DRESSER INC
AMENDED AND RESTATED AGREEMENT AND PLAN OF RECAPITALIZATION
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>44
<FILENAME>dex101.txt
<DESCRIPTION>AMENDED AND RESTATED AGREEMENT AND PLAN OF RECAPITALIZATION
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.1

                                                                  EXECUTION COPY


                              AMENDED AND RESTATED

                               AGREEMENT AND PLAN

                               OF RECAPITALIZATION

                           DATED AS OF APRIL 10, 2001

                                      AMONG

                              HALLIBURTON COMPANY,

                            THE SELLER NAMED HEREIN,

                                       AND

                              DEG ACQUISITIONS, LLC

<PAGE>

                                TABLE OF CONTENTS

                                    ARTICLE I
                                   DEFINITIONS

Section 1.01.   Definitions....................................................2
Section 1.02.   Rules of Construction..........................................2

                                   ARTICLE II
                                SALE AND PURCHASE

Section 2.01.   Sale and Purchase of Securities................................2
Section 2.02.   Sale and Purchase of BV Companies..............................4
Section 2.03.   Cash Consideration.............................................4
Section 2.04.   The Closings...................................................4
Section 2.05.   Pre-Closing Transactions.......................................5
Section 2.06.   Transactions at the First Closing..............................5
Section 2.07.   Transactions at the Second Closing.............................7
Section 2.08.   Adjustment of the Preliminary Purchase Price...................8
Section 2.09.   Procedures for Calculating the Purchase Price Adjustment.......9
Section 2.10.   Adjustments to Net Equity.....................................11
Section 2.11.   Allocation of Purchase Price Adjustment.......................13
Section 2.12.   Amendments to Effect Recapitalization.........................13
Section 2.13.   Delayed Purchases.............................................13
Section 2.14.   Joint Ventures................................................14

                                   ARTICLE III
     REPRESENTATIONS AND WARRANTIES REGARDING PARENT AND DRESSER INDUSTRIES

Section 3.01.   Organization and Qualification................................15
Section 3.02.   Authorization of Agreement....................................15
Section 3.03.   Approvals.....................................................16
Section 3.04.   No Violation..................................................16
Section 3.05.   No Brokers....................................................16
Section 3.06.   Title to Securities...........................................17

                                   ARTICLE IV
               REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER

Section 4.01.   Organization..................................................17
Section 4.02.   Authorization of Agreement....................................17
Section 4.03.   Approvals.....................................................18
Section 4.04.   No Violation..................................................18
Section 4.05.   Title to Securities...........................................18

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                        i

<PAGE>

                                    ARTICLE V
     REPRESENTATIONS AND WARRANTIES REGARDING MEMBERS OF THE COMPANY GROUPS

Section 5.01.   Organization; Subsidiaries....................................19
Section 5.02.   Organizational Documents; Authorization; No Violation.........20
Section 5.03.   Capitalization................................................20
Section 5.04.   Title to Properties...........................................21
Section 5.05.   Financial Statements..........................................22
Section 5.06.   Authorizations................................................23
Section 5.07.   Compliance With Laws; Regulation of Businesses................24
Section 5.08.   Taxes.........................................................24
Section 5.09.   Principal Contracts...........................................26
Section 5.10.   Employees.....................................................26
Section 5.11.   Environmental Matters.........................................30
Section 5.12.   Litigation....................................................31
Section 5.13.   Material Adverse Changes......................................31
Section 5.14.   Customers and Suppliers.......................................32
Section 5.15.   Adequacy of Assets............................................32
Section 5.16.   Full Disclosure...............................................32
Section 5.17.   Disclaimers...................................................32

                                   ARTICLE VI
                REPRESENTATIONS AND WARRANTIES REGARDING ACQUIROR

Section 6.01.   Organization and Qualification................................33
Section 6.02.   Authorization of Agreement....................................33
Section 6.03.   Approvals.....................................................34
Section 6.04.   No Violation..................................................34
Section 6.05.   Commitment Letters............................................34
Section 6.06.   No Brokers....................................................34
Section 6.07.   Transitory Merger Sub.........................................34

                                   ARTICLE VII
                 REPRESENTATIONS AND WARRANTIES REGARDING BUYERS

Section 7.01.   Organization..................................................35
Section 7.02.   Authorization of Agreement....................................35
Section 7.03.   Approvals.....................................................35
Section 7.04.   No Violation..................................................35
Section 7.05.   Investment in Securities......................................36

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       ii

<PAGE>

                                  ARTICLE VIII
                             COVENANTS OF THE PARENT

Section 8.01.   Affirmative Covenants Regarding
                Operation of the Businesses...................................36
Section 8.02.   Negative Covenants Regarding the
                Operation of the Businesses...................................37
Section 8.03.   Access to Information.........................................41
Section 8.04.   Insurance Benefits............................................41
Section 8.05.   Compliance with Competition Laws Applicable
                to Designated Regulatory Assets...............................42
Section 8.06.   Covenant Not to Compete.......................................44
Section 8.07.   Nonsolicitation...............................................45
Section 8.08.   Accountants' Opinion and Consents.............................46
Section 8.09.   Financing.....................................................46
Section 8.10.   Financial Statements..........................................48
Section 8.11.   Assignments...................................................48
Section 8.12.   Release of Liens..............................................48
Section 8.13.   Environmental Schedules.......................................48
Section 8.14.   Use of Dresser Name...........................................48

                                   ARTICLE IX
                            COVENANTS OF THE ACQUIROR

Section 9.01.   Confidentiality Agreement.....................................49
Section 9.02.   Corporate Name................................................49
Section 9.03.   Surety Arrangements...........................................49
Section 9.04.   Dresser Valve Division Contracts..............................49

                                    ARTICLE X
                                MUTUAL COVENANTS

Section 10.01.  Cooperation...................................................50
Section 10.02.  Ancillary Agreements..........................................52
Section 10.03.  Public Announcements..........................................53
Section 10.04.  Transfer Taxes................................................53
Section 10.05.  Expenses......................................................53
Section 10.06.  Tax Matters...................................................53
Section 10.07.  Offers to Employees...........................................56
Section 10.08.  Related Party Contracts.......................................57
Section 10.09.  Litigation Support............................................57
Section 10.10.  Post-Closing Matters..........................................58

                                   ARTICLE XI
                           CONDITIONS TO FIRST CLOSING

Section 11.01.  Conditions to Obligations of
                Each Party Under This Agreement...............................59

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       iii

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Section 11.02.  Additional Conditions to the Parent's Obligations.............60
Section 11.03.  Additional Conditions to the Acquiror's Obligations...........61

                                   ARTICLE XII
                                 INDEMNIFICATION

Section 12.01.  Survival of Representations, Warranties,
                Covenants and Agreements......................................63
Section 12.02.  General Indemnification by the Parent.........................64
Section 12.03.  General Indemnification by the Acquiror.......................68
Section 12.04.  Procedures....................................................69
Section 12.05.  Special Environmental Indemnification Provisions..............72
Section 12.06.  Punitive Damages..............................................75
Section 12.07.  Failure of Acquiror to Close..................................75
Section 12.08.  No Right of Contribution......................................75
Section 12.09.  Specific Performance..........................................75
Section 12.10.  Sole Remedy...................................................75

                                  ARTICLE XIII
                        TERMINATION, AMENDMENT AND WAIVER

Section 13.01.  Termination...................................................76
Section 13.02.  Effect of Termination.........................................77
Section 13.03.  Amendment.....................................................77
Section 13.04.  Waiver........................................................77

                                   ARTICLE XIV
                                  MISCELLANEOUS

Section 14.01.  Notices.......................................................77
Section 14.02.  Headings......................................................79
Section 14.03.  Severability..................................................79
Section 14.04.  Entire Agreement..............................................79
Section 14.05.  Assignment....................................................80
Section 14.06.  Successors; Parties in Interest...............................80
Section 14.07.  Failure or Indulgence Not Waiver; Remedies Cumulative.........80
Section 14.08.  Disclosure Letters............................................80
Section 14.09.  Governing Law.................................................80
Section 14.10.  Arbitration...................................................80
Section 14.11.  Confidentiality Agreements....................................81
Section 14.12.  Counterparts..................................................81

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       iv

<PAGE>

ANNEXES

     Annex A        --    Definitions.
     Annex B        --    Reorganization (Components and Procedure).
     Annex C        --    List of the Seller, Buyers and BV Companies and
                          BV Allocable Purchase Price.
     Annex D        --    Allocation Procedures for Purchase Price Adjustment.

APPENDICES

     Appendix I     --    Form of Merger Agreement.
     Appendix II    --    Forms of Releases of Intercompany Indebtedness.
     Appendix III   --    Forms of Releases of Claims.
     Appendix IV    --    Form of Assignment of Name.
     Appendix V     --    Form of Highway 6 Lease Agreement.
     Appendix VI    --    Form of Employee Benefits Agreement.
     Appendix VII   --    Form of Transition Services Agreement.
     Appendix VIII  --    Form of Stockholders' Agreement.
     Appendix IX    --    Form of Category 2A Purchase and Sale Agreement.
     Appendix X     --    Form of Opinion of Acquiror's Counsel.
     Appendix XI    --    Form of Opinion of Parent's Counsel.

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                        v

<PAGE>

                                                                  EXECUTION COPY

           AMENDED AND RESTATED AGREEMENT AND PLAN OF RECAPITALIZATION

          This AMENDED AND RESTATED AGREEMENT AND PLAN OF RECAPITALIZATION (this
"Agreement") dated as of April 10, 2001, is by and among Halliburton Company, a
Delaware corporation (the "Parent"), Dresser B.V., a Netherlands company and a
wholly owned indirect Subsidiary of the Parent (the "Seller") and DEG
Acquisitions, LLC, a Delaware limited liability company (the "Acquiror"). This
Agreement amends and restates in its entirety that certain Agreement and Plan of
Recapitalization dated as of January 30, 2001 by and among the Parent, the
Seller and the Acquiror, as amended by Amendatory Agreement No. 1 thereto, dated
March 2001, and Amendatory Agreement No. 2 thereto, dated March 2001. References
in this Agreement to the "date of this Agreement," or "the date hereof" shall
refer to January 30, 2001.

                                    RECITALS:

          The Parent has determined to redeploy a significant portion of its
assets. Accordingly, the Parent desires to sell, and the Acquiror has determined
to purchase, certain interests in the Parent's businesses relating to, among
other things, the design, manufacturing and marketing of engineered measurement,
flow control and power systems for customers primarily in the energy industry.

          In order to accomplish this transaction, the Parent will, in
consultation with the Acquiror and in the manner set forth herein, prior to the
First Closing effect the Reorganization described in Annex B of the various
legal entities that comprise the Dresser Equipment Group.

          After giving effect to the Reorganization, (a) the Parent desires to
cause Dresser Industries and DEGI to engage, and the Acquiror desires to engage,
and to cause Transitory Merger Sub to engage, in the transactions contemplated
by Article II herein at the First Closing and (b) immediately following the
First Closing, the Parent desires to cause the Seller to engage, and the
Acquiror desires to cause the Buyers to engage, in the transactions contemplated
by Article II herein at the Second Closing.

          On March 28, 2001, DEGI changed its legal name from "Dresser Equipment
Group, Inc." to "Dresser, Inc." References in this Agreement (including the
exhibits, annexes and schedules hereto) to "Dresser Equipment Group, Inc." shall
mean Dresser, Inc.

          NOW, THEREFORE, the parties hereto, in consideration of the premises
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, agree as follows:

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

          Section 1.01.  Definitions. Capitalized and other terms used in this
Agreement are defined in Annex A attached hereto and are used herein with the
meanings ascribed to them therein.

          Section 1.02.  Rules of Construction.

          (a)  Unless the context otherwise requires, as used in this Agreement:
               (i) a term defined in Annex A has the meaning ascribed to it in
               Annex A; (ii) an accounting term not defined herein has the
               meaning ascribed to it in accordance with U.S. GAAP; (iii) "or"
               is not exclusive; (iv) "including" means "including without
               limitation;" (v) words in the singular include the plural and
               vice versa; (vi) words applicable to one gender shall be
               construed to apply to each gender; (vii) the terms "hereof,"
               "herein," "hereby," "hereto" and derivative or similar words
               refer to this entire Agreement, including the Annexes and
               Appendices hereto; (viii) the terms "Article," "Section," "Annex"
               and "Appendix" shall refer to the specified Article, Section,
               Annex or Appendix of or to this Agreement; (ix) the term
               "Schedule" shall refer to the appropriate Schedule to the
               Parent's Disclosure Letter or the Acquiror's Disclosure Letter;
               and (x) the phrases "pursuant to," "as described in" and "subject
               to the terms of," when used with reference to a particular
               Section of this Agreement, or words of similar import, shall
               refer to such Section and to any Schedule of the Parent's
               Disclosure Letter or the Acquiror's Disclosure Letter referenced
               therein.

          (b)  A reference to any Person includes such Person's successors and
               permitted assigns.

          (c)  Any reference to "days" shall mean calendar days unless "Business
               Days" (as defined in Annex A) are expressly specified.

          (d)  Each Annex and Appendix identified in this Agreement is
               incorporated herein by reference and made a part hereof for all
               purposes.

          (e)  The Parent and the Acquiror, each represented by legal counsel,
               have each participated in the negotiation and drafting of this
               Agreement. If an ambiguity or question of intent or
               interpretation should arise, this Agreement shall be construed as
               if drafted jointly by such parties and no presumption or burden
               of proof shall arise favoring or burdening any party hereto by
               virtue of the authorship of any of the provisions of this
               Agreement.

                                   ARTICLE II

                                SALE AND PURCHASE

          Section 2.01.  Sale and Purchase of Securities. On the terms and
subject to the conditions contained in this Agreement, the Parent agrees to
cause DEGI and Dresser Industries to engage at the First Closing in the
following transactions, and the Acquiror agrees to engage and to cause the
Transitory Merger Sub to engage at the First Closing in the following
transactions:

                              HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                        2

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               (a)  The Acquiror shall purchase from Transitory Merger Sub, upon
                    original issue, common stock of Transitory Merger Sub for
                    cash in an amount in U.S. Dollars (which the Acquiror
                    estimates will be approximately $400,000,000) equal to at
                    least the Purchase Price, plus fees and expenses incurred by
                    the Acquiror in connection with the transactions
                    contemplated hereby (other than fees or discounts related to
                    the Loan) less the Loan (the "Investment");

               (b)  DEGI shall borrow an amount in cash in U.S. Dollars equal to
                    at least $970,000,000 (nine hundred seventy million dollars)
                    (the net proceeds to DEGI pursuant to this clause (b), being
                    the "Loan"), comprised of (i) borrowings from a syndicate of
                    Lenders on Terms contemplated by the Commitment Letter Term
                    Sheet attached to the Bank Commitment Letter and (ii) the
                    proceeds from the issuance of senior subordinated notes in a
                    private placement of such notes or borrowings from a
                    syndicate of Lenders on the Terms contemplated by the
                    Commitment Letter Term Sheet attached to the Bridge
                    Commitment Letter; and

               (c)  The Acquiror and the Parent shall cause the merger (the
                    "Merger") of Transitory Merger Sub with and into DEGI, which
                    shall be the corporation surviving the Merger, to be
                    effected through execution and delivery of the Merger
                    Agreement and the filing thereof with the Secretary of State
                    of Delaware, pursuant to which:

                    (i)   All the issued and outstanding capital stock of
                          Transitory Merger Sub shall be converted into an
                          aggregate number of shares of common stock of DEGI
                          ("DEGI Common Stock") equal to (i) the total number of
                          shares of DEGI Common Stock outstanding immediately
                          prior to the Merger multiplied by (ii) 0.949;

                    (ii)  subject to the provisions of clause (iii) of this
                          subsection (c), the number of shares of DEGI Common
                          Stock owned by Dresser Industries equal to (i) the
                          total number of shares of DEGI Common Stock
                          outstanding immediately prior to the Merger multiplied
                          by (ii) 0.949 shall be converted into the right to
                          receive cash in an aggregate amount equal to (A) the
                          DEGI Group Preliminary Purchase Price Percentage times
                          the Preliminary Purchase Price as adjusted by (B) a
                          portion of the Purchase Price Adjustment determined in
                          accordance with the Allocation Procedures (the "Merger
                          Consideration") (with the balance of the shares of
                          DEGI Common Stock owned by Dresser Industries to
                          remain outstanding); and

                    (iii) if any Management Shares are outstanding at the
                          effective date of the Merger, then (A) the number of
                          shares of DEGI Common Stock converted into the right
                          to receive cash pursuant to clause (ii) of this
                          subsection (c) shall be increased by a number equal to
                          the number of

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                        3

<PAGE>

                          Management Shares and (B) the consideration payable to
                          Dresser Industries in connection with the Merger shall
                          be increased by the amount of the cash consideration
                          received by DEGI against the issuance of such
                          Management Shares.

               (d)  Any Management Shares issued by DEGI prior to the First
                    Closing shall be sold to management employees at a price per
                    share not less than an amount equal to the Merger
                    Consideration plus the BV Consideration divided by the
                    number of shares of DEGI Common Stock to be converted by
                    Dresser Industries in the Merger as determined pursuant to
                    clause (ii) of subsection 2.01(c) before giving effect to
                    clause (iii) of subsection 2.01(c).

          Section 2.02.  Sale and Purchase of BV Companies. On the terms and
subject to the conditions contained in this Agreement, the Parent agrees to
cause the Seller to engage at the Second Closing in the following transactions,
and the Acquiror agrees to cause each of the Buyers to engage at the Second
Closing in the following transactions: The Seller shall assign to the
appropriate Buyer as indicated on Annex C hereto, and such Buyer shall accept,
the Equity Securities of the BV Company whose name is set forth next to the name
of such Buyer on Annex C hereto. In consideration for such assignments, the
Buyers shall pay to the Seller cash in U.S. Dollars in an aggregate amount equal
to (a) the BV Preliminary Purchase Price Percentage times the Preliminary
Purchase Price as adjusted by (b) a portion of the Purchase Price Adjustment
determined in accordance with the Allocation Procedures (the "BV
Consideration").

          Section 2.03.  Cash Consideration.

          (a)  The aggregate cash consideration to be paid to Dresser Industries
               and the Seller for engaging in the transactions contemplated by
               Sections 2.01 and 2.02 herein shall consist of the Purchase
               Price. The "Purchase Price" shall be equal to the Preliminary
               Purchase Price as adjusted by the Purchase Price Adjustment in
               accordance with Sections 2.08 and 2.09.

          (b)  The parties hereto have agreed that the "Preliminary Purchase
               Price" shall be equal to (i) U.S. $1,309,111,797 (one billion
               three hundred nine million one hundred eleven thousand seven
               hundred ninety-seven dollars) less (ii) the amount which, when
               taken together with the aggregate consideration paid to acquire
               the Management Shares, equals 5.1% of the Equity of DEGI.

          Section 2.04.  The Closings.

          (a)  The transactions contemplated by Section 2.01 shall be
               consummated (the "First Closing") on the date and at the time and
               place determined pursuant to this subsection (a). The First
               Closing shall be held at the offices of Latham & Watkins, 885
               Third Avenue, New York, New York 10022 on the Closing Date. The
               "Closing Date" shall be the fifteenth (15th) Business Day
               following the date on which the Closing Conditions (other than
               conditions that can be satisfied only by delivery of

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                        4

<PAGE>

               certificates or other documents at the Closings and where such
               delivery is in the control of a party hereto) have been fulfilled
               or waived. If such date is not a Business Day, then the Closing
               Date shall be the next succeeding Business Day.

          (b)  Upon fulfillment or waiver of the Closing Conditions to which
               reference is made in subsection (a) of this Section, either the
               Parent or the Acquiror may give the other notice thereof (the
               "Closing Notice") and the date of receipt of such Closing Notice
               determined in accordance with Section 14.01 shall be the first
               Business Day of the time periods therein referenced.

          (c)  Immediately following the First Closing, the transactions
               contemplated by Section 2.02 shall be consummated (the "Second
               Closing"). The Second Closing shall be held at the same location
               as the First Closing. The consummation of the Second Closing
               shall be a condition subsequent to the consummation of the First
               Closing, such that if the Second Closing shall not occur
               immediately following the First Closing either the Parent or the
               Acquiror shall be entitled to cause the rescission of the
               transactions consummated at the First Closing.

          Section 2.05.  Pre-Closing Transactions.

          (a)  Prior to the First Closing, the Parent shall effect the
               Reorganization described in Annex B. The Parent and the Acquiror
               shall cooperate with each other with respect to the
               implementation of the Reorganization described in Annex B,
               including actions involving filings with Governmental
               Authorities, the execution of agreements, transfer documents and
               similar instruments and the issuance of securities. If the Parent
               and the Acquiror consent in writing to any action that is
               inconsistent with the transactions described on Annex B hereto,
               then Annex B shall, automatically and without further action by
               the parties hereto, be deemed to have been amended to the extent
               necessary to permit such action.

          (b)  The Parent shall prior to the First Closing cause the outstanding
               DEGI Common Stock to be subdivided pursuant to a stock split on a
               basis that is mutually satisfactory to the Acquiror and the
               Parent.

          (c)  In any case in which the Reorganization, as the Reorganization
               may be amended as provided in subsection (a) of this Section 2.05
               prior to the First Closing, requires that a member of a Company
               Group be "formed" or otherwise implies that it must be organized
               de novo, the parties hereto acknowledge that counsel to, or other
               representatives of, the Parent or the Acquiror may, in lieu of a
               legal entity organized de novo, use a previously formed legal
               entity "off the shelf" for such purpose ( herein called a "Shelf
               Entity").

          Section 2.06.  Transactions at the First Closing. Subject to the terms
and conditions of this Agreement, the Parent shall at the First Closing cause
DEGI to do and perform the following actions

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                        5

<PAGE>

and to deliver the following documents, and the Acquiror shall do and perform
the following actions and deliver the following documents. At the First Closing,
the following events shall occur, each event being (i) conditioned on the
occurrence or waiver of each other event and (ii) deemed to occur simultaneously
with each other event:

          (a)  Financial Transactions:

               (i)   The Acquiror shall purchase from the Transitory Merger Sub
                     upon original issue shares of common stock for cash in the
                     amount of the Investment;

               (ii)  DEGI shall execute and deliver the Loan Documents against
                     the funding of the full amount of the Loan to DEGI by wire
                     transfer of immediately available funds to the wire
                     transfer address of DEGI provided in written instructions
                     to the Acquiror not less than three (3) Business Days prior
                     to the Closing Date; and

               (iii) the Parent and the Acquiror shall cause the Merger to be
                     effected in accordance with subsection (c) of Section 2.01;
                     provided, however, that the amount of cash to be paid to
                     Dresser Industries pursuant to the Merger at the time of
                     the First Closing (subject to adjustment pursuant to
                     Sections 2.08 and 2.09) shall be an aggregate amount equal
                     to the DEGI Group Preliminary Purchase Price Percentage
                     times the Estimated Purchase Price. The consideration to be
                     received by Dresser Industries pursuant to the Merger shall
                     be paid to Dresser Industries by wire transfer of
                     immediately available funds to the wire transfer address of
                     Dresser Industries provided in written instructions by the
                     Acquiror not less than three (3) Business Days prior to the
                     Closing Date.

          (b)  Ancillary Agreements. The parties to each Ancillary Agreement
               shall execute and deliver such Ancillary Agreement.

          (c)  Intercompany Indebtedness. Any Intercompany Indebtedness owed at
               the Closing Date by any member of the Parent Group to any member
               of the DEGI Group or by any member of the DEGI Group to any
               member of the Parent Group shall be discharged, whether, at the
               election of the Parent (provided, that the Parent shall cooperate
               with the Acquiror to structure such discharge in the manner that
               is most tax-efficient to all the parties), by payment by the
               obligor or by release and forgiveness by the obligee pursuant to
               a written release, in form and substance substantially similar to
               the form thereof attached hereto as Appendix II, executed and
               delivered at the First Closing. The Intercompany Indebtedness has
               not been reflected in the Initial Balance Sheet, and will not be
               reflected in the Estimated or Closing Balance Sheet, as an asset
               or liability and, consequently, shall have no effect on the
               calculation of the Purchase Price Adjustment hereunder.

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                        6

<PAGE>

          (d)  The Parent shall at the First Closing execute, where appropriate,
               and deliver to the Acquiror the following documents:

               (i)   A release, in form and substance substantially similar to
                     the form thereof attached hereto as Appendix III, by the
                     Parent on behalf of itself and the Parent Group of all
                     claims that they may have against any member of the DEGI
                     Group with respect to the operation or conduct of the
                     Businesses prior to the Closing Date;

               (ii)  A certificate in the form required by Treasury Regulation
                     Section 1.1445-2; and

               (iii) such other documents and instruments as shall evidence
                     fulfillment or waiver of the Closing Conditions.

          (e)  The Acquiror shall at the First Closing execute, where
               appropriate, and deliver to the Parent such documents and
               instruments as shall evidence fulfillment or waiver of the
               Closing Conditions.

          Section 2.07.  Transactions at the Second Closing. Subject to the
terms of this Agreement and to the condition that the First Closing shall have
been effected, the Parent shall cause the Seller at the Second Closing to do and
perform the following actions and to deliver the following documents, and the
Acquiror shall do and perform the following actions and cause the Buyers at the
Second Closing to do and perform the following actions and to deliver the
following documents. At the Second Closing, the following events shall occur,
each event being (i) conditioned on the occurrence or waiver of each other event
and (ii) deemed, except as otherwise provided in subsection (b) of this Section,
to occur simultaneously with each other event:

          (a)  The Parent shall cause the Seller to deliver, in the sequence
               provided on Annex C, to the appropriate Buyer the certificate or
               certificates evidencing the Equity Securities of the BV Companies
               to be sold by it at the Second Closing in accordance with Annex
               C, which certificates shall be duly endorsed for transfer or
               accompanied by duly executed stock transfer powers or other
               appropriate instruments of assignment and transfer in favor of
               the Buyer;

          (b)  The Acquiror shall cause the Buyers to deliver or cause to be
               delivered to the Seller cash in the amount of the BV Preliminary
               Purchase Price Percentage times the Estimated Purchase Price.
               Such amount shall be paid in United States Dollars by wire
               transfer of immediately available funds to the wire transfer
               address of the Seller provided in written instructions by the
               Seller not less than three (3) Business Days prior to the Closing
               Date.

          (c)  Any Intercompany Indebtedness owed at the Closing Date by any
               member of the Parent Group to any member of the BV Group or by
               any member of the BV Group

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                        7

<PAGE>

               to any member of the Parent Group shall be discharged, whether,
               at the election of the Parent (provided, that the Parent shall
               cooperate with the Acquiror to structure such discharge in the
               manner that is most tax-efficient to all the parties), by payment
               by the obligor or by release and forgiveness by the obligee
               pursuant to a written release, in form and substance
               substantially similar to the form thereof attached hereto as
               Appendix II, executed and delivered at the Second Closing. The
               Intercompany Indebtedness has not been reflected in the Initial
               Balance Sheet, and will not be reflected in the Estimated or
               Closing Balance Sheet, as an asset or liability and,
               consequently, shall have no effect on the calculation of the
               Purchase Price Adjustment hereunder.

          (d)  The Parent shall at the Second Closing execute, where
               appropriate, and deliver to the Acquiror, a release, in form and
               substance substantially similar to the form thereof attached
               hereto as Appendix III, by the Parent on behalf of itself and the
               Parent Group of all claims that they may have against any member
               of the BV Group with respect to the operation or conduct of the
               Businesses prior to the Closing Date.

          Section 2.08.  Adjustment of the Preliminary Purchase Price.

          (a)  By no later than five (5) Business Days after the delivery of a
               Closing Notice, the Parent shall deliver to the Acquiror on a
               consolidated basis, (i) the balance sheet of the Businesses as of
               December 31, 2000 and the related statement of results of
               operations for the twelve months then ended (the "Year-End
               Financial Statements") and (ii) the balance sheet (the "Estimated
               Balance Sheet") as of the close of business on the last day of
               the most recently completed calendar month for which internal
               management financial statements are available (the "Estimated
               Balance Sheet Date") and the related statement of results of
               operations of the Businesses for the period beginning on January
               1, 2001 and ending on the Estimated Balance Sheet Date (together
               with the Estimated Balance Sheet, the "Estimated Financial
               Statements"). The Year End Financial Statements and the Estimated
               Financial Statements shall be prepared in accordance with U.S.
               GAAP applied consistently with the Initial Financial Statements.
               The Year End Financial Statements shall present fairly the
               financial position and the results of operations of the
               Businesses as of the date and for the period then ended and the
               Estimated Financial Statements shall, to the extent reasonably
               practicable in light of the purpose for which they were prepared
               and the time parameter provided in this subsection, present
               fairly the financial position and results of operations of the
               Businesses as of the date and for the period then ended.

          (b)  The "Estimated Purchase Price" shall mean the Preliminary
               Purchase Price adjusted by the Estimated Purchase Price
               Adjustment. The Preliminary Purchase Price shall be increased by
               a positive Estimated Purchase Price Adjustment and decreased by a
               negative Estimated Purchase Price Adjustment.

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                        8

<PAGE>

          (c)  The "Estimated Purchase Price Adjustment" shall be an amount
               equal to the increase (positive) or decrease (negative) in the
               Net Equity as of the Initial Balance Sheet Date to the Estimated
               Balance Sheet Date, determined, in accordance with Section 2.10,
               by comparing the amount of Net Equity as of the Initial Balance
               Sheet Date with the amount of Net Equity as of the Estimated
               Balance Sheet Date; provided, however, that, if the amount of
               such Estimated Purchase Price Adjustment is less than U.S.
               $10,000,000 (ten million dollars), whether positive or negative,
               the Estimated Purchase Price Adjustment shall be deemed to be $0.

          (d)  For purposes of the determination of the Estimated Purchase Price
               Adjustment and the Purchase Price Adjustment, Intercompany
               Indebtedness shall be classified and reflected in each of the
               Initial Balance Sheet, the Estimated Balance Sheet and the
               Closing Balance Sheet neither as an asset nor a liability.

          Section 2.09.  Procedures for Calculating the Purchase Price
Adjustment.

          (a)  Following the end of the calendar month in which the First
               Closing shall occur, the Acquiror shall cause to be prepared and
               delivered to the Parent, no later than ninety (90) days following
               the end of such month, on a consolidated basis, the Closing
               Financial Statements, prepared in accordance with U.S. GAAP
               applied consistently with the Initial Financial Statements which
               shall be certified by Arthur Andersen LLP as presenting fairly
               the financial position of the Businesses as of the Closing Date.
               Thereafter, the Acquiror shall promptly provide to the Parent
               such supporting work papers or other supporting information as
               may be reasonably requested by the Parent, including access to
               the work papers of Arthur Andersen LLP prepared in connection
               with the audit of the Initial Financial Statements and the audit
               of the Closing Financial Statements. To the extent that the
               judgment of management of the Businesses is relied upon for any
               estimate used to prepare the Closing Balance Sheet as required or
               permitted by U.S. GAAP, such judgment shall not differ in any
               material respect from the judgment relied upon for the same or
               any similar estimate used to prepare the Initial Financial
               Statements unless there has been a material change since the date
               of the Initial Financial Statements in the facts upon which such
               judgment is based.

          (b)  If the Parent shall have any objections to the Closing Balance
               Sheet, the Parent shall within twenty (20) Business Days
               following receipt of the Closing Balance Sheet so notify the
               Acquiror, stating in reasonable detail the basis for any such
               objections; provided, however, that the only bases for objection
               shall be (i) non-compliance with the standards set forth in
               subsection (a) of this Section for the preparation of the Closing
               Balance Sheet and (ii) computational errors. If the Parent fails
               to notify the Acquiror of any such objections in writing within
               such twenty (20) Business Day period, the Parent shall be deemed
               to have concurred with the Closing Balance Sheet. Otherwise,
               following any such notification, the Acquiror and the Parent
               shall endeavor in good faith for a period not to exceed twenty
               (20) Business Days to

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                        9

<PAGE>

               resolve their differences (the "Differences"). If the parties are
               unable to resolve all their Differences and have not agreed in
               writing to extend the resolution period, either the Parent or the
               Acquiror shall, if the aggregate amount of the unresolved
               Differences does not exceed U.S. $10 million, be entitled for a
               period of twenty (20) additional Business Days to request the
               Accounting Firm to resolve the unresolved Differences or, if the
               aggregate amount of the unresolved Differences exceeds $10
               million, to apply for arbitration pursuant to the provisions of
               Section 14.10. If the parties are unable to resolve all their
               Differences but neither party shall apply to the Accounting Firm
               or for arbitration for resolution of the remaining Differences,
               the determinations set forth in the Closing Balance Sheet, as
               adjusted for those Differences that the parties were able to
               resolve, shall be


               deemed to be dispositive.

          (c)  If either party shall request the Accounting Firm to resolve the
               unresolved Differences, both parties shall cooperate with the
               Accounting Firm and its representatives by providing access to
               all relevant Books and Records and access at reasonable times to
               personnel having relevant information. The Accounting Firm shall
               be requested to use all reasonable efforts to resolve such
               Differences in favor of the Parent in their entirety or in favor
               of the Acquiror in their entirety within twenty (20) Business
               Days after the matter is referred to it on the basis of the
               standards set forth in subsection (a) of this Section or as soon
               thereafter as possible. Upon completion of its task, the
               Accounting Firm shall notify each party of its determination of
               the matters subject to the Differences, which determination shall
               be conclusive. The fees and expenses of the Accounting Firm shall
               be borne 50% by the Parent and 50% by the Acquiror.

          (d)  If either party shall apply for arbitration to resolve the
               unresolved Differences, or if the Accounting Firm is unable to
               resolve the Differences, both parties shall cooperate with the
               arbitration tribunal and its representatives by providing access
               to all relevant Books and Records and access at reasonable times
               to personnel having relevant information. The arbitration
               tribunal shall be requested to use all reasonable efforts to
               resolve such Differences in favor of the Parent in their entirety
               or in favor of the Acquiror in their entirety within twenty (20)
               Business Days after the matter is referred to it on the basis of
               the standards set forth in subsection (a) of this Section or as
               soon thereafter as possible. The determination of the arbitration
               tribunal with respect to the Differences shall be conclusive.
               Unless differently awarded by the arbitration tribunal, the fees
               and expenses of arbitration shall be borne 50% by the Parent and
               50% by the Acquiror.

          (e)  The "Purchase Price Adjustment" shall mean an amount equal to the
               increase (positive) or decrease (negative) in the Net Equity of
               the Businesses from the Initial Balance Sheet Date to the Closing
               Date in accordance with Section 2.10, determined by comparing the
               amount of Net Equity as of the Initial Balance Sheet Date with
               the amount of Net Equity as of the Closing Date (based on the
               Closing Balance Sheet as finally determined pursuant to
               subsections (a) through (d) of this Section).

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       10

<PAGE>

          (f)  The result obtained by subtracting the Estimated Purchase Price
               Adjustment from the Purchase Price Adjustment is referred to as
               the "Post-Closing Payment Amount." The Post-Closing Payment
               Amount shall be paid by the Acquiror to the Parent if it is
               positive or by the Parent to the Acquiror if it is negative, in
               cash in United States Dollars, by wire transfer of immediately
               available funds to the wire transfer address of the Acquiror
               provided in written instructions to the Parent or to the wire
               transfer address of the Parent provided in written instructions
               to the Acquiror, as appropriate, on the third (3rd) Business Day
               following the date on which the procedures in this Section 2.09
               have been completed. The Post-Closing Payment Amount shall bear
               simple interest at the lowest interest rate applicable under the
               revolving credit agreement referred to in the Commitment Letter
               Term Sheets from the Closing Date to the date of such payment,
               inclusive.

          (g)  If, notwithstanding the representations and warranties set forth
               in subsection (a) of Section 5.05 herein, it shall be determined
               that the Initial Financial Statements were not in fact prepared
               in accordance with U.S. GAAP, the Closing Financial Statements
               prepared pursuant to subsection (a) of Section 2.09 need not be
               prepared consistently with the Initial Financial Statements to
               the extent and only to the extent that such Initial Financial
               Statements were not prepared in accordance with U.S. GAAP. If the
               Closing Financial Statements are not prepared consistently with
               the Initial Financial Statements pursuant to this subsection (g)
               of Section 2.09 and such inconsistency results in a decrease in
               the amount of the Purchase Price Adjustment, any indemnification
               to be paid by the Parent to the Acquiror with respect to any such
               breach of the representations and warranties in Section 5.05 that
               caused the Purchase Price Adjustment shall be reduced by the
               amount of such decrease.

          Section 2.10. Adjustments to Net Equity. In determining the Estimated
Purchase Price Adjustment and the Purchase Price Adjustment pursuant to Sections
2.08 and 2.09, the Net Equity reflected in the Initial Balance Sheet, the
Estimated Balance Sheet and the Closing Balance Sheet shall be adjusted as
follows:

          (a)  Solely for the purpose of determining Net Equity in calculating
               the Estimated Purchase Price Adjustment and the Purchase Price
               Adjustment, the Net Equity reflected in each of such Balance
               Sheets shall be adjusted to exclude the following assets and
               liabilities in order that these assets and liabilities shall have
               no effect on the Estimated Purchase Price Adjustment or the
               Purchase Price Adjustment: (i) The Highway 6 Real Property; (ii)
               the accumulated projected benefit obligation for the
               postretirement medical and life benefits; (iii) assets
               transferred in excess of liabilities assumed of the DICON defined
               benefit retirement plan (Plan No. 164); (iv) reserves for
               uninsured litigation; and (v) the self-insurance reserves for
               workers' compensation, general liability, product liability and
               automobile liability. For the purpose of clarity of
               identification of the foregoing items, the amounts reflected on,
               or missing from, the Initial Balance Sheet for each of the above
               listed items is as follows: (A) Real Property subject to the
               Highway 6 Deed: $12.4 million, (B) the

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       11

<PAGE>

               accumulated projected benefit obligation for the post-retirement
               medical and life benefits: $128.3 million, (C) assets transferred
               in excess of liabilities assumed of the DICON defined benefit
               retirement plan (Plan No. 164): $9.0 million, (D) reserves for
               uninsured litigation: $10 million, and (E) the self-insurance
               reserves, including case reserves and IBNR, for workers'
               compensation, general liability, product liability and automobile
               liability: $21.7 million.

          (b)  The Initial Balance Sheet includes an asset in the amount of
               $14,708,000 (fourteen million seven hundred and eight thousand
               dollars) representing the assets in excess of liabilities of the
               Dresser Canada Retirement Income Plan. This $14,708,000 asset is
               not an asset of a member of a Company Group and should not have
               been included in the Initial Financial Statements. In computing
               Net Equity at the Initial Balance Sheet Date, the Net Equity
               shall be reduced by $14,708,000, but this reduction shall not be
               made to the Net Equity to be determined as of either the
               Estimated Balance Sheet Date or the Closing Balance Sheet Date.
               The Parent shall not be entitled to make further adjustments to
               Net Equity reflected in the Initial Balance Sheet (other than
               those adjustments identified in this Agreement) after the date
               hereof. If it is determined by the Acquiror during the period
               from the date hereof to the date on which the Closing Balance
               Sheet is delivered to the Parent that any liabilities reflected
               in the Initial Balance Sheet are not liabilities of a member of a
               Company Group or that any assets of a member of a Company Group
               are not reflected in the Initial Balance Sheet, then the Net
               Equity determined by reference to the Initial Balance Sheet shall
               be increased to exclude such liabilities or to include such
               assets up to $14,780,000 in order that they shall have no effect
               on the Estimated Purchase Price Adjustment or the Purchase Price
               Adjustment.

          (c)  No adjustments will be recorded in the Estimated Balance Sheet or
               the Closing Balance Sheet related to the allocation of the
               purchase price in connection with the acquisition of NIMCO.

          (d)  Solely for the purpose of determining Net Equity in calculating
               the Estimated Purchase Price Adjustment and the Purchase Price
               Adjustment, cash and cash equivalents (net of the aggregate
               amount of (i) outstanding checks and overdrafts drawn on bank
               accounts of all members of the Company Groups and (ii) any notes
               payable by any member of either Company Group) ("Net Cash") shall
               be deemed to be $11.5 million on the Initial Balance Sheet
               notwithstanding the $23 million in Net Cash actually reflected in
               the Initial Balance Sheet. No adjustment shall be made to the
               actual Net Cash on the Estimated Balance Sheet or Closing Balance
               Sheet.

          (e)  To the extent that Net Cash reflected in the Estimated Balance
               Sheet or Closing Balance Sheet exceeds $11.5 million in
               compliance with Section 11.03 (f), such excess will contribute
               positively to any Purchase Price Adjustment calculation to the
               benefit of the Parent.

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       12

<PAGE>

          No other adjustments will be made to the Net Equity reflected in each
of the Initial Balance Sheet, the Estimated Balance Sheet or the Closing Balance
Sheet for the purpose of computing the Estimated Purchase Price Adjustments or
the Purchase Price Adjustment. Accordingly, any changes in the amounts of other
assets or liabilities reflected in the Estimated Balance Sheet or the Closing
Balance Sheet as compared with the Initial Balance Sheet will have an effect on
the Estimated Purchase Price Adjustment or the Purchase Price Adjustment or
both.

          Section 2.11. Allocation of Purchase Price Adjustment. The Purchase
Price Adjustment shall be allocated among Dresser Industries and the Seller in
accordance with the Allocation Procedures of Annex D. Dresser Industries and the
Seller shall be deemed to hold that portion of the Purchase Price Adjustment
that it has theretofore received in constructive trust pending allocation of the
entire Purchase Price Adjustment in accordance with such Allocation Procedures.
Upon completion of the allocation, Dresser Industries and the Seller shall make
such payments of cash in U.S. Dollars as shall be necessary to give effect to
the allocation and the Parent shall, promptly after completion of the
allocation, provide to the Acquiror a copy of the allocation, together with
evidence, reasonably satisfactory to the Acquiror, of such payments.

          Section 2.12. Amendments to Effect Recapitalization. The parties
acknowledge that certain amendments to the structure of the transactions
contemplated hereby may be necessary in order to record such transactions as a
Recapitalization for financial reporting purposes, as well as amendments to
provide for the adjustment of the Purchase Price to account for the retention of
equity by the Parent and the rollover of management equity, and the parties
shall cooperate in good faith to effect such amendments.

          Section 2.13. Delayed Purchases. Notwithstanding any provisions to the
contrary herein,

          (a)  If at the time of the First Closing any of the Category 2A
               Requirements applicable to the First Closing shall not have been
               satisfied, the Acquiror may elect, in its sole discretion, to
               delay the purchase of the Equity Securities of the DEGI Group
               member located in such jurisdiction in which such Category 2A
               Requirements shall not have been satisfied until such time as
               such requirements have been satisfied; provided that the Acquiror
               shall have given written notice to the Parent of such election no
               later than ten (10) Business Days prior to the Closing Date. In
               such event, (i) prior to the First Closing, the Parent shall (A),
               if the assets subject to delayed purchase have not theretofore
               been transferred to the DEGI Group, cause a Retained Subsidiary
               to retain such assets or, if the assets subject to delayed
               purchase have theretofore been transferred to the DEGI Group,
               cause the appropriate member of the DEGI Group to transfer such
               Equity Securities to a member of the Parent Group; (ii) the
               Preliminary Purchase Price and the Merger Consideration shall be
               reduced by the dollar amount allocated to such Equity Securities
               on Schedule 2.13 to the Parent's Disclosure Letter; (iii) for any
               determination of Net Equity, the transfer of such Equity
               Securities pursuant to this subsection (a) shall be disregarded;
               and (iv) at the First Closing, the Acquiror shall execute and
               deliver to the Parent a Purchase and Sale Agreement, in form and
               substance substantially similar to the form thereof attached
               hereto as Appendix IX.

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       13

<PAGE>

          (b)  If at the time of the Second Closing any of the Category 2A
               Requirements applicable to the Second Closing shall not have been
               satisfied, the Acquiror may elect, in its sole discretion, to
               delay the purchase of the Equity Securities of the BV Group
               member located in such jurisdiction in which such Category 2A
               Requirements shall not have been satisfied until such time as
               such requirements have been satisfied; provided that the Acquiror
               shall have given written notice to the Parent of such election no
               later than ten (10) Business Days prior to the Closing Date. In
               such event, (i) prior to the Second Closing, the Parent shall
               (A), if the assets subject to delayed purchase have not
               theretofore been transferred to the BV Group, cause a Retained
               Subsidiary to retain such assets or, if the assets subject to
               delayed purchase have theretofore been transferred to the BV
               Group, cause the appropriate member of the BV Group to transfer
               such Equity Securities to a member of the Parent Group; (ii) the
               Preliminary Purchase Price and the BV Consideration shall be
               reduced by the dollar amount allocated to such Equity Securities
               on Schedule 2.13 to the Parent's Disclosure Letter; (iii) for any
               determination of Net Equity, the transfer of such Equity
               Securities pursuant to this subsection (b) shall be disregarded;
               and (iv) at the Second Closing, the Acquiror shall execute and
               deliver to the Parent a Purchase and Sale Agreement, in form and
               substance substantially similar to the form thereof attached
               hereto as Appendix IX.

          (c)  If the Equity Securities of any member of the DEGI Group or the
               BV Group are subject to delayed purchase pursuant to subsection
               (a) or (b) of this Section 2.13 and the operations of such member
               are conducted in more than one jurisdiction, the Parent and the
               Acquiror shall cooperate in amending Annex B to preserve the
               assets of such member that are located in any jurisdiction other
               than the Category 2A Jurisdiction resulting in the delayed
               purchase.

          Section 2.14. Joint Ventures.

          (a)  If prior to the First Closing, a third Person has, with respect
               to its rights under any Contractual Transfer Restrictions
               relating to any DEGI Joint Venture, (i) (A) exercised a right to
               acquire the Equity Securities of the DEGI Joint Venture owned
               indirectly by DEGI (giving effect to the Reorganization), (B)
               failed to waive any such rights or (C) failed to provide a
               required consent and (ii) consummation of the transactions
               contemplated hereby would violate the terms of such Contractual
               Transfer Restriction, then (x) such DEGI Joint Venture shall be
               deemed not to be a member of the DEGI Group; (y) the Preliminary
               Purchase Price and the Merger Consideration shall be reduced by
               the dollar amount allocated to such DEGI Joint Venture on
               Schedule 2.14 to the Parent's Disclosure Letter; and (z) for any
               determination of Net Equity, such DEGI Joint Venture shall be
               disregarded.

          (b)  If prior to the Second Closing, a third Person has, with respect
               to its rights under any Contractual Transfer Restrictions
               relating to any BV Joint Venture, (i) (A) exercised a right to
               acquire the Equity Securities of the BV Joint Venture owned
               indirectly by a BV Company (giving effect to the Reorganization),
               (B) failed to waive any such

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       14

<PAGE>

               rights or (C) failed to provide a required consent and (ii)
               consummation of the transactions contemplated hereby would
               violate the terms of such Contractual Transfer Restriction, then
               (x) such BV Joint Venture shall be deemed not to be a member of
               the BV Group; (ii) the Preliminary Purchase Price and the BV
               Consideration shall be reduced by the dollar amount allocated to
               such BV Joint Venture on Schedule 2.14 to the Parent's Disclosure
               Letter; and (iii) for any determination of Net Equity, such BV
               Joint Venture shall be disregarded.

                                   ARTICLE III

           REPRESENTATIONS AND WARRANTIES REGARDING PARENT AND DRESSER
                                   INDUSTRIES

          Except as set forth in the Parent's Disclosure Letter and subject to
the limitations set forth in Section 12.01, the Parent represents and warrants
to the Acquiror that:

          Section 3.01. Organization and Qualification. The Parent is a
corporation duly organized, validly existing and in good standing under the Laws
of the State of Delaware, has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business as it is now
being conducted. The Parent is duly qualified to do business as a foreign
corporation and is in good standing (in those jurisdictions in which the concept
of good standing is applicable) in each jurisdiction in which the character of
the property owned or leased by it or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified or in good
standing could not reasonably be expected to affect materially and adversely the
Parent's ability to perform its obligations under this Agreement or any
Ancillary Agreement. Dresser Industries is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware, has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as it is now being conducted and is duly qualified
to do business as a foreign corporation and is in good standing (in those
jurisdictions in which the concept of good standing is applicable) in each
jurisdiction in which the character of the property owned or leased by it or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified or in good standing could not reasonably be expected
to affect materially and adversely the Parent's ability to cause Dresser
Industries to consummate the transactions contemplated under this Agreement or
any Ancillary Agreement.

          Section 3.02. Authorization of Agreement. The Parent has all requisite
corporate power and authority to execute and deliver this Agreement and each of
the Ancillary Agreements to which it will be a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by the Parent of this Agreement and each
of the Ancillary Agreements to which it will be a party and the performance by
the Parent of its obligations hereunder and thereunder have been duly and
validly authorized by all requisite corporate action on the part of the Parent.
No vote of, or consent by, the holders of any class or series of capital stock
or voting debt issued by the Parent is necessary to authorize the execution and
delivery by the Parent of this Agreement or any Ancillary Agreement to which it
will

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       15

<PAGE>

be a party or the performance by the Parent of its obligations hereunder or
thereunder. This Agreement has been, and each Ancillary Agreement to which the
Parent will be a party will at the First Closing have been, duly executed and
delivered by the Parent and (assuming due authorization, execution and delivery
hereof by the Acquiror and thereof by each other party thereto) constitutes or,
in the case of each such Ancillary Agreement, will at the First Closing
constitute the legal, valid and binding obligation of the Parent, enforceable
against the Parent in accordance with its terms, except as enforcement hereof or
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar Laws relating to or affecting the
enforcement of creditors' rights generally and legal principles of general
applicability governing the availability of equitable remedies (whether
considered in a proceeding in equity or at law or under applicable legal codes).

          Section 3.03. Approvals. Except for (a) such filings and approvals as
may be required under the HSR Act, (b) other Regulatory Transfer Restrictions
and (c) applicable Legal Requirements, if any, noncompliance with which, in the
case of clause (c), could not reasonably be expected, individually or in the
aggregate, to prevent the Parent from performing this Agreement or any Ancillary
Agreement to which it will be a party in all material respects or to have a
Material Adverse Effect on the Businesses, no filing or registration with, no
waiting period imposed by, and no Authorization of, any Court or Governmental
Authority is required under any Legal Requirement applicable to the Parent or
any of its Affiliates (excluding the Seller and the members of the Company
Groups) to permit the Parent to execute, deliver or perform this Agreement or
any Ancillary Agreement to which it will be a party or to permit the Parent to
consummate the transactions contemplated hereby or thereby.

          Section 3.04. No Violation. Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by, and receipt of all Authorizations of, any Court or Governmental
Authority indicated as required pursuant to Section 3.03, neither the execution
and delivery by the Parent of this Agreement or any Ancillary Agreement to which
it will be a party nor the performance by the Parent of its obligations
hereunder or thereunder will (a) violate or breach the terms of or cause a
default or give rise to rights under any Contractual Transfer Restrictions under
(i) any Legal Requirement applicable to the Parent or Dresser Industries, (ii)
the Organizational Documents of the Parent or Dresser Industries, or (iii) any
contract or agreement to which the Parent or Dresser Industries is a party or by
which the Parent or Dresser Industries or any of their properties or assets is
bound (including any provision thereof requiring any Third Person Consents) or
(b), with the passage of time, the giving of notice or the taking of any action
by a third Person, have any of the effects set forth in clause (a) of this
Section, except for any matters described in clauses (a)(i) and (a)(iii) of this
Section that could not reasonably be expected, individually or in the aggregate,
to prevent the Parent from performing this Agreement or any Ancillary Agreement
to which it will be a party in all material respects or to have a Material
Adverse Effect on the Businesses.

          Section 3.05. No Brokers. No broker, finder or investment banker
(other than Morgan Stanley Dean Witter Incorporated) is entitled to any
brokerage, finder's or investment banking fee or commission in connection with
the transactions contemplated by this Agreement based upon

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       16

<PAGE>

arrangements made by or on behalf of the Parent or its Affiliates. All fees and
expenses of the Parent and its Affiliates incurred pursuant to the engagement of
Morgan Stanley Dean Witter Incorporated will be discharged by the Parent.

          Section 3.06. Title to Securities. Dresser Industries has, or after
giving effect to the Reorganization will have, directly or indirectly, good
title to the Equity Securities of each member of the DEGI Group indicated as
owned, directly or indirectly, by DEGI on Schedule 5.03(a) to the Parent's
Disclosure Letter, free and clear of any Liens, and there are no contracts,
agreements, commitments or arrangements of the Parent or any of its Subsidiaries
obligating Dresser Industries (other than pursuant to this Agreement and the
Reorganization) to sell or to offer to sell any Equity Securities of any such
member of the DEGI Group or to purchase or acquire, or to offer to purchase or
acquire, any outstanding Equity Securities of any such member of the DEGI Group.
Upon consummation of the transactions contemplated hereby, the Acquiror will
acquire good title to such Equity Securities to be acquired by Acquiror
hereunder directly or indirectly, free and clear of any such Liens (other than
any created by the Acquiror).

                                   ARTICLE IV

               REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER

          Except as set forth in the Parent's Disclosure Letter and subject to
the limitations set forth in Section 12.01, the Parent and the Seller, jointly
and severally, represent and warrant to the Acquiror that:

          Section 4.01. Organization. The Seller is a legal entity duly
organized, validly existing and in good standing under the Laws of its
jurisdiction of incorporation or organization and has all requisite
organizational power and authority to own, lease and operate its properties and
to carry on its business as it is now being conducted. The Seller is duly
qualified to do business as a foreign corporation and is in good standing (in
those jurisdictions in which the concept of good standing is applicable) in each
jurisdiction in which the character of the property owned or leased by it or the
nature of its activities makes such qualification necessary in order for the
Seller to perform this Agreement and any Ancillary Agreement to which it is a
party in all material respects.

          Section 4.02. Authorization of Agreement. The Seller has all requisite
organizational power and authority to execute and deliver this Agreement and
each Ancillary Agreement to which it will be a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby.
The execution and delivery by the Seller of this Agreement and each Ancillary
Agreement to which it will be a party and the performance by the Seller of its
obligations hereunder and thereunder have been duly and validly authorized by
all requisite organizational action on the part of the Seller and, to the extent
required by Law, Regulation or the Seller's Organizational Documents, by the
holder of the Seller's Equity Securities. This Agreement has been, and any
Ancillary Agreement to which it will be a party will at the Second Closing have
been, duly executed and delivered by the Seller and (assuming due authorization,
execution and delivery hereof by the Acquiror and of any Ancillary Agreement by
each Buyer) constitutes or, in the case

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       17

<PAGE>

of any such Ancillary Agreement, will at the Second Closing constitute the
legal, valid and binding obligation of the Seller, enforceable against the
Seller in accordance with its terms, except as enforcement hereof or thereof may
be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar Laws relating to or affecting the enforcement of
creditors' rights generally and legal principles of general applicability
governing the availability of equitable remedies (whether considered in a
proceeding in equity or at law or under applicable legal codes).

          Section 4.03. Approvals. Except for (a) such filings and approvals as
may be required under the HSR Act, (b) other Regulatory Transfer Restrictions
and (c) applicable Legal Requirements, if any, noncompliance with which, in the
case of clause (c), could not reasonably be expected, individually or in the
aggregate, to prevent the Seller from performing this Agreement or any Ancillary
Agreement to which it will be a party in all material respects or to have a
Material Adverse Effect on the Businesses, no filing or registration with, no
waiting period imposed by, and no Authorization of, any Court or Governmental
Authority is required under any Legal Requirement applicable to the Seller to
permit the Seller to execute, deliver or perform this Agreement or any Ancillary
Agreement to which it will be a party or to consummate the transactions
contemplated hereby.

          Section 4.04. No Violation. Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by, and receipt of all Authorizations of, any Court or Governmental
Authority indicated as required pursuant to Section 4.03, neither the execution
and delivery by the Seller of this Agreement or any Ancillary Agreement to which
it will be a party nor the performance by the Seller of its obligations
hereunder or thereunder will (a) violate or breach the terms of or cause a
default or give rise to any rights under (i) any Legal Requirement applicable to
the Seller, or (ii) the Organizational Documents of the Seller, or (iii) any
contract or agreement to which such Seller is a party or by which it or any of
its properties or assets is bound (including any provisions thereof requiring
any Third Person Consents) or (b), with the passage of time, the giving of
notice or the taking of any action by a third Person, have any of the effects
set forth in clause (a) of this Section, except in any such case for any matters
described in clauses (a)(i) and (a)(iii) of this Section that could not
reasonably be expected, individually or in the aggregate, to prevent the Seller
from performing this Agreement or any Ancillary Agreement to which it will be a
party in all material respects or to have a Material Adverse Effect on the
Businesses.

          Section 4.05. Title to Securities. The Seller has, or after giving
effect to the Reorganization will have, good title to the Equity Securities of
each BV Company to be sold by the Seller hereunder as provided on Annex C, free
and clear of any Liens, and there are no contracts, agreements, commitments or
arrangements of any Person obligating the Seller (other than pursuant to this
Agreement and the Reorganization) to sell or to offer to sell any Equity
Securities of any such BV Company or to purchase or acquire, or to offer to
purchase or acquire, any outstanding Equity Securities of any such BV Company.
Upon consummation of the transactions contemplated hereby, each Buyer will
acquire good title to the Securities to be purchased by such Buyer hereunder as

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       18

<PAGE>

provided on Annex B, free and clear of any such Liens (other than any created by
the Acquiror or such Buyer).

                                    ARTICLE V

                    REPRESENTATIONS AND WARRANTIES REGARDING
                          MEMBERS OF THE COMPANY GROUPS

          Except for the representations and warranties set forth in Sections
5.01, 5.02, and 5.03, to the extent that any of the representations and
warranties set forth in this Article V is made with respect to any member of a
Company Group that is a Non-Controlled Entity, the representation and warranty
is qualified as being given only to the Knowledge of the Parent. Each of the
representations and warranties contained in this Article V, other than those
made in subsection (b) of Section 5.02 but including those that are made only as
of the date hereof, gives effect to the Reorganization as if the Reorganization
had been effected on the date of this Agreement. Subject to the preceding
provisions of this Article V, to the matters set forth in the Parent's
Disclosure Letter and to the limitations set forth in Section 12.01, the Parent
and the Seller, jointly and severally, represent and warrant to the Acquiror
that:

          Section 5.01. Organization; Subsidiaries.

          (a)  Each member of each Company Group is a legal entity duly
               organized, validly existing and in good standing (in those
               jurisdictions in which the concept of good standing is
               applicable) under the Laws of its jurisdiction of incorporation
               or organization and has all requisite organizational power and
               authority to own, lease and operate its properties and to carry
               on its business as it is now being conducted, other than any
               matters that could not reasonably be expected, individually or in
               the aggregate, to have a Material Adverse Effect on the
               Businesses. Each member of each Company Group is duly qualified
               to do business as a foreign corporation or entity and is in good
               standing (in those jurisdictions in which the concept of good
               standing is applicable) in each jurisdiction in which the
               character of the property owned or leased by it or the nature of
               its activities makes such qualification necessary, except where
               any such failure to be so qualified or in good standing, could
               not reasonably be expected, individually or in the aggregate, to
               result in a Material Adverse Effect on the Businesses. Schedule
               5.01 of the Parent's Disclosure Letter sets forth a true and
               complete list, as of the date of this Agreement, of the members
               of each Company Group, together with (a) a specification of the
               nature of the legal organization of each such entity, (b) the
               jurisdiction of incorporation or other organization of each such
               entity, (c) the magnitude (expressed as a percentage of the
               aggregate ordinary voting power of all outstanding Equity
               Securities of such legal entity) of the direct or indirect equity
               investment of the Parent (and, if different, the economic
               interest) in each such entity and (d) the identity of the
               Business to be conducted by each member of each Company Group
               after giving effect to the Reorganization.

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       19

<PAGE>

          (b)  To the extent that any member of a Company Group constitutes a
               "Shelf Entity" in accordance with subsection (c) of Section 2.05,
               such Shelf Entity, immediately prior to the time it became a
               member of a Company Group (i) was not a party to, and had no
               liability or obligation under, any executory contract or
               agreement, whether written or oral, and (ii) had no assets or
               other liabilities or obligations (whether accrued, absolute or
               otherwise).

          Section 5.02. Organizational Documents; Authorization; No Violation.

          (a)  The Parent has heretofore made available to the Acquiror complete
               and correct copies of the Organizational Documents, in each case
               as amended or restated to the date hereof, of each member of each
               Company Group. None of the members of either Company Group is in
               violation of any of the provisions of its Organizational
               Documents, except for any such violations that could not
               reasonably be expected, individually or in the aggregate, to have
               a Material Adverse Effect on the Businesses.

          (b)  At the time of the Reorganization, each member of each Company
               Group will, to the extent required, have all requisite
               organizational power and authority to consummate the
               Reorganization and the other transactions contemplated to be
               consummated by it by this Agreement, and the consummation of the
               Reorganization and such other transactions will have been, to the
               extent required, duly and validly authorized by all requisite
               company action on the part of each such entity.

          (c)  The consummation of the Reorganization and the other transactions
               contemplated by this Agreement will not (i) violate or breach the
               terms of or cause a default or give rise to rights under any
               Contractual Transfer Restrictions under (A) any Legal Requirement
               applicable to any member of either Company Group, (B) the
               Organizational Documents of any member of either Company Group or
               (C) any contract or agreement to which any member of either
               Company Group is a party or by which it or its properties or
               assets are bound (including any provision thereof requiring any
               Third Person Consent) or (ii), with the passage of time, the
               giving of notice or the taking of any action by a third Person,
               have any of the effects set forth in clause (i) of this
               subsection (c), except for any matters described in clauses (A)
               and (C) of clause (i) of this subsection (c) that could not
               reasonably be expected, individually or in the aggregate, to
               prevent any member of either Company Group from consummating the
               Reorganization or the other transactions contemplated by this
               Agreement in all material respects or to have a Material Adverse
               Effect on the Businesses.

          Section 5.03. Capitalization.

          (a)  The authorized Equity Securities of each member of each Company
               Group, the total outstanding Equity Securities of each such
               Company Group member and the name of the record holders of all
               the outstanding Equity Securities of each such Company

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       20

<PAGE>

               Group member, in each case as of the date of this Agreement, are
               as set forth in Schedule 5.03(a) of the Parent's Disclosure
               Letter.

          (b)  No Equity Securities of any member of either Company Group are
               reserved for issuance, and there are no outstanding options,
               warrants, calls, pre-emptive rights, subscriptions or other
               rights, contracts, agreements, commitments or arrangements
               obligating any such Company Group member to offer, sell, issue or
               grant any of its Equity Securities or to redeem, purchase or
               acquire, or offer to purchase or acquire, any of its outstanding
               Equity Securities.

          (c)  Except as required by this Agreement and the Reorganization,
               there are no options, warrants, calls, pre-emptive rights,
               subscriptions or other rights, contracts, agreements, commitments
               or arrangements obligating any such Company Group member (A) to
               offer, sell, issue, grant, pledge, dispose of or encumber any
               Equity Securities of any other Company Group member or (B) to
               purchase or acquire, or offer to purchase or acquire, any
               outstanding Equity Securities of any other Company Group member
               or (C) to grant any Lien on any outstanding Equity Securities of
               any other Company Group member.

          (d)  All the issued and outstanding Equity Securities of each member
               of each Company Group that are owned directly or indirectly by
               the Parent have been duly authorized and are validly issued and,
               with respect to capital stock, are fully paid and nonassessable.
               All such issued and outstanding Equity Securities that are owned
               directly or indirectly by the Parent are owned free and clear of
               all Liens.

          (e)  Except for matters contemplated by this Agreement or the
               Ancillary Agreements and for revocable proxies, if any, granted
               by any member of either Company Group with respect to the capital
               stock of another Company Group member, there are no voting
               trusts, proxies or other agreements, commitments or
               understandings of any character to which any member of either
               Company Group is a party or by which it is bound with respect to
               the voting of any Equity Securities of any Company Group member.

          Section 5.04. Title to Properties.

          (a)  Schedule 5.04(a)(i) sets forth all of the Real Property owned by
               any member of either Company Group and Schedule 5.04(a)(ii) sets
               forth all of the Real Property leased by any member of either
               Company Group other than any such leased Real Property that is
               not individually or in the aggregate Material to the Businesses.
               The appropriate member of each Company Group has (i) good and
               marketable title to all of the Real Property marked as
               "designated" (the "Designated Real Property") on Schedule
               5.04(a)(i) to the Parent's Disclosure Letter and (ii) good and
               defensible title to the other properties reflected in the Initial
               Financial Statements (other than, in the case of this clause
               (ii), (A) any properties sold or otherwise disposed of in the
               ordinary course of business since the Initial Balance Sheet Date,
               and (B) any

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       21

<PAGE>

               properties that are not material to the Businesses) free and
               clear of Liens, other than (X) Liens securing debt, the existence
               of which is reflected in the Initial Financial Statements, (Y)
               Permitted Encumbrances and (Z) Liens that are not, individually
               or in the aggregate, Material to the Businesses. The appropriate
               member of each Company Group holds under valid lease agreements
               (i) all Material Real Property reflected in Schedule 5.04(a)(ii)
               to the Parent's Disclosure Letter and (ii) all other properties
               reflected in the Initial Financial Statements as being held under
               capitalized leases or operating leases and enjoys peaceful and
               undisturbed possession of such properties under such leases,
               other than, in the case of clause (ii), (A) any properties as to
               which such leases have terminated in the ordinary course of
               business since the Initial Balance Sheet Date without any
               liability of such Company Group member party thereto that is
               Material to the Businesses and (B) any properties that are not,
               individually or in the aggregate, Material to the Businesses.
               Each such lease is valid and enforceable against the Company
               Group member party thereto and, to the Knowledge of the Parent,
               each other party thereto, in accordance with its terms and there
               is not under any such lease any existing default by the Company
               Group member party thereto or, to the Knowledge of the Parent,
               any other party thereto, or any condition, event or act which,
               with notice or lapse of time or action of a third Person, would
               constitute such a default, except in each case for matters that
               could not reasonably be expected, individually or in the
               aggregate, to have a Material Adverse Effect on the Businesses.
               Neither the Parent, the Seller nor any Company Group member has
               received any written notification of any adverse claim to the
               title to any properties owned by such Company Group member or
               with respect to any lease under which any properties are held by
               it, other than any claims that could not reasonably be expected,
               individually or in the aggregate, to have a Material Adverse
               Effect on the Businesses.

          (b)  Schedule 5.04(b) to the Parent's Disclosure Letter sets forth, as
               of the date hereof, to the extent material to a Business, all
               Intellectual Property owned by or registered in the name of any
               member of either Company Group or in which any such entity has
               any rights including the name of the Company Group member in
               whose name such Intellectual Property is registered or which has
               such rights and the Business to which such Intellectual Property
               relates. Except as could not reasonably be expected to have a
               Material Adverse Effect on the Businesses, as of the date hereof
               the members of the Company Groups own, or have the valid right to
               use, all of the Intellectual Property. Except as could not
               reasonably be expected to have a Material Adverse Effect on the
               Businesses, after giving effect to the Reorganization, the
               members of the Company Groups which conduct each Business will
               own, or have the valid right to use, all of the Intellectual
               Property used in such Business.

          Section 5.05. Financial Statements.

          (a)  The Initial Financial Statements (i) are attached as Schedule
               5.05 to the Parent's Disclosure Letter, (ii) have been prepared
               in accordance with U.S. GAAP

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       22

<PAGE>

               consistently applied, (iii) fairly present the combined financial
               position of the Businesses as of the respective dates thereof and
               the combined results of operations of the Businesses for the
               periods indicated and (iv) reflect all material "loss
               contingencies" as determined under Statement of Financial
               Accounting Standards No. 5 other than those for which, at the
               time of preparation of the Initial Financial Statements, the
               members of the Parent Group were expected to be responsible after
               giving effect to the transactions contemplated hereby.

          (b)  There exist no liabilities, obligations or commitments, whether
               direct or indirect, absolute or contingent, of the members of
               either Company Group that are Material to the Businesses and that
               would be required to be reflected or reserved for under U.S. GAAP
               in an historical combined balance sheet of the members of the
               Company Groups, other than (i) liabilities or obligations that
               are reflected or reserved for in the Initial Financial
               Statements, (ii) liabilities or obligations excluded from the
               Initial Financial Statements as described in note 2 to such
               Initial Financial Statements, (iii) liabilities or obligations
               incurred in the ordinary course of business of the Businesses
               since the Initial Balance Sheet Date and (iv) liabilities or
               obligations incurred since the Initial Balance Sheet Date of the
               nature of liabilities that may be incurred after the date of this
               Agreement pursuant to subsection (b) of Section 8.02. None of the
               liabilities described in clauses (iii) and (iv) of the preceding
               sentence has or could reasonably be expected to have,
               individually or in the aggregate, a Material Adverse Effect on
               the Businesses.

          (c)  The books, records and accounts of the members of the Company
               Groups, in reasonable detail, accurately and fairly reflect in
               the aggregate the transactions and dispositions of the assets of
               the Businesses. No member of either Company Group has engaged in
               any Material transaction, maintained any Material bank account or
               used any Material corporate funds except for transactions, bank
               accounts and funds that have been and are reflected in the
               normally maintained Books and Records of such member of either
               Company Group.

          (d)  The notes to the Initial Financial Statements fairly reflect in
               all material respects all transactions between or among any
               member of either Company Group and any Affiliate thereof (other
               than transactions solely between or among the members of the
               Company Groups).

          Section 5.06. Authorizations. Each member of each Company Group has
obtained all Authorizations that are necessary to carry on the Business related
thereto as currently conducted, except for any such Authorizations that its
failure to possess, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect on the Businesses. Each such
Authorization (i) is in full force and effect, (ii) has not been violated in any
respect and (iii) is not subject to any suspension, revocation or cancellation,
other than for matters, in any such case, that could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on the
Businesses. There is no action, proceeding or investigation pending or, to the
Knowledge of the Parent, threatened regarding suspension, revocation or
cancellation of any of such Authorizations, except in any circumstances in which
the suspension, revocation or cancellation of such

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       23

<PAGE>

Authorizations could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect on the Businesses.

          Section 5.07. Compliance With Laws; Regulation of Businesses. Each
member of each Company Group is and, to the extent that any noncompliance could
reasonably be expected to have current consequences, has been in compliance with
all applicable Laws and Regulations and any Orders applicable to any such
entity, other than Environmental Laws and, to the extent applicable to the
execution, delivery and performance of this Agreement, foreign competition Laws
and except such events of noncompliance or defaults that, individually or, with
respect to multiple events of noncompliance or defaults arising out of the same
facts or circumstances, in the aggregate, could not reasonably be expected to
have a Material Adverse Effect on the Businesses. To the Knowledge of the
Parent, each member of each Company Group has at all times been in compliance
with, and continues to comply with, the Foreign Corrupt Practices Act of 1977,
as amended.

          Section 5.08. Taxes. Except for any matter that could not reasonably
be expected, individually or in the aggregate, to have a Material Adverse Effect
on the Businesses:

          (a)  (i) all Tax Returns that were required to be filed by or with
               respect to any member of a Company Group, or any member of the
               Parent Group insofar as it affects any member of a Company Group,
               have been duly and timely filed, (ii) all items of income, gain,
               loss, deduction and credit or other items ("Tax Items") required
               to be included in each such Tax Return have been so included and
               all such Tax Items and any other information provided in each
               such Tax Return are true, correct and complete insofar as such
               items are related to or affect a member of a Company Group, (iii)
               all Taxes shown as due on each such Tax Return have been timely
               paid in full insofar as such Taxes are related to or affect a
               member of a Company Group, (iv) insofar as such items are related
               to or affect a member of a Company Group, no penalty, interest or
               other charge is or will become due with respect to the late
               filing of any such Tax Return or late payment of any such Tax and
               (v) all Tax withholding and deposit requirements imposed on or
               with respect to any member of a Company Group, or any member of
               the Parent Group insofar as it affects any member of a Company
               Group, have been satisfied in full in all respects;

          (b)  no member of a Company Group (or the Parent Group insofar as it
               affects any member of a Company Group) has in force any waiver of
               any statute of limitations in respect of Taxes or any extension
               of time with respect to a Tax assessment or deficiency;

          (c)  there are no pending Tax audits or examinations and no proposed
               deficiencies or other claims for unpaid Taxes of any member of a
               Company Group for which written notice has been received;

                               HALLIBURTON COMPANY
                     AGREEMENT AND PLAN OF RECAPITALIZATION

                                       24

<PAGE>

          (d)  Schedule 5.08(d) to the Parent's Disclosure Letter contains a
               list as of the date hereof of (i) all tax allocation or sharing
               agreements to which any member of either Company Group is a party
               and (ii) each member of a Company Group that has any liability
               for the Taxes of any other Person (other than members of its
               respective Company Group) under United States Treasury Regulation
               section 1.1502-6 (or any similar provision of state, local or
               foreign law);

          (e)  the aggregate unpaid Taxes of all members of the Company Groups
               (computed with respect to each such member on the basis of the
               income, operations and activities of such member through the
               Closing Date as if the applicable taxable year of such member
               ended on the Closing Date) did not, as of the date of the
               Closing, exceed the amounts reserved for Tax liability (as
               distinguished from any reserve for deferred taxes established to
               reflect timing differences between book and tax income) in the
               reserve for Taxes set forth on the face of (rather than in any
               notes to) the Closing Financial Statements;

          (f)  none of the assets of any member of any Company Group is property
               required to be treated as being owned by any other Person
               pursuant to the "safe harbor lease" provisions of former Section
               168(f)(8) of the Code;

          (g)  none of the assets of any member of any Company Group directly or
               indirectly secures any debt the interest on which is tax-exempt
               under Section 103(a) of the Code;

          (h)  none of the assets of any member of any Company Group is
               "tax-exempt use property" within the meaning of Section 168(h) of
               the Code;

          (i)  each member of each Company Group that is not a corporation is
               properly classified for United States federal income tax purposes
               as a partnership or a disregarded entity, and not as an
               association or publicly traded partnership taxable

</TEXT>
</DOCUMENT>
