EXHIBIT 10.1
EXECUTION COPY
AMENDED AND RESTATED
AGREEMENT AND PLAN
OF RECAPITALIZATION
DATED AS OF APRIL 10, 2001
AMONG
HALLIBURTON COMPANY,
THE SELLER NAMED HEREIN,
AND
DEG ACQUISITIONS, LLC
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01. Definitions....................................................2 Section 1.02. Rules of Construction..........................................2
ARTICLE II
SALE AND PURCHASE
Section 2.01. Sale and Purchase of Securities................................2 Section 2.02. Sale and Purchase of BV Companies..............................4 Section 2.03. Cash Consideration.............................................4 Section 2.04. The Closings...................................................4 Section 2.05. Pre-Closing Transactions.......................................5 Section 2.06. Transactions at the First Closing..............................5 Section 2.07. Transactions at the Second Closing.............................7 Section 2.08. Adjustment of the Preliminary Purchase Price...................8 Section 2.09. Procedures for Calculating the Purchase Price Adjustment.......9 Section 2.10. Adjustments to Net Equity.....................................11 Section 2.11. Allocation of Purchase Price Adjustment.......................13 Section 2.12. Amendments to Effect Recapitalization.........................13 Section 2.13. Delayed Purchases.............................................13 Section 2.14. Joint Ventures................................................14
ARTICLE III
REPRESENTATIONS AND WARRANTIES REGARDING PARENT AND DRESSER INDUSTRIES
Section 3.01. Organization and Qualification................................15 Section 3.02. Authorization of Agreement....................................15 Section 3.03. Approvals.....................................................16 Section 3.04. No Violation..................................................16 Section 3.05. No Brokers....................................................16 Section 3.06. Title to Securities...........................................17
ARTICLE IV
REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER
Section 4.01. Organization..................................................17 Section 4.02. Authorization of Agreement....................................17 Section 4.03. Approvals.....................................................18 Section 4.04. No Violation..................................................18 Section 4.05. Title to Securities...........................................18
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ARTICLE V
REPRESENTATIONS AND WARRANTIES REGARDING MEMBERS OF THE COMPANY GROUPS
Section 5.01. Organization; Subsidiaries....................................19 Section 5.02. Organizational Documents; Authorization; No Violation.........20 Section 5.03. Capitalization................................................20 Section 5.04. Title to Properties...........................................21 Section 5.05. Financial Statements..........................................22 Section 5.06. Authorizations................................................23 Section 5.07. Compliance With Laws; Regulation of Businesses................24 Section 5.08. Taxes.........................................................24 Section 5.09. Principal Contracts...........................................26 Section 5.10. Employees.....................................................26 Section 5.11. Environmental Matters.........................................30 Section 5.12. Litigation....................................................31 Section 5.13. Material Adverse Changes......................................31 Section 5.14. Customers and Suppliers.......................................32 Section 5.15. Adequacy of Assets............................................32 Section 5.16. Full Disclosure...............................................32 Section 5.17. Disclaimers...................................................32
ARTICLE VI
REPRESENTATIONS AND WARRANTIES REGARDING ACQUIROR
Section 6.01. Organization and Qualification................................33 Section 6.02. Authorization of Agreement....................................33 Section 6.03. Approvals.....................................................34 Section 6.04. No Violation..................................................34 Section 6.05.
Commitment Letters...........................................34 Section 6.06. No Brokers....................................................34 Section 6.07. Transitory Merger Sub.........................................34
ARTICLE VII
REPRESENTATIONS AND WARRANTIES REGARDING BUYERS
Section 7.01. Organization..................................................35 Section 7.02. Authorization of Agreement....................................35 Section 7.03. Approvals.....................................................35 Section 7.04. No Violation..................................................35 Section 7.05. Investment in Securities......................................36
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ARTICLE VIII
COVENANTS OF THE PARENT
Section 8.01. Affirmative Covenants Regarding
Operation of the Businesses...................................36 Section 8.02. Negative Covenants Regarding the
Operation of the Businesses...................................37 Section 8.03. Access to Information.........................................41 Section 8.04. Insurance Benefits............................................41 Section 8.05. Compliance with Competition Laws Applicable
to Designated Regulatory Assets...............................42 Section 8.06. Covenant Not to Compete.......................................44 Section 8.07. Nonsolicitation...............................................45 Section 8.08. Accountants' Opinion and Consents.............................46 Section 8.09. Financing.....................................................46 Section 8.10. Financial Statements..........................................48 Section 8.11. Assignments...................................................48 Section 8.12. Release of Liens..............................................48 Section 8.13. Environmental Schedules.......................................48 Section 8.14. Use of Dresser Name...........................................48
ARTICLE IX
COVENANTS OF THE ACQUIROR
Section 9.01. Confidentiality Agreement.....................................49 Section 9.02. Corporate Name................................................49 Section 9.03. Surety Arrangements...........................................49 Section 9.04. Dresser Valve Division Contracts..............................49
ARTICLE X
MUTUAL COVENANTS
Section 10.01. Cooperation...................................................50 Section 10.02. Ancillary Agreements..........................................52 Section 10.03. Public Announcements..........................................53 Section 10.04. Transfer Taxes................................................53 Section 10.05. Expenses......................................................53 Section 10.06. Tax Matters...................................................53 Section 10.07. Offers to Employees...........................................56 Section 10.08. Related Party Contracts.......................................57 Section 10.09. Litigation Support............................................57 Section 10.10. Post-Closing Matters..........................................58
ARTICLE XI
CONDITIONS TO FIRST CLOSING
Section 11.01. Conditions to Obligations of
Each Party Under This Agreement...............................59
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Section 11.02. Additional Conditions to the Parent's Obligations.............60 Section 11.03. Additional Conditions to the Acquiror's Obligations...........61
ARTICLE XII
INDEMNIFICATION
Section 12.01. Survival of Representations, Warranties,
Covenants and Agreements......................................63 Section 12.02. General Indemnification by the Parent.........................64 Section 12.03. General Indemnification by the Acquiror.......................68 Section 12.04. Procedures....................................................69 Section 12.05. Special Environmental Indemnification Provisions..............72 Section 12.06. Punitive Damages..............................................75 Section 12.07. Failure of Acquiror to Close..................................75 Section 12.08. No Right of Contribution......................................75 Section 12.09. Specific Performance..........................................75 Section 12.10. Sole Remedy...................................................75
ARTICLE XIII
TERMINATION, AMENDMENT AND WAIVER
Section 13.01. Termination...................................................76 Section 13.02. Effect of Termination.........................................77 Section 13.03. Amendment.....................................................77 Section 13.04. Waiver........................................................77
ARTICLE XIV
MISCELLANEOUS
Section 14.01. Notices.......................................................77 Section 14.02. Headings......................................................79 Section 14.03. Severability..................................................79 Section 14.04. Entire Agreement..............................................79 Section 14.05. Assignment....................................................80 Section 14.06. Successors; Parties in Interest...............................80 Section 14.07. Failure or Indulgence Not Waiver; Remedies Cumulative.........80 Section 14.08. Disclosure Letters............................................80 Section 14.09. Governing Law.................................................80 Section 14.10. Arbitration...................................................80 Section 14.11. Confidentiality Agreements....................................81 Section 14.12. Counterparts..................................................81
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ANNEXES
Annex A -- Definitions.
Annex B -- Reorganization (Components and Procedure).
Annex C -- List of the Seller, Buyers and BV Companies and
BV Allocable Purchase Price.
Annex D -- Allocation Procedures for Purchase Price Adjustment.
APPENDICES
Appendix I -- Form of Merger Agreement.
Appendix II -- Forms of Releases of Intercompany Indebtedness.
Appendix III -- Forms of Releases of Claims.
Appendix IV -- Form of Assignment of Name.
Appendix V -- Form of Highway 6 Lease Agreement.
Appendix VI -- Form of Employee Benefits Agreement.
Appendix VII -- Form of Transition Services Agreement.
Appendix VIII -- Form of Stockholders' Agreement.
Appendix IX -- Form of Category 2A Purchase and Sale Agreement.
Appendix X -- Form of Opinion of Acquiror's Counsel.
Appendix XI -- Form of Opinion of Parent's Counsel.
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EXECUTION COPY
AMENDED AND RESTATED AGREEMENT AND PLAN OF RECAPITALIZATION
This AMENDED AND RESTATED AGREEMENT AND PLAN OF RECAPITALIZATION (this "Agreement") dated as of April 10, 2001, is by and among Halliburton Company, a
Delaware corporation (the "Parent"), Dresser B.V., a Netherlands company and a wholly owned indirect Subsidiary of the Parent (the "Seller") and DEG Acquisitions, LLC, a Delaware limited liability company (the "Acquiror"). This Agreement amends and restates in its entirety that certain Agreement and Plan of Recapitalization dated as of January 30, 2001 by and among the Parent, the Seller and the Acquiror, as amended by Amendatory Agreement No. 1 thereto, dated March 2001, and Amendatory Agreement No. 2 thereto, dated March 2001. References in this Agreement to the "date of this Agreement," or "the date hereof" shall refer to January 30, 2001.
RECITALS:
The Parent has determined to redeploy a significant portion of its assets. Accordingly, the Parent desires to sell, and the Acquiror has determined to purchase, certain interests in the Parent's businesses relating to, among other things, the design, manufacturing and marketing of engineered measurement, flow control and power systems for customers primarily in the energy industry.
In order to accomplish this transaction, the Parent will, in consultation with the Acquiror and in the manner set forth herein, prior to the First Closing effect the Reorganization described in Annex B of the various legal entities that comprise the Dresser Equipment Group.
After giving effect to the Reorganization, (a) the Parent desires to cause Dresser Industries and DEGI to engage, and the Acquiror desires to engage, and to cause Transitory Merger Sub to engage, in the transactions contemplated by Article II herein at the First Closing and (b) immediately following the First Closing, the Parent desires to cause the Seller to engage, and the Acquiror desires to cause the Buyers to engage, in the transactions contemplated by Article II herein at the Second Closing.
On March 28, 2001, DEGI changed its legal name from "Dresser Equipment Group, Inc." to "Dresser, Inc." References in this Agreement (including the exhibits, annexes and schedules hereto) to "Dresser Equipment Group, Inc." shall mean Dresser, Inc.
NOW, THEREFORE, the parties hereto, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, agree as follows:
HALLIBURTON COMPANY
AGREEMENT AND PLAN OF RECAPITALIZATION
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Capitalized and other terms used in this Agreement are defined in Annex A attached hereto and are used herein with the meanings ascribed to them therein.
Section 1.02. Rules of Construction.
(a) Unless the context otherwise requires, as used in this Agreement:
(i) a term defined in Annex A has the meaning ascribed to it in
Annex A; (ii) an accounting term not defined herein has the
meaning ascribed to it in accordance with U.S. GAAP; (iii) "or"
is not exclusive; (iv) "including" means "including without
limitation;" (v) words in the singular include the plural and
vice versa; (vi) words applicable to one gender shall be
construed to apply to each gender; (vii) the terms "hereof,"
"herein," "hereby," "hereto" and derivative or similar words
refer to this entire Agreement, including the Annexes and
Appendices hereto; (viii) the terms "Article," "Section," "Annex"
and "Appendix" shall refer to the specified Article, Section,
Annex or Appendix of or to this Agreement; (ix) the term
"Schedule" shall refer to the appropriate Schedule to the
Parent's Disclosure Letter or the Acquiror's Disclosure Letter;
and (x) the phrases "pursuant to," "as described in" and "subject
to the terms of," when used with reference to a particular
Section of this Agreement, or words of similar import, shall
refer to such Section and to any Schedule of the Parent's
Disclosure Letter or the Acquiror's Disclosure Letter referenced
therein.
(b) A reference to any Person includes such Person's successors and
permitted assigns.
(c) Any reference to "days" shall mean calendar days unless "Business
Days" (as defined in Annex A) are expressly specified.
(d) Each Annex and Appendix identified in this Agreement is
incorporated herein by reference and made a part hereof for all
purposes.
(e) The Parent and the Acquiror, each represented by legal counsel,
have each participated in the negotiation and drafting of this
Agreement. If an ambiguity or question of intent or
interpretation should arise, this Agreement shall be construed as
if drafted jointly by such parties and no presumption or burden
of proof shall arise favoring or burdening any party hereto by
virtue of the authorship of any of the provisions of this
Agreement.
ARTICLE II
SALE AND PURCHASE
Section 2.01. Sale and Purchase of Securities. On the terms and subject to the conditions contained in this Agreement, the Parent agrees to cause DEGI and Dresser Industries to engage at the First Closing in the following transactions, and the Acquiror agrees to engage and to cause the Transitory Merger Sub to engage at the First Closing in the following transactions:
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(a) The Acquiror shall purchase from Transitory Merger Sub, upon
original issue, common stock of Transitory Merger Sub for
cash in an amount in U.S. Dollars (which the Acquiror
estimates will be approximately $400,000,000) equal to at
least the Purchase Price, plus fees and expenses incurred by
the Acquiror in connection with the transactions
contemplated hereby (other than fees or discounts related to
the Loan) less the Loan (the "Investment");
(b) DEGI shall borrow an amount in cash in U.S. Dollars equal to
at least $970,000,000 (nine hundred seventy million dollars)
(the net proceeds to DEGI pursuant to this clause (b), being
the "Loan"), comprised of (i) borrowings from a syndicate of
Lenders on Terms contemplated by the Commitment Letter Term
Sheet attached to the Bank Commitment Letter and (ii) the
proceeds from the issuance of senior subordinated notes in a
private placement of such notes or borrowings from a
syndicate of Lenders on the Terms contemplated by the
Commitment Letter Term Sheet attached to the Bridge
Commitment Letter; and
(c) The Acquiror and the Parent shall cause the merger (the
"Merger") of Transitory Merger Sub with and into DEGI, which
shall be the corporation surviving the Merger, to be
effected through execution and delivery of the Merger
Agreement and the filing thereof with the Secretary of State
of Delaware, pursuant to which:
(i) All the issued and outstanding capital stock of
Transitory Merger Sub shall be converted into an
aggregate number of shares of common stock of DEGI
("DEGI Common Stock") equal to (i) the total number of
shares of DEGI Common Stock outstanding immediately
prior to the Merger multiplied by (ii) 0.949;
(ii) subject to the provisions of clause (iii) of this
subsection (c), the number of shares of DEGI Common
Stock owned by Dresser Industries equal to (i) the
total number of shares of DEGI Common Stock
outstanding immediately prior to the Merger multiplied
by (ii) 0.949 shall be converted into the right to
receive cash in an aggregate amount equal to (A) the
DEGI Group Preliminary Purchase Price Percentage times
the Preliminary Purchase Price as adjusted by (B) a
portion of the Purchase Price Adjustment determined in
accordance with the Allocation Procedures (the "Merger
Consideration") (with the balance of the shares of
DEGI Common Stock owned by Dresser Industries to
remain outstanding); and
(iii) if any Management Shares are outstanding at the
effective date of the Merger, then (A) the number of
shares of DEGI Common Stock converted into the right
to receive cash pursuant to clause (ii) of this
subsection (c) shall be increased by a number equal to
the number of
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Management Shares and (B) the consideration payable to
Dresser Industries in connection with the Merger shall
be increased by the amount of the cash consideration
received by DEGI against the issuance of such
Management Shares.
(d) Any Management Shares issued by DEGI prior to the First
Closing shall be sold to management employees at a price per
share not less than an amount equal to the Merger
Consideration plus the BV Consideration divided by the
number of shares of DEGI Common Stock to be converted by
Dresser Industries in the Merger as determined pursuant to
clause (ii) of subsection 2.01(c) before giving effect to
clause (iii) of subsection 2.01(c).
Section 2.02. Sale and Purchase of BV Companies. On the terms and subject to the conditions contained in this Agreement, the Parent agrees to cause the Seller to engage at the Second Closing in the following transactions, and the Acquiror agrees to cause each of the Buyers to engage at the Second Closing in the following transactions: The Seller shall assign to the appropriate Buyer as indicated on Annex C hereto, and such Buyer shall accept, the Equity Securities of the BV Company whose name is set forth next to the name of such Buyer on Annex C hereto. In consideration for such assignments, the Buyers shall pay to the Seller cash in U.S. Dollars in an aggregate amount equal to (a) the BV Preliminary Purchase Price Percentage times the Preliminary Purchase Price as adjusted by (b) a portion of the Purchase Price Adjustment determined in accordance with the Allocation Procedures (the "BV Consideration").
Section 2.03. Cash Consideration.
(a) The aggregate cash consideration to be paid to Dresser Industries
and the Seller for engaging in the transactions contemplated by
Sections 2.01 and 2.02 herein shall consist of the Purchase
Price. The "Purchase Price" shall be equal to the Preliminary
Purchase Price as adjusted by the Purchase Price Adjustment in
accordance with Sections 2.08 and 2.09.
(b) The parties hereto have agreed that the "Preliminary Purchase
Price" shall be equal to (i) U.S. $1,309,111,797 (one billion
three hundred nine million one hundred eleven thousand seven
hundred ninety-seven dollars) less (ii) the amount which, when
taken together with the aggregate consideration paid to acquire
the Management Shares, equals 5.1% of the Equity of DEGI.
Section 2.04. The Closings.
(a) The transactions contemplated by Section 2.01 shall be
consummated (the "First Closing") on the date and at the time and
place determined pursuant to this subsection (a). The First
Closing shall be held at the offices of Latham & Watkins, 885
Third Avenue, New York, New York 10022 on the Closing Date. The
"Closing Date" shall be the fifteenth (15th) Business Day
following the date on which the Closing Conditions (other than
conditions that can be satisfied only by delivery of
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certificates or other documents at the Closings and where such
delivery is in the control of a party hereto) have been fulfilled
or waived. If such date is not a Business Day, then the Closing
Date shall be the next succeeding Business Day.
(b) Upon fulfillment or waiver of the Closing Conditions to ...