Exhibit 4.16
CONSENT, AMENDMENT, ASSIGNMENT AND ASSUMPTION
OF
DRESSER, INC.
This Consent, Amendment, Assignment and Assumption of the Dresser, Inc.
(this "Consent") is made and entered into as of July 3,
2002, by DEG Acquisitions, LLC, a Delaware limited liability company ("DEG"),
First Reserve Fund VIII, L.P. ("Fund VIII"), First Reserve Fund IX, L.P. ("Fund
IX"), Odyssey Investment Partners Fund, LP ("Odyssey Fund"), Odyssey
Coinvestors, LLC ("Coinvestors"), DI Coinvestment, LLC ("DI" and, together with
Odyssey Fund and Coinvestors, "Odyssey") Dresser, Inc., a Delaware corporation
("Dresser"), and Dresser, Ltd., a Bermuda company ("Dresser Bermuda").
R E C I T A L S
WHEREAS, DEG owns 9,700,000 shares of Class A Common Stock, par value $.001
per share (the "Class A Common Stock") and 550,000 shares of Class B Common
Stock, par value $.001 per share (the "Class B Common Stock" and, together with
the Class A Common Stock, the "Dresser Common Stock") of Dresser;
WHEREAS, Dresser heretofore entered into an Agreement and Plan of Merger
(the "Merger Agreement") among Dresser Mergerco, Inc., a Delaware corporation,
Dresser Bermuda and Dresser.
WHEREAS, as a result of the transactions contemplated by the Merger
Agreement (the "Merger"), each outstanding share of Dresser Common Stock will be
cancelled and the holders thereof will receive one class A common share of
Dresser Bermuda, par value $.01 (the "Bermuda Class A Common Shares"), for each
share of Class A Common Stock and one class B common share of Dresser Bermuda,
par value $.01 (the "Bermuda Class B Common Shares" and, collectively with the
Bermuda Class A Common Shares, the "Bermuda Common Shares"), for each share of
Class B Common Stock, respectively, held by such stockholder;
WHEREAS, DEG, Dresser, Fund VIII, Fund IX and Odyssey are all of the
parties to that certain , dated as of April 10, 2001, as
amended from time to time (the "SRA"), pursuant to which Fund VIII, Fund IX and
Odyssey (collectively, the "Sponsors") have certain rights with respect to their
indirect ownership of the Dresser Common Stock;
WHEREAS, without affecting the rights and obligations of the parties to the
SRA (except as expressly set forth in this Consent), Dresser wishes to assign
its rights and obligations under the SRA to Dresser Bermuda and Dresser Bermuda
wishes to assume such rights and obligations, effective upon completion of the
Merger, so that the relative rights and obligations of the parties to the SRA as
they related to the Sponsors' ownership of shares of Dresser Common Stock prior
to the Merger will be the relative rights and obligations of the Parties to the
SRA as they relate to the Sponsors' ownership of Bermuda Common Shares following
the Merger;
WHEREAS, Dresser and Dresser Bermuda wish to amend the SRA to provide that
references to Dresser and the "Company" will be changed to refer to Dresser
Bermuda for all purposes under the SRA;
WHEREAS, pursuant to Section 6.2 of the SRA, the compliance with any
provision of the SRA can be amended or waived with the written consent of all
"Stockholders" (as defined in the SRA) party to the SRA that hold, directly or
indirectly, more than 1% of the shares subject to the SRA;
WHEREAS, DEG, Fund VIII, Fund IX and Odyssey are the sole "Stockholders"
party to the SRA that hold, directly or indirectly, more than 1% of the shares
subject to the SRA and Fund VIII, Fund IX and Odyssey are all of the members of
DEG; and
WHEREAS, DEG, Fund VIII, Fund IX, Dresser and Dresser Bermuda wish to
consent to the assignment, assumption and amendment referred to above to give
effect to such actions without otherwise affecting the rights and obligations of
the parties to the SRA;
NOW, THEREFORE:
1. Dresser hereby grants, transfers and assigns to Dresser Bermuda all of
Dresser's right, title and interest in the SRA and all of its obligations
thereunder.
2. Dresser Bermuda hereby does absolutely and irrevocably assume and agrees
to perform and discharge all of Dresser's obligations under the SRA.
3. The SRA is hereby amended as follows:
a) All references to "Dresser, Inc." shall be changed to "Dresser, Ltd."
and the defined term the "Company" shall mean Dresser, Ltd.
b) All references to "Class A Common Stock, par value $.001 per share",
shares of "Class A Common Stock" and similar phrase shall refer to the
Class A common shares, par value U.S. $.01 per share, of the Company,
and all references to "Class B Common Stock, par value $.001 per
share", shares of "Class B Common Stock" and similar phrases shall
refer to the Class B common shares, par value U.S. $.01 per share, of
the Company.
c) All references to the "Corporation" in Section 7 shall be changed to
the "Company".
d) All references to "Certificate of Incorporation" and "Bylaws" shall be
changed to "Memorandum of Association" and "Bye-Laws".
4. DEG, Fund VIII, Fund IX and Odyssey, pursuant to Section 6.2 of the SRA,
hereby agree to amend Section 2.5 of the SRA by deleting the first sentence of
the first paragraph thereof in its entirety and replacing it with the following:
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"Management of the Company. The Company will not take any of the
following actions and will not permit any of its subsidiaries to take any
of the following actions (each a "Restricted Action"), unless, in addition
to any other consents or approvals that may be required to effect such
Restricted Action, such Restricted Action is approved by a majority of the
Board that includes at least one (1) Board Designee designated by FRC and
one (1) Board Designee designated by OIPF.
5. DEG, Fund VIII, Fund IX and Odyssey, pursuant to Section 6.2 of the SRA,
hereby agree to amend Section 2.5 of the SRA by adding the following paragraphs
immediately prior to the final paragraph thereof:
"If an affiliate of either Sponsor who is not an employee of the
Company or any of its subsidiaries is appointed to a committee or
sub-committee of the Board or the board of directors of any subsidiary of
the Company or any committee or sub-committee thereof, then the Company
will also appoint or cause to be appointed at least one designee of the
other Sponsor to such committee or sub-committee of the Board, subsidiary
board of directors, or committee or sub-committee thereof; provided that if
any Sponsor at any time owns less than 5% of the combined voting power of
the Company, then such Sponsor shall no longer be entitled to designate any
member of a committee or sub-committee of the Board or the board of
directors of any subsidiary of the Company or any committee or
sub-committee thereof. Any determination of voting power pursuant to this
Section shall be made in the same manner as the calculation in 2.3(a)
above.
From and after the date of this Consent, without the written consent
of each of the Sponsors, the Company will not, and will cause its
subsidiaries not to, take any action (including, without limitation, any
distribution of assets by Dresser Inc. to its stockholders) that would
result in inclusion by any Sponsor, or any direct or indirect owner of any
Sponsor, of Subpart F income (as defined in Xxxxxxx 000 xx xxx Xxxxxx
Xxxxxx Internal Revenue Code of 1986, as amended (the "Code")), income
pursuant to Section 951(a)(1)(B) of the Code or undistributed foreign
personal holding company income pursuant to Section 551(b) of the Code."
6. DEG, Fund VIII, Fund IX and Odyssey, pursuant to Section 6.2 of the SRA,
hereby agree to amend Section 7 of the SRA by deleting the first two sentences
of the first paragraph thereof in its entirety and replacing it with the
following:
"Each certificate representing shares of capital stock of the Company
now or hereafter owned by a Stockholder party to this agreement shall be
endorsed with the following legend:"
7. DEG, Fund VIII, Fund IX and Odyssey each hereby consent to the above
mentioned assignment, assumption and amendment.
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8. This Consent is intended solely for the purpose described in Sections 1,
2, 3, 4, 5 and 6 above, and is not a general waiver of the SRA. Except as
specifically set forth herein, the SRA shall remain in full force and effect.
9. The Company shall pay reasonable out-of-pocket costs and expenses
(including attorneys' and accountants' fees) of the Sponsors incurred in
connection with the preparation and execution of this Consent, the transactions
described in the Recitals hereto and any necessary or advisable internal
restructuring of the Sponsors' investment vehicles arising out of the foregoing.
The Sponsors shall endeavor to minimize such expenses by coordinating their use
of counsel and advisors to complete the foregoing.
10. This Consent shall be governed by and construed exclusively in
accordance with the internal laws of the State of Delaware, excluding that body
of law relating to conflict of laws and choice of law.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned have executed this Consent as of the
date first written above.
DEG ACQUISITIONS, LLC
FIRST RESERVE FUND VIII, L.P.,
a Delaware limited partnership, its manager
By: FIRST RESERVE GP VIII, L.P.
a Delaware limited partnership, its general partner
By: FIRST RESERVE CORPORATION,
a Delaware corporation, its general partner
By: _______________________
Name:
Title:
FIRST RESERVE FUND VIII, L.P.,
a Delaware limited partnership
By: FIRST RESERVE GP VIII, L.P.
a Delaware limited partnership, its general partner
By: FIRST RESERVE CORPORATION,
a Delaware corporation, its general partner
By: ______________________________
Name:
Title:
FIRST RESERVE FUND IX, L.P.,
a Delaware limited partnership
By: FIRST RESERVE GP IX, L.P.
a Delaware limited partnership, its general partner
By: FIRST RESERVE GP IX, INC.,
a Delaware corporation, its general partner
By: ____________________________
Name:
Title:
ODYSSEY INVESTMENT PARTNERS FUND, LP,
a Delaware limited partnership
By: ODYSSEY CAPITAL PARTNERS, LLC,
a Delaware limited liability company, its general partner
By: _______________________
Name:
Title:
ODYSSEY COINVESTORS, LLC,
a Delaware limited liability company
By: ODYSSEY INVESTMENT PARTNERS, LLC,
a Delaware limited liability company, its manager
By: _______________________
Name:
Title:
DI COINVESTMENT, LLC,
a Delaware limited liability company
By: ODYSSEY INVESTMENT PARTNERS, LLC,
a Delaware limited liability company, its manager
By: _______________________
Name:
Title:
DRESSER, INC.
By: _______________________
Name:
Title:
DRESSER, LTD.
By: _______________________
Name:
Title:
