UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
NATCO GROUP INC.
| CASE NO.: 1:09-cv-02165
DECK TYPE: Antitrust
DATE STAMP: November 17, 2009
JUDGE: Bates, John D.
HOLD SEPARATE STIPULATION AND ORDER
It is hereby stipulated by and between the undersigned parties, by
their respective attorneys, subject to approval and entry by the Court,
As used in this Hold Separate Stipulation and Order:
- "Acquirer" or "Acquirers" means the entity or entities to whom
defendants divest the Divestiture Assets.
- "Cameron" means defendant Cameron International Corporation, a
Delaware corporation with its headquarters in Houston, Texas, its
successors and assigns, and its subsidiaries, divisions, groups,
affiliates, partnerships and joint ventures, and all of their directors,
officers, managers, agents, and employees.
- "NATCO" means defendant NATCO Group Inc., a Delaware corporation
with its headquarters in Houston, Texas, its successors and assigns,
and its subsidiaries, divisions, groups, affiliates, partnerships
and joint ventures, and all of their directors, officers, managers,
agents, and employees.
- "Closing Date" means the date upon which each transfer of the
Divestiture Assets from the defendants to the Acquirer or Acquirers
- "Dual Frequency Products" means downstream refinery desalters
that utilize dual frequency transformers and AC/DC power supplies.
- "Dual Frequency Technology" means any and all intellectual property,
data, drawings, ideas, designs, concepts, know-how, procedures,
processes, and any other assets primarily used in or necessary to
the development, production, sale, repair, or service of Dual Frequency
Products owned or controlled by defendants as of the time of the
- "EDGE Business" means the desalter and dehydrator assets purchased
by Petreco International, Inc. from Howe Baker Engineers Ltd., a
wholly owned subsidiary of Chicago Bridge & Iron N.V., pursuant
to an Asset Purchase Agreement dated October 7, 2005, and any additions
or improvements to such assets made through the Closing Date. The
Edge Business includes all inventory specifically related to the
EDGE Business as of the Closing Date.
- "Pilot plant" means equipment used to evaluate and simulate performance
of desalter technologies on oil samples.
- "Refinery desalter" means customized electrostatic desalters used
in the oil refining industry.
- "Divestiture Assets" means:
- All tangible assets primarily used in or necessary to the
EDGE Business, including, but not limited to, the inventory
of spare parts for the EDGE Business; engineering drawings and
documents related to all prior sales; all licenses, permits,
and authorizations issued by any governmental organization relating
to the EDGE Business; all contracts, teaming arrangements, agreements,
leases, commitments, certifications, and understandings, relating
principally to the EDGE Business, including supply agreements;
all customer lists, contracts, accounts, and credit records;
all repair and performance records and all other records relating
to the EDGE Business;
- All intangible assets primarily used in or necessary to the
EDGE Business, including, but not limited to, the EDGE Desalter
Installation Database and any accompanying design information;
the unregistered trademarks "Edge" and "EDGE"; all data concerning
installations or pilot testing; the EDGE Desalter Sizing Software
Program and related documentation; any other intellectual property
including patents and patent applications, licenses and sublicenses,
copyrights, trademarks, trade names, service marks, service
names, slogans, domain names, logos, and trade dress related
to the EDGE Business; any other technical information, software
and related documentation, know-how, trade secrets, drawings,
blueprints, designs, design protocols, specifications for materials,
specifications for parts and devices, safety procedures for
the handling of materials and substances, quality assurance
and control procedures, design tools and simulation capability,
manuals and technical information used principally for the EDGE
Business; all repair, performance, financial, and operational
records, and all other records relating to the EDGE Business;
and all research data concerning historic and current research
and development efforts relating to the EDGE Business, including,
but not limited to, designs of experiments, and the results
of successful and unsuccessful designs and experiments;
- At the Acquirer's option, Cameron's pilot plant located in
Houston, Texas or NATCO's pilot plant located in Tulsa, Oklahoma;
- A fully paid-up, non-exclusive, worldwide, non-sublicensable
(except to subcontractors of the Acquirer solely for the purpose
of having Dual Frequency Products made for the Acquirer) license
to the Dual Frequency Technology for the development, production,
sale, repair, and service of refinery desalters. This license
shall be transferable two years after divestiture of the Divestiture
Assets. Defendants shall retain the right and discretion to
file and prosecute patent applications and maintain patents
in the United States relating to any Dual Frequency Technology
developed by defendants prior to the Closing Date, and any such
patent shall be considered part of the Dual Frequency Technology
and be licensed to the Acquirer. Any improvements or modifications
to the Dual Frequency Technology (whether or not patentable)
developed by either the defendants or the Acquirer shall be
owned solely by such party.
The proposed Final Judgment filed in this case is meant to ensure defendants'
prompt divestitures of the Divestiture Assets for the purpose of establishing
one or more viable competitors in the refinery desalter business in
order to remedy the effects that the United States alleges would otherwise
result from Cameron's acquisition of NATCO and Cameron's acquisition
of the EDGE Business. This Hold Separate Stipulation and Order ensures,
prior to such divestitures, that the Divestiture Assets remain independent,
economically viable, and ongoing business concerns that will remain
independent and uninfluenced by Cameron, and that competition is maintained
during the pendency of the ordered divestitures.
- JURISDICTION AND VENUE
The Court has jurisdiction over the subject matter of this action
and over each of the parties hereto, and venue of this action is proper
in the United States District Court for the District of Columbia.
- COMPLIANCE WITH AND ENTRY OF FINAL JUDGMENT
- The parties stipulate that a Final Judgment in the form attached
hereto as Exhibit A may be filed and entered by the Court, upon the
motion of any party or upon the Court's own motion, at any time after
compliance with the requirements of the Antitrust Procedures and Penalties
Act (15 U.S.C. § 16), and without further notice to any party
or other proceedings, provided that the United States has not withdrawn
its consent, which it may do at any time before the entry of the proposed
Final Judgment by serving notice thereof on defendants and by filing
that notice with the Court.
- Defendants shall abide by and comply with the provisions of the
proposed Final Judgment, pending the Judgment's entry by the Court,
or until expiration of time for all appeals of any Court ruling declining
entry of the proposed Final Judgment, and shall, from the date of
the signing of this Stipulation by the parties, comply with all the
terms and provisions of the proposed Final Judgment as though the
same were in full force and effect as an order of the Court.
- Defendants shall not consummate the transaction sought to be enjoined
by the Complaint herein before the Court has signed this Hold Separate
Stipulation and Order.
- This Stipulation shall apply with equal force and effect to any
amended proposed Final Judgment agreed upon in writing by the parties
and submitted to the Court.
- In the event: (1) the United States has withdrawn its consent, as
provided in Section IV(A), above; or (2) the proposed Final Judgment
is not entered pursuant to this Stipulation, the time has expired
for all appeals of any Court ruling declining entry of the proposed
Final Judgment, and the Court has not otherwise ordered continued
compliance with the terms and provisions of the proposed Final Judgment,
then the parties are released from all further obligations under this
Stipulation, and the making of this Stipulation shall be without prejudice
to any party in this or any other proceeding.
- Defendants represent that the divestitures ordered in the proposed
Final Judgment can and will be made, and that defendants will later
raise no claim of mistake, hardship, or difficulty of compliance as
grounds for asking the Court to modify any of the provisions contained
- HOLD SEPARATE PROVISIONS
Until the divestitures required by the Final Judgment have been accomplished:
- Cameron shall take all steps necessary to ensure that the Divestiture
Assets are fully maintained in operable condition and shall maintain
and adhere to normal repair and maintenance schedules for the Divestiture
- Defendants shall not, except as part of a divestiture approved
by the United States in accordance with the terms of the proposed
Final Judgment, remove, sell, lease, assign, transfer, pledge or
otherwise dispose of any of the Divestiture Assets, provided, however,
that nothing herein precludes defendants from selling and/or shipping
products or inventory in the ordinary course of business.
- Defendants shall take no action that would jeopardize, delay,
or impede the sale of the Divestiture Assets.
- Defendants' employees with primary responsibility for the operation
of the Divestiture Assets shall not be transferred or reassigned
to other areas within the company except for transfer bids initiated
by employees pursuant to defendants' regular, established job posting
policy. Defendant shall provide the United States with ten (10)
calendar days notice of such transfer.
- Defendants shall appoint a person or persons to oversee the Divestiture
Assets, and who will be responsible for defendants' compliance with
this section. This person shall have complete managerial responsibility
for the Divestiture Assets, subject to the provisions of this Final
Judgment. In the event such person is unable to perform his duties,
defendants shall appoint, subject to the approval of the United
States, a replacement within ten (10) working days. Should defendants
fail to appoint a replacement acceptable to the United States within
this time period, the United States shall appoint a replacement.
- Defendants shall take no action that would interfere with the
ability of any trustee appointed pursuant to the Final Judgment
to complete the divestitures pursuant to the Final Judgment to a
Acquirer or Acquirers acceptable to the United States.
- DURATION OF HOLD SEPARATE
AND ASSET PRESERVATION OBLIGATIONS
Defendants' obligations under Section V of this Hold Separate Stipulation
and Order shall remain in effect until: (1) consummation of the divestitures
required by the proposed Final Judgment; or (2) until further order
of the Court. If the United States voluntarily dismisses the Complaint
in this matter, defendants are released from all further obligations
under this Hold Separate Stipulation and Order.
|Dated: November 17, 2009
|| Respectfully submitted,
UNITED STATES OF AMERICA
Christine Hill, Esquire
D.C. Bar No.: 461045
United States Department of Justice
Antitrust Division, Litigation II Section
450 Fifth Street, NW
Washington, DC 20530
Telephone No.: (202) 305-2738
|FOR DEFENDANT CAMERON
Sean F.X. Boland, Esquire
D.C. Bar No. 249318
Paul C. Cuomo, Esquire
D.C. Bar No. 457793
1299 Pennsylvania Avenue, NW
Washington, DC 20004-2402
Telephone No.: (202) 383-7122
|| FOR DEFENDANT NATCO GROUP INC.
Bradley C. Weber, Esquire
Locke Lord Bissell & Liddell LLP
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201-6776
Telephone No.: (214) 740-8497
IT IS SO ORDERED by the Court, this ____ day of __________ 2009.
United States District Judge