<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): May 28, 1999
DAILEY INTERNATIONAL INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 001-11963 76-0503351
- --------------------------------------------------------------------------------
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
2507 North Frazier
Conroe, Texas 77303
- --------------------------------------------------------------------------------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (281) 350-3399
<PAGE> 2
Item 3. Bankruptcy or Receivership
On May 28, 1999, Dailey International, Inc. (the "Company") announced that the
Company and certain of its subsidiaries filed petitions for relief under Chapter
11 of the Bankruptcy Code in the United States Bankruptcy Court for the District
of Delaware (the "Bankruptcy Court"). The petitions seek Bankruptcy Court
approval to implement a financial restructuring in accordance with a Joint Plan
of Reorganization (the "Plan")and a related Disclosure Statement, which were
also filed with the Bankruptcy Court on May 28, 1999. In addition to the
approval of the Bankruptcy Court, the Plan is subject to receiving the approval
of the requisite number and amount of certain of the Company's creditors.
The filing of the Plan was contemplated by the previously- announced acquisition
agreement (the "Acquisition Agreement"), dated May 21, 1999, among the Company,
certain of its subsidiaries and Weatherford International, Inc. ("Weatherford").
Under the Acquisition Agreement, the Company's outstanding $275 million senior
note indebtedness will be exchanged pro rata for $185 million in Weatherford
stock. All outstanding equity securities held by the Company's equity security
holders would be exchanged for $10 million in Weatherford stock that would be
shared pro rata based on share ownership. The value of the Weatherford common
stock would be fixed as of the date of the consummation of the acquisition and
will be based on an average closing sale price calculation over a 10 trading-day
period preceding the date of consummation.
The Plan has been agreed to by the holders of approximately $225 million (82%)
of the outstanding principal amount of the Company's senior notes and more than
50% of the Company's common stock.
For a further description of this proposed acquisition and restructuring, see
the Joint Plan of Reorganization filed with the Bankruptcy Court on May 28, 1999
filed herewith as Exhibit 2.1, the Acquisition Agreement filed herewith as
Exhibit 2.2, and the Press Release issued by the Company on May 28, 1999 filed
herewith as Exhibit 99.1.
- 2 -
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Item 7. Exhibits
(c) Exhibits.
2.1 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 Acquisition Agreement dated May 21, 1999 among Dailey
International Inc., certain of its subsidiaries and
Weatherford International, Inc.
99.1 Press Release, dated May 28, 1999, announcing the filing
of a joint plan of reorganization for financial
restructuring.
- 3 -
<PAGE> 4
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: May 28, 1999
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<PAGE> 5
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
2.1 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 Acquisition Agreement dated May 21, 1999 among Dailey International
Inc., certain of its subsidiaries and Weatherford International, Inc.
99.1 Press Release, dated May 28, 1999, announcing the filing of a joint
plan of reorganization for financial restructuring.
</TABLE>
<PAGE> 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-
SERVICES, INC.; DAILEY ENVIRONMENTAL )
REMEDIATION TECHNOLOGIES, INC.; )
DAILEY WORLDWIDE SERVICES CORP.; )
AIR DRILLING INTERNATIONAL, INC.; and )
AIR DRILLING SERVICES, INC., )
)
Debtors. ) Jointly Administered
---------------------------------------------
DEBTORS' JOINT PLAN OF REORGANIZATION
---------------------------------------------
Dated: May 28, 1999
HAYNES AND BOONE, L.L.P. YOUNG, CONAWAY, STARGATT & TAYLOR
ROBERT D. ALBERGOTTI LAURA DAVIS JONES (NO. 2436)
STEPHEN M. PEZANOSKY MICHAEL NESTOR (NO. 3526)
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
PROPOSED CO-COUNSEL TO THE DEBTORS AND THE DEBTORS-IN-POSSESSION
DEBTORS' JOINT PLAN OF REORGANIZATION
<PAGE> 2
TABLE OF CONTENTS
DEBTORS' JOINT PLAN OF REORGANIZATION
<TABLE>
<CAPTION>
PAGE NO.
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DEBTORS' 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 13
c. Bar Date for Administrative Claims.....................................Page 13
i. General Provisions............................................Page 13
ii. Professionals.................................................Page 13
iii. Ordinary Course Liabilities...................................Page 13
iv. Assumed Contractual Employee Claims...........................Page 14
v. Claims of Employees, Officers, and Directors
Under Company Policies and Employment Contracts
Other Than Change in Control Contracts........................Page 14
vi. Post-Petition Tax Claims......................................Page 14
3.2 Treatment of Pre-Petition Priority Tax Claims...................................Page 14
ARTICLE IV ......................................................................................Page 15
CLASSIFICATION AND TREATMENT OF CLASSIFIED CLAIMS
AND INTERESTS ..........................................................................Page 15
4.1 Class 1A: Secured Claims against Dailey International ........................Page 15
4.2 Class 1B: Secured Claims against DES .........................................Page 15
4.3 Class 1C: Secured Claims against DIS .........................................Page 16
4.4 Class 1D: Secured Claims against CPS .........................................Page 16
</TABLE>
DEBTORS' JOINT PLAN OF REORGANIZATION
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<TABLE>
<S> <C> <C> <C>
4.5 Class 1E: Secured Claims against IPS .........................................Page 17
4.6 Class 1F: Secured Claims against DERT ........................................Page 17
4.7 Class 1G: Secured Claims against DWS .........................................Page 17
4.8 Class 1H: Secured Claims against ADI .........................................Page 18
4.9 Class 1I: Secured Claims against ADS .........................................Page 18
4.10 Class 2: Priority Claims (Other than Unclassified Claims) ...................Page 19
4.11 Class 3: Unsecured Claims of Holders of Senior Notes ........................Page 19
4.12 Class 4A: General Unsecured Claims against Dailey International ..............Page 19
4.13 Class 4B: General Unsecured Claims against DES ...............................Page 20
4.14 Class 4C: General Unsecured Claims against DIS ...............................Page 20
4.15 Class 4D: General Unsecured Claims against CPS ...............................Page 20
4.16 Class 4E: General Unsecured Claims against IPS ...............................Page 21
4.17 Class 4F: General Unsecured Claims against DERT ..............................Page 21
4.18 Class 4G: General Unsecured Claims against DWS ...............................Page 21
4.19 Class 4H: General Unsecured Claims against ADI ...............................Page 22
4.20 Class 4I: General Unsecured Claims against ADS ...............................Page 22
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 23
4.23 Class 6B: DIS Common Stock ...................................................Page 23
4.24 Class 6C: CPS Common Stock ...................................................Page 23
4.25 Class 6D: IPS Common Stock ...................................................Page 23
4.26 Class 6E: DERT Common Stock ..................................................Page 23
4.27 Class 6F: DWS Common Stock ...................................................Page 24
4.28 Class 6G: ADI Common Stock ...................................................Page 24
4.29 Class 6H: ADS Common Stock ...................................................Page 24
</TABLE>
DEBTORS' JOINT PLAN OF REORGANIZATION
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<TABLE>
<S> <C> <C> <C>
4.30 Class 7: Other Equity Interests .............................................Page 24
4.31 Class 8: Intercompany Claims...................................................Page 25
ARTICLE V .......................................................................................Page 25
ACCEPTANCE OR REJECTION OF THE PLAN ....................................................Page 25
5.1 Voting Classes..................................................................Page 25
5.2 Presumed Acceptance of Plan.....................................................Page 25
5.3 Presumed Rejection of Plan......................................................Page 25
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 26
6.4 Distributions to Holders of Allowed Secured Claims..............................Page 26
6.5 Distributions to Holders of Allowed General Unsecured Claims....................Page 26
ARTICLE VII .....................................................................................Page 26
MANNER OF DISTRIBUTION OF PROPERTY UNDER THE PLAN ......................................Page 26
7.1 Cash Distributions..............................................................Page 26
7.2 Distribution of Weatherford Consideration.......................................Page 26
a. Distribution of Weatherford - Senior Note Holder Consideration.........Page 26
b. Distribution of Weatherford - Old DII Equity Consideration.............Page 26
7.3 Surrender and Cancellation of Old Securities....................................Page 27
a. Surrender of Senior Notes..............................................Page 27
b. Surrender of Old Common Stock..........................................Page 27
c. Surrender of Class 7 Interests.........................................Page 27
7.4 Ballot Record Date; Distribution Date...........................................Page 28
</TABLE>
DEBTORS' JOINT PLAN OF REORGANIZATION
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<TABLE>
<S> <C> <C> <C>
7.5 Disputed Claims.................................................................Page 28
7.6 Manner of Payment Under the Plan................................................Page 28
7.7 Delivery of Distributions and Undeliverable or Unclaimed Distributions..........Page 28
a. Delivery of Distributions in General...................................Page 28
b. Undeliverable Distributions............................................Page 29
i. Holding and Investment of Undeliverable Property .................Page 29
ii. Distribution of Undeliverable Property After it Becomes
Deliverable and Failure to Claim Undeliverable Property.........Page 29
c. Failure to Present Checks..............................................Page 29
7.8 Compliance with Tax Requirements................................................Page 30
7.9 Setoffs.........................................................................Page 30
7.10 Fractional Interests............................................................Page 30
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 31
8.3 Bar Date for Filing of Rejection Claims.........................................Page 31
8.4 Change in Control Contracts.....................................................Page 31
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 32
ARTICLE X .......................................................................................Page 32
MEANS FOR EXECUTION AND IMPLEMENTATION OF THE PLAN .....................................Page 32
10.1 Consummation of the Acquisition Agreement.......................................Page 32
10.2 Cancellation of Old Securities..................................................Page 32
10.3 Reorganized Dailey International Common Stock...................................Page 32
</TABLE>
DEBTORS' JOINT PLAN OF REORGANIZATION
<PAGE> 6
<TABLE>
<S> <C> <C> <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 33
10.8 Responsibilities of Reorganized Debtors.........................................Page 33
10.9 Preservation of Rights of Action................................................Page 33
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 34
10.12 Retiree Benefits................................................................Page 35
10.13 Exemption from Stamp and Similar Taxes..........................................Page 35
ARTICLE XI ......................................................................................Page 35
CONDITIONS TO EFFECTIVENESS OF THE PLAN ................................................Page 35
11.1 Conditions to Effectiveness.....................................................Page 35
11.2 Waiver of Conditions............................................................Page 37
11.3 No Requirement of Final Order...................................................Page 37
ARTICLE XII .....................................................................................Page 37
EFFECTS OF PLAN CONFIRMATION ...........................................................Page 37
12.1 Discharge of Debtors and Reorganized Debtors and Injunction.....................Page 37
12.2 Revesting.......................................................................Page 38
12.3 No Liability for Solicitation or Participation..................................Page 38
12.4 Limitation of Liability.........................................................Page 38
12.5 Other Documents and Actions.....................................................Page 39
12.6 Post-Consummation Effect of Evidences of Claims or Interests....................Page 39
</TABLE>
DEBTORS' JOINT PLAN OF REORGANIZATION
<PAGE> 7
<TABLE>
<S> <C> <C> <C>
12.7 Term of Injunctions or Stays....................................................Page 39
ARTICLE XIII ....................................................................................Page 39
CONFIRMABILITY OF PLAN AND CRAMDOWN ....................................................Page 39
ARTICLE XIV .....................................................................................Page 39
RETENTION OF JURISDICTION ..............................................................Page 39
14.1 Retained Jurisdiction...........................................................Page 39
14.2 Abstention......................................................................Page 41
ARTICLE XV ......................................................................................Page 41
MISCELLANEOUS PROVISIONS ...............................................................Page 41
15.1 Fractional Dollars..............................................................Page 41
15.2 Modification of Plan............................................................Page 41
15.3 Withdrawal of Plan..............................................................Page 41
15.4 Governing Law...................................................................Page 41
15.5 Time............................................................................Page 42
15.6 Payment Dates...................................................................Page 42
15.7 Headings........................................................................Page 42
15.8 Successors and Assigns..........................................................Page 42
15.9 Severability of Plan Provisions.................................................Page 42
15.10 No Admissions...................................................................Page 42
</TABLE>
DEBTORS' JOINT PLAN OF REORGANIZATION
<PAGE> 8
INDEX TO EXHIBITS
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
DEBTORS' 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-
SERVICES, INC.; DAILEY ENVIRONMENTAL )
REMEDIATION TECHNOLOGIES, INC.; )
DAILEY WORLDWIDE SERVICES CORP.; )
AIR DRILLING INTERNATIONAL, INC.; and )
AIR DRILLING SERVICES, INC., )
)
Debtors. ) Jointly Administered
DEBTORS' 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 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' 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' 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 U.S.C. 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
DEBTORS' JOINT PLAN OF REORGANIZATION Page 2
<PAGE> 11
amount 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 __________, 1999.
1.10 "Ballot Return Date" means 5:00 p.m. Eastern Daylight Time on
_________________, 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' 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' 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".
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' 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. ss. 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' 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' 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' 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' 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
- ----- ------
<S> <C> <C>
SECURED CLAIMS
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
UNSECURED CLAIMS
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
</TABLE>
DEBTORS' JOINT PLAN OF REORGANIZATION Page 10
<PAGE> 19
<TABLE>
<S> <C> <C>
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
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
</TABLE>
DEBTORS' JOINT PLAN OF REORGANIZATION Page 11
<PAGE> 20
<TABLE>
<S> <C> <C>
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.
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
DEBTORS' JOINT PLAN OF REORGANIZATION Page 12
<PAGE> 21
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 hereinbelow, 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 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
DEBTORS' JOINT PLAN OF REORGANIZATION Page 13
<PAGE> 22
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 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
DEBTORS' JOINT PLAN OF REORGANIZATION Page 14
<PAGE> 23
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 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.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 15
<PAGE> 24
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.
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
DEBTORS' JOINT PLAN OF REORGANIZATION Page 16
<PAGE> 25
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 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.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 17
<PAGE> 26
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 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.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 18
<PAGE> 27
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 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.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 19
<PAGE> 28
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 of Reorganized DERT on
the later of (i) the Effective Date or (ii) the date on which
Claim is Allowed.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 20
<PAGE> 29
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' 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' 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
DEBTORS' JOINT PLAN OF REORGANIZATION Page 23
<PAGE> 32
a. Classification: Class 7 consists of all other equity
Interests in any of the Debtors.
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.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 24
<PAGE> 33
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.
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
DEBTORS' JOINT PLAN OF REORGANIZATION Page 25
<PAGE> 34
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 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
DEBTORS' JOINT PLAN OF REORGANIZATION Page 26
<PAGE> 35
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.
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.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 27
<PAGE> 36
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 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
DEBTORS' JOINT PLAN OF REORGANIZATION Page 28
<PAGE> 37
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 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.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 29
<PAGE> 38
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, or
(c) is identified on the Plan Supplement. 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 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
DEBTORS' JOINT PLAN OF REORGANIZATION Page 30
<PAGE> 39
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 Lease Modification Agreements as set forth in section 9.2
hereinbelow, 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.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 31
<PAGE> 40
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 and the issuance of the Dailey
International Common Stock 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 or, if not, subject to shelf
resale registration rights.
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.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 32
<PAGE> 41
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.
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, the receipt and
sufficiency of which is hereby acknowledged, release
unconditionally, and are hereby deemed to 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 Code),
whether known or unknown, foreseen or unforeseen, existing or
hereafter 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
release 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, the receipt and
sufficiency of which is hereby acknowledged, release
unconditionally, and are hereby deemed to 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),
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 hereafter arising, in law, equity or otherwise,
based in whole or in part on any act,
DEBTORS' JOINT PLAN OF REORGANIZATION Page 33
<PAGE> 42
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), the "Released Matters"); provided, however, that the
foregoing release 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.
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, 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;
DEBTORS' JOINT PLAN OF REORGANIZATION Page 34
<PAGE> 43
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;
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 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.
b. The Confirmation Order shall have become an Effective
Confirmation Order and not have been stayed, modified,
reversed or amended; and
DEBTORS' JOINT PLAN OF REORGANIZATION Page 35
<PAGE> 44
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.
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
DEBTORS' JOINT PLAN OF REORGANIZATION Page 36
<PAGE> 45
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 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 Debtor dated May 21, 1999, 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.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 37
<PAGE> 46
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.
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 CRAMDOWN
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.
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' 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
Technology Agreement, the Lawrence/Dailey Lease Modification
Agreements or any entity's obligations incurred in connection
therewith;
i. 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;
j. 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;
k. Enter and implement such orders as are necessary or
appropriate if the Confirmation Order is for any reason
modified, stayed, reversed, revoked or vacated;
l. 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
m. Enter an Order concluding the Reorganization Case.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 39
<PAGE> 48
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).
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 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
DEBTORS' JOINT PLAN OF REORGANIZATION Page 40
<PAGE> 49
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.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 41
<PAGE> 50
Dated: May 28, 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' JOINT PLAN OF REORGANIZATION
<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' JOINT PLAN OF REORGANIZATION
<PAGE> 52
HAYNES AND BOONE, L.L.P. 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/ ROBERT D. ALBERGOTTI /s/ LAURA DAVID JONES
- -------------------------------------- ------------------------------------
Robert D. Albergotti Laura Davis Jones (No. 2436)
Stephen M. Pezanosky Michael Nestor (No. 3526)
PROPOSED CO-COUNSEL TO DEBTORS AND DEBTORS-IN-POSSESSION
DEBTORS' JOINT PLAN OF REORGANIZATION
<PAGE> 1
ACQUISITION AGREEMENT
BY AND AMONG
WEATHERFORD INTERNATIONAL, INC.
AND
DAILEY INTERNATIONAL INC.,
DAILEY ENERGY SERVICES, INC.,
DAILEY INTERNATIONAL SALES CORPORATION
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.
MAY 21, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C> <C>
ARTICLE I THE TRANSACTIONS......................................................................1
1.1 Closing Date..........................................................................1
1.2 The Transactions......................................................................2
ARTICLE II REPRESENTATIONS AND WARRANTIES........................................................2
2.1 Representations and Warranties of Weatherford.........................................2
(a) Organization.................................................2
(b) Authorization and Validity of Agreement
and Issuance of Weatherford Shares...........................2
(c) Ownership of Dailey Notes....................................3
(d) No Conflict..................................................3
(e) Commission Filings...........................................3
(f) Disclosure Statement.........................................3
2.2 Representations and Warranties of Dailey..............................................4
(a) Organization.................................................4
(b) Dailey Subsidiaries..........................................4
(c) Capitalization...............................................4
(d) Authorization and Validity of Agreement......................5
(e) No Approvals or Notices Required; No Conflict
with Instruments to which Dailey is a Party..................6
(f) Commission Filings; Financial Statements.....................6
(g) Disclosure Statement.........................................7
(h) Conduct of Business in the Ordinary Course;
Absence of Certain Changes and Events........................7
(i) Litigation...................................................8
(j) Employee Benefit Plans.......................................8
(k) Taxes.......................................................10
(l) Environmental Matters.......................................11
(m) Severance Payments..........................................12
(n) Brokers.....................................................12
(o) Compliance with Laws........................................12
(p) Contracts...................................................12
(q) Title to Property...........................................13
(r) Insurance Policies..........................................14
(s) Loans.......................................................14
ARTICLE III COVENANTS OF DAILEY..................................................................14
3.1 Certain Covenants Concerning the Prospective Bankruptcy Cases........................14
3.2 Conduct of Business by Dailey Pending the Closing Date...............................15
ARTICLE IV COVENANTS OF WEATHERFORD PRIOR TO THE EFFECTIVE TIME.................................18
4.1 Reservation of Weatherford Stock.....................................................18
4.2 Stock Exchange Listing...............................................................18
ARTICLE V ADDITIONAL AGREEMENTS................................................................18
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C> <C> <C>
5.1 Filings; Consents; Reasonable Efforts................................................18
5.2 Notification of Certain Matters......................................................19
5.3 Certain Fees and Expenses............................................................19
ARTICLE VI CONDITIONS...........................................................................20
6.1 Conditions to Obligations of Each Party..............................................20
6.2 Additional Conditions to Obligations of Weatherford..................................21
6.3 Additional Conditions to Obligations of Dailey.......................................23
ARTICLE VII GENERAL PROVISIONS...................................................................23
7.1 Survival of Representations and Warranties...........................................23
7.2 Public Statements....................................................................23
7.3 Assignment...........................................................................23
7.4 Notices..............................................................................23
7.5 Governing Law........................................................................24
7.6 Severability.........................................................................24
7.7 Counterparts.........................................................................24
7.8 Headings.............................................................................24
7.9 Confidentiality Agreements...........................................................25
7.10 Entire Agreement: Third Party Beneficiaries..........................................25
7.11 Waiver and Amendment.................................................................25
</TABLE>
EXHIBIT A - Joint Plan of Reorganization
-ii-
<PAGE> 4
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT dated as of May 21, 1999 (this "Agreement"),
is made and entered into by and among Weatherford International, Inc., a
Delaware corporation ("Weatherford"), Dailey International Inc., a Delaware
corporation ("Dailey"), and the subsidiaries of Dailey set forth on the
signature pages hereof (the "Subsidiary Parties").
WHEREAS, subject to and in accordance with the terms and conditions of
this Agreement, the respective Boards of Directors of Weatherford, Dailey, and
the Subsidiary Parties have approved an acquisition of Dailey by Weatherford
(the "Acquisition"), in connection with which (i) all of Dailey's outstanding 9
1/2% Senior Notes due 2008 (the "Dailey Notes") will be cancelled, and the
holders thereof (the "Dailey Noteholders") will receive in exchange shares of
the common stock, $1.00 par value per share, of Weatherford ("Weatherford Common
Stock"), having an aggregate market value of $185,000,000, (ii) all of the
issued and outstanding shares of Class A common stock, $0.01 par value per
share, of Dailey ("Dailey Class A Common Stock") and Class B Common Stock, $0.01
par value per share, of Dailey ("Dailey Class B Common Stock" and collectively
with the Dailey Class A Common Stock, the "Dailey Common Stock") will be
cancelled, and the holders thereof will receive in exchange shares of
Weatherford Common Stock having an aggregate market value of $10,000,000, and
(iii) Dailey shall issue 1,000 newly-issued shares of common stock of Dailey
(the "New Dailey Stock") to Weatherford, in each case as more fully described
herein (together with the other transactions contemplated by this Agreement, the
"Transactions");
WHEREAS, Weatherford is a Dailey Noteholder;
WHEREAS, following the execution of this Agreement by the parties
hereto, each of Dailey and the Subsidiary Parties will file a voluntary petition
for relief (the "Bankruptcy Cases") under Chapter 11 of the United States
Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court
for the District of Delaware (the "Bankruptcy Court"), together with a Joint
Plan of Reorganization in the form attached hereto as Exhibit A (the "Plan") and
to which this Agreement shall be an Exhibit and a Disclosure Statement (as
defined herein); and
WHEREAS, the parties hereto desire to set forth certain
representations, warranties and covenants made by each to the other as an
inducement to the consummation of the Transactions;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained, the parties hereto
hereby agree as follows:
ARTICLE I
THE TRANSACTIONS
1.1 CLOSING DATE. The closing of the Transactions (the "Closing") shall
take place at the offices of Andrews & Kurth L.L.P, Houston, Texas, as soon as
practicable after the confirmation of the Plan by the Bankruptcy Court and the
satisfaction or waiver of each of the conditions set forth in Article VI hereof
or at such other time and place and on such other date as Weatherford and Dailey
shall agree; provided that each of the closing conditions set forth in Article
VI hereof shall have been satisfied or waived at or prior to such time. The date
on which the Closing occurs is herein referred to as the "Closing Date."
-1-
<PAGE> 5
1.2 THE TRANSACTIONS. Subject to the terms and conditions of this
Agreement and consistent with the terms of the Plan, on the Closing Date:
(a) (i) As more fully described in the Plan, holders of
allowed interests under the Plan, based upon
ownership of Dailey Common Stock, shall share pro
rata according to share ownership in the
Weatherford-Old DII Equity Consideration (as defined
in the Plan).
(ii) As more fully described in the Plan, holders of
allowed claims under the Plan, based upon ownership
of the Dailey Notes, shall share pro rata in the
Weatherford- Senior Note Holder Consideration (as
defined in the Plan).
(b) Dailey shall issue to Weatherford 1,000 shares of New
Dailey Stock, whereupon Weatherford shall become the
sole stockholder of Dailey.
(c) Any outstanding Dailey Options (as defined herein)
shall be canceled pursuant to the Plan, and all
Dailey Option Plans (as defined herein) shall
automatically be terminated.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF WEATHERFORD. Weatherford hereby
represents and warrants to Dailey and the Subsidiary Parties that:
(a) Organization. Weatherford is a corporation duly
incorporated, validly existing and in good standing under the laws of
the state of Delaware. Weatherford has all requisite corporate power
and corporate authority to own, lease and operate all of its properties
and assets and to carry on its business as now being conducted, except
where the failure to be so organized, existing or in good standing
would not have a material adverse effect on the financial condition of
Weatherford and its subsidiaries, taken as a whole (a "Weatherford
MAE"). Weatherford is duly qualified to do business, and is in good
standing, in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary, except in such jurisdictions where the failure
to be duly qualified would not have a Weatherford MAE. Weatherford has
heretofore delivered to Dailey true and complete copies of
Weatherford's Restated Certificate of Incorporation, as amended (the
"Weatherford Certificate"), and Weatherford's bylaws as in existence on
the date hereof.
(b) Authorization and Validity of Agreement and Issuance of
Weatherford Shares. The execution and delivery by Weatherford of this
Agreement and the consummation by Weatherford of the transactions
contemplated hereby (including the issuance of shares of Weatherford's
Common Stock in accordance with the terms of this Agreement and the
Plan) have been duly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by Weatherford and is
the legal valid and binding obligation of Weatherford, enforceable
against Weatherford in accordance with its terms, subject to the
approval of the Bankruptcy Court. Upon issuance of the
-2-
<PAGE> 6
shares of Weatherford Common Stock to be issued pursuant to the terms
of this Agreement and the Plan, such shares shall be validly issued,
fully paid and non-assessable.
(c) Ownership of Dailey Notes. Weatherford has, and on the
Closing Date will have, good and valid title to at least $60,550,000
aggregate principal amount of Dailey Notes, free and clear of all liens
and encumbrances.
(d) No Conflict. The execution and delivery of this Agreement
does not, and the consummation of the Transactions will not, conflict
with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of or "put" right with
respect to any obligation or to loss of a material benefit under, or
result in the creation of any lien or encumbrance upon any of the
properties or assets of Weatherford under, any provision of (i) the
Weatherford Certificate or bylaws of Weatherford, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease, guaranty or
other financial assurance agreement or other agreement, instrument,
permit, concession, franchise or license applicable to Weatherford, and
(iii) subject to governmental filing and other matters referred to in
the following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation or arbitration award applicable to
Weatherford, other than, in the case of clause (ii), any such
conflicts, violations, defaults, rights or liens or encumbrances that
individually or in the aggregate would not have a Weatherford MAE. No
consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or
commission or other governmental authority or agency, domestic or
foreign, including local authorities (a "Governmental Entity"), is
required by or with respect to Weatherford in connection with the
execution and delivery of this Agreement by Weatherford or the
consummation by Weatherford of the Transactions, except for (i) the
approval of the Plan by the Bankruptcy Court, (ii) the filing of a
pre-merger notification and report form by Weatherford under the HSR
Act, and (iii) such other consents, approvals, orders, authorizations,
registrations, declarations, filings and notices as are set forth in
Schedule 2.1(d).
(e) Commission Filings. Weatherford has filed all reports and
documents required to filed with the Securities and Exchange Commission
(the "Commission") since December 31, 1997. All reports, registration
statements and other filings (including all notes, exhibits and
schedules thereto and documents incorporated by reference therein)
filed by Weatherford with the Commission since December 31, 1997,
through the date of this Agreement, together with any amendments
thereto, are sometimes collectively referred to as the "Weatherford
Commission Filings." As of the respective dates of their filing with
the Commission or, if any such Weatherford Commission Filings were
amended, as of the date of the filing of such amendment, the
Weatherford Commission Filings complied, and as of the Closing Date
will comply, in all material respects with the applicable requirements
of the Securities Act of 1933 (the "Securities Act") or the Securities
Exchange Act of 1934 (the "Exchange Act"), as the case may be, and the
applicable rules and regulations of the Commission thereunder, and did
not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(f) Disclosure Statement. The information provided by
Weatherford in writing expressly for inclusion in the Disclosure
Statement (as defined herein) will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
-3-
<PAGE> 7
2.2 REPRESENTATIONS AND WARRANTIES OF DAILEY. Dailey and the Subsidiary
Parties hereby jointly and severally represent and warrant to Weatherford that:
(a) Organization. Dailey is a corporation duly organized,
validly existing and in good standing under the laws of the state of
Delaware. Dailey has all requisite corporate power and corporate
authority and all necessary governmental authorizations to own, lease
and operate all of its properties and assets and to carry on its
business as now being conducted, except where the failure to be so
organized, existing or in good standing or to have such governmental
authority would not (i) have a material adverse effect on the assets,
properties, business, operations, or condition (financial or otherwise)
of Dailey and the Dailey Subsidiaries (as defined below), taken as a
whole or (ii) prevent or materially adversely affect the ability of
Dailey to perform and comply with its obligations under this Agreement,
or any other agreement to be executed and delivered in connection with
the Transactions (a "Dailey MAE"). Dailey is duly qualified as a
foreign corporation to transact business, and is in good standing, in
each jurisdiction in which the property owned, leased or operated by it
or the nature of the business conducted by it makes such qualification
necessary, except in such jurisdictions where the failure to be duly
qualified does not and would not have a Dailey MAE. Dailey is in
compliance with all applicable laws, judgments, orders, rules and
regulations, domestic and foreign, except where failure to be in such
compliance would not have a Dailey MAE. Dailey has heretofore delivered
to Weatherford true and complete copies of Dailey's Certificate of
Incorporation (the "Dailey Certificate") and bylaws, as in existence on
the date hereof.
(b) Dailey Subsidiaries. Schedule 2.2(b) sets forth a list of
all corporations, partnerships, limited liability companies and other
entities of which Dailey owns, directly or indirectly, an equity
interest (such entities referred to herein as the "Dailey
Subsidiaries"). The Dailey Subsidiaries are duly organized, validly
existing and in good standing under the laws of their respective
jurisdictions of organization and have the requisite power and
authority (as a corporation, partnership, limited liability company or
otherwise) to carry on their respective businesses as they are now
being conducted and to own, operate and lease the assets they now own,
operate or hold under lease, except where the failure to be so
organized, existing or in good standing would not have a Dailey MAE.
The Dailey Subsidiaries are duly qualified to transact business and are
in good standing in each jurisdiction in which the nature of their
respective businesses or the ownership or leasing of their respective
properties makes such qualification necessary, other than in such
jurisdictions where the failure to be so qualified or in good standing
would not have a Dailey MAE. All the outstanding shares of capital
stock or other ownership interests of the Dailey Subsidiaries have been
duly authorized and validly issued and are fully paid and
non-assessable and were not issued in violation of any preemptive
rights or other preferential rights of subscription or purchase of any
person. All such stock and ownership interests are owned of record and
beneficially by Dailey or by an Dailey Subsidiary, free and clear of
all liens, pledges, security interests, charges, claims, rights of
third parties and other encumbrances of any kind or nature. Dailey has
heretofore delivered to Weatherford true and complete copies of each
respective Dailey Subsidiary's organizational documents, as in
existence on the date hereof.
(c) Capitalization.
(i) The authorized capital stock of Dailey consists
of 20,000,000 shares of Dailey Class A Common Stock,
10,000,000 shares of Dailey Class B Common Stock, and
5,000,000 shares of preferred stock, $0.01 par value per share
("Dailey Preferred Stock"). As of the date of this Agreement,
there were 5,129,004 shares of Dailey Class A Common
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<PAGE> 8
Stock issued and outstanding, 5,000,000 shares of Dailey Class
B Common Stock issued and outstanding and 574,651 shares of
Dailey Common Stock were held as treasury shares. There are no
outstanding shares of Dailey Preferred Stock. A total of
976,031 shares of Dailey Common Stock have been reserved for
issuance pursuant to the stock options and warrants described
in Section 2.2(c)(ii). All issued and outstanding shares of
Dailey Common Stock are validly issued, fully paid and
nonassessable, were not issued in violation of any preemptive
rights or other preferential rights of subscription or
purchase of any person, and no holder thereof is entitled to
preemptive rights. Dailey is not a party to, and is not aware
of, (i) any voting agreement, voting trust or similar
agreement or arrangement relating to any class or series of
its capital stock, or (ii) except for agreements that are
filed (or incorporated by reference) as exhibits to Dailey's
Annual Report on Form 10-K for the year ended December 31,
1998 (the "1998 10-K"), any agreement or arrangement providing
for registration rights with respect to any capital stock or
other securities of Dailey.
(ii) Schedule 2.2(c)(ii) sets forth a list of all
existing plans pursuant to which options to purchase shares of
Dailey Common Stock may be issued (the "Dailey Option Plans").
Each unexpired and unexercised option to purchase shares of
Dailey Common Stock (the "Dailey Options") granted under each
Dailey Option Plan or otherwise that has an exercise price of
less than $3.75 is identified on Schedule 2.2(c)(ii). Other
than as set forth in this Section 2.2(c) or in Schedule
2.2(c)(ii), there are not now and at the Effective Time there
will not be any (A) shares of capital stock or other equity
securities of Dailey outstanding other than Dailey Common
Stock issued pursuant to the exercise of the Dailey Options or
(B) outstanding options (other than the Dailey Options),
warrants, scrip, rights to subscribe for, calls or commitments
of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of any
class of capital stock of Dailey, or contracts, understandings
or arrangements to which Dailey is a party, or by which it is
or may be bound, to issue additional shares of its capital
stock (other than the issuance of the New Dailey Stock
pursuant to this Agreement and the Plan) or options, warrants,
scrip or rights to subscribe for, or securities or rights
convertible into or exchangeable for, any additional shares of
its capital stock.
(d) Authorization and Validity of Agreement. Dailey and each
Subsidiary Party has all requisite corporate power and authority to
enter into this Agreement, the Plan, the Technology Transfer Agreement,
dated as of May 18, 1999, among Dailey, Weatherford, Robert A. Evans
and Evans Engineering & Manufacturing Inc. (the "Technology
Agreement"), and the other agreements and instruments contemplated to
be executed and delivered by it in connection with the Transactions
(collectively with the Technology Agreement, the "Other Agreements")
and to perform its respective obligations hereunder and thereunder,
subject only to the confirmation of the Plan by the Bankruptcy Court.
The execution and delivery by Dailey and each Subsidiary Party of this
Agreement and any of the Other Agreements to which it is a party and
the consummation by it of the Transactions have been duly authorized by
all necessary corporate action. This Agreement has been duly executed
and delivered by Dailey and each Subsidiary Party and is the valid and
binding obligation of Dailey and each Subsidiary Party enforceable
against it in accordance with its terms. The Other Agreements, when
executed and delivered by Dailey and each Subsidiary Party, will
constitute valid and binding obligations of Dailey and each Subsidiary
Party, enforceable against it in accordance with their respective
terms.
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<PAGE> 9
(e) No Approvals or Notices Required; No Conflict with
Instruments to which Dailey is a Party. The execution and delivery of
this Agreement and the Other Agreements do not, and the consummation of
the Transactions and compliance with the provisions hereof and thereof
will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of or "put"
right with respect to any obligation or to loss of a material benefit
under, or result in the creation of any lien or encumbrance upon any of
the properties or assets of Dailey or any of the Dailey Subsidiaries
under, any provision of (i) the Dailey Certificate or bylaws of Dailey
or any of the Dailey Subsidiaries, (ii) except as set forth in Schedule
2.2(e), any loan or credit agreement, note, bond, mortgage, indenture,
lease, guaranty or other financial assurance agreement or other
agreement, instrument, permit, concession, franchise or license
applicable to Dailey or any of the Dailey Subsidiaries or any of their
respective properties or assets, and (iii) subject to governmental
filing and other matters referred to in the following sentence, any
judgment, order, decree, statute, law, ordinance, rule or regulation or
arbitration award applicable to Dailey or any of the Dailey
Subsidiaries or their respective properties or assets, other than (A),
in the case of clause (ii), any such conflicts, violations, defaults,
rights or liens or encumbrances that individually or in the aggregate
would not have a Dailey MAE and (B) conflicts or defaults arising
solely out of the filing of the Bankruptcy Cases. No consent, approval,
order or authorization of, or registration, declaration or filing with,
any Governmental Entity is required by or with respect to Dailey or any
of the Dailey Subsidiaries in connection with the execution and
delivery of this Agreement by Dailey or the consummation by Dailey of
the Transactions, except for (i) confirmation of the Plan by the
Bankruptcy Court, (ii) the filing of a pre-merger notification and
report form by Dailey under the HSR Act and (iii) such other consents,
approvals, orders, authorizations, registrations, declarations, filings
and notices as are set forth in Schedule 2.2(e).
(f) Commission Filings; Financial Statements. Dailey has filed
all reports, registration statements and other filings, together with
any amendments required to be made with respect thereto, that it has
been required to file with the Commission. All reports, registration
statements and other filings (including all notes, exhibits and
schedules thereto and documents incorporated by reference therein)
filed by Dailey with the Commission since August 31, 1996, through the
date of this Agreement, together with any amendments thereto, are
sometimes collectively referred to as the "Dailey Commission Filings."
Dailey has heretofore delivered to Weatherford copies of the Dailey
Commission Filings. As of the respective dates of their filing with the
Commission or, if any such Dailey Commission Filings were amended, as
of the date of the filing of such amendment, the Dailey Commission
Filings complied, and as of the Closing Date will comply, in all
material respects with the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations of the Commission
thereunder, and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading. All
documents required to be filed as exhibits to Dailey Commission Filings
pursuant to the Exchange Act and the Securities Act and the rules and
regulations thereunder have been so filed.
Each of the consolidated financial statements (including any
related notes or schedules) included in the Dailey Commission Filings
(i) was prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be noted
therein or in the notes or schedules thereto) and (ii) except for
non-compliance that would not have a Dailey MAE, complied with the
rules and regulations of the Commission. Such consolidated financial
statements included in
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<PAGE> 10
the Dailey Commission Filings fairly present the consolidated financial
position of Dailey as of the dates thereof and the results of
operations, cash flows and changes in stockholders' equity for the
periods then ended (subject, in the case of the unaudited interim
financial statements, to the exclusion of normal year-end audit
adjustments and footnote disclosures). As of the date hereof, Dailey
has no liabilities, absolute or contingent, that may reasonably be
expected to have a Dailey MAE, that are not reflected in the Dailey
Commission Filings, except (i) those incurred in the ordinary course of
business consistent with past operations and not relating to the
borrowing of money (ii) those set forth in Schedule 2.2(f) or (iii)
those identified in Dailey's draft Form 10-Q (printer's edgarized
proof, as of May 18, 1999, at 4:16 a.m.) for the three months ended
March 31, 1999, which has been previously provided to Weatherford (the
"Draft 10-Q").
(g) Disclosure Statement. The disclosure statement to be filed
by Dailey and the Subsidiary Parties with the Bankruptcy Court pursuant
to Section 1125 of the Bankruptcy Code and in accordance with Section
3.1(a) hereof, is herein called the "Disclosure Statement." The
Disclosure Statement will not, as of the date as of which it speaks,
contain an untrue statement of a material fact or omit to state a
material fact required to make the statements therein, in light of the
circumstances under which they are made, not misleading and will
describe accurately in all material respects the business and
operations of Dailey and the Dailey Subsidiaries and the provisions of
the Plan and this Agreement and will, as of the date of mailing of the
Bankruptcy Court-approved Disclosure Statement and other ballot
materials to the creditors and shareholders of Dailey, contain
"adequate information" (as defined in Section 1125(a)(1) of the
Bankruptcy Code) with respect to the Plan, Dailey and the Subsidiary
Parties and will describe accurately in all material respects the
provisions of the Plan and this Agreement.
(h) Conduct of Business in the Ordinary Course; Absence of
Certain Changes and Events. Since December 31, 1998, except as
contemplated by this Agreement or as disclosed in the Dailey Commission
Filings or the Draft 10-Q or set forth in Schedule 2.2(h), Dailey and
the Dailey Subsidiaries have conducted their respective businesses only
in the ordinary and usual course in accordance with past practice, and
there has not been: (i) a Dailey MAE; (ii) to the knowledge of Dailey,
any other condition, event or development that reasonably may be
expected to result in a Dailey MAE; (iii) any change by Dailey in its
accounting methods, principles or practices; (iv) any revaluation by
Dailey of any of its assets, including, without limitation, writing
down the value of inventory or writing off notes or accounts receivable
other than in the ordinary course of business and consistent with past
practice; (v) any entry by Dailey into any commitment or transaction
that would be material to Dailey; (vi) any declaration, setting aside
or payment of any dividends or distributions in respect of the Dailey
Common Stock or any redemption, purchase or other acquisition of any of
its securities; (vii) any damage, destruction or loss (whether or not
covered by insurance) materially adversely affecting the properties or
business of Dailey; (viii) any increase in indebtedness of borrowed
money other than borrowing under existing credit facilities, the amount
of which is disclosed in Schedule 2.2(h); (ix) any granting of a
security interest or lien or encumbrance on any property or assets of
Dailey, other than (A) liens or encumbrances for taxes not due and
payable and (B) inchoate mechanics', warehousemen's and other statutory
liens or encumbrances incurred in the ordinary course of business; or
(x) any increase in or establishment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing,
stock option (including, without limitation, the granting of stock
options, stock appreciation rights, performance awards or restricted
stock awards), stock purchase or other employee benefit plan or any
other increase in the compensation payable or
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<PAGE> 11
to become payable to any directors, officers or key employees of Dailey
or the Dailey Subsidiaries or for which Dailey or any of the Dailey
Subsidiaries would be responsible.
(i) Litigation. Except as disclosed in the Dailey Commission
Filings or the Draft 10-Q or as set forth in Schedule 2.2(i), there are
no claims, actions, suits, investigations, inquiries or proceedings
(collectively, "Demands"), pending or, to the knowledge of Dailey,
threatened against Dailey or any of the Dailey Subsidiaries or any of
their respective properties at law or in equity, or any of their
employee benefit plans or fiduciaries of such plans, before or by any
Governmental Entity, wherever located (i) that exist today or (ii) that
would otherwise, if adversely determined, have a Dailey MAE. Neither
Dailey nor any of the Dailey Subsidiaries are subject to any judicial,
governmental or administrative order, writ, judgment, injunction or
decree.
(j) Employee Benefit Plans.
(i) Schedule 2.2(j) provides a description of each of
the following that is sponsored, maintained or contributed to
by, or to which there is any liability (secondary, contingent
or otherwise) of, Dailey, any Dailey Subsidiary or any
corporation, trade, business or entity under common control
with Dailey or any Dailey Subsidiary within the meaning of
Section 414(b),(c),(m) or (o) of the Internal Revenue Code of
1986, as amended (the "Code"), or Section 4001 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")
(a "Dailey ERISA Affiliate"), for the benefit of its employees
(or former employees) or directors (or former directors), or
has been so sponsored, maintained or contributed to within
three years prior to the Closing Date:
(A) each "employee benefit plan" (each a
"Benefit Plan"), as such term is defined in Section
3(3) of ERISA; and
(B) each stock option plan, collective
bargaining agreement, bonus plan or arrangement,
incentive award plan or arrangement, vacation policy,
severance pay plan or other arrangement, policy or
agreement, deferred compensation agreement or
arrangement, executive compensation or supplemental
income arrangement, consulting agreement, employment
agreement and each other employee benefit plan,
agreement, arrangement, program, practice or
understanding that is not described in Section
2.2(j)(i)(A) ("Benefit Program or Agreement").
True and complete copies of each of the Benefit Plans and
Benefit Programs or Agreements, related trusts, if applicable,
and all amendments thereto, together with (i) the Forms 5500,
as applicable, for the three most recent plan years, (ii) all
current summary plan descriptions for each such Benefit Plan,
and (iii) the most recent Internal Revenue Service
determination letters for each such Benefit Plan, as
applicable, and all correspondence with the Internal Revenue
Service and the Department of Labor within the past thirty-six
months relating to such Benefit Plans, Benefit Programs and
Agreements have been furnished to Weatherford.
(ii) Except as otherwise set forth in Schedule
2.2(j),
(A) None of the Benefit Plans are subject to
Title IV of ERISA or Section 412 of the Code; no plan
is a multiemployer plan within the meaning of
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<PAGE> 12
Section 3(37) of ERISA; each Benefit Plan is a single
employer plan; and no Benefit Plan has engaged in any
transaction described in Sections 406 and 407 of
ERISA (unless exempt under Section 408) or Section
4975 of the Code (unless exempt), which in the
aggregate would have a Dailey MAE;
(B) Each Benefit Plan and each Benefit
Program or Agreement has been administered,
maintained and operated in all material respects in
accordance with the terms thereof and in compliance
with its governing documents and applicable law
(including, where applicable, ERISA and the Code and
timely filing of Form 5500's for each year);
(C) There is no matter pending with respect
to any of the Benefit Plans before any governmental
agency, and there are no actions, suits or claims
pending (other than routine claims for benefits) or,
to the knowledge of Dailey, threatened against, or
with respect to, any of the Benefit Plans or Benefit
Programs or Agreements or its assets;
(D) No act, omission or transaction has
occurred which would result in imposition on Dailey
or any Dailey ERISA Affiliate of breach of fiduciary
duty liability damages under Section 409 of ERISA, a
civil penalty assessed pursuant to subsections (c),
(i) or (l) of Section 502 of ERISA or a tax imposed
pursuant to Chapter 43 of Subtitle D of the Code,
which in the aggregate would have a Dailey MAE;
(E) The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby will not require Dailey or any
Dailey ERISA Affiliate to make a larger contribution
to, or pay greater benefits under, any Benefit Plan
or Benefit Program or Agreement than it otherwise
would or create or give rise to any additional vested
rights or service credits under any Benefit Plan or
Benefit Program or Agreement or cause the companies
to make accelerated payments; and
(F) Each Benefit Plan intended to be a
"qualified plan" under Section 401(a) of the Code is
so qualified.
(iii) Except as set forth in Schedule 2.2(j),
termination of employment of any employee of Dailey or any
Dailey Sub immediately after consummation of the Transactions
would not result in payments under the Benefit Plans or
Benefit Programs or Agreements which, in the aggregate, would
result in imposition of the sanctions imposed under Sections
280G and 4999 of the Code.
(iv) Each Benefit Plan may be unilaterally amended or
terminated in its entirety without liability except as to
benefits accrued thereunder prior to such amendment or
termination.
(v) Except as set forth in Schedule 2.2(j), none of
the employees of Dailey or any Dailey Sub are subject to union
or collective bargaining agreements.
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<PAGE> 13
(vi) None of Dailey or any of the Dailey ERISA
Affiliates has agreed or is obligated to provide retiree
medical coverage, other than COBRA-required coverage, and each
of such companies has fully complied with all obligations
under COBRA applicable to it.
(k) Taxes. Except as set forth in Schedule 2.2(k),
(i) all returns and reports, including, without
limitation, information and withholding returns and reports
("Tax Returns"), of or relating to any foreign, federal, state
or local tax, assessment or other governmental charge ("Taxes"
or a "Tax") that are required to be filed on or before the
Closing Date by or with respect to Dailey or any Dailey
Subsidiary, have been or will be duly and timely filed, all
such Tax Returns are or will be true, correct and complete in
all material respects, and all Taxes, including interest and
penalties, due and payable whether or not shown on any such
Tax Return have been or will be duly and timely paid or
adequately provided for in reserves established by Dailey in
its consolidated financial statements or any such Dailey
Subsidiary, except where the failure to file Tax Returns or to
pay or provide for Taxes would not result in a Dailey MAE;
(ii) the charges, accruals and reserves for Taxes
with respect to Dailey and the Dailey Subsidiaries reflected
in the consolidated financial statements included in the
Dailey Commission Filings have been prepared in accordance
with generally accepted accounting principles and are
sufficient to cover the payment of all material Taxes,
including any penalties or interest thereon and whether or not
assessed or disputed, that are, or are hereafter found to be,
or to have been, due with respect to the operations of Dailey
or any Dailey Subsidiary through the periods covered thereby
and Dailey and any Dailey Subsidiary has (and as of the
Closing Date will have) made all estimated tax payments
required with respect to Taxes for Tax Returns not yet due;
(iii) there is no action, suit, proceeding, audit or
claim now proposed or pending against or with respect to
Dailey or any Dailey Subsidiary in respect to any Taxes, and
no material assessment, deficiency or adjustment has been
asserted or proposed with respect to any Tax Return of or with
respect to Dailey or any Dailey Subsidiary that has not been
adequately provided for in reserves established by Dailey or
such Dailey Subsidiary;
(iv) no waiver or extension of any statute of
limitations or the period of assessment or collection of any
Taxes relating to any federal, state, local or foreign Tax
matter has been given by or requested from Dailey or any
Dailey Subsidiary and no power of attorney with respect to any
such Taxes has been filed or entered into with any
Governmental Authority, in either case that will be
outstanding as of the Effective Time and the time for filing
any Tax Return relating to Dailey has not been extended to a
date later than the date of this Agreement;
(v) except for statutory liens or encumbrances for
current Taxes not yet delinquent, no liens or encumbrances for
Taxes exist upon the assets of Dailey or any Dailey
Subsidiary;
(vi) none of Dailey or any Dailey Subsidiary is a
party to or bound by or has an obligation under any written
Tax separation, sharing or similar agreement or arrangement;
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<PAGE> 14
(vii) at the time of the spin-off of MacLaw Holdings,
Inc. by Lawrence Administrative Services, Inc. and at the time
of the acquisition of Lawrence Administrative Services, Inc.
by Dailey, there was no plan or intention to acquire directly
or indirectly stock representing a 50 percent or greater
interest in MacLaw Holdings, Inc. or Dailey within the meaning
of Section 355(e) of the Code.
(l) Environmental Matters. Except as set forth in Schedule
2.2(l), (i) the properties, operations and activities of Dailey and
each of the Dailey Subsidiaries comply in all material respects with
all applicable Environmental Laws; (ii) assuming no change in permitted
activities and timely notification of change of ownership, all the
material environmental permits of Dailey are transferable; (iii) none
of Dailey or any of the Dailey Subsidiaries is subject to any existing,
pending or, to the knowledge of Dailey, threatened action, suit,
investigation, inquiry, removal, remediation or corrective action
requirements, citation, outstanding administrative order, judicial
decree or proceeding by or before any governmental authority under any
Environmental Law; (iv) except where the failure would not have a
Dailey MAE, all notices, permits, licenses, or similar authorizations,
if any, required to be obtained or filed by Dailey under any
Environmental Law in connection with any aspect of the business of
Dailey or any Dailey Subsidiary, including without limitation those
relating to the treatment, storage, disposal or release of a hazardous
substance or solid waste, have been duly obtained or filed and will
remain valid and in effect after the Closing Date, and Dailey and each
Dailey Subsidiary is in compliance with the terms and conditions of all
such notices, permits, licenses and similar authorizations; (v) Dailey
and each of the Dailey Subsidiaries has satisfied and is currently in
compliance with all financial responsibility requirements applicable to
its operations and imposed by any governmental authority under any
other Environmental Law, and none of such parties has received any
notice of noncompliance with any such requirements; (vi) there are no
physical or environmental conditions existing on any property currently
owned, leased or operated or previously owned, leased or operated by
Dailey or any entity in which it has or had ownership interest that
could reasonably be expected to give rise to any on-site or off-site
remedial obligations under any Environmental Laws; and (vii) to
Dailey's knowledge, since the effective date of the relevant
requirements of applicable Environmental Laws, all hazardous substances
or solid wastes generated by Dailey or any Dailey Subsidiary or used in
connection with their properties or operations have been transported
only by carriers authorized under Environmental Laws to transport such
substances and wastes, and disposed of only at treatment, storage, and
disposal facilities authorized under environmental laws to treat, store
or dispose of such substances and wastes, and, to the knowledge of
Dailey, such carriers and facilities have been and are operating in
compliance with such authorizations and are not the subject of any
existing, pending, or threatened action, investigation, inquiry, or
corrective action measures by any governmental authority in connection
with any Environmental Laws.
For purposes of this Agreement, the term "Environmental Laws"
shall mean any and all laws, statutes, ordinances, rules, regulations,
orders or determinations of any Governmental Authority pertaining to
health or the environment currently in effect in any and all
jurisdictions in which the party in question and its subsidiaries own
property or conduct business, including without limitation, the Clean
Air Act, as amended, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980, as amended ("CERCLA"), the
Federal Water Pollution Control Act, as amended, the Occupational
Safety and Health Act of 1970, as amended, the Resource Conservation
and Recovery Act of 1976, as amended ("RCRA"), the Safe Drinking Water
Act, as amended, the Toxic Substances Control Act, as amended, the
Hazardous & Solid Waste Amendments Act of 1984, as amended, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the
Hazardous Materials
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<PAGE> 15
Transportation Act, as amended, the Oil Pollution Act of 1990 ("OPA"),
any state laws pertaining to the handling of oil and gas exploration
and production wastes or the use, maintenance, and closure of pits and
impoundments, and all other environmental conservation or protection
laws. For purposes of this Agreement, the terms "hazardous substance"
and "release" have the meanings specified in CERCLA and shall also
include PCBs, asbestos, crude oil and refined products; provided,
however, that to the extent the laws of the state in which the property
is located establish a meaning for "hazardous substance," "release,"
"solid waste" or "disposal" that is broader than that specified in
CERCLA, such broader meaning shall apply. For purposes of this
Agreement, the term "Governmental Authority" includes the United
States, any foreign jurisdiction, the state, county, city and political
subdivisions in which the party in question owns or leases property or
conducts business, and any agency, department, commission, board,
bureau or instrumentality of any of them.
(m) Severance Payments. Except as set forth in Schedule
2.2(m), neither Dailey nor any of the Dailey Subsidiaries will have any
liability or obligation to pay a severance payment or similar
obligation to any of their respective employees, officers or directors
as a result of the Transactions, nor will any of such persons be
entitled to an increase in severance payments or other benefits as a
result of the Transactions in the event of the subsequent termination
of their employment.
(n) Brokers. Except as set forth in Schedule 2.2(n), no
broker, investment banker, or other Person acting on behalf of Dailey
is or will be entitled to any broker's, finder's or other similar fee
or commission in connection with the Transactions.
(o) Compliance with Laws. Dailey and each of the Dailey
Subsidiaries hold all required, necessary or applicable permits,
licenses, variances, exemptions, orders, franchises and approvals of
all Governmental Entities, except where the failure to so hold could
not reasonably be expected to have a Dailey MAE (the "Dailey Permits").
All applications with respect to such Dailey Permits, were complete and
correct in all material respects when made and Dailey does not know of
any reason why any of such permits, licenses, variances, exemptions,
orders, franchises and approvals would be subject to cancellation.
Dailey and each of the Dailey Subsidiaries are in compliance with the
terms of the Dailey Permits except where the failure to so comply could
not reasonably be expected to have a Dailey MAE. None of Dailey or any
of the Dailey Subsidiaries has violated or failed to comply with any
statute, law, ordinance, regulation, rule, permit or order of any
Federal, state or local government, domestic or foreign, or any
Governmental Entity, any arbitration award or any judgment, decree or
order of any court or other Governmental Entity, applicable to Dailey
or any of the Dailey Subsidiaries or their respective business, assets
or operations, except for violations and failures to comply that would
not have a Dailey MAE.
(p) Contracts.
(i) Schedule 2.2(p) contains a complete list of the
following contracts, agreements, arrangements and commitments:
(A) all employment or consulting contracts or agreements to
which Dailey or any of the Dailey Subsidiaries is
contractually obligated; (B) current leases, sales contracts
and other agreements with respect to any real property of
Dailey or any of the Dailey Subsidiaries or to which Dailey or
any of the Dailey Subsidiaries is contractually obligated and
current leases, sales contracts or other agreements with
respect to personal property of Dailey or any of the Dailey
Subsidiaries or to which Dailey or any of the Dailey
Subsidiaries is contractually obligated, in each case having
(1) a remaining term
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<PAGE> 16
of greater than one year or (2) total payments that may be
required of Dailey or the Dailey Subsidiaries exceeding
$50,000; (C) contracts or commitments for capital expenditures
or acquisitions in excess of $500,000 to which Dailey or any
of the Dailey Subsidiaries is obligated; (D) agreements,
contracts, indentures or other instruments relating to the
borrowing of money, or the guarantee of any obligation for the
borrowing of money, to which Dailey or any of the Dailey
Subsidiaries is a party or any of their respective properties
is bound; (E) contracts or agreements or amendments thereto
that would be required to be filed as an exhibit to an Annual
Report on Form 10-K filed by Dailey as of the date hereof that
has not been filed as an exhibit to Dailey's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998, filed
by Dailey with the Commission or any report filed with the
Commission under the Exchange Act since such date; (F) all
material indemnification and guaranty or other similar
obligations (other than those obligations which occur in the
ordinary course of business) to which Dailey or any of the
Dailey Subsidiaries is bound; (G) any outstanding bonds,
letters of credit posted or guaranteed by Dailey or any of the
Dailey Subsidiaries with respect to any Person, other than
those that do not exceed $500,000 in the aggregate (H) any
covenants not to compete or other obligations affecting Dailey
or any Dailey Subsidiary that would materially restrict any of
them or their affiliates from engaging in any business or
activity; and (I) contracts under which Dailey or any Dailey
Subsidiary has received any material advance, "take-or-pay" or
other similar payments and that entitle purchasers to receive
deliveries without paying at such time the contract price
therefor.
(ii) True and correct copies of all the instruments
described in Schedule 2.2(p) have been furnished or made
available to Weatherford. Except as noted in Schedule 2.2(p),
all such agreements, arrangements or commitments are valid and
subsisting and each of Dailey and the Dailey Subsidiaries, to
the extent each is a party, has duly performed its obligations
thereunder in all material respects to the extent such
obligations have accrued, and no breach or default exists
thereunder by Dailey or the Dailey Subsidiaries or, to the
knowledge of Dailey, any other party thereto. There are no
material liabilities of any of the parties to any of the
contracts between Dailey or any of the Dailey Subsidiaries and
third parties arising from any breach of or default in any
provision thereof, other than such breaches that, individually
or in the aggregate, could not reasonably be expected to have
a Dailey MAE, or that would permit the acceleration of any
obligation of any party thereto or the creation of a lien or
encumbrance upon any asset of Dailey or any of the Dailey
Subsidiaries.
(iii) The Subsidiary Parties are the only Dailey
Subsidiaries that have guaranteed the Dailey Notes or are
required to do so pursuant to the indenture for the Dailey
Notes.
(q) Title to Property.
(i) Dailey and each of the Dailey Subsidiaries have
good and indefeasible title to, or valid leasehold interests
in, all of their properties and assets including all real
property and all other properties (tangible or intangible,
real or personal) carried on their books as an asset or used
exclusively by them in their business.
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(ii) Except as set forth in Schedule 2.2(q)(ii),
Dailey and each of the Dailey Subsidiaries has complied in all
material respects with the terms of all leases to which it is
a party and under which it is in occupancy, and all such
leases are in full force and effect. Dailey and each of the
Dailey Subsidiaries enjoys peaceful and undisturbed possession
under all such leases.
(r) Insurance Policies. Schedule 2.2(r) contains a correct and
complete description of all insurance policies of Dailey covering
Dailey and the Dailey Subsidiaries, any employees or other agents of
Dailey and the Dailey Subsidiaries or any assets of Dailey and the
Dailey Subsidiaries. Each such policy is in full force and effect, is
with responsible insurance carriers and is substantially equivalent in
coverage and amount to policies covering companies of the size of
Dailey and in the business in which Dailey and the Dailey Subsidiaries
is engaged, in light of the risk to which such companies and their
employees, businesses, properties and other assets may be exposed. All
retroactive premium adjustments under any worker's compensation policy
of Dailey or any of the Dailey Subsidiaries have been recorded in
Dailey's financial statements in accordance with generally accepted
accounting principles and are reflected in the financial statements
contained in the Dailey Commission Filings.
(s) Loans. Schedule 2.2(s) sets forth all existing loans,
advances or other extensions of credit (excluding accounts receivable
arising in the ordinary course of business) by Dailey or the Dailey
Subsidiaries to any party, including intercompany loans, advances,
guaranties or extensions of credit.
(t) Voting Requirements. Dailey has taken all action to assure
that no state takeover statute or similar statute or regulation,
including, without limitation ss.203 of the Delaware General
Corporation Law, shall apply to the Transactions or to Weatherford.
Dailey has also taken such other action with respect to any other
anti-takeover provisions in its by-laws or Certificate of Incorporation
to the extent necessary to consummate the Transactions on the terms set
forth in this Agreement.
ARTICLE III
COVENANTS OF DAILEY
3.1 CERTAIN COVENANTS CONCERNING THE PROSPECTIVE BANKRUPTCY CASES.
(a) On or before June 1, 1999, each of Dailey and the
Subsidiary Parties shall file the Bankruptcy Cases, together with the
Plan substantially in the form attached as Exhibit A hereto and to
which this Agreement shall be an Exhibit and the Disclosure Statement,
with the Bankruptcy Court pursuant to Chapter 11 of the United States
Bankruptcy Code (the "Bankruptcy Code"). Weatherford and its counsel
shall be given reasonable opportunity to review and comment upon drafts
of the Disclosure Statement before its filing.
(b) Dailey and the Subsidiary Parties shall seek Bankruptcy
Court approval of the Disclosure Statement as expeditiously as
permitted by the Bankruptcy Code, the Federal Rules of Bankruptcy
Procedure and the local rules, if any, of the Bankruptcy Court.
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(c) Subject to their fiduciary obligations as debtors in
possession in the Bankruptcy Cases, Dailey and the Subsidiary Parties
shall exercise all reasonable efforts diligently and in good faith to
cause the Plan to be confirmed by the Bankruptcy Court as promptly as
practicable and in substantially the form of Exhibit A hereto. Dailey
shall not amend or permit the Plan to be amended without the prior
written consent of Weatherford and, upon the reasonable request of
Weatherford, shall promptly file with the Bankruptcy Court all such
amendments to the Plan, the Disclosure Statement or any exhibit to
either as are necessary in order to give effect to the provisions of
this Agreement. Subject to confirmation of the Plan, Dailey and the
Dailey Subsidiaries shall take all action not inconsistent with the
provisions of this Agreement that is necessary or appropriate in order
to effect the consummation of the Plan and the Transactions.
(d) Neither Dailey nor any Dailey Subsidiaries shall have
filed any motion or other pleading, or otherwise shall have brought any
action or proceeding, challenging or objecting to the Dailey Note
Claims of the holders of the Dailey Notes that are signatories to that
certain agreement among such signatories and Dailey and the Subsidiary
Parties (each a "Consenting Noteholder" and collectively, the
"Consenting Noteholders") or otherwise seeking any recovery from, or
injunctive relief against, a Consenting Noteholder (other than with
respect to any alleged or actual breach by a Consenting Noteholder of
the terms of this Agreement);
3.2 CONDUCT OF BUSINESS BY DAILEY PENDING THE CLOSING DATE. Dailey
covenants and agrees that, from the date of this Agreement until the Closing
Date, unless Weatherford shall otherwise agree in writing or as otherwise
expressly and specifically contemplated by this Agreement or expressly and
specifically permitted in the Plan:
(a) The business of Dailey and the Dailey Subsidiaries shall
be conducted only in, and Dailey and the Dailey Subsidiaries shall not
take any action except in, the ordinary course of business and
consistent with past practice;
(b) Dailey and the Dailey Subsidiaries shall not, except as
contemplated hereby or by the Plan, directly or indirectly do any of
the following: (i) issue, sell, pledge, dispose of or encumber any
capital stock or grant or issue any right to acquire any capital stock;
(ii) split, combine or reclassify any outstanding capital stock, or
declare, set aside or pay any dividend payable in cash, stock, property
or otherwise with respect to its capital stock whether now or hereafter
outstanding; (iii) redeem, purchase or acquire or offer to acquire any
of its capital stock or outstanding indebtedness; (iv) acquire, agree
to acquire or make any offer to acquire for cash or other
consideration, any equity interest in or assets of any corporation,
partnership, joint venture or other entity; or (v) enter into any
contract, agreement, commitment or arrangement with respect to any of
the matters set forth in this Section 3.2(b);
(c) Dailey and the Dailey Subsidiaries shall not enter into
any contract regarding its business having a term greater than 120 days
or involving an amount in excess of $500,000 nor commit to do the same;
provided, however, that Weatherford shall not unreasonably withhold any
consent sought by Dailey or any of the Dailey Subsidiaries with respect
to this covenant;
(d) Dailey and the Dailey Subsidiaries shall not become bound
by any agreement or obligation in an amount in excess of $500,000 in
the aggregate for all such agreements and obligations;
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<PAGE> 19
provided, however, that Weatherford shall not unreasonably withhold any
consent sought by Dailey or any of the Dailey Subsidiaries with respect
to this covenant;
(e) Neither Dailey nor any of the Dailey Subsidiaries shall
(i) increase the compensation payable or to become payable to its
officers or employees, except for increases in compensation of
non-officer employees in accordance with past practices in salaries or
wages of employees of Dailey or any of the Dailey Subsidiaries who are
not officers of Dailey or any of the Dailey Subsidiaries, (ii) grant
any severance or termination pay to any director, officer or other
employee of Dailey or any of the Dailey Subsidiaries, (iii) enter into
or amend any employment or severance agreement with any director,
officer or other employee of Dailey or any of the Dailey Subsidiaries
or (iv) establish, adopt, enter into, extend, or, except as set forth
on Schedule 3.2(e), amend or terminate any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted
stock, pension, retirement, deferred compensation, employment,
termination, severance or other agreement, trust, fund, policy or
arrangement for the benefit of any director, officer or employee;
(f) Neither Dailey nor any of the Dailey Subsidiaries shall
enter into any collective bargaining agreement or any agreement to
change or modify any existing collective bargaining agreement, except
for such changes or modifications as may be required by law;
(g) Neither Dailey nor any of the Dailey Subsidiaries shall
merge or consolidate with any corporation or business entity, acquire
control or acquire any capital shares of other securities of any other
corporation or business entity, or take any steps incident to or in
furtherance of any such actions, whether by entering into an agreement
providing therefor or otherwise;
(h) Neither Dailey nor any of the Dailey Subsidiaries shall
enter, or agree to enter, into any contract or agreement (i) granting
any rights of first refusal or similar preferential rights to purchase
any assets or rights of Dailey or any of the Dailey Subsidiaries, other
than in the ordinary course of business with respect to non-material
assets or rights, (ii) requiring the consent of any party to the
consummation of any of the transactions contemplated by this Agreement
or the Plan, or (iii) that if effective on the date hereof would be
required to be identified as a disclosure pursuant to Schedule 2.2(p);
(i) Neither Dailey nor any of the Dailey Subsidiaries shall
sell, lease, mortgage, pledge, grant a lien or encumbrance on or
otherwise encumber or otherwise dispose of any of Dailey's or the
Dailey Subsidiaries' properties or assets, except sales of inventory
and rental of equipment in the ordinary course of business consistent
with past practice, or cancel any material liabilities owed to it, or
agree to do any of the foregoing;
(j) Except as disclosed in Schedule 3.2(j), neither Dailey nor
any of the Dailey Subsidiaries shall, directly or indirectly, incur any
indebtedness for borrowed money or guarantee any such indebtedness of
another person, issue or sell any debt securities or warrants or other
rights to acquire any debt securities of Dailey or any of the Dailey
Subsidiaries, guarantee any debt securities of another person (other
than endorsements of drafts, checks and notes in the ordinary course of
business), enter into any "keep well" or other agreement to maintain
any financial statement condition of another person or enter into any
arrangement having the economic effect of any of the foregoing or make
or permit to remain outstanding any loans, advances or capital
contributions to, or investments in, any other person, other than to
Dailey or any Subsidiary Party;
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(k) Neither Dailey nor any of the Dailey Subsidiaries shall
make any election relating to Taxes or settle or compromise any
material federal, state, local or foreign income tax liability;
(l) Neither Dailey nor any of the Dailey Subsidiaries shall
change any accounting principle or practices used by it except as
required by generally accepted accounting principles;
(m) Dailey shall use its reasonable efforts to (i) preserve
intact the business organization of Dailey and the Dailey Subsidiaries,
(ii) maintain in effect any material authorizations or similar rights
of Dailey and the Dailey Subsidiaries, (iii) preserve the goodwill of
those having material business relationships with Dailey and the Dailey
Subsidiaries; (iv) maintain and keep each of Dailey's and the Dailey
Subsidiaries' properties in the same repair and condition as presently
exists, except for deterioration due to ordinary wear and tear and
damage due to casualty; and (v) maintain in full force and effect
insurance comparable in amount and scope of coverage to that currently
maintained by it;
(n) Dailey shall, and shall cause the Dailey Subsidiaries to,
perform their respective obligations under any contracts and agreements
to which it is a party or to which any of its assets is subject, except
to the extent such failure to perform would not have a Dailey MAE;
(o) Neither Dailey nor any of the Dailey Subsidiaries shall
(i) settle any unsecured claims in the Bankruptcy Cases without
Weatherford's prior written consent or (ii) reject any executory
contracts with respect to which the damages resulting from such
rejection would exceed $50,000;
(p) Upon Weatherford's written request, Dailey and the
Subsidiary Parties shall file and prosecute claims and objections in
the Bankruptcy Cases;
(q) Neither Dailey nor any of the Dailey Subsidiaries shall
amend or otherwise change its Certificate of Incorporation or bylaws or
equivalent organizational documents;
(r) Neither Dailey nor any of the Dailey Subsidiaries shall
take any action that would prevent or impede any party to this
Agreement from obtaining any consent or approval the receipt of which
is a condition to the consummation of the Plan;
(s) Neither Dailey nor any of the Dailey Subsidiaries shall
enter into any agreement or arrangement that would limit or otherwise
restrict Dailey or any of the Dailey Subsidiaries or any successor
thereto or, after consummation of the Plan, Weatherford or any
subsidiary thereof or any successor thereto, from engaging or competing
in any line of business or in any geographic area;
(t) Neither Dailey nor any of the Dailey Subsidiaries shall
take any action that is inconsistent with the terms of the Plan;
(u) Dailey shall not authorize any of, or commit or agree to
take any of, or permit any Dailey Subsidiary to take any of, the
foregoing actions to the extent prohibited by the foregoing and shall
not, and shall not permit any of the Dailey Subsidiaries to, take any
action that would, or that reasonably could be expected to, result in
any of the representations and warranties set forth in this Agreement
becoming untrue or any of the conditions to the Acquisition set forth
in Article VI not being satisfied. Dailey promptly shall advise
Weatherford orally and in writing of any change or event
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having, or which, insofar as reasonably can be foreseen, would have, a
material adverse effect on Dailey and the Dailey Subsidiaries, taken as
a whole, or cause a Dailey MAE; and
(v) Prior to the time the Bankruptcy Cases, the Plan and the
Disclosure Statement are filed with the Bankruptcy Court, Dailey shall
not, nor shall Dailey authorize or knowingly permit any affiliate,
officer, director, employee, subsidiary, investment banker, attorney,
advisor, agent or representative (collectively, any "Affiliate") of
Dailey to, directly or indirectly, (i) solicit, initiate or encourage
the submission of any Alternative Transaction (as defined in Section
5.3(a)), (ii) enter into any agreement with respect to any Alternative
Transaction, or (iii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or
take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to,
any Alternative Transaction. Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in the
preceding sentence by any Affiliate of Dailey, whether or not such
Affiliate is purporting to act on behalf of Dailey, shall be deemed to
be a material breach of this Agreement by Dailey.
In addition to the obligations of Dailey set forth in the
foregoing paragraph, Dailey shall promptly advise Weatherford orally
and in writing of any Alternative Transaction or any inquiry with
respect to or which could lead to any Alternative Transaction, the
material terms and conditions of such inquiry or Alternative
Transaction (including any proposed financing for such Alternative
Transaction), and the identity of the person proposing such Alternative
Transaction. Dailey will keep Weatherford fully informed of the status
and details of any such proposed Alternative Transaction.
ARTICLE IV
COVENANTS OF WEATHERFORD PRIOR TO THE EFFECTIVE TIME
4.1 RESERVATION OF WEATHERFORD STOCK. Weatherford shall reserve for
issuance, out of its authorized but unissued capital stock, such number of
shares of Weatherford Common Stock as may be issuable pursuant to this Agreement
upon consummation of the Acquisition.
4.2 STOCK EXCHANGE LISTING. Weatherford shall use its best efforts to
cause the shares of Weatherford Common Stock to be issued in the Acquisition to
be approved for listing on the NYSE, subject to official notice of issuance,
prior to the Closing Date.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 FILINGS; CONSENTS; REASONABLE EFFORTS. Subject to the terms and
conditions of this Agreement, Dailey and Weatherford shall (i) make all
necessary filings with respect to the Plan and this Agreement under the HSR Act,
the Securities Act, the Exchange Act, and applicable blue sky or similar
securities laws and shall use all reasonable efforts to obtain required
approvals and clearances with respect thereto; (ii) use reasonable efforts to
obtain all consents, waivers, approvals, authorizations, and orders required in
connection with the authorization, execution, and delivery of this Agreement and
the consummation
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of the Plan; and (iii) use reasonable efforts to take, or cause to be taken, all
appropriate action, and do, or cause to be done, all things necessary, proper,
or advisable to consummate the Plan and make effective as promptly as
practicable the Transactions, including (with respect to Dailey) causing any
Dailey Subsidiary that is not a Subsidiary Party to authorize and execute any
Other Agreements.
5.2 NOTIFICATION OF CERTAIN MATTERS. Dailey shall give prompt notice to
Weatherford, and Weatherford shall give prompt notice to Dailey, orally and in
writing, of (i) the occurrence, or failure to occur, of any event which
occurrence or failure would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate at any time from the date
hereof to the Effective Time; and (ii) any material failure of Dailey or
Weatherford, as the case may be, or any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
compiled with or satisfied by it hereunder.
5.3 CERTAIN FEES AND EXPENSES. In the event that the Transactions and
the Plan are not consummated under one of the circumstances set forth below
(other than as a result of the breach of this Agreement by Weatherford), then
Dailey and the Dailey Subsidiaries, jointly and severally, shall reimburse
Weatherford for its reasonable out-of-pocket fees and expenses (including
reasonable attorneys' fees and disbursements at such attorneys' normal hourly
rates) incurred in connection this Agreement, the Plan, the Transactions and the
Bankruptcy Cases, and shall also make the indicated payment to Weatherford to
compensate Weatherford for its time and expense incurred in connection with this
Agreement:
(a) If the Transactions and the Plan are not consummated
because of the failure of the condition set forth in Section 6.2(d) to
occur, Dailey shall issue to Weatherford 2,000,000 shares of Dailey
Class A Common, provided that if such failure is the result of an
injunction or similar order issued by a Governmental Entity of
competent jurisdiction and such injunction or order is subsequently
dissolved or rescinded, Weatherford shall promptly return such shares
to Dailey; in addition, if this Agreement is terminated by Weatherford
because of the failure of the condition in Section 6.2(d) to be
satisfied, and if within one year of such termination of this
Agreement, an agreement or an agreement in principle is reached, a
tender or exchange offer is commenced or a bankruptcy plan is filed, in
any such case that results in an Alternative Transaction that is
ultimately consummated, Dailey and the Dailey Subsidiaries shall also
pay to Weatherford the amount of $6,000,000 as a condition to and upon
consummation of the Alternative Transaction; for purposes of this
Agreement, "Alternative Transaction" means (A) any merger,
reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction
involving Dailey or any of the Dailey Subsidiaries where the
shareholders of Dailey cease to own at least 60% of the voting power
and equity of the surviving entity, (B) the acquisition from Dailey or
any of its affiliates in any manner, directly or indirectly, of a
greater than 35% voting or equity interest in Dailey or the acquisition
of in excess of $25 million in assets or businesses of Dailey and the
Dailey Subsidiaries, on a consolidated basis or a sale of a material
portion of Dailey's jar business or underbalanced or air drilling
businesses, (C) the acquisition from the stockholders of Dailey, by
tender offer, exchange offer or otherwise, of more than 35% of any
class of common stock of Dailey then outstanding, or (D) any plan of
reorganization providing for any of the foregoing, unless such plan of
reorganization contemplates only the conversion of creditor claims into
equity of Dailey and does not provide for any third-party additional
equity or debt (except for working capital or capital facility
financing);
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(b) If the Transactions and the Plan are not consummated
because any of the conditions set forth in Sections 6.1 or 6.2 hereof,
excluding the conditions set forth in Section 6.2(b) and 6.2(d), fails
to be satisfied or waived, Dailey and the Dailey Subsidiaries shall pay
to Weatherford the amount of $6,000,000 provided, however, that if the
failure of the condition contained in Section 6.2(e) to be satisfied is
the result of Dailey's breach of its covenant contained in Section
3.2(v), then Weatherford's remedies shall be limited to such $6,000,000
plus the reimbursement of its reasonable out-of-pocket fees and
expenses as set forth above in this Section 5.3; or
(c) If the Transactions and the Plan are not consummated
because the condition set forth in Section 6.2(b) fails to be satisfied
or waived, Dailey and the Dailey Subsidiaries shall not be required to
pay any amounts other than the reimbursement provided for by this
Section 5.3.
ARTICLE VI
CONDITIONS
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective obligations
of each party to consummate the Agreement and the Transactions shall be subject
to the fulfillment of the following conditions:
(a) (i) none of the Bankruptcy Cases shall have been dismissed
or converted to a case under chapter 7 of the Bankruptcy Code, (ii) the
Plan shall incorporate the terms of this Agreement and (iii) the Plan
shall have been confirmed pursuant to an order of the Bankruptcy Court,
which order shall have become final, non-appealable and not subject to
further review (the "Confirmation Order") in accordance with the
provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy
Procedure and the local rules of the Bankruptcy Court.
(b) The waiting period (and any extension thereof) applicable
to the consummation of the Acquisition under the HSR Act shall have
expired or been terminated;
(c) No order shall have been entered and remain in effect in
any action or proceeding before any foreign, federal or state court or
governmental agency or other foreign, federal or state regulatory or
administrative agency or commission that would prevent or make illegal
the consummation of the Transactions or the Plan;
(d) There shall have been obtained any and all material
permits, approvals and consents of any governmental body, commission or
agency that reasonably may be deemed necessary so that the consummation
of the Plan and the transactions contemplated thereby will be in
compliance with applicable laws, the failure to comply with which would
have a Dailey MAE or Weatherford MAE; and
(e) The receipt of all approvals and consents of third persons
the granting of which is necessary for the consummation of the Plan or
the Transactions contemplated in connection therewith.
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6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF WEATHERFORD. The obligation
of Weatherford to consummate the Agreement and the Transactions is, at the
option of Weatherford, also subject to the fulfillment at or prior to the
Closing Date of the following conditions:
(a) The representations and warranties of Dailey and the
Dailey Subsidiaries in this Agreement shall be true and correct on the
Closing Date as if made on and as of that date, except for changes that
do not constitute a breach or violation of Section 3.2 hereof, or with
the prior written consent of Weatherford;
(b) There shall have been no material adverse change in the
assets, properties, business, operations, or condition (financial or
otherwise) of Dailey and the Dailey Subsidiaries (taken as a whole),
other than those changes arising out of the filing of the Bankruptcy
Cases and the Plan (including any adverse effect on the interest of Air
Drilling Services, Inc. in International Nitrogen Services, LLC),
provided, however, that a continuation of trends of the type and
magnitude as reflected in the consolidated financial statements
contained in the Dailey Commission Filings filed since January 1, 1998
and the Draft 10-Q shall not be considered to be such a material
adverse change;
(c) There shall be no liability or claim existing with respect
to Dailey or any Subsidiary Party that is material to Dailey and the
Subsidiary Parties, taken as a whole, other than such liabilities or
claims the nature and amount of which have been disclosed in all
material respects in this Agreement as of the date hereof;
(d) (i) the Dailey Noteholders shall not have elected to
exercise their right to terminate their obligations under the Agreement
dated May 21, 1999, among Weatherford, Dailey, the Subsidiary Parties,
J. D. Lawrence, and certain Dailey Noteholders (the "Voting
Agreement"), which right arose as a result of Dailey's failure to
timely file the Bankruptcy Cases, the Plan and the Disclosure Statement
on or before June 1, 1999, and (ii) Weatherford shall not have notified
Dailey of its election to terminate this Agreement pursuant to this
Section 6.2(d) by noon, Houston time on June 3, 1999 based on
Weatherford's determination in its sole discretion that Dailey and the
Subsidiary Parties have not made or are not making a good faith effort
to file the Bankruptcy Cases, the Plan and the Disclosure Statement on
or prior to June 1, 1999;
(e) All of the other terms, conditions, covenants and
agreements to be complied with or performed by Dailey under this
Agreement on or before the Closing Date shall have been duly complied
with or performed in all material respects;
(f) Unless otherwise agreed to in writing by Weatherford, on
or before September 30, 1999 the Confirmation Order shall have become a
final non-appealable (and not subject to pending appeal) order that,
among other things, (A) approves the terms of this Agreement and
Dailey's execution, delivery and performance of this Agreement, the
Technology Agreement, and all other agreements contemplated by this
Agreement; (B) approves the sale of the New Dailey Stock to Weatherford
free and clear of all liens, claims, interests, rights of others and
encumbrances of every kind; (C) includes an express finding that
Weatherford is a "good faith purchaser" of the New Dailey Stock; (D)
includes an express finding that Weatherford has acted in good faith
with respect to the Acquisition pursuant to Section 363(m) of the
Bankruptcy Code; (E) expressly effects the assumption of this Agreement
by Dailey and the Subsidiary Parties, and of the
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Technology Agreement by Dailey pursuant to Section 365(a) of the
Bankruptcy Code; (F) enjoins and restrains all creditors of Dailey or
any of the Subsidiary Parties 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 Dailey Stock or any of the assets of Dailey or the
Subsidiary Parties; (G) includes a reservation, pursuant to the Plan,
of jurisdiction by the Bankruptcy Court to implement and enforce this
Agreement and Weatherford's peaceful use and enjoyment of the assets of
Dailey or any of the Subsidiary Parties after the Closing Date, free
and clear of all liens, claims, and encumbrances to the fullest extent
permitted under the Bankruptcy Code; (H) terminates the automatic stay
under Section 362 of the Bankruptcy Code to the extent necessary to
permit Weatherford to enforce the terms of this Agreement; (I) releases
Weatherford and its post-closing affiliates, representatives, employees
and agents from any claims related to or arising in the Bankruptcy Case
through the Closing Date other than claims arising under this
Agreement; (J) provides that the transfer of the Dailey Stock to
Weatherford is exempt from any tax to the fullest extent permitted by
Section 1146 of the Bankruptcy Code; (K) provides that the issuance of
Weatherford Common Stock pursuant to the Plan in accordance with the
terms of this Agreement is exempt from registration under the
Securities Act and all applicable state and local securities laws; and
(L) any other matter that Weatherford shall reasonably determine is
necessary or appropriate to effect the transactions contemplated by,
and to carry out the intent of, this Agreement;
(g) The Disclosure Statement, the Plan and the Confirmation
Order shall (i) incorporate, and otherwise be consistent in all
material respects with, the terms of this Agreement and (ii) be in form
and substance reasonably satisfactory to Weatherford;
(h) Dailey shall deliver to Weatherford customary closing
documents, each of which shall be dated as of the Closing Date, duly
executed and in a form reasonably satisfactory to Weatherford,
including a certificate of Dailey's president or a vice president
confirming all of the matters set forth in Sections 6.2(a)-(c);
(i) The Lease Modification Agreement between Dailey and
Lawrence International, Inc., in substantially the form as attached to
the Plan, shall have been entered into by such parties and shall remain
in effect;
(j) There shall not have occurred (i) any suspension or
limitation on trading in securities generally on the New York Stock
Exchange or the establishment of minimum prices on such Exchange, (ii)
a declaration of a banking moratorium either by Federal or New York
State authorities or (iii) any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is
such as to make it, in the sole judgment of Weatherford, impractical or
inadvisable to proceed with the consummation of the transactions
contemplated hereby to be consummated at the Closing Date; and
(k) the Voting Agreement shall not have been terminated on or
before September 30, 1999.
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6.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF DAILEY. The obligation of
Dailey to consummate the transactions contemplated by this Agreement is, at the
option of Dailey, also subject to the fulfillment at or prior to the Closing
Date of the following conditions:
(a) The representations and warranties of Weatherford
contained in Section 2.1 shall be accurate as of the date of this
Agreement and (except to the extent such representations and warranties
speak specifically as of an earlier date) as of the Closing Date as
though such representations and warranties had been made at and as of
that time; all the terms, covenants and conditions of this Agreement to
be complied with and performed by Weatherford on or before the Closing
Date shall have been duly complied with and performed in all material
respects; and a certificate to the foregoing effect dated the Closing
Date and signed by any vice president or senior vice president of
Weatherford shall have been delivered to Dailey; and
(b) The Bankruptcy Court shall have entered an order of
confirmation of the Plan with respect to all debtors in the Bankruptcy
Cases, which order shall have become a final order.
ARTICLE VII
GENERAL PROVISIONS
7.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties in this Agreement shall survive the confirmation of the Plan and the
Closing Date.
7.2 PUBLIC STATEMENTS. Dailey and Weatherford agree to consult with
each other prior to issuing any press release or otherwise making any public
statement with respect to the transactions contemplated hereby.
7.3 ASSIGNMENT. This Agreement shall inure to the benefit of and will
be binding upon the parties hereto and their respective legal representatives,
successors and permitted assigns.
7.4 NOTICES. All notices, requests, demands, claims and other
communications which are required to be or may be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (i) delivered
in Person or by courier, (ii) sent by telecopy or facsimile transmission, answer
back requested, or (iii) mailed, certified first class mail, postage prepaid,
return receipt requested, to the parties hereto at the following addresses:
if to Dailey:
Dailey International, Inc.
2507 N. Frazier
Conroe, Texas 77303
Attn: Al Kite
Facsimile: 409-539-2132
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<PAGE> 27
with a copy to:
Haynes and Boone, LLP
1000 Louisiana, Suite 4300
Houston, Texas 77002
Attn: Marc H. Folladori
Robert D. Albergotti
Facsimile: 713-547-2600
if to Weatherford or Sub:
Weatherford International, Inc.
515 Post Oak Blvd., Suite 600
Houston, Texas 77027
Attn: Curtis W. Huff
Facsimile: 713-693-4484
with a copy to:
Andrews & Kurth L.L.P.
600 Travis, Suite 4200
Houston, Texas 77002
Attn: Robert V. Jewell
Facsimile: 713-220-4285
or to such other address as any party shall have furnished to the other by
notice given in accordance with this Section 7.4. Such notices shall be
effective, (i) if delivered in Person or by courier, upon actual receipt by the
intended recipient, (ii) if sent by telecopy or facsimile transmission, when the
answer back is received, or (iii) if mailed, upon the earlier of five days after
deposit in the mail and the date of delivery as shown by the return receipt
therefor.
7.5 GOVERNING LAW. All questions arising out of this Agreement and the
rights and obligations created herein, or its validity, existence,
interpretation, performance or breach shall be governed by the laws of the State
of Delaware, without regard to conflict of laws principles.
7.6 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provision, covenants and
restrictions of this Agreement shall continue in full force and effect and shall
in no way be affected, impaired or invalidated.
7.7 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be an original, but all of which together shall constitute one
and the same agreement.
7.8 HEADINGS. The Section headings herein are for convenience only and
shall not affect the construction hereof.
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<PAGE> 28
7.9 CONFIDENTIALITY AGREEMENTS. The Confidentiality Agreements entered
into between Weatherford and Dailey on August 12, 1998, and May 12, 1999 (the
"Confidentiality Agreements") are hereby incorporated by reference herein and
made a part hereof.
7.10 ENTIRE AGREEMENT: THIRD PARTY BENEFICIARIES. This Agreement, the
Other Agreements and the Confidentiality Agreements constitute the entire
agreement and supersede all other prior agreements and understandings, both oral
and written, among the parties or any of them, with respect to the subject
matter hereof and neither this nor any document delivered in connection with
this Agreement confers upon any Person not a party hereto any rights or remedies
hereunder.
7.11 WAIVER AND AMENDMENT. Any provision of this Agreement may be
waived at any time by the party that is, or whose stockholders are, entitled to
the benefits thereof. This Agreement may not be amended or supplemented at any
time, except by an instrument in writing signed on behalf of each party hereto.
The waiver by any party hereto of any condition or of a breach of another
provision of this Agreement shall not operate or be construed as a waiver of any
other condition or subsequent breach. The waiver by any party hereto of any of
the conditions precedent to its obligations under this Agreement shall not
preclude it from seeking redress for breach of this Agreement other than with
respect to the condition so waived.
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<PAGE> 29
IN WITNESS WHEREOF, each of the parties caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
WEATHERFORD
WEATHERFORD INTERNATIONAL, INC.
By: /s/ CURTIS W. HUFF
----------------------------
Name: Curtis W. Huff
Title: Senior Vice President
DAILEY
DAILEY INTERNATIONAL INC.
By: /s/ J. D. LAWRENCE
----------------------------
Name: J. D. Lawrence
Title: Chairman of the Board
SUBSIDIARY PARTIES
DAILEY ENERGY SERVICES, INC.
By: /s/ Al E. KITE
----------------------------
Name: Al E. Kite
Title: President
<PAGE> 30
DAILEY INTERNATIONAL SALES
CORPORATION
By: /s/ Al E. KITE
----------------------------
Name: Al E. Kite
Title: President
COLOMBIA PETROLEUM SERVICES
CORP.
By: /s/ Al E. KITE
----------------------------
Name: Al E. Kite
Title: President
INTERNATIONAL PETROLEUM
SERVICES, INC.
By: /s/ Al E. KITE
----------------------------
Name: Al E. Kite
Title: President
DAILEY ENVIRONMENTAL
REMEDIATION TECHNOLOGIES
By: /s/ Al E. KITE
----------------------------
Name: Al E. Kite
Title: President
<PAGE> 31
DAILEY WORLDWIDE SERVICES, CORP.
By: /s/ Al E. KITE
----------------------------
Name: Al E. Kite
Title: President
AIR DRILLING INTERNATIONAL, INC.
By: /s/ Al E. KITE
----------------------------
Name: Al E. Kite
Title: President
AIR DRILLING SERVICES, INC.
By: /s/ Al E. KITE
----------------------------
Name: Al E. Kite
Title: President
<PAGE> 1
EXHIBIT 99.1
05/28/99
FOR IMMEDIATE RELEASE
Contact: Jean Davenport
Dailey International Inc.
(281) 350-3399
DAILEY INTERNATIONAL ANNOUNCES FILING OF CHAPTER 11 REORGANIZATION PROCEEDINGS
UNDER WEATHERFORD ACQUISITION AGREEMENT
May 28, 1999, Conroe, Texas -- As previously announced, Dailey
International Inc. and certain of its subsidiaries filed today in the United
States Bankruptcy Court for the District of Delaware petitions for relief under
Chapter 11 of the Bankruptcy Code. These filings were made in accordance with
the terms of the acquisition agreement announced last week among the Company,
certain of its subsidiaries and Weatherford International, Inc. The plan
contemplates that all trade creditors' claims will be paid as and when they come
due in the ordinary course of business or in full on the effective date of the
plan. Consummation of the acquisition and debt restructuring is subject to a
number of conditions, including consummation of the Chapter 11 plan, which
requires, among other things, Bankruptcy Court approval.
Dailey International 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.
