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EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
DATED AS OF AUGUST 20, 1998
BETWEEN
HALLIBURTON ENERGY SERVICES, INC.
MIHC, INC.,
▇▇▇▇▇ INTERNATIONAL, INC.,
▇▇▇▇▇ INTERNATIONAL ACQUISITION CORP.,
M-I PURCHASE CORP.
AND
M-I L.L.C.
RELATING TO INTERESTS IN
M-I L.L.C.
AND
M-I DRILLING FLUIDS CANADA, INC.
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PURCHASE AND SALE AGREEMENT
TABLE OF CONTENTS
PAGE
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ARTICLE I.DEFINITIONS
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Rules of Construction . . . . . . . . . . . . . . . . . . . 1
ARTICLE II.PURCHASE AND SALE OF M-I INTERESTS
Section 2.01. Purchase and Sale of M-I Interests . . . . . . . . . . . . 2
Section 2.02. Purchase Price . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.03. Allocation of Purchase Price . . . . . . . . . . . . . . . 2
Section 2.04. Closing . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III.REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Section 3.01. Organization . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.02. Authorization of Agreement . . . . . . . . . . . . . . . . 3
Section 3.03. M-I Interests . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.04. Approvals . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.05. No Violation . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.06. Litigation . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.07. Brokerage Agreements . . . . . . . . . . . . . . . . . . . 4
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OFTHE PURCHASERS
Section 4.01. Organization and Good Standing . . . . . . . . . . . . . . 5
Section 4.02. Investment Purpose . . . . . . . . . . . . . . . . . . . . 5
Section 4.03. Authorization . . . . . . . . . . . . . . . . . . . . . . . 5
Section 4.04. Approvals . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.05. No Violation . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.06. Litigation . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.07. Brokerage Agreements . . . . . . . . . . . . . . . . . . . 6
Section 4.08. SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE V.REPRESENTATIONS AND WARRANTIES OF M-I
Section 5.01. Organization . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.02. Authorization of Agreement . . . . . . . . . . . . . . . . 7
Section 5.03. Approvals . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.04. No Violation . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.05. Litigation . . . . . . . . . . . . . . . . . . . . . . . . 8
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ARTICLE VI.AGREEMENTS
Section 6.01. Covenant . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 6.02. Appropriate Action; Consents; Filings . . . . . . . . . . . 8
Section 6.03. Certain Tax Matters . . . . . . . . . . . . . . . . . . . . 9
Section 6.04. Access to Information . . . . . . . . . . . . . . . . . . 11
Section 6.05. Public Announcements . . . . . . . . . . . . . . . . . . 12
Section 6.06. Disposition of Halliburton Obligations . . . . . . . . . 12
Section 6.07. Post-Closing Liabilities . . . . . . . . . . . . . . . . 13
Section 6.08. Restrictions on Sale of M-I . . . . . . . . . . . . . . . 13
Section 6.09. Halliburton Name . . . . . . . . . . . . . . . . . . . . 13
Section 6.10. Non-Solicitation of Employees . . . . . . . . . . . . . . 13
Section 6.11 Confidentiality of Information . . . . . . . . . . . . . 14
Section 6.12 M-I Confidentiality Memoranda . . . . . . . . . . . . . . 14
Section 6.13 M-I 1995 Omnibus Plan . . . . . . . . . . . . . . . . . . 14
Section 6.14 Leased or Shared Facilities . . . . . . . . . . . . . . . 14
ARTICLE VII.CONDITIONS TO THE CLOSING
Section 7.01. Conditions to Obligations of Each Party . . . . . . . . . 15
Section 7.02. Conditions to Obligation of the Purchasers . . . . . . . 15
Section 7.03. Conditions to Obligation of the Sellers . . . . . . . . . 16
ARTICLE VIII.TERMINATION
Section 8.01. Termination . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.02. Effect of Termination; Nonconsummation . . . . . . . . . 19
Section 8.03. Fees and Expenses . . . . . . . . . . . . . . . . . . . . 19
ARTICLE IX.MISCELLANEOUS
Section 9.01. Survival . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 9.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 9.03. Headings; Cross References . . . . . . . . . . . . . . . 21
Section 9.04. Prior Agreements . . . . . . . . . . . . . . . . . . . . 21
Section 9.05. Amendment . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 9.06. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 9.07. Further Actions . . . . . . . . . . . . . . . . . . . . . 22
Section 9.08. Assignment . . . . . . . . . . . . . . . . . . . . . . . 22
Section 9.09. Governing Law . . . . . . . . . . . . . . . . . . . . . . 22
Section 9.10. Counterparts . . . . . . . . . . . . . . . . . . . . . . 22
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EXHIBITS
Exhibit A Form of Promissory Note
Exhibit B Form of Guaranty Agreement
Exhibit C Form of Agreement relating to the Sale of the North Course
Building
Exhibit D Form of Agreement relating to the Lease of a Portion of the North
Course Building
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered
into as of August 20, 1998 by and between HALLIBURTON ENERGY SERVICES, INC., a
Delaware corporation ("Halliburton"), MIHC, INC., a Delaware corporation and
wholly owned subsidiary of Halliburton ("MIHC" and, together with Halliburton,
the "Sellers"), ▇▇▇▇▇ INTERNATIONAL, INC., a Delaware corporation ("▇▇▇▇▇"),
▇▇▇▇▇ INTERNATIONAL ACQUISITION CORP., a Delaware corporation and wholly owned
subsidiary of ▇▇▇▇▇ (~SIAC"), M-I PURCHASE CORP., a Delaware corporation and a
wholly owned subsidiary of ▇▇▇▇▇ ("MIPC" and, together with ▇▇▇▇▇ and SIAC, the
"Purchasers"), and M-I L.L.C., a Delaware limited liability company ("M-I").
RECITALS:
MIHC owns of record and beneficially a 36% interest in M-I (the "M-I
L.L.C. Interest"), and Halliburton owns of record and beneficially 4,000 shares
of common stock of M-I Drilling Fluids Canada, Inc., a Canadian corporation
("M-I Canada"), (the "M-I Canada Interest" and, together with the M-I L.L.C.
Interest, the "M-I Interests").
The remaining 64% interest in M-I and the remaining outstanding capital
stock of M-I Canada are owned of record and beneficially by SIAC.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, in reliance upon the mutual covenants and agreements hereinafter
set forth and subject to the terms and conditions herein contained, the parties
hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01. Definitions. Certain capitalized and other terms used
in this Agreement are defined in Annex A hereto and are used herein with the
meanings ascribed to them therein.
Section 1.02. Rules of Construction. Unless the context otherwise
requires, as used in this Agreement: (a) a term has the meaning ascribed to it;
(b) "or" is not exclusive; (c) "including" means "including without limitation;"
(d) words in the singular include the plural; (e) words in the plural include
the singular; (f) words applicable to one gender shall be construed to apply to
each gender; (g) the terms "hereof," "herein," "hereby," "hereto" and derivative
or similar words refer to this entire Agreement; and (h) the terms "Article" or
"Section" shall refer to the specified Article or Section of this Agreement.
ARTICLE II.
PURCHASE AND SALE OF M-I INTERESTS
Section 2.01. Purchase and Sale of M-I Interests. Subject to the
terms and conditions and in reliance upon the representations, warranties,
covenants and agreements contained herein, (a) MIHC shall sell to MIPC the M-I
L.L.C. Interest, and MIPC shall purchase from MIHC the M-I L.L.C. Interest, and
(b) Halliburton shall sell to MIPC the M-I Canada Interest, and MIPC shall
purchase from Halliburton the M-I Canada Interest, in each case, at the Closing
referred to in Section 2.04 in consideration, among other things, of the payment
by MIPC to MIHC and Halliburton of the Adjusted Purchase Price in accordance
with Section 2.02.
Section 2.02. Purchase Price. The purchase price for the M-I
Interests (the "Purchase Price") shall be an amount equal to $265 million
(allocated $257 million to the M-I L.L.C. Interest and $8 million to the M-I
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Canada Interest), subject to adjustment as set forth below. The Purchase Price
shall be (a) decreased by an amount equal to the sum of all dividends and
distributions, if any, received by the Sellers in respect of the M-I Interests
after August 5, 1998 and prior to the Closing (the "Computation Period"); (b)
increased by an amount equal to the sum of all contributions, if any, by the
Sellers to the equity of any member of the M-I Group during the Computation
Period, whether resulting from the forgiveness by the Sellers or any of their
Affiliates of existing intercompany indebtedness owed by any member of the M-I
Group to the Sellers or any their Affiliates or otherwise; and (c) increased by
an amount equal to the sum of all payments, if any, made by the Sellers or any
of their Affiliates pursuant to the Halliburton Guarantees during the
Computation Period (the Purchase Price as so adjusted is hereinafter referred to
as the "Adjusted Purchase Price"). The Adjusted Purchase Price shall be paid to
MIHC by the Purchasers pursuant to a fully negotiable promissory note made by
MIPC substantially in the form of Exhibit A hereto (the "Promissory Note"). The
principal amount of the Promissory Note (which shall be equal to the Adjusted
Purchase Price) shall be payable in full on the day that is 240 days after the
Closing Date, or if such date is a banking holiday in the State of Texas, the
next succeeding business day. The Promissory Note will not bear interest except
default interest which would commence following the stated maturity of the
Promissory Note. The obligations of MIPC (or its assigns, if any) under the
Promissory Note shall be fully and unconditionally guaranteed by ▇▇▇▇▇ pursuant
to a Guaranty Agreement between ▇▇▇▇▇ and MIHC substantially in the form of
Exhibit B hereto (the "Guaranty Agreement").
Section 2.03. Allocation of Purchase Price. The Adjusted Purchase
Price shall be allocated between the M-I Canada Interest and the M-I L.L.C.
Interest pro rata based on the relative allocation of the Purchase Price as set
forth in Section 2.02. The Purchasers shall prepare such further allocation of
the Adjusted Purchase Price among the assets of M-I as may be required for Tax
and financial accounting purposes and shall deliver such allocation (the
"Allocation Schedule") to the Sellers for their review within 120 days after the
Closing Date. The Sellers shall have 30 days to dispute the allocation or any
item thereon, in which case, the Purchasers and the Sellers shall negotiate in
good faith to resolve any disagreement. Should the parties fail to resolve any
dispute, the matter shall be referred to an independent, nationally recognized
certified public accounting firm mutually agreed to by the parties ("Independent
CPA"), whose determination shall be final and binding on the parties. If the
Sellers fail to make a timely objection to the allocation as proposed by the
Purchasers, the allocation as set forth on the initial Allocation Schedule shall
be considered final and binding on all parties. The Sellers and the Purchasers
shall duly prepare and timely file any forms required by federal or state Tax
law to report the allocation of the Adjusted Purchase Price in accordance with
the final Allocation Schedule. The Purchasers and the Sellers agree that the
allocation of the Adjusted Purchase Price as set forth on the final Allocation
Schedule shall be used for all purposes (including Tax and financial accounting
purposes) and that the Purchasers and the Sellers and their respective
Affiliates shall file all Tax Returns (including amended Tax Returns and claims
for refund) and information reports in a manner consistent with such final
Allocation Schedule, except as may be otherwise required by a Governmental
Authority.
Section 2.04. Closing. Subject to the terms and conditions of this
Agreement, the Closing shall take place at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇
L.L.P., ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m. on August 31 or at such
other place, time and date as the parties hereto may agree. The date on which
the Closing occurs is referred to herein as the "Closing Date."
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers hereby represents and warrants to the Purchasers as
follows:
Section 3.01. Organization. Each of the Sellers is a corporation duly
incorporated, validly existing and in good standing under the Laws of the State
of Delaware, with all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as it is now conducted.
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Section 3.02. Authorization of Agreement. Each of the Sellers has all
requisite corporate power and authority to execute and deliver this Agreement
and each instrument required hereby to be executed and delivered by it at the
Closing, to perform its obligations hereunder and thereunder and to consummate
the transactions contemplated hereby. The execution and delivery by each of the
Sellers of this Agreement and each instrument required hereby to be executed and
delivered by it at the Closing, and the performance of its obligations hereunder
and thereunder, have been duly and validly authorized by all requisite corporate
action on the part of such Seller. This Agreement has been duly executed and
delivered by each of the Sellers and (assuming due authorization, execution and
delivery hereof by the other parties hereto) constitutes a legal, valid and
binding obligation of each of the Sellers, enforceable against each of the
Sellers in accordance with its terms, except as the same may be limited by legal
principles of general applicability governing the application and availability
of equitable remedies.
Section 3.03. M-I Interests. Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by and receipt of all Permits and Orders of, Governmental Authorities
indicated as required in Section 3.04, MIHC (with respect to the M-I L.L.C.
Interest) and Halliburton (with respect to the M-I Canada Interest) have full
right, power and authority to sell, transfer, convey and deliver the M-I
Interests to MIPC, in accordance with the terms of this Agreement, free and
clear of any and all Liens. Neither Sellers nor their Affiliates have any equity
interest, direct or indirect, in the M-I Group except the M-I L.L.C. Interest
and the M-I Canada Interest.
Section 3.04. Approvals. Except for the requirements of (i) the Laws,
Regulations and Orders set forth in Schedule 3.04 to this Agreement and (ii)
those Laws, Regulations and Orders noncompliance with which could not reasonably
be expected to have a material adverse effect on the ability of the Sellers to
perform their obligations under this Agreement, no filing or registration with,
no waiting period imposed by and no Permit or Order of, any Governmental
Authority is required under any Law, Regulation or Order applicable to any of
the Sellers to permit the Sellers to execute, deliver or perform this Agreement
or any instrument required hereby to be executed and delivered by any of the
Sellers at the Closing.
Section 3.05. No Violation. Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by and receipt of all Permits and Orders of, Governmental Authorities
indicated as required pursuant to Section 3.04, neither the execution and
delivery by the Sellers of this Agreement or any instrument required hereby to
be executed and delivered by any of them at the Closing nor the performance by
the Sellers of their obligations hereunder or thereunder will (a) violate or
breach the terms of or cause a default under (i) any Law, Regulation or Order
applicable to the Sellers, (ii) the certificate of incorporation or bylaws of
either of the Sellers or (iii) any contract or agreement to which any of the
Sellers or any of their subsidiaries (other than any member of the M-I Group) is
a party or by which any Seller or any of such Seller?s properties or assets is
bound, or (b) with the passage of time, the giving of notice or the taking of
any action by a third party, have any of the effects set forth in clause (a) of
this Section.
Section 3.06. Litigation. There are no actions, suits, investigations
or proceedings (including any proceedings in arbitration) pending, or, to the
Knowledge of any of the Sellers, threatened, against either of the Sellers or
any of their assets, at law or in equity, in any Court or before or by any
Governmental Authority that could reasonably be expected to have an adverse
effect on the validity or enforceability of this Agreement or the ability of the
Sellers to perform their obligations under this Agreement or any instrument
required hereby to be executed and delivered by any of them at the Closing.
Section 3.07. Brokerage Agreements. Neither of the Sellers has,
directly or indirectly, entered into any agreement with any Person that would
obligate any member of the M-I Group or any of the Purchasers or any Affiliate
of the Purchasers to pay any commission, brokerage fee or "finder?s fee" in
connection with the transactions contemplated herein. The fees and expenses of
Warburg Dillon Read LLC incurred in connection with the transactions
contemplated hereby will be for the account of the Sellers.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF
THE PURCHASERS
Each of the Purchasers represents and warrants to the Sellers as
follows:
Section 4.01. Organization and Good Standing. Each of the Purchasers
is a corporation duly incorporated, validly existing and in good standing under
the Laws of the State of Delaware, with all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now conducted.
Section 4.02. Investment Purpose. MIPC is acquiring the M-I Interests
for its own account and not with a view to or in connection with a sale or
distribution thereof in violation of any securities laws, and it has no present
intention of selling or distributing any of the M-I Interests in violation of
any securities laws. MIPC reserves the right, however, to pledge all or part of
the M-I Interests or otherwise use the M-I Interests as collateral at its
discretion, provided that the pledgee accepts such M-I Interests not with a view
to or in connection with a sale or distribution thereof in violation of any
securities laws.
Section 4.03. Authorization. Each of the Purchasers has all requisite
corporate power and authority to execute and deliver this Agreement and each
instrument (including the Promissory Note and the Guaranty Agreement) required
hereby to be executed and delivered by it at the Closing, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby. The execution and delivery by each of the Purchasers of
this Agreement and each instrument (including the Promissory Note and the
Guaranty Agreement) required hereby to be executed and delivered by it at the
Closing, and the performance of its obligations hereunder and thereunder, have
been duly and validly authorized by all requisite corporate action on the part
of such Purchaser. This Agreement has been duly executed and delivered by each
of the Purchasers and (assuming due authorization, execution and delivery hereof
by the other parties hereto) constitutes a legal, valid and binding obligation
of each of the Purchasers, enforceable against each of the Purchasers in
accordance with its terms, except as the same may be limited by legal principles
of general applicability governing the application and availability of equitable
remedies. At the time of its delivery, the Promissory Note will be duly executed
and delivered by MIPC and will constitute a legal, valid and binding obligation
of MIPC, enforceable against MIPC in accordance with its terms, except as the
same may be limited by legal principles of general applicability governing the
application and availability of equitable remedies. At the time of its execution
and delivery, the Guaranty Agreement will be duly executed and delivered by
▇▇▇▇▇ and will constitute a legal, valid and binding obligation of ▇▇▇▇▇,
enforceable against ▇▇▇▇▇ in accordance with its terms, except as the same may
be limited by legal principles of general applicability governing the
application and availability of equitable remedies.
Section 4.04. Approvals. Except for the requirements of (i) the Laws,
Regulations and Orders set forth in Schedule 4.04 to this Agreement and (ii)
those Laws, Regulations and Orders noncompliance with which could not reasonably
be expected to have a material adverse effect on the ability of the Purchasers
to perform their obligations under this Agreement, under the Promissory Note or
under the Guaranty Agreement, no filing or registration with, no waiting period
imposed by and no Permit or Order of, any Governmental Authority is required
under any Law, Regulation or Order applicable to any of the Purchasers to permit
the Purchasers to execute, deliver or perform this Agreement or any instrument
(including the Promissory Note and the Guaranty Agreement) required hereby to be
executed and delivered by any of the Purchasers at the Closing.
Section 4.05. No Violation. Assuming effectuation of all filings and
registrations with, termination or expiration of all waiting periods imposed by
and receipt of all Permits and Orders of, Governmental Authorities indicated as
required in Section 4.04 and, except as set forth in Schedule 4.05 to this
Agreement, which exceptions (due to the Purchasers' receipt prior to the Closing
Date of all necessary consents of the parties to the agreements set
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forth in Schedule 4.05 of this Agreement) shall not apply on the Closing Date,
neither the execution and delivery by the Purchasers of this Agreement or any
instrument (including the Promissory Note and the Guaranty Agreement) required
hereby to be executed and delivered by any of them at the Closing nor the
performance by the Purchasers of their obligations hereunder or thereunder will
(a) violate or breach the terms of or cause a default under (i) any Law,
Regulation or Order applicable to the Purchasers, (ii) the certificate of
incorporation or bylaws of each of the Purchasers or (iii) any contract or
agreement to which any of the Purchasers or any of their subsidiaries (other
than any member of the M-I Group) is a party or by which any Purchaser or any of
such Purchaser's properties or assets is bound, or (b) with the passage of time
or the giving of notice or the taking of any action by a third party, have any
of the effects set forth in clause (a) of this Section.
Section. 4.06. Litigation. There are no actions, suits, investigations
or proceedings (including any proceedings in arbitration) pending, or, to the
Knowledge of any of the Purchasers, threatened, against any of the Purchasers or
any of their assets, at law or in equity, in any Court or before or by any
Governmental Authority that could reasonably be expected to have an adverse
effect on the validity or enforceability of this Agreement, the Promissory Note
or the Guaranty Agreement or the ability of the Purchasers to perform their
obligations under this Agreement or any instrument (including the Promissory
Note and the Guaranty Agreement) required hereby to be executed and delivered by
any of them at the Closing.
Section. 4.07. Brokerage Agreements. None of the Purchasers has
directly or indirectly, entered into any agreement with any Person that would
obligate any of the Sellers to pay any commission, brokerage fee or "finder's
fee" in connection with the transactions contemplated herein.
Section 4.08. SEC Reports. Since December 31, 1997, ▇▇▇▇▇ has filed
all SEC Reports required to be filed by it with the Commission. Such SEC Reports
were prepared in all material respects in accordance with the requirements of
the Securities Act and the Exchange Act and did not at the time they were filed
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
OF M-I
M-I represents and warrants to the Sellers as follows:
Section 5.01. Organization. M-I is a limited liability company duly
organized, validly existing and in good standing under the Laws of the State of
Delaware, with all requisite power and authority to own, lease and operate its
properties and to carry on its business as it is now conducted.
Section 5.02. Authorization of Agreement. M-I has all requisite
power and authority to execute and deliver this Agreement and each instrument
required hereby to be executed and delivered by it at the Closing, to perform
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby. The execution and delivery by M-I of this Agreement and
each instrument required hereby to be executed and delivered by it at the
Closing and the performance of its obligations hereunder and thereunder have
been duly and validly authorized by all requisite action on the part of M-I.
This Agreement has been duly executed and delivered by M-I and (assuming due
authorization, execution and delivery hereof by the other parties hereto)
constitutes a legal, valid and binding obligation of M-I, enforceable against
M-I in accordance with its terms, except as the same may be limited by legal
principles of general applicability governing the application and availability
of equitable remedies.
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Section 5.03. Approvals. Except for the requirements of (i) the Laws,
Regulations and Orders set forth in Schedule 5.03 to this Agreement and (ii)
those Laws, Regulations and Orders noncompliance with which could not reasonably
be expected to have a material adverse effect on the ability of M-I to perform
its obligations under this Agreement, no filing or registration with, no waiting
period imposed by and no Permit or Order of, any Governmental Authority is
required under any Law, Regulation or Order applicable to M-I to permit M-I to
execute, deliver or perform this Agreement or any instrument required hereby to
be executed and delivered by it at the Closing.
Section 5.04. No Violation. Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by and receipt of all Permits and Orders of, Governmental Authorities
indicated as required pursuant to Section 5.03, neither the execution and
delivery by M-I of this Agreement or any instrument required hereby to be
executed and delivered by it at the Closing nor the performance by M-I of its
obligations hereunder or thereunder will (a) violate or breach the terms of or
cause a default under (i) any Law, Regulation or Order applicable to M-I or M-I
Canada, (ii) charter or bylaws or similar organizational documents of M-I or M-I
Canada or (iii) any contract or agreement to which M-I or M-I Canada is a party
or by which M-I or M-I Canada or any of M-I?s or M-I Canada?s properties or
assets is bound, or (b) with the passage of time, the giving of notice or the
taking of any action by a third party, have any of the effects set forth in
clause (a) of this Section.
Section 5.05. Litigation. There are no actions, suits, investigations
or proceedings (including any proceedings in arbitration) pending, or, to the
Knowledge of M-I, threatened, against M-I or any of its assets, at law or in
equity, in any Court or before or by any Governmental Authority that could
reasonably be expected to have an adverse effect on the validity or
enforceability of this Agreement or the ability of M-I to perform its
obligations under this Agreement or any instrument required hereby to be
executed and delivered by it at the Closing.
ARTICLE VI.
AGREEMENTS
Section 6.01. Covenant. Each of the parties to this Agreement agrees,
during the period from the execution of this Agreement by each of such parties
to the Closing, to not take or to fail to take any action that could reasonably
be expected to cause any of the representations and warranties of such party set
forth in this Agreement to be untrue in any material respect.
Section 6.02. Appropriate Action; Consents; Filings.
(a) Each of the parties to this Agreement shall use all
commercially reasonable efforts (i) to take, or to cause to be taken,
all appropriate action, and to do, or to cause to be done, all things
necessary, proper or advisable under applicable Law or otherwise to
consummate and make effective the transactions contemplated by this
Agreement (including the satisfaction of the conditions to the Closing
set forth in Article VII hereof), (ii) to obtain, or to cause to be
obtained, from any Governmental Authorities any Licenses, Permits or
Orders required to be obtained by such party in connection with the
authorization, execution and delivery of this Agreement and the
performance of its obligations hereunder and (iii) to make, or to cause
to be made, all necessary filings, and thereafter to make, or to cause
to be made, promptly any other required submissions, with respect to
this Agreement required under any applicable Law, Regulation or Order;
provided, however, that the parties to this Agreement shall cooperate
with each other in connection with the making of all such filings and
in supplying any information requested supplementally or by second
request from any Governmental Authority.
(b) Each of the parties to this Agreement agrees to
cooperate with respect to, and agrees to use all commercially
reasonable efforts vigorously to contest and resist and to seek to have
vacated, lifted,
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reversed or overturned, any action, including legislative,
administrative or judicial action, including any Order (whether
temporary, preliminary or permanent) of any Governmental Authority,
that is in effect and that restricts, prevents or prohibits the
consummation of the transactions contemplated by this Agreement. Each
of the parties to this Agreement also agrees to take, or to cause to be
taken, any and all commercially reasonable actions that may be required
by any Governmental Authority as a condition to the granting of any
Permit or Order required in order to permit the consummation of the
transactions contemplated hereby or as may be required to vacate, lift,
reverse or overturn any administrative or judicial action that would
otherwise cause any condition to the Closing not to be satisfied;
provided, however, that in no event shall any party be required to take
any action that could reasonably be expected to have a Material Adverse
Effect on such party or to result in a breach of this Agreement or, in
the case of the Purchasers, to agree to any limitations or conditions
that substantially impair their investment in the M-I Group or the
benefits contemplated by the transactions set forth in this Agreement.
(c) Each of the Sellers and the Purchasers shall use all
commercially reasonable efforts to obtain from all Persons (other than
Governmental Authorities) all consents that are (i) necessary, proper
or advisable or (ii) otherwise required under any contracts, licenses,
leases or other agreements to which any of the Sellers or any of their
subsidiaries, on the one hand, or any of the Purchasers or any of their
subsidiaries, on the other, is a party or by which it is bound, in
order to permit the Sellers or the Purchasers and M-I, as the case may
be, to perform their obligations hereunder, except for any such
consents the receipt of which is not necessary to satisfy the
conditions contained in Section 7.02(e) or 7.03(e).
(d) If any party hereto shall fail to obtain any third
party consent described in the exception to subsection (c) above, such
party shall use all commercially reasonable efforts, and shall take any
such actions reasonably requested by any other party hereto, to limit
the adverse effect upon the other parties hereto resulting, or which
could reasonably be expected to result after the Closing, from the
failure to obtain such consent.
(e) Each of the parties hereto shall promptly notify the
other parties hereto of (i) any complaints, investigations or hearings
(or communications indicating that the same may be contemplated) from
or by any Governmental Authorities with respect to the transactions
contemplated hereby or (ii) the institution or the threat in writing of
litigation involving this Agreement or the transactions contemplated
hereby.
Section 6.03. Certain Tax Matters.
(a) M-I Income Allocation. Notwithstanding Section 2.6(f)
of the Limited Liability Company Agreement, the parties hereto agree
that MIHC's distributive share of all items taxable to the members of
M-I individually, rather than to M-I as an entity, of income, gain,
loss, deduction and credit or other items (collectively, "Tax Items")
attributable to the M-I L.L.C. Interest for the taxable period that
includes the Closing Date shall be allocated between MIHC and SIAC for
federal, state and local income tax purposes pursuant to an interim
closing of the books of M-I at July 31, 1998, adjusted by a prorated
share of Tax Items for the period beginning August 1, 1998 through the
Closing Date (the "Short Period"), as follows:
A ratio of the number of days in the Short Period to 153 days
(the number of days from August 1 through December 31) shall be applied
against the difference between the Tax Items for the calendar year,
excluding extraordinary items, and Tax Items determined for the July
31, 1998 interim closing, excluding extraordinary items, plus or minus
extraordinary items specifically allocated to the Short Period.
Extraordinary items shall include capital gains or losses, dividends
received, deemed dividends, credits, any effect of adjustments to items
as a result of the transfer of the partnership interest, and any other
item which would materially misstate a Taxable Item.
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(b) Responsibility for Certain Taxes. Each member of the
M-I Group shall be responsible for all Taxes assessable against it for
all taxable periods, including any property, sales, use, franchise or
employment Taxes. The Purchasers and M-I agree to indemnify and hold
harmless the Sellers and their Affiliates against any and all such
Taxes asserted against any member of the M-I Group.
(c) Preparation of Tax Returns. Without limitation of any
rights or obligations of any of the parties under the M-I Group
Agreements:
(i) M-I Canada. With respect to each Tax Return that
covers a taxable period ending on or before or including the
Closing Date and that is required to be filed after the Closing
Date for, by or with respect to M-I Canada or any of its
subsidiaries, ▇▇▇▇▇ shall cause such Tax Return to be prepared,
shall cause to be included in such Tax Return all Tax Items
required to be included therein, and shall deliver a copy of such
Tax Return to Halliburton within 30 days after the filing of such
Tax Return.
(ii) M-I. With respect to each Tax Return covering a
taxable period that ends on or before or includes the Closing
Date and that is required to be filed after the Closing Date for,
by or with respect to M-I, such Tax Return shall be prepared in
accordance with the provisions of Article V of the Limited
Liability Company Agreement. A copy of any such Tax Return shall
be furnished by the Purchasers to Halliburton for its review and
approval at least 30 days prior to the statutory date for filing
(including extensions) such Tax Return. Halliburton shall have
ten days after receipt of such Tax Return to make written
objection to the treatment of any item on such Tax Return and,
following such objection, the parties shall negotiate in good
faith to resolve the disagreement. Should the parties fail to
resolve any such dispute, the matter shall be referred to an
Independent CPA whose determination shall be final and binding on
the parties. If Halliburton fails to provide timely written
objection as provided for herein, the Tax Return shall be
considered approved by Halliburton and the Purchasers shall file
such Tax Return with the appropriate Tax authority.
(d) Audits. In connection with any audit of a Tax Return
of, or any claim for Taxes required to be paid by, any member of the
M-I Group for a period during which any Tax Item was allocated to the
Sellers or any of their Affiliates, ▇▇▇▇▇ or the party designated under
the relevant M-I Group Agreement shall control the supervision of and
responses to such audit and shall determine the method and conduct of
any contest of a proposed adjustment of a Tax Item resulting from such
audit; provided however, that party shall: (i) provide prompt notice of
any such audit to Halliburton, (ii) consult in good faith with
Halliburton regarding the manner of responding to such audit and the
conduct of any contest of a proposed adjustment arising from such
audit, (iii) keep Halliburton promptly informed of all developments
arising in connection with any such audit or contest, and (iv) not
enter into any settlement of any audit or contest with the Internal
Revenue Service without the written consent of Halliburton, which
consent shall not be unreasonably withheld.
(e) Transfer Taxes. The Purchasers shall be responsible for
the payment of all transfer, sales, use or other similar taxes
resulting from the transactions contemplated by this Agreement.
Section 6.04. Access to Information. Without limitation of any of the
rights or obligations of any of the parties under the M-I Group Agreements, from
and after the Closing:
(a) The Purchasers and each member of the M-I Group shall
grant to the Sellers, any of their Affiliates or their designees access
at all reasonable times to all of the information, books and records
relating to each member of the M-I Group within the possession of the
Purchasers or a member of the M-I
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Group (including work papers and correspondence with taxing
authorities), and shall afford to the Sellers, any of their Affiliates
or their designees the right (at the Sellers? expense) to take extracts
therefrom and to make copies thereof, to the extent reasonably
necessary to permit the Sellers, any of their Affiliates or their
designees to prepare Tax Returns, to conduct negotiations with Tax
authorities, to fulfill an obligation to any Governmental Authority
imposed by Law, Regulation or Order and to implement the provisions of,
or to investigate or defend any claims between the parties arising
under, this Agreement, but subject to existing confidentiality
obligations, attorney-client privilege and attorney work product
privilege.
(b) Each of the parties hereto shall preserve and retain
all documents which in any case they are legally required to preserve
and retain relating to any Tax Returns of or with respect to any member
or members of the M-I Group or to any claims, audits or other
proceedings affecting any member or members of the M-I Group until the
expiration of the statute of limitations (including extensions)
applicable to the taxable period to which such documents relate or
until the final determination of any controversy with respect to such
taxable period, and until the final determination of any payments that
may be required with respect to such taxable period under this
Agreement.
Section 6.05. Public Announcements. The Sellers and the Purchasers
shall consult with each other before issuing any press release or otherwise
making any public statements with respect to this Agreement and the transactions
contemplated hereby and shall not issue any such press release or make any such
public statement prior to such consultation; provided, however, that a party to
this Agreement or any of its Affiliates may, without consulting with the other
parties, issue such a press release or make such a public statement if required
by applicable Law or the rules of a national securities exchange if such party
has used commercially reasonable efforts to consult with the other parties but
has been unable to do so in a timely manner. The press release announcing the
execution and delivery of this Agreement shall be a joint press release of the
Sellers (or one or more of their Affiliates) and the Purchasers.
Section 6.06. Disposition of Halliburton Obligations.
(a) Effective as of the Closing, the Purchasers shall
assume and thereafter pay, perform and discharge the Halliburton
Obligations.
(b) Effective as of, and by virtue of, the Closing, the
Purchasers and M-I hereby (i) agree that none of the Sellers nor any of
their Affiliates shall have any further obligation under and (ii)
release, acquit and discharge each of the Sellers and each of their
Affiliates from any and all claims, losses, liabilities, obligations,
demands and causes of action of any kind and every character relating
to, or arising out of, any and all of the Halliburton Obligations,
including any breach or violation of any such Halliburton Obligations,
past, present or future, except for Halliburton Retained Obligations.
Each of the parties to this Agreement hereby agrees (to the extent that
any such party is a party to the relevant agreement or instrument),
effective as of the Closing, that each of the M-I Group Agreements is
hereby amended to the extent necessary to cause Halliburton and each of
its Affiliates to have no further obligations pursuant to such
agreement and to release and discharge Halliburton and each of its
Affiliates from any and all obligations (past, present and future)
pursuant to any such agreement, except for Halliburton Retained
Obligations.
(c) Effective as of, and by virtue of, the Closing, the
Purchasers and M-I hereby, on behalf of themselves and their
Affiliates, (i) release, acquit and discharge each of the Sellers and
each of their Affiliates from any and all claims, demands and causes of
action of any kind and every character relating to, or arising out of,
any breach or violation, past, present or future, of any noncompetition
obligation of any of the Sellers or any of their Affiliates, including
pursuant to Section 8.6 of the Organization Agreement, as modified by
Section 3.5 of the Owners Agreement (collectively, the "Noncompetition
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Obligations"), and (ii) waive the enforceability of the Noncompetition
Obligations and covenant not to bring an action or proceeding to
attempt enforcement of the Noncompetition Obligations.
(d) Subsequent to the Closing, to the extent permitted by
Law, and the right of any party which is the beneficiary thereof,
Halliburton and its Affiliates shall have the right to cancel any
Halliburton Guarantee. In addition, the Purchasers and M-I shall use
all commercially reasonable efforts to replace the Halliburton
Guarantees, or cause the requirements therefor to be terminated, as
soon as practicable after the Closing. The failure of Halliburton or
any of its Affiliates to cancel any Halliburton Guarantee shall not
affect any of the rights of the Sellers and their Affiliates or the
obligations of the Purchasers, M-I and their Affiliates pursuant to
this Agreement, including the rights of the Sellers and their
Affiliates pursuant to this Section 6.06 and to indemnification
pursuant to Section 6.07.
Section 6.07. Post-Closing Liabilities. From and after the Closing,
the Purchasers and M-I hereby covenant and agree to indemnify the Sellers and
their Affiliates and hold them harmless against any and all claims, losses,
liabilities, demands and obligations with respect to, or based upon or arising
out of, the Halliburton Obligations, except for the Halliburton Retained
Obligations or the M-I Group or its operations or businesses, whether arising
prior to or after the Closing. THE PARTIES HERETO INTEND THAT THE FOREGOING
RIGHTS TO INDEMNIFICATION BE CONSTRUED AND APPLIED AS WRITTEN ABOVE
NOTWITHSTANDING ANY RULE OF CONSTRUCTION TO THE CONTRARY. WITHOUT LIMITING THE
FOREGOING, SUCH RIGHTS TO INDEMNIFICATION SHALL APPLY NOTWITHSTANDING ANY
STATE'S "EXPRESS NEGLIGENCE RULE" OR SIMILAR RULE THAT WOULD DENY COVERAGE BASED
ON AN INDEMNITEE'S SOLE OR CONCURRENT, ACTIVE OR PASSIVE NEGLIGENCE OR GROSS
NEGLIGENCE. IT IS THE INTENT OF THE PARTIES THAT THE RIGHTS TO INDEMNIFICATION
SET FORTH HEREIN SHALL APPLY TO AN INDEMNITEE'S SOLE OR CONCURRENT, ACTIVE OR
PASSIVE NEGLIGENCE OR GROSS NEGLIGENCE. THE PARTIES AGREE THAT THIS PROVISION IS
"CONSPICUOUS" FOR PURPOSES OF ALL STATE LAWS.
Section 6.08. Restrictions on Sale of M-I. The Purchasers hereby
agree that, following the Closing, they shall not sell any interest in M-I to
Halliburton or any of its Affiliates or to Baroid Drilling Fluids (whether or
not owned by Halliburton or any of its Affiliates), or combine any interest in
M-I with the drilling fluids operations of Halliburton or any of its Affiliates
or of Baroid Drilling Fluids (whether or not owned by Halliburton or any of its
Affiliates).
Section 6.09. Halliburton Name. The Purchasers and M-I acknowledge
that they have no rights to the use of the name "Halliburton" or any derivative
thereof (collectively, the "Halliburton Name"). The Purchasers and M-I hereby
agree to, and to cause their subsidiaries to, discontinue immediately after the
Closing the use of the Halliburton Name in connection with the any of the
businesses or operations of the M-I Group, including in all marketing and
promotional material, signage and similar uses.
Section 6.10. Non-Solicitation of Employees. Sellers covenant and
agree that during the two-year period immediately following the Closing, Sellers
will not, and will cause their Affiliates to not, directly or indirectly,
solicit for employment by Sellers or their Affiliates, any employee of the M-I
Group or any person who was an employee of the M-I Group within the four-month
period immediately preceding such solicitation other than a person (i) whose
employment was terminated by the M-I Group or (ii) who responds to an
advertisement for employment by Sellers or their Affiliates in a publication of
general circulation.
Section 6.11. Confidentiality of Information. From and after the
Closing, the Sellers shall continue to be bound by the provisions of Section
8.6(c) and (d) of the Organization Agreement. Both Sellers and Purchasers shall
remain bound by the terms and conditions of Mutual Confidentiality Agreement,
Halliburton F.N. 1243.1271 as amended, dated March 1, 1996 and which covers
joint development projects; subject to the right of such parties to terminate
such Agreement in accordance with its terms. For a period of one year after the
Closing, and provided
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he is employed by Sellers or their Affiliates, Sellers agree that J. ▇▇▇▇ ▇▇▇▇▇▇
will not engage in the development of new water or oil based polymeric
viscosifiers for drilling fluids with the current fluids operation of Dresser.
Section 6.12. M-I Confidentiality Memoranda. Within twenty days after
the Closing, Sellers shall provide Purchasers with a list of all Persons,
including name and address, to whom non-public information concerning M-I was
provided as well as a copy of any confidentiality agreement signed by any such
Person. To the extent any such confidentiality agreement is legally assignable
to Purchasers, Sellers or their Affiliates shall execute an assignment of any
such confidentiality agreement to Purchasers, in a form reasonably acceptable to
Purchasers. If any such confidentiality agreement is not legally assignable to
Purchasers, Sellers agree that, at Purchasers? request and sole expense, Sellers
or their Affiliates will seek to enforce the terms of the confidentiality
agreement through appropriate legal proceedings and any appeals.
Section 6.13. M-I 1995 Omnibus Plan. Halliburton agrees that it will
pay ▇▇▇▇▇, within 10 days of receipt of sufficient documentation to verify the
amount, the obligation of Halliburton with respect to the M-I 1995 Omnibus Plan,
but in no event shall such obligation exceed $590,000.
Section 6.14. Leased or Shared Facilities. Purchasers or their
Affiliates currently share with, or lease from, Sellers or their Affiliates or
occupy, certain office, warehouse or dock space owned or leased by Sellers or
their Affiliates in both domestic and international locations. Purchasers shall,
and shall cause their Affiliates to, vacate such occupied, shared or leased
facilities within 120 days of the Closing (except as otherwise provided pursuant
to the terms of written agreements executed by the parties), except the
following facilities which will be treated as described below:
(a) Purchasers or their Affiliates shall have six months
from the Closing to relocate the office, warehouse and
dock space at Luanda, Angola, unless any written
agreement between the parties provides for a longer
period;
(b) Sellers and Purchasers will negotiate in good faith to
determine, in the absence of any written agreement or
obligation, if there are any mutual advantages to
continue the existing space sharing arrangement with
respect to their work on the Sable Island project; and
(c) Sellers agree, to or to cause their Affiliates to,
quitclaim the interest, if any, owned by the Sellers or
their Affiliates in real estate comprising
approximately 14 acres occupied by M-I at Battle
Mountain, Nevada.
ARTICLE VII.
CONDITIONS TO THE CLOSING
Section 7.01. Conditions to Obligations of Each Party. The
obligations of each party to this Agreement to effect the transactions
contemplated hereby to occur at the Closing shall be subject to the satisfaction
or, to the extent permitted by Law, waiver of each of the following conditions:
(a) All requirements of any applicable Law, Regulation or
Order necessary for the valid consummation of the transactions
contemplated herein to occur at the Closing have been fulfilled, and
all filings required to be made with any Governmental Authority under
any applicable Law, Regulation or Order and all Permits and Orders
required to be obtained from any Governmental Authority or Court under
any applicable Law, Regulation or Order, in each case, in order to
permit the Sellers, the Purchasers and M-I to consummate the
transactions contemplated hereby to occur at the Closing have been made
or obtained (other than any requirement the nonfulfillment of which and
any Permit or Order the nonreceipt of which could not reasonably be
expected to have a Material Adverse Effect on the Sellers, the
Purchasers
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or M-I or, in the case of the Purchasers substantially impair its
investment in the M-I Group or the benefits contemplated by the
transactions set forth in this Agreement);
(b) No temporary restraining order, preliminary or
permanent injunction or other Order issued by any Court of competent
jurisdiction preventing the consummation of the transactions
contemplated hereby to occur at the Closing is in effect;
(c) Each of Halliburton and ▇▇▇▇▇ shall have executed and
delivered to the other an agreement substantially in the form of
Exhibit C hereto relating to the sale by Halliburton to ▇▇▇▇▇ of the
North Course Building for a purchase price equal to $7 million; and
(d) Each of Halliburton and ▇▇▇▇▇ shall have executed and
delivered to the other a lease agreement substantially in the form of
Exhibit D hereto relating to the lease by Halliburton from ▇▇▇▇▇ of a
portion of the North Course Building as described therein.
Section 7.02 Conditions to Obligation of the Purchasers. The
obligations of the Purchasers to effect the transactions contemplated hereby to
occur at the Closing are subject to the satisfaction or, to the extent permitted
by Law, waiver of each of the following conditions:
(a) The representations and warranties of each of the
Sellers set forth in this Agreement are true and correct in all
material respects as of the date hereof and as of the Closing as though
made at and as of the Closing, and the Purchasers have received a
certificate from each Seller signed on behalf of such Seller by the
president or any vice president of such Seller to such effect;
(b) The Sellers have performed in all material respects all
obligations required to be performed by them under this Agreement at or
prior to the Closing Date, and the Purchasers have received a
certificate from each Seller signed on behalf of such Seller by the
president or any vice president of such Seller to such effect;
(c) Each of the Sellers has furnished the Purchasers at the
Closing with certified copies of resolutions duly adopted by the Board
of Directors of such Seller authorizing the execution, delivery and
performance of this Agreement and each instrument required hereby to be
executed and delivered by such Seller at the Closing;
(d) There is no action or proceeding pending or threatened
(including any investigation) by any Governmental Authority to
restrain, enjoin or invalidate the transactions contemplated hereby;
(e) The Purchasers have received from the Sellers copies of
all written consents of third Persons (other than Governmental
Authorities) that are required to be obtained by the Sellers in order
for the Sellers to consummate the transactions contemplated by this
Agreement, other than any such consents the nonreceipt of which could
not reasonably be expected to have a Material Adverse Effect on M-I or
the Purchasers or to have a material adverse effect on the ability of
the Sellers to consummate the transactions contemplated by this
Agreement; and
(f) Halliburton has delivered to the Purchasers at the
Closing one or more stock certificates representing the M-I Canada
Interest, duly endorsed by Halliburton in blank or with duly executed
stock powers attached.
Section 7.03. Conditions to Obligation of the Sellers. The
obligations of the Sellers to effect the transactions contemplated hereby to
occur at the Closing are subject to the satisfaction or, to the extent permitted
by Law, waiver of each of the following conditions:
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(a) The representations and warranties of each of the
Purchasers and M-I set forth in this Agreement are true and correct in
all material respects as of the date hereof and as of the Closing as
though made at and as of the Closing and the Sellers have received a
certificate from each of the Purchasers and M-I signed on behalf of
such Purchaser or M-I (as applicable) by the president or any vice
president of such Purchaser or M-I (as applicable) to such effect;
(b) Each of the Purchasers and M-I have performed in all
material respects all obligations required to be performed by such
Purchaser or M-I (as applicable) under this Agreement at or prior to
the Closing Date, and the Sellers have received a certificate from each
of the Purchasers and M-I signed on behalf of such Purchaser or M-I (as
applicable) by the president or any vice president of such Purchaser or
M-I (as applicable) to such effect;
(c) Each of the Purchasers and M-I have furnished the
Sellers at the Closing with certified copies of resolutions duly
adopted by the Board of Directors (or equivalent body) of such
Purchaser or M-I (as applicable) authorizing the execution, delivery
and performance of this Agreement and each instrument required hereby
to be executed and delivered by such Purchaser or M-I (as applicable)
at the Closing;
(d) There is no action or proceeding pending or threatened
(including any investigation) by any Governmental Authority to
restrain, enjoin or invalidate the transactions contemplated hereby;
(e) The Sellers have received from each of the Purchasers
and M-I copies of all written consents of third Persons (other than
Governmental Authorities) that are required to be obtained by the
Purchasers or M-I in order for the Purchasers and M-I to consummate the
transactions contemplated by this Agreement, other than any such
consents the nonreceipt of which could not reasonably be expected to
have a Material Adverse Effect on the Sellers or to have a material
adverse effect on the ability of the Purchasers or M-I to consummate
the transactions contemplated by this Agreement;
(f) The Purchasers have delivered to the Sellers at the
Closing the Promissory Note, duly executed by an authorized officer of
MIPC, with a principal amount equal to the Adjusted Purchase Price and
the Guaranty Agreement, duly executed by an authorized officer of
▇▇▇▇▇; and
(g) The Purchasers and M-I have delivered to the Sellers a
release and waiver in form and substance reasonably satisfactory to the
Sellers pursuant to which the Purchasers and M-I, on behalf of
themselves and each of their Affiliates, (i) release, acquit and
discharge the Sellers and each of their Affiliates from any and all
claims, demands and causes of action of any kind and every character
relating to, or arising out of, any breach or violation, past, present
or future, of the Noncompetition Obligations and (ii) waive the
enforceability of the Noncompetition Obligations and covenant not to
bring an action or proceeding to attempt enforcement of the
Noncompetition Obligations.
ARTICLE VIII.
TERMINATION
Section 8.01. Termination. This Agreement may be terminated at any
time prior to the Closing Date:
(a) by mutual consent of the Sellers and the Purchasers;
(b) by the Purchasers, upon a breach in any material
respect of any representation, warranty, covenant or agreement on the
part of any of the Sellers set forth in this Agreement, or if any
representation or warranty of any of the Sellers has become untrue in
any material respect, in either case such that the
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conditions set forth in Section 7.02(a) or Section 7.02(b), as the case
may be, would be incapable of being satisfied by August 31, 1998 (or as
otherwise extended as described in Section 8.01(e)); provided, however,
that, in any case, a willful breach shall be deemed to cause such
conditions to be incapable of being satisfied for purposes of this
subsection;
(c) by the Sellers, upon a breach in any material respect
of any representation, warranty, covenant or agreement on the part of
any of the Purchasers or M-I set forth in this Agreement, or if any
representation or warranty of any of the Purchasers or M-I has become
untrue in any material respect, in either case such that the conditions
set forth in Section 7.03(a) or Section 7.03(b), as the case may be,
would be incapable of being satisfied by August 31, 1998 (or as
otherwise extended as described in Section 8.01(e)); provided, however,
that, in any case, a willful breach shall be deemed to cause such
conditions to be incapable of being satisfied for purposes of this
subsection;
(d) by either the Sellers or the Purchasers, if there shall
be any Order which is final and nonappealable preventing the
consummation of the transactions contemplated hereby, unless the party
relying on such Order to terminate this Agreement has not complied with
its obligations under subsection (b) of Section 6.02; and
(e) by either the Sellers or the Purchasers, if the Closing
shall not have occurred prior to August 31, 1998; provided, however,
that this Agreement may be extended by written notice from the Sellers
to the Purchasers or the Purchasers to the Sellers to a date not later
than December 31, 1998, if the Closing shall not have occurred as a
direct result of the nonfulfillment of the condition contained in
subsection (a) of Section 7.01 by August 31, 1998.
The right of any party hereto to terminate this Agreement pursuant to
this Section 8.01 shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers, directors,
employees or representatives, whether prior to or after the execution of this
Agreement; provided, however, that each party shall provide written notice to
the other parties of any breach by any such other parties of a representation,
warranty, covenant or agreement set forth in this Agreement as soon as
practicable upon learning of such breach, and the non-breaching parties may only
terminate this Agreement pursuant to Sections 8.01(b) or (c) if such breach is
not cured within ten days of such notice being given. If such ten day cure
period extends beyond the date set forth in Section 8.01(b) or (c), as the case
may be, then such date shall be extended to be the first business day
immediately following the expiration of such ten day cure period.
Section 8.02 Effect of Termination; Nonconsummation. Except as
provided in this Section and Section 8.03, in the event of the termination of
this Agreement pursuant to Section 8.01, this Agreement shall forthwith become
void and of no further force and effect. If the transactions contemplated hereby
are not consummated by reason of the termination of this Agreement or otherwise,
there shall be no liability on the part of any party hereto to the other and all
rights and obligations of each party hereto shall cease, except that nothing
herein (other than the immediately following sentence) shall relieve any party
of any liability for (i) any breach of such party?s covenants or agreements
contained in this Agreement or (ii) any willful breach of such party?s
representations or warranties contained in this Agreement. NOTWITHSTANDING
ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL ANY LOSSES,
CLAIMS, DAMAGES OR LIABILITIES CLAIMED WITH RESPECT TO THE EXCEPTION TO THE
IMMEDIATELY PRECEDING SENTENCE INCLUDE ANY CONSEQUENTIAL OR PUNITIVE DAMAGES.
Section 8.03. Fees and Expenses. All Expenses incurred by the parties
hereto, including legal and accounting fees and expenses, shall be borne solely
and entirely by the party that has incurred such Expenses.
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ARTICLE IX.
MISCELLANEOUS
Section 9.01. Survival. Except as otherwise specifically provided in
this Agreement, all of the representations, warranties and covenants of the
parties to this Agreement shall survive the Closing hereunder and (other than
the representations and warranties of the Sellers contained in Section 3.07 and
the representations and warranties of the Purchasers contained in Sections 4.07
and 4.08) continue in full force and effect until the expiration of the
applicable statute of limitations (if any). All of the representations and
warranties of the Sellers contained in Section 3.07 of this Agreement and the
representations and warranties of the Purchasers contained in Section 4.07 of
this Agreement shall survive the Closing until the second anniversary of the
Closing Date, at which time such representations and warranties shall terminate.
The representations and warranties of the Purchasers contained in Section 4.08
of this Agreement shall survive the Closing until the first anniversary of the
time that the Purchasers? obligations under the Promissory Note are paid in
full, at which time such representations and warranties shall terminate. All
such representations, warranties and covenants shall survive as to any claim or
demand made prior to their termination date (if any) until such claim or demand
is fully paid or otherwise resolved by the parties hereto in writing or by a
court of competent jurisdiction. The representations and warranties of the
Sellers and the Purchasers shall survive the Closing as described in this
Section 9.01 even if the other parties hereto knew or had reason to know of any
misrepresentation or breach of warranty at the time of Closing.
Section 9.02. Notices. All notices and other communications
hereunder to a party hereto shall be in writing and shall be deemed to be
properly given if delivered personally, telecopied (subject to confirmation) or
mailed to it by registered or certified mail (return receipt requested), in the
case of the Sellers, to:
Halliburton Energy Services, Inc./MIHC, Inc.
c/o Halliburton Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Executive Vice President and General Counsel
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
3600 First City Tower
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ III
in the case of the Purchasers, to:
▇▇▇▇▇ International, Inc./▇▇▇▇▇ International Acquisition
Corp./M-I Purchase Corp.
c/▇ ▇▇▇▇▇ International Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
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and, in the case of M-I, to:
M-I L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
with a copy to:
▇▇▇▇▇ International, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
or at such other address as shall be specified by like notice.
Section 9.03. Headings; Cross References. The descriptive headings
of the several Articles and Sections of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement. Unless the
context otherwise requires, all references herein to Articles or Sections shall
refer to Articles or Sections of this Agreement.
Section 9.04. Prior Agreements. This Agreement shall supersede all
prior agreements, documents or other instruments with respect to the
purchase and sale of the M-I Interests; provided that if the transactions
contemplated hereby are not consummated, the provisions contained in Article VI
of the Limited Liability Company Agreement and Article VI of the Owners
Agreement shall survive in full force and effect.
Section 9.05. Amendment. This Agreement may be amended by the
parties hereto by action taken by or on behalf of their respective Boards
of Directors (or any equivalent governing body) at any time prior to the
Closing. This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.
Section 9.06. Waiver.
(a) At any time prior to the Closing, the Purchasers may
(i) extend the time for the performance of any of the obligations or
other acts of any of the Sellers, (b) waive any inaccuracies in the
representations and warranties of any of the Sellers contained herein
or in any document delivered pursuant hereto and (c) waive compliance
by any of the Sellers with any of the covenants or conditions contained
herein.
(b) At any time prior to the Closing, the Sellers may (i)
extend the time for the performance of any of the obligations or other
acts of any of the Purchasers or M-I, (b) waive any inaccuracies in the
representations and warranties of any of the Purchasers or M-I
contained herein or in any document delivered pursuant hereto and (c)
waive compliance by any of the Purchasers or M-I with any of the
covenants or conditions contained herein.
Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party or parties to be bound thereby.
Section 9.07. Further Actions. Each party to this Agreement shall
execute and deliver such other certificates, agreements and other documents
and take such other actions as may reasonably be requested by any other party to
this Agreement in order to consummate or implement the transactions and matters
contemplated by this Agreement. In addition, upon the request of Halliburton or
any transferee of the Promissory Note, ▇▇▇▇▇ agrees to promptly confirm in
writing its representations and warranties as set forth in Article IV (other
than those
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representations and warranties contained in Sections 4.02 and 4.07 of
this Agreement) as they relate to the Promissory Note and the Guaranty Agreement
to any potential purchaser of the Promissory Note or to any legal counsel that
may be requested to deliver a legal opinion to a potential purchaser of the
Promissory Note.
Section 9.08. Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned, by operation of law or otherwise, by any party hereto without the
prior written consent of the other parties; provided, however, that MIPC may
assign its right to acquire the M-I Interests pursuant to this Agreement to any
corporation, all of the outstanding voting stock of which is owned directly or
indirectly by ▇▇▇▇▇; and provided, further, that no such assignment shall
relieve the Purchasers of any of their obligations under this Agreement. Except
as expressly set forth in this Agreement, nothing in this Agreement is intended
to confer upon any person other than the parties hereto and their respective
successors and permitted assigns, any rights, remedies or obligations under or
by reason of this Agreement.
Section 9.09. Governing Law. The terms of this Agreement shall be
governed by, and interpreted in accordance with the provisions of, the laws
of the State of Texas, without regard to conflict of law principles.
Section 9.10. Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed an
original but all of which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed in its name by its duly authorized officer, all as of the
date first above written.
HALLIBURTON ENERGY SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President and Assistant Secretary
MIHC, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
As Attorney-in-Fact
▇▇▇▇▇ INTERNATIONAL, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
▇▇▇▇▇ INTERNATIONAL ACQUISITION CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
M-I PURCHASE CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
M-I L.L.C.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
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ANNEX A
SCHEDULE OF DEFINED TERMS
The following terms when used in the Agreement shall have the meanings
set forth below unless the context shall otherwise require:
"1990 Agreement" shall mean that certain 1990 Agreement, dated as of
April 30, 1990, among Halliburton, Dresser and M-I Drilling Fluids Company, a
Texas general partnership and the predecessor of M-I.
"Adjusted Purchase Price" shall have the meaning ascribed to such term
in Section 2.02 of the Agreement.
"Affiliate" shall, with respect to any Person, mean any other Person
which controls, is controlled by or is under common control with the former. The
term "control" and correlative terms shall have the meanings ascribed to them in
Rule 405 under the Securities Act.
"Agreement" shall mean the Purchase and Sale Agreement made and entered
into as of August 20, 1998 between the Sellers, the Purchasers and M-I,
including any amendments thereto and each Annex and Schedule thereto.
"Allocation Schedule" shall have the meaning ascribed to such term in
Section 2.03 of the Agreement.
"Closing" shall mean a meeting of the representatives of each of the
parties to the Agreement at which (i) all documents deemed necessary by the
parties to the Agreement to evidence the fulfillment or waiver of all conditions
precedent to the consummation of the transactions contemplated by the Agreement,
to the extent not previously delivered, are delivered and (ii) the certificates
or other evidence of the M-I Interests are delivered by the Sellers to the
Purchasers against payment of the Adjusted Purchase Price via the Promissory
Note and the Guaranty Agreement in accordance with Sections 2.02 and 2.04 of the
Agreement.
"Closing Date" shall have the meaning ascribed to such term in Section
2.04 of the Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"Commission" shall mean the United States Securities and Exchange
Commission.
"Computation Period" shall have the meaning ascribed to such term in
Section 2.02 of the Agreement.
"Court" shall mean any court, federal, state or local, or arbitration
tribunal.
"Dresser" shall mean Dresser Industries, Inc., a Delaware corporation.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the Regulations promulgated thereunder.
"Expenses" shall mean all out-of-pocket expenses (including all fees
and expenses of counsel, accountants, investment bankers, experts and
consultants to a party hereto and its Affiliates) incurred by a party or on its
behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of the Agreement, and all other matters
related to the consummation of the transactions contemplated thereby.
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"Governmental Authority" shall mean any federal, state or local
governmental agency or authority (other than a Court).
"Guaranty Agreement" shall have the meaning ascribed to such term in
Section 2.02 of the Agreement.
"Halliburton" shall mean Halliburton Energy Services, Inc., a Delaware
corporation, and its successors.
"Halliburton Guarantees" shall mean any and all guarantees, bonds or
undertakings by Halliburton or any of its Affiliates of, or with respect to, the
performance, payment or collection of any obligation of any member of the M-I
Group, whether pursuant to a loan or credit agreement, line of credit, letter of
credit, bank borrowing, note, lease or otherwise.
"Halliburton Name" shall have the meaning ascribed to such term in
Section 6.09 of the Agreement.
"Halliburton Obligations" shall mean the Halliburton Guarantees and
each and every other obligation, agreement or instrument that Halliburton or any
of its Affiliates may have or be subject to, or pursuant or with respect to
which any of such Persons? properties may be subject or bound, that in any way
relates to the M-I Group or the M-I Group?s operations or businesses, whether
pursuant to the M-I Group Agreements or otherwise, except for any obligations
arising in the ordinary course of business and unrelated to the M-I Group
Agreements, the Halliburton Guarantees or the Seller?s ownership of the M-I
Interests (such as product sales and services and leasing transactions);
provided, however, that such term shall not include any obligations of Dresser
or any of its subsidiaries as of the date of this Agreement.
"Halliburton Retained Obligations" shall mean (i) those liabilities
relating to the assets or operations of Imco prior to December 1, 1986 which (a)
were not Halliburton Assumed Liabilities or Affiliated Entities Liabilities,
each as defined in the Organization Agreement or (b) otherwise assumed by M-I or
its predecessors pursuant to the M-I Group Agreements; (ii) any pension, welfare
or other benefit obligations under any Halliburton pension, welfare or benefit
plan to any current or former employee of Halliburton who worked at any time for
the general partnership known as M-I Drilling Fluids Company; (iii) the
obligations of confidentiality contained in Section 8.6(c) and (d) of the
Organization Agreement; (iv) contracts, agreements or obligations relating to or
arising from alliance or integrated service offerings involving Sellers and M-I;
and (v) covenants or any other agreements to be performed after the Closing.
"Independent CPA" shall have the meaning ascribed to such term in
Section 2.03 of the Agreement.
"Knowledge" shall mean, with respect to each party, the actual
knowledge of the senior officers of such party.
"Law" shall mean all laws, statutes and ordinances of the United
States, any foreign country, or any domestic or foreign state, and any political
subdivision thereof, including without limitation all decisions of Courts having
the effect of law in each such jurisdiction.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing) or any conditional sale or other title retention agreement.
"Limited Liability Company Agreement" shall mean that certain Limited
Liability Company Agreement, dated as of March 10, 1994, between MIHC and SIAC,
as amended.
"Material Adverse Effect" shall mean any change or effect that would be
material and adverse to the condition (financial or otherwise), results of
operations or business of a specified Person and its subsidiaries, if any,
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taken as a whole, and, for purposes of this definition, the term "material"
shall have the meaning ascribed to such term as used in Section 11 of the
Securities Act.
"M-I" shall mean M-I L.L.C., a Delaware limited liability company.
"M-I Canada" shall mean M-I Drilling Fluids Canada, Inc., a Canadian
corporation, and its successors.
"M-I Canada Interest" shall have the meaning ascribed to such term in
the recitals to the Agreement.
"M-I Group" shall mean M-I, M-I Canada, and each of the subsidiaries of
such Persons taken together.
"M-I Group Agreements" shall mean the Owners Agreement, the 1990
Agreement, the Partnership Agreement, the Organization Agreement, the Limited
Liability Company Agreement and each and every other agreement or instrument
with respect to the M-I Group to which Halliburton or any of its Affiliates is a
party or pursuant to which any of Halliburton?s or any of its Affiliates?
properties are subject or bound or purported to be subject or bound.
"M-I Interests" shall have the meaning ascribed to such term in the
recitals to the Agreement.
"M-I L.L.C. Interest" shall have the meaning ascribed to such term in
the recitals to the Agreement.
"MIHC" shall mean MIHC, Inc., a Delaware corporation and wholly owned
subsidiary of Halliburton, and its successors.
"MIPC" shall mean M-I Purchase Corp., a Delaware corporation and a
wholly-owned subsidiary of ▇▇▇▇▇, and its successors.
"Noncompetition Obligations" shall have the meaning ascribed to such
term in Section 6.06(c) of the Agreement.
"North Course Building" shall mean those property and fixtures
described in Exhibit C attached hereto.
"Order" shall mean any judgment, order or decree of any court,
arbitration tribunal or Governmental Authority, federal, state or local.
"Organization Agreement" shall mean that certain Organization
Agreement, dated as of December 1, 1986, between Halliburton and Dresser, as
amended.
"Owners Agreement" shall mean that certain Owners Agreement, dated
February 28, 1994, among the Sellers, the Purchasers and M-I Drilling Fluids
Company, a Texas general partnership and the predecessor of M-I.
"Partnership Agreement" shall mean that certain Partnership Agreement,
dated as of December 1, 1986, between Halliburton and Dresser, as amended.
"Permit" shall mean any and all permits, licenses, authorizations,
orders, certificates, registrations or other approvals granted by any federal,
state, local or foreign Governmental Authority.
"Person" shall mean an individual, partnership, limited liability
company, corporation, joint stock company, trust, estate, joint venture,
association or unincorporated organization, or any other form of business or
professional entity.
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"Promissory Note" shall have the meaning ascribed to such term in
Section 2.02 of the Agreement.
"Purchase Price" shall have the meaning ascribed to such term in
Section 2.02 of the Agreement.
"Purchasers" shall mean ▇▇▇▇▇, SIAC and MIPC taken together.
"Regulation" shall mean any rule or regulation of any Governmental
Authority having the effect of law.
"SIAC" shall mean ▇▇▇▇▇ International Acquisition Corp., a Delaware
corporation and wholly owned subsidiary of ▇▇▇▇▇, and its successors.
"SEC Reports" shall mean (1) all Annual Reports on Form 10-K, (2) all
Quarterly Reports on Form 10-Q, (3) all proxy statements relating to meetings of
stockholders (whether annual or special), (4) all Current Reports on Form 8-K
and (5) all other reports, schedules, registration statements or other documents
required to be filed during a specified period with the Commission pursuant to
the Securities Act or the Exchange Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the Regulations promulgated thereunder.
"Sellers" shall mean Halliburton and MIHC taken together.
"▇▇▇▇▇" shall mean ▇▇▇▇▇ International, Inc., a Delaware corporation,
and its successors.
A "subsidiary" of a specified Person shall be any corporation,
partnership, limited liability company, joint venture or other legal entity of
which the specified Person (either alone or through or together with any other
subsidiary), owns, directly or indirectly, 50% or more of the stock or other
equity interests the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such corporation
or other legal entity.
"Tax Items" shall have the meaning ascribed to such term in Section
6.03(a) of the Agreement.
"Tax Returns" shall mean all returns and reports of or with respect to
any Tax.
"Taxes" shall mean all taxes, charges, imposts, tariffs, fees, levies
or other similar assessments or liabilities, including income taxes, ad valorem
taxes, excise taxes, withholding taxes or other taxes of or with respect to
gross receipts, premiums, real property, personal property, windfall profits,
sales, use, transfers, licensing, employment, payroll and franchises imposed by
or under any Law; and such terms shall include any interest, fines, penalties,
assessments or additions to tax resulting from, attributable to or incurred in
connection with any such tax or any contest or dispute thereof.
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