<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 20, 1999
DAILEY INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 001-11963 76-0503351
- --------------------------------------------------------------------------------------------------------------------------
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)
2507 North Frazier
Conroe, Texas 77303
- --------------------------------------------------------------------------------------------------------------------------
(Address of principal (Zip Code)
executive offices
</TABLE>
Registrant's telephone number, including area code: (281) 350-3399
1
<PAGE> 2
Item 3. Bankruptcy or Receivership
On August 20, 1999, the United States Bankruptcy Court for the
District of Delaware (the "Bankruptcy Court") entered an order (the
"Confirmation Order") confirming the Second Amended Joint Plan of
Reorganization (the "Plan") for Dailey International, Inc. (the "Company") and
certain of its subsidiaries ("Debtor Subsidiaries"). The effective date of the
Plan is August 31, 1999 (the "Effective Date"). A copy of each of the Plan and
the Confirmation Order is filed herewith.
The Plan in its original form had been filed by the Company and the
Debtor Subsidiaries on May 28, 1999 along with petitions for relief under
Chapter 11 of the Bankruptcy Code, pursuant to the terms of the Acquisition
Agreement between the Company and Weatherford International, Inc.
("Weatherford") dated May 21, 1999. The Acquisition Agreement and the Plan had
contemplated, among other things, that the Company's outstanding $275 million
9 1/2% Senior Notes due 2008 indebtedness (the "Senior Notes") would be
exchanged pro rata for $185 million in market value (as defined in the Plan) of
Weatherford common stock and that all outstanding shares of common stock of the
Company would be exchanged for $10 million in market value (as defined in the
Plan) of Weatherford common stock. On August 31, 1999, the transactions
contemplated under the Acquisition Agreement were consummated, whereupon the
Company became a wholly-owned subsidiary of Weatherford.
The following is a general summary of the material features of the
Plan. The following summary is qualified in its entirety by the Plan and the
Confirmation Order.
Shortly after the petitions were filed, the Company and the Debtor
Subsidiaries obtained an order of the Bankruptcy Court to pay their creditors
all pre-petition claims and debts in the ordinary course of business, except
for the holders of the Senior Notes. The Plan also provides that
administrative and priority claims will be paid in full in cash.
On the Effective Date, $185 million (determined as set forth in the
Plan) in shares of Weatherford common stock were issued for distribution, pro
rata, to the holders of Senior Notes in full and final satisfaction of all
unpaid principal, interest and other claims owed under, or on account of, the
Senior Notes. The number of shares of Weatherford common stock issued in
respect of the Senior Note claims was approximately 5,212,185, including
approximately 1,226,285 shares to be received by Weatherford in its capacity as
a Senior Noteholder, which shares shall be retained by Weatherford as treasury
shares. As provided in the Plan, that number of shares was determined based on
a price per share of $35.49375, which was the average closing sales price of
Weatherford shares as reported on the New York Stock Exchange for the 10
consecutive trading days prior to the Effective Date. Any fractional shares of
Weatherford common stock that would otherwise be issued shall instead be paid in
cash on the basis of the $35.49375 average closing price.
2
<PAGE> 3
In addition, on the Effective Date, Weatherford delivered to American
Stock Transfer Co., as disbursing agent, $10 million (determined as set forth in
the Plan) in shares of Weatherford common stock in respect of the Company's
Class A and Class B Common Stock interests. The number of shares of Weatherford
common stock issued in respect of the common stock interests was approximately
281,470, based upon the average price per share of $35.49375, determined in the
manner as set forth above. Any fractional shares of Weatherford common stock
that would otherwise be issued shall instead be paid in cash on the basis of the
$35.49375 average closing price. On and following the Effective Date, the
disbursing agent will have responsibility for disbursing the Weatherford common
stock to persons who were holders of the Company's common stock in full and
final satisfaction of such interests.
As a condition to receiving shares of Weatherford common stock being
distributed under the Plan, the holders of the Senior Note claims are required
to surrender their Senior Notes to the Indenture Trustee. Weatherford was
deemed to have surrendered the Senior Notes it owned to the Company as a
capital contribution. Any holder of a Senior Note who has not surrendered or
been deemed to have surrendered its Senior Note within two years after the
Effective Date shall have its claim as a holder of Senior Notes disallowed,
shall receive no distribution on account of its claim as a holder of Senior
Notes, and shall be forever barred from asserting any claim on account of its
Senior Notes. As of the Effective Date, Senior Notes represent only the right
to participate in the distributions provided in the Plan with respect to the
Senior Note claims.
In addition, the holders of Company common stock will be required to
surrender their shares of Company common stock to the disbursing agent pursuant
to the Plan. Any holder of Company common stock that has not surrendered or
been deemed to have surrendered its Company common stock within two years after
the effective date of the Plan shall have its interest as a holder of Company
common stock disallowed, shall receive no distribution on account of its
interest as a holder of Company common stock, and shall be forever barred from
asserting any claim or interest on account of its Company common stock. As of
the Effective Date, all shares of the Company's Class A and Class B Common
Stock represent only the right to participate in the distributions provided in
the Plan with respect to the Company common stock interests.
On the Effective Date, the instruments evidencing any other interests
in the Company (including Company stock options) were deemed surrendered and
canceled. All rights of holders of such interests were deemed forever
extinguished as of the Effective Date.
3
<PAGE> 4
As noted above, the consummation of the transactions set forth in the
Acquisition Agreement and the Plan resulted in Weatherford's being the sole
owner of all of the common stock of the Company, as reorganized. In connection
with such acquisition, on the Effective Date, pursuant to the Confirmation
Order and without any further action by the stockholders or directors of the
Company, the reorganized Company issued 1,000 shares of newly-authorized Common
Stock, $1.00 par value, of the reorganized Company to Weatherford and filed
with the Secretary of State of Delaware an Amendment to its Certificate of
Incorporation, which conformed to the provisions of the Plan and prohibits the
issuance of non-voting equity securities. On the Effective Date, the officers
and directors of the Company and its subsidiaries resigned or were removed from
office pursuant to the Confirmation Order, and the reorganized Company and its
subsidiaries installed new officers and directors.
As of August 31, 1999, there were 5,081,704 shares of the Company's
Class A Common Stock and 5,000,000 shares of the Company's Class B Common Stock,
par value $.01 per share, outstanding. As described above, on the Effective
Date pursuant to the Plan, (i) all of the Company's outstanding Senior Notes
were deemed canceled, and the holders thereof (excluding Weatherford) will be
entitled to receive in exchange, in the aggregate, approximately 3,985,900
shares of the common stock of Weatherford, (ii) Weatherford will contribute its
Senior Notes to the reorganized Company as a capital contribution and will
receive 1,226,285 shares of Weatherford common stock to be retained as treasury
shares, (iii) all of the issued and outstanding shares of the Company's Class A
and Class B Common Stock will be canceled, and the holders thereof will be
entitled to receive in exchange, in the aggregate, approximately 281,740 shares
of Weatherford common stock, and (iv) the reorganized Company issued 1,000
shares of its newly-authorized Common Stock, $1.00 par value, to Weatherford.
Any fractional shares of Weatherford common stock that would otherwise be issued
shall instead be paid in cash on the basis of the $35.49375 average closing
price.
Financial information regarding the assets and liabilities of the
Company, is set forth in the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1999, which is specifically incorporated into this Form
8-K by reference. For a further description of the proposed acquisition and
restructuring, see the Second Amended Joint Plan of Reorganization filed as
Exhibit 2.1 hereto, the Confirmation Order filed as Exhibit 2.2 hereto, and the
Acquisition Agreement filed as Exhibit 2.2 to the Company's Current Report on
Form 8-K as filed with the Securities and Exchange Commission on June 1, 1999.
4
<PAGE> 5
Item 7. Exhibits
(c) Exhibits.
*2.1 Second Amended Joint Plan of Reorganization of Dailey
International Inc., Dailey Energy Services, Inc.,
Dailey International Sales Corp., Colombia Petroleum
Services Corp., International Petroleum Services,
Inc., Dailey Environmental Remediation Technologies,
Inc., Dailey Worldwide Services Corp., Air Drilling
International, Inc. and Air Drilling Services, Inc.,
under Chapter 11 of the Bankruptcy Code.
*2.2 Order of the United States Bankruptcy Court for the
District of Delaware confirming the Second Amended
Joint Plan of Reorganization, dated August 19, 1999.
*3.1 Certificate of Amendment of Restated Certificate of
Incorporation of Dailey International, Inc., as filed
with the Office of the Secretary of State of Delaware
on August 31, 1999.
*99.1 Press Release, dated August 19, 1999, announcing the
confirmation of the Second Amended Joint Plan of
Reorganization by the United States Bankruptcy Court
for the District of Delaware.
*99.2 Press Release, dated August 31, 1999, announcing
effectiveness of the Second Amended Joint Plan of
Reorganization.
**99.3 Dailey International Inc. Quarterly Report on Form
10-Q for the quarter ended June 30, 1999, which
exhibit is incorporated herein by reference.
- ------------------------
* Filed herewith.
** Previously Filed.
5
<PAGE> 6
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
DAILEY INTERNATIONAL INC.
By:/s/ WILLIAM D. SUTTON
---------------------------------------
William D. Sutton
Senior Vice President, General
Counsel and Secretary
Dated: August 31, 1999
<PAGE> 7
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
*2.1 Second Amended Joint Plan of Reorganization of Dailey
International Inc., Dailey Energy Services, Inc.,
Dailey International Sales Corp., Colombia Petroleum
Services Corp., International Petroleum Services,
Inc., Dailey Environmental Remediation Technologies,
Inc., Dailey Worldwide Services Corp., Air Drilling
International, Inc. and Air Drilling Services, Inc.,
under Chapter 11 of the Bankruptcy Code.
*2.2 Order of the United States Bankruptcy Court for the
District of Delaware confirming the Second Amended
Joint Plan of Reorganization, dated August 19, 1999.
*3.1 Certificate of Amendment of Restated Certificate of
Incorporation of Dailey International, Inc., as filed
with the Office of the Secretary of State of Delaware
on August 31, 1999.
*99.1 Press Release, dated August 19, 1999, announcing the
confirmation of the Second Amended Joint Plan of
Reorganization by the United States Bankruptcy Court
for the District of Delaware.
*99.2 Press Release, dated August 31, 1999, announcing
effectiveness of the Second Amended Joint Plan of
Reorganization.
**99.3 Dailey International Inc. Quarterly Report on Form
10-Q for the quarter ended June 30, 1999, which
exhibit is incorporated herein by reference.
- ---------------------------
* Filed herewith.
** Previously Filed.
<PAGE> 1
EXHIBIT 2.1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
IN RE: ) Chapter 11
)
DAILEY INTERNATIONAL INC.; )
DAILEY ENERGY SERVICES, INC.; )
DAILEY INTERNATIONAL SALES CORP.; )
COLOMBIA PETROLEUM SERVICES CORP.; )
INTERNATIONAL PETROLEUM ) CASE NO. 99-1233 (PJW)
SERVICES, INC.; DAILEY ENVIRONMENTAL )
REMEDIATION TECHNOLOGIES, INC.; )
DAILEY WORLDWIDE SERVICES CORP.; )
AIR DRILLING INTERNATIONAL, INC.; and )
AIR DRILLING SERVICES, INC., )
)
Debtors. Jointly Administered
---------------------------------------------
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
---------------------------------------------
Dated: July 12, 1999
HAYNES AND BOONE, LLP YOUNG, CONAWAY, STARGATT & TAYLOR
ROBERT D. ALBERGOTTI LAURA DAVIS JONES (NO. 2436)
JUDITH ELKIN MICHAEL NESTOR (NO. 3526)
STEPHEN M. PEZANOSKY 11TH FLOOR, RODNEY SQUARE NORTH
901 MAIN STREET, SUITE 3100 P. O. BOX 391
DALLAS, TEXAS 75201-3714 WILMINGTON, DELAWARE 19899-0391
TELEPHONE: (214) 651-5000 TELEPHONE: (302) 571-6600
TELECOPY: (214) 651-5940 TELECOPY: (302) 571-1253
CO-COUNSEL TO THE DEBTORS AND THE DEBTORS-IN-POSSESSION
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
<PAGE> 2
TABLE OF CONTENTS
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION.........................................................Page 1
ARTICLE I ..................................................................................................Page 2
DEFINITIONS.........................................................................................Page 2
ARTICLE II ................................................................................................Page 10
DESIGNATION OF CLAIMS AND INTERESTS ..............................................................Page 10
ARTICLE III ...............................................................................................Page 12
TREATMENT OF UNCLASSIFIED CLAIMS...................................................................Page 12
3.1 Administrative Claims.....................................................................Page 12
a. General..........................................................................Page 12
b. Payment of Statutory Fees........................................................Page 12
c. Bar Date for Administrative Claims...............................................Page 12
i. General Provisions......................................................Page 12
ii. Professionals...........................................................Page 12
iii. Ordinary Course Liabilities.............................................Page 13
iv. Assumed Contractual Employee Claims.....................................Page 13
v. Claims of Employees, Officers, and Directors
Under Company Policies and Employment Contracts
Other Than Change in Control Contracts..................................Page 13
vi. Post-Petition Tax Claims................................................Page 14
3.2 Treatment of Pre-Petition Priority Tax Claims.............................................Page 14
ARTICLE IV ..........................................................................................Page 14
CLASSIFICATION AND TREATMENT OF CLASSIFIED CLAIMS
AND INTERESTS ....................................................................................Page 14
4.1 Class 1A: Secured Claims against Dailey International ..................................Page 14
4.2 Class 1B: Secured Claims against DES ...................................................Page 15
4.3 Class 1C: Secured Claims against DIS ...................................................Page 15
4.4 Class 1D: Secured Claims against CPS ...................................................Page 16
</TABLE>
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
<PAGE> 3
<TABLE>
<S> <C>
4.5 Class 1E: Secured Claims against IPS ...................................................Page 16
4.6 Class 1F: Secured Claims against DERT ..................................................Page 16
4.7 Class 1G: Secured Claims against DWS ...................................................Page 17
4.8 Class 1H: Secured Claims against ADI ...................................................Page 17
4.9 Class 1I: Secured Claims against ADS ...................................................Page 18
4.10 Class 2: Priority Claims (Other than Unclassified Claims) .............................Page 18
4.11 Class 3: Unsecured Claims of Holders of Senior Notes ..................................Page 18
4.12 Class 4A: General Unsecured Claims against Dailey International ........................Page 19
4.13 Class 4B: General Unsecured Claims against DES .........................................Page 19
4.14 Class 4C: General Unsecured Claims against DIS .........................................Page 19
4.15 Class 4D: General Unsecured Claims against CPS .........................................Page 20
4.16 Class 4E: General Unsecured Claims against IPS .........................................Page 20
4.17 Class 4F: General Unsecured Claims against DERT ........................................Page 20
4.18 Class 4G: General Unsecured Claims against DWS .........................................Page 21
4.19 Class 4H: General Unsecured Claims against ADI .........................................Page 21
4.20 Class 4I: General Unsecured Claims against ADS .........................................Page 21
4.21 Class 5: Old DII Class A Common Stock and
Old DII Class B Common Stock ............................................................Page 22
4.22 Class 6A: DES Common Stock .............................................................Page 22
4.23 Class 6B: DIS Common Stock .............................................................Page 22
4.24 Class 6C: CPS Common Stock .............................................................Page 22
4.25 Class 6D: IPS Common Stock .............................................................Page 22
4.26 Class 6E: DERT Common Stock ............................................................Page 23
4.27 Class 6F: DWS Common Stock .............................................................Page 23
4.28 Class 6G: ADI Common Stock .............................................................Page 23
4.29 Class 6H: ADS Common Stock .............................................................Page 23
</TABLE>
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
<PAGE> 4
<TABLE>
<S> <C>
4.30 Class 7: Other Equity Interests .......................................................Page 24
4.31 Class 8: Intercompany Claims.............................................................Page 24
ARTICLE V .................................................................................................Page 24
ACCEPTANCE OR REJECTION OF THE PLAN ..............................................................Page 24
5.1 Voting Classes............................................................................Page 24
5.2 Presumed Acceptance of Plan...............................................................Page 24
5.3 Presumed Rejection of Plan................................................................Page 24
ARTICLE VI..................................................................................................Page 25
FUNDING AND METHODS OF DISTRIBUTION AND PROVISIONS
FOR TREATMENT OF DISPUTED CLAIMS .................................................................Page 25
6.1 Funding of Distributions Under the Plan...................................................Page 25
6.2 Distribution Procedures...................................................................Page 25
6.3 Distributions to Holders of Allowed Administrative Expense Claims,
Pre-Petition Tax Claims and Class 2 Priority Claims.......................................Page 25
6.4 Distributions to Holders of Allowed Secured Claims........................................Page 25
6.5 Distributions to Holders of Allowed General Unsecured Claims..............................Page 25
ARTICLE VII ...............................................................................................Page 25
MANNER OF DISTRIBUTION OF PROPERTY UNDER THE PLAN ................................................Page 25
7.1 Cash Distributions........................................................................Page 25
7.2 Distribution of Weatherford Consideration.................................................Page 25
a. Distribution of Weatherford - Senior Note Holder Consideration...................Page 25
b. Distribution of Weatherford - Old DII Equity Consideration.......................Page 26
7.3 Surrender and Cancellation of Old Securities..............................................Page 26
a. Surrender of Senior Notes........................................................Page 26
b. Surrender of Old Common Stock....................................................Page 26
c. Surrender of Class 7 Interests...................................................Page 27
7.4 Ballot Record Date; Distribution Date.....................................................Page 27
</TABLE>
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
<PAGE> 5
<TABLE>
<S> <C>
7.5 Disputed Claims...........................................................................Page 27
7.6 Manner of Payment Under the Plan..........................................................Page 27
7.7 Delivery of Distributions and Undeliverable or Unclaimed Distributions....................Page 28
a. Delivery of Distributions in General.............................................Page 28
b. Undeliverable Distributions......................................................Page 28
i. Holding and Investment of Undeliverable Property ......................Page 28
ii. Distribution of Undeliverable Property After it Becomes
Deliverable and Failure to Claim Undeliverable Property ...............Page 28
c. Failure to Present Checks........................................................Page 29
7.8 Compliance with Tax Requirements..........................................................Page 29
7.9 Setoffs...................................................................................Page 29
7.10 Fractional Interests......................................................................Page 29
ARTICLE VIII ..............................................................................................Page 30
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES ............................................Page 30
8.1 Assumption of All Executory Contracts and Leases Not Rejected.............................Page 30
8.2 Cure Payments.............................................................................Page 30
8.3 Bar Date for Filing of Rejection Claims...................................................Page 30
8.4 Change in Control Contracts...............................................................Page 30
ARTICLE IX ................................................................................................Page 31
MODIFICATION OF LAWRENCE LEASES ..................................................................Page 31
9.1 Assumption of Lawrence Leases.............................................................Page 31
9.2 Lawrence/Dailey Lease Modification Agreements.............................................Page 31
ARTICLE X .................................................................................................Page 31
MEANS FOR EXECUTION AND IMPLEMENTATION OF THE PLAN ...............................................Page 31
10.1 Consummation of the Acquisition Agreement.................................................Page 31
10.2 Cancellation of Old Securities............................................................Page 31
10.3 Reorganized Dailey International Common Stock.............................................Page 31
</TABLE>
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
<PAGE> 6
<TABLE>
<S> <C>
10.4 Registration Exemption for Weatherford Common Stock.......................................Page 32
10.5 Charter and By-Laws.......................................................................Page 32
10.6 Corporate Action..........................................................................Page 32
10.7 Removal of Officers and Directors.........................................................Page 32
10.8 Responsibilities of Reorganized Debtors...................................................Page 32
10.9 Preservation of Rights of Action..........................................................Page 32
10.10 Objections to Claims......................................................................Page 33
a. Prior to the Effective Date......................................................Page 33
b. From and After the Effective Date................................................Page 33
10.11 Releases..................................................................................Page 33
10.12 Retiree Benefits..........................................................................Page 34
10.13 Exemption from Stamp and Similar Taxes....................................................Page 34
ARTICLE XI ................................................................................................Page 34
CONDITIONS TO EFFECTIVENESS OF THE PLAN ..........................................................Page 34
11.1 Conditions to Effectiveness...............................................................Page 34
11.2 Waiver of Conditions......................................................................Page 36
ARTICLE XII ...............................................................................................Page 36
EFFECTS OF PLAN CONFIRMATION .....................................................................Page 36
12.1 Discharge of Debtors and Reorganized Debtors and Injunction...............................Page 36
12.2 Revesting.................................................................................Page 37
12.3 No Liability for Solicitation or Participation............................................Page 37
12.4 Limitation of Liability...................................................................Page 37
12.5 Other Documents and Actions...............................................................Page 38
12.6 Post-Consummation Effect of Evidences of Claims or Interests..............................Page 38
12.7 Term of Injunctions or Stays..............................................................Page 38
</TABLE>
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
<PAGE> 7
<TABLE>
<S> <C>
ARTICLE XIII ..............................................................................................Page 38
CONFIRMABILITY OF PLAN AND CRAM DOWN .............................................................Page 38
ARTICLE XIV ...............................................................................................Page 38
RETENTION OF JURISDICTION ........................................................................Page 38
14.1 Retained Jurisdiction.....................................................................Page 38
14.2 Abstention................................................................................Page 40
ARTICLE XV ................................................................................................Page 40
MISCELLANEOUS PROVISIONS .........................................................................Page 40
15.1 Fractional Dollars........................................................................Page 40
15.2 Modification of Plan......................................................................Page 40
15.3 Withdrawal of Plan........................................................................Page 41
15.4 Governing Law.............................................................................Page 41
15.5 Time......................................................................................Page 41
15.6 Payment Dates.............................................................................Page 41
15.7 Headings..................................................................................Page 41
15.8 Successors and Assigns....................................................................Page 41
15.9 Severability of Plan Provisions...........................................................Page 41
15.10 No Admissions.............................................................................Page 42
</TABLE>
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
<PAGE> 8
INDEX TO PLAN EXHIBITS
<TABLE>
<S> <C>
EXHIBIT 1: ACQUISITION AGREEMENT
EXHIBIT 2: AMENDED CERTIFICATE OF INCORPORATION OF DAILEY
INTERNATIONAL INC.
EXHIBIT 3: LAWRENCE/DAILEY LEASE MODIFICATION AGREEMENTS
EXHIBIT 4: DISBURSING AGREEMENT
</TABLE>
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
<PAGE> 9
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
IN RE: ) Chapter 11
)
DAILEY INTERNATIONAL INC.; )
DAILEY ENERGY SERVICES, INC.; )
DAILEY INTERNATIONAL SALES CORP.; )
COLOMBIA PETROLEUM SERVICES CORP.; )
INTERNATIONAL PETROLEUM ) CASE NO. 99-1233 (PJW)
SERVICES, INC.; DAILEY ENVIRONMENTAL )
REMEDIATION TECHNOLOGIES, INC.; )
DAILEY WORLDWIDE SERVICES CORP.; )
AIR DRILLING INTERNATIONAL, INC.; and )
AIR DRILLING SERVICES, INC., )
Debtors. Jointly Administered
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Dailey Energy Services, Inc. ("DES"); Dailey International Sales
Corp. ("DIS"); Colombia Petroleum Services Corp. ("CPS"); International
Petroleum Services, Inc. ("IPS"); Dailey Environmental Remediation
Technologies, Inc. ("DERT"); Dailey Worldwide Services Corp. ("DWS"); Air
Drilling International, Inc. ("ADI"); Air Drilling Services, Inc. ("ADS")
(collectively, the "Debtor Subsidiaries"); and Dailey International Inc.
("Dailey International" and, together with the Debtor Subsidiaries, the
"Debtors") as debtors and debtors-in-possession, propose this Second Amended
Joint Plan of Reorganization (the "Plan") pursuant to section 1121(a) of Title
11 of the United States Code for the resolution of the Debtors' outstanding
creditor claims and equity interests. Reference is made to the Debtors' Second
Amended Disclosure Statement (the "Disclosure Statement") for a discussion of
the Debtors' history, business, properties and results of operations, and for a
summary of this Plan and certain related matters.
All holders of Claims and Interests are encouraged to read the Plan and
the Disclosure Statement in their entirety before voting to accept or reject
this Plan. No materials, other than the Disclosure
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 1
<PAGE> 10
Statement and any exhibits and schedules attached thereto or referenced
therein, have been approved by the Debtors for use in soliciting acceptances or
rejections of this Plan.
ARTICLE I
DEFINITIONS
Rules of Interpretation. As used herein, the following terms have the
respective meanings specified below, and such meanings shall be equally
applicable to both the singular and plural, and masculine and feminine, forms
of the terms defined. The words "herein," "hereof," "hereto," "hereunder" and
others of similar import, refer to the Plan as a whole and not to any
particular section, subsection or clause contained in the Plan. Captions and
headings to articles, sections and exhibits are inserted for convenience of
reference only and are not intended to be part of or to affect the
interpretation of the Plan. The rules of construction set forth in section 102
of the Bankruptcy Code shall apply. In computing any period of time prescribed
or allowed by the Plan, the provisions of Bankruptcy Rule 9006(a) shall apply.
Any capitalized term used herein that is not defined herein but is defined in
the Bankruptcy Code shall have the meaning ascribed to such term in the
Bankruptcy Code. In addition to such other terms as are defined in other
sections of the Plan, the following terms (which appear in the Plan as
capitalized terms) have the following meanings as used in the Plan.
1.1 "Acquisition Agreement" means the Acquisition Agreement by and
among the Debtors and Weatherford, a true and correct copy of which is attached
to the Plan as Exhibit "1".
1.2 "Administrative Claim" means a Claim for costs and expenses of
administration allowed under section 503(b) of the Bankruptcy Code and referred
to in section 507(a)(1) of the Bankruptcy Code, including, without limitation:
(a) the actual and necessary costs and expenses incurred after the Petition
Date of preserving the Estates and operating the business of the Debtors (such
as wages, salaries or payments for goods and services); (b) compensation for
legal, financial advisory, accounting and other services and reimbursement of
expenses awarded or allowed under sections 330(a) or 331 of the Bankruptcy
Code; (c) all fees and charges assessed against the Estates under 28 Section
193; and (d) all fees and expenses incurred by the Indenture Trustee that are
payable by Dailey International to the Indenture Trustee pursuant to the terms
of the Indenture.
1.3 "Affiliate" means (a) an entity that directly or indirectly owns,
controls or holds with power to vote, twenty percent or more of the outstanding
voting securities of a Debtor, other than an entity that holds such securities
(i) in a fiduciary or agency capacity without sole discretionary power to vote
such securities or (ii) solely to secure a debt, if such entity has not in fact
exercised such power to vote, or (b) a corporation twenty percent or more of
whose outstanding voting securities are directly or indirectly owned,
controlled or held with power to vote, by a Debtor, or by an entity that
directly or indirectly owns, controls or holds with power to vote, twenty
percent or more of the outstanding voting securities of a Debtor, other than an
entity that holds such securities (i) in a fiduciary or agency capacity without
sole discretionary power to vote such securities or (ii) solely to secure a
debt, if such entity has not in fact exercised such power to vote.
1.4 "Allowed" means, with respect to any Claim, proof of which has been
properly Filed or, if no proof of claim was so Filed, which was or hereafter is
listed on the Schedules as liquidated in amount
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 2
<PAGE> 11
and not disputed or contingent, and, in either case, a Claim as to which no
objection to the allowance thereof, or motion to estimate for purposes of
allowance, shall have been Filed on or before any applicable period of
limitation that may be fixed by the Bankruptcy Code, the Bankruptcy Rules
and/or the Bankruptcy Court, or as to which any objection, or any motion to
estimate for purposes of allowance, shall have been so Filed, to the extent
allowed by a Final Order.
1.5 "Allowed Claim" means that portion of a Claim, as that term is
defined in section 101(5) of the Code, other than an Administrative Claim or a
Disputed Claim against the Debtors, to the extent that (i) a proof of Claim has
been timely Filed, or (ii) which has or may hereafter be scheduled by the
Debtors as liquidated in an amount and undisputed or not contingent, or (iii) a
Claim to which neither the Debtors nor a party-in-interest have Filed an
objection; and, in any case, a Claim as to which all orders or judgments (if
any) allowing such claim in whole or in part are no longer appealable or are
otherwise final because all appellate or review remedies have been exhausted.
1.6 "Allowed Secured Claim" means an Allowed Claim, or that portion
thereof, of any Person who holds a Claim secured by a lien or security
interest, as those terms are defined in section 101 of the Code, which Claim
has been properly perfected as required by law and determined in accordance
with section 506 of the Bankruptcy Code with respect to properties owned by the
Debtors. Such Allowed Secured Claim is secured only to the extent of the value
of the Debtors' property which the Court finds is subject to a valid security
interest of the creditor enforceable against property of the Estates.
1.7 "Amended Certificate of Incorporation" means the restated
certificate of incorporation of Dailey International, as amended by the
certificate of amendment, substantially in the form attached to the Plan as
Exhibit "2".
1.8 "Ballots" means the written Ballots for acceptance or rejection of
the Plan.
1.9 "Ballot Record Date" means July 12, 1999.
1.10 "Ballot Return Date" means 4:00 o'clock p.m. Eastern Daylight
Time on August 16, 1999, unless and to the extent such date is extended by the
Debtors in accordance with the Disclosure Statement.
1.11 "Bankruptcy Code" or "Code" means Title 11 of the United States
Code as now in effect or hereafter amended.
1.12 "Bankruptcy Court" means the United States Bankruptcy Court for
the District of Delaware, which presides over this proceeding, or if necessary,
the United States District Court for said District having original jurisdiction
over this case.
1.13 "Bankruptcy Rules" means, collectively (a) the Federal Rules of
Bankruptcy Procedure, and (b) the local rules of the Bankruptcy Court, as
applicable from time to time in the Reorganization Case.
1.14 "Business Day" means any day, other than a Saturday, Sunday or
"legal holiday" (as defined in Bankruptcy Rule 9006(a)).
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 3
<PAGE> 12
1.15 "Cash" means cash, wire transfer, certified check, cash
equivalents and other readily marketable securities or instruments, including,
without limitation, readily marketable direct obligations of the United States
of America, certificates of deposit issued by banks, and commercial paper of
any Person, including interests accrued or earned thereon, or a check from a
Reorganized Debtor.
1.16 "Change in Control Contract" means each of the employment
agreements existing and in effect as of the Petition Date between Dailey
International and Warren Avery, John Beard, Dwight Goolsbay, James D. Lawrence,
Martin Lyons, William D. Sutton and Michael A. Torres, each of which contains a
provision whereby the affected employee, officer or director may have certain
severance payment rights upon a change in control of Dailey International.
1.17 "Claim" means any right to payment from the Debtors arising
before the Confirmation Date, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, contested,
uncontested, legal, equitable, secured, or unsecured; or any right to an
equitable remedy for breach of performance if such breach gives rise to a right
of payment from the Debtors, whether or not such right to an equitable remedy
is reduced to judgment, fixed, contingent, matured, unmatured, contested,
uncontested, secured or unsecured.
1.18 "Class" means one of the classes of Claims or Interests defined
in Article III hereof.
1.19 "Class 1 Claims" means, collectively, all Claims in Classes 1A,
1B, 1C, 1D, 1E, 1F, 1G, 1H and 1I.
1.20 "Class 4 Claims" means, collectively, all Claims in Classes 4A,
4B, 4C, 4D, 4E, 4F, 4G, 4H and 4I.
1.21 "Company" means Dailey International Inc., a Delaware
Corporation, and all of its Affiliates.
1.22 "Confirmation" means the entry of a Confirmation Order confirming
this Plan at or after a hearing pursuant to section 1129 of the Bankruptcy
Code.
1.23 "Confirmation Date" means the date the Confirmation Order is
entered on the docket by the Clerk of the Bankruptcy Court.
1.24 "Confirmation Order" means the order entered by the Bankruptcy
Court determining that this Plan meets the requirements of Chapter 11 of the
Bankruptcy Code and is entitled to Confirmation pursuant to section 1129 of the
Bankruptcy Code.
1.25 "Creditors' Committee" collectively means any Official Committee
of Unsecured Creditors appointed in the Reorganization Case by the United
States Trustee pursuant to section 1102 of the Bankruptcy Code, as constituted
by the addition or removal of members from time to time.
1.26 "Cure Payment" means any payment required to be made by a Debtor
to cure an existing monetary default under an executory contract or unexpired
lease in order to assume such contract or lease pursuant to section 365(b) of
the Bankruptcy Code.
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 4
<PAGE> 13
1.27 "Debtors" means Dailey International Inc., Dailey Energy
Services, Inc., Dailey International Sales Corp., Colombia Petroleum Services
Corp., International Petroleum Services, Inc., Dailey Environmental Remediation
Technologies, Inc., Dailey Worldwide Services Corp., Air Drilling
International, Inc., and Air Drilling Services, Inc.
1.28 "Disbursing Agent" means the agent appointed to disburse the
Weatherford - Old DII Equity Consideration pursuant to the Disbursing
Agreement.
1.29 "Disbursing Agreement" means the agreement by and among Dailey
International, Weatherford and the Disbursing Agent dated May ___, 1999, a true
and correct copy of which is attached hereto as Exhibit "4", or if not attached
or deemed unnecessary by the Debtors, will be available for review 15 days
prior to the hearing on Confirmation.
1.30 "Disclosure Statement" means the Disclosure Statement Filed by
the Debtors as approved by the Bankruptcy Court for submission to the
Creditors, Interest holders, and parties-in-interest of the Debtors, as amended
or supplemented from time to time.
1.31 "Disputed Claim" means a Claim as to which a proof of claim has
been Filed or deemed Filed under applicable law, as to which an objection has
been or may be timely Filed and which objection, if timely Filed, has not been
withdrawn and which has not been overruled or denied by a Final Order. Prior to
the time that an objection has been or may be timely Filed, for the purposes of
this Plan, a Claim shall be considered a Disputed Claim to the extent that: (i)
the amount of the Claim specified in the proof of claim exceeds the amount of
any corresponding Claim listed by the Debtors in their respective Schedules to
the extent of such excess; (ii) any corresponding Claim listed by the Debtors
in their respective Schedules has been scheduled as disputed, contingent, or
unliquidated, irrespective of the amount scheduled; or (iii) no corresponding
Claim has been listed by the Debtors in their respective Schedules.
1.32 "Distributions" means the properties or interests in property to
be paid or distributed hereunder to the holders of Allowed Claims or Interests.
1.33 "Docket" means the docket in the Reorganization Case maintained
by the Clerk.
1.34 "Effective Confirmation Order" means the Confirmation Order
rendered by the Bankruptcy Court or other court of competent jurisdiction that
has been entered on the docket and (unless otherwise ordered by such court) as
to which (i) both (a) the time to seek reconsideration, rehearing, or new trial
by the rendering court (hereinafter, a "Post-Trial Motion"), and (b) the time
(including time resulting from a timely filed motion under Rule 8002(c) under
the Federal Rules of Bankruptcy Procedure) to appeal or to seek a petition for
review or certiorari (hereinafter, an "Appellate Court Review"), has expired
(without regard to whether time to seek relief of a judgment under Rule 60(b)
of the Federal Rules of Civil Procedure or Rule 9024 of the Federal Rules of
Bankruptcy Procedure has expired); and (ii) either (a) no Post-Trial Motion or
request for Appellate Court Review is pending, or (b) a Post-Trial Motion or a
request for Appellate Court Review is pending but the subject order of judgment
has not been stayed, amended, modified or reversed by a court of competent
jurisdiction or, if stayed, such stay has been vacated or is no longer in
effect. Without limiting the foregoing, the pendency of, or request for, a
Post-Trial Motion or an Appellate Court Review shall not prevent an order from
becoming final and being implemented, absent the entry of a stay by a court of
competent jurisdiction and the continuation thereof.
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 5
<PAGE> 14
1.35 "Effective Date" means the date on which all of the conditions
required in Article XI have occurred, except as expressly waived in writing by
the Debtors, the Creditors' Committee and Weatherford.
1.36 "Estates" means the estates created in the Reorganization Case
under section 541 of the Bankruptcy Code.
1.37 "Estimated Claim" means a Claim, the allowed amount of which has
been or is to be estimated by the Court under section 502(c) of the Code.
1.38 "Executory Contract" means any unexpired lease and/or executory
contract as set forth in section 365 of the Code.
1.39 "Fair Market Value", when used in reference to Weatherford Common
Stock issued as Weatherford Consideration only, means the average of the
closing sale price of Weatherford Common Stock as traded on the New York Stock
Exchange for the ten (10) trading days immediately preceding the Effective
Date.
1.40 "File" or "Filed" means filed with the Bankruptcy Court in the
Reorganization Case.
1.41 "Final Order" means an order or judgment of the Bankruptcy Court
or other court of competent jurisdiction as entered on the Docket in the
Reorganization Case, which has not been reversed, stayed, modified or amended,
and as to which (i) the time to appeal or seek certiorari has expired and no
appeal or petition for certiorari has been timely filed, or (ii) any appeal
that has been or may be taken or any petition for certiorari that has been or
may be filed has been resolved by the highest court to which the order or
judgment was appealed or from which certiorari was sought.
1.42 "Impaired" means that a class of claims or interests is impaired
because the Plan alters the legal, equitable or contractual rights of a Claim
or Interest holder within the meaning of 11 U.S.C. Section 1124.
1.43 "Indenture" means the Indenture, dated as of February 13, 1998,
between the Debtors and U.S. Trust Company of Texas, N.A., as Trustee, relating
to the Senior Notes.
1.44 "Indenture Trustee" means U.S. Trust Company of Texas, N.A., as
Trustee, under the Indenture.
1.45 "Interest" means the rights of the owners and/or holders of
outstanding share or shares of the Debtor's Common Stock with respect of such
Interest as of the date immediately preceding the Petition Date.
1.46 "Lawrence International" means Lawrence International, Inc., a
Delaware corporation.
1.47 "Lawrence Leases" means those certain non-residential real
property leases between Lawrence International and Dailey International
covering real property located in Conroe, Texas, as more fully described in the
Lawrence/Dailey Lease Modification Agreements.
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 6
<PAGE> 15
1.48 "Lawrence/Dailey Lease Modification Agreements" means those
certain agreements between Lawrence International and Reorganized Dailey
International concerning a restructuring of the Lawrence Leases, a true and
correct copy of which is attached hereto as Exhibit "3".
1.49 "Old Common Stock" means the Old DII Class A Common Stock and the
Old DII Class B Common Stock.
1.50 "Old DII Stock Holder" means the beneficial owner (and/or agent,
advisor, affiliate, manager or other authorized representative of such
beneficial owner), as of the Effective Date, of Old Common Stock.
1.51 "Old DII Class A Common Stock" means the Class A Common Stock of
Dailey International prior to the Effective Date.
1.52 "Old DII Class B Common Stock" means the Class B Common Stock of
Dailey International prior to the Effective Date.
1.53 "Old Securities" means the Senior Notes and the Old Common Stock.
1.54 "Old Securities Holders" means, individually and collectively,
Old Common Stock Holders and Senior Note Holders.
1.55 "Order" means an order or judgment of the Bankruptcy Court as
entered on the Docket.
1.56 "Person" means any individual, corporation, general partnership,
limited partnership, association, joint stock company, joint venture, estate,
trust, indenture trustee, government or any political subdivision, governmental
unit (as defined in the Bankruptcy Code), official committee appointed by the
United States Trustee, unofficial committee of creditors or equity holders, or
any other entity.
1.57 "Petition Date" means May 28, 1999, the date on which Debtors
filed their voluntary Chapter 11 petitions.
1.58 "Plan" means this Joint Plan of Reorganization in its present
form, or as amended, modified, and/or supplemented from time to time in
accordance with the Bankruptcy Code, by agreement of all affected parties, or
by order of the Bankruptcy Court, as the case may be.
1.59 "Plan Supplement" means the supplement to this Plan that will be
Filed by the Debtors on or before ten (10) days prior to the hearing to
consider Confirmation of the Plan, which will include a list of executory
contracts and unexpired leases that the Debtors intend to reject under the
Plan.
1.60 "Priority Claim" means all Claims entitled to priority under 11
U.S.C. Section 507(a) of the Bankruptcy Code, other than an Administrative
Claim or a Tax Claim.
1.61 "Professional" means any professional or other entity employed
pursuant to sections 327 or 1103 of the Bankruptcy Code.
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 7
<PAGE> 16
1.62 "Pro Rata" means proportionately, based on the percentage that
the distribution made on account of a particular Allowed Claim or Interest
bears to the distributions made on account of all Allowed Claims or Interests
of the Class in which the Allowed Claim or Interests is included.
1.63 "Rejection Claim" means a Claim resulting from the rejection of a
lease or executory contract by a Debtor pursuant to section 365(g) of the
Bankruptcy Code.
1.64 "Reorganization Case" means, collectively, the Debtors' cases
under Chapter 11 of the Bankruptcy Code that were commenced on the Petition
Date.
1.65 "Reorganized ADI" means ADI as it shall exist after the Effective
Date of this Plan.
1.66 "Reorganized ADS" means ADS as it shall exist after the Effective
Date of this Plan.
1.67 "Reorganized CPS" means CPS as it shall exist after the Effective
Date of this Plan.
1.68 "Reorganized Dailey International" means Dailey International as
it shall exist after the Effective Date of this Plan.
1.69 "Reorganized Debtors" means any or all of Reorganized Dailey
International, Reorganized DES, Reorganized DIS, Reorganized DWS, Reorganized
DERT, Reorganized IPS, Reorganized CPS, Reorganized ADI and Reorganized ADS.
1.70 "Reorganized DERT" means DERT as it shall exist after the
Effective Date of this Plan.
1.71 "Reorganized DES" means DES as it shall exist after the Effective
Date of this Plan.
1.72 "Reorganized DIS" means DIS as it shall exist after the Effective
Date of this Plan.
1.73 "Reorganized DWS" means DWS as it shall exist after the Effective
Date of this Plan.
1.74 "Reorganized IPS" means IPS as it shall exist after the Effective
Date of this Plan.
1.75 "Schedules" means the Schedules of Assets and Liabilities,
Statement of Financial Affairs and Statement of Executory Contracts that may be
filed by the Debtors with the Bankruptcy Court, as amended or supplemented on or
before the Confirmation Date, listing the liabilities and assets of the Debtors.
1.76 "Secured Claim" means any Claim that is secured by a lien (as
defined in 11 U.S.C. Section 101(37)) on property in which the Estates have an
interest or that is subject to setoff under section 553 of the Bankruptcy Code,
to the extent of the value of the Claim holder's interest in the Estates'
interest in such property or to the extent of the amount subject to setoff, as
applicable, as determined pursuant to section 506(a) of the Bankruptcy Code.
1.77 "Security Agreement" means the documentation that creates or
provides for a security interest (as defined in 11 U.S.C. Section 101(51)).
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 8
<PAGE> 17
1.78 "Senior Notes" means the 9 1/2% Senior Notes due 2008 issued by
Dailey International.
1.79 "Senior Note Guaranties" means any and all guaranty obligations
of the Debtor Subsidiaries in connection with the Senior Notes.
1.80 "Senior Note Holder" means the beneficial owner (and/or agent,
advisor, affiliate, manager or other authorized representative(s) of such
beneficial owner), as of the Effective Date, of a Senior Note.
1.81 "Severance Claim" means any Claim arising after the Petition Date
that is held by an employee, officer or director of the Debtors (i) under an
employment agreement with a Debtor, other than a Change of Control Contract, or
under a Debtor's severance policy, which Claim is based upon the termination of
such person's employment (a) on or before the Effective Date at the request of
Weatherford or (b) within 30 days after the Effective Date by a Reorganized
Debtor and (ii) based upon any Debtor's retention policy (e.g., employee stay
bonuses).
1.82 "Tax Claim" means either (a) an Allowed Unsecured Claim of a
governmental entity as provided by section 507(a)(8) of the Code, or (b) an
Allowed Claim of a governmental entity secured by a lien on property of the
Debtors under applicable state law.
1.83 "Technology Agreement" means the Technology Transfer Agreement
dated May 18, 1999, among Dailey International, Weatherford, Robert A. Evans and
Evans Engineering & Manufacturing, Inc., and all other agreements and
instruments contemplated to be executed and delivered by such agreement.
1.84 "Unsecured Claim" means any Claim that is not an Administrative
Claim, Tax Claim or Secured Claim, and includes, but is not limited to, any
claim arising as a result of a Debtor's execution of a guaranty agreement,
promissory note, negotiable instrument, or other similar written instrument,
whether as maker, endorser, guarantor, or otherwise.
1.85 "Weatherford" means Weatherford International, Inc., a Delaware
corporation.
1.86 "Weatherford Common Stock" means the common stock of Weatherford,
as registered pursuant to section 12(b) of the Securities Exchange Act of 1934
and as traded on the New York Stock Exchange, which shall be issued and
distributed to certain holders of Claims and Interests under the terms of this
Plan.
1.87 "Weatherford Consideration" means the Weatherford - Senior Note
Holder Consideration, together with the Weatherford - Old DII Equity
Consideration.
1.88 "Weatherford - Old DII Equity Consideration" means shares of
Weatherford Common Stock having an aggregate Fair Market Value equal to $10
million.
1.89 "Weatherford - Senior Note Holder Consideration" means shares of
Weatherford Common Stock having an aggregate Fair Market Value equal to $185
million.
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 9
<PAGE> 18
ARTICLE II
DESIGNATION OF CLAIMS AND INTERESTS
2.1 The following is a designation of the classes of Claims and
Interests under this Plan. In accordance with Section 1123(a)(1) of the
Bankruptcy Code, Administrative Claims and Tax Claims described in Article III
of the Plan have not been classified and are excluded from the following
Classes. A Claim or Interest is classified in a particular Class only to the
extent that the Claim or Interest qualifies within the description of that
Class, and is classified in another Class or Classes to the extent that any
remainder of the Claim or Interest qualifies within the description of such
other Class or Classes. A Claim or Interest is classified in a particular Class
only to the extent that the Claim or Interest is an Allowed Claim or Allowed
Interest in that Class and has not been paid, released or otherwise satisfied
before the Effective Date. A Claim or Interest that is not an Allowed Claim or
Interest is not in any Class. Notwithstanding anything to the contrary
contained in the Plan, no distribution shall be made on account of any Claim or
Interest which is not an Allowed Claim or Allowed Interest.
<TABLE>
<CAPTION>
CLASS STATUS
SECURED CLAIMS
<S> <C>
Class 1A: Secured Claims against Unimpaired - Not entitled to vote
Dailey International
Class 1B: Secured Claims against DES Unimpaired - Not entitled to vote
Class 1C: Secured Claims against DIS Unimpaired - Not entitled to vote
Class 1D: Secured Claims against CPS Unimpaired - Not entitled to vote
Class 1E: Secured Claims against IPS Unimpaired - Not entitled to vote
Class 1F: Secured Claims against DERT Unimpaired - Not entitled to vote
Class 1G: Secured Claims against DWS Unimpaired - Not entitled to vote
Class 1H: Secured Claims against ADI Unimpaired - Not entitled to vote
Class 1I: Secured Claims against ADS Unimpaired - Not entitled to vote
</TABLE>
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 10
<PAGE> 19
<TABLE>
<CAPTION>
UNSECURED CLAIMS
<S> <C> <C>
Class 2: Priority Claims Unimpaired - Not entitled to vote
(Other than Unclassified Priority Claims)
Class 3: Unsecured Claims of Senior Note Holders Impaired - Entitled to vote
Class 4A: General Unsecured Claims Against Unimpaired - Not entitled to vote
Dailey International
Class 4B: General Unsecured Claims Against DES Unimpaired - Not entitled to vote
Class 4C: General Unsecured Claims Against DIS Unimpaired - Not entitled to vote
Class 4D: General Unsecured Claims Against CPS Unimpaired - Not entitled to vote
Class 4E: General Unsecured Claims Against IPS Unimpaired - Not entitled to vote
Class 4F: General Unsecured Claims Against DERT Unimpaired - Not entitled to vote
Class 4G: General Unsecured Claims Against DWS Unimpaired - Not entitled to vote
Class 4H: General Unsecured Claims Against ADI Unimpaired - Not entitled to vote
Class 4I: General Unsecured Claims Against ADS Unimpaired - Not entitled to vote
INTERESTS
Class 5: Old DII Class A Common Stock and Impaired - Deemed to reject
Old DII Class B Common Stock
(excludes any option, warrant, conversion
or other right to convert or obtain equity
securities of Dailey International)
Class 6A: DES Common Stock Unimpaired - Not entitled to vote
Class 6B: DIS Common Stock Unimpaired - Not entitled to vote
Class 6C: CPS Common Stock Unimpaired - Not entitled to vote
Class 6D: IPS Common Stock Unimpaired - Not entitled to vote
Class 6E: DERT Common Stock Unimpaired - Not entitled to vote
Class 6F: DWS Common Stock Unimpaired - Not entitled to vote
</TABLE>
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 11
<PAGE> 20
<TABLE>
<S> <C> <C>
Class 6G: ADI Common Stock Unimpaired - Not entitled to vote
Class 6H: ADS Common Stock Unimpaired - Not entitled to vote
Class 7: All other Equity Securities of the Debtors Impaired - Deemed to reject
(includes any option, warrant, conversion
or other right to convert or obtain equity
securities of Dailey International)
Class 8: Intercompany Claims Unimpaired - Not entitled to vote
</TABLE>
ARTICLE III
TREATMENT OF UNCLASSIFIED CLAIMS
3.1 ADMINISTRATIVE CLAIMS
a. GENERAL. Subject to the bar date provisions herein,
unless otherwise agreed to by the parties, each holder of an
Allowed Administrative Claim shall receive Cash equal to the
unpaid portion of such Allowed Administrative Claim on the
later of (a) the Effective Date or as soon as practicable
thereafter, (b) the date on which such Claim becomes an
Allowed Administrative Claim and (c) such other date as is
mutually agreed upon by the Debtors and the holder of such
Claim; provided, however, that Administrative Claims that
represent liabilities incurred by the Debtors in the ordinary
course of their respective businesses during the
Reorganization Case shall be paid by the Reorganized Debtors
in the ordinary course of their respective businesses and in
accordance with any terms and conditions of any agreements
relating thereto.
b. PAYMENT OF STATUTORY FEES. All fees payable pursuant
to 28 U.S.C. Section 1930 shall be paid in Cash equal to the
amount of such Administrative Claim when due.
c. BAR DATE FOR ADMINISTRATIVE CLAIMS.
i. GENERAL PROVISIONS. Except as otherwise provided
in the Plan, requests for payment of Administrative
Claims must be Filed no later than forty-five (45)
days after the Effective Date. Holders of
Administrative Claims (including, without limitation,
professionals requesting compensation or
reimbursement of expenses and the holders of any
Claims for federal, state or local taxes) that are
required to File a request for payment of such Claims
and that do not File such requests by the applicable
bar date shall be forever barred from asserting such
Claims against the Debtors, the Reorganized Debtors,
any of their affiliates, any of their successors or
assignees, or any of their respective properties.
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 12
<PAGE> 21
ii. PROFESSIONALS. All Professionals requesting
compensation or reimbursement of expenses pursuant
to sections 327, 328, 330, 331, 503(b) or 1103 of
the Bankruptcy Code for services rendered before the
Effective Date (including, without limitation, any
compensation requested by any Professional or any
other entity for making a substantial contribution
in the Reorganization Case) shall File and serve on
the Reorganized Debtors, the Creditors' Committee
and the United States Trustee for the District of
Delaware an application for final allowance of
compensation and reimbursement of expenses no later
than forty-five (45) days after the Effective Date.
Objections to timely-filed applications of
Professionals for compensation or reimbursement of
expenses must be Filed and served on the Debtors and
the Professionals to whose application the
objections are addressed no later than seventy (70)
days after the Effective Date. Any professional fees
and reimbursements or expenses incurred by the
Reorganized Debtors or the Creditors' Committee (or
any successor thereto) subsequent to the Effective
Date may be paid by the Reorganized Debtors without
application to the Bankruptcy Court.
iii. ORDINARY COURSE LIABILITIES. Holders of
Administrative Claims based on liabilities incurred
in the ordinary course of the Debtors' respective
businesses (other than Claims of governmental units
for taxes or Claims and/or penalties related to such
taxes) shall not be required to File any request for
payment of such Claims. Such Administrative Claims
shall be assumed and paid by Reorganized Debtors in
the ordinary course of their respective businesses
and according to the ordinary and customary business
terms and conditions of the particular transaction
giving rise to such Administrative Claim without the
need for any further action by the holders of such
Claims.
iv. ASSUMED CONTRACTUAL EMPLOYEE CLAIMS. Holders of
Claims under employment contracts approved by the
Court or assumed in the Plan shall not be required
to File any request for payment of such Claims and
such Claims shall be paid in accordance with the
terms of such contract.
v. CLAIMS OF EMPLOYEES, OFFICERS, AND DIRECTORS UNDER
COMPANY POLICIES AND EMPLOYMENT CONTRACTS OTHER THAN
CHANGE IN CONTROL CONTRACTS. Except as set forth in
section 8.4 herein below, each current employee,
officer, or director of a Debtor will have an Allowed
Administrative Claim for amounts owed to such
employee, officer, or director under such Debtor's
employee, officer, or director policies and/or under
an employment contract other than a Change in Control
Contract, to the extent that such amounts become due
after the Petition Date and are unpaid as of the
Effective Date; the obligation for payment of such
Claims will be assumed by the Reorganized Debtors and
paid in full in Cash on the Effective Date from
available Cash of the Reorganized Debtors. Employees,
officers, and directors shall not be required to file
any request for payment of Claims for accrued and
unused paid vacation and sick leave or for Severance
Claims, all of which will be assumed by the
Reorganized Debtors. Severance Claims shall be paid
in Cash in full by the
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 13
<PAGE> 22
Reorganized Debtors on the later of (a) the
Effective Date or (b) the date of termination of the
affected employee, officer or director.
vi. POST-PETITION TAX CLAIMS. All requests for
payment of Administrative Claims by a governmental
unit and all Tax Claims (including interest and/or
penalties relating to such Tax Claim) for any tax
year or period, all or any portion of which occurs or
falls within the period from and including the
Petition Date through and including the Effective
Date ("Post-Petition Tax Claims") and for which no
bar date has otherwise been previously established,
must be Filed on or before the later of (a) 45 days
following the Effective Date; or (b) subject to
section 505(b) of the Bankruptcy Code, 60 days
following the filing with the applicable governmental
unit of the tax return for such taxes. Any holder of
any Post-Petition Tax Claim that is required to File
a request for payment of such taxes, penalties, or
interest and does not File such a request by the
applicable bar date shall be forever barred from
asserting any such Post-Petition Tax Claim against
any of the Debtors, the Reorganized Debtors, any of
their successors or assignees, and any of their
affiliates or their respective properties, whether
any such Post-Petition Tax Claim is deemed to arise
prior to, on, or subsequent to the Effective Date. To
the extent that the holder of a Tax Claim holds a
lien to secure its Claim under applicable state law,
such lien shall remain in place and be unaffected by
Confirmation of the Plan.
3.2 TREATMENT OF PRE-PETITION PRIORITY TAX CLAIMS. Each holder
of an Allowed Pre-Petition Tax Claim shall, at the election of the Reorganized
Debtor that is liable with respect to such Allowed Pre-Petition Tax Claim,
either (a) be paid in Cash in full on the latest of: (i) the Effective Date or
the first practicable date thereafter, (ii) 30 calendar days after the date on
which an Order allowing such Claim becomes a Final Order, (iii) the last day the
taxes may be paid under applicable law without incurring penalties or interest,
or (iv) such other time or times as may be agreed to by the holder of such Claim
and the Reorganized Debtor responsible for payment of such Claim or (b) with
respect to a Claim of the kind specified in section 507(a)(8) of the Bankruptcy
Code, receive on account of such Claim deferred Cash payments, over a period not
exceeding six years after the date of assessment of such Claim, of a value, as
of the Effective Date, equal to the Allowed amount of such Claim. To the extent
that the holder of a Tax Claim holds a lien to secure its Claim under applicable
state law, such lien shall remain in place and be unaffected by Confirmation of
the Plan.
ARTICLE IV
CLASSIFICATION AND TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS
4.1 CLASS 1A: SECURED CLAIMS AGAINST DAILEY INTERNATIONAL
a. Classification: Class 1A consists of all non-tax
Secured Claims against Dailey International.
b. Treatment: Class 1A is unimpaired and, accordingly,
the members of Class 1A are not entitled to vote on the Plan.
Unless the holder of such Class 1A Claim agrees otherwise, the
obligation for payment of all Allowed Claims in Class 1A shall
be assumed
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 14
<PAGE> 23
by Reorganized Dailey International, and the legal, equitable
and contractual rights and liens of each holder of an Allowed
Claim in Class 1A shall be unaffected by Confirmation of the
Plan. All Allowed Claims in Class 1A shall be paid on the
date or dates contained in any agreements for repayment
currently existing between any such holder of a Claim in
Class 1A and Dailey International; provided, however, that
Reorganized Dailey International may, at its option, cure any
prepetition default(s) under any such agreement(s) in
accordance with section 1124(2) of the Bankruptcy Code. If no
such agreement exists, such Claim will be paid by Reorganized
Dailey International on the latest of (i) the Effective Date
or the first practicable date thereafter, (ii) 30 calendar
days after the date on which an Order allowing such Claim
becomes a Final Order, or (iv) such other time or times as
may be agreed to by the holder of such Claim and Reorganized
Dailey International.
4.2 CLASS 1B: SECURED CLAIMS AGAINST DES
a. Classification: Class 1B consists of all non-tax
Secured Claims against DES.
b. Treatment: Class 1B is unimpaired and, accordingly,
the members of Class 1B are not entitled to vote on the Plan.
Unless the holder of such Class 1B Claim agrees otherwise,
the obligation for payment of all Allowed Claims in Class 1B
shall be assumed by Reorganized DES, and the legal, equitable
and contractual rights and liens of each holder of an Allowed
Claim in Class 1B shall be unaffected by Confirmation of the
Plan. All Allowed Claims in Class 1B shall be paid on the
date or dates contained in any agreements for repayment
currently existing between any such holder of a Claim in
Class 1B and DES; provided, however, that Reorganized DES
may, at its option, cure any prepetition default(s) under any
such agreement(s) in accordance with section 1124(2) of the
Bankruptcy Code. If no such agreement exists, such Claim will
be paid by Reorganized DES on the latest of (i) the Effective
Date or the first practicable date thereafter, (ii) 30
calendar days after the date on which an Order allowing such
Claim becomes a Final Order, or (iv) such other time or times
as may be agreed to by the holder of such Claim and
Reorganized DES.
4.3 CLASS 1C: SECURED CLAIMS AGAINST DIS
a. Classification: Class 1C consists of all non-tax
Secured Claims against DIS.
b. Treatment: Class 1C is unimpaired and, accordingly,
the members of Class 1C are not entitled to vote on the Plan.
Unless the holder of such Class 1C Claim agrees otherwise,
the obligation for payment of all Allowed Claims in Class 1C
shall be assumed by Reorganized DIS, and the legal, equitable
and contractual rights and liens of each holder of an Allowed
Claim in Class 1C shall be unaffected by Confirmation of the
Plan. All Allowed Claims in Class 1C shall be paid on the
date or dates contained in any agreements for repayment
currently existing between any such holder of a Claim in
Class 1C and DIS; provided, however, that Reorganized DIS
may, at its option, cure any prepetition default(s) under any
such agreement(s) in accordance with section 1124(2) of the
Bankruptcy Code. If no such agreement exists, such Claim will
be paid by Reorganized DIS on the latest of (i) the Effective
Date or the first practicable date
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 15
<PAGE> 24
thereafter, (ii) 30 calendar days after the date on which an
Order allowing such Claim becomes a Final Order, or (iv) such
other time or times as may be agreed to by the holder of such
Claim and Reorganized DIS.
4.4 CLASS 1D: SECURED CLAIMS AGAINST CPS
a. Classification: Class 1D consists of all non-tax
Secured Claims against CPS.
b. Treatment: Class 1D is unimpaired and, accordingly,
the members of Class 1D are not entitled to vote on the Plan.
Unless the holder of such Class 1D Claim agrees otherwise,
the obligation for payment of all Allowed Claims in Class 1D
shall be assumed by Reorganized CPS, and the legal, equitable
and contractual rights and liens of each holder of an Allowed
Claim in Class 1D shall be unaffected by Confirmation of the
Plan. All Allowed Claims in Class 1D shall be paid on the
date or dates contained in any agreements for repayment
currently existing between any such holder of a Claim in
Class 1D and CPS; provided, however, that Reorganized CPS
may, at its option, cure any prepetition default(s) under any
such agreement(s) in accordance with section 1124(2) of the
Bankruptcy Code. If no such agreement exists, such Claim will
be paid by Reorganized CPS on the latest of (i) the Effective
Date or the first practicable date thereafter, (ii) 30
calendar days after the date on which an Order allowing such
Claim becomes a Final Order, or (iv) such other time or times
as may be agreed to by the holder of such Claim and
Reorganized CPS.
4.5 CLASS 1E: SECURED CLAIMS AGAINST IPS
a. Classification: Class 1E consists of all non-tax
Secured Claims against IPS.
b. Treatment: Class 1E is unimpaired and, accordingly,
the members of Class 1E are not entitled to vote on the Plan.
Unless the holder of such Class 1E Claim agrees otherwise,
the obligation for payment of all Allowed Claims in Class 1E
shall be assumed by Reorganized IPS, and the legal, equitable
and contractual rights and liens of each holder of an Allowed
Claim in Class 1E shall be unaffected by Confirmation of the
Plan. All Allowed Claims in Class 1E shall be paid on the
date or dates contained in any agreements for repayment
currently existing between any such holder of a Claim in
Class 1E and IPS; provided, however, that Reorganized IPS
may, at its option, cure any prepetition default(s) under any
such agreement(s) in accordance with section 1124(2) of the
Bankruptcy Code. If no such agreement exists, such Claim will
be paid by Reorganized IPS on the latest of (i) the Effective
Date or the first practicable date thereafter, (ii) 30
calendar days after the date on which an Order allowing such
Claim becomes a Final Order, or (iv) such other time or times
as may be agreed to by the holder of such Claim and
Reorganized IPS.
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 16
<PAGE> 25
4.6 CLASS 1F: SECURED CLAIMS AGAINST DERT
a. Classification: Class 1F consists of all non-tax
Secured Claims against DERT.
b. Treatment: Class 1F is unimpaired and, accordingly,
the members of Class 1F are not entitled to vote on the Plan.
Unless the holder of such Class 1F Claim agrees otherwise,
the obligation for payment of all Allowed Claims in Class 1F
shall be assumed by Reorganized DERT, and the legal,
equitable and contractual rights and liens of each holder of
an Allowed Claim in Class 1F shall be unaffected by
Confirmation of the Plan. All Allowed Claims in Class 1F
shall be paid on the date or dates contained in any
agreements for repayment currently existing between any such
holder of a Claim in Class 1F and DERT; provided, however,
that Reorganized DERT may, at its option, cure any
prepetition default(s) under any such agreement(s) in
accordance with section 1124(2) of the Bankruptcy Code. If no
such agreement exists, such Claim will be paid by Reorganized
DERT on the latest of (i) the Effective Date or the first
practicable date thereafter, (ii) 30 calendar days after the
date on which an Order allowing such Claim becomes a Final
Order, or (iv) such other time or times as may be agreed to
by the holder of such Claim and Reorganized IPS.
4.7 CLASS 1G: SECURED CLAIMS AGAINST DWS
a. Classification: Class 1G consists of all non-tax
Secured Claims against DWS.
b. Treatment: Class 1G is unimpaired and, accordingly,
the members of Class 1G are not entitled to vote on the Plan.
Unless the holder of such Class 1C Claim agrees otherwise,
the obligation for payment of all Allowed Claims in Class 1G
shall be assumed by Reorganized DWS, and the legal, equitable
and contractual rights and liens of each holder of an Allowed
Claim in Class 1G shall be unaffected by Confirmation of the
Plan. All Allowed Claims in Class 1G shall be paid on the
date or dates contained in any agreements for repayment
currently existing between any such holder of a Claim in
Class 1G and DWS; provided, however, that Reorganized DWS
may, at its option, cure any prepetition default(s) under any
such agreement(s) in accordance with section 1124(2) of the
Bankruptcy Code. If no such agreement exists, such Claim will
be paid by Reorganized DWS on the latest of (i) the Effective
Date or the first practicable date thereafter, (ii) 30
calendar days after the date on which an Order allowing such
Claim becomes a Final Order, or (iv) such other time or times
as may be agreed to by the holder of such Claim and
Reorganized DWS.
4.8 CLASS 1H: SECURED CLAIMS AGAINST ADI
a. Classification: Class 1H consists of all non-tax
Secured Claims against ADI.
b. Treatment: Class 1H is unimpaired and, accordingly,
the members of Class 1H are not entitled to vote on the Plan.
Unless the holder of such Class 1H Claim agrees otherwise,
the obligation for payment of all Allowed Claims in Class 1H
shall be assumed by Reorganized ADI, and the legal, equitable
and contractual rights and liens of each holder of an Allowed
Claim in Class 1H shall be unaffected by Confirmation of the
Plan. All Allowed Claims in Class 1H shall be paid on the
date or dates contained in any agreements for repayment
currently existing between any such holder of a Claim in
Class 1H and ADI; provided, however, that Reorganized ADI
may, at its option, cure any prepetition default(s) under any
such agreement(s) in accordance with section 1124(2) of
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 17
<PAGE> 26
the Bankruptcy Code. If no such agreement exists, such Claim
will be paid by Reorganized ADI on the latest of (i) the
Effective Date or the first practicable date thereafter, (ii)
30 calendar days after the date on which an Order allowing
such Claim becomes a Final Order, or (iv) such other time or
times as may be agreed to by the holder of such Claim and
Reorganized ADI.
4.9 CLASS 1I: SECURED CLAIMS AGAINST ADS
a. Classification: Class 1I consists of all non-tax
Secured Claims against ADS.
b. Treatment: Class 1I is unimpaired and, accordingly,
the members of Class 1I are not entitled to vote on the Plan.
Unless the holder of such Class 1I Claim agrees otherwise,
the obligation for payment of all Allowed Claims in Class 1I
shall be assumed by Reorganized ADS, and the legal, equitable
and contractual rights and liens of each holder of an Allowed
Claim in Class 1I shall be unaffected by Confirmation of the
Plan. All Allowed Claims in Class 1I shall be paid on the
date or dates contained in any agreements for repayment
currently existing between any such holder of a Claim in
Class 1I and ADS; provided, however, that Reorganized ADS
may, at its option, cure any prepetition default(s) under any
such agreement(s) in accordance with section 1124(2) of the
Bankruptcy Code. If no such agreement exists, such Claim will
be paid by Reorganized ADS on the latest of (i) the Effective
Date or the first practicable date thereafter, (ii) 30
calendar days after the date on which an Order allowing such
Claim becomes a Final Order, or (iv) such other time or times
as may be agreed to by the holder of such Claim and
Reorganized ADS.
4.10 CLASS 2: PRIORITY CLAIMS (OTHER THAN UNCLASSIFIED
CLAIMS)
a. Classification: Class 2 consists of all Priority
Claims (other than unclassified Claims set forth in Article
III of the Plan) against any of the Debtors.
b. Treatment: Class 2 is unimpaired and, accordingly,
the members of Class 2 are not entitled to vote on the Plan.
Unless otherwise agreed to by the parties, each holder of an
Allowed Claim in Class 2 will be paid the Allowed amount of
such Claim in full in Cash by the Reorganized Debtor liable
on such Claim on or before the latest of (a) the Effective
Date or the first practicable date thereafter, (b) the date
such Claim becomes an Allowed Claim, or (c) such other date
as is mutually agreed upon by such Debtor and the holder of
such Claim.
4.11 CLASS 3: UNSECURED CLAIMS OF HOLDERS OF SENIOR NOTES
a. Classification: Class 3 consists of the Allowed
Unsecured Claims of the Senior Note Holders against Dailey
International, DES, DIS, CPS, IPS, DERT, DWS, ADI and ADS.
b. Treatment: Class 3 is impaired. Accordingly, members
of Class 3 are entitled to vote on the Plan. Each holder of
an Allowed Claim in Class 3 will receive, in full and final
satisfaction of all unpaid principal, interest and other
Claims owed under, or on
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 18
<PAGE> 27
account of, the Senior Notes and the Senior Note Guaranties,
its Pro Rata share of the Weatherford - Senior Note Holder
Consideration. Weatherford shall deliver the Weatherford -
Senior Note Holder Consideration, other than the portion of
the Weatherford - Senior Note Holder Consideration that is
allocable to the Senior Notes owned by Weatherford, to the
Indenture Trustee for distribution to the holders of Claims in
Class 3, other than Weatherford, in accordance with the
requirements of the Indenture. To the extent Weatherford is
not the record holder of all or a portion of the Senior Notes
owned by Weatherford, Weatherford will provide evidence of
such ownership satisfactory to the Indenture Trustee.
4.12 CLASS 4A: GENERAL UNSECURED CLAIMS AGAINST DAILEY
INTERNATIONAL
a. Classification: Class 4A consists of all unsecured Claims
against Dailey International excluding Administrative Claims,
Tax Claims, Priority Claims and Claims in Class 3 and Class 8.
b. Treatment: Class 4A is unimpaired, and accordingly, the
members of Class 4A are not entitled to vote on the Plan. The
obligation for payment of all Allowed Claims in Class 4A shall
be assumed by Reorganized Dailey International, and the legal,
equitable and contractual rights of each holder of an Allowed
Claim in Class 4A shall be unaffected by Confirmation of the
Plan. Unless otherwise agreed to by the parties, each holder
of an Allowed Claim in Class 4A will be paid the Allowed
amount of such Claim in Cash from the available Cash of
Reorganized Dailey International on the later of (i) the
Effective Date or (ii) the date that such Claim is Allowed.
4.13 CLASS 4B: GENERAL UNSECURED CLAIMS AGAINST DES
a. Classification: Class 4B consists of all unsecured Claims
against DES excluding Administrative Claims, Tax Claims,
Priority Claims and Claims in Class 3 and Class 8.
b. Treatment: Class 4B is unimpaired, and accordingly, the
members of Class 4B are not entitled to vote on the Plan. The
obligation for payment of all Allowed Claims in Class 4B shall
be assumed by Reorganized DES, and the legal, equitable and
contractual rights of each holder of an Allowed Claim in Class
4B shall be unaffected by Confirmation of the Plan. Unless
otherwise agreed to by the parties, each holder of an Allowed
Claim in Class 4B will be paid the Allowed amount of such
Claim in Cash from the available Cash of Reorganized DES on
the later of (i) the Effective Date or (ii) the date on which
such Claim is Allowed.
4.14 CLASS 4C: GENERAL UNSECURED CLAIMS AGAINST DIS
a. Classification: Class 4C consists of all unsecured Claims
against DIS excluding Administrative Claims, Tax Claims,
Priority Claims and Claims in Class 3 and Class 8.
b. Treatment: Class 4C is unimpaired, and accordingly, the
members of Class 4C are not entitled to vote on the Plan. The
obligation for payment of all Allowed Claims in Class 4C shall
be assumed by Reorganized DIS, and the legal, equitable and
contractual
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 19
<PAGE> 28
rights of each holder of an Allowed Claim in Class 4C shall be
unaffected by Confirmation of the Plan. Unless otherwise
agreed to by the parties, each holder of an Allowed Claim in
Class 4C will be paid the Allowed amount of such Claim in Cash
from the available Cash of Reorganized DIS on the later of (i)
the Effective Date or (ii) the date on which such Claim is
Allowed.
4.15 CLASS 4D: GENERAL UNSECURED CLAIMS AGAINST CPS
a. Classification: Class 4D consists of all unsecured Claims
against CPS excluding Administrative Claims, Tax Claims,
Priority Claims and Claims in Class 3 and Class 8.
b. Treatment: Class 4D is unimpaired, and accordingly, the
members of Class 4D are not entitled to vote on the Plan. The
obligation for payment of all Allowed Claims in Class 4D shall
be assumed by Reorganized CPS, and the legal, equitable and
contractual rights of each holder of an Allowed Claim in Class
4D shall be unaffected by Confirmation of the Plan. Unless
otherwise agreed to by the parties, each holder of an Allowed
Claim in Class 4D will be paid the Allowed amount of such
Claim in Cash from the available Cash of Reorganized CPS on
the later of (i) the Effective Date or (ii) the date on which
such Claim is Allowed.
4.16 CLASS 4E: GENERAL UNSECURED CLAIMS AGAINST IPS
a. Classification: Class 4E consists of all unsecured Claims
against IPS excluding Administrative Claims, Tax Claims,
Priority Claims and Claims in Class 3 and Class 8.
b. Treatment: Class 4E is unimpaired, and accordingly, the
members of Class 4E are not entitled to vote on the Plan. The
obligation for payment of all Allowed Claims in Class 4E shall
be assumed by Reorganized IPS, and the legal, equitable and
contractual rights of each holder of an Allowed Claim in Class
4E shall be unaffected by Confirmation of the Plan. Unless
otherwise agreed to by the parties, each holder of an Allowed
Claim in Class 4E will be paid the Allowed amount of such
Claim in Cash from the available Cash of Reorganized IPS on
the later of (i) the Effective Date or (ii) the date on which
such Claim is Allowed.
4.17 CLASS 4F: GENERAL UNSECURED CLAIMS AGAINST DERT
a. Classification: Class 4F consists of all unsecured Claims
against DERT excluding Administrative Claims, Tax Claims,
Priority Claims and Claims in Class 3 and Class 8.
b. Treatment: Class 4F is unimpaired, and accordingly, the
members of Class 4F are not entitled to vote on the Plan. The
obligation for payment of all Allowed Claims in Class 4F shall
be assumed by Reorganized DERT, and the legal, equitable and
contractual rights of each holder of an Allowed Claim in Class
4F shall be unaffected by Confirmation of the Plan. Unless
otherwise agreed to by the parties, each holder of an Allowed
Claim in Class 4F will be paid the Allowed amount of such
Claim in Cash from the available Cash
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 20
<PAGE> 29
of Reorganized DERT on the later of (i) the Effective Date or
(ii) the date on which Claim is Allowed.
4.18 CLASS 4G: GENERAL UNSECURED CLAIMS AGAINST DWS
a. Classification: Class 4G consists of all unsecured Claims
against DWS excluding Administrative Claims, Tax Claims,
Priority Claims and Claims in Class 3 and Class 8.
b. Treatment: Class 4G is unimpaired, and accordingly, the
members of Class 4G are not entitled to vote on the Plan. The
obligation for payment of all Allowed Claims in Class 4G shall
be assumed by Reorganized DWS, and the legal, equitable and
contractual rights of each holder of an Allowed Claim in Class
4G shall be unaffected by Confirmation of the Plan. Unless
otherwise agreed to by the parties, each holder of an Allowed
Claim in Class 4G will be paid the Allowed amount of such
Claim in Cash from the available Cash of Reorganized DWS on
the later of (i) the Effective Date or (ii) the date on which
such Claim is Allowed.
4.19 CLASS 4H: GENERAL UNSECURED CLAIMS AGAINST ADI
a. Classification: Class 4H consists of all unsecured Claims
against ADI excluding Administrative Claims, Tax Claims,
Priority Claims and Claims in Class 3 and Class 8.
b. Treatment: Class 4H is unimpaired, and accordingly, the
members of Class 4H are not entitled to vote on the Plan. The
obligation for payment of all Allowed Claims in Class 4H shall
be assumed by Reorganized ADI, and the legal, equitable and
contractual rights of each holder of an Allowed Claim in Class
4H shall be unaffected by Confirmation of the Plan. Unless
otherwise agreed to by the parties, each holder of an Allowed
Claim in Class 4H will be paid the Allowed amount of such
Claim in Cash from the available Cash of Reorganized ADI on
the later of (i) the Effective Date or (ii) the date which
such Claim is Allowed.
4.20 CLASS 4I: GENERAL UNSECURED CLAIMS AGAINST ADS
a. Classification: Class 4I consists of all unsecured Claims
against ADS excluding Administrative Claims, Tax Claims,
Priority Claims and Claims in Class 3 and Class 8.
b. Treatment: Class 4I is unimpaired, and accordingly, the
members of Class 4I are not entitled to vote on the Plan. The
obligation for payment of all Allowed Claims in Class 4I shall
be assumed by Reorganized ADS, and the legal, equitable and
contractual rights of each holder of an Allowed Claim in Class
4I shall be unaffected by Confirmation of the Plan. Unless
otherwise agreed to by the parties, each holder of an Allowed
Claim in Class 4I will be paid the Allowed amount of such
Claim in Cash from the available Cash of Reorganized ADS on
the later of (i) the Effective Date or (ii) the date on which
such Claim is Allowed.
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 21
<PAGE> 30
4.21 CLASS 5: OLD DII CLASS A COMMON STOCK AND OLD DII CLASS B
COMMON STOCK
a. Classification: Class 5 consists of the Interests of the
holders of the issued and outstanding Old DII Class A Common
Stock and the issued and outstanding Old DII Class B Common
Stock.
b. Treatment: Class 5 is impaired. Each holder of an Allowed
Interest in Class 5 will receive its Pro Rata share of the
Weatherford - Old DII Equity Consideration in full and final
satisfaction of such holder's Interests, but the Debtors shall
not solicit acceptances of the Plan from holders of Interests
in Class 5. Accordingly, members of Class 5 are deemed to
reject the Plan and are not entitled to vote on the Plan.
4.22 CLASS 6A: DES COMMON STOCK
a. Classification: Class 6A consists of the Interests of the
holders of DES Common Stock.
b. Treatment: Class 6A is unimpaired, and accordingly, members
of Class 6A are not entitled to vote on the Plan. Each holder
of an Interest in Class 6A will retain its Interest in
Reorganized DES, and such Interest will be unaffected by
Confirmation of the Plan.
4.23 CLASS 6B: DIS COMMON STOCK
a. Classification: Class 6B consists of the Interests of the
holders of DIS Common Stock.
b. Treatment: Class 6B is unimpaired, and accordingly, members
of Class 6B are not entitled to vote on the Plan. Each holder
of an Interest in Class 6B will retain its Interest in
Reorganized DIS, and such Interest will be unaffected by
Confirmation of the Plan.
4.24 CLASS 6C: CPS COMMON STOCK
a. Classification: Class 6C consists of the Interests of the
holders of CPS Common Stock.
b. Treatment: Class 6C is unimpaired, and accordingly, members
of Class 6C are not entitled to vote on the Plan. Each holder
of an Interest in Class 6C will retain its Interest in
Reorganized CPS, and such Interest will be unaffected by
Confirmation of the Plan.
4.25 CLASS 6D: IPS COMMON STOCK
a. Classification: Class 6D consists of the Interests of the
holders of IPS Common Stock.
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 22
<PAGE> 31
b. Treatment: Class 6D is unimpaired, and accordingly, members
of Class 6D are not entitled to vote on the Plan. Each holder
of an Interest in Class 6D will retain its Interest in
Reorganized IPS, and such Interest will be unaffected by
Confirmation of the Plan.
4.26 CLASS 6E: DERT COMMON STOCK
a. Classification: Class 6E consists of the Interests of the
holders of DERT Common Stock.
b. Treatment: Class 6E is unimpaired, and accordingly, members
of Class 6E are not entitled to vote on the Plan. Each holder
of an Interest in Class 6E will retain its Interest in
Reorganized DERT, and such Interest will be unaffected by
Confirmation of the Plan.
4.27 CLASS 6F: DWS COMMON STOCK
a. Classification: Class 6F consists of the Interests of the
holders of DWS Common Stock.
b. Treatment: Class 6F is unimpaired, and accordingly, members
of Class 6F are not entitled to vote on the Plan. Each holder
of an Interest in Class 6F will retain its Interest in
Reorganized DWS, and such Interest will be unaffected by
Confirmation of the Plan.
4.28 CLASS 6G: ADI COMMON STOCK
a. Classification: Class 6G consists of the Interests of the
holders of ADI Common Stock.
b. Treatment: Class 6G is unimpaired, and accordingly, members
of Class 6G are not entitled to vote on the Plan. Each holder
of an Interest in Class 6G will retain its Interest in
Reorganized ADI, and such Interest will be unaffected by
Confirmation of the Plan.
4.29 CLASS 6H: ADS COMMON STOCK
a. Classification: Class 6H consists of the Interests of the
holders of ADS Common Stock.
b. Treatment: Class 6H is unimpaired, and accordingly, members
of Class 6H are not entitled to vote on the Plan. Each holder
of an Interest in Class 6H will retain its Interest in
Reorganized ADS, and such Interest will be unaffected by
Confirmation of the Plan.
4.30 CLASS 7: OTHER EQUITY INTERESTs
a. Classification: Class 7 consists of all other equity
Interests in any of the Debtors.
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 23
<PAGE> 32
b. Treatment: The holders of Interests in Class 7 will not
receive any distribution on account of their Interests.
Accordingly, the holders of Class 7 Interests are impaired and
are deemed to have rejected the Plan.
4.31 CLASS 8: INTERCOMPANY CLAIMS
a. Classification: Class 8 consists of all Allowed Claims
between and among the Debtors as reflected on the books and
records of each, whether or not such Claim(s) are Filed or
deemed to be Filed pursuant to sections 501 and 1111(a) of the
Bankruptcy Code.
b. Treatment: Class 8 is unimpaired, and accordingly, the
members of Class 8 are not entitled to vote on the Plan. Each
of the Reorganized Debtors shall assume its obligation(s) for
payment of all Class 8 claims, and the legal, equitable and
contractual rights of each holder of an Allowed Claim in Class
8 shall be unaffected by Confirmation of the Plan. Unless
otherwise agreed to by the parties, each holder of an Allowed
Claim in Class 8 shall be paid the Allowed amount of such
Claim in Cash from the available Cash of the Reorganized
Debtor obligated on such Allowed Claim on the latest of (i)
the Effective Date; (ii) the date upon which such Claim is
allowed; or (iii) the date upon which such Claim becomes due
under its own terms.
ARTICLE V
ACCEPTANCE OR REJECTION OF THE PLAN
5.1 VOTING CLASSES. The holders of Claims in Class 3 are impaired
and shall be entitled to vote to accept or reject the Plan.
5.2 PRESUMED ACCEPTANCE OF PLAN. Classes 1A, 1B, 1C, 1D, 1E, 1F,
1G, 1H, 1I, 2, 4A, 4B, 4C, 4D, 4E, 4F, 4G, 4H, 4I, 6A, 6B, 6C, 6D, 6E, 6F, 6G,
6H and 8 are unimpaired. Therefore, none of the holders of Claims or Interests
in such classes are entitled to vote on the Plan.
5.3 PRESUMED REJECTION OF PLAN. The holders of Interests in Class
5 are impaired, but the Debtors are not soliciting their acceptances of the
Plan. The holders of Interests in Class 7 are impaired and will receive no
distribution under the Plan. Accordingly, holders of Interests in Classes 5 or 7
are not entitled to vote on the Plan, and Classes 5 and 7 are deemed to have
rejected the Plan.
ARTICLE VI
FUNDING AND METHODS OF DISTRIBUTION AND
PROVISIONS FOR TREATMENT OF DISPUTED CLAIMS
6.1 FUNDING OF DISTRIBUTIONS UNDER THE PLAN. On or before the
Effective Date, the Debtors and/or the Indenture Trustee shall obtain all Cash
and Weatherford Consideration that is necessary to make the distributions
required to be made under the Plan on the Effective Date.
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 24
<PAGE> 33
6.2 DISTRIBUTION PROCEDURES. Except as otherwise provided in the
Plan, all distributions of property on account of any Allowed Claim or Allowed
Interest shall be made in accordance with the terms of this Plan on the later of
(i) the Effective Date or the first practicable date thereafter or (ii) the date
on which such Claim is Allowed. Distributions required to be made on a
particular date shall be deemed to have been made on such date if actually made
on such date or as soon thereafter as practicable. No payments or other
distributions of property shall be made on account of any Claim or Interest or
portion thereof unless and until such Claim or portion thereof is Allowed.
6.3 DISTRIBUTIONS TO HOLDERS OF ALLOWED ADMINISTRATIVE EXPENSE
CLAIMS, PRE-PETITION TAX CLAIMS AND CLASS 2 PRIORITY CLAIMS. Commencing on the
Effective Date, the Reorganized Debtors shall, in accordance with Article III of
the Plan, distribute Cash to each holder of a then unpaid Allowed Administrative
Claim, to each holder of a then unpaid Allowed Pre-Petition Tax Claim, and to
each holder of a then unpaid Allowed Class 2 Priority Claim in the Allowed
amount of such holder's Claim. The Reorganized Debtors shall maintain Cash or
access to working capital necessary to pay the remaining Administrative Expense
Claims, Pre-Petition Tax Claims, and Class 2 Priority Claims (or portions
thereof) pursuant to Article III of the Plan if and to the extent that the
balance, if any, of such Claims is Allowed by Final Order.
6.4 DISTRIBUTIONS TO HOLDERS OF ALLOWED SECURED CLAIMS.
Distributions on the Allowed amounts of Class 1 Claims shall be made in
accordance with sections 4.1 - 4.9 of the Plan.
6.5 DISTRIBUTIONS TO HOLDERS OF ALLOWED GENERAL UNSECURED CLAIMS.
Distributions on the Allowed amounts of Class 4 Claims shall be in accordance
with sections 4.12 - 4.20 of the Plan.
ARTICLE VII
MANNER OF DISTRIBUTION OF PROPERTY UNDER THE PLAN
7.1 CASH DISTRIBUTIONS. All Cash distributions made pursuant to
the Plan shall be made by the Reorganized Debtors or their agents from the
Reorganized Debtors' available Cash. Any such payments may be made either by
check or wire transfer, at the option of the payor.
7.2 DISTRIBUTION OF WEATHERFORD CONSIDERATION.
A. DISTRIBUTION OF WEATHERFORD - SENIOR NOTE HOLDER
CONSIDERATION. On or before the Effective Date, Weatherford
shall deliver to the Indenture Trustee all of the Weatherford
- Senior Note Holder Consideration, other than the portion of
the Weatherford - Senior Note Holder Consideration that is
allocable to the Senior Notes owned by Weatherford.
Weatherford shall issue and retain as Treasury shares the
Weatherford - Senior Note Holder Consideration that is
allocable to the Senior Notes owned by Weatherford. On the
Effective Date, the Indenture Trustee will have responsibility
pursuant to the Indenture for disbursing the Weatherford -
Senior Note Holder Consideration to the holders of Class 3
Claims, other than Weatherford, in accordance with section
4.11 of this Plan.
B. DISTRIBUTION OF WEATHERFORD - OLD DII EQUITY CONSIDERATION.
On or before the Effective Date, Weatherford shall deliver to
the Disbursing Agent all of the
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 25
<PAGE> 34
Weatherford Old DII Equity Consideration. On the Effective
Date, the Disbursing Agent will have responsibility pursuant
to the Disbursing Agreement for disbursing the Weatherford -
Old DII Equity Consideration to the holders of Class 5 Claims
in accordance with section 4.21 of this Plan.
7.3 SURRENDER AND CANCELLATION OF OLD SECURITIES.
A. SURRENDER OF SENIOR NOTES. As a condition to receiving the
Weatherford - Senior Note Holder Consideration distributable under the
Plan, the holders of Senior Notes shall surrender their Senior Notes to
the Indenture Trustee. Any holder of a Senior Note whose instrument has
been lost, stolen, mutilated or destroyed shall, in lieu of
surrendering such instrument, deliver to the Indenture Trustee or its
agent: (a) evidence satisfactory to the Indenture Trustee or its agent
of the loss, theft, mutilation or destruction of such instrument, and
(b) such security or indemnity that may be reasonably required by the
Indenture Trustee or its agent to hold the Indenture Trustee and its
agent harmless with respect to any such representation of such holder.
Upon compliance with the preceding sentence, such holder shall, for all
purposes under the Plan, be deemed to have surrendered such instrument.
Weatherford shall be deemed to have surrendered such instrument as a
capital contribution to Dailey International. Any holder of a Senior
Note which has not surrendered or been deemed to have surrendered its
Senior Notes within two years after the Effective Date shall have its
Claim as a holder of Senior Notes disallowed, shall receive no
distribution on account of its Claim as a holder of Senior Notes, and
shall be forever barred from asserting any Claim on account of its
Senior Notes. Any Weatherford - Senior Note Holder Consideration issued
and held for distribution on account of such disallowed claims of
holders of Senior Notes shall be returned to Weatherford. As of the
Effective Date, all Senior Notes shall represent only the right to
participate in the distributions provided in the Plan on account of
such Senior Notes.
B. SURRENDER OF OLD COMMON STOCK. As a condition to receiving
the Weatherford Old DII Equity Consideration distributable under the
Plan, the holders of Old Common Stock shall surrender their Old Common
Stock to the Disbursing Agent. Any holder of Old Common Stock whose
instrument has been lost, stolen, mutilated or destroyed shall, in lieu
of surrendering such instrument, deliver to the Disbursing Agent: (a)
evidence satisfactory to the Disbursing Agent of the loss, theft,
mutilation or destruction of such instrument, and (b) such security or
indemnity that may be reasonably required by the Disbursing Agent to
hold the Disbursing Agent harmless with respect to any such
representation of such holder. Upon compliance with the preceding
sentence, such holder shall, for all purposes under the Plan, be deemed
to have surrendered such instrument. Any holder of Old Common Stock
that has not surrendered or been deemed to have surrendered its Old
Common Stock within two years after the Effective Date shall have its
Interest as a holder of Old Common Stock disallowed, shall receive no
distribution on account of its Interest as a holder of Old Common
Stock, and shall be forever barred from asserting any Claim or Interest
on account of its Old Common Stock. Any Weatherford - Old DII Equity
Consideration issued and held for distribution on account of such
disallowed Interests of holders of Old Common Stock shall be returned
to Weatherford. As of the Effective Date, all Old Common Stock shall
represent only the right to participate in the distributions provided
in the Plan on account of such Old Common Stock.
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 26
<PAGE> 35
C. SURRENDER OF CLASS 7 INTERESTS. On the Effective Date, the
instruments evidencing the Interests of holders of Interests in Class 7
shall be deemed surrendered and canceled. All rights of such holders
attributable to their Class 7 Interests shall be forever terminated and
extinguished as of the Effective Date.
7.4 BALLOT RECORD DATE; DISTRIBUTION DATE. The Indenture Trustee
shall distribute all Weatherford - Senior Note Holder Consideration to be
distributed pursuant to the Plan to the record holders of Senior Notes, other
than Weatherford, as of the Ballot Record Date, unless, prior to the Effective
Date, the holder or transferee of any such Claim furnishes the Indenture
Trustee, or its agent, with sufficient evidence (in the Indenture Trustee's or
its agent's sole and absolute discretion) of the transfer of such Claim, in
which event the Indenture Trustee shall distribute, or cause to be distributed,
all distributions of property to the transferee of such Claim as of the
Effective Date. As of the close of business on the Effective Date, the transfer
ledgers with respect to the Senior Notes shall be closed and the Debtors, the
Reorganized Debtors, and the Indenture Trustee shall have no obligation to
recognize any transfer of the Senior Notes occurring thereafter.
The Disbursing Agent shall distribute all Weatherford - Old DII Equity
Consideration to be distributed pursuant to the Plan to the record holders of
Old Common Stock as of the Ballot Record Date, unless, prior to the Effective
Date, the holder or transferee of any such Interest furnishes the Disbursing
Agent with sufficient evidence (in the Disbursing Agent's sole and absolute
discretion) of the transfer of such Interest, in which event the Disbursing
Agent shall distribute, or cause to be distributed, all distributions of
property to the transferee of such Interest as of the Effective Date. As of the
close of business on the Effective Date, the transfer ledgers with respect to
the Old Common Stock shall be closed and the Debtors and the Reorganized Debtors
shall have no obligation to recognize any transfer of the Old Common Stock
occurring thereafter.
7.5 DISPUTED CLAIMS. Notwithstanding any other provisions of the
Plan, no payments or distributions shall be made on account of any Disputed
Claim until such Claim becomes an Allowed Claim, and then only to the extent
that it becomes an Allowed Claim.
7.6 MANNER OF PAYMENT UNDER THE PLAN. Cash payments made by the
Reorganized Debtors pursuant to the Plan shall be in U.S. dollars by checks
drawn on a domestic bank selected by the Reorganized Debtors or by wire transfer
from a domestic bank, at the Reorganized Debtor's option, except that payments
made to foreign trade creditors holding Allowed Claims may be paid, at the
option of the Reorganized Debtors, in such funds and by such means as are
necessary or customary in a particular foreign jurisdiction.
7.7 DELIVERY OF DISTRIBUTIONS AND UNDELIVERABLE OR UNCLAIMED
DISTRIBUTIONS.
A. DELIVERY OF DISTRIBUTIONS IN GENERAL. Except as provided
below in section 7.7(b) for holders of undeliverable
distributions, distributions to holders of Allowed Claims
shall be distributed by mail as follows: (a) except in the
case of the holder of a Senior Note, (1) to the addresses set
forth on the respective proofs of claim filed by such holders;
(2) to the addresses set forth in any written notices of
address changes delivered to the Reorganized Debtors after the
date of any related proof of claim; or (3) to the addresses
reflected on the Schedules of Assets and Liabilities Filed by
the Debtors if no proof of Claim or proof of Interest is Filed
and the Reorganized Debtors have not received
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 27
<PAGE> 36
a written notice of a change of address; and (b) in the case
of the holder of a Senior Note, by the Indenture Trustee to
the latest mailing address maintained of record by the
pertinent Indenture Trustee.
B. UNDELIVERABLE DISTRIBUTIONS.
I. HOLDING AND INVESTMENT OF UNDELIVERABLE PROPERTY.
If the distribution to the holder of any Claim or
Interest other than the holder of a Senior Note is
returned to the Reorganized Debtors or the Disbursing
Agent as undeliverable, no further distribution shall
be made to such holder unless and until the
Reorganized Debtors or the Disbursing Agent are
notified in writing of such holder's then current
address. Subject to section 7.7(b)(ii), undeliverable
distributions shall remain in the possession of the
Reorganized Debtors or the Disbursing Agent pursuant
to this section until such time as a distribution
becomes deliverable.
Unclaimed Cash (including interest, dividends and
other consideration, if any, distributed on or
received for undeliverable Weatherford Common Stock)
shall be held in trust in a segregated bank account
in the name of Reorganized Dailey International, for
the benefit of the potential claimants of such funds,
and shall be accounted for separately. Such funds
shall be held in interest-bearing accounts if
practicable, and the parties entitled to such funds
shall be entitled to their Pro Rata share of any
interest earned on such funds.
Undeliverable Weatherford - Old DII Equity
Consideration shall be held in trust for the benefit
of the potential claimants of such consideration. The
Disbursing Agent shall hold in trust a number of
shares sufficient to provide for unclaimed amounts of
such securities.
II. DISTRIBUTION OF UNDELIVERABLE PROPERTY AFTER IT
BECOMES DELIVERABLE AND FAILURE TO CLAIM
UNDELIVERABLE PROPERTY. Any holder of an Allowed
Claim or Interest other than a holder of a Senior
Note who is entitled to but does not assert a claim
for an undeliverable distribution held by the
Reorganized Debtors, or the Disbursing Agent, within
two (2) years after the Effective Date shall no
longer have any claim to or interest in such
undeliverable distribution, and shall be forever
barred from receiving any distributions under this
Plan. In such cases, any Cash held for distribution
on account of such Claims shall be delivered to the
Reorganized Debtors, and any undeliverable
Weatherford - Old DII Equity Consideration shall be
returned to Weatherford.
C. FAILURE TO PRESENT CHECKS. Checks issued in respect
of distributions under the Plan shall be null and void if not
presented for payment by the drawee bank within 60 days after
the date of issuance. Any amounts returned to the Reorganized
Debtors in respect of such checks shall be held by the
Reorganized Debtors. Requests for re-issuance of any such
check may be made directly to the Reorganized Debtors by the
holder of the Allowed Claim with respect to which such check
originally was issued, in which case a replacement check in
the same amount as the original, unpresented check shall be
issued. Any claim in respect of such voided check is required
to be made before the second
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 28
<PAGE> 37
anniversary of the Effective Date, after which time all Claims
in respect of void checks and the underlying distributions
shall be discharged and forever barred from assertion against
the Reorganized Debtors and their property.
7.8 COMPLIANCE WITH TAX REQUIREMENTS. In connection with the Plan,
to the extent applicable, the Reorganized Debtors shall comply with all
withholding and reporting requirements imposed on them by any governmental unit,
and all distributions pursuant to the Plan shall be subject to such withholding
and reporting requirements. The Weatherford - Senior Note Holder consideration
will be allocated first to principal and then, to the extent such consideration
exceeds the principal amount of the Claim, to accrued but unpaid interest.
7.9 SETOFFS. Unless otherwise provided in a Final Order or in this
Plan, the Debtors may, but shall not be required to, offset against any Claim
and the payments to be made pursuant to the Plan in respect of such Claim, any
claims of any nature whatsoever the Debtors may have against the holder of such
Claim or its predecessor, but neither the failure to do so nor the allowance of
any Claim hereunder shall constitute a waiver or release by the Debtor of any
such claims the Companies may have against such holder or its predecessor.
7.10 FRACTIONAL INTERESTS. The calculation of any percentage
distribution of Weatherford Common Stock to be made to holders of certain
Allowed Claims and Interests as provided elsewhere in this Plan may
mathematically entitle the holder of such an Allowed Claim or Interest to a
fractional interest in such Weatherford Common Stock. For purposes of applying
this section, the holders of Allowed Claims or Interests under or evidenced by
Old Securities shall, in the case of Old Securities held in street name, mean
the beneficial holders thereof as of the Effective Date.
In lieu of fractional shares of Weatherford Common Stock, a Person who
would otherwise be entitled to receive a fraction of a share shall receive Cash,
without interest, in an amount equal to such fraction multiplied by the Fair
Market Value of the Weatherford Common Stock. The total number of shares of
Weatherford Common Stock to be distributed to a class of Claims or Interests
shall be adjusted as necessary to account for such elimination of fractional
shares.
ARTICLE VIII
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
8.1 ASSUMPTION OF ALL EXECUTORY CONTRACTS AND LEASES NOT REJECTED. The
Plan constitutes and incorporates a motion by the Debtors to assume, as of the
Effective Date, all pre-petition executory contracts and unexpired leases to
which the Debtors are a party (including the Acquisition Agreement, the
Technology Agreement and the Lawrence Leases, as modified by the Lawrence/Dailey
Lease Modification Agreements), except for any executory contract or unexpired
lease that (a) has been previously assumed or rejected pursuant to a Final
Order, (b) is the subject of a pending contested motion for authority to assume
the contract or lease Filed by the Debtors prior to the Confirmation Date, (c)
is identified on the Plan Supplement, or (d) is a pre-existing employment
agreement contract with any of Messrs. Lawrence, Kite, Sutton., Beard, Avery,
Lyons, Torres, or Goolsbay, each of which is deemed rejected on the Effective
Date. The Plan Supplement shall be filed on or before ten (10) days prior to the
hearing to consider Confirmation of this Plan and will include a list of all
executory contracts or unexpired
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 29
<PAGE> 38
leases that the Debtors intend to reject pursuant to the Plan (together, the
"Rejected Contracts"). Each assumed executory contract or assumed unexpired
lease (together, the "Assumed Contracts") shall, pursuant to the Plan, be
assumed without further order of Court upon Confirmation of this Plan. Each
Rejected Contract shall, pursuant to the Plan, be rejected without further order
of the Court upon Confirmation of this Plan.
8.2 CURE PAYMENTS. Any Cure Payment for each Assumed Contract
shall be made (i) in Cash on the Effective Date, or (ii) on such other terms as
agreed to by the Reorganized Debtors and the non-debtor parties to such Assumed
Contract. In the event of a dispute regarding (i) the amount of any Cure
Payment, (ii) the ability of the Reorganized Debtors to provide adequate
assurance of future performance under the Assumed Contract, or (iii) any other
matter pertaining to assumption (or assumption and assignment), the Cure Payment
required by section 365(b)(1) of the Bankruptcy Code shall be made by the
Reorganized Debtors following the entry of a Final Order resolving the dispute
and approving such assumption.
8.3 BAR DATE FOR FILING OF REJECTION CLAIMS. Any Rejection Claim
arising from the rejection under this Plan of a Rejected Contract must be Filed
within thirty (30) days after the mailing of notice of Confirmation. Any
Rejection Claim that is not filed within such time frame shall be forever barred
and unenforceable against the Debtors, the Estates, the Reorganized Debtors, any
of their affiliates, successors and assignees, and their properties and barred
from receiving any distribution under this Plan. Any Allowed Rejection Claim
shall be treated in this Plan as a general unsecured Claim against the Debtor
that is a party to the Rejected Contract.
8.4 CHANGE IN CONTROL CONTRACTS. On the Effective Date, all Change
in Control Contracts will be deemed rejected. Any non-Debtor party to a rejected
Change in Control Contract will have an allowed Rejection Claim in Class 4A,
pursuant to section 502(b)(7) of the Bankruptcy Code, equal to the compensation
provided by such party's employment agreement, without acceleration, for one
year following the Petition Date plus any unpaid compensation, without
acceleration, as of the Petition Date. All non-Debtor parties to rejected Change
in Control Contracts, except James D. Lawrence, will enter into consulting
contracts with Reorganized Dailey International on the Effective Date. Each such
consulting contract shall have a term of one year and provide for compensation
payable to the non-Debtor party equal to the difference between the payment in
respect of that party's Rejection Claim and the aggregate amount which would
have been payable if a change of control severance payment had been due
immediately prior to the commencement of the Reorganization Case. James D.
Lawrence will receive a bonus from Reorganized Dailey International on the
Effective Date equal to the difference between the payment he receives on
account of his Rejection Claim and the aggregate amount of severance that would
have been payable to him if a change of control severance payment had been due
immediately prior to the commencement of the Reorganization Case.
ARTICLE IX
MODIFICATION OF LAWRENCE LEASES
9.1 ASSUMPTION OF LAWRENCE LEASES. Notwithstanding Article VIII of
the Plan, the Plan constitutes and incorporates a motion by Dailey International
to assume the Lawrence Leases as of the Effective Date pursuant to section 365
of the Bankruptcy Code in accordance with the terms of this Article IX. Subject
to the terms of this Article IX and conditioned upon the execution of the
Lawrence/Dailey
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 30
<PAGE> 39
Lease Modification Agreements as set forth in section 9.2 herein below, the
Lawrence Leases shall, pursuant to the Plan, be assumed without further order of
the Bankruptcy Court on the Effective Date by virtue of Confirmation of the
Plan.
9.2 LAWRENCE/DAILEY LEASE MODIFICATION AGREEMENTS. On the
Effective Date, Reorganized Dailey International and Lawrence International
shall execute the Lawrence/Dailey Lease Modification Agreements attached hereto
as Exhibit "3", thereby restructuring the Lawrence Leases.
ARTICLE X
MEANS FOR EXECUTION AND IMPLEMENTATION OF THE PLAN
10.1 CONSUMMATION OF THE ACQUISITION AGREEMENT. On the Effective
Date, the Debtors will consummate the transactions set forth in the Acquisition
Agreement, a copy of which is attached to this Plan as Exhibit "1" and
incorporated herein by reference, which will result in Weatherford's owning all
of the common stock of Reorganized Dailey International.
10.2 CANCELLATION OF OLD SECURITIES. On the Effective Date, all Old
Securities shall be terminated and canceled, and the indentures or statements of
resolution governing such Old Securities shall be rendered void. Notwithstanding
the foregoing, such termination will not impair the rights and duties under the
Indenture between the Indenture Trustee and the beneficiaries of the trust
created thereby including, but not limited to, the rights of the Indenture
Trustee to receive payment of its fees and expenses, to the extent not paid by
Reorganized Dailey International, from amounts distributable to holders of the
Senior Notes.
10.3 REORGANIZED DAILEY INTERNATIONAL COMMON STOCK. On the
Effective Date, pursuant to the Confirmation Order and without any further
action by the stockholders or directors of Dailey International, Reorganized
Dailey International shall issue 1,000 shares of Reorganized Dailey
International Class A Common Stock to Weatherford.
10.4 REGISTRATION EXEMPTION FOR WEATHERFORD COMMON STOCK. The
Confirmation Order shall provide that any distribution of the Weatherford Common
Stock to holders of Allowed Claims and Interests pursuant to the Plan and the
Amended Certificate of Incorporation shall be (i) exempt from any and all
federal, state and local laws requiring the registration of such securities
pursuant to Section 1145(a)(1) of the Bankruptcy Code and (ii) freely tradeable
by most recipients who are not underwriters or, if not, subject to shelf resale
registration rights. Such exemption is based on the fact that Weatherford is a
successor to the Debtors whose common stock will be issued to holders of Claims
against and Interests in the Debtors in exchange for such Claims and Interests.
The Confirmation Order shall provide that the issuance of the Dailey
International Common Stock to Weatherford pursuant to the Plan and the Amended
Certificate of Incorporation shall be exempt from any and all federal, state and
local laws requiring the registration of such securities pursuant to Section
4(2) of the 1933 Act and similar exemptions to registration under applicable
state securities laws. This exemption is applicable because Weatherford is a
sophisticated and knowledgeable investor and is acquiring the stock of Dailey
International for investment rather than distribution purposes, subject to its
right to seek registration in the event it subsequently intends to sell such
stock. Any resale may be subject to registration or other exemptions.
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 31
<PAGE> 40
10.5 CHARTER AND BY-LAWS. The certificate of incorporation of
Reorganized Dailey International shall read substantially as set forth in the
Amended Certificate of Incorporation.
10.6 CORPORATE ACTION. Upon entry of the Confirmation Order, the
following shall be authorized and approved in all respects: (a) the filing by
Reorganized Dailey International of the Amended Certificate of Incorporation and
(b) the issuance of Reorganized Dailey Common Stock to Weatherford. On the
Effective Date, or as soon thereafter as is practicable, Reorganized Dailey
International shall file with the Secretary of State of the State of Delaware,
in accordance with applicable state law, the Amended Certificate of
Incorporation, which shall conform to the provisions of the Plan and prohibit
the issuance of non-voting equity securities. On the Effective Date, the Debtors
shall be authorized and directed to take all necessary and appropriate actions
to effectuate the transactions contemplated by the Plan and the Disclosure
Statement.
10.7 REMOVAL OF OFFICERS AND DIRECTORS. On the Effective Date, the
officers and boards of directors of the Debtors shall be deemed removed from
office pursuant to the Confirmation Order, and the Reorganized Debtors shall, on
the Effective Date, install new officers and directors. The post-Effective Date
operation of the Reorganized Debtors in accordance with the provisions of the
Plan shall become the general responsibility of the Reorganized Debtors.
10.8 RESPONSIBILITIES OF REORGANIZED DEBTORS. The general
responsibilities of the Reorganized Debtors shall include implementing all
distributions under the terms of this Plan, filing all required tax returns and
paying taxes and all other obligations on behalf of the Reorganized Debtors,
prosecuting Claims objections and otherwise managing the Claims resolution
process, filing a motion to close the Reorganization Case, and such other
responsibilities as may be vested in the Reorganized Debtors pursuant to the
Plan or Bankruptcy Court order or as may be necessary and proper to carry out
the provisions of the Plan.
10.9 PRESERVATION OF RIGHTS OF ACTION. Except as otherwise provided
in the Plan, or in any contract, instrument, release, or other agreement entered
into in connection with the Plan, in accordance with section 1123(b) of the
Bankruptcy Code, the Reorganized Debtors shall retain and may enforce any
claims, rights and causes of action that the Debtors or the Estates may hold
against any entity, including, without limitation, any claims, rights or causes
of action arising under sections 544 through 551 or other sections of the
Bankruptcy Code or any similar provisions of state law, or any other statute or
legal theory. The Reorganized Debtors shall retain and may enforce their
respective rights to object to Claims on any basis, including 11 U.S.C. Section
502(d). The Reorganized Debtors or any successor to or designee of any of them
may pursue those rights of action, as appropriate, in accordance with what is in
the best interests of the Reorganized Debtors or successors holding such rights
of action.
10.10 OBJECTIONS TO CLAIMS.
a. PRIOR TO THE EFFECTIVE DATE. Pursuant to the terms of the
Acquisition Agreement, the Debtors shall not, prior to the Effective
Date, settle any Unsecured Claim without Weatherford's written consent.
Moreover, upon written request from Weatherford, the Debtors shall file
and prosecute Claims objections in the Reorganization Case. Subject to
the foregoing, the Debtors and any party-in-interest may object to
Claims prior to the Effective Date.
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 32
<PAGE> 41
b. FROM AND AFTER THE EFFECTIVE DATE. Except as otherwise
provided for with respect to applications of professionals for
compensation and reimbursement of expenses under section 3.1(c)(ii)
hereof, or as otherwise ordered by the Bankruptcy Court after notice
and a hearing, objections to Claims, including Administrative Claims,
shall be Filed and served upon the holder of such Claim or
Administrative Claim not later than the later of (i) ninety (90) days
after the Effective Date, and (ii) ninety (90) days after a proof of
Claim or request for payment of such Administrative Claim is Filed,
unless this period is extended by the Court. Such extension may occur
ex parte. After the Effective Date, the Reorganized Debtors shall have
the exclusive right to object to Claims.
10.11 RELEASES.
a. On the Effective Date, the Reorganized Debtors, on their
own behalf and as representatives of the Debtors' Estates, in
consideration of services rendered in the Reorganization Case
and other good and valuable consideration, will release
unconditionally each of the Debtors' present and former
officers and directors, and the entities that elected such
directors to the extent they are or may be liable for the
actions or inactions of such officers or directors, from any
and all claims, obligations, suits, judgments, damages,
rights, causes of action and liabilities whatsoever
(including, without limitation, those arising under the
Bankruptcy Code), whether known or unknown, foreseen or
unforeseen, existing or thereafter arising, in law, equity or
otherwise, based in whole or in part on any act, omission,
transaction, event or other occurrence taking place before, on
or after the Petition Date up to the Effective Date, in any
way relating to the Debtors (before, on or after the Petition
Date), the Reorganization Case, or the Plan; provided,
however, that the foregoing shall not apply to any action or
omission that constitutes actual fraud or criminal behavior.
b. On the Effective Date, the Reorganized Debtors, on their
own behalf and as representatives of the Debtors' Estates, in
consideration of services rendered in the Reorganization Case
and other good and valuable consideration, will release
unconditionally the professional advisors who have performed
services after the Petition Date on behalf of the Debtors, the
Debtors' present and former officers and directors
(collectively with the releases set out in paragraph 10.11(a)
above, the "Releases"), from any and all claims, obligations,
suits, judgments, damages, rights, causes of action and
liabilities whatsoever (including, without limitation, those
arising under the Code), whether known or unknown, foreseen or
unforeseen, existing or thereafter arising, in law, equity or
otherwise, based in whole or in part on any act, omission,
transaction, event or other occurrence taking place after the
Petition Date up to the Effective Date, in any way relating to
post-petition services performed relating to the Debtors
(after the Petition Date), the Reorganization Case, or the
Plan (collectively with the items set out in paragraph
10.11(a) above, the "Released Matters"); provided, however,
that the foregoing shall not apply to any action or omission
that constitutes actual fraud or criminal behavior.
c. The Confirmation Order shall contain a permanent injunction
to effectuate the releases granted herein.
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 33
<PAGE> 42
10.12 RETIREE BENEFITS. On or after the Effective Date, pursuant to
section 1129(a)(13) of the Bankruptcy Code, the Company will continue to pay all
retiree benefits, as that term is defined in section 1114 of the Bankruptcy
Code, at the level established pursuant to subsection (e)(1)(B) or (g) of
section 1114, at any time prior to confirmation of the Plan, for the duration of
the period the Debtors have obligated themselves to provide such benefits.
10.13 EXEMPTION FROM STAMP AND SIMILAR TAXES. The issuance and
transfer of the (i) Weatherford Common Stock to holders of Claims or Interests
and (ii) the Reorganized Dailey International common stock to Weatherford shall
not be taxed under any law imposing a stamp tax or similar tax in accordance
with 11 U.S.C. Section 1146(c).
ARTICLE XI
CONDITIONS TO EFFECTIVENESS OF THE PLAN
11.1 CONDITIONS TO EFFECTIVENESS. Except as expressly waived by the
Debtors and Weatherford, subject to Article 11.2, the following conditions must
occur and be satisfied on or before the Effective Date:
a. The Confirmation Order shall have been signed by the Court
and duly entered on the docket for the Reorganization Case by
the clerk of the Court in form and substance acceptable to the
Debtors, the Creditors' Committee and Weatherford and, unless
otherwise agreed to in writing by Weatherford, shall include,
among other things, findings of fact and/or conclusions of law
that:
i. approve the terms of the Acquisition Agreement and
the Debtors' assumption pursuant to Bankruptcy Code
Section 365, execution, delivery and performance of
the Acquisition Agreement, the Technology Agreement,
the Lawrence Leases, as modified by the
Lawrence/Dailey Lease Modification Agreements, and
all other agreements contemplated by the Acquisition
Agreement;
ii. approve the sale of the Reorganized Dailey
International common stock to Weatherford free and
clear of all liens, claims, interests, rights of
others and encumbrances of every kind;
iii. provide that Weatherford is a "good faith
purchaser" of the Reorganized Daily International
common stock;
iv. provide that Weatherford has acted in good faith
with respect to the Acquisition Agreement pursuant to
section 363(m) of the Bankruptcy Code;
v. enjoin and restrain all creditors of the Debtors
from asserting any lien, claim, interest or
encumbrance (other than any lien, claim, interest or
encumbrance that cannot be removed under the
Bankruptcy Code) that any of them has or had against
the Reorganized Dailey International common stock or
any of the assets of the Debtors;
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 34
<PAGE> 43
vi. reserve the jurisdiction of the Bankruptcy Court
to implement and enforce the Plan, the Acquisition
Agreement, the Technology Agreement and the
Lawrence/Dailey Lease Modification Agreements, as
well as Weatherford's peaceful use and enjoyment of
the assets of the Debtors after the Effective Date,
free and clear of all liens, claims and encumbrances
to the fullest extent permitted under the Bankruptcy
Code;
vii. terminate the automatic stay under section 362
of the Bankruptcy Code to the extent necessary to
permit Weatherford to enforce the terms of the
Acquisition Agreement;
viii. release Weatherford and its post-closing
affiliates, representatives, employees and agents
from any claims related to or arising in the
Reorganization Case through the Effective Date other
than claims arising under the Acquisition Agreement;
ix. provide that the transfer of the Reorganized
Dailey International common stock to Weatherford is
exempt from any tax to the fullest extent permitted
by section 1146 of the Bankruptcy Code;
x. provide that the issuance of Weatherford Common
Stock pursuant to the Plan is exempt from
registration under the Securities Act and all
applicable state and local securities laws;
xi. provide, pursuant to section 1125(e) of the
Bankruptcy Code, that Persons who have solicited
acceptances or rejections of the Plan and/or
participate in the offer, issuance, sale or purchase
of securities offered or sold under the Plan have
acted in good faith and in compliance with the
provisions of the Bankruptcy Code, and are not liable
on account of such solicitation or participation for
violation of applicable law, rule, or regulation
governing the solicitation of acceptances or
rejections of the Plan or the offer, issuance, sale
or purchase of securities.
b. The Confirmation Order shall have become an Effective
Confirmation Order and not have been stayed, modified,
reversed or amended; and
c. The Acquisition Agreement shall not have been terminated
and there shall be no fact, event, condition or circumstance
that will impede or prevent the Closing and effectiveness of
the Acquisition Agreement on the Effective Date.
11.2 WAIVER OF CONDITIONS. The Debtors and Weatherford may waive
any condition set forth in this Article XI at any time, without notice, without
leave of or order of the Court, and without any formal action other than
proceeding to consummate the Plan. In accordance with the terms of the Voting
Agreement, to the extent such waiver would adversely effect the Senior Note
Holders, the Debtors and Weatherford will obtain the consent of the Creditors'
Committee to such waiver.
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 35
<PAGE> 44
ARTICLE XII
EFFECTS OF PLAN CONFIRMATION
12.1 DISCHARGE OF DEBTORS AND REORGANIZED DEBTORS AND INJUNCTION.
The rights afforded in this Plan, including the issuance by Weatherford of
Weatherford Common Stock to the holders of Claims or Interests, and the
treatment of all Claims and Interests herein, shall be in exchange for and in
reliance on the complete satisfaction, discharge, and release of all Claims and
Interests of any nature whatsoever, including any interest accrued on such
Claims from and after the Petition Date, against the Debtors, the
Debtors-In-Possession, and the Reorganized Debtors and all of their affiliates,
or any of their assets or properties. Except as otherwise provided in this Plan
or the Confirmation Order: (i) on the Effective Date, the Debtors, the
Reorganized Debtors, and all of their affiliates, shall be deemed discharged and
released to the fullest extent permitted by section 1141 of the Bankruptcy Code
from all Claims and Interests, including, but not limited to, demands,
liabilities, Claims and Interests that arose before the Effective Date and all
debts of the kind specified in sections 502(g), 502(h) or 502(i) of the
Bankruptcy Code, whether or not: (a) a proof of Claim or proof of Interest based
on such debt or Interest is Filed or deemed Filed pursuant to section 501 of the
Bankruptcy Code, (b) a Claim or Interest based on such debt or Interest is
allowed pursuant to section 502 of the Bankruptcy Code, or (c) the holder of a
Claim or Interest based on such debt or Interest has accepted the Plan; and (ii)
all Persons shall be precluded from asserting against the Reorganized Debtors,
their successors, their affiliates, or their assets or properties any other or
further Claims or Interests based upon any act or omission, transaction, or
other activity of any kind or nature that occurred prior to the Effective Date.
Except as otherwise provided in the Plan or the Confirmation Order, as of the
Effective Date the Confirmation Order shall act as a discharge of any and all
Claims against and all debts and liabilities of the Debtors or the Reorganized
Debtors, as provided in sections 524 and 1141 of the Bankruptcy Code, and such
discharge shall void any judgment against any of the Debtors or the Reorganized
Debtors and their affiliates at any time obtained to the extent that it relates
to a discharged Claim.
Except as otherwise provided in this Plan or the Confirmation Order, on
and after the Effective Date, all persons who have held, currently hold or may
hold a debt, Claim or Interest discharged pursuant to the terms of this Plan are
permanently enjoined from taking any of the following actions on account of any
such discharged debt, Claim or Interest: (i) commencing or continuing in any
manner any action or other proceeding against the Debtors, the Reorganized
Debtors, any of their affiliates, successors or assignees, or their respective
properties; (ii) enforcing, attaching, collecting or recovering in any manner
any judgment, award, decree or order against the Debtors, the Reorganized
Debtors, any of their affiliates, successors or assignees, or their respective
properties; (iii) creating, perfecting or enforcing any lien or encumbrance
against the Debtors, the Reorganized Debtors, any of their affiliates,
successors or assignees, or their respective properties; (iv) asserting any
setoff, right of subrogation or recoupment of any kind against any obligation
due to the Debtors, the Reorganized Debtors, any of their affiliates, successors
or assignees, or their respective properties; and (v) commencing or continuing
any action, in any manner, in any place that does not comply with or is
inconsistent with the provisions of this Plan or the Confirmation Order. Any
Person injured by any willful violation of such injunction shall recover actual
damages, including costs and attorneys' fees, and, in appropriate circumstances,
may recover punitive damages, from the willful violator.
12.2 REVESTING. On the Effective Date, the Reorganized Debtors will be
vested with all the property of the respective Estates of the Debtors free and
clear of all Claims and other interests of creditors
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 36
<PAGE> 45
and equity holders, except as provided herein; provided, however, that the
Debtors shall continue as debtors-in-possession under the Bankruptcy Code until
the Effective Date, and, thereafter, the Reorganized Debtors may operate their
businesses free of any restrictions imposed by the Bankruptcy Code or the Court.
12.3 NO LIABILITY FOR SOLICITATION OR PARTICIPATION. As specified
in section 1125(e) of the Bankruptcy Code, the Confirmation Order shall provide
that Persons who have solicited acceptances or rejections of the Plan and/or
participated in the offer, issuance, sale, or purchase of securities offered or
sold under the Plan, have acted in good faith and in compliance with the
applicable provisions of the Bankruptcy Code, and are not liable on account of
such solicitation or participation, for violation of any applicable law, rule,
or regulation governing the solicitation of acceptances or rejections of the
Plan or the offer, issuance, sale, or purchase of securities.
12.4 LIMITATION OF LIABILITY. None of the Debtors, the Reorganized
Debtors, Weatherford, the Creditors' Committee and its members, the Indenture
Trustee, or the Senior Note Holders who entered into the Voting Agreement with
the Debtors, any of their affiliates nor any of their respective officers,
directors, employees, members or agents, nor any professional Persons employed
by any of them (collectively, the "Exculpated Persons"), shall have or incur any
liability to any Person for any act taken or omission made in good faith in
connection with or related to negotiating, formulating, implementing, confirming
or consummating the Plan, the Disclosure Statement, the Acquisition Agreement or
any contract, instrument, release or other agreement or document created in
connection with the Plan. The Exculpated Persons shall have no liability to any
Creditors or Interest holders for actions taken or omissions made under the
Plan, in connection therewith or with respect thereto in good faith, including,
without limitation, failure to obtain Confirmation of the Plan or to satisfy any
condition or conditions, or refusal to waive any condition or conditions,
precedent to Confirmation or to the occurrence of the Effective Date. Further,
the Exculpated Persons will not have or incur any liability to any holder of a
Claim, holder of an Interest, or party-in-interest herein or any other Person
for any act or omission in connection with or arising out of their
administration of the Plan or the property to be distributed under the Plan,
except for gross negligence or willful misconduct as finally determined by the
Bankruptcy Court, and in all respects such Persons will be entitled to rely upon
the advice of counsel with respect to their duties and responsibilities under
the Plan. Nothing contained herein shall release any Exculpated Persons from
their respective obligations under the Acquisition Agreement or any contract,
instrument, release or other agreement or document created in connection with
the Plan.
12.5 OTHER DOCUMENTS AND ACTIONS. The Debtors, the
Debtors-In-Possession, and the Reorganized Debtors may execute such documents
and take such other action as is necessary to effectuate the transactions
provided for in the Plan.
12.6 POST-CONSUMMATION EFFECT OF EVIDENCES OF CLAIMS OR INTERESTS.
Senior Notes, Old DII Class A Common Stock certificates, Old DII Class B Common
Stock certificates, and other evidences of Claims against or Interests in the
Debtors shall, effective upon the Effective Date, represent only the right to
participate in the distributions contemplated by the Plan.
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 37
<PAGE> 46
12.7 TERM OF INJUNCTIONS OR STAYS. Unless otherwise provided, all
injunctions or stays provided for in the Reorganization Case pursuant to
sections 105 or 362 of the Bankruptcy Code or otherwise and in effect on the
Confirmation Date shall remain in full force and effect until the Effective
Date.
ARTICLE XIII
CONFIRMABILITY OF PLAN AND CRAM DOWN
The Debtors request Confirmation under section 1129(b) of the
Bankruptcy Code. The Debtors reserve the right to modify the Plan to the extent,
if any, that Confirmation of the Plan under section 1129(b) of the Bankruptcy
Code requires modification; provided, however, that such right of the Debtors
shall not in any manner affect, limit or modify the rights of Weatherford under
the Acquisition Agreement, including, without limitation, the right of
Weatherford to suspend or to withhold performance under the Acquisition
Agreement in the event that such modification of the Plan results in the failure
of any condition required to be satisfied pursuant to the Acquisition Agreement.
To the extent any modification has a material adverse affect on the Senior Note
Holders or any other Class of Creditors or Interest Holders, the Debtors will
comply with the requirements of Section 1127 of the Bankruptcy Code and any
order of the Court. Furthermore, the Debtors will not modify the Plan in a
manner which would materially adversely affect the Senior Note Holders as set
forth in the Voting Agreement or give rise to a Termination Event as defined in
the Voting Agreement without the consent of the Consenting Note Holders.
ARTICLE XIV
RETENTION OF JURISDICTION
14.1 RETAINED JURISDICTION. Notwithstanding the entry of the
Confirmation Order or the occurrence of the Effective Date, the Bankruptcy Court
shall retain such jurisdiction over the Reorganization Case after the Effective
Date as is legally permissible, including, without limitation, jurisdiction to:
a. Allow, disallow, determine, liquidate, classify or
establish the priority or secured or unsecured status of or
estimate any Claim or Interest, including, without limitation,
the resolution of any request for payment of any
Administrative Claim or Indenture Trustee expenses and the
resolution of any and all objections to the allowance or
priority of Claims or Interests;
b. Grant or deny any and all applications for allowance of
compensation or reimbursement of expenses authorized pursuant
to the Bankruptcy Code or the Plan, for periods ending on or
before the Effective Date;
c. Resolve any motions pending on the Effective Date to
assume, assume and assign or reject any executory contract or
unexpired lease to which the Debtors are parties or with
respect to which the Debtors may be liable and to hear,
determine and, if necessary, liquidate, any and all Claims
arising therefrom;
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 38
<PAGE> 47
d. Ensure that distributions to holders of Allowed Claims and
Allowed Interests are accomplished pursuant to the provisions
of the Plan;
e. Decide or resolve any and all applications, motions,
adversary proceedings, contested or litigated matters and any
other matters or grant or deny any applications involving the
Debtors that may be pending on the Effective Date;
f. Hear, decide, resolve, and enforce any and all claims,
rights and/or causes of action preserved to the Reorganized
Debtors pursuant to section 10.9 of this Plan and section
1123(b) of the Bankruptcy Code, including, without limitation,
any claims, rights or causes of action held by the Debtor or
the Estates against any entity that arise under Chapter 5 of
the Bankruptcy Code or any similar provisions of state law;
g. Enter such Orders as may be necessary or appropriate to
implement or consummate the provisions of the Plan and all
contracts, instruments, releases, and other agreements or
documents created in connection with the Plan or the
Disclosure Statement including, without limitation, Orders
pursuant to Rule 2004 of the Federal Rules of Bankruptcy
Procedure;
h. Resolve any and all controversies, suits or issues that may
arise in connection with the consummation, interpretation or
enforcement of the Plan, the Acquisition Agreement, the
Lawrence/Dailey Lease Modification Agreements or any entity's
obligations incurred in connection therewith;
i. Resolve any and all controversies, suits or issues that may
arise in connection with the assumption of the Technology
Agreement, the effect of the non-compete provisions contained
therein and the determination of any cure amounts thereunder;
provided however, that any controversies, suits or issues
relating to the post-Confirmation performance of the parties
to the Technology Agreement may be adjudicated in the
appropriate non-bankruptcy court having jurisdiction over such
controversies;
j. Modify the Plan before or after the Effective Date pursuant
to section 1127 of the Bankruptcy Code, or to modify the
Disclosure Statement or any contract, instrument, release, or
other agreement or document created in connection with the
Plan or Disclosure Statement; or remedy any defect or omission
or reconcile any inconsistency in any Bankruptcy Court Order,
the Plan, the Disclosure Statement or any contract,
instrument, release, or other agreement or document created in
connection with the Plan or Disclosure Statement, in such
manner as may be necessary or appropriate to consummate the
Plan, to the extent authorized by the Bankruptcy Code;
k. Issue injunctions, enter and implement other orders or take
such other actions as may be necessary or appropriate to
restrain interference by any Person with consummation or
enforcement of the Plan;
l. Enter and implement such orders as are necessary or
appropriate if the Confirmation Order is for any reason
modified, stayed, reversed, revoked or vacated;
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 39
<PAGE> 48
m. Determine any other matters that may arise in connection
with or relate to the Plan, the Acquisition Agreement, the
Disclosure Statement, the Confirmation Order or any contract,
instrument, release, or other agreement or document created in
connection with the Plan or the Disclosure Statement; and
n. Enter an Order concluding the Reorganization Case.
14.2 ABSTENTION. If the Bankruptcy Court abstains from exercising
jurisdiction or is otherwise without jurisdiction over any matter arising out of
the Reorganization Case, including, without limitation, the matters set forth in
this Article, this Article shall have no effect upon and shall not control,
prohibit, or limit the exercise of jurisdiction by any other court having
competent jurisdiction with respect to such matter.
ARTICLE XV
MISCELLANEOUS PROVISIONS
15.1 FRACTIONAL DOLLARS. Any other provision of the Plan
notwithstanding, no payments of fractions of dollars will be made to any holder
of an Allowed Claim. Whenever any payment of a fraction of a dollar to any
holder of an Allowed Claim would otherwise be called for, the actual payment
made will reflect a rounding of such fraction to the nearest whole dollar (up or
down). Payments of Weatherford common stock will be made in whole numbers of
shares. In lieu of fractional shares of Weatherford Common Stock, a Person who
would otherwise be entitled to receive a fraction of a share shall receive Cash,
without interest, in an amount equal to such fraction multiplied by the Fair
Market Value of the Weatherford Common Stock
15.2 MODIFICATION OF PLAN. The Debtors reserve the right, in
accordance with the Bankruptcy Code and the Acquisition Agreement, to amend or
modify the Plan prior to the entry of the Confirmation Order. After the entry of
the Confirmation Order, the Debtors or Reorganized Debtors, as the case may be,
may, upon order of the Bankruptcy Court, amend or modify the Plan in accordance
with section 1127(b) of the Bankruptcy Code, or remedy any defect or omission or
reconcile any inconsistency in the Plan in such manner as may be necessary to
carry out the purpose and intent of the Plan.
15.3 WITHDRAWAL OF PLAN. The Debtors reserve the right, at any time
prior to entry of the Confirmation Order, to revoke or withdraw the Plan. If the
Debtors revoke or withdraw the Plan under this section 15.3 or if the Effective
Date does not occur, then the Plan shall be deemed null and void. In that event,
nothing contained in the Plan shall be deemed to constitute a waiver or release
of any Claims by or against the Debtors or any other person, or to prejudice in
any manner the rights of the Debtors or any other person in any further
proceedings involving the Debtors.
15.4 GOVERNING LAW. Except to the extent the Bankruptcy Code, the
Bankruptcy Rules or the Delaware General Corporation Law are applicable, the
rights and obligations arising under the Plan shall be governed by, and
construed and enforced in accordance with the laws of the State of Texas,
without giving effect to the principles of conflicts of law thereof.
15.5 TIME. In computing any period of time prescribed or allowed by
this Plan, the day of the act, event, or default from which the designated
period of time begins to run shall not be included. The
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 40
<PAGE> 49
last day of the period so computed shall be included, unless it is not a
Business Day or, when the act to be done is the filing of a paper in court, a
day on which weather or other conditions have made the clerk's office
inaccessible, in which event the period runs until the end of the next day which
is not one of the aforementioned days. When the period of time prescribed or
allowed is less than eight days, intermediate days that are not Business Days
shall be excluded in the computation.
15.6 PAYMENT DATES. Whenever any payment to be made under the Plan
is due on a day other than a Business Day, such payment will instead be made,
without interest, on the next Business Day.
15.7 HEADINGS. The headings used in this Plan are inserted for
convenience only and neither constitute a portion of the Plan nor in any manner
affect the provisions of the Plan.
15.8 SUCCESSORS AND ASSIGNS. The rights, benefits and obligations
of any entity named or referred to in the Plan shall be binding on, and shall
inure to the benefit of, any heir, executor, administrator, successor or assign
of such entity.
15.9 SEVERABILITY OF PLAN PROVISIONS. If prior to Confirmation any
term or provision of the Plan, which does not govern the treatment of Claims or
Interests or the conditions of the Effective Date or which is not governed by
the terms of the Acquisition Agreement or documents related thereto, is held by
the Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy Court
shall have the power to alter and interpret such term or provision to make it
valid or enforceable to the maximum extent practicable, consistent with the
original purpose of the term or provision held to be invalid, void, or
unenforceable, and such term or provision shall then be applicable as altered or
interpreted. Notwithstanding any such holding, alteration or interpretation, the
remainder of the terms and provisions of the Plan will remain in full force and
effect and will in no way be affected, impaired, or invalidated by such holding,
alteration, or interpretation. The Confirmation Order shall constitute a
judicial determination and shall provide that each term and provision of the
Plan, as it may have been altered or interpreted in accordance with the
foregoing, is valid and enforceable pursuant to its terms.
15.10 NO ADMISSIONS. Notwithstanding anything herein to the
contrary, nothing contained in the Plan shall be deemed as an admission by the
Debtors with respect to any matter set forth herein, including, without
limitation, liability on any Claim or the propriety of any Claims
classification.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 41
<PAGE> 50
Dated: July 12, 1999
DAILEY INTERNATIONAL, INC.
By: /s/ John Beard
------------------------------------------
John Beard
Chief Financial Officer
and Vice President
DAILEY ENERGY SERVICES, INC.
By: /s/ John Beard
------------------------------------------
John Beard
Vice President
DAILEY INTERNATIONAL SALES CORPORATION
By: /s/ John Beard
------------------------------------------
John Beard
Vice President
COLOMBIA PETROLEUM SERVICES CORPORATION
By: /s/ John Beard
------------------------------------------
John Beard
Vice President
INTERNATIONAL PETROLEUM SERVICES, INC.
By: /s/ John Beard
------------------------------------------
John Beard
Vice President
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 42
<PAGE> 51
DAILEY ENVIRONMENTAL REMEDIATION TECHNOLOGIES, INC.
By: /s/ John Beard
------------------------------------------
John Beard
Vice President
DAILEY WORLDWIDE SERVICES CORPORATION
By: /s/ John Beard
------------------------------------------
John Beard
Vice President
AIR DRILLING INTERNATIONAL, INC.
By: /s/ John Beard
------------------------------------------
John Beard
Vice President
AIR DRILLING SERVICES, INC.
By: /s/ John Beard
------------------------------------------
John Beard
Vice President
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 43
<PAGE> 52
HAYNES AND BOONE, LLP YOUNG, CONAWAY, STARGATT & TAYLOR
Suite 3100 11th Floor, Rodney Square North
901 Main Street P. O. Box 391
Dallas, Texas 75201-3714 Wilmington, Delaware 19899-0391
Telephone: (214) 651-5000 Telephone: (302) 571-6600
Telecopy: (214) 651-5940 Telecopy: (302) 571-1253
/s/ Judith Elkin /s/ Michael Nestor
- ------------------------------ -----------------------------------
Robert D. Albergotti Laura Davis Jones (No. 2436)
Judith Elkin Michael Nestor (No. 3526)
Stephen M. Pezanosky
CO-COUNSEL TO DEBTORS AND DEBTORS-IN-POSSESSION
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Page 44
<PAGE> 1
EXHIBIT 2.2
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
IN RE: ) Chapter 11
)
DAILEY INTERNATIONAL INC.; )
DAILEY ENERGY SERVICES, INC.; )
DAILEY INTERNATIONAL SALES CORP.; )
COLOMBIA PETROLEUM SERVICES CORP.; )
INTERNATIONAL PETROLEUM ) Case No. 99-1233 (PJW)
SERVICES, INC.; DAILEY ENVIRONMENTAL )
REMEDIATION TECHNOLOGIES, INC.; )
DAILEY WORLDWIDE SERVICES CORP.; )
AIR DRILLING INTERNATIONAL, INC.; and )
AIR DRILLING SERVICES, INC., )
)
Debtors. ) Jointly Administered
ORDER AND JUDGMENT CONFIRMING THE DEBTORS'
SECOND AMENDED JOINT PLAN OF REORGANIZATION
UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
AND GRANTING RELATED RELIEF
On August 19, 1999, a hearing was held concerning confirmation (the
"Confirmation Hearing") of the Debtors' Second Amended Joint Plan of
Reorganization dated July 12, 1999 (the "Plan"), that was filed by Dailey Energy
Services, Inc. ("DES"); Dailey International Sales Corp. ("DIS"); Colombia
Petroleum Services Corp. ("CPS"); International Petroleum Services, Inc.
("IPS"); Dailey Environmental Remediation Technologies, Inc. ("DERT"); Dailey
Worldwide Services Corp. ("DWS"); Air Drilling International, Inc. ("ADI"); Air
Drilling Services, Inc. ("ADS") (collectively, the "Debtor Subsidiaries"); and
Dailey International Inc. ("Dailey International" and, together with the Debtor
Subsidiaries, the "Debtors") as debtors and debtors-in-possession. On the basis
of (i) the record of this Reorganization Case, including the evidence presented
at the Confirmation Hearing, (ii) the Findings of Fact and Conclusions of Law
entered contemporaneously herewith (whose definitions and the definitions
contained in the Plan are incorporated herein by reference) and which are
incorporated herein by reference, (iii) the Court's oral Findings of Fact and
Conclusions of Law on the record at the hearing on Confirmation of the
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 1
<PAGE> 2
Plan, which also are incorporated herein by reference, and (iv) any timely filed
objections (the "Objections") to confirmation of the Plan; the Court, after due
deliberation, ORDERS, ADJUDGES AND DECREES THAT:
1. This Order shall be effective according to its terms upon entry.
References herein to the Debtors shall be deemed to refer to the Debtors in this
Reorganization Case to the extent the context of such reference applies to a
time period on or prior to the Effective Date and shall be deemed to refer to
the Reorganized Debtors to the extent the context of such reference applies to a
time period on or after the Effective Date.
2. The Plan(1) complies with all applicable provisions of the
Bankruptcy Code and applicable Bankruptcy Rules relating to confirmation,
including those provisions contained in Section 1129(b) pertaining to "cram
down." The Plan and all provisions thereof, including the terms of the
Acquisition Agreement, which are deemed incorporated into the Plan, are hereby
approved and confirmed in all respects.
3. The record of the Confirmation Hearing is closed.
4. Four Objections were timely filed to Confirmation of the Plan.
a. For the reasons set forth in the Court's Findings of Fact
and Conclusions of Law, the Objection of the Texas Taxing Authority is
overruled.
b. The objections of the IRS have been resolved and its
Objection has been withdrawn.
c. The objection of the EPA has been withdrawn.
d. The objection of Manscop has been withdrawn.
- ------------------
(1) All capitalized terms used herein shall have the meaning ascribed
to them in the Plan, Disclosure Statement, Acquisition Agreement and the Court's
Findings of Fact and Conclusions of Law entered simultaneously herewith.
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 2
<PAGE> 3
5. Pending the occurrence of the Effective Date, the Debtors shall be
subject to all of the provisions of the Bankruptcy Code, except as specifically
provided in the Plan, the Acquisition Agreement or this Order. Without limiting
the generality of the foregoing, pending the occurrence of the Effective Date:
a. The Debtors are authorized to operate and manage their
businesses and assets in compliance with the terms and provisions of the Plan,
the Acquisition Agreement, and in accordance with the Bankruptcy Code.
b. All property to be transferred or otherwise dealt with in
the Plan shall remain property of the Debtors' bankruptcy estates, and such
bankruptcy estates shall continue until the occurrence of the Effective Date.
c. Unless otherwise ordered by the Court, all injunctions or
stays provided for in the Reorganization Case pursuant to Sections 105 or 362 of
the Bankruptcy Code or otherwise in effect on the Confirmation Date shall
continue in effect until the Effective Date, provided however, that this
provision shall not affect prior orders of this Court, if any, granting relief
from the stay.
d. Notwithstanding Confirmation of the Plan, this Court
retains jurisdiction as is provided in Article 14 of the Plan.
6. In accordance with Section 1142 of the Bankruptcy Code, the Debtors,
Weatherford and any and all other parties-in-interest herein are authorized and
directed, without the necessity of any further corporate action or other
approval, to immediately take any action necessary or appropriate to implement,
effectuate and consummate the Plan and any transactions contemplated thereby or
by this Order in accordance with their respective terms, including, without
limitation, effectuating the transactions contemplated by the Acquisition
Agreement, the Technology Agreement, the Lawrence Leases, as modified by the
Lawrence/Dailey Lease Modification Agreement, and any other document,
certificate, agreement or instrument and the transfer of any security.
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 3
<PAGE> 4
7. Upon entry of this Order (and prior to the Effective Date), the
Debtors are authorized and directed to file, in accordance with applicable state
law, with the Secretary of State of the State of Delaware, or with any other
governmental agency, board, bureau or office within or without the State of
Delaware, the Amended Certificate of Incorporation in the form attached to the
Plan as Exhibit 2 and, if necessary, Amended Bylaws, and as appropriate, any
other document, to the extent necessary or appropriate to ensure that the
Amended Certificate of Incorporation of Reorganized Dailey International is
effective as of the Effective Date. The Secretary of State of the State of
Delaware (and any other federal and state governmental entity) is authorized to
accept for filing and to file the Amended Certificate of Incorporation and, if
necessary, the Amended Bylaws and any other instruments necessary. The Amended
Certificate of Incorporation shall prohibit the issuance of non-voting equity
securities.
8. Any of the Chief Executive Officer, the President, any Vice
President and the Secretary of the Debtors is authorized and designated, upon
the entry of this Order, to execute, on behalf of the Debtors, any agreements,
the Amended Bylaws, the Amended Certificate of Incorporation, any related
documents and any other certificates, instruments or documents that such officer
deems necessary or advisable in order to consummate and effectuate the Plan and
the transactions contemplated thereby as of the time they are to become
effective. No further approval of the Board of Directors or shareholders of the
Debtors shall be required with respect to the implementation and consummation of
the Plan or the transactions contemplated by the Plan and the Acquisition
Agreement.
9. The Debtors are authorized, directed and instructed to take all
steps necessary to implement the terms of the Plan and the Acquisition Agreement
in accordance with the terms thereof both prior to and as of the Effective Date.
On the Effective Date, the following transactions are approved and ratified and
are directed to occur:
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 4
<PAGE> 5
a. The Debtors will consummate the transactions set forth in
the Acquisition Agreement which will result in Weatherford's owning all of the
Common Stock of Reorganized Dailey International.
b. All Old Securities shall be terminated and canceled, and
the indentures or statements of resolution governing such Old Securities shall
be rendered void. Notwithstanding the foregoing, such termination will not
impair the rights and duties under the Indenture between the Indenture Trustee
and the beneficiaries of the trust created thereby including, but not limited
to, the rights of the Indenture Trustee to receive payment of its fees and
expenses from Reorganized Dailey International. The obligations of Dailey
International to pay the fees and expenses of the Indenture Trustee and to
indemnify the Indenture Trustee are hereby assumed in their entirety.
c. Reorganized Dailey International shall issue 1,000 shares
of Reorganized Dailey International Class A Common Stock to Weatherford. The
sale of the Dailey International Common Stock to Weatherford is free and clear
of all liens, claims, interests, rights of others and encumbrances of any kind.
d. The distribution of the Weatherford Common Stock to holders
of Allowed Claims and Interests pursuant to the Plan and the Amended Certificate
of Incorporation shall be (i) exempt from any and all federal, state and local
laws requiring the registration of such securities pursuant to Section
1145(a)(1) of the Bankruptcy Code and (ii) freely tradeable by most recipients
who are not underwriters or, if not, subject to shelf resale registration
rights. The issuance of the Dailey International Common Stock to Weatherford
pursuant to the Plan and the Amended Certificate of Incorporation shall be
exempt from any and all federal, state and local laws requiring the registration
of such securities pursuant to Section 4(2) of the 1933 Act and similar
exemptions to registration under applicable state securities laws. Any resale
may be subject to registration or other exemptions.
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 5
<PAGE> 6
e. The officers and boards of directors of the Debtors shall
be deemed removed from office on the Effective Date, and the Reorganized Debtors
shall, on the Effective Date, install new officers and directors. The
post-Effective Date operation of the Reorganized Debtors in accordance with the
provisions of the Plan shall become the general responsibility of Weatherford
and the Reorganized Debtors.
f. As a condition to receiving the Weatherford - Senior Note
Holder Consideration distributable under the Plan, the holders of Senior Notes
shall surrender their Senior Notes to the Indenture Trustee. Weatherford shall
be deemed to have surrendered its Senior Notes as a capital contribution to
Dailey International. Any holder of a Senior Note which has not surrendered or
been deemed to have surrendered its Senior Notes within two years after the
Effective Date shall have its Claim as a holder of Senior Notes disallowed,
shall receive no distribution on account of its Claim as a holder of Senior
Notes, and shall be forever barred from asserting any Claim on account of its
Senior Notes. Any Weatherford Senior Note Holder Consideration issued and held
for distribution on account of such disallowed claims of holders of Senior Notes
shall be returned to Weatherford. As of the Effective Date, all Senior Notes
shall represent only the right to participate in the distributions provided in
the Plan on account of such Senior Notes.
g. As a condition to receiving the Weatherford - Old DII
Equity Consideration distributable under the Plan, the holders of Old Common
Stock shall surrender their Old Common Stock to the Disbursing Agent. Any holder
of Old Common Stock that has not surrendered or been deemed to have surrendered
its Old Common Stock within two years after the Effective Date shall have its
Interest as a holder of Old Common Stock disallowed, shall receive no
distribution on account of its Interest as a holder of Old Common Stock, and
shall be forever barred from asserting any Claim or Interest on account of its
Old Common Stock. Any Weatherford - Old DII Equity Consideration issued and held
for
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 6
<PAGE> 7
distribution on account of such disallowed Interests of holders of Old Common
Stock shall be returned to Weatherford. As of the Effective Date, all Old Common
Stock shall represent only the right to participate in the distributions
provided in the Plan on account of such Old Common Stock.
h. The instruments evidencing the Interests of holders of
Interests in Class 7 shall be deemed surrendered and canceled. All rights of
such holders attributable to their Class 7 Interests shall be forever terminated
and extinguished as of the Effective Date.
i. The transfer of the Reorganized Dailey International Common
Stock to Weatherford is exempt from any tax to the fullest extent permitted by
Section 1146 of the Bankruptcy Code.
10. The Official Committee of Unsecured Creditors (the "Creditors'
Committee") shall cease to exist on the Effective Date.
11. The Indenture Trustee for the Senior Notes shall be discharged on
the earlier of (i) the distribution of all Senior Note Holder Consideration or
(ii) two years from the Effective Date. The Indenture Trustee shall be entitled
to compensation and reimbursement of expenses incurred (including the fees and
expenses of counsel) following the Effective Date from the Reorganized Debtors.
12. The Disbursing Agent Agreement is approved and will remain in
effect for the term set forth therein. The Disbursing Agent will be compensated
in accordance with the terms of the Disbursing Agent Agreement.
13. The proposed officers and directors for the Reorganized Debtors
presented at the Confirmation Hearing are hereby approved.
14. The treatment provided for Classes and Claims set forth in Articles
3 and 4 of the Plan and the distribution procedures set forth in Articles 6 and
7 of the Plan comply with the applicable provisions of the Bankruptcy Code and
Rules, and are hereby approved as reasonable and appropriate.
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 7
<PAGE> 8
15. Except as otherwise provided in the Plan or this Order, all
distributions of Cash and other property shall be made by the Debtors,
Weatherford, the Indenture Trustee or the Disbursing Agent, as applicable, on
the later of the Effective Date, the date on which such Claim or Interest is
Allowed, or as soon thereafter as practicable. No payments or other
distributions of property shall be made on account of any Claim or Interest or
portion thereof unless and until such Claim or portion thereof is Allowed.
16. The Disbursing Agent shall distribute all of the Weatherford Common
Stock to be distributed under the Plan to the holders of Interests in Classes 5.
The initial distribution of Weatherford Common Stock on account of Allowed
Interests shall be on the Effective Date or as soon thereafter as practicable.
17. The Indenture Trustee shall, if it has not already done so, certify
to the Debtors, Weatherford or its agent, a list of the registered holders of
the Senior Notes designating the name, address, taxpayer identification number
(if known), certificate number, and the amount of unpaid principal and accrued
interest owed to each holder on their respective Senior Notes. Notwithstanding
the existence of proofs of claim that may have been filed in this Reorganization
Case by alleged holders of Senior Notes, or information in the Debtors'
Schedules of Liabilities listing record holders of Senior Notes on the Petition
Date, the Indenture Trustee shall distribute all Weatherford Common Stock or
other property to be distributed pursuant to the Plan to the record holders of
Senior Notes as of the Ballot Record Date, unless, prior to the distribution
date, the holder or transferee of any such Claim furnishes the Indenture
Trustee, or its agent, with sufficient evidence (in the Indenture Trustee's or
its agent's sole and absolute discretion) of the transfer of such Claim, in
which event the Indenture Trustee shall distribute, or cause to be distributed,
all the applicable pro rata distribution of Weatherford Common Stock or such
other property to the transferee of such Claim as of the distribution date,
pursuant to Bankruptcy Rule 3021. The Debtors are authorized to give notice to
all banks, brokers, depositories, trustees, and other similar financial
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 8
<PAGE> 9
intermediaries and "street name" holders of the record date for distributions to
creditors and equity holders.
18. The Reorganized Debtors shall pay all reasonable fees and expenses
of the Indenture Trustee in effectuating the terms of the Plan when such fees
and expenses come due without further order of the Bankruptcy Court.
19. The transfers of assets by the Debtors, the Reorganized Debtors,
Weatherford, the Indenture Trustee and the Disbursing Agent which are
contemplated by the Plan and this Order will be legal, valid, binding and
effective transfers of property and will, to the fullest extent permitted by the
Bankruptcy Code, vest in the transferee good title to such property, free and
clear of all liens, claims and encumbrances, except as otherwise provided in the
Plan or this Order.
20. In accordance with Section 1141 of the Bankruptcy Code, the Plan
and each of its provisions shall be binding upon the Debtors, Weatherford and
each Person or entity acquiring or receiving property under the Plan, each
lessor or lessee of property to or from the Debtors, each holder of a Claim
against or Interest in the Debtors, whether or not the Claim or Interest of such
creditor or Interest holder is impaired under the Plan and whether or not such
creditor or Interest holder has filed, or is deemed to have filed, a proof of
Claim or Interest, or has accepted or rejected the Plan, and each party to this
Reorganization Case, and irrespective of whether such provision of the Plan is
specifically mentioned or otherwise referred to in this Order.
21. The automatic stay under Section 362 of the Bankruptcy Code is
terminated to the extent necessary to permit Weatherford to enforce the terms of
the Acquisition Agreement.
22. In accordance with Section 1141 of the Bankruptcy Code and except
as provided in the Plan, any property transferred or otherwise dealt with in the
Plan shall be free and clear of all Claims against and Interests in the Debtors,
and all such property remaining in the Debtors' estate shall, on the Effective
Date, vest in the Reorganized Debtors (except as otherwise provided in the
Plan). An exception
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 9
<PAGE> 10
to the foregoing is set forth in Sections 3.1 and 3.2 of the
Plan, which provide that to the extent that the holder of a Tax Claim holds a
lien to secure its Claim under applicable state law, on the Effective Date the
lien shall remain in place and be unaffected by Confirmation of the Plan
23. The rights afforded in this Plan, including the issuance by
Weatherford of Weatherford Common Stock to the holders of certain Claims and
Interests, and the treatment of all Claims and Interests herein, shall be in
exchange for and in reliance on the complete satisfaction, discharge, and
release of all Claims and Interests of any nature whatsoever, including any
interest accrued on such Claims from and after the Petition Date, against the
Debtors and the Reorganized Debtors or any of their assets or properties. Except
as otherwise provided in the Plan or this Confirmation Order: (i) on the
Effective Date, the Debtors and the Reorganized Debtors, shall be deemed
discharged and released to the fullest extent permitted by Section 1141 of the
Bankruptcy Code from all Claims and Interests, including, but not limited to,
demands, liabilities, Claims and Interests that arose before the Effective Date
and all debts of the kind specified in Sections 502(g), 502(h) or 502(i) of the
Bankruptcy Code, whether or not: (a) a proof of Claim or proof of Interest based
on such debt or Interest is filed or deemed filed pursuant to Section 501 of the
Bankruptcy Code, (b) a Claim or Interest based on such debt or Interest is
allowed pursuant to Section 502 of the Bankruptcy Code, or (c) the holder of a
Claim or Interest based on such debt or Interest has accepted the Plan; and (ii)
all Persons shall be precluded from asserting against the Debtors, the
Reorganized Debtors, their successors, or their assets or properties any other
or further Claims or Interests based upon any act or omission, transaction, or
other activity of any kind or nature that occurred prior to the Effective Date.
Except as otherwise provided in the Plan or the Confirmation Order, as of the
Effective Date, the Confirmation Order shall act as a discharge of any and all
Claims against and all debts and liabilities of the Debtors or the Reorganized
Debtors, as provided in Sections 524 and 1141 of the Bankruptcy Code, and such
discharge shall void any judgment against any of the Debtors or the Reorganized
Debtors at any time obtained to the extent that it relates to a discharged
Claim.
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 10
<PAGE> 11
24. In accordance with Section 524 of the Bankruptcy Code, this Order:
a. voids any judgment at any time obtained, to the extent
that such judgment is a determination of the personal liability of any of the
Debtors with respect to any debt or Claim discharged hereby; and
b. operates as a permanent injunction against the
commencement or continuation of an action, the employment of process, or an act,
to collect, recover or offset any such debt or Claim discharged hereby as a
personal liability of any of the Debtors.
25. Except as otherwise provided in this Plan or the Confirmation
Order, on and after the Effective Date, all persons who have held, currently
hold or may hold a debt, Claim or Interest discharged pursuant to the terms of
this Plan are permanently enjoined from taking any of the following actions on
account of any such discharged debt, Claim or Interest: (i) commencing or
continuing in any manner any action or other proceeding against the Debtors, the
Reorganized Debtors, their successors or assignees, or their respective
properties; (ii) enforcing, attaching, collecting or recovering in any manner
any judgment, award, decree or order against the Debtors, the Reorganized
Debtors, their successors or assignees, or their respective properties; (iii)
creating, perfecting, asserting or enforcing any lien, claim or encumbrance
against the Debtors, the Reorganized Debtors, their successors or assignees, or
their respective assets and properties; (iv) asserting any setoff, right of
subrogation or recoupment of any kind against any obligation due to the Debtors,
the Reorganized Debtors, their successors or assignees, or their respective
properties; and (v) commencing or continuing any action, in any manner, in any
place that does not comply with or is inconsistent with the provisions of this
Plan or the Confirmation Order. Any Person injured by any willful violation of
such injunction shall recover actual damages, including costs and attorneys'
fees, and, in appropriate circumstances, may recover punitive damages, from the
willful violator. In order to effectuate the terms and provisions of the Plan
and the Acquisition Agreement, this Order operates as a permanent injunction
against all creditors and Interest holders of the Debtors from asserting any
lien, claim, interest or
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 11
<PAGE> 12
encumbrance that any of them has or had against the Reorganized Dailey
International Common Stock except as otherwise provided in the Plan.
26. Nothing in this Order or the Plan shall be construed as releasing
or relieving any entity from any liability asserted by or on behalf of the
United States Environmental Protection Agency against the entity as the owner or
operator of property that the entity owns or operates after the date of this
Order. Nothing in this Order or the Plan shall discharge or release any
liability asserted by or on behalf of the United States Environmental Protection
Agency for a claim that arises after the date of confirmation of the Plan.
Nothing in this Order or the Plan shall discharge or release any liability
asserted by or on behalf of the United States Environmental Protection Agency
for an obligation or equitable remedy that is not a claim under 11 U.S.C.
Section 101(5).
27. Weatherford and its post-closing affiliates, representatives,
employees and agents are hereby released from any claims related to or arising
in this Reorganization Case through the Effective Date other than claims arising
under the Acquisition Agreement and the Technology Agreement.
28. To the extent provided in Section 12.4 of the Plan, on the
Effective Date, none of the Debtors, Reorganized Debtors, Weatherford, the
Creditors' Committee and its members, the Indenture Trustee, or the Senior Note
Holders who entered into the Voting Agreement with the Debtors, nor any of their
respective officers, directors, employees, members or agents, or any
professional Persons employed by any of them (collectively the "Exculpated
Persons"), shall have or incur any liability to any Person for any act taken or
omission made in good faith in connection with or related to negotiating,
formulating, implementing, confirming or consummating the Plan, the Disclosure
Statement, the Acquisition Agreement or any contract, instrument, release or
other agreement or document created in connection with the Plan. The Exculpated
Persons shall have no liability to any holder of Claims or Interests for actions
taken under the Plan, in connection therewith or with respect thereto in good
faith, including, without limitation, failure to obtain Confirmation of the Plan
or to satisfy any condition or conditions, or refusal to
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 12
<PAGE> 13
waive any condition or conditions, precedent to the occurrence of the Effective
Date. Further, the Exculpated Persons will not have or incur any liability to
any holder of a Claim or Interest, or party-in-interest herein or any other
Person for any act or omission in connection with or arising out of their
administration of the Plan or the property to be distributed under the Plan,
except for gross negligence or willful misconduct as finally determined by the
Bankruptcy Court, and in all respects such Persons will be entitled to rely upon
the advice of counsel with respect to their duties and responsibilities under
the Plan. Nothing contained herein shall release any Exculpated Persons from
their respective obligations under the Acquisition Agreement or any contract,
instrument, release or other agreement or document created in connection with
the Plan.
29. This Order operates as a permanent injunction against the
commencement or continuation of, and Weatherford and its post-Closing
subsidiaries, representatives, employees, and agents shall be permanently
released and discharged from, any action or proceeding at law or in equity
(including without limitation any action or proceeding seeking indemnification
or contribution) relating to any claims related to or arising in the
Reorganization Case through the Effective Date, other than claims arising under
the Acquisition Agreement and the Technology Agreement.
30. Pursuant to Sections 1123(a) and 1142(a) of the Bankruptcy Code,
the provisions of this Order, the Plan, the Acquisition Agreement and all
related documents, and all other agreements and documents executed and delivered
pursuant to the Plan shall apply and be enforceable notwithstanding any
otherwise applicable nonbankruptcy law.
31. Reorganized Dailey International shall have the right, to the full
extent permitted by Section 1142 of the Bankruptcy Code, to apply to this Court
for an order, notwithstanding any otherwise applicable nonbankruptcy law,
directing any appropriate entity to execute and deliver an instrument or perform
any other act necessary to implement the Plan or the provisions of this Order.
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 13
<PAGE> 14
32. On or after the Effective Date, pursuant to Section 1129(a)(13) of
the Bankruptcy Code, the Reorganized Debtors will continue to pay all retiree
benefits, as that term is defined in Section 1114 of the Bankruptcy Code, at the
level established pursuant to subsection (e)(1)(B) or (g) of Section 1114, at
any time prior to confirmation of the Plan, for the duration of the period the
Debtors have obligated themselves to provide such benefits.
33. The distribution of the Weatherford Common Stock to holders of
Allowed Claims and Interests pursuant to the Plan and the Amended Certificate of
Incorporation shall be (i) exempt from any and all federal, state and local laws
requiring the registration of such securities pursuant to Section 1145(a)(1) of
the Bankruptcy Code and (ii) freely tradeable by most recipients who are not
underwriters or, if not, subject to shelf resale registration rights. Such
exemption is based on the fact that Weatherford is a successor to the Debtors
whose common stock will be issued to holders of Claims against and Interests in
the Debtors in exchange for such Claims and Interests.
34. The issuance of the Dailey International Common Stock to
Weatherford pursuant to the Plan and the Amended Certificate of Incorporation
shall be exempt from any and all federal, state and local laws requiring the
registration of such securities pursuant to Section 4(2) of the Securities Act
of 1933 and similar exemptions to registration under applicable state securities
laws. This exemption is applicable because Weatherford is a sophisticated and
knowledgeable investor and is acquiring the stock of Dailey International for
investment rather than distribution purposes, subject to its right to seek
registration in the event it subsequently intends to sell such stock. Any resale
may be subject to registration or other exemptions.
35. Pursuant the Plan, the Effective Date shall occur on the Closing
Date. The Reorganized Debtors and Weatherford are authorized to proceed to
effectuate the transactions as of the Effective Date.
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 14
<PAGE> 15
36. "Substantial consummation" of the Plan as defined in Section
1101(2) of the Bankruptcy Code, shall be deemed to occur upon the Effective Date
and the consummation of the transactions required to occur on such date in
accordance with the Plan and the Acquisition Agreement.
37. On and after the Effective Date, except as provided in the Plan and
the Acquisition Agreement, the Reorganized Debtors may use, operate and deal
with their assets, and may conduct their businesses in the ordinary course,
without any supervision by the Bankruptcy Court or the Office of the United
States Trustee, and free of any restrictions imposed on the Debtors by the
Bankruptcy Code or by the Court during this Reorganization Case.
38. Pursuant to Bankruptcy Rule 3020(c), the Debtors shall (a) within
five (5) business days after the entry of this Order serve notice of the entry
of this Order as provided in Bankruptcy Rule 2002(f) to be sent by first class
mail, postage prepaid, except to such parties who may be served by hand or
facsimile or overnight courier, which service is hereby authorized, and (b)
cause such notice to be published as soon as practicable in The Wall Street
Journal, national edition and such other publications as the Debtors may
designate.
39. The Acquisition Agreement, Technology Agreement and all other
agreements contemplated by the Acquisition Agreement are hereby approved. In
accordance with the Plan and the Acquisition Agreement, the Debtors are
authorized to assume all pre-petition executory contracts and unexpired leases
to which the Debtors are a party (including the Acquisition Agreement, the
Technology Agreement and the Lawrence Leases, as modified by the Lawrence/Dailey
Lease Modification Agreement), except for any executory contract or unexpired
lease that (a) has been previously assumed or rejected pursuant to a Final
Order, (b) is the subject of a pending contested motion for authority to assume
the contract or lease filed by the Debtors prior to the Confirmation Date, (c)
is identified on the Plan Supplement, or (d) is a pre-petition employment
contract with any of Messrs. Lawrence, Kite, Sutton, Beard, Avery, Lyons,
Torres, or Goolsbay (the "Employment Contracts"), each of which is
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 15
<PAGE> 16
deemed rejected on the Effective Date. The Plan Supplement, which was to be
filed ten days prior to confirmation and was to contain a list of all executory
contracts or unexpired leases that the Debtors intended to reject pursuant to
the Plan (together with the Employment Contracts, the "Rejected Contracts"), was
timely filed on August 9, 1999 and indicated that no additional executory
contracts or leases would be rejected, except as expressly set forth in the
Plan. The Debtors had previously filed a Motion to Reject the Employment
Contract of Jean Buytaert (the "Buytaert Contract"), which order has not yet
been entered. The Buytaert Contract shall be rejected upon Confirmation of the
Plan and the settlement set forth in the Motion to Reject is approved. Each
assumed executory contract or assumed unexpired lease (together, the "Assumed
Contracts") shall, pursuant to the Plan, be assumed without further order of the
Court upon Confirmation of the Plan. Each Rejected Contract shall, pursuant to
the Plan, be rejected without further order of the Court upon Confirmation of
the Plan. The Debtors' assumption of the Assumed Contracts in the context of the
Plan taken as a whole, reflects the Debtors' sound business judgment and is
reasonable and in the best interests of the estate. To the extent any default
exists under any Assumed Contract, the Plan provides either that such default
will be cured as of the Effective Date or as agreed between the parties, or
adequate assurance that such default will be cured promptly. The Plan further
provides adequate assurance of future performance of any Assumed Contract and
compensates any party to an Assumed Contract for any pecuniary losses incurred
as a result of any breach.
40. The assumption of the Technology Agreement is approved. The patents
and certain intellectual property that protect the drilling jar technology used
in several of Dailey International's products were acquired and/or licensed from
Robert W. Evans, an inventor and former employee of Dailey International. The
consideration paid by Dailey International for those rights consisted of a
royalty based on the sales of products employing the patents. Dailey
International, Weatherford and
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 16
<PAGE> 17
Mr. Evans entered into the Technology Agreement on May 18, 1999, pursuant to
which Dailey International and Evans agreed to assign all of their respective
rights in the Intellectual Property, as defined in the Technology Agreement, to
Weatherford. A copy of the Technology Agreement is attached to the Disclosure
Statement as Exhibit I. In consideration for those assignments, Weatherford will
pay to Mr. Evans an annual payment of $1 million through 2009, as provided in
the Technology Agreement. The technology owned by Dailey International will be
transferred to Weatherford as part of the Plan. The Technology Agreement will be
assumed by the Debtors on the Effective Date and to the extent any defaults
exist thereunder, such defaults will be cured. All royalty payments will be paid
by the Reorganized Debtors or Weatherford as an Administrative Claim in the
ordinary course of business when due and owing. To the extent any prepetition
royalty payments become due and owing post-Confirmation, such payments will be
paid as an Administrative Claim either on the Effective Date or in the ordinary
course when such payments become due. In accordance with the terms of the
Technology Agreement, the consulting services agreement with Mr. Evans shall be
terminated on the Effective Date without further obligation. The Technology
Agreement provides for a bifurcation of responsibility for royalties earned
before and after May 18, 1999 (the date of the Technology Agreement). With
regard to royalties earned before May 18, 1999 but not due and owing until late
September 1999, these pre-petition royalties shall be paid on the earlier of the
Effective Date or September 30, 1999 by Dailey International. The Debtors are
current on the payment of all obligations under these prior agreements at this
time and will continue to make any payments due thereunder in the ordinary
course of business. If any such payments remain unpaid on the Effective Date,
such payments will be paid on the Effective Date as an Administrative Claim
without the need for Mr. Evans or Evans Engineering & Manufacturing to file a
written claim therefor.
41. The rejection of the Employment Contracts constitutes a breach of
such contracts as of a time immediately prior to the Petition Date, and
therefore, constitutes a termination of employment without cause. To the extent
such termination causes the contractual restricted stock grants to certain
employees,
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 17
<PAGE> 18
these being William Sutton and Warren Avery, to immediately and fully
vest, then for purposes of the distribution of Weatherford Common Stock under
the Plan to holders of Dailey International Common Stock, Mr. Sutton and Mr.
Avery will be deemed to have been fully vested in such restricted Dailey
International Common Stock immediately prior to the Petition Date, and such
Dailey International Common Stock will be included in the calculation of
Weatherford Common Stock to be distributed to Class 5. All Dailey International
stock options and other grants will be canceled, and no person will receive any
distribution under the Plan on account of any stock options or other grants.
42. Notwithstanding any provision to the contrary contained in the
Plan, nothing in the Plan shall release officers and directors of the Debtors
from any Claims of the United States arising under 26 U.S.C. Section 6672, and
nothing in the Plan shall be deemed to discharge the Claims of any officers and
directors to seek indemnification from the Reorganized Debtors on account of
such Claims. Any of the rights and claims of the United States to setoff under
Section 553 of the Bankruptcy Code are hereby preserved.
43. Except as otherwise provided in the Plan or in this Order, requests
for payment of Administrative Claims must be filed no later than forty-five (45)
days after the Effective Date. Holders of Administrative Claims that are
required to file a request for payment of such Claims and that do not file such
requests by the applicable bar date shall be forever barred from asserting such
Claims against the Debtors, the Reorganized Debtors, any of their successors or
assignees, or any of their respective properties.
44. All Professionals requesting compensation or reimbursement of
expenses pursuant to Sections 327, 328, 330, 331, 503(b) or 1103 of the
Bankruptcy Code for services rendered before the Effective Date (including,
without limitation, any compensation requested by any Professional or any other
entity for making a substantial contribution in the Reorganization Case) shall
file and serve on the Reorganized Debtors, the Creditors' Committee and the
United States Trustee for the District of Delaware
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 18
<PAGE> 19
an application for final allowance of compensation and reimbursement of expenses
no later than forty-five (45) days after the Effective Date. Objections to
timely-filed applications of Professionals for compensation or reimbursement of
expenses must be filed and served on the Debtors and the Professionals to whose
application the objections are addressed no later than seventy (70) days after
the Effective Date. Any professional fees and reimbursements for expenses
incurred by the Reorganized Debtors or the Creditors' Committee (or any
successor thereto) subsequent to the Effective Date may be paid by the
Reorganized Debtors without application to the Bankruptcy Court.
45. Holders of Administrative Claims based on liabilities incurred in
the ordinary course of the Debtors' respective businesses (other than Claims of
governmental units for taxes or Claims and/or penalties related to such taxes)
shall not be required to file any request for payment of such Claims. Such
Administrative Claims shall be assumed and paid by the Reorganized Debtors in
the ordinary course of their respective businesses and according to the ordinary
and customary business terms and conditions of the particular transaction giving
rise to such Administrative Claim without the need for any further action by the
holders of such Claims.
46. Holders of Claims under employment contracts approved by the Court
or assumed in the Plan shall not be required to file any request for payment of
such Claims and such Claims shall be paid in accordance with the terms of such
contract.
47. Except as set forth in Section 8.4 of the Plan, each current
employee, officer, or director of a Debtor will have an Allowed Administrative
Claim for amounts owed to such employee, officer, or director under such
Debtor's employee, officer, or director policies and/or under an employment
contract other than a Change in Control Contract, to the extent that such
amounts become due after the Petition Date and are unpaid as of the Effective
Date; the obligation for payment of such Claims will be assumed by the
Reorganized Debtors and paid in full in Cash on the Effective Date from
available Cash of the Reorganized Debtors. Employees, officers, and directors
shall not be required to file any request for
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 19
<PAGE> 20
payment of Claims for accrued and unused paid vacation and sick leave or for
Severance Claims, all of which will be assumed by the Reorganized Debtors.
Severance Claims shall be paid in Cash in full by the Reorganized Debtors on the
later of (a) the Effective Date or (b) the date of termination of the affected
employee, officer or director.
48. All requests for payment of Administrative Claims by a governmental
unit and all Tax Claims (including interest and/or penalties relating to such
Tax Claim) for any tax year or period, all or any portion of which occurs or
falls within the period from and including the Petition Date through and
including the Effective Date ("Post-Petition Tax Claims") and for which no bar
date has otherwise been previously established, must be filed on or before the
later of (a) 45 days following the Effective Date; or (b) subject to Section
505(b) of the Bankruptcy Code, 60 days following the filing with the applicable
governmental unit of the tax return for such taxes. Notwithstanding the
foregoing, the United States shall have 180 days after the filing of a tax
return to file a request for payment of an Administrative Claim with respect to
such taxes. Any holder of any Post-Petition Tax Claim that is required to file a
request for payment of such taxes, penalties, or interest and does not file such
a request by the applicable bar date shall be forever barred from asserting any
such Post-Petition Tax Claim against any of the Debtors, the Reorganized
Debtors, any of their successors or assignees, or their respective properties,
whether any such Post-Petition Tax Claim is deemed to arise prior to, on, or
subsequent to the Effective Date. To the extent that the holder of a Tax Claim
holds a lien to secure its Claim under applicable state law, such lien shall
remain in place and be unaffected by Confirmation of the Plan. In the event the
Reorganized Debtors opt to pay a Tax Claim over six years, interest will be paid
on such Claim at the statutory rate applicable to such Tax Claim.
49. Except as otherwise provided in the Plan, or in any contract,
instrument, release, or other agreement entered into in connection with the
Plan, on and after the Effective Date, in accordance with Section 1123(b) of the
Bankruptcy Code, the Reorganized Debtors shall retain and may enforce any
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 20
<PAGE> 21
claims, rights and causes of action that the Debtors or the Estates may hold
against any entity, including, without limitation, any claims, rights or causes
of action arising under Sections 544 through 551 or other sections of the
Bankruptcy Code or any similar provisions of state law, or any other statute or
legal theory. The Reorganized Debtors or any successor to or designee of either
of them may pursue those rights of action, as appropriate, in accordance with
what is in the best interests of the Reorganized Debtors or successors holding
such rights of action.
50. After the Effective Date, the Reorganized Debtors shall retain the
right to object to any Claim or Interest on any basis permitted by law and the
Bankrutpcy Code, including 11 U.S.C. Section 502(d), and nothing herein shall be
deemed to constitute a determination that any Claim or Interest is an Allowed
Claim or Allowed Interest, except as expressly set forth in the Plan.
51. Subject to Article 13 of the Plan, the Debtors reserve the right,
in accordance with the Bankruptcy Code and the Acquisition Agreement, to amend
or modify the Plan prior to the entry of the Confirmation Order. After the entry
of the Confirmation Order, the Debtors or Reorganized Debtors, as the case may
be, may, upon order of the Bankruptcy Court, amend or modify the Plan in
accordance with Section 1127(b) of the Bankruptcy Code, or remedy any defect or
omission or reconcile any inconsistency in the Plan in such manner as may be
necessary to carry out the purpose and intent of the Plan.
52. Notwithstanding the entry of this Order or the occurrence of the
Effective Date, this Court shall retain such jurisdiction over the
Reorganization Case after the Effective Date as is set forth in Article 14 of
the Plan. Furthermore, this Court shall specifically retain jurisdiction to
implement and enforce the Acquisition Agreement and Weatherford's (or its
subsidiaries') peaceful use and enjoyment of the Reorganized Debtors' assets and
the Dailey International Common Stock after the Effective Date free and clear of
all liens, claims, and encumbrances to the fullest extent permitted under the
Bankruptcy Code and under the terms of the Plan and this Order.
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 21
<PAGE> 22
53. Nothing in the Plan, including Section 12.6 of the Plan, shall
constitute a discharge or release of non-debtor affiliates.
54. This is a final order immediately subject to appeal.
SIGNED this 19th day of August, 1999.
/s/ PETER J. WALSH
---------------------------------------------
HONORABLE PETER J. WALSH
UNITED STATES BANKRUPTCY JUDGE
ORDER AND JUDGMENT CONFIRMING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE AND
GRANTING RELATED RELIEF PAGE 22
<PAGE> 1
EXHIBIT 3.1
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
DAILEY INTERNATIONAL INC.
Pursuant to Section 303 of the Delaware General Corporation Law, Dailey
International Inc. (the "Corporation"), a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware, for
the purpose of amending its Restated Certificate of Incorporation, as previously
amended (the "Restated Certificate of Incorporation"),
DOES HEREBY CERTIFY:
FIRST: That the following amendments to the Corporation's Restated
Certificate of Incorporation were generally approved by an order entered on
August 20, 1999 (the "Confirmation Order") by the United States Bankruptcy Court
for the District of Delaware (the "Bankruptcy Court") confirming the Debtor's
Joint Plan of Reorganization of the Corporation (the "Plan"), in the case styled
In re Dailey International Inc. (Case No. 99-1233 (PJW)). The Confirmation Order
provides, among other things, for the making and filing of this Certificate of
Amendment by the Corporation's officers, including the execution hereof by the
undersigned officer of the Corporation. The Bankruptcy Court has jurisdiction
over the Corporation's reorganization proceedings under Chapter 11 of the United
States Bankruptcy Code, 11 U.S.C. ss.101 et seq.
SECOND: The amendments effectuate certain changes to the Corporation's
Restated Certificate of Incorporation, which changes are summarized in this
Article Second and are required or permitted by the Plan and the Confirmation
Order. The amendments (i) amend and restate Article 4 of the Corporation's
Restated Certificate of Incorporation in its entirety, (ii) amend and restate
Article 6 of the Corporation's Restated Certificate of Incorporation in its
entirety, (iii) add a new Article 8 canceling and retiring all previously issued
shares of capital stock, whether outstanding or held in the Corporation's
treasury, and effecting a net reduction in the Corporation's stated capital
through both the cancellation and retirement of previously issued shares of
capital stock and the issuance of 1,000 shares of Common Stock under the Plan,
and (iv) add a new Article 9 required by the United States Bankruptcy Code
prohibiting the issuance of non-voting equity securities.
THIRD: That in accordance with the Plan and Confirmation Order, Article
4 of the Restated Certificate of Incorporation of the Corporation is hereby
amended to read, in its entirety, as follows:
"ARTICLE 4
The total number of shares of stock of all classes which the
Corporation shall have authority to issue is 1,000 shares, consisting
of 1,000 shares of Common Stock, having a par value of $1.00 per share
(the "Common Stock").
<PAGE> 2
FOURTH: That in accordance with the Plan and Confirmation Order,
Article 6 of the Certificate of Incorporation of the Corporation is hereby
amended to read, in its entirety, as follows:
"ARTICLE 6
Election of directors need not be by written ballot unless the
by-laws of the Corporation shall so provide. All of the powers of the
Corporation, insofar as the same may be lawfully vested by this
Restated Certificate of Incorporation, as amended, in the Board of
Directors of the Corporation, are hereby conferred upon the Board of
Directors of the Corporation. In furtherance and not in limitation of
the foregoing provisions of this Article, and for the purpose of the
orderly management of the business and the conduct of the affairs of
the Corporation, the Board of Directors of the Corporation shall have
the power to adopt, amend or repeal from time to time the by-laws of
the Corporation, subject to the right of the stockholders of the
Corporation entitled to vote thereon to adopt, amend or repeal by-laws
of the Corporation."
FIFTH: That in accordance with the Plan and Confirmation Order,
Articles 8 and 9 are hereby added to the Restated Certificate of Incorporation
to read as follows:
"ARTICLE 8
Effective as of the filing with the Secretary of State of
Delaware of this Certificate of Amendment (the "Effective Time"), the
Corporation does hereby cancel and retire in their entirety all shares
of the Corporation's capital stock, including all shares of Class A
Common Stock, par value $0.01 per share and all shares of Class B
Common Stock par value $0.01 per share, whether issued prior to the
Effective Time or being authorized but unissued shares of capital
stock. Each share of the Corporation's capital stock, including all
shares of Class A Common Stock, par value $0.01 per share and all
shares of Class B Common Stock par value $0.01 per share, issued prior
to the Effective Time shall, at the Effective Time, by virtue of the
filing of this Certificate of Amendment with the Secretary of State of
the State of Delaware and without any action on the part of the holder
thereof, automatically be, and hereby is, canceled and retired in its
entirety.
ARTICLE 9
From and after the Effective Time, the Corporation shall be
prohibited from issuing non-voting equity securities in accordance with
and to the extent required by Section 1123(a)(6) of the United States
Bankruptcy Code (11 U.S.C. ss.1123(a)(6))."
* * * * * *
-2-
<PAGE> 3
IN WITNESS WHEREOF, the Corporation has executed this Certificate of
Amendment, this 31 day of August, 1999.
DAILEY INTERNATIONAL INC.
By: /s/ RANDALL D. STILLEY
---------------------------------------
Name: Randall D. Stilley
--------------------------------------
Title: President
-------------------------------------
-3-
<PAGE> 1
Exhibit 99.1
DAILEY INTERNATIONAL, INC. ANNOUNCES CONFIRMATION OF
PLAN OF REORGANIZATION
Acquisition by Weatherford International Inc. Moves Ahead
CONROE, Texas, Aug. 19 -- Dailey International Inc. (OTC Bulletin Board: DALY)
today announced that the Delaware Bankruptcy Court entered an order confirming
the Second Amended Joint Plan of Reorganization of Dailey and certain of its
subsidiaries. The Plan was accepted by the requisite vote of holders of
Dailey's 9 1/2% Senior Notes due 2008. The Plan is expected to become effective
on August 31, 1999.
The Plan provides for the acquisition of Dailey by Weatherford International,
Inc. (NYSE: WFT) under the terms of an acquisition agreement previously
announced by Dailey and Weatherford. On the effective date, (i) all of the
outstanding Dailey Senior Notes will be canceled, and the holders thereof will
have the right to receive in exchange shares of common stock of Weatherford
having an aggregate market value (as provided in the Plan) of $185 million, and
(ii) all of the issued and outstanding shares of Class A and Class B common
stock of Dailey will be canceled and the holders thereof will have the right to
receive in exchange shares of Weatherford common stock having an aggregate
market value (as provided in the Plan) of $10 million.
Dailey International Inc. is a leading provider of specialty drilling equipment
and services to the oil and gas industry and designs, manufactures and rents
proprietary downhole tools for oil and gas drilling and workover applications
worldwide. Weatherford International, Inc. is one of the world's largest
providers of equipment and services used for the exploration and production of
oil and natural gas.
Contact:
Don Galletly (713) 693-4148
Bill Sutton (409) 523-4732
9
<PAGE> 1
Exhibit 99.2
DAILEY INTERNATIONAL INC. ANNOUNCES EFFECTIVENESS OF
PLAN OF REORGANIZATION AND CLOSING OF ACQUISITION
BY WEATHERFORD INTERNATIONAL, INC.
CONROE, TEXAS, August 31, 1999 - Dailey International Inc. today
announced the closing of its acquisition by Weatherford International, Inc.
(NYSE:WFT) under the terms of its previously-announced acquisition agreement
with Weatherford. In addition, it announced that the Second Amended Joint Plan
of Reorganization of Dailey and certain of its subsidiaries, as confirmed by
order of the United States Bankruptcy Court for the District of Delaware
entered on August 20, 1999, became effective today.
Under the Plan and the acquisition agreement, on the effective date,
(i) all of the outstanding Dailey Senior Notes were canceled, and the holders
thereof will be entitled to receive in exchange shares of common stock of
Weatherford having an aggregate market value (as provided in the Plan) of $185
million, at a rate of 18.9534 shares of Weatherford common stock per $1,000
principal amount of Senior Notes, and (ii) all of the issued and outstanding
shares of Class A and Class B common stock of Dailey were canceled and the
holders thereof will be entitled to receive in exchange shares of Weatherford
common stock having an aggregate market value (as provided in the Plan) of $10
million, at a rate of 0.02795 shares of Weatherford common stock per share of
Dailey common stock. It is anticipated that instruments for the exchange of
Dailey Senior Note and common stock certificates will be mailed to holders
later this week.
Dailey International Inc. is a leading provider of specialty drilling
equipment and services to the oil and gas industry and designs, manufactures
and rents proprietary downhole tools for oil and gas drilling and workover
applications worldwide. Weatherford International, Inc. is one of the world's
largest providers of equipment and services used for the exploration and
production of oil and natural gas.
# # #
Contact:
Don Galletly (713) 693-4148
Jean Davenport (409) 760-3399
10
