meetings of the Board, a quorum shall
consist of all Directors. Except as set forth in Section 3.4, all actions of the Board shall
require the affirmative vote of at least a majority of the votes held by all Directors (whether or
not present at the meeting) and each Director shall be entitled to one vote on each matter that
comes before the Board. Any action that may be taken at a meeting of the Board may also be taken
by written consent of Directors holding the minimum number of the votes of Directors necessary to
authorize or take such action.

     (f) Telephonic Board Meetings. The Company shall take or cause to be taken all
necessary actions to allow any Director to attend telephonically any meeting of the Board or any
committee thereof.

     (g) Expenses. The Company shall pay the reasonable out-of-pocket expenses incurred by
each Director in connection with performing his duties as a Director, including, without
limitation, the reasonable out-of-pocket expenses incurred by such person for attending meetings of
the Board or meetings of any board of directors or other similar managing body of any Subsidiary of
the Company.

     Section 3.2 Directors as Agents. The Directors, to the extent of their powers set
forth in this Agreement, are agents of the Company for the purpose of the Company’s business, and
the actions of the Directors taken in accordance with such powers shall bind the Company.

     Section 3.3 Officers. The Board shall appoint an individual or individuals to serve
as the Company’s Chairman, Chief Executive Officer, President and Vice President(s) and may, from
time to time as it deems advisable, appoint additional officers of the Company (together

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with the Chairman, Chief Executive Officer, President and Vice President(s), the
“Officers”) and assign such officers titles (including, without limitation, Vice President,
Secretary and Treasurer). Unless the Board decides otherwise, if the title is one commonly used
for officers of a business corporation formed under the Oklahoma General Corporation Act, the
assignment of such title shall constitute the delegation to such person of the authorities and
duties that are normally associated with that office. Any delegation pursuant to this Section 3.3
may be revoked at any time by the Board. Any Officer may be removed with or without cause by the
Board, except as otherwise provided in any services or employment agreement between such Officer
and the Company.

     Section 3.4 Affiliate Transactions. Notwithstanding anything to the contrary in this
Agreement, each of the Members shall not, and shall not permit any of their Affiliates to, directly
or indirectly (or agree to or delegate any Person to), without the prior written consent of MRM and
Ketchum Members holding a majority of the Common Units held by all Ketchum Members, (a) enter into
any transactions (except as expressly contemplated by this Agreement or the Services Agreement)
with the Company, or any Subsidiary of the Company, or (b) acquire any securities of the Company.

ARTICLE IV

MEMBERS AND INTERESTS GENERALLY

     Section 4.1 Powers of Members. The Members shall have the power to exercise any and
all rights or powers granted to the Members pursuant to the Oklahoma Act and the express terms of
this Agreement. The approval or consent of the Members shall not be required in order to authorize
the taking of any action by the Company unless and then only to the extent that (a) this Agreement
shall expressly provide therefor, (b) such approval or consent shall be required by non-waivable
provisions of the Oklahoma Act or (c) the Board shall have determined in its sole discretion that
obtaining such approval or consent would be appropriate or desirable. The Members, as such, shall
have no power to bind the Company.

     Section 4.2 Interests Generally. As of the date hereof, the Company has one
authorized class of Interests: Common Units. Subject to the terms of this Agreement, additional
classes of Interests denominated in the form of Units may be authorized from time to time by the
Board without obtaining the consent of any Member or class of Members. Except as otherwise
provided in this Agreement, Units in a particular class may be issued from time to time, at such
prices and on such terms as the Board may determine, without obtaining the consent of any Member or
class of Members. The holders of Common Units will have voting rights with respect to their Common
Units as provided in Section 4.3(d) and shall have the rights with respect to profits and losses of
the Company and distributions from the Company as are set forth herein. The number of Common Units
of each Member as of any given time shall be set forth on Schedule A, as it may be updated from
time to time in accordance with this Agreement.

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     Section 4.3 Meetings of Members.

     (a) Meetings; Notice of Meetings. Meetings of the Members may be called by the Board
or any Member from time to time. Notice of any such meeting shall be given to all Members entitled
to vote at such meeting not less than two nor more than 60 days prior to the date of such meeting
and shall state the location, date and hour of the meeting and, in the case of a special meeting,
the nature of the business to be transacted. Meetings shall be held at the location (within or
without the State of Oklahoma) at the date and hour set forth in the notice of the meeting.

     (b) Waiver of Notice. No notice of any meeting of Members need be given to any Member
who submits a signed waiver of notice, whether before or after the meeting. Neither the business
to be transacted at, nor the purpose of, any meeting of the Members need be specified in a written
waiver of notice. The attendance of any Member at a meeting of Members shall constitute a waiver
of notice of such meeting, except when the Member attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business on the ground that
the meeting is not lawfully called or convened.

     (c) Quorum. Except as otherwise required by applicable law or by this Agreement, the
presence in person or by proxy of the holders of record of all of the Common Units, shall
constitute a quorum for the transaction of business at such meeting.

     (d) Voting. If the Board has fixed a record date, every holder of record of Common
Units shall be entitled to vote at a meeting of Members or to consent in writing in lieu of a
meeting of Members as of such date and shall be entitled to one vote for each Common Unit
outstanding in such Member’s name at the close of business on such record date. If no record date
has been so fixed, then every holder of record of such Common Units entitled to vote at a meeting
of Members or to consent in writing in lieu of a meeting of Members shall be entitled to one vote
for each such Unit outstanding in such Member’s name at the close of business on the day next
preceding the day on which notice of the meeting is given or the first consent in respect of the
applicable action is executed and delivered to the Company, or, if notice is waived, at the close
of business on the day next preceding the day on which the meeting is held.

     (e) Proxies. Each Member may authorize any Person to act for such Member by proxy on
all matters in which a Member is entitled to participate, including waiving notice of any meeting,
or voting or participating at a meeting. Every proxy must be signed by the Member or such Member’s
attorney-in-fact. No proxy shall be valid after the expiration of three years from the date
thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of
the Member executing it unless otherwise provided in such proxy, provided that such right
to revocation shall not invalidate or otherwise affect actions taken under such proxy prior to such
revocation.

     (f) Organization. Each meeting of Members shall be conducted by such Person as the
Board may designate.

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     (g) Action Without a Meeting. Unless otherwise provided in this Agreement, any action
which may be taken at any meeting of the Members may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so taken, shall be
signed by Members holding not less than the minimum number of Common Units necessary to authorize
or take such action at a meeting at which a quorum was present.

     Section 4.4 Business Transactions of a Member with the Company. A Member may lend
money to, borrow money from, act as surety or endorser for, guarantee or assume one or more
specific obligations of, provide collateral for, or transact any other business with the Company or
any of its Subsidiaries, provided that any such transaction shall require the approval of
the Board.

     Section 4.5 No Cessation of Membership upon Bankruptcy. A Person shall not cease to
be a Member of the Company upon the happening, with respect to such Person, of any assignment for
the benefit of creditors, filing of a voluntary petition in bankruptcy, seeking the appointment of
a trustee, receiver or liquidator or other similar event.

     Section 4.6 Confidentiality. Without the prior written consent of the Board, except
(a) to the extent required by law, rule, regulation or court order, (b) for disclosure made by a
Member to any Person who is an officer, director, employee or agent of such Member or counsel to,
accountants of, consultants to or other advisors for, such Member, and (c) for disclosure to the
shareholders, limited partners, partners or members of a Member and their respective advisors;
provided any disclosure pursuant to this clause (c) is generally consistent with the scope
and nature of disclosure made by a Member to such Persons in respect of such Member’s other
investments, no Member shall disclose any trade secrets, customer lists, drawings, designs,
information regarding product development, marketing plans, sales plans, management organization
information (including data and other information relating to members of the Board or management),
operating policies or manuals, business plans, financial records, packaging design or other
financial, commercial, business or technical information relating to the Company or any of its
Subsidiaries or information designated as confidential or proprietary that the Company or any of
its Subsidiaries may receive belonging to suppliers, customers or others who do business with the
Company or any of its Subsidiaries (collectively, “Confidential Information”) to any third
Person unless such Confidential Information has been previously disclosed to the public by the
Company or any of its Subsidiaries or is in the public domain (other than by reason of such
Member’s breach of this Section 4.6).

     Section 4.7 Other Business for MRM. The Company and each of the Members agrees and
acknowledges that MRM or any of its Affiliates, or any of its or their respective partners,
officers, members, shareholders, subsidiaries, directors, employees, agents, consultants, or legal
or other advisors may at any time possess or acquire knowledge of a potential transaction or matter
which may be a Competitive Opportunity and may exploit a Competitive Opportunity or engage in, or
hold interests in, one or more businesses that may compete with a business of the Company or any of
its Subsidiaries. The Company and the Ketchum Members agree and acknowledge that neither the
Company nor any of its Subsidiaries shall have an interest in such Competitive Opportunity, or
expectation that such Competitive Opportunity be offered to it, any such interest or expectation
being hereby renounced so that MRM and its respective Affiliates,

7

 

and its and their respective partners, officers, members, shareholders, subsidiaries,
directors, employees, agents, consultants, or legal or other advisors (i) shall have no duty to
communicate or present such Competitive Opportunity to the Company or any of its Subsidiaries, (ii)
shall have the right to hold any such Competitive Opportunity for their own account, or to
recommend, assign or otherwise transfer such Competitive Opportunity to Persons other than the
Company or any of its Subsidiaries and (iii) shall not be liable to the Company or any of its
Subsidiaries or their respective members or shareholders by reason of the fact that they pursue or
acquire such Competitive Opportunity for themselves, direct, sell, assign or otherwise transfer
such Competitive Opportunity to another Person, do not communicate information regarding such
Competitive Opportunity to the Company or any of its Subsidiaries, or engage in, or hold any
interest in, any business that competes with any business of the Company or any of its
Subsidiaries.

     Section 4.8 Preemptive Rights.

     (a) Subject to the terms and conditions of this Section 4.8, if the Company or any of its
Subsidiaries proposes to issue or sell any Units or other securities of the Company or any of its
Subsidiaries (“Additional Securities”) to any Person, the Company shall first offer a
portion of such Additional Securities to MRM, as set forth in this Section 4.8. MRM shall be
entitled to apportion the right of first offer hereby granted to it among itself and its Affiliates
in such proportions as it deems appropriate.

     (b) The Company shall provide written notice (the “Participation Notice”) to MRM of
the material terms of the proposed issuance of Additional Securities, including (i) its or its
Subsidiaries’ bona fide intention to offer such Additional Securities, (ii) the number of such
Additional Securities to be offered, and (iii) the price and terms, if any, upon which it proposes
to offer such Additional Securities.

     (c) By notification to the Company within twenty (20) days after the Participation Notice is
given, MRM may elect to purchase or otherwise acquire, at the price and on the terms specified in
the Participation Notice, up to that portion of such Additional Securities which equals the
proportion that the Units or other securities issued and held by MRM (directly or indirectly) bears
to the total Units or other securities of the Company or its Subsidiaries then outstanding (the
“Preemption Right”). If MRM fails to exercise its Preemption Right in whole or in part
within twenty (20) days of receipt of the Participation Notice, the Additional Securities in
respect of which the Preemption Right is not exercised may be offered by the Company or any of its
Subsidiaries to any other Person on terms no less favorable to the Company or its Subsidiaries than
those offered to MRM.

     (d) Notwithstanding anything to the contrary contained in this Agreement, in no event shall
the Company or any of its Subsidiaries issue or sell any Additional Securities if such issuance
would cause the Company to be decertified under the certification requirements of any State or
Federal minority supplier development council (or similar certifications).

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ARTICLE V

REPRESENTATIONS, WARRANTIES AND COVENANTS

     Section 5.1 Investment Representations, Warranties and Covenants of Members.

     (a) Investment Intention and Restrictions on Disposition. Each Member represents and
warrants that such Member is acquiring the Interests solely for such Member’s own account for
investment and not with a view to resale in connection with any distribution thereof.

     (b) Securities Laws Matters. Each Member acknowledges receipt of advice from the
Company that (i) the Interests have not been registered under the Securities Act or qualified under
any state securities or “blue sky” laws; (ii) it is not anticipated that there will be any public
market for the Interests; (iii) the Interests must be held indefinitely and such Member must
continue to bear the economic risk of the investment in the Interests unless the Interests are
subsequently registered under the Securities Act and such state laws or an exemption from
registration is available; (iv) Rule 144 is not presently available with respect to sales of any
securities of the Company and the Company has made no covenant to make Rule 144 available and Rule
144 is not anticipated to be available in the foreseeable future; (v) when and if the Interests may
be disposed of without registration in reliance upon Rule 144, such disposition can be made only in
limited amounts and in accordance with the terms and conditions of such Rule and the provisions of
this Agreement; (vi) if the exemption afforded by Rule 144 is not available, public sale of the
Interests without registration will require the availability of an exemption under the Securities
Act; (vii) restrictive legends shall be placed on any certificate representing the Interests; and
(viii) a notation shall be made in the appropriate records of the Company indicating that the
Interests are subject to restrictions on transfer and, if the Company should in the future engage
the services of a transfer agent, appropriate stop-transfer instructions will be issued to such
transfer agent with respect to the Interests.

     (c) Ability to Bear Risk. Each Member represents and warrants that (i) such Member’s
financial situation is such that such Member can afford to bear the economic risk of holding the
Interests for an indefinite period and (ii) such Member can afford to suffer the complete loss of
such Member’s investment in the Interests.

     (d) Access to Information; Sophistication; Lack of Reliance. Each Member represents
and warrants that (i) such Member is familiar with the business and financial condition,
properties, operations and prospects of the Company and that such Member has been granted the
opportunity to ask questions of, and receive answers from, representatives of the Company
concerning the Company and the terms and conditions of the purchase of the Interests and to obtain
any additional information that such Member deems necessary; (ii) such Member’s knowledge and
experience in financial and business matters is such that such Member is capable of evaluating the
merits and risk of the investment in the Interests; and (iii) such Member has carefully reviewed
the terms and provisions of this Agreement and has evaluated the restrictions and obligations
contained therein. In furtherance of the foregoing, each Member represents and warrants that (i)
no representation or warranty, express or implied, whether written or oral, as to the financial
condition, results of operations, prospects, properties or business of the Company or

9

 

as to the desirability or value of an investment in the Company has been made to such Member
by or on behalf of the Company; (ii) such Member has relied upon such Member’s own independent
appraisal and investigation, and the advice of such Member’s own counsel, tax advisors and other
advisors, regarding the risks of an investment in the Company; and (iii) such Member will continue
to bear sole responsibility for making its own independent evaluation and monitoring of the risks
of its investment in the Company.

     (e) Accredited Investor. Each Member represents and warrants that such Member is an
“accredited investor” as such term is defined in Rule 501(a) of Regulation D promulgated under the
Securities Act and, in connection with the execution of this Agreement, agrees to deliver such
certificates to that effect as the Board may request.

     Section 5.2 Covenant Not to Compete. Other than the distribution of oil country
tubular goods in North America, the Company shall not, anywhere in the world, directly or
indirectly, engage or otherwise participate, whether as an agent, director, officer, shareholder,
partner, joint venturer, investor, consultant, advisor, or otherwise, in any business in which, at
the time the Company first engages or participates in such business, MRM or any of its Affiliates
is then engaged.

     Section 5.3 Independent Accountants. Notwithstanding anything to the contrary in this
Agreement, the Company shall not, and neither the Company nor the Board shall permit any of the
Company’s Subsidiaries or Officers to, directly or indirectly (or agree to or delegate any Person
to), replace the Company’s independent accountants with an accounting firm that is not a
nationally-recognized independent accounting firm.

ARTICLE VI

CAPITAL ACCOUNTS; CAPITAL CONTRIBUTIONS

     Section 6.1 Capital Accounts. A separate capital account (a “Capital
Account”) shall be established and maintained for each Member. The initial balance in each
Member’s Capital Account shall be set forth in Schedule A.

     Section 6.2 Adjustments. The balance in each Member’s Capital Account shall be
adjusted by (i) increasing such balance by such Member’s (A) allocable share of items of income and
gain (allocated in accordance with Section 7.1) and (B) the amount of cash and the Fair Market
Value of any property (as of the date of the contribution thereof and net of any liabilities
encumbering such property) contributed to the Company by such Member, and (ii) decreasing such
balance by (A) the amount of cash and the Fair Market Value of any property (as of the date of the
distribution thereof and net of any liabilities encumbering such property) distributed to such
Member and (B) such Member’s allocable share of items of loss and deduction (allocated in
accordance with Section 7.1). Each Member’s Capital Account shall be further adjusted with respect
to any special allocations pursuant to Section 7.2. The provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with Treasury Regulations section
1.704-1(b) and section 1.704-2 and shall be interpreted and applied in a manner consistent with
such Treasury Regulations.

10

 

     Section 6.3 Additional Capital Contributions. Except as provided in this Section 6.3,
no Member shall be required to make any additional Capital Contribution to the Company in respect
of the Interests then owned by such Member (including, without limitation, with respect to any
amount owed by the Company pursuant to Article XI). A Member may make further Capital
Contributions to the Company, but only with the written consent of the Board. The provisions of
this Section 6.3 are intended solely to benefit the Members and, to the fullest extent permitted by
applicable law, shall not be construed as conferring any benefit upon any creditor of the Company
(and no such creditor shall be a third party beneficiary of this Agreement), and, to the maximum
extent permitted by law, no Member shall have any duty or obligation to any creditor of the Company
to make any additional Capital Contributions or to cause the Board to consent to the making of
additional Capital Contributions.

     Section 6.4 Negative Capital Accounts. No Member shall be required to make up a
negative balance in its Capital Account.

ARTICLE VII

ALLOCATIONS

     Section 7.1 Book Allocations of Income and Loss. Except as provided in Section 7.2,
each item of income, gain, loss and deduction of the Company shall be allocated among the Capital
Accounts as of the end of the applicable Accounting Period in a manner that as closely as possible
gives effect to the provisions of Article VIII and the other relevant provisions of this Agreement.

     Section 7.2 Special Book Allocations.

     (a) Qualified Income Offset. If any Member unexpectedly receives any adjustment,
allocation or distribution described in Treasury Regulations section 1.704-1(b)(2)(ii)(d)(4), (5)
or (6) and such adjustment, allocation or distribution causes or increases a deficit in such
Member’s Capital Account (a “Deficit”), items of gross income and gain for such Accounting
Period and each subsequent Accounting Period shall be specifically allocated to such Member in an
amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the
Deficit of such Member as quickly as possible; provided that an allocation pursuant to this
Section 7.2(a) shall be made only if and to the extent that such Member would have a Deficit after
all other allocations provided for in this Article VII have been tentatively made as if this
Section 7.2(a) were not in this Agreement. This Section 7.2(a) is intended to comply with the
qualified income offset provision of Treasury Regulations section 1.704-1(b)(2)(ii)(d) and shall be
interpreted in a manner consistent therewith.

     (b) Restorative Allocations. Any special allocations of items of income or gain
pursuant to this Section 7.2 shall be taken into account in computing subsequent allocations
pursuant to this Agreement, so that the net amount for any item so allocated and all other items
allocated to each Member pursuant to this Agreement shall be equal, to the extent possible, to the
net amount that would have been allocated to each Member pursuant to the provisions of this
Agreement if such special allocations had not occurred.

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     (c)  Allocation Adjustments. Notwithstanding anything to the contrary herein, the
Board is authorized to allocate items of income, gain, loss and expense and to otherwise modify the
distributions and allocations provisions, to reflect any admission of new Members, or distributions
of property, as determined by the Board in its sole discretion.

     Section 7.3 Tax Allocations. The income, gains, losses, credits and deductions
recognized by the Company shall be allocated among the Members, for U.S. federal, state and local
income tax purposes, to the extent permitted under the Code and the Treasury Regulations, in the
same manner that each such item is allocated to the Members’ Capital Accounts. Notwithstanding the
foregoing, the Board shall have the power to make such allocations for U.S. federal, state and
local income tax purposes so long as such allocations have substantial economic effect, or are
otherwise in accordance with the Members’ Interests, in each case within the meaning of the Code
and the Treasury Regulations. In accordance with section 704(c) of the Code and the Treasury
Regulations thereunder, income, gain, loss and deduction with respect to any property contributed
to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as
to take account of any variation between the adjusted basis of such property to the Company for
U.S. federal income tax purposes and its fair market value at the time of contribution.

ARTICLE VIII

DISTRIBUTIONS

     Section 8.1 Distributions Generally. In the sole discretion of the Board, the Company
may from time to time distribute its available cash to the Members on a pro rata basis in
proportion to the number of Common Units outstanding at the time of such distribution.

     Section 8.2 Distributions In Kind. In the event of a distribution of Company
property, such property shall for all purposes of this Agreement be deemed to have been sold at its
Fair Market Value and the proceeds of such sale shall be deemed to have been distributed to the
Members.

     Section 8.3 No Withdrawal of Capital. Except as otherwise expressly provided in
Section 12.10 or Article XII, no Member shall have the right to withdraw capital from the Company
or to receive any distribution or return of such Member’s Capital Contributions.

     Section 8.4 Withholding.

     (a) Each Member shall, to the fullest extent permitted by applicable law, indemnify and hold
harmless each Person who is or who is deemed to be the responsible withholding agent for U.S.
federal, state or local income tax purposes against all claims, liabilities and expenses of
whatever nature (other than any claims, liabilities and expenses in the nature of penalties and
accrued interest thereon that result from such Person’s fraud, willful misfeasance, bad faith or
gross negligence) relating to such Person’s obligation to withhold and to pay over, or otherwise
pay, any withholding or other taxes payable by the Company or as a result of such Member’s
participation in the Company.

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     (b) Notwithstanding any other provision of this Article VIII, (i) each Member hereby
authorizes the Company to withhold and to pay over, or otherwise pay, any withholding or other
taxes payable by the Company or any of its Affiliates with respect to such Member or as a result of
such Member’s participation in the Company and (ii) if and to the extent that the Company shall be
required to withhold or pay any such taxes (including any amounts withheld from amounts payable to
the Company to the extent attributable, in the judgment of the Members, to such Member’s Interest),
such Member shall be deemed for all purposes of this Agreement to have received a payment from the
Company as of the time such withholding or tax is required to be paid, which payment shall be
deemed to be a distribution with respect to such Member’s Interest to the extent that the Member
(or any successor to such Member’s Interest) is then entitled to receive a distribution. To the
extent that the aggregate of such payments to a Member for any period exceeds the distributions to
which such Member is entitled for such period, such Member shall make a prompt payment to the
Company of such amount.

     (c) If the Company makes a distribution in kind and such distribution is subject to
withholding or other taxes payable by the Company on behalf of any Member, such Member shall make a
prompt payment to the Company of the amount of such withholding or other taxes by wire transfer.

     Section 8.5 Restricted Distributions. Notwithstanding any provision to the contrary
contained in this Agreement, the Company shall not make a distribution to any Member on account of
its Interest if such distribution would violate Sections 2030 or 2040 of the Oklahoma Act or other
applicable law.

     Section 8.6 Tax Distributions. In the event that the Members are otherwise allocated
taxable income from the Company, the Company may make distributions to the Members to the extent of
available cash (as determined by the Board in its discretion) in an amount equal to such income
multiplied by a reasonable tax rate determined by the Board; it being understood that, if the
Members are allocated material taxable income without corresponding cash distributions sufficient
to pay the resulting tax liabilities, it is the Company’s intention to make the tax distributions
referred to herein, provided that the Board in its sole discretion shall determine whether
any such tax distributions will be made. Any distributions made to a Member pursuant to this
Section 8.6 shall reduce the amount otherwise distributable to such Member pursuant to the other
provisions of this Agreement, so that to the maximum extent possible, the total amount of
distributions received by each Member pursuant to this Agreement at any time is the same as such
Member would have received if no distribution had been made pursuant to this Section 8.6. To the
extent the cumulative sum of tax distributions made to a Member under this Section 8.6 has not been
applied pursuant to the preceding sentence to reduce other amounts distributable to such Member,
such Member shall contribute to the Company the remaining amounts necessary to give full effect to
the preceding sentence on the date of the final liquidating distribution made by the Company
pursuant to Section 12.2.

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ARTICLE IX

BOOKS AND RECORDS

     Section 9.1 Books, Records and Financial Statements. At all times during the
continuance of the Company, the Company shall maintain, at its principal place of business, in
addition to information required to be maintained under the Oklahoma Act, separate books of account
for the Company that shall show a true and accurate record of all costs and expenses incurred, all
charges made, all credits made and received and all income derived in connection with the operation
of the Company’s business in accordance with generally accepted accounting principles consistently
applied, and, to the extent inconsistent therewith, in accordance with this Agreement. Such books
of account, together with a copy of this Agreement and the Articles, shall at all times be
maintained at the principal place of business of the Company and shall be open to inspection and
examination at reasonable times by each Member and its duly authorized representative for any
purpose reasonably related to such Member’s Interest.

     Section 9.2 Filings of Returns and Other Writings; Tax Matters Partner.

     (a) The Company shall timely file all Company tax returns and shall timely file all other
writings required by any governmental authority having jurisdiction to require such filing. Within
ninety (90) days after the end of each taxable year (or as soon as reasonably practicable
thereafter), the Company shall send to each Person that was a Member at any time during such year
copies of Schedule K-1, “Partner’s Share of Income, Credits, Deductions, Etc.”, or any successor
schedule or form, with respect to such Person, together with such additional information as may be
necessary for such Person to file his, her or its United States federal income tax returns.

     (b) MRM shall be the tax matters partner of the Company, within the meaning of section 6231 of
the Code (the “Tax Matters Partner”). Each Member hereby consents to such designation and
agrees that upon the request of the Tax Matters Partner, such Member will execute, certify,
acknowledge, deliver, swear to, file and record at the appropriate public offices such documents as
may be necessary or appropriate to evidence such consent. The Tax Matters Partner shall, in its
sole discretion, determine whether to make or revoke any tax election available to the Company
pursuant to the Code.

     (c) Promptly following the written request of the Tax Matters Partner, the Company shall, to
the fullest extent permitted by applicable law, reimburse and indemnify the Tax Matters Partner for
all reasonable expenses, including reasonable legal and accounting fees, claims, liabilities,
losses and damages incurred by the Tax Matters Partner in connection with any administrative or
judicial proceeding with respect to the tax liability of the Members, except to the extent arising
from the bad faith, gross negligence, willful violation of law, fraud or breach of this Agreement
by such Tax Matters Partner.

     (d) The provisions of this Section 9.2 shall survive the termination of the Company or the
termination of any Member’s Interest and shall remain binding on the Members for as long a

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period of time as is necessary to resolve with the Internal Revenue Service any and all
matters regarding the U.S. federal income taxation of the Company or the Members.

     Section 9.3 Accounting Method. For both financial and tax reporting purposes, the
books and records of the Company shall be kept on the accrual method of accounting applied in a
consistent manner and shall reflect all Company transactions and be appropriate and adequate for
the Company’s business.

ARTICLE X

LIABILITY, EXCULPATION AND INDEMNIFICATION

     Section 10.1 Liability. Except as otherwise provided by the Oklahoma Act or other
applicable law, the debts, obligations and liabilities of the Company, whether arising in contract,
tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no
Covered Person shall be obligated personally for any such debt, obligation or liability of the
Company solely by reason of being a Covered Person.

     Section 10.2 Exculpation. Except as otherwise provided by the Oklahoma Act or other
applicable law, no Covered Person shall be liable to the Company or any other Covered Person for
any loss, damage or claim incurred by reason of any act or omission of such Covered Person in good
faith on behalf of the Company and in a manner believed to be within the scope of authority
conferred on such Covered Person by this Agreement, provided that nothing contained herein
shall limit or eliminate the liability of a Director for (i) any breach of the Director’s duty of
loyalty to the Company or its Members, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, or (iii) any transaction from which the
Director derived an improper personal benefit.

     Section 10.3 Fiduciary Duty. Any duties (including fiduciary duties) of a Covered
Person to the Company or to any other Covered Person that would otherwise apply at law or in equity
are hereby eliminated to the fullest extent permitted under the Oklahoma Act and any other
applicable law, provided that (i) the foregoing shall not eliminate the obligation of each
Covered Person to act in compliance with the express terms of this Agreement and (ii) the foregoing
shall not be deemed to eliminate the duty of loyalty or the obligation of good faith and fair
dealing. Notwithstanding anything to the contrary contained in this Agreement, each of the Members
hereby acknowledges and agrees that each Director, in determining whether or not to vote in support
of or against any particular decision for which the Board’s consent is required, may act in and
consider the best interest of the Member or Members who designated such Director and shall not be
required to act in or consider the best interests of the Company, any Subsidiary of the Company or
any other Members.

     Section 10.4 Indemnification. To the fullest extent permitted by applicable law, a
Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim
incurred by such Covered Person by reason of any act or omission performed or omitted by such
Covered Person in good faith on behalf of the Company and in a manner believed to be within the
scope of authority conferred on such Covered Person by this Agreement, except that

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(a) no Covered Person shall be entitled to be indemnified in the case of action or failure to
act by the Covered Person which constitutes willful misconduct or recklessness, and (b) nothing in
this Section 10.4 shall limit or eliminate the liability of a Director for (i) for any breach of
the Director’s duty of loyalty to the Company or its Members, (ii) acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law, or (iii) any
transaction from which the Director derived an improper personal benefit; provided, that
any indemnity under this Section 10.4 shall be provided out of and to the extent of Company assets
only, and no Covered Person shall have any personal liability on account thereof.

     Section 10.5 Expenses. To the fullest extent permitted by applicable law, expenses
(including, without limitation, reasonable attorneys’ fees, disbursements, fines and amounts paid
in settlement) incurred by a Covered Person in defending any claim, demand, action, suit or
proceeding relating to or arising out of their performance of their duties on behalf of the Company
shall, from time to time, be advanced by the Company prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of
the Covered Person to repay such amount if it shall ultimately be determined by a court of
competent jurisdiction that the Covered Person is not entitled to be indemnified as authorized in
this Section 10.1.

     Section 10.6 Severability. To the fullest extent permitted by applicable law, if any
portion of this Article shall be invalidated on any ground by any court of competent jurisdiction,
then the Company shall nevertheless indemnify each Covered Person and may indemnify each employee
or agent of the Company as to costs, charges and expenses (including reasonable attorneys’ fees),
judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding,
whether civil, criminal, administrative or investigative, including an action by or in the right of
the Company, to the fullest extent permitted by any applicable portion of this Article that shall
not have been invalidated.

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ARTICLE XI

TRANSFERS OF INTERESTS

     Section 11.1 Restrictions on Transfers of Interests by Members. The Ketchum Members
shall not Transfer any Units at any time to any Person, directly or indirectly without the prior
written consent of MRM; provided that MRM shall not unreasonably withhold or delay its
consent of a Permitted Transfer by any Ketchum Member. MRM shall not Transfer any Units at any
time, directly or indirectly, without the prior written consent of Ketchum Members holding greater
than 50% of the number of Units held by all Ketchum Members; provided that MRM may Transfer
all or any part of its Units at any time to any Affiliate of MRM or in connection with a Transfer
of interests or equity in PVF Holdings LLC, or any of its Subsidiaries, in each case without the
prior written consent of Ketchum Members holding greater than 50% of the number of Units held by
all Ketchum Members.

     Section 11.2 Overriding Provisions. Notwithstanding anything to the contrary in this
Agreement:

     (a) Any Transfer in violation of this Article XI shall be null and void ab initio, and the
provisions of Section 11.2(e) shall not apply to any such Transfers. The approval of any Transfer
in any one or more instances shall not limit or waive the requirement for such approval in any
other or future instance.

     (b) All Transfers permitted under this Article XI are subject to this Section 11.2 and
Sections 11.3 and 11.4.

     (c) In addition to meeting all of the other requirements of this Agreement, no Transfer by a
Member pursuant to the terms of this Article XI shall be effected that could result in any risk
that the Company would be treated as a publicly traded partnership or otherwise be taxable as an
association for U.S. federal income tax purposes.

     (d) The Company shall promptly amend Schedule A to reflect any Transfers of Interests pursuant
to and permitted in accordance with this Article XI.

     (e) The Company shall, from the effective date of any permitted assignment of an Interest (or
part thereof), thereafter pay all further distributions on account of such Interest (or part
thereof) to the assignee of such Interest (or part thereof), provided that such assignee
shall have no right or powers as a Member unless such assignee complies with Section 11.4.

     Section 11.3 Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by the Company and its
successors and assigns and each Member and his, her and its respective successors, permitted
assigns, heirs and personal representatives, so long as they hold Units. Each Member shall have
the right to assign all or part of its or his rights and obligations under this Agreement only to a
transferee pursuant to a Transfer of Units in compliance with the terms of this Agreement. Upon
any such assignment, such assignee shall have and be able to exercise and enforce all rights of

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the assigning Member which are assigned to it and, to the extent such rights are assigned, any
reference to the assigning Member shall be treated as a reference to the assignee.

     Section 11.4 Substitute Members. In the event any Member Transfers its Interest in
compliance with the other provisions of this Article XI, the transferee thereof shall have the
right to become a substitute Member, but only upon satisfaction of the following:

     (a) execution of such instruments as the Board deems reasonably necessary or desirable to
effect such substitution; and

     (b) the parties hereto hereby agree that any person who acquires any Units from the Company on
or after the date hereof shall become, prior to such acquisition, a signatory to this Agreement by
executing a written instrument setting forth that the person agrees to be bound by the terms and
conditions of this Agreement and this Agreement will be deemed to be amended to include such person
as a Member. Upon the execution of the instrument of assumption by such transferee and, such
transferee shall enjoy all of the rights and shall be subject to all of the restrictions and
obligations of the transferor of such transferee.

     Section 11.5 Release of Liability. In the event any Member shall Transfer such
Member’s entire Interest in compliance with the provisions of this Agreement, without retaining any
interest therein, directly or indirectly, then the selling Member shall, to the fullest extent
permitted by applicable law, be relieved of any further liability arising hereunder for events
occurring from and after the date of such Transfer, provided, however, that no such
Transfer shall relieve any Member of its obligations pursuant to Section 3.6 hereof and such
obligations shall survive any termination of such Member’s membership in the Company.

     Section 11.6 MRM Call Right.

     (a) MRM shall have the right, but not the obligation, at any time after the date hereof, to
purchase, for cash, in one or more transactions, all (but not less than all) of the Common Units
held by the Ketchum Members (the “Equity Call Option” and such Common Units subject to the
Equity Call Option, the “Call Equity Securities”) at the Equity Call Purchase Price.

     (b) If MRM desires to exercise the Equity Call Option, it shall deliver written notice thereof
(a “Call Notice”) to the Ketchum Members, which notice shall set forth the number of and
identify the Call Equity Securities of the Ketchum Members MRM desires to purchase, the Equity Call
Purchase Price for each such Call Equity Security, and the proposed closing date of the
transaction.

     (c) All sales of Call Equity Securities to MRM pursuant to this Section 11.6 shall be
consummated at the offices of the Company at such time specified in the Call Notice, or at such
other time and/or place as MRM may otherwise agree. The delivery of certificates, if applicable,
or other instruments reasonably requested by MRM evidencing such Call Equity Securities and
transfer duly endorsed for transfer shall be made on such date against payment of the purchase
price for such Call Equity Securities.

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ARTICLE XII

DISSOLUTION, LIQUIDATION AND TERMINATION

     Section 12.1 Dissolving Events. The Company shall be dissolved and its affairs wound
up in the manner hereinafter provided upon the first to occur of any of the following events:

     (a) the Board shall vote or agree in writing to dissolve the Company;

     (b) any event which under applicable law would cause the dissolution of the Company,
provided that, unless required by applicable law, the Company shall not be wound up as a
result of any such event and the business of the Company shall continue.

     Notwithstanding the foregoing, the death, retirement, resignation, expulsion, bankruptcy or
dissolution of any Member or the occurrence of any other event that terminates the continued
membership of any Member in the Company under the Oklahoma Act shall not, in and of itself, cause
the dissolution of the Company. In such event, the remaining Member(s) shall continue the business
of the Company without dissolution.

     Section 12.2 Dissolution and Winding-Up. Upon the dissolution of the Company, the
assets of the Company shall be liquidated or distributed under the direction of and to the extent
determined by the Board and the business of the Company shall be wound up. Within a reasonable
time after the effective date of dissolution of the Company, the Company’s assets shall be
distributed in the following manner and order:

     First, to creditors in satisfaction of indebtedness (other than any loans or advances
that may have been made by any of the Members to the Company), whether by payment or the making of
reasonable provision for payment, and the expenses of liquidation, whether by payment or the making
of reasonable provision for payment, including the establishment of reasonable reserves (which may
be funded by a liquidating trust) determined by the Board or the liquidating trustee, as the case
may be, to be reasonably necessary for the payment of the Company’s expenses, liabilities and other
obligations (whether fixed, conditional, unmatured or contingent);

     Second, to the payment of loans or advances that may have been made by any of the
Members to the Company; and

     Third, to the Members in accordance with their respective Capital Accounts.

provided that no payment or distribution in any of the foregoing categories shall be made
until all payments in each prior category shall have been made in full, and provided,
further, that if the payments due to be made in any of the foregoing categories exceed the
remaining assets available for such purpose, such payments shall be made to the Persons entitled to
receive the same pro rata in accordance with the respective amounts due to them.

     Section 12.3 Distributions in Cash or in Kind. Upon the dissolution of the Company,
the Board shall use all commercially reasonable efforts to liquidate all of the Company’s assets

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in an orderly manner and apply the proceeds of such liquidation as set forth in Section 12.2,
provided that if in the good faith judgment of the Board, a Company asset should not be
liquidated, the Board shall cause the Company to allocate, on the basis of the Fair Market Value of
any Company assets not sold or otherwise disposed of, any unrealized gain or loss based on such
value to the Members’ Capital Accounts as though the assets in question had been sold on the date
of distribution and, after giving effect to any such adjustment, distribute such assets in
accordance with Section 12.2 as if such Fair Market Value had been received in cash, subject to the
priorities set forth in Section 12.2, and provided, further, that the Board shall
in good faith attempt to liquidate sufficient Company assets to satisfy in cash (or make reasonable
provision for) the debts and liabilities referred to in Section 12.2.

     Section 12.4 Termination. The Company shall terminate when the winding up of the
Company’s affairs has been completed, all of the assets of the Company have been distributed and
the Articles have been canceled, all in accordance with the Oklahoma Act.

     Section 12.5 Claims of the Members. The Members and former Members shall look solely
to the Company’s assets for the return of their Capital Contributions, and if the assets of the
Company remaining after payment of or due provision for all debts, liabilities and obligations of
the Company are insufficient to return such Capital Contributions, the Members and former Members
shall have no recourse against the Company or any other Member.

ARTICLE XIII

MISCELLANEOUS

     Section 13.1 Notices. Any notice, request, instruction or other document to be given
hereunder by any party to the others shall be in writing and delivered personally or sent by
registered or certified mail, postage prepaid, or by facsimile to the Company at the address set
forth below and to any Member at the address indicated on the signature pages hereto and to any
subsequent holder of Units subject to this Agreement at such address as indicated by the Company’s
records, or at such address or to the attention of such other person as the recipient party has
specified by prior written notice to the sending party. Any notice, request, instruction or other
document given as provided above shall be deemed given to the receiving party upon actual receipt,
if delivered personally; three (3) business days after deposit in the mail, if sent by registered
or certified mail; upon confirmation of successful transmission if sent by facsimile
(provided that if given by facsimile such notice, request, instruction or other document
shall be followed up within one (1) business day by dispatch pursuant to one of the other methods
described herein); or on the next business day after deposit with an overnight courier, if sent by
an overnight courier. The Company’s address is:

Two Memorial Place 8023 East 63rd Place

Suite 600

Tulsa, Oklahoma 74133

Fax: (918) 461-5375

     Section 13.2 Interpretation, Construction.

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     (a) The table of contents and headings herein are for convenience of reference only, do not
constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the
provisions hereof. Where a reference in this Agreement is made to a Section, Article or Schedule,
such reference shall be to a Section, Article or Schedule of this Agreement unless otherwise
indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement,
they shall be deemed to be followed by the words “without limitation.”

     (b) The parties have participated jointly in negotiating and drafting this Agreement. In the
event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

     Section 13.3 Entire Agreement. This Agreement and the other writings referred to
herein or delivered pursuant hereto which form a part hereof constitute the entire agreement, and
supersede all other prior agreements, understandings, representations and warranties both written
and oral, including, without limitation, the Original Agreement and any other limited liability
company operating agreements, among the parties, with respect to the subject matter hereof. EACH
PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
AGREEMENT, THE PARTIES HERETO DO NOT MAKE ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY
DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING AS TO THE ACCURACY
OR COMPLETENESS OF ANY OTHER INFORMATION, MADE BY, OR MADE AVAILABLE BY, ITSELF OR ANY OF ITS
REPRESENTATIVES, WITH RESPECT TO, OR IN CONNECTION WITH, THE NEGOTIATION, EXECUTION OR DELIVERY OF
THIS AGREEMENT, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR THE OTHER’S
REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE
FOREGOING.

     Section 13.4 Counterparts. This Agreement may be executed in separate counterparts
(including by facsimile), all of which taken together shall constitute one and the same agreement.

     Section 13.5 Governing Law; Waiver of Jury Trial.

     (a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED,
CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF OKLAHOMA WITHOUT REGARD TO
THE CONFLICTS OF LAW PRINCIPLES THEREOF. The parties hereby irrevocably submit to the personal
jurisdiction of the courts of the State of Oklahoma located in the County of Tulsa and the Federal
courts of the United States of America located in the County of Tulsa solely in respect of the
interpretation and enforcement of the provisions of this Agreement and of the documents referred to
in this Agreement, and in respect of the transactions contemplated hereby, and hereby waive, and
agree not to assert, as a defense in any action, suit or proceeding for the interpretation or
enforcement hereof or of any such document, that it is not subject thereto or that such action,
suit or proceeding may not be brought or is not maintainable in said courts or that the venue
thereof may not be appropriate or that this Agreement or any such document may

21

 

not be enforced in or by such courts, and the parties hereto irrevocably agree that all claims
with respect to such action or proceeding shall be heard and determined in such a Oklahoma State or
Federal court located in the County of Tulsa. The parties hereby consent to and grant any such
court jurisdiction over the person of such parties and, to the extent permitted by law, over the
subject matter of such dispute and agree that mailing of process or other papers in connection with
any such action or proceeding in the manner provided in Section 13.1 or in such other manner as may
be permitted by law shall be valid and sufficient service thereof.

     (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (ii)
EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (iii) EACH PARTY MAKES
THIS WAIVER VOLUNTARILY; AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13.5(b).

     Section 13.6 Specific Performance. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in Oklahoma State or Federal court
located in the County of Tulsa, this being in addition to any other remedy to which such party is
entitled at law or in equity.

     Section 13.7 Invalidity of Provision. The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of
the remainder of this Agreement in that jurisdiction or the validity or enforceability of this
Agreement, including that provision, in any other jurisdiction.

     Section 13.8 Further Actions. Each Member shall execute and deliver such other
certificates, agreements and documents, and take such other actions, as may reasonably be requested
by the Company in connection with the continuation of the Company and the achievement of its
purposes, including, without limitation, (a) any documents that the Company deems necessary or
appropriate to continue the Company as a limited liability company in all jurisdictions in which
the Company or its Subsidiaries conduct or plan to conduct business and (b) all such agreements,
certificates, tax statements and other documents as may be required to be filed in respect of the
Company.

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     Section 13.9 Legend. In the sole discretion of the Board, the issued and outstanding
Units may be represented by certificates. Each Member and the Company shall take all such action
necessary to cause any certificate representing outstanding Units owned by each Member to bear a
legend containing the following words:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED OR APPLICABLE STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, PLEDGED, EXCHANGED,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH SUCH ACT AND
SUCH LAWS.”

“IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
RESTRICTIONS ON TRANSFER AND VOTING SET FORTH IN THE AMENDED AND RESTATED LIMITED
LIABILITY COMPANY OPERATING AGREEMENT OF THE COMPANY DATED AS OF SEPTEMBER 18, 2008
AS AMENDED AND IN EFFECT FROM TIME TO TIME, A COPY OF WHICH IS ON FILE IN THE OFFICE
OF THE COMPANY.”

     The requirement that the above securities legend be placed upon certificates evidencing Units
shall cease and terminate upon the earliest of the following events: (i) when such Units are
transferred in a public offering; (ii) when such Units are transferred pursuant to Rule 144
promulgated under the Securities Act (“Rule 144”), as such Rule may be amended (or
successor provision thereto); or (iii) when such Units are transferred in any other transaction if,
in each such case, the seller delivers to the Company an opinion of his, her or its counsel, which
counsel and opinion shall be reasonably satisfactory to the Company, or a “no-action” letter from
the staff of the Securities and Exchange Commission, in either case to the effect that such legend
is no longer necessary in order to protect the Company against a violation by it of the Securities
Act upon any sale or other disposition of such Units without registration thereunder. Upon the
consummation of any event requiring the removal of a legend hereunder, the Company, upon the
surrender of certificates containing such legend, shall, at its own expense, deliver to the holder
of any such Units as to which the requirement for such legend shall have terminated, one or more
new certificates evidencing such Units not bearing such legend.

     Section 13.10 Expenses. Each party hereto shall pay its own expenses incurred in
connection with the preparation, execution, and performance of this Agreement and the transactions
contemplated by this Agreement, including all fees and expenses of agents, representatives, counsel
and accountants.

     Section 13.11 Amendment and Waiver. Except as otherwise expressly provided in this
Agreement, any provisions of this Agreement may be amended, modified, supplemented or waived with
the written approval of Ketchum Members holding greater than 50% of the number Units held by all
Ketchum Members and MRM. No waiver of any of the provisions of this Agreement shall be deemed to
or shall constitute a waiver of any other provision hereof (whether or not similar). No failure or
delay on the part of any party in exercising any right, power or

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privilege hereunder shall operate as a waiver thereof or of any other or future exercise of
any such right, power or privilege.

     Section 13.12 Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this Agreement, or the
application thereof to any person or any circumstance, is invalid or unenforceable, (a) a suitable
and equitable provision shall be substituted therefor in order to carry out, so far as may be valid
and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of such provision to other persons or circumstances
shall not be affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.

     Section 13.13 No Third Party Beneficiaries. Except for Covered Persons with respect
to Article XI, this Agreement is not intended to confer upon any Person, except for the parties
hereto, any rights or remedies hereunder.

     Section 13.14 Survival of Representations and Warranties. All representations and
warranties contained in this Agreement or made in writing by any party in connection herewith shall
survive the execution and delivery of this Agreement regardless of any investigation made by, or on
behalf of, any Member.

     Section 13.15 Conflicting Agreements. Each Member represents and warrants that such
Member has not granted and is not a party to any proxy, voting trust or other agreement which
conflicts with any provision of this Agreement, and no holder of any Units shall grant any proxy or
become party to any voting trust or other agreement which conflicts with any provision of this
Agreement.

     Section 13.16 Each Interest in the Company is a Security. It is expressly
acknowledged and agreed that (a) each interest in the Company is a security governed by Article 8
of the OKUCC and the Uniform Commercial Code of any other relevant jurisdiction and (b) this
Agreement establishes the terms of the interests in the Company. The issuer’s jurisdiction (within
the meaning of Section 8-110 of the OKUCC) of the Company shall be the State of Oklahoma.

     Section 13.17 Additional Credit Agreement Obligations.

     (a) RMD will not create, incur or suffer to exist any Lien (other than tax Liens) upon any of
its Accounts (as defined in the Uniform Commercial Code as from time to time in effect in the State
of New York).

     (b) (i) Each of the Company and MRM hereby acknowledges that the Company’s Accounts owing to
MRM or any of its subsidiaries (the “Intercompany Accounts”) have been pledged as
collateral for MRM’s obligations under its primary revolving credit facility (the “Credit
Facility”), and (ii) each of the Company and MRM hereby agrees that, upon the

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occurrence and during the continuance of an Event of Default (as defined in the Credit
Facility) and following notice to MRM by the collateral agent under the Credit Facility of its
intent to exercise such right, the collateral agent under the Credit Facility shall be subrogated
to the rights of MRM with respect to the Intercompany Accounts.

ARTICLE XIV

DEFINED TERMS

     Section 14.1 Definitions.

     “Accounting Period” means, for the first Accounting Period, the period commencing on
the date hereof and ending on the next Adjustment Date. All succeeding Accounting Periods shall
commence on the day after an Adjustment Date and end on the next Adjustment Date.

     “Additional Securities” has the meaning set forth in Section 4.8(a).

     “Adjustment Date” means the last day of each fiscal year of the Company or any other
date determined by the Board, in its sole discretion, as appropriate for an interim closing of the
Company’s books.

     “Affiliate” means, with respect to any Person, any other Person controlling,
controlled by or under common control with such Person, where “control” means the possession,
directly or indirectly, of the power to direct the management and policies of a Person, whether
through the ownership of voting securities, contract or otherwise; provided,
however, that, for purposes hereof, neither the Company nor any Person controlled by the
Company shall be deemed to be an Affiliate of any Member.

     “Agreement” means this Amended and Restated Limited Liability Company Operating
Agreement of the Company, as this agreement may be amended, modified, supplemented or restated from
time to time after the date hereof.

     “Articles” means the Articles of Organization of the Company and any and all
amendments thereto and restatements thereof filed on behalf of the Company with the office of the
Secretary of State of the State of Oklahoma pursuant to the Oklahoma Act.

     “Board” has the meaning set forth in Section 3.1.

     “Call Equity Securities” has the meaning set forth in Section 11.6(a).

     “Call Notice” has the meaning set forth in Section 11.6(b).

     “Call Period” has the meaning set forth in Section 11.6(b).

     “Capital Account” has the meaning set forth in Section 6.1.

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     “Capital Contribution” means, for any Member, the total amount of cash and the Fair
Market Value of any property contributed to the Company by such Member.

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Common Units” mean a class of Interests in the Company, as described in Section 4.2.

     “Company” has the meaning set forth in the Preamble.

     “Competitive Opportunity” means an investment or business opportunity or prospective
economic or competitive advantage in which the Company or any of its Subsidiaries could have an
interest or expectancy.

     “Confidential Information” has the meaning set forth in Section 4.6.

     “Covered Person” means a current or former Member or Director, an Affiliate of a
current or former Member or Director, any officer, director, shareholder, partner, member,
employee, representative or agent of a current or former Member or Director or any of their
respective Affiliates, or any current or former officer, employee or agent of the Company or any of
its Subsidiaries.

     “Credit Facility” has the meaning set forth in Section 13.17(b)(i).

     “Deficit” has the meaning set forth in Section 7.2(a)

     “Director” has the meaning set forth in Section 3.1(a).

     “Director Cause” means, with respect to a Director’s removal from the Board, the
Director’s (i) continuing failure, for more than 10 days after the Company’s written notice to the
Director thereof, to perform such duties as a Director as are reasonably requested by the Company;
(ii) failure to observe material policies generally applicable to Directors unless such failure is
capable of being cured and is cured within 10 days of the Director receiving written notice of such
failure; (iii) failure to cooperate with any internal investigation of the Company or any of its
Subsidiaries; (iv) commission of any act of fraud, theft or financial dishonesty with respect to
the Company or any of its Subsidiaries or indictment or conviction of any felony; (v) chronic
absenteeism; or (vi) abuse of alcohol or another controlled substance.

     “Equity Call Option” has the meaning set forth in Section 11.6(a).

     “Equity Call Purchase Price” means the Fair Market Value of the Call Equity
Securities, determined as of date of the Call Notice by the Company.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

26

 

     “Fair Market Value” means, as of any date,

(a) for purposes of determining the value of any property owned by, contributed to
or distributed by the Company, (i) in the case of publicly traded securities, the
average of their last sales prices on the applicable trading exchange or quotation
system on each trading day during the five trading-day period ending on such date and
(ii) in the case of any other property, the fair market value of such property, as
determined in good faith by the Board, or

(b) for purposes of determining the value of any Member’s Interest in connection
with Section 11.6 (MRM Call Right), the fair market value of such Interest as reflected
in an appraisal report prepared, following delivery of a Call Notice by MRM to the
Ketchum Members, by an independent valuation consultant or appraiser of recognized
national standing, reasonably satisfactory to the Board and MRM and assuming for the
purpose of such determination that the Company is wholly owned by MRM.

     “Family Member” means, for any Ketchum Member who is an individual, a spouse, lineal
ancestor, lineal descendant, legally adopted child, or brother or sister of such Ketchum Member.

     “Intercompany Accounts” has the meaning set forth in Section 13.17(b)(i).

     “Interest” means a limited liability interest in the Company, which represents the
interest of each Member in and to the profits and losses of the Company and such Member’s right to
receive distributions of the Company’s assets, as set forth in this Agreement.

     “Lien” shall mean any mortgage, pledge, security interest, hypothecation, assignment,
lien (statutory or other) or similar encumbrance (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement or any lease in the nature
thereof).

     “Member” means, initially, the Ketchum Members and MRM and includes any Person
admitted as an additional or substitute Member of the Company pursuant to this Agreement.

     “MRM” has the meaning set forth in the recitals.

     “Officers” has the meaning set forth in Section 3.3.

     “Oklahoma Act” means the Oklahoma Limited Liability Company Act, Okla. Stat.
tit. 18, §2000, et seq., as amended from time to time.

     “OKUCC” means the Uniform Commercial Code in effect in the state of Oklahoma.

     “Original Agreement” has the meaning set forth in the recitals.

     “Participation Notice” has the meaning set forth in Section 4.8(b).

27

 

     “Permitted Transfer” means any Transfer of Units by a Ketchum Member (i) if such
Ketchum Member is an individual, to a Family Member of such Ketchum Member, or to a trust or other
entity whose sole and exclusive beneficiaries are such Ketchum Member, and/or Family Members of
such Ketchum Member, or (ii) upon the death of an individual Ketchum Member, pursuant to the terms
of any trust or will of the deceased individual Ketchum Member, or by the laws of intestate
succession.

     “Person” means any individual, corporation (including not-for-profit), general or
limited partnership, limited liability company, joint venture, estate, trust, association,
organization, governmental entity or agency or other entity of any kind or nature.

     “Preemption Right” has the meaning set forth in Section 4.8(c).

     “Rule 144” has the meaning set forth in Section 14.9.

     “Securities Act” means the Securities Act of 1933 as amended from time to time.

     “Services Agreement” means that certain Amended and Restated Services Agreement, dated
as of the date hereof, between MRM and the Company.

     “Subsidiary” means any direct or indirect subsidiary of the Company on the date hereof
and any direct or indirect subsidiary of the Company organized or acquired after the date hereof.

     “Tax Matters Partner” has the meaning set forth in Section 9.2(b).

     “Transfer” means, as the case may be, (i) to directly or indirectly transfer, sell,
assign, distribute, pledge, encumber, hypothecate or otherwise dispose of, either voluntarily or
involuntarily, including by gift, by way of a merger (forward or reverse) or similar transaction,
by operation of law or otherwise or (ii) any direct or indirect transfer, sale assignment,
distribution, pledge, encumbrance, hypothecation or other disposition, either voluntarily or
involuntarily, including by gift, by way of merger (forward or reverse) or similar transaction, by
operation of law or otherwise.

     “Treasury Regulations” means the Regulations of the Treasury Department of the United
States issued pursuant to the Code.

     “Units” means any class of Interests provided for herein.

28

 

     IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the
date first above written.

	 	 	 	 	 
	 	KETCHUM MEMBERS:

 	 
	 	/s/ Craig Ketchum
 	 
	 	Craig Ketchum 	 
	 	 	 
	 
	 	 	 
	 	/s/
Kent Ketchum
 	 
	 	Kent Ketchum 	 
	 	 	 
	 
	 	 	 
	 	/s/
Kevin Ketchum
 	 
	 	Kevin Ketchum 	 
	 	 	 
	 
	 	 	 
	 	/s/
Brian Ketchum
 	 
	 	Brian Ketchum 	 
	 	 	 
	 
	 	MRM:

McJUNKIN RED MAN CORPORATION

 	 
	 	By:  	/s/
JF Underhill	 
	 	 	Name:  	JF Underhill	 
	 	 	Title:  	Executive VP & CFO	 
	 
	 	COMPANY:

RED MAN DISTRIBUTORS LLC

 	 
	 	By:  	/s/
Craig Ketchum	 
	 	 	Name:  	Craig Ketchum	 
	 	 	Title:  	Chairman & CEO	 
	 

29

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