<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
WEATHERFORD INTERNATIONAL INCORPORATED
---------------------------------------------------------
(NAME OF ISSUER)
COMMON STOCK, $.10 PAR VALUE
---------------------------------------------------------
(TITLE OF CLASS OF SECURITIES)
0009470761
---------------------------------------------------------
(CUSIP NUMBER)
ELIZABETH FOLEY
FIRST RESERVE CORPORATION
475 STEAMBOAT ROAD
GREENWICH, CONNECTICUT 06830
(203) 661-6601
---------------------------------------------------------
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND
COMMUNICATIONS)
OCTOBER 5, 1995
---------------------------------------------------------
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this statement because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement /X/. (A
fee is not required only if the reporting person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
<PAGE> 2
2
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes.)
<PAGE> 3
SCHEDULE 13D
<TABLE>
<S> <C>
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CUSIP NO. 293805107 PAGE 3 OF 23 PAGES
- ---------------------------------------- ----------------------------------------
- ----------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
American Gas & Oil Investors, Limited Partnership
I.R.S. Identification No.: 13-3077100
- ----------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
- ----------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
- ----------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- ----------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- ----------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,684,532 (Item 5)
NUMBER OF ----------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY ----------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE
REPORTING 1,684,532 (Item 5)
PERSON ----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE
0
- ----------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,684,432
- ----------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES / /
- ----------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.3%
- ----------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
SCHEDULE 13D
<TABLE>
<S> <C>
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CUSIP NO. 293805107 PAGE 4 OF 23 PAGES
- ---------------------------------------- ----------------------------------------
- ----------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
AmGo II, Limited Partnership
I.R.S. Identification No.: 13-3149992
- ----------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
- ----------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
- ----------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- ----------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- ----------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,042,651 (Item 5)
NUMBER OF ----------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY ----------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE
REPORTING 1,042,651 (Item 5)
PERSON ----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE
0
- ----------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,042,651
- ----------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES / /
- ----------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.1%
- ----------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 5
SCHEDULE 13D
<TABLE>
<S> <C>
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CUSIP NO. 293805107 PAGE 5 OF 23 PAGES
- ---------------------------------------- ----------------------------------------
- ----------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
AmGo III, Limited Partnership
I.R.S. Identification No.: 06-1176782
- ----------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
- ----------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
- ----------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- ----------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- ----------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
504,809 (Item 5)
NUMBER OF ----------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY ----------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE
REPORTING 504,809 (Item 5)
PERSON ----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE
0
- ----------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
504,809
- ----------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES / /
- ----------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.0%
- ----------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
SCHEDULE 13D
<TABLE>
<S> <C>
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CUSIP NO. 293805107 PAGE 6 OF 23 PAGES
- ---------------------------------------- ----------------------------------------
- ----------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
First Reserve Secured Energy Assets Fund,
Limited Partnership
I.R.S. Identification No.: 06-1232433
- ----------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
- ----------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
- ----------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- ----------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ----------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,963,409 (Item 5)
NUMBER OF ----------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY ----------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE
REPORTING 1,963,409 (Item 5)
PERSON ----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE
0
- ----------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,963,409
- ----------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES / /
- ----------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.9%
- ----------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 7
SCHEDULE 13D
<TABLE>
<S> <C>
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CUSIP NO. 293805107 PAGE 7 OF 23 PAGES
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- ----------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
First Reserve Fund V, Limited Partnership
I.R.S. Identification No.: 06-1295657
- ----------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
- ----------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
- ----------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- ----------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ----------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
2,835,189 (Item 5)
NUMBER OF ----------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY ----------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE
REPORTING 2,835,189 (Item 5)
PERSON ----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE
0
- ----------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,835,189
- ----------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES / /
- ----------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.6%
- ----------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 8
SCHEDULE 13D
<TABLE>
<S> <C>
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CUSIP NO. 293805107 PAGE 8 OF 23 PAGES
- ---------------------------------------- ----------------------------------------
- ----------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
First Reserve Fund V-2, Limited Partnership
I.R.S. Identification No.: 06-6351960
- ----------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
- ----------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- ----------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- ----------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ----------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
708,470 (Item 5)
NUMBER OF ----------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY ----------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE
REPORTING 708,470 (Item 5)
PERSON ----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE
0
- ----------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
708,470
- ----------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES / /
- ----------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.4%
- ----------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 9
SCHEDULE 13D
<TABLE>
<S> <C>
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CUSIP NO. 293805107 PAGE 9 OF 23 PAGES
- ---------------------------------------- ----------------------------------------
- ----------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
First Reserve Fund VI, Limited Partnership
I.R.S. Identification No.: 06-1334650
- ----------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
- ----------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
- ----------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- ----------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ----------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
735,371 (Item 5)
NUMBER OF ----------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY ----------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE
REPORTING 735,371 (Item 5)
PERSON ----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE
0
- ----------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
735,371
- ----------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES / /
- ----------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.4%
- ----------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 10
SCHEDULE 13D
<TABLE>
<S> <C>
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CUSIP NO. 293805107 PAGE 10 OF 23 PAGES
- ---------------------------------------- ----------------------------------------
- ----------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
First Reserve Corporation
I.R.S. Identification No.: 06-1210123
- ----------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
- ----------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- ----------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- ----------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ----------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
9,474,431 (Item 5)
NUMBER OF ----------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY ----------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE
REPORTING 9,474,431 (Item 5)
PERSON ----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE
0
- ----------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,474,431
- ----------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES / /
- ----------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.6%
- ----------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 11
11
ITEM 1. SECURITY AND ISSUER.
This Statement on Schedule 13D (the "Schedule 13D") relates to the Common
Stock, par value $0.10 per share (the "Common Stock"), of Weatherford
International Incorporated, a Delaware corporation (the "Issuer"). The principal
executive offices of the Issuer are located at 1360 Post Oak Boulevard, Suite
1000, Houston, Texas, 77056.
ITEM 2. IDENTITY AND BACKGROUND.
This Schedule 13D is being filed by American Gas & Oil Investors, Limited
Partnership ("Fund I"), AmGO II, Limited Partnership ("Fund II"), AmGO III,
Limited Partnership ("Fund III"), First Reserve Secured Energy Assets Fund,
Limited Partnership ("Fund IV"), First Reserve Fund V, Limited Partnership
("Fund V"), First Reserve Fund V-2, Limited Partnership ("Fund V-2") and First
Reserve Fund VI, Limited Partnership ("Fund VI", and together with Fund I, Fund
II, Fund III, Fund IV, Fund V and Fund V-2, the "Funds"), and by First Reserve
Corporation ("First Reserve"), to report the acquisition by the Funds of Common
Stock. First Reserve is the managing general partner of each of the Funds. The
Funds, in the aggregate, directly own more than 5% of the issued and outstanding
shares of Common Stock ("Weatherford Shares").
Fund I, Fund II, and Fund III are New York limited partnerships and Fund IV
is a Delaware limited partnership. Their principal purpose is to make equity and
debt investments in companies engaged in various energy and energy related
activities, including, but not limited to, energy production,
<PAGE> 12
12
processing, transmission, distribution, marketing, equipment manufacturing,
electrical generation, and technical services, and in energy assets such as oil
and gas reserves or processing and transmission facilities (collectively,
"energy companies").
Fund V and Fund V-2 are Delaware limited partnerships. Their principal
purpose is to make equity and debt investments in companies engaged in various
energy and energy related activities, including, but not limited to, energy
production, processing, transmission, distribution, marketing, equipment
manufacturing, electrical generation, and technical services, and in energy
assets such as oil and gas reserves or processing and transmission facilities.
Fund VI is a Delaware limited partnership. Its principal purpose is to make
equity, equity-linked and debt investments in companies engaged in various
energy and energy related activities, including, but not limited to, energy
production, processing, transmission, distribution, marketing, equipment
manufacturing, electrical generation, and technical services, and in energy
assets such as oil and gas reserves or processing and transmission facilities,
but excluding any oil and gas exploration directly or through an entity whose
primary activity is to conduct such exploration.
First Reserve is a Delaware corporation which raises funds for and manages
the Funds. The seven Funds constitute all of the limited partnerships managed by
First Reserve. The principal business of First Reserve is to act as managing
general partner and provide investment management services to the Funds.
<PAGE> 13
13
The principal business and office address of First Reserve and each of the
Funds (together, the "Reporting Persons") is 475 Steamboat Road, Greenwich,
Connecticut 06830.
Information with respect to the executive officers and directors of First
Reserve, including name, business address, present principal occupation or
employment and the organization in which such employment is conducted, and their
citizenship is listed on the schedule attached hereto as Schedule I, which is
incorporated in this Schedule 13D by reference.
During the last five years, none of the Reporting Persons nor any executive
officer or director of First Reserve has (i) been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a
party to a civil proceeding or a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On August 12, 1994 Total Energy Services Company ("Total") merged with and
into ET Merger Corporation ("ET"), a wholly owned subsidiary of Enterra
Corporation ("Enterra") pursuant to an Agreement and Plan of Merger among Total,
Enterra and ET dated as of May 2, 1994, as amended by the First Amendment to
Agreement and Plan of Merger dated as of July 15, 1994 (the "Enterra Merger
Agreement") (the "Enterra Merger"). Prior to the
<PAGE> 14
14
Enterra Merger, the Funds beneficially owned approximately 99.2% of the
outstanding shares of common stock of Total, par value $.01 per share ("Total
Stock"). Total continued as a wholly-owned subsidiary of Enterra, and each share
of Total Stock was converted into approximately 169.3 shares of Enterra common
stock, par value $1.00 per share (the "Enterra Shares") (although cash was paid
in lieu of fractional Enterra Shares), such that each Fund owned the following
numbers of Enterra Shares: (i) Fund I owned 1,993,529 Enterra Shares, as a
result of the conversion of 11,774.68 shares of Total Stock; (ii) Fund II owned
1,233,907 Enterra Shares, as a result of the conversion of 7,288.01 shares of
Total Stock; (iii) Fund III owned 597,408 Enterra Shares, as a result of the
conversion of 3,687.97 Enterra Shares of Total Stock and of the grant of the
right to receive 26,989 Enterra Shares to Fund VI in exchange for cash; (iv)
Fund IV owned 2,323,562 Enterra Shares, as a result of the conversion of
14,343.54 shares of Total Stock and of the grant of the right to receive
104,892.0 Enterra Shares to Fund VI for cash; (v) Fund V owned 3,355,254 Shares,
as a result of the conversion of 19,817.64 shares of Total Stock; (vi) Fund V-2
owned 838,427.0 Enterra Shares, resulting from the conversion of 4,952.13 shares
of Total Stock; and (vii) Fund VI owned 870,262 Enterra Shares, as a result of
the conversion of 4,349.72 shares of Total Stock and of the receipt of the right
to receive 133,827 Enterra Shares, in the aggregate, from Fund III, Fund IV and
Gerald Hage in exchange for cash.
<PAGE> 15
15
On October 5, 1995, Enterra merged with and into Weatherford, pursuant to
an Agreement and Plan of Merger, dated as of June 23, 1995, as amended as of
August 28, 1995 (the "Weatherford Merger Agreement") (the "Weatherford Merger").
Weatherford continued as the surviving corporation and changed its name to
Weatherford Enterra, Inc. Pursuant to the Weatherford Merger, each Enterra Share
was converted into the right to receive 1.69 Weatherford Shares, before giving
effect to a one-for-two reverse stock split (the "Reverse Stock Split") of
Weatherford Shares. After giving effect to the Reverse Stock Split as of the
Effective Time (as defined in the Weatherford Merger Agreement), each Enterra
Share was converted into the right to receive 0.845 of a Weatherford Share
(although cash was paid in lieu of fractional Shares).
Following the Reverse Stock Split, each Fund owned the following numbers of
Weatherford Shares: (i) Fund I owned 1,684,532 Weatherford Shares, as a result
of the conversion of 1,993,529 Enterra Shares; (ii) Fund II owned 1,042,651
Weatherford Shares, as a result of the conversion of 1,233,907 Enterra Shares;
(iii) Fund III owned 504,809 Weatherford Shares, as a result of the conversion
of 597,408 Enterra Shares; (iv) Fund IV owned 1,963,409 Weatherford Shares, the
conversion of 2,323,562 Enterra Shares; (v) Fund V owned 2,835,189 Weatherford
Shares, as a result of the conversion of 3,355,254 Enterra Shares; (vi) Fund V-2
owned 708,470 Weatherford Shares, as a result of the conversion of 838,427.0
Enterra Shares; and (vii) Fund VI owned 735,371 Weatherford Shares, as a result
of the conversion of 870,262 Enterra Shares.
<PAGE> 16
16
The source of consideration used by the Funds in acquiring the Weatherford
Shares reported as beneficially owned in Item 5 hereof was 11,212,349 Enterra
Shares.
The 11,212,349 Enterra Shares used by the Funds to obtain their 9,474,431
Weatherford Shares, were acquired with 66,213.69 shares of Total Stock, and in
the case of Fund VI only, also working capital. The 66,213.69 shares of Total
Stock used by the Funds to obtain their 11,212,349 Enterra Shares were acquired
with the assets of the Fund.
ITEM 4. PURPOSE OF TRANSACTION.
The Funds acquired the Weatherford Shares disclosed in Item 5 of this
Schedule 13D in order to continue their substantial investment position in the
entity surviving the Weatherford Merger. During the term of the Stockholders'
Agreement dated as of June 23, 1995, as amended, between Weatherford and the
Funds (the "Weatherford Stockholders' Agreement") attached as Exhibit C, two of
four designated Funds will be permitted to designate two members for nomination
to the Weatherford Board of Directors, provided the Funds own Weatherford Shares
in certain minimum amounts. The Funds intend to participate in and influence the
affairs of Weatherford through their two designees on the Board of Directors.
The Funds are contractually prohibited from taking certain actions with
respect to the Weatherford Shares during the term of the Weatherford
Stockholders' Agreement as further described in Item 6 of this Schedule 13D.
<PAGE> 17
17
Except as described above, at the present time the Reporting Persons do not
have any plans or proposals that would relate to any transaction, change or
event specified in clauses (a) through (j) of Item 4 of the Schedule 13D form.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of October 5, 1995, the Funds beneficially owned an aggregate of
9,474,431 Weatherford Shares, constituting approximately 18.6% of the
50,851,238 Weatherford Shares outstanding as of October 5, 1995, such
Weatherford Shares consisting of the 9,474,431 Weatherford Shares issued
pursuant to the Merger (following the Reverse Stock Split). The number and
percentage of Weatherford Shares beneficially owned by each Reporting Person
identified in Item 2 of this Schedule 13D are:
<TABLE>
<CAPTION>
PERCENTAGE OF
WEATHERFORD
SHARES
OUTSTANDING ON
OCTOBER 5,
SHARES 1995
--------- --------------
<S> <C> <C>
Fund I..................................................... 1,684,532 3.3%
Fund II.................................................... 1,042,651 2.1%
Fund III................................................... 504,809 1.0%
Fund IV.................................................... 1,963,409 3.9%
Fund V..................................................... 2,835,189 5.6%
Fund V-2................................................... 708,470 1.4%
Fund VI.................................................... 735,371 1.4%
First Reserve.............................................. 9,474,431 18.6%
</TABLE>
(b) Each Fund has the sole power to vote or to direct the vote and sole
power to dispose or direct the disposition of all Weatherford Shares held by it.
First Reserve, in its role as managing general partner of the Funds and acting
on behalf of the Funds, has the power to cause each Fund to dispose of or vote
Weatherford Shares held by such Funds.
(c) Not applicable.
<PAGE> 18
18
(d) To the best knowledge of the Reporting Persons, no other person has the
right to receive, or the power to direct the receipt of dividends from, or the
power to direct the receipt of proceeds of the sale of Weatherford Shares.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS OR UNDERSTANDING WITH RESPECT TO SECURITIES OF
THE ISSUER UNDER THE STOCKHOLDERS' AGREEMENT.
The Weatherford Stockholders' Agreement provides, among other things, that
the Funds and First Reserve are contractually prohibited from (i) subject to
certain exceptions, acquiring additional Weatherford Shares if the effect of
such acquisition would be to either increase the aggregate holdings of
"Weatherford Voting Securities" (as defined in Section 1.1 of the Weatherford
Stockholders' Agreement) of First Reserve, the Funds and their affiliates
(collectively, the "First Reserve Group") to 20% or more of the "Combined Voting
Power" (as defined in Section 1.3 of the Stockholders' Agreement) or increase
the First Reserve Group's holdings of any class or series of Weatherford Voting
Securities to more than 20%, (ii) depositing any Weatherford Voting Securities
owned by them in a voting trust or entering into any similar voting arrangement
unless all the parties to the trust or arrangement are First Reserve Group
members, (iii) making or in any way becoming "participants" in the
"solicitation" of proxies (as such terms are defined in Rule 14a-1 of Regulation
14A under the Securities Exchange Act of 1934, as amended), (iv) participating
in or becoming a member of a "13D/G Group" (as that term is defined in the
Weatherford
<PAGE> 19
19
Stockholders' Agreement), other than the First Reserve Group for the
purposes of holding, acquiring or disposing of Weatherford Voting Securities,
(v) making a proposal to a third party or initiating any proposal that would
reasonably result in a change of control of Weatherford or make any public
announcement with respect to any such proposal, (vi) disposing of any
Weatherford Voting Securities except (A) by conversion, exchange or exercise of
Weatherford Voting Securities pursuant to their terms, in a manner not otherwise
in violation of clause (i) above, (B) in a bonafide pledge or similar or related
action of such Weatherford Voting Securities to a lender that is not a First
Reserve Group member to secure a bonafide loan, for money borrowed, made to one
or more First Reserve Group members with full recourse to the borrower or
borrowers, (C) by transfer, assignment, sale or disposition of such Weatherford
Voting Securities to another First Reserve Group member, (D) by distribution of
Weatherford Voting Securities to any partner of a First Reserve Group member,
provided that any such distributee which is a member of the First Reserve Group
has signed the Weatherford Stockholders' Agreement and that the subsequent
distributions of such distributee, if assisted by First Reserve, conform with
the distribution restrictions imposed by the Weatherford Stockholders'
Agreement, (E) pursuant to a registration statement, (F) in sales in broker's
transactions, effected on the NYSE or any other securities exchange on which the
Weatherford Voting Securities are listed or in any other public trading market
in which the Weatherford Voting Securities are then being traded, in compliance
with the provisions of Rule 144, including the volume
<PAGE> 20
20
restrictions set forth in such rule (excluding for purposes of this clause (F)
in sales pursuant to the provisions of paragraph (k) of Rule 144, which sales
are included under (G), (G) sales pursuant to paragraph (k) of Rule 144, (H)
other negotiated sales of Weatherford Voting Securities, or (I) pursuant to the
provisions of the Weatherford Stockholders' Agreement permitting, in certain
circumstances, sales into tender or exchange offers, (vii) disposing of
Weatherford Voting Securities pursuant to clause (vi) (E) above, unless the
First Reserve Group members use their reasonable best efforts to refrain from
disposing of Weatherford Voting Securities representing 3% or more of the
Combined Voting Power to any one person or group, (viii) disposing of any
Weatherford Voting Securities pursuant to clauses (vi)(D), (E) and (F) above to
any one person or group if such Weatherford Voting Securities represent 5% or
more of the Combined Voting Power, and (ix) disposing of Weatherford Voting
Securities pursuant to clauses (vi)(D), (E) and (F) above to any one person or
group who, upon consummation of such sale would, directly or indirectly, have
beneficial ownership of or the right to acquire beneficial ownership of
Weatherford Voting Securities representing 10% or more of the Combined Voting
Power.
<PAGE> 21
21
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A. Agreement Concerning Filing of Schedule 13D.
Exhibit B. Agreement and Plan of Merger, dated as of June 23, 1995, as
amended as of August 28, 1995, between Weatherford International Incorporated
and Enterra Corporation.
Exhibit C. Agreement dated as of June 23, 1995, as amended as of August
28, 1995, among Weatherford International Incorporated, American Gas & Oil
Investors, Limited Partnership, AmGO II, Limited Partnership, AmGO III, Limited
Partnership, First Reserve Secured Energy Assets Fund, Limited Partnership,
First Reserve Fund V, Limited Partnership, First Reserve Fund V-2, Limited
Partnership, First Reserve Fund VI, Limited Partnership and First Reserve
Corporation.
<PAGE> 22
22
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct. Dated: October 5, 1995.
FIRST RESERVE CORPORATION
By: /s/ ELIZABETH C. FOLEY
------------------------------------
Name: Elizabeth C. Foley
Title: Treasurer
AMERICAN GAS & OIL INVESTORS,
LIMITED PARTNERSHIP
By: First Reserve Corporation,
as Managing General Partner
By: /s/ ELIZABETH C. FOLEY
------------------------------------
Name: Elizabeth C. Foley
Title: Treasurer
AMGO II, LIMITED PARTNERSHIP
By: First Reserve Corporation,
as Managing General Partner
By: /s/ ELIZABETH C. FOLEY
------------------------------------
Name: Elizabeth C. Foley
Title: Treasurer
AMGO III, LIMITED PARTNERSHIP
By: First Reserve Corporation,
as Managing General Partner
By: /s/ ELIZABETH C. FOLEY
------------------------------------
Name: Elizabeth C. Foley
Title: Treasurer
<PAGE> 23
23
FIRST RESERVE FUND V, LIMITED
PARTNERSHIP
By: First Reserve Corporation,
as Managing General Partner
By: /s/ ELIZABETH C. FOLEY
------------------------------------
Name: Elizabeth C. Foley
Title: Treasurer
FIRST RESERVE FUND V-2, LIMITED
PARTNERSHIP
By: First Reserve Corporation,
as Managing General Partner
By: /s/ ELIZABETH C. FOLEY
------------------------------------
Name: Elizabeth C. Foley
Title: Treasurer
FIRST RESERVE FUND VI, LIMITED
PARTNERSHIP
By: First Reserve Corporation,
as Managing General Partner
By: /s/ ELIZABETH C. FOLEY
------------------------------------
Name: Elizabeth C. Foley
Title: Treasurer
<PAGE> 24
24
SCHEDULE I
1. The name, business address, and present principal occupation or
employment of each of the executive officers and directors of the First Reserve
Corporation are set forth below. Unless otherwise indicated, (i) the business
address of each is 475 Steamboat Road, Greenwich, Connecticut 06830, (ii) each
such person is a citizen of the United States, and (iii) such person does not
have any other principal occupation:
NAME AND POSITION WITH
FIRST RESERVE CORPORATION
-------------------------
John A. Hill
Chairman, Managing Director and Director
David H. Kennedy
Managing Director and Director
Cathleen M. Ellsworth
Vice President
Bruce M. Rothstein
Vice President
William E. Macaulay
President and Chief Executive
Officer, Managing Director
and Director
Elizabeth C. Foley
Managing Director, Treasurer and Secretary
<PAGE> 25
EXHIBIT INDEX
Exhibit A. Agreement Concerning Filing of Schedule 13D.
Exhibit B. Agreement and Plan of Merger, dated as of June 23, 1995, as
amended as of August 28, 1995, between Weatherford International Incorporated
and Enterra Corporation.
Exhibit C. Agreement dated as of June 23, 1995, as amended as of August
28, 1995, among Weatherford International Incorporated, American Gas & Oil
Investors, Limited Partnership, AmGO II, Limited Partnership, AmGO III, Limited
Partnership, First Reserve Secured Energy Assets Fund, Limited Partnership,
First Reserve Fund V, Limited Partnership, First Reserve Fund V-2, Limited
Partnership, First Reserve Fund VI, Limited Partnership and First Reserve
Corporation.
<PAGE> 1
EXHIBIT A
---------
AGREEMENT CONCERNING FILING OF SCHEDULE 13D
American Gas & Oil Investors, Limited Partnership ("Fund I"), AmGO II,
Limited Partnership ("Fund II"), AmGO III, Limited Partnership ("Fund III"),
First Reserve Secured Energy Assets Fund, Limited Partnership ("Fund IV"), First
Reserve Fund V, Limited Partnership ("Fund V"), First Reserve Fund V-2, Limited
Partnership ("Fund V-2"), First Reserve Fund VI, Limited Partnership ("Fund VI")
and First Reserve Corporation ("First Reserve"), pursuant to Rule 13d-1(f)
promulgated under the Securities Exchange Act of 1934, as amended, hereby agree
to the joint filing with the other Reporting Persons (as such term is defined in
the Schedule 13D referred to below) on behalf of each of them of a statement on
Schedule 13D with respect to Common Stock, par value $.10 per share of
Weatherford International Incorporated and that this agreement be included as an
exhibit to such joint filing.
Fund I, Fund II, Fund II, Fund IV, Fund V and Fund V-2, Fund VI and First
Reserve separately acknowledge that they are each responsible for the timely
filing of such statement and any amendments thereto, and for the completeness
and accuracy of the information concerning them contained therein. No party to
this Agreement is responsible for the completeness or accuracy of the
information concerning the other parties, unless such party knows or has reason
to believe that such information is inaccurate.
This agreement may be executed in any number of counterparts all of which
taken together shall constitute one and the same instrument.
Dated this 5th day of October, 1995.
AMERICAN GAS & OIL INVESTORS,
LIMITED PARTNERSHIP
By: First Reserve Corporation, as
Managing General Partner
By: /s/ Elizabeth C. Foley
------------------------------------
Name: Elizabeth C. Foley
Title: Treasurer
<PAGE> 1
EXHIBIT B
AGREEMENT AND PLAN OF MERGER
Between
Weatherford International Incorporated
and
Enterra Corporation
June 23, 1995
(As amended August 28, 1995)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Consummation of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Certificate of Incorporation; Bylaws . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Conversion of Securities; Exchange; Fractional Shares . . . . . . . . . . . . . . 2
1.8 Taking of Necessary Action; Further Action . . . . . . . . . . . . . . . . . . . 4
ARTICLE II
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Representations and Warranties of Weatherford . . . . . . . . . . . . . . . . . . 5
(a) Organization and Compliance with Law . . . . . . . . . . . . . . . . . . . . 5
(b) Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(c) Authorization and Validity of Agreement . . . . . . . . . . . . . . . . . . 7
(d) No Approvals or Notices Required; No Conflict with Instruments to
which Weatherford is a Party . . . . . . . . . . . . . . . . . . . . . . . . 7
(e) Commission Filings; Financial Statements . . . . . . . . . . . . . . . . . . 8
(f) Conduct of Business in the Ordinary Course; Absence of Certain Changes
and Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(g) Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(h) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(i) Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(j) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(k) Environmental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(l) No Severance Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(m) Voting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(n) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(o) Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(p) Weatherford Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.3 Representations and Warranties of Enterra . . . . . . . . . . . . . . . . . . . . 14
(a) Organization and Compliance with Law . . . . . . . . . . . . . . . . . . . . 14
(b) Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(c) Authorization and Validity of Agreement . . . . . . . . . . . . . . . . . . 15
(d) No Approvals or Notices Required; No Conflict with Instruments to
which Enterra is a Party . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(e) Commission Filings; Financial Statements . . . . . . . . . . . . . . . . . . 16
(f) Conduct of Business in the Ordinary Course, Absence of Certain Changes
and Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(g) Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(h) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(i) Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(j) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
(k) Environmental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(l) No Severance Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(m) Voting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(n) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(o) Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(p) Enterra Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE III
COVENANTS OF WEATHERFORD PRIOR TO THE EFFECTIVE TIME . . . . . . . . . . . . . . . . . . 23
3.1 Conduct of Business by Weatherford Pending the Merger . . . . . . . . . . . . . . 23
3.2 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.3 Affiliates' Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.4 Reservation of Weatherford Common Stock . . . . . . . . . . . . . . . . . . . . . 25
3.5 Stock Exchange Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE IV
COVENANTS OF ENTERRA PRIOR TO THE EFFECTIVE TIME . . . . . . . . . . . . . . . . . . . . 25
4.1 Conduct of Business by Enterra Pending the Merger . . . . . . . . . . . . . . . . 25
4.2 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.3 Affiliates' Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE V
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.1 Joint Proxy Statement/Prospectus; Registration Statement . . . . . . . . . . . . 28
5.2 Comfort Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.3 Meetings of Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.4 Reasonable Efforts; Consents, Approvals and Waivers . . . . . . . . . . . . . . . 29
5.5 Antitrust Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.6 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.7 Agreement to Defend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.8 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.9 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.10 Post-Effective Time Mailing . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.11 Stockholders' Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.12 Enterra Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.13 Enterra Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.14 Update of Disclosure Letters . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.15 Weatherford Special Severance Pay Plan . . . . . . . . . . . . . . . . . . . . . 34
5.16 Change of Control Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.17 Indemnification Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.18 Enterra Employee Bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.19 Enterra Severance Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.20 Enterra Chairman, President and Chief Executive Officer . . . . . . . . . . . . . 36
5.21 Weatherford Chairman, President and Chief Executive Officer . . . . . . . . . . . 36
5.22 Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE VI
CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.1 Conditions to Obligations of Each Party to Effect the Merger . . . . . . . . . . 37
6.2 Additional Conditions to Obligations of Weatherford . . . . . . . . . . . . . . . 38
6.3 Additional Conditions to Obligations of Enterra . . . . . . . . . . . . . . . . . 40
ARTICLE VII
SPECIAL PROVISIONS AS TO CERTAIN MATTERS . . . . . . . . . . . . . . . . . . . . . . . . 42
7.1 No Solicitation by Weatherford . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.2 No Solicitation by Enterra . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.3 Fee and Expense Reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE VIII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.3 Waiver and Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.4 Nonsurvival of Representations, Warranties, Covenants and Agreements . . . . . . 48
8.5 Public-Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.6 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.8 Governing Law; Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.11 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.12 Entire Agreement; Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . 50
</TABLE>
-iii-
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of the 23rd day of June, 1995
(the "Agreement"), is between Weatherford International Incorporated, a
Delaware corporation ("Weatherford"), and Enterra Corporation, a Delaware
corporation ("Enterra").
WHEREAS, subject to and in accordance with the terms and conditions of
this Agreement, the respective Boards of Directors of Weatherford and Enterra
have approved the merger of Enterra with and into Weatherford (the "Merger"),
whereby each issued and outstanding share of common stock, par value $1.00 per
share, of Enterra ("Enterra Common Stock") not owned directly or indirectly by
Enterra or Weatherford will be converted into the right to receive common
stock, par value $.10 per share, of Weatherford ("Weatherford Common Stock"),
as provided herein;
WHEREAS, for federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, the Merger is intended to be treated as a "pooling of interests"
for accounting purposes; 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 Merger;
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 MERGER
1.1 The Merger. Subject to and in accordance with the terms and
conditions of this Agreement and in accordance with the Delaware General
Corporation Law (the "DGCL"), at the Effective Time (as defined in Section 1.3)
Enterra will be merged with and into Weatherford. As a result of the Merger,
the separate corporate existence of Enterra shall cease and Weatherford shall
continue as the surviving corporation (sometimes referred to herein as the
"Surviving Corporation") and shall succeed to and assume all of the rights and
obligations of Enterra in accordance with the DGCL. The corporate name of the
Surviving Corporation shall be "Weatherford Enterra, Inc.".
1.2 Closing Date. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Fulbright &
Jaworski L.L.P., 1301 McKinney, Suite 5100, Houston, Texas as soon as
practicable after the satisfaction or waiver of the conditions set forth in
Article VI or at such other time and place and on such other date as
Weatherford and Enterra shall agree; provided, that the closing
-1-
<PAGE> 6
conditions set forth in Article VI 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".
1.3 Consummation of the Merger. As soon as practicable on the Closing
Date, the parties hereto will cause the Merger to be consummated by filing with
the Secretary of State of the State of Delaware a certificate of merger in such
form as required by, and executed in accordance with, the relevant provisions
of the DGCL. The "Effective Time" of the Merger as that term is used in this
Agreement shall mean the effective time set forth in the certified copy of the
certificate of merger issued by the Secretary of State of the State of Delaware
with respect to the Merger.
1.4 Effects of the Merger. The Merger shall have the effects set forth
in the applicable provisions of the DGCL.
1.5 Certificate of Incorporation; Bylaws. The Restated Certificate of
Incorporation and bylaws of Weatherford, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation and bylaws of the
Surviving Corporation and thereafter shall continue to be its Certificate of
Incorporation and bylaws until amended as provided therein and under the DGCL.
1.6 Directors and Officers.
(a) The Board of Directors of the Surviving Corporation shall
consist of ten persons. Exhibit 1.6(a) sets forth the initial directors
of the Surviving Corporation, along with the term of office for, and the
committee or committees of the Board of Directors, if any, on, which each
such director shall serve.
(b) Exhibit 1.6(b) sets forth the initial officers of the Surviving
Corporation, each of whom shall hold office until his or her successor is
duly elected or appointed and qualified.
1.7 Conversion of Securities; Exchange Fractional Shares. Subject to
the terms and conditions of this Agreement, at the Effective Time, by virtue of
the Merger and without any action on the part of Weatherford, Enterra or their
stockholders:
(a) Each share of Enterra Common Stock issued and outstanding
immediately prior to the Effective Time (the "Shares"), other than any
Shares to be canceled pursuant to Section 1.7(b), shall be converted,
subject to the provisions of this Section 1.7, into the right to receive
0.845 of a share (which number reflects a 1 for 2 reverse stock split to
be effected at the Closing) of Weatherford Common Stock (the "Conversion
Rate"); provided, however, that no fractional shares of Weatherford Common
Stock shall be issued, and, in lieu thereof, a cash payment shall be made
pursuant to Section 1.7(f) hereof.
(b) Each share of Enterra Common Stock held in the treasury of
Enterra and each Share owned by Weatherford or any direct or indirect
wholly-owned subsidiary of Enterra or of Weatherford immediately prior to
the
-2-
<PAGE> 7
Effective Time shall be canceled and extinguished at the Effective Time
without any conversion thereof and no payment shall be made with respect
thereto.
(c) As soon as practicable after the Effective Time, each holder of
an outstanding certificate that prior thereto represented Shares shall be
entitled, upon surrender thereof to the transfer agent for the Weatherford
Common Stock, to receive in exchange therefor a certificate or
certificates representing the number of whole shares of Weatherford Common
Stock into which the Shares so surrendered shall have been converted as
aforesaid, of such denominations and registered in such names as such
holder may request. Each holder of Shares who would otherwise be entitled
to a fraction of a share of Weatherford Common Stock shall, upon surrender
of the certificates representing Shares held by such holder to
Weatherford's transfer agent, be paid an amount in cash in accordance with
the provisions of Section 1.7(f). Until so surrendered, each outstanding
certificate that, prior to the Effective Time, represented Shares shall be
deemed from and after the Effective Time, for all corporate purposes,
other than the payment of earlier dividends and distributions, to evidence
the ownership of the number of full shares of Weatherford Common Stock
into which such Shares shall have been converted pursuant to this Section
1.7. Unless and until any such outstanding certificates shall be
surrendered, no dividends or other distributions payable to the holders of
Weatherford Common Stock, as of any time on or after the Effective Time,
shall be paid to the holders of such outstanding certificates that prior
to the Effective Time represented Shares; provided, however, that, upon
surrender and exchange of such outstanding certificates, there shall be
paid to the record holders of the certificates issued and exchanged
therefor the amount, without interest thereon, of dividends and other
distributions, if any, that theretofore were declared and became payable
since the Effective Time with respect to the number of full shares of
Weatherford Common Stock issued to such holders.
(d) All shares of Weatherford Common Stock into which the Shares
shall have been converted pursuant to this Section 1.7 shall be issued in
full satisfaction of all rights pertaining to such converted Shares.
(e) If any certificate for shares of Weatherford Common Stock is to
be issued in a name other than that in which the certificate surrendered
in exchange therefor is registered, it shall be a condition of the
issuance thereof that the certificate so surrendered shall be properly
endorsed and otherwise in proper form for transfer and that the person
requesting such exchange shall have paid to Weatherford or its transfer
agent any transfer or other taxes required by reason of the issuance of a
certificate for shares of Weatherford Common Stock in any name other than
that of the registered holder of the certificate surrendered, or
established to the satisfaction of Weatherford or its transfer agent that
such tax has been paid or is not payable.
(f) No fraction of a share of Weatherford Common Stock shall be
issued, but in lieu thereof each holder of Shares who would otherwise be
entitled to a fraction of a share of Weatherford Common Stock shall, upon
surrender of
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the Shares held by such holder to Weatherford's transfer agent, be paid an
amount in cash equal to the value of such fraction of a share based upon
the closing price of Weatherford Common Stock on the New York Stock
Exchange on the last trading day prior to the Effective Time. No interest
shall be paid on such amount. All Shares held by a record holder other
than nominee holders shall be aggregated for purposes of computing the
number of shares of Weatherford Common Stock to be issued pursuant to this
Section 1.7.
(g) None of Weatherford, Enterra, the Surviving Corporation or
Weatherford's transfer agent shall be liable to a holder of the Shares for
any amount properly paid to a public official pursuant to applicable
property, escheat or similar law.
1.8 Taking of Necessary Action; Further Action. The parties hereto shall
take all such reasonable and lawful action as may be necessary or appropriate
to effectuate the Merger as promptly as possible. If, at any time after the
Effective Time, any such further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of Weatherford and Enterra, such corporations shall direct their
respective officers and directors to take all such lawful and necessary action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Certain Definitions. As used in this Agreement, the following terms
shall have the meanings ascribed to them below:
(a) "Environmental Laws" shall mean all United States or foreign
federal, state, local or municipal laws, rules, regulations, statutes,
ordinances or orders of any governmental entity relating to (i) the
control of any potential pollutant or protection of the air, water or
land, (ii) solid, gaseous or liquid waste generation, handling, treatment,
storage, disposal or transportation, and (iii) exposure to hazardous,
toxic or other substances alleged to be harmful. The term "Environmental
Laws" shall include, but not be limited to, the Clean Air Act, 42 U.S.C.
Section 7401 et seq., the Clean Water Act, 33 U.S.C. Section 1251 et seq.,
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et
seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.,
the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq. and the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. Section 9601 et seq.
(b) "Environmental Permit" shall mean any permit, license, approval,
registration, identification number or other authorization with respect to
any business or other operations conducted by Weatherford or any
Weatherford Subsidiary (as defined in Section 2.2(a)) or Enterra or any
Enterra Subsidiary (as defined in Section 2.3(a)), as the case may be,
required under any applicable Environmental Law.
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<PAGE> 9
(c) "Hazardous Materials" shall mean any (i) petroleum or petroleum
products, (ii) hazardous substance as defined pursuant to Section 101(14)
of CERCLA or (iii) any other chemical, substance or waste that is
regulated under any Environmental Law.
(d) "Material Adverse Change" with respect to any party shall mean a
material adverse change in the business, financial condition or results of
operations of such party and its subsidiaries, taken as a whole; provided,
however, that in no event shall the term "Material Adverse Change" be
deemed to include (i) changes in national or international economic
conditions or industry conditions generally, (ii) changes, or possible
changes, in foreign, federal, state or local statutes and regulations
applicable to Weatherford or Enterra, as the case may be, or (iii) the
loss of employees, customers or suppliers by such party as a direct or
indirect consequence of any announcement relating to the Merger.
(e) "Material Adverse Effect" on any party shall mean any material
adverse effect on the business, financial condition or results of
operations of such party and its subsidiaries, taken as a whole;
provided, however, that in no event shall the term "Material Adverse
Effect" be deemed to include (i) changes in national or international
economic conditions or industry conditions generally, (ii) changes, or
possible changes, in foreign, federal, state or local statutes and
regulations applicable to Weatherford or Enterra, as the case may be, or
(iii) the loss of employees, customers or suppliers by such party as a
direct or indirect consequence of any announcement relating to the Merger.
(f) "Permitted Liens" shall mean: (i) liens for taxes not due and
payable or which are being contested in good faith, (ii) mechanics',
warehousemen's and other statutory liens incurred in the ordinary course
of business and (iii) defects and irregularities in title and encumbrances
that are not substantial in character or amount and do not materially
impair the use of the property or asset in question.
2.2 Representations and Warranties of Weatherford. Weatherford hereby
represents and warrants to Enterra that, except as expressly contemplated by
this Agreement or as set forth in the disclosure letter delivered by
Weatherford to Enterra on the date hereof (the "Weatherford Disclosure
Letter"):
(a) Organization and Compliance with Law. Weatherford and each of
its corporate subsidiaries (the "Weatherford Subsidiaries") is a
corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction in which it is organized and has all
requisite corporate power and 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 do so would not, either individually or in the aggregate, have
a Material Adverse Effect. Weatherford and each of the Weatherford
Subsidiaries is duly qualified as a foreign corporation to do business,
and is in good standing, in each jurisdiction in which the property
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<PAGE> 10
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 do so does not and would not, either individually or in the
aggregate, have a Material Adverse Effect. Weatherford and each of the
Weatherford Subsidiaries 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, either individually or
in the aggregate, have a Material Adverse Effect. Weatherford has
heretofore delivered to Enterra true and complete copies of Weatherford's
Restated Certificate of Incorporation and bylaws, as in existence on the
date hereof.
(b) Capitalization.
(i) The authorized capital stock of Weatherford consists of
80,000,000 shares of Weatherford Common Stock, par value $.10 per
share, and 1,000,000 shares of preferred stock, par value $1.00 per
share. As of June 21, 1995, there were issued and outstanding
54,276,632 shares of Weatherford Common Stock (including shares
deemed to be outstanding pending the exchange of shares of common
stock of Petroleum Equipment Tools Co. and H&H Oil Tool Co., Inc.)
and no shares of preferred stock, and 111,043 shares of Weatherford
Common Stock were held as treasury shares, of which 82,783 shares
were reserved for issuance pursuant to various stock option
agreements. As of June 21, 1995, there were reserved for issuance
2,299,414 shares of Weatherford Common Stock pursuant to stock
option, employee stock purchase, 401(k) savings, stock incentive and
restricted stock plans (collectively, the "Weatherford Options").
All issued shares of Weatherford Common Stock are validly issued,
fully paid and nonassessable and no holder thereof is entitled to
preemptive rights. Weatherford is not a party to, and, excluding
agreements among various funds held or managed by institutional
investors, has no knowledge of, any voting agreement, voting trust or
similar agreement or arrangement relating to any class or series of
its capital stock, or any agreement or arrangement providing for
registration rights with respect to any capital stock or other
securities of Weatherford. All shares of Weatherford Common Stock to
be issued pursuant to the Merger, when issued in accordance with this
Agreement, will be validly issued, fully paid and nonassessable and
will not violate the preemptive rights of any person. All
outstanding shares of capital stock of the Weatherford Subsidiaries
are owned by Weatherford, free and clear of all liens, charges,
encumbrances, adverse claims and options of any nature; provided,
however, that Weatherford's ownership of shares of capital stock of
certain foreign Weatherford Subsidiaries may be subject to Permitted
Liens.
(ii) Other than as set forth in this Section 2.2(b) and as
contemplated by Section 3.1(b)(iii), there are not now, and at the
Effective Time there will not be, any (A) shares of capital stock or
other equity securities of Weatherford outstanding (other than
Weatherford Common
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<PAGE> 11
Stock issued pursuant to Weatherford Options as described
herein) or (B) outstanding 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
Weatherford, or contracts, understandings or arrangements to
which Weatherford is a party, or by which it is or may be bound,
to issue additional shares of its capital stock 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.
(c) Authorization and Validity of Agreement. Weatherford has
all requisite corporate power and authority to enter into this
Agreement and to perform its obligations hereunder. The execution
and delivery by Weatherford of this Agreement and the consummation by
it of the transactions contemplated hereby have been duly authorized
by all necessary corporate action (subject only, with respect to the
Merger, to adoption and approval of this Agreement by the
stockholders of Weatherford as provided in Section 5.3(b)). This
Agreement has been duly executed and delivered by Weatherford and is
the valid and binding obligation of Weatherford, enforceable against
Weatherford in accordance with its terms, except as such
enforceability may be limited or affected by (i) bankruptcy,
insolvency, reorganization, moratorium, liquidation, arrangement,
fraudulent transfer, fraudulent conveyance and other similar laws
(including, without limitation, court decisions) now or hereafter in
effect and affecting the rights and remedies of creditors generally
or providing for the relief of debtors, (ii) the refusal of a
particular court to grant equitable remedies, including, without
limitation, specific performance and injunctive relief, and (iii)
general principles of equity (regardless of whether such remedies are
sought in a proceeding in equity or at law) and except as the
enforceability of any indemnification provision contained in this
Agreement may be limited by applicable federal or state securities
laws.
(d) No Approvals or Notices Required; No Conflict with
Instruments to which Weatherford is a Party. Neither the execution
and delivery of this Agreement nor the performance by Weatherford of
its obligations hereunder, nor the consummation of the transactions
contemplated hereby by Weatherford, will (i) conflict with
Weatherford's Restated Certificate of Incorporation or bylaws;
(ii) assuming satisfaction of the requirements set forth in clause
(iii) below, violate any provision of law applicable to Weatherford;
(iii) except for (A) requirements of Federal and state securities
law, (B) requirements arising out of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act"), (C) requirements of filings
in such foreign jurisdictions as may be applicable and (D) the filing
of a certificate of merger in accordance with the DGCL, require any
consent or approval of, or filing with or notice to, any public body
or authority, domestic or foreign, under any provision of law
applicable to Weatherford; or (iv) require any consent, approval or
notice under, or violate, breach, be in conflict with or constitute a
default (or an event that, with notice or lapse of time or both,
would constitute a default) under, or permit the termination of any
provision of, or result in the creation or imposition of any
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<PAGE> 12
lien upon any properties, assets or business of Weatherford under,
any note, bond, indenture, mortgage, deed of trust, lease, franchise,
permit, authorization, license, contract, instrument or other
agreement or commitment or any order, judgment or decree to which
Weatherford is a party or by which Weatherford or its assets or
properties is bound or encumbered, except those that have already
been given, obtained or filed and except in any of the cases
enumerated in clauses (ii) through (iv), those that, in the
aggregate, would not have a Material Adverse Effect.
(e) Commission Filings; Financial Statements. Since January 1,
1992, Weatherford and each of the Weatherford Subsidiaries have filed
all reports, registration statements and other filings, together with
any amendments required to be made with respect thereto, that they
have been required to file with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), and the Securities Exchange Act of
1934, as amended (the "Exchange Act"). All reports, registration
statements and other filings (including, without limitation, all
notes, exhibits and schedules thereto and documents incorporated by
reference therein) filed by Weatherford with the Commission since
January 1, 1992 through the date of this Agreement, together with any
amendments thereto, are sometimes collectively referred to as the
"Weatherford Commission Filings". Weatherford has heretofore
delivered to Enterra copies of the Weatherford Commission Filings.
As of the effectiveness dates declared by the Commission, in the case
of registration statements, as of the mailing dates, in the case of
proxy statements, or as of the filing dates with the Commission, in
the case of all other Weatherford Commission Filings, the Weatherford
Commission Filings complied, and the Proxy Statement (as defined in
Section 5.1) and the Registration Statement (as defined in Section
5.1) (except with respect to information concerning Enterra and the
Enterra Subsidiaries furnished by or on behalf of Enterra to
Weatherford specifically for use therein) will comply, in all
material respects with the Securities Act, the Exchange Act and the
rules and regulations of the Commission promulgated thereunder, as
applicable, and did not or will not, as the case may be, 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 material contracts of Weatherford and the Weatherford
Subsidiaries have been included in the Weatherford Commission
Filings, except for those contracts not required to be filed pursuant
to the rules and regulations of the Commission.
Each of the audited consolidated financial statements
(including, without limitation, any related notes or schedules)
included or incorporated by reference in the Weatherford Commission
Filings was, and each of the audited consolidated financial
statements to be included or incorporated by reference in the Proxy
Statement and the Registration Statement (except for those financial
statements of Enterra and the Enterra Subsidiaries furnished by or on
behalf of
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Enterra to Weatherford specifically for use therein) will be,
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 fairly presents, or will fairly
present, as the case may be, in all material respects, the
consolidated financial position of Weatherford and the Weatherford
Subsidiaries as of the dates thereof and the statements of income,
cash flows and stockholders' equity for the periods then ended in
accordance with generally accepted accounting principles. Each of
the unaudited interim financial statements included or incorporated
by reference in the Weatherford Commission Filings was, and each of
the unaudited consolidated financial statements to be included or
incorporated by reference in the Proxy Statement and the Registration
Statement (except for those financial statements of Enterra and the
Enterra Subsidiaries furnished by or on behalf of Enterra to
Weatherford specifically for use therein) will be, prepared in a
manner consistent with the audited consolidated financial statements
and generally accepted accounting principles. As of the date hereof,
Weatherford has no material liabilities, absolute or contingent, not
reflected in the Weatherford Commission Filings, except (i)
liabilities not required under generally accepted accounting
principles to be reflected on such financial statements or the notes
thereto and (ii) liabilities incurred in the ordinary course of
business since the date of such financial statements consistent with
past operations and not relating to the borrowing of money.
(f) Conduct of Business in the Ordinary Course; Absence of
Certain Changes and Events. Since April 1, 1995, except as disclosed
in the Weatherford Commission Filings filed with the Commission since
that date, Weatherford and the Weatherford Subsidiaries have
conducted their business only in the ordinary and usual course, and
there has not been (i) any Material Adverse Change in Weatherford or
any condition, event or development that reasonably may be expected
to result in any Material Adverse Change; (ii) any change by
Weatherford in its accounting methods, principles or practices; (iii)
any revaluation by Weatherford or any of the Weatherford Subsidiaries
of any of its or their 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; (iv) any
entry by Weatherford or any of the Weatherford Subsidiaries into any
commitment or transaction material to Weatherford and the Weatherford
Subsidiaries, taken as a whole, other than in the ordinary course of
business; (v) any declaration, setting aside or payment of any
dividends or distributions in respect of the Weatherford Common
Stock, or any redemption, purchase or other acquisition of any of its
securities or any securities of any of the Weatherford Subsidiaries;
(vi) any damage, destruction or loss (whether or not covered by
insurance) materially adversely affecting the properties or business
of Weatherford and the Weatherford Subsidiaries, taken as a whole;
(vii) any increase in indebtedness for borrowed money; (viii) any
granting of a security interest or lien on any property or assets of
Weatherford and the Weatherford Subsidiaries, other than Permitted
Liens; or (ix) any increase in or establishment of any bonus,
insurance, severance, deferred compensation, pension, retirement,
profit sharing, stock option (including, without limitation,
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<PAGE> 14
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 to
become payable to any officers or key employees of Weatherford or any
of the Weatherford Subsidiaries.
(g) Certain Fees. Neither Weatherford nor any of its officers,
directors or employees, on behalf of Weatherford or any of the
Weatherford Subsidiaries or its or their respective Boards of
Directors (or any committee thereof), has employed any financial
advisor, broker or finder or incurred any liability for any financial
advisory, brokerage or finders' fees or commissions in connection
with the transactions contemplated hereby.
(h) Litigation. Except as disclosed in the Weatherford
Commission Filings, there are no claims, actions, suits,
investigations or proceedings pending or, to the knowledge of
Weatherford, threatened against or affecting Weatherford or any of
the Weatherford Subsidiaries or any of their respective properties at
law or in equity, or any of their respective employee benefit plans
or fiduciaries of such plans, or before or by any federal, state,
municipal or other governmental agency or authority, or before any
arbitration board or panel, wherever located, that, individually or
in the aggregate, if adversely determined would have a Material
Adverse Effect, or that involve the risk of criminal liability.
(i) Employee Benefit Plans. The Weatherford Disclosure Letter
sets forth a complete and accurate list of:
(i) each "employee welfare benefit plan" (as such term is
defined in Section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) (the "Weatherford
Welfare Plans");
(ii) each "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA) (the "Weatherford Pension
Plans"); and
(iii) all other employee benefit agreements or
arrangements, including, without limitation, deferred
compensation plans, incentive plans, bonus plans or
arrangements, stock option plans, stock purchase plans, golden
parachute agreements, severance pay plans, dependent care plans,
cafeteria plans, employee assistance programs, scholarship
programs, employment contracts and other similar plans,
agreements and arrangements (collectively, with the Weatherford
Welfare Plans and the Weatherford Pension Plans, the
"Weatherford Benefit Plans"),
that are currently in effect or were maintained within three years of
the Closing Date, or have been approved before this date but are not
yet effective, for the benefit of directors, officers, employees or
former employees (or their beneficiaries) of Weatherford, any of the
Weatherford Subsidiaries incorporated in the United States (the
"Weatherford U.S. Subsidiaries") or any member of a controlled group
or affiliated service group (as defined in Section 414(b), (c), (m)
or (o) of the Code) that is incorporated or domiciled in the United
States of
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<PAGE> 15
which Weatherford or any of the Weatherford U.S. Subsidiaries is a
member (collectively, the "Weatherford Group"). Weatherford and the
Weatherford U.S. Subsidiaries will provide to Enterra, as to each
Weatherford Benefit Plan, as applicable, access to a complete and
accurate copy of (i) such plan, agreement or arrangement; (ii) the
trust, group annuity contract or other document that provides the
funding for such plan; (iii) the most recent annual Form 5500, 990
and 1041 reports; (iv) the most recent actuarial report or valuation
statement; (v) the most current summary plan description, handbook or
other booklet that describes any Weatherford Benefit Plan, and any
summary of material modifications prepared after each such summary
plan description; (vi) the most recent Internal Revenue Service
("IRS") determination letter and all rulings or determinations
requested from the IRS subsequent to the date of such determination
letter; and (vii) all other pending correspondence from the IRS or
the Department of Labor received by any member of the Weatherford
Group that relates to such plan.
Each Weatherford Welfare Plan and Weatherford Pension Plan (i)
is in compliance with ERISA, including, without limitation, all
reporting and disclosure requirements of Part 1 of Subtitle B of
Title I of ERISA, except where the failure to be in compliance would
not, either individually or in the aggregate, have a Material Adverse
Effect; (ii) is in compliance with the Code, except where the failure
to be in compliance would not, either individually or in the
aggregate, have a Material Adverse Effect; (iii) has had the
appropriate Form 5500 timely filed for any Weatherford Pension Plan,
if applicable, for each year of its existence and for any Weatherford
Welfare Plan for each year of its existence after 1987, except where
the failure to cause such timely filing would not, either
individually or in the aggregate, have a Material Adverse Effect;
(iv) has not engaged in any transaction described in Section 406 or
407 of ERISA or Section 4975 of the Code unless it received or is
entitled to an exemption under Section 408 of ERISA or Section 4975
of the Code, as applicable, or unless such transaction has been
corrected and all applicable excise taxes paid or waived; (v) has no
issue pending (other than the payment of benefits in the normal
course or the qualification of the plan pursuant to an application
pending before the IRS) nor any issue resolved adversely to the
Weatherford Group that, in either case, may subject the Weatherford
Group to the payment of a penalty, interest, tax or other amount,
which, either individually or in the aggregate, would have a Material
Adverse Effect; and (vi) can be unilaterally terminated or amended on
no more than 90 days notice. No notice has been received by the
Weatherford Group of an increase or proposed increase in any premium
relative to any Weatherford Benefit Plan, and no amendment to any
Weatherford Benefit Plan within the last twelve months has increased
the rate of employer contributions thereunder that, either
individually or in the aggregate, would have a Material Adverse
Effect.
Each Weatherford Benefit Plan that is intended to be a voluntary
employee benefit association has been submitted to and approved by
the IRS as exempt from federal income tax under Section 501(c)(9) of
the Code or the applicable submission period relating to any such
plan will not have ended prior
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to the Closing. No Weatherford Benefit Plan will cause the
Weatherford Group to have liability for severance pay as a result of
this Agreement. The Weatherford Group does not provide employee
post-retirement medical or health coverage or contribute to or
maintain any employee welfare benefit plan that provides for health
benefit coverage following termination of employment except as
required by Section 4980B(f) of the Code or other applicable statute,
nor has the Weatherford Group made any representations, agreements,
covenants or commitments to provide that coverage.
Except for each Weatherford Pension Plan that is an ERISA top-
hat plan, each Weatherford Pension Plan has been submitted to and
approved as qualifying under Section 401(a) of the Code by the IRS or
the applicable remedial amendment period relating to such plan will
not have ended prior to the Closing. To the knowledge of Weatherford,
no facts have occurred that, if known by the IRS, could cause
disqualification of any Weatherford Pension Plan. Each Weatherford
Pension Plan to which Section 412 of the Code is applicable fully
complies with the funding requirements of that Section and there is
no accumulated funding deficiency as defined in Section 302(a)(2) of
ERISA (whether or not waived) in any such plan. The Weatherford
Group has paid all premiums (including, without limitation, interest,
charges and penalties for late payment) due the Pension Benefit
Guaranty Corporation (the "PBGC") with respect to each Weatherford
Pension Plan for which premiums are required. No Weatherford Pension
Plan has been terminated under circumstances that would result in
liability to the PBGC or the Weatherford Group. There has been no
"reportable event" (as defined in Section 4043(b) of ERISA and the
regulations under that Section) with respect to any Weatherford
Pension Plan subject to Title IV of ERISA. With respect to each
Weatherford Pension Plan subject to Title IV of ERISA, the
Weatherford Group has not (i) ceased operations at a facility so as
to become subject to the provisions of Section 4062(e) of ERISA, (ii)
withdrawn as a substantial employer so as to become subject to the
provisions of Section 4063 of ERISA or (iii) ceased making
contributions on or before the Closing Date to any such plan subject
to Section 4064(a) of ERISA to which the Weatherford Group made
contributions at any time during the six years prior to the Closing
Date. Neither the Weatherford Group nor any member thereof has made
a complete or partial withdrawal from a multiemployer plan (as
defined in Section 3(37) of ERISA) so as to incur withdrawal
liability as defined in Section 4201 of ERISA.
Weatherford's subsidiaries incorporated outside of the United
States and any benefit plans maintained by any of them for the
benefit of their directors, officers, employees or former employees
(or any of their beneficiaries) are in compliance with applicable
laws pertaining to such plans in the jurisdictions of such
subsidiaries, except where such failure to be in compliance would
not, either individually or in the aggregate, have a Material Adverse
Effect.
(j) Taxes. 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
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<PAGE> 17
charge ("Taxes" or a "Tax") that are required to be filed on or
before the Closing Date by or with respect to Weatherford or any of
the Weatherford Subsidiaries have been or will be duly and timely
filed, and all Taxes, including, without limitation, interest and
penalties, due and payable pursuant to such Tax Returns have been
paid or adequately provided for in reserves established by
Weatherford, except where the failure to file, pay or provide for
would not, either individually or in the aggregate, have a Material
Adverse Effect. All Tax Returns of or with respect to Weatherford or
any of the Weatherford Subsidiaries have been audited by the
applicable governmental authority, or the applicable statute of
limitations has expired, for all periods up to and including, without
limitation, the tax year ended December 31, 1987. There is no
material claim against Weatherford or any of the Weatherford
Subsidiaries with 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 Weatherford or any of the
Weatherford Subsidiaries that has not been adequately provided for in
reserves established by Weatherford. The total amounts set up as
liabilities for current and deferred Taxes in the consolidated
financial statements included in the Weatherford Commission Filings
have been prepared in accordance with generally accepted accounting
principles and are sufficient to cover the payment of all material
Taxes, including, without limitation, any penalties or interest
thereon and whether or not assessed or disputed, that are, or are
hereafter finally determined to be, or to have been, due with respect
to the operations of Weatherford and the Weatherford Subsidiaries
through the periods covered thereby.
(k) Environmental.
(i) There are no facts, conditions or circumstances known
to Weatherford that could cause Weatherford or any Weatherford
Subsidiary to incur any loss, liability, damage, cost or
expense, either individually or in the aggregate, in excess of
Weatherford's charges, accruals and reserves for environmental
matters reflected on Weatherford's consolidated balance sheet
contained in the most recent Weatherford Commission Filing, for
(A) violations of Environmental Laws, (B) failure to obtain an
Environmental Permit, (C) a requirement to install environmental
or pollution control equipment, (D) removal, response or
remedial costs related to Hazardous Materials or (E) personal
injury, property damage or natural resources damage resulting
from exposure to or releases of Hazardous Materials, except in
each case where such loss, liability, damage, cost or expense
would not have a Material Adverse Effect.
(ii) The business and any other operations conducted by
Weatherford or any Weatherford Subsidiary are in compliance with
all applicable limitations, restrictions, conditions, standards,
prohibitions, requirements and obligations established under
applicable Environmental Laws, except where the failure to be in
compliance would not, either individually or in the aggregate,
have a Material Adverse Effect.
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<PAGE> 18
(l) No Severance Payments. None of Weatherford or the
Weatherford Subsidiaries will owe a severance payment or similar
obligation to any of their respective employees, officers or
directors as a result of the Merger or the transactions contemplated
by this Agreement, nor will any of such persons be entitled to an
increase in severance payments or other benefits as a result of the
Merger or the transactions contemplated by this Agreement in the
event of the subsequent termination of their employment.
(m) Voting Requirements. The affirmative vote of the holders
of a majority of the outstanding shares of Weatherford Common Stock
is the only vote of the holders of any class or series of the capital
stock of Weatherford necessary to approve this Agreement and the
Merger.
(n) Insurance. The Weatherford Disclosure Letter sets forth
all policies of insurance currently in effect relating to the
business or operations of Weatherford and the Weatherford
Subsidiaries.
(o) Title to Property. Except as set forth in the Weatherford
Commission Filings, Weatherford and each of the Weatherford
Subsidiaries have good and indefeasible title to all of their real
properties purported to be owned in fee and good title to all their
other material assets, free and clear of all mortgages, liens,
charges and encumbrances other than Permitted Liens.
(p) Weatherford Actions. As of the date hereof, the Board of
Directors of Weatherford (at a meeting duly called and held) has
resolved to recommend approval and adoption of this Agreement and the
Merger by the stockholders of Weatherford. Merrill Lynch & Co. has
delivered to the Board of Directors of Weatherford its opinion that
the Conversion Rate is fair to the holders of Weatherford Common
Stock from a financial point of view.
2.3 Representations and Warranties of Enterra. Enterra hereby
represents and warrants to Weatherford that, except as expressly
contemplated by this Agreement or as set forth in the disclosure letter
delivered by Enterra to Weatherford on the date hereof (the "Enterra
Disclosure Letter"):
(a) Organization and Compliance with Law. Enterra and each of
its corporate subsidiaries (the "Enterra Subsidiaries") is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is organized and has
all requisite corporate power and 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 do so would not, either
individually or in the aggregate, have a Material Adverse Effect.
Enterra and each of the Enterra Subsidiaries is duly qualified as a
foreign corporation 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 do so
does not and would not, either individually or in the aggregate, have
a Material
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<PAGE> 19
Adverse Effect. Enterra and each of the Enterra Subsidiaries 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, either individually or in the aggregate, have a
Material Adverse Effect. Enterra has heretofore delivered to
Weatherford true and complete copies of Enterra's Restated
Certificate of Incorporation and bylaws, as in existence on the date
hereof.
(b) Capitalization.
(i) The authorized capital stock of Enterra consists of
40,000,000 shares of Enterra Common Stock, par value $1.00 per
share, and 10,000,000 shares of series preferred stock, par
value $1.00 per share. As of June 21, 1995, there were issued
and outstanding 27,774,950 shares of Enterra Common Stock and no
shares of series preferred stock, and no shares of Enterra
Common Stock were held as treasury shares. As of June 21, 1995,
there were reserved for issuance 2,587,071 shares of Enterra
Common Stock pursuant to stock option plans (collectively, the
"Enterra Options"). All issued shares of Enterra Common Stock
are validly issued, fully paid and nonassessable and no holder
thereof is entitled to preemptive rights. Enterra is not a
party to, and, excluding agreements among various funds held or
managed by institutional investors, has no knowledge of, any
voting agreement, voting trust or similar agreement or
arrangement relating to any class or series of its capital
stock, or any agreement or arrangement providing for
registration rights with respect to any capital stock or other
securities of Enterra. All outstanding shares of capital stock
of the Enterra Subsidiaries are owned by Enterra, free and clear
of all liens, charges, encumbrances, adverse claims and options
of any nature; provided, however, that Enterra's ownership of
shares of capital stock of certain foreign Enterra Subsidiaries
may be subject to Permitted Liens.
(ii) Other than as set forth in this Section 2.3(b) and as
contemplated by Section 4.1(b)(iii), there are not now, and at
the Effective Time there will not be, any (A) shares of capital
stock or other equity securities of Enterra outstanding (other
than Enterra Common Stock issued pursuant to Enterra Options as
described herein) or (B) outstanding 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
Enterra, or contracts, understandings or arrangements to which
Enterra is a party, or by which it is or may be bound, to issue
additional shares of its capital stock 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.
(c) Authorization and Validity of Agreement. Enterra has all
requisite corporate power and authority to enter into this Agreement
and to perform its
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<PAGE> 20
obligations hereunder. The execution and delivery by Enterra of this
Agreement and the consummation by it of the transactions contemplated
hereby have been duly authorized by all necessary corporate action
(subject only, with respect to the Merger, to adoption and approval
of this Agreement by its stockholders as provided for in Section
5.3(a)). This Agreement has been duly executed and delivered by
Enterra and is the valid and binding obligation of Enterra,
enforceable against Enterra in accordance with its terms, except as
such enforceability may be limited or affected by (i) bankruptcy,
insolvency, reorganization, moratorium, liquidation, arrangement,
fraudulent transfer, fraudulent conveyance and other similar laws
(including, without limitation, court decisions) now or hereafter in
effect and affecting the rights and remedies of creditors generally
or providing for the relief of debtors, (ii) the refusal of a
particular court to grant equitable remedies, including, without
limitation, specific performance and injunctive relief, and (iii)
general principles of equity (regardless of whether such remedies are
sought in a proceeding in equity or at law).
(d) No Approvals or Notices Required; No Conflict with
Instruments to which Enterra is a Party. Neither the execution and
delivery of this Agreement nor the performance by Enterra of its
obligations hereunder, nor the consummation of the transactions
contemplated hereby by Enterra, will (i) conflict with Enterra's
Restated Certificate of Incorporation or bylaws; (ii) assuming
satisfaction of the requirements set forth in clause (iii) below,
violate any provision of law applicable to Enterra; (iii) except for
(A) requirements of Federal and state securities law, (B)
requirements arising out of the HSR Act, (C) requirements of filings
in such foreign jurisdictions as may be applicable and (D) the filing
of a certificate of merger in accordance with the DGCL, require any
consent or approval of, or filing with or notice to, any public body
or authority, domestic or foreign, under any provision of law
applicable to Enterra; or (iv) require any consent, approval or
notice under, or violate, breach, be in conflict with or constitute a
default (or an event that, with notice or lapse of time or both,
would constitute a default) under, or permit the termination of any
provision of, or result in the creation or imposition of any lien
upon any properties, assets or business of Enterra under, any note,
bond, indenture, mortgage, deed of trust, lease, franchise, permit,
authorization, license, contract, instrument or other agreement or
commitment or any order, judgment or decree to which Enterra is a
party or by which Enterra or any of its assets or properties is bound
or encumbered, except those that have already been given, obtained or
filed and except in any of the cases enumerated in clauses (ii)
through (iv), those that, in the aggregate, would not have a Material
Adverse Effect.
(e) Commission Filings; Financial Statements. Since January 1,
1992, Enterra and each of the Enterra Subsidiaries have filed all
reports, registration statements and other filings, together with any
amendments required to be made with respect thereto, that they have
been required to file with the Commission under the Securities Act
and the Exchange Act. All reports, registration statements and other
filings (including, without limitation, all notes, exhibits and
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<PAGE> 21
schedules thereto and documents incorporated by reference therein)
filed by Enterra with the Commission since January 1, 1992 through
the date of this Agreement, together with any amendments thereto, are
sometimes collectively referred to as the "Enterra Commission
Filings". Enterra has heretofore delivered to Weatherford copies of
the Enterra Commission Filings. As of the effectiveness dates
declared by the Commission, in the case of registration statements,
as of the mailing dates, in the case of proxy statements, or as of
the filing dates with the Commission, in the case of all other
Enterra Commission Filings, the Enterra Commission Filings complied,
and the Proxy Statement (except with respect to information
concerning Weatherford and the Weatherford Subsidiaries furnished by
or on behalf of Weatherford to Enterra specifically for use therein)
will comply, in all material respects with the Securities Act, the
Exchange Act and the rules and regulations of the Commission
promulgated thereunder, as applicable, and did not or will not, as
the case may be, 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 material contracts of Enterra and the Enterra Subsidiaries
have been included in the Enterra Commission Filings, except for
those contracts not required to be filed pursuant to the rules and
regulations of the Commission.
Each of the audited consolidated financial statements
(including, without limitation, any related notes or schedules)
included or incorporated by reference in the Enterra Commission
Filings was, and each of the audited consolidated financial
statements to be included or incorporated by reference in the Proxy
Statement (except for those financial statements of Weatherford and
the Weatherford Subsidiaries furnished by or on behalf of Weatherford
to Enterra specifically for use therein) will be, 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 fairly presents or will fairly present, as
the case may be, in all material respects, the consolidated financial
position of Enterra and the Enterra Subsidiaries as of the dates
thereof and the statements of income, cash flows and stockholders'
equity for the periods then ended in accordance with generally
accepted accounting principles. Each of the unaudited interim
financial statements included or incorporated by reference in the
Enterra Commission Filings was, and each of the unaudited
consolidated financial statements to be included or incorporated by
reference in the Proxy Statement (except for those financial
statements of Weatherford and the Weatherford Subsidiaries furnished
by or on behalf of Weatherford to Enterra specifically for use
therein) will be, prepared in a manner consistent with the audited
consolidated financial statements and generally accepted accounting
principles. As of the date hereof, Enterra has no material
liabilities, absolute or contingent, not reflected in the Enterra
Commission Filings, except (i) liabilities not required under
generally accepted accounting principles to be reflected on such
financial statements or the notes thereto and (ii) liabilities
incurred in the ordinary course of business since the date of such
financial
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<PAGE> 22
statements consistent with past operations and not relating to the
borrowing of money.
(f) Conduct of Business in the Ordinary Course; Absence of
Certain Changes and Events. Since April 1, 1995, except as disclosed
in the Enterra Commission Filings filed with the Commission since
that date, Enterra and the Enterra Subsidiaries have conducted their
business only in the ordinary and usual course, and there has not
been (i) any Material Adverse Change in Enterra or any condition,
event or development that reasonably may be expected to result in any
Material Adverse Change; (ii) any change by Enterra in its accounting
methods, principles or practices; (iii) any revaluation by Enterra or
any of the Enterra Subsidiaries of any of its or their 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; (iv) any entry by Enterra or any of the Enterra
Subsidiaries into any commitment or transaction material to Enterra
and the Enterra Subsidiaries, taken as a whole, other than in the
ordinary course of business; (v) any declaration, setting aside or
payment of any dividends or distributions in respect of the Enterra
Common Stock, or any redemption, purchase or other acquisition of any
of its securities or any securities of any of the Enterra
Subsidiaries; (vi) any damage, destruction or loss (whether or not
covered by insurance) materially adversely affecting the properties
or business of Enterra and the Enterra Subsidiaries, taken as a
whole; (vii) any increase in indebtedness for borrowed money; (viii)
any granting of a security interest or lien on any property or assets
of Enterra and the Enterra Subsidiaries, other than Permitted Liens;
or (ix) 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 to become
payable to any officers or key employees of Enterra or any of the
Enterra Subsidiaries.
(g) Certain Fees. Neither Enterra nor any of its officers,
directors or employees, on behalf of Enterra or any of the Enterra
Subsidiaries or its or their respective Boards of Directors (or any
committee thereof), has employed any financial advisor, broker or
finder or incurred any liability for any financial advisory,
brokerage or finders' fees or commissions in connection with the
transactions contemplated hereby.
(h) Litigation. Except as disclosed in the Enterra Commission
Filings, there are no claims, actions, suits, investigations or
proceedings pending or, to the knowledge of Enterra, threatened
against or affecting Enterra or any of the Enterra Subsidiaries or
any of their respective properties at law or in equity, or any of
their respective employee benefit plans or fiduciaries of such plans,
or before or by any federal, state, municipal or other governmental
agency or authority, or before any arbitration board or panel,
wherever located, that, individually or in the aggregate, if
adversely determined would have a Material Adverse Effect, or that
involve the risk of criminal liability.
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<PAGE> 23
(i) Employee Benefit Plans. The Enterra Disclosure Letter sets
forth a complete and accurate list of:
(i) each "employee welfare benefit plan" (as such term is
defined in Section 3(1) of ERISA) (the "Enterra Welfare Plans");
(ii) each "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA) (the "Enterra Pension Plans");
and
(iii) all other employee benefit agreements or
arrangements, including, without limitation, deferred
compensation plans, incentive plans, bonus plans or
arrangements, stock option plans, stock purchase plans, golden
parachute agreements, severance pay plans, dependent care plans,
cafeteria plans, employee assistance programs, scholarship
programs, employment contracts and other similar plans,
agreements and arrangements (collectively, with the Enterra
Welfare Plans and the Enterra Pension Plans, the "Enterra
Benefit Plans"),
that are currently in effect or were maintained within three years of
the Closing Date, or have been approved before this date but are not
yet effective, for the benefit of directors, officers, employees or
former employees (or their beneficiaries) of Enterra, any of the
Enterra Subsidiaries incorporated in the United States (the "Enterra
U.S. Subsidiaries") or any member of a controlled group or affiliated
service group (as defined in Sections 414(b), (c), (m) and (o) of the
Code) that is incorporated or domiciled in the United States of which
Enterra or any of the Enterra U.S. Subsidiaries is a member
(collectively, the "Enterra Group"). Enterra and the Enterra U.S.
Subsidiaries will provide to Weatherford, as to each Enterra Benefit
Plan, as applicable, access to a complete and accurate copy of (i)
such plan, agreement or arrangement; (ii) the trust, group annuity
contract or other document that provides the funding for such plan;
(iii) the most recent annual Form 5500, 990 and 1041 reports; (iv)
the most recent actuarial report or valuation statement; (v) the most
current summary plan description, handbook or other booklet that
describes any Enterra Benefit Plan, and any summary of material
modifications prepared after each such summary plan description; (vi)
the most recent IRS determination letter and all rulings or
determinations requested from the IRS subsequent to the date of such
determination letter; and (vii) all other pending correspondence from
the IRS or the Department of Labor received by any member of the
Enterra Group that relates to such plan.
Each Enterra Welfare Plan and Enterra Pension Plan (i) is in
compliance with ERISA, including, without limitation, all reporting
and disclosure requirements of Part 1 of Subtitle B of Title I of
ERISA, except where the failure to be in compliance would not, either
individually or in the aggregate, have a Material Adverse Effect;
(ii) is in compliance with the Code, except where the failure to be
in compliance would not, either individually or in the aggregate,
have a Material Adverse Effect; (iii) has had the appropriate Form
5500 timely filed for any Enterra Pension Plan, if applicable, for
each year of its existence
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<PAGE> 24
and for any Enterra Welfare Plan for each year of its existence after
1987, except where the failure to cause such timely filing would not,
either individually or in the aggregate, have a Material Adverse
Effect; (iv) has not engaged in any transaction described in Section
406 or 407 of ERISA or Section 4975 of the Code unless it received or
is entitled to an exemption under Section 408 of ERISA or Section
4975 of the Code, as applicable, or unless such transaction has been
corrected and all applicable excise taxes paid or waived; (v) has no
issue pending (other than the payment of benefits in the normal
course or the qualification of the plan pursuant to an application
pending before the IRS) nor any issue resolved adversely to the
Enterra Group that, in either case, may subject the Enterra Group to
the payment of a penalty, interest, tax or other amount, which,
either individually or in the aggregate, would have a Material
Adverse Effect; and (vi) can be unilaterally terminated or amended on
no more than 90 days notice. No notice has been received by the
Enterra Group of an increase or proposed increase in any premium
relative to any Enterra Benefit Plan, and no amendment to any Enterra
Benefit Plan within the last twelve months has increased the rate of
employer contributions thereunder that, either individually or in the
aggregate, would have a Material Adverse Effect.
Each Enterra Benefit Plan that is intended to be a voluntary
employee benefit association has been submitted to and approved by
the IRS as exempt from federal income tax under Section 501(c)(9) of
the Code or the applicable submission period relating to any such
plan will not have ended prior to the Closing. No Enterra Benefit
Plan will cause the Enterra Group to have liability for severance pay
as a result of this Agreement. The Enterra Group does not provide
employee post-retirement medical or health coverage or contribute to
or maintain any employee welfare benefit plan that provides for
health benefit coverage following termination of employment except as
required by Section 4980B(f) of the Code or other applicable statute,
nor has the Enterra Group made any representations, agreements,
covenants or commitments to provide that coverage.
Except for each Enterra Pension Plan that is an ERISA top-hat
plan, each Enterra Pension Plan has been submitted to and approved as
qualifying under Section 401(a) of the Code by the IRS or the
applicable remedial amendment period relating to such plan will not
have ended prior to the Closing. To the knowledge of Enterra, no
facts have occurred that, if known by the IRS, could cause
disqualification of any Enterra Pension Plan. Each Enterra Pension
Plan to which Section 412 of the Code is applicable fully complies
with the funding requirements of that Section and there is no
accumulated funding deficiency as defined in Section 302(a)(2) of
ERISA (whether or not waived) in any such plan. The Enterra Group
has paid all premiums (including, without limitation, interest,
charges and penalties for late payment) due the PBGC with respect to
each Enterra Pension Plan for which premiums are required. No
Enterra Pension Plan has been terminated under circumstances that
would result in liability to the PBGC or the Enterra Group. There
has been no "reportable event" (as defined in Section 4043(b) of
ERISA and the regulations under that Section) with respect to any
Enterra Pension Plan subject to Title IV of ERISA.
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<PAGE> 25
With respect to each Enterra Pension Plan subject to Title IV of
ERISA, the Enterra Group has not (i) ceased operations at a facility
so as to become subject to the provisions of Section 4062(e) of
ERISA, (ii) withdrawn as a substantial employer so as to become
subject to the provisions of Section 4063 of ERISA or (iii) ceased
making contributions on or before the Closing Date to any such plan
subject to Section 4064(a) of ERISA to which the Enterra Group made
contributions at any time during the six years prior to the Closing
Date. Neither the Enterra Group nor any member thereof has made a
complete or partial withdrawal from a multiemployer plan (as defined
in Section 3(37) of ERISA) so as to incur withdrawal liability as
defined in Section 4201 of ERISA.
Enterra's subsidiaries incorporated outside of the United
States and any benefit plans maintained by any of them for the
benefit of their directors, officers, employees or former employees
(or any of their beneficiaries) are in compliance with applicable
laws pertaining to such plans in the jurisdictions of such
subsidiaries, except where such failure to be in compliance would
not, either individually or in the aggregate, have a Material Adverse
Effect.
(j) Taxes. All Tax Returns of or relating to any Taxes that
are required to be filed on or before the Closing Date by or with
respect to Enterra or any of the Enterra Subsidiaries have been or
will be duly and timely filed, and all Taxes, including, without
limitation, interest and penalties, due and payable pursuant to such
Tax Returns have been paid or adequately provided for in reserves
established by Enterra, except where the failure to file, pay or
provide for would not, either individually or in the aggregate, have
a Material Adverse Effect. All Tax Returns of or with respect to
Enterra or any of the Enterra Subsidiaries have been audited by the
applicable governmental authority, or the applicable statute of
limitations has expired, for all periods up to and including, without
limitation, the tax year ended December 31, 1987. There is no
material claim against Enterra or any of the Enterra Subsidiaries
with 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 Enterra or any of the Enterra
Subsidiaries that has not been adequately provided for in reserves
established by Enterra. The total amounts set up as liabilities for
current and deferred Taxes in the consolidated financial statements
included in the Enterra Commission Filings have been prepared in
accordance with generally accepted accounting principles and are
sufficient to cover the payment of all material Taxes, including,
without limitation, any penalties or interest thereon and whether or
not assessed or disputed, that are, or are hereafter finally
determined to be, or to have been, due with respect to the operations
of Enterra and the Enterra Subsidiaries through the periods covered
thereby.
(k) Environmental.
(i) There are no facts, conditions or circumstances known
to Enterra that could cause Enterra or any Enterra Subsidiary to
incur any loss, liability, damage, cost or expense, either
individually or in the aggregate, in excess of Enterra's
charges, accruals and reserves for
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<PAGE> 26
environmental matters reflected on Enterra's consolidated
balance sheet contained in the most recent Enterra Commission
Filing, for (A) violations of Environmental Laws, (B) failure to
obtain an Environmental Permit, (C) a requirement to install
environmental or pollution control equipment, (D) removal,
response or remedial costs related to Hazardous Materials or (E)
personal injury, property damage or natural resources damage
resulting from exposure to or releases of Hazardous Materials,
except in each case where such loss, liability, damage, cost or
expense would not have a Material Adverse Effect.
(ii) The business and any other operations conducted by
Enterra or any Enterra Subsidiary are in compliance with all
applicable limitations, restrictions, conditions, standards,
prohibitions, requirements and obligations established under
applicable Environmental Laws, except where the failure to be in
compliance would not, either individually or in the aggregate,
have a Material Adverse Effect.
(l) No Severance Payments. None of Enterra or the Enterra
Subsidiaries will owe a severance payment or similar obligation to
any of their respective employees, officers or directors as a result
of the Merger or the transactions contemplated by this Agreement, nor
will any of such persons be entitled to an increase in severance
payments or other benefits as a result of the Merger or the
transactions contemplated by this Agreement in the event of the
subsequent termination of their employment.
(m) Voting Requirements. The affirmative vote of the holders
of a majority of the outstanding shares of Enterra Common Stock is
the only vote of the holders of any class or series of the capital
stock of Enterra necessary to approve this Agreement and the Merger.
(n) Insurance. The Enterra Disclosure Letter sets forth all
policies of insurance currently in effect relating to the business or
operations of Enterra and the Enterra Subsidiaries.
(o) Title to Property. Except as set forth in the Enterra
Commission Filings, Enterra and each of the Enterra Subsidiaries have
good and indefeasible title to all of their real properties purported
to be owned in fee and good title to all their other material assets,
free and clear of all mortgages, liens, charges and encumbrances
other than Permitted Liens.
(p) Enterra Actions. As of the date hereof, the Board of
Directors of Enterra (at a meeting duly called and held) has resolved
to recommend approval and adoption of this Agreement and the Merger
by the stockholders of Enterra. Simmons & Company International,
Inc. has delivered to the Board of Directors of Enterra its opinion
that the consideration to be received by the holders of Enterra
Common Stock in the Merger is fair from a financial point of view to
such holders.
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<PAGE> 27
ARTICLE III
COVENANTS OF WEATHERFORD PRIOR TO THE EFFECTIVE TIME
3.1 Conduct of Business by Weatherford Pending the Merger. Weatherford
covenants and agrees that, from the date of this Agreement until the Effective
Time, unless Enterra shall otherwise provide its prior consent in writing
(which consent shall not be unreasonably withheld) or as otherwise expressly
contemplated by this Agreement or as set forth in the Weatherford Disclosure
Letter:
(a) The business of Weatherford and the Weatherford Subsidiaries
shall be conducted only in, and Weatherford and the Weatherford
Subsidiaries shall not take any action except in, the ordinary course of
business;
(b) Weatherford shall not, and shall not permit any of the
Weatherford Subsidiaries to:
(i) split, combine or reclassify any outstanding capital stock
of Weatherford, or authorize, declare, set aside or pay any dividend
payable in cash, stock, property or otherwise in respect of the
capital stock of Weatherford;
(ii) authorize or pay any extraordinary bonuses to employees;
(iii) grant any stock options or rights to acquire
Weatherford Common Stock or common stock of any of the Weatherford
Subsidiaries to any person or entity, other than options to purchase
Weatherford Common Stock issued pursuant to employee stock option
plans in amounts consistent with past practice;
(iv) authorize or issue, sell, pledge, dispose of or encumber
any shares of capital stock of Weatherford or, except to Weatherford
or a wholly-owned Weatherford Subsidiary, any of the Weatherford
Subsidiaries, other than pursuant to Weatherford Options;
(v) sell, pledge, dispose of or encumber any assets of
Weatherford or any of the Weatherford Subsidiaries, other than (A) in
the ordinary course of business, (B) not relating to the borrowing of
money, (C) with respect to purchase money security interests or (D)
with respect to encumbered assets acquired in connection with an
acquisition permitted under Section 3.1(b)(viii);
(vi) redeem, purchase, acquire or offer to acquire any shares of
Weatherford Common Stock;
(vii) enter into, or grant any material change in, employment,
compensation, benefit, severance, consulting or stay-bonus,
arrangements;
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<PAGE> 28
(viii) acquire any corporation, partnership, other business
organization or division thereof for a purchase price in excess of
$5,000,000 or acquire corporations, partnerships, other business
organizations or divisions thereof for an aggregate purchase price in
excess of $15,000,000;
(ix) enter into any contract, agreement, commitment or
arrangement other than in the ordinary course of business;
(x) authorize any capital expenditures other than in the
ordinary course of business, and in accordance with a plan previously
presented to, and not rejected by, the Weatherford Board of
Directors;
(xi) incur any obligation for borrowed money or purchase money
indebtedness, whether or not evidenced by a note, bond, debenture or
similar instrument, except in the ordinary course of business, and in
no event in excess of the unused credit available from time to time
under existing credit facilities of Weatherford;
(xii) amend or propose to amend the charter or bylaws of
Weatherford or any of the Weatherford Subsidiaries in which
Weatherford, either directly or indirectly, has less than a 100%
equity interest; or
(xiii) take, and Weatherford shall use its reasonable efforts
to prevent any affiliate of Weatherford from taking, any action that
would prevent, including with the passage of time, the Merger's
qualification for "pooling of interests" accounting treatment or
prevent the Merger from being treated for federal income tax purposes
as a reorganization within the meaning of Section 368(a) of the Code;
(c) Weatherford shall use all reasonable efforts (i) to preserve
intact the business organization of Weatherford and each of the
Weatherford Subsidiaries whose stock is pledged under existing credit
facilities, (ii) to maintain in effect any material franchises,
authorizations or similar rights of Weatherford and each of the
Weatherford Subsidiaries, (iii) to keep available the services of the
current officers and key employees of Weatherford and each of the
Weatherford Subsidiaries, (iv) to preserve its goodwill with those having
material business relationships with Weatherford and the Weatherford
Subsidiaries, (v) to maintain and keep the material properties of
Weatherford and each of the Weatherford Subsidiaries in as good a repair
and condition as presently exists, except for deterioration due to
ordinary wear and tear and damage due to casualty, and (vi) to maintain in
full force and effect insurance comparable in amount and scope of coverage
to that currently maintained by Weatherford and the Weatherford
Subsidiaries; and
(d) Weatherford shall not, and shall not permit any of the
Weatherford Subsidiaries to, take any action that would, or that
reasonably could be expected
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to, result in any of the representations and warranties set forth in this
Agreement becoming untrue or any of the conditions to the Merger set forth
in Article VI not being satisfied. Weatherford promptly shall advise
Enterra orally and in writing of any change or event having, or which,
insofar as reasonably can be foreseen, would have, a Material Adverse
Effect on Weatherford.
3.2 Access to Information. From the date hereof to the Effective Time,
Weatherford shall, and shall cause the Weatherford Subsidiaries and its and
their officers, directors, employees and representatives to, afford the
representatives of Enterra complete access during normal business hours to its
officers, employees, representatives, properties, books and records, and shall
furnish Enterra all financial, operating and other data and information as
Enterra, through its representatives, reasonably may request; provided,
however, that notwithstanding the foregoing provisions of this Section 3.2 or
any other provision of this Agreement, Weatherford shall not be required to
provide to Enterra any information that is the subject of a confidentiality
agreement and that relates primarily to a party other than Weatherford, a
Weatherford Subsidiary or a former subsidiary of Weatherford.
3.3 Affiliates' Agreements. Weatherford will use its reasonable efforts
to cause each stockholder who, in the opinion of counsel to Weatherford, is an
"affiliate" of Weatherford to enter into an agreement substantially in the form
of Exhibit 3.3.
3.4 Reservation of Weatherford Common 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 upon consummation of the
Merger.
3.5 Stock Exchange Listing. Weatherford shall use all reasonable efforts
to cause the shares of Weatherford Common Stock to be issued upon consummation
of the Merger to be approved for listing on the New York Stock Exchange,
subject to official notice of issuance, prior to the Closing Date.
ARTICLE IV
COVENANTS OF ENTERRA PRIOR TO THE EFFECTIVE TIME
4.1 Conduct of Business by Enterra Pending the Merger. Enterra covenants
and agrees that, from the date of this Agreement until the Effective Time,
unless Weatherford shall otherwise provide its prior consent in writing (which
consent shall not be unreasonably withheld) or as otherwise expressly
contemplated by this Agreement or as set forth in the Enterra Disclosure
Letter:
(a) The business of Enterra and the Enterra Subsidiaries shall be
conducted only in, and Enterra and the Enterra Subsidiaries shall not take
any action except in, the ordinary course of business;
(b) Enterra shall not, and shall not permit any of the Enterra
Subsidiaries to:
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(i) split, combine or reclassify any outstanding capital stock
of Enterra, or authorize, declare, set aside or pay any dividend
payable in cash, stock, property or otherwise in respect of the
capital stock of Enterra;
(ii) authorize or pay any extraordinary bonuses to employees;
(iii) grant any stock options or rights to acquire Enterra
Common Stock or common stock of any of the Enterra Subsidiaries to
any person or entity, other than options to purchase Enterra Common
Stock issued pursuant to employee stock option plans in amounts
consistent with past practice;
(iv) authorize or issue, sell, pledge, dispose of or encumber
any shares of capital stock of Enterra or, except to Enterra or a
wholly-owned Enterra Subsidiary, any of the Enterra Subsidiaries,
other than pursuant to Enterra Options;
(v) sell, pledge, dispose of or encumber any assets of Enterra
or any of the Enterra Subsidiaries, other than (A) in the ordinary
course of business, (B) not relating to the borrowing of money, (C)
with respect to purchase money security interests or (D) with respect
to encumbered assets acquired in connection with an acquisition
permitted under Section 4.1(b)(viii);
(vi) redeem, purchase, acquire or offer to acquire any shares of
Enterra Common Stock;
(vii) enter into, or grant any material change in, employment,
compensation, benefit, severance, consulting or stay-bonus
arrangements;
(viii) acquire any corporation, partnership, other business
organization or division thereof for a purchase price in excess of
$5,000,000 or corporations, partnerships, other business
organizations or divisions thereof for an aggregate purchase price in
excess of $15,000,000;
(ix) enter into any contract, agreement, commitment or
arrangement other than in the ordinary course of business;
(x) authorize any capital expenditures other than in the
ordinary course of business, and in accordance with a plan previously
presented to, and not rejected by, the Enterra Board of Directors;
(xi) incur any obligation for borrowed money or purchase money
indebtedness, whether or not evidenced by a note, bond, debenture or
similar instrument, except in the ordinary course of business, and in
no event in excess of the unused credit available from time to time
under existing credit facilities of Enterra;
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(xii) amend or propose to amend the charter or bylaws of
Enterra or any of the Enterra Subsidiaries in which Enterra, either
directly or indirectly, has less than a 100% equity interest; or
(xiii) take, and Enterra shall use its reasonable efforts to
prevent any affiliate of Enterra from taking, any action that would
prevent, including with the passage of time, the Merger's
qualification for "pooling of interests" accounting treatment or
prevent the Merger from being treated for federal income tax purposes
as a reorganization within the meaning of Section 368(a) of the Code;
(c) Enterra shall use its reasonable efforts (i) to preserve intact
the business organization of Enterra and each of the Enterra Subsidiaries
whose stock is pledged under existing credit facilities, (ii) to maintain
in effect any material franchises, authorizations or similar rights of
Enterra and each of the Enterra Subsidiaries, (iii) to keep available the
services of the current officers and key employees of Enterra and each of
the Enterra Subsidiaries, (iv) to preserve its goodwill with those having
material business relationships with Enterra and the Enterra Subsidiaries,
(v) to maintain and keep the material properties of Enterra and each of
the Enterra Subsidiaries in as good a repair and condition as presently
exists, except for deterioration due to ordinary wear and tear and damage
due to casualty, and (vi) to maintain in full force and effect insurance
comparable in amount and scope of coverage to that currently maintained by
Enterra and each of the Enterra Subsidiaries; and
(d) Enterra shall not, and shall not permit any of the Enterra
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 Merger
set forth in Article VI not being satisfied. Enterra promptly shall
advise Weatherford orally and in writing of any change or event having, or
which, insofar as reasonably can be foreseen, would have, a Material
Adverse Effect on Enterra.
4.2 Access to Information. From the date hereof to the Effective Time,
Enterra shall, and shall cause the Enterra Subsidiaries and its and their
officers, directors, employees and representatives to, afford the
representatives of Weatherford complete access during normal business hours to
its officers, employees, representatives, properties, books and records, and
shall furnish Weatherford all financial, operating and other data and
information as Weatherford, through its representatives, reasonably may
request; provided, however, that notwithstanding the foregoing provisions of
this Section 4.2 or any other provision of this Agreement, Enterra shall not
be required to provide to Weatherford any information that is the subject of a
confidentiality agreement and that relates primarily to a party other than
Enterra, an Enterra Subsidiary or a former subsidiary of Enterra.
4.3 Affiliates' Agreements. Enterra will use its reasonable efforts to
cause each stockholder who, in the opinion of counsel to Enterra, is an
"affiliate" of Enterra to enter into an agreement substantially in the form of
Exhibit 4.3.
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ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Joint Proxy Statement/Prospectus; Registration Statement. As
promptly as practicable after the execution of this Agreement, Weatherford and
Enterra shall prepare and file with the Commission preliminary proxy materials
that shall constitute the joint proxy statement (the "Proxy Statement") of
Weatherford and Enterra and the registration statement with respect to the
Weatherford Common Stock to be issued in connection with the Merger (the
"Registration Statement"). As promptly as practicable after comments are
received from the Commission on the preliminary proxy materials, Weatherford
and Enterra shall file with the Commission a combined joint proxy statement
and registration statement on Form S-4 (or on such other form as shall be
appropriate) relating to the approval and adoption of the Merger and this
Agreement by the stockholders of Weatherford and the stockholders of Enterra
and the issuance by Weatherford of Weatherford Common Stock in connection with
the Merger and shall use their reasonable efforts to cause the Registration
Statement to become effective as soon as practicable. Subject to the terms and
conditions set forth in Section 7.2, the Proxy Statement shall contain a
statement that the Board of Directors of Enterra recommended that the
stockholders of Enterra approve and adopt the Merger and this Agreement.
Subject to the terms and conditions set forth in Section 7.1, the Proxy
Statement shall contain a statement that the Board of Directors of Weatherford
recommended that the stockholders of Weatherford approve and adopt the Merger
and this Agreement.
5.2 Comfort Letters.
(a) Enterra shall use its reasonable efforts to cause to be
delivered to Weatherford a letter of KPMG Peat Marwick LLP dated as of a
date within five business days before the date on which the Registration
Statement shall become effective and addressed to Weatherford, in form and
substance reasonably satisfactory to Weatherford and customary in scope
and substance for "comfort" letters delivered by independent public
accountants in connection with registration statements and proxy
statements similar to the Registration Statement and Proxy Statement.
(b) Weatherford shall use its reasonable efforts to cause to be
delivered to Enterra a letter of Arthur Andersen LLP dated as of a date
within five business days before the date on which the Registration
Statement shall become effective and addressed to Enterra, in form and
substance reasonably satisfactory to Enterra and customary in scope and
substance for "comfort" letters delivered by independent public
accountants in connection with registration statements and proxy
statements similar to the Registration Statement and Proxy Statement.
5.3 Meetings of Stockholders.
(a) Enterra shall promptly take all action reasonably necessary in
accordance with the DGCL and its Restated Certificate of Incorporation and
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bylaws to convene a meeting of its stockholders to consider and vote upon
the adoption and approval of the Merger and this Agreement. Subject to
the terms and conditions set forth in Section 7.2, the Board of Directors
of Enterra (i) shall recommend at such meeting that the stockholders of
Enterra vote to adopt and approve the Merger and this Agreement, (ii)
shall use its reasonable efforts to solicit from stockholders of Enterra
proxies in favor of such adoption and approval and (iii) shall take all
other action reasonably necessary to secure a vote of its stockholders in
favor of the adoption and approval of the Merger and this Agreement.
(b) Weatherford shall promptly take all action reasonably necessary
in accordance with the DGCL and its Restated Certificate of Incorporation
and bylaws to convene a meeting of its stockholders to consider and vote
upon the adoption and approval of the Merger and this Agreement. Subject
to the terms and conditions set forth in Section 7.1, the Board of
Directors of Weatherford (i) shall recommend at such meeting that the
stockholders of Weatherford vote to adopt and approve the Merger and this
Agreement, (ii) shall use its reasonable efforts to solicit from
stockholders of Weatherford proxies in favor of such adoption and approval
and (iii) shall take all other action reasonably necessary to secure a
vote of its stockholders in favor of the adoption and approval of the
Merger and this Agreement.
(c) Weatherford and Enterra shall coordinate and cooperate with
respect to the timing of such meetings and shall endeavor to hold such
meetings on the same day and as soon as practicable after the date hereof.
5.4 Reasonable Efforts; Consents, Approvals and Waivers. Upon the terms
and subject to the conditions set forth in this Agreement, each of the parties
agrees to use reasonable efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, and to assist and cooperate with the other
party in doing, all things necessary, proper or advisable (a) to consummate and
make effective, in the most expeditious manner practicable, the Merger, and the
other transactions contemplated by this Agreement, including, without
limitation, (i) the obtaining of all necessary consents, approvals or waivers
required in connection with the authorization, execution and delivery of this
Agreement and the consummation of the Merger (provided that no such consent,
approval or waiver shall require such party to take any action that would
impair the value that such party reasonably attributes to the Merger) and (ii)
the execution and delivery of any additional instruments (including, without
limitation, any required supplemental indentures) necessary to consummate the
transactions contemplated by this Agreement; and (b) to defend any
non-regulatory lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated hereby, including, without limitation, seeking to
have any stay or temporary restraining order entered by any court or other
governmental entity vacated or reversed.
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5.5 Antitrust Matters. The obligations of each of the parties to this
Agreement shall include the following:
(a) each of the parties hereto shall file a premerger notification
and report form pursuant to the HSR Act with respect to the Merger as
promptly as reasonably possible following execution and delivery of this
Agreement. Each of the parties agrees to use best efforts to promptly
respond to any request for additional information pursuant to Section
(e)(1) of the HSR Act; and
(b) each party hereto will furnish to the other copies of all
correspondence, filings or communications between that party, or any of
its representatives, on the one hand, and any governmental agency or
authority, on the other hand, with respect to pre-notification obligations
under any antitrust law with respect to this Agreement or the Merger;
provided, however, that with respect to any documents that the party
reasonably believes should not be disclosed to the other party, the party
shall instead furnish those documents to counsel for the other party
pursuant to a mutually satisfactory confidentiality agreement.
5.6 Notification of Certain Matters. Enterra shall give prompt notice to
Weatherford, and Weatherford shall give prompt notice to Enterra, orally and in
writing, of (a) 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, (b) any material failure of Enterra 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
complied with or satisfied by it hereunder, and (c) any fact or event that
would make it necessary to amend the Registration Statement or the Proxy
Statement to render the statements therein not misleading or to comply with
applicable law.
5.7 Agreement to Defend. In the event any claim, action, suit,
investigation or other proceeding by any governmental body or other person or
other legal or administrative proceeding is commenced that questions the
validity or legality of the transactions contemplated hereby or seeks damages
in connection therewith, whether before or after the Effective Time, the
parties hereto agree to cooperate and use their reasonable efforts to defend
against and respond thereto; provided, however, that this Section 5.7 shall not
apply to any governmental investigation contemplated under Section 5.5(a).
5.8 Expenses. Subject to the terms and conditions set forth in Section
7.3, and except as otherwise agreed to in writing by the parties, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses.
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5.9 Indemnification.
(a) After the Effective Time Weatherford and the Surviving
Corporation shall, to the fullest extent permitted under applicable law,
defend, indemnify and hold harmless each person who is now, or has been at
any time prior to the date hereof or who becomes prior to the Effective
Time, an officer or director of Enterra or any of the Enterra Subsidiaries
(each, an "Indemnified Party" and, collectively, the "Indemnified
Parties") against (i) all costs or expenses (including, without
limitation, reasonable attorneys' fees), judgments, fines, losses, claims,
damages, liabilities and amounts paid in settlement in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, based in whole or in part on, or arising
in whole or in part out of, the fact that such person is or was an officer
or director, whether pertaining to any matter existing or occurring at or
prior to the Effective Time and whether asserted or claimed prior to, or
at or after, the Effective Time (collectively, the "Indemnified
Liabilities"); and (ii) all Indemnified Liabilities based in whole or in
part on, or arising in whole or in part out of, or pertaining to, this
Agreement, the Merger or the transactions contemplated hereby. After the
Effective Time, Weatherford and the Surviving Corporation will he entitled
to participate in and, to the extent that it may wish, to assume the
defense of any action, with counsel reasonably satisfactory to the
Indemnified Party; provided, however, if any Indemnified Party believes
that, by reason of an actual or potential conflict of interest, it is
advisable for such Indemnified Party to be represented by separate
counsel, or if Weatherford or the Surviving Corporation shall fail after
the Effective Time to assume responsibility for such defense, such
Indemnified Party may retain counsel reasonably satisfactory to
Weatherford and the Surviving Corporation who will represent such
Indemnified Party, and Weatherford and the Surviving Corporation shall pay
all reasonable fees and disbursements of such counsel promptly as
statements therefor are received to the fullest extent permitted by
applicable law upon receipt of any undertaking contemplated by Section
145(e) of the DGCL. The Indemnified Party, Weatherford and the Surviving
Corporation will cooperate with each other and use their reasonable
efforts to assist each other in the vigorous defense of any such matter;
provided, however, that neither Weatherford nor the Surviving Corporation
shall be liable for any settlement of any claim effected without its
written consent, which consent, however, shall not be unreasonably
withheld. Any Indemnified Party wishing to claim indemnification under
this Section 5.9, upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify Weatherford or the
Surviving Corporation, as applicable (but the failure to be so notified by
an Indemnified Party shall not relieve an indemnifying party from any
liability that it may have under this Section 5.9 except to the extent
such failure materially prejudices such indemnifying party). The
indemnifying parties shall be required to pay for only one law firm (in
addition to any required local counsel) selected by the Indemnified
Parties as a group in accordance with the foregoing provisions with
respect to each such matter unless there is, under applicable standards of
professional conduct, a conflict in any significant issue between the
positions of any two or more Indemnified Parties. This Section 5.9 is
intended
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to be for the benefit of, and shall be enforceable by, each Indemnified
Party, his or her heirs and his or her representatives.
(b) For a period of six years after the Effective Time, the
Surviving Corporation shall use its best efforts to maintain in effect
director and officer liability insurance for the benefit of the
Indemnified Parties in comparable amounts, with comparable deductibles or
retained amounts and with comparable coverages and exclusions as currently
maintained by Enterra; provided, however, that if the Surviving
Corporation is unable to obtain insurance for such period for an aggregate
premium of $1,000,000 or less or if such insurance otherwise cannot be
obtained or maintained by the Surviving Corporation, then the Surviving
Corporation's obligation pursuant hereto shall only be to seek to be
obtained the best possible coverage under the circumstances subject to the
foregoing limitation on premiums.
(c) All rights and obligations under this Section 5.9 shall be in
addition to any rights an Indemnified Party may have under the Restated
Certificate of Incorporation or bylaws of Enterra as in effect on the date
hereof, or pursuant to any other agreement, arrangement or document in
effect prior to the Effective Time. The provisions of this Section 5.9
are intended to benefit, and may be enforced by, all Indemnified Parties,
and their respective heirs and representatives, This Section 5.9 shall be
binding upon all successors and assigns of Enterra, Weatherford and the
Surviving Corporation.
(d) If the Surviving Corporation is sold to a third party, such
third party shall expressly assume the Surviving Corporation's
indemnification obligation under this Section 5.9.
5.10 Post-Effective Time Mailing. As soon as practicable following the
Effective Time, the Surviving Corporation will cause to be mailed to each
holder of certificates that represented Enterra Common Stock prior to the
Effective Time, at such holder's address as it appears on Enterra's stock
transfer records, a letter of transmittal and other information advising such
holder of the consummation of the Merger and to enable such holder to effect
the exchange of stock certificates as contemplated by Article I of this
Agreement.
5.11 Stockholders' Agreement. Weatherford will enter into a Stockholders'
Agreement, and an amendment thereto, with First Reserve Corporation and the
various First Reserve Funds (as defined therein), in the forms attached hereto
as Exhibits 5.11(a) and 5.11(b), respectively.
5.12 Enterra Stock Options. At the Effective Time, each Enterra Option
that remains as of such date unexercised in whole or in part shall be replaced
by a substitute option, granted under an existing Weatherford stock option
plan, to purchase that number of shares of Weatherford Common Stock determined
by multiplying the number of shares of Enterra Common Stock subject to such
Enterra Option by the Conversion Rate and multiplying the exercise price per
share of such Enterra Option by a fraction the numerator of which is one and
the denominator of which is the Conversion Rate.
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Each such substitute option shall otherwise replicate the terms and conditions
of the Enterra Option it replaces. Weatherford shall take all corporate action
necessary (a) to reserve for issuance a sufficient number of shares of
Weatherford Common Stock for delivery upon exercise of such Enterra Options,
(b) to ensure that all shares of Weatherford Common Stock subject to such
Enterra Options are issued pursuant to a plan that complies with the exemption
provided by Rule 16b-3 promulgated under the Exchange Act and (c) to ensure
that shares of Weatherford Common Stock issued pursuant to the exercise of such
Enterra Options are registered under the Securities Act, listed on the New York
Stock Exchange and may be freely transferred by the holders thereof.
5.13 Enterra Employee Benefits.
(a) For the period beginning at the Effective Time and ending on
June 30, 1996, Weatherford will either (i) cause to remain in effect all
Enterra Benefit Plans, as in effect at the Effective Time, or (ii) provide
benefits to employees of Enterra and the Enterra Subsidiaries under the
Weatherford Benefit Plans that are substantially comparable to the
benefits provided to such employees under the Enterra Benefit Plans, as in
effect at the Effective Time. From and after July 1, 1996, Weatherford
agrees that participation in the Weatherford Benefit Plans, as then in
effect, shall be made available to all Weatherford employees, including
employees who were employees of Enterra, and that such plans will provide
the same or substantially comparable benefits to all similarly situated
employees.
(b) If participation in any Weatherford Benefit Plan is made
available to employees of Enterra or any Enterra Subsidiary, all service
with Enterra and the Enterra Subsidiaries prior to the Effective Time and
any other service recognized under the applicable Enterra Benefit Plans
for vesting and eligibility purposes shall be credited to such employees
and all waiting periods and pre-existing condition limitations shall be
waived under such Weatherford Benefit Plan.
(c) Prior to the Effective Time, Enterra shall have established the
Enterra Special Severance Pay Plan, in the form attached hereto as Exhibit
5.13.
(d) Weatherford agrees that it shall make non-elective employer
contributions, including fixed or discretionary pension, profit sharing
and matching contributions, to each Enterra Benefit Plan that is intended
to be a qualified defined contribution plan under Section 401(a) of the
Code for the respective Enterra Benefit Plan's first plan year ending on
or after the Effective Time in accordance with the terms of such plan.
Weatherford agrees that the rate of each such non-elective employer
contribution in each case shall not be less than the rate of such non-
elective employer contribution that was made to the respective Enterra
Benefit Plan for the last plan year ending prior to the Effective Time.
An employee of Enterra or an Enterra Subsidiary who is employed, and who
is a participant in an Enterra Benefit Plan that is subject to this
Section 5.13(d), on the day before the Effective Time (an "Eligible
Enterra
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Employee") shall be entitled to receive an allocation of such non-elective
employer contributions without regard to whether such employee continues
to be an employee of Enterra or an Enterra Subsidiary or any successor
thereto on the last day of the respective Enterra Benefit Plan's plan year
(or other period) for which such contributions are to be made. Weatherford
agrees to make any amendment to the applicable Enterra Benefit Plans as
may be necessary to effectuate the terms of this Section 5.13(d).
5.14 Update of Disclosure Letters.
(a) Weatherford shall promptly disclose to Enterra in writing (i)
any information set forth in the Weatherford Disclosure Letter with
respect to subsections (b), (c), (e) and (g) of Section 2.2 that no longer
is accurate and with respect to all other subsections of Section 2.2 that
no longer is accurate in any material respect and (ii) any information of
the nature of that set forth in the Weatherford Disclosure Letter that
arises between the date hereof and the Closing and that would have been
required to be included in the Weatherford Disclosure Letter if such
information had existed and been known or available on the date hereof.
Neither any such new disclosure, nor the determination of Enterra to
proceed with the Merger in spite of any such new disclosure, shall relieve
Weatherford from any liability for any prior misrepresentation or breach
of warranty.
(b) Enterra shall promptly disclose to Weatherford in writing (i)
any information set forth in the Enterra Disclosure Letter with respect to
subsections (b), (c), (e) and (g) of Section 2.3 that no longer is
accurate and with respect to all other subsections of Section 2.3 that no
longer is accurate in any material respect and (ii) any information of the
nature of that set forth in the Enterra Disclosure Letter that arises
between the date hereof and the Closing and that would have been required
to be included in the Enterra Disclosure Letter if such information had
existed and been known or available on the date hereof. Neither any such
new disclosure, nor the determination of Weatherford to proceed with the
Merger in spite of any such new disclosure, shall relieve Enterra from any
liability for any prior misrepresentation or breach of warranty.
5.15 Weatherford Special Severance Pay Plan. Prior to the Effective Time,
Weatherford shall have established the Weatherford Special Severance Pay Plan,
in the form attached hereto as Exhibit 5.15.
5.16 Change of Control Agreements. Weatherford shall, as of the Effective
Time, have entered into change of control agreements, substantially in the form
of Exhibit 5.16(a), with the persons and for the respective severance benefits
set forth on Exhibit 5.16(b).
5.17 Indemnification Agreements. Weatherford shall, as of the Effective
Time, have entered into indemnification agreements, substantially in the form
of Weatherford's existing indemnification agreements with the persons set forth
on Exhibit 5.17.
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5.18 Enterra Employee Bonuses.
(a) The Enterra Board of Directors or the Executive Compensation
Committee of the Enterra Board of Directors (the "Enterra Committee")
shall determine, prior to the Closing Date, the final amount of bonuses to
be paid to the Enterra employees listed on Exhibit 5.18 for the fiscal
year ended December 31, 1993, such amount not to exceed the amount that
previously has been accrued for such bonuses. Such bonuses shall be paid
only after collection of at least $10,000,000 of the disputed outstanding
receivables from Kuwait Oil Company. If such bonuses are not paid prior to
the Closing Date, (i) the determination of the Enterra Board of Directors
or the Enterra Committee, as the case may be, will be binding upon
Weatherford, (ii) any Enterra employee terminated after such date shall
receive the entire amount of the bonus determined by the Enterra Board of
Directors or the Enterra Committee, as the case may be, and (iii) payment
of such bonuses shall be administered by Messrs. William E. Macaulay and
Robert L. Parker, Sr., who will be directors of the Surviving Corporation.
(b) The Enterra Board of Directors or the Enterra Committee shall
declare, prior to the Closing Date, the amount of bonuses to Enterra
employees, based upon Enterra's achievement of certain financial and other
targets for Enterra for the fiscal year ending December 31, 1995,
determined by the Enterra Board of Directors or the Enterra Committee, as
the case may be, in a manner consistent with the Enterra and Total Energy
Services Company bonus plans under which bonuses were paid for the fiscal
year ended December 31, 1994. The final amount of bonuses shall be
determined by the Enterra Board of Directors or the Enterra Committee, as
the case may be, if audited financial results for the year ending December
31, 1995 are known prior to the Closing Date, or by Messrs. Macaulay and
Parker, if such results are not known until after the Closing Date.
Bonuses will be paid not earlier than February 1, 1996 and not later than
February 28, 1996. Any Enterra employee terminated after the Closing Date
shall receive the entire amount of the bonus.
(c) In addition to the 1995 bonuses referenced in Section 5.18(b),
Enterra may pay bonuses to Enterra employees in an amount not to exceed
$1,000,000 in the aggregate. The recipients and amounts of such bonuses
shall be determined in the sole discretion of the Enterra Committee;
provided, however, that the total amount paid to any one employee shall
not exceed the aggregate of the current annualized salary and most recent
annual bonus of such employee.
5.19 Enterra Severance Agreements.
(a) Each of the Enterra severance agreements with the individuals
set forth on Exhibit 5.19(a)(i) shall be amended, pursuant to the form
attached hereto as Exhibit 5.19(a)(ii), and each of the Enterra severance
agreements with the individuals set forth on Exhibit 5.19(a)(iii) shall be
amended, pursuant to the form attached hereto as Exhibit 5.19(a)(iv).
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(b) The parties agree that, as a result of the Merger, any
resignation by any of M. Timothy Carey, Steven C. Grant, Edward C. Grimes,
Steven W. Krablin, J. Joseph Percle and Michael L. Stansberry at any time
from the Effective Time through August 12, 1996 shall constitute a
"Termination upon Change of Control" (as such term is defined in the
severance agreement between such person and Enterra). Further, it is
agreed that, for purposes of Section 3(a)(ii) of the severance agreement
between Enterra and each such individual, if the bonus for the 1993 fiscal
year is required to be taken into account, the final amount of the 1993
bonus determined by the Enterra Board of Directors or the Enterra
Committee pursuant to Section 5.18(a) shall be counted, notwithstanding
whether the disputed receivables from Kuwait Oil Company have been
collected. It is further agreed that the manner in which the obligation
to provide extended medical and dental benefits under Section 4(b) of each
such individual's severance agreement with Enterra shall be to pay to such
individual during the full period for which such benefits are required to
be extended a monthly amount equal to the difference between the
applicable COBRA continuation premium for such benefits and the premium,
if any, charged to the individual for such benefits immediately prior to
the Change in Control (as defined in such severance agreement) and such
individual shall pay the full premium to the plan.
5.20 Enterra Chairman, President and Chief Executive Officer.
(a) Weatherford shall, as of the Effective Time, have entered into
definitive arrangements with D. Dale Wood reflecting the principal terms
set forth in Exhibit 5.20.
(b) If the implementation of the principal terms set forth in
Exhibit 5.20 shall make the Merger ineligible for pooling-of-interests
accounting treatment under Accounting Principles Bulletin No. 16, Enterra
agrees to use its best efforts to negotiate a package that would provide
Mr. Wood in the aggregate with a substantially similar economic benefit.
5.21 Weatherford Chairman, President and Chief Executive Officer.
Weatherford shall, as of the Effective Time, pay Philip Burguieres a fee in the
amount set forth in Exhibit 5.21. If Mr. Burguieres' fee set forth in Exhibit
5.21 shall make the Merger ineligible for pooling-of-interests accounting
treatment under Accounting Principles Bulletin No. 16, Weatherford agrees to
use its best efforts to negotiate an alternative package with Mr. Burguieres.
5.22 Board of Directors.
(a) The Board of Directors of Weatherford will take action prior to
the Effective Time to cause the number of directors comprising the full
Board of Directors of the Surviving Corporation at the Effective Time to
be increased to ten persons, and the five persons listed on Exhibit 5.22
as the Enterra designees to the Board of Directors of the Surviving
Corporation shall be elected to the Board of Directors of the Surviving
Corporation by the Weatherford Board of
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Directors effective at the Effective Time, such increase in number and
such election to be subject to the Closing. The Weatherford Board of
Directors will also take action prior to the Effective Time to cause the
committees of the Board of Directors of the Surviving Corporation at the
Effective Time to be the committees listed on Exhibit 1.6(a) hereto,
having the membership noted on such Exhibit, such action to be subject to
the Closing. If prior to the Effective Time, any Enterra designee for
director set forth on Exhibit 5.22, or if during the two years after the
Effective Time, any Enterra designated director shall decline or be unable
to serve as a director of the Surviving Corporation, the other Enterra
designees or the remaining Enterra designated directors, as the case may
be, shall designate another person to serve in such person's stead,
subject to the approval of a majority of the Weatherford designated
directors at that time, which approval shall not be unreasonably withheld.
Weatherford agrees that, during the two year period after the Effective
Time, it shall cause at least one Enterra designee listed on Exhibit 5.22
(or his successor chosen pursuant to this Section 5.22(a)) to be a member
of each of the Executive and Nominating Committee, Audit Committee and
Compensation and Stock Plans Committee of the Board of Directors of the
Surviving Corporation. Weatherford shall take all appropriate action for
two years after the Effective Time to assist in the nomination for
election as directors of the Enterra designees listed on Exhibit 5.22 (or
any successor chosen pursuant to this Section 5.22(a)).
(b) Each person designated by Enterra to serve on the Board of
Directors of the Surviving Corporation, and any person subsequently
appointed to the Board of Directors of the Surviving Corporation by such
designees pursuant to Section 5.22(a), shall be covered by the Weatherford
International Incorporated Non-Employee Director Retirement Plan and the
prior service of any such person on the Enterra Board of Directors shall
count as service on the Board of Directors of the Surviving Corporation
for all purposes under such plan.
(c) If prior to the Effective Time, any Weatherford designee for
director set forth on Exhibit 5.22, or if during the two years after the
Effective Time, any Weatherford designated director shall decline or be
unable to serve as a director of the Surviving Corporation, the other
Weatherford designees or the remaining Weatherford designated directors,
as the case may be, shall designate another person to serve in such
person's stead, subject to the approval of a majority of the Enterra
designated directors at that time, which approval shall not be
unreasonably withheld.
ARTICLE VI
CONDITIONS
6.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment or waiver at or prior to the Closing Date of the following
conditions:
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(a) This Agreement and the Merger shall have been approved and
adopted by the requisite vote of the stockholders of Weatherford and the
stockholders of Enterra as may be required by law and by any applicable
provisions of their respective certificates of incorporation or bylaws;
(b) The waiting period (and any extension thereof) applicable to the
consummation of the Merger 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 Merger;
(d) The Registration Statement shall be effective on the Closing
Date, and all post-effective amendments filed shall have been declared
effective or shall have been withdrawn; and no stop order suspending the
effectiveness thereof shall have been issued and no proceedings for that
purpose shall have been initiated or, to the knowledge of the parties,
threatened by the Commission;
(e) There shall have been obtained any and all material permits,
approvals and consents of securities or blue sky commissions of any
jurisdiction, and of any other governmental body or agency, that
reasonably may be deemed necessary so that the consummation of the Merger
and the transactions contemplated thereby will be in compliance with
applicable laws, the failure to comply with which would have a Material
Adverse Effect on Enterra or Weatherford; and
(f) All approvals of private persons, financial institutions or
corporations, (i) the granting of which is necessary for the consummation
of the Merger or the transactions contemplated in connection therewith and
(ii) the non-receipt of which would have a Material Adverse Effect on
Enterra or Weatherford, shall have been obtained.
6.2 Additional Conditions to Obligations of Weatherford. The obligation
of Weatherford to effect the Merger is, at the option of Weatherford, also
subject to the fulfillment or waiver at or prior to the Closing Date of the
following conditions:
(a) The representations and warranties of Enterra contained in
subsections (b), (c) (e) and (g) of Section 2.3 shall be accurate, and the
representations and warranties of Enterra contained in all other
subsections of Section 2.3 shall be accurate in all material respects
(except to the extent qualified by materiality, in which case such
representations and warranties shall be accurate), as of the Closing Date
as though such representations and warranties had been made at and as of
that time (except where any such representation or warranty is made as of
a date specifically set forth therein); all of the terms, covenants and
conditions of this Agreement to be complied with and performed by Enterra
on or before the Closing Date shall have been duly
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complied with and performed in all material respects; and a certificate of
Enterra to the foregoing effect dated the Closing Date and signed by the
chief executive officer of Enterra shall have been delivered to
Weatherford;
(b) Since the date of this Agreement, no Material Adverse Change of
Enterra shall have occurred, and Weatherford shall have received a
certificate of Enterra signed by the chief executive officer of Enterra
dated the Closing Date to such effect;
(c) Weatherford shall have been advised in writing as of the date of
this Agreement and as of the Closing Date (i) by Arthur Andersen LLP that,
in accordance with generally accepted accounting principles and applicable
rules and regulations of the Commission, Weatherford is eligible to be a
party to a merger accounted for as a "pooling of interests" and that
Arthur Andersen LLP is not aware of any matters that prohibit the use of
"pooling of interests" accounting in connection with the Merger and (ii)
by KPMG Peat Marwick LLP that, in accordance with generally accepted
accounting principles and applicable rules and regulations of the
Commission, no conditions exist that would preclude Weatherford's
accounting for the Merger with Enterra as a "pooling of interests" as
those conditions relate to Enterra;
(d) Enterra shall have received, and furnished written copies to
Weatherford of, the Enterra affiliates' agreements pursuant to Section
4.3;
(e) Weatherford shall have received from Morgan, Lewis & Bockius,
counsel to Enterra, an opinion dated the Effective Time covering the
matters set forth in Exhibit 6.2(e);
(f) Weatherford shall have received a copy of the "comfort letter"
of KPMG Peat Marwick LLP pursuant to Section 5.2(a) and on or prior to the
Closing Date an additional letter from KPMG Peat Marwick LLP dated as of
the Closing Date, in form and substance reasonably satisfactory to
Weatherford, stating that nothing has come to their attention, as of a
date no earlier than five days prior to the Closing Date, which would
require any change in their letter delivered pursuant to Section 5.2(a) if
it were required to be dated and delivered on the Closing Date;
(g) The Board of Directors of Weatherford shall have received from
Merrill Lynch & Co. a written opinion, dated as of the date of this
Agreement, in form and substance reasonably satisfactory to the Board of
Directors of Weatherford, to the effect that the Conversion Rate is fair
to the holders of Weatherford Common Stock from a financial point of view,
which opinion shall have been confirmed in writing to such Board as of the
date the Proxy Statement is first mailed to the stockholders of
Weatherford and not subsequently withdrawn;
(h) Weatherford shall have received from Fulbright & Jaworski
L.L.P., counsel to Weatherford, a written opinion dated as of the date
that the Proxy
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Statement is first mailed to stockholders of Weatherford to the effect
that (i) the Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code, (ii)
Weatherford and Enterra will each be a party to that reorganization within
the meaning of Section 368(b) of the Code and (iii) Weatherford and
Enterra shall not recognize any gain or loss as a result of the Merger,
and such opinion shall not have been withdrawn or modified in any material
respect;
(i) The Stockholders' Agreement among Enterra, First Reserve
Corporation and the various First Reserve Funds shall have been in full
force and effect, and the stockholders of Enterra named therein shall not
be in breach of any of the material terms thereof, immediately prior to
the Closing; and
(j) D. Dale Wood shall have entered into definitive arrangements
reflecting the principal terms set forth in Exhibit 5.20.
6.3 Additional Conditions to Obligations of Enterra. The obligation of
Enterra to effect the Merger is, at the option of Enterra, also subject to the
fulfillment or waiver at or prior to the Closing Date of the following
conditions:
(a) The representations and warranties of Weatherford contained in
subsections (b), (c), (e) and (g) of Section 2.2 shall be accurate, and
the representations and warranties of Weatherford contained in all other
subsections of Section 2.2 shall be accurate in all material respects
(except to the extent qualified by materiality, in which case such
representations and warranties shall be accurate), as of the Closing Date
as though such representations and warranties had been made at and as of
that time (except where any such representation or warranty is made as of
a date specifically set forth therein); all of 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 of
Weatherford to the foregoing effect dated the Closing Date and signed by
the chief executive officer of Weatherford shall have been delivered to
Enterra;
(b) Since the date of this Agreement, no Material Adverse Change of
Weatherford shall have occurred, and Enterra shall have received a
certificate of Weatherford signed by the chief executive officer of
Weatherford dated the Closing Date to such effect;
(c) Enterra shall have been advised in writing as of the date of
this Agreement and as of the Closing Date (i) by Arthur Andersen LLP that,
in accordance with generally accepted accounting principles and applicable
rules and regulations of the Commission, Weatherford is eligible to be a
party to a merger accounted for as a "pooling of interests" and that
Arthur Andersen LLP is not aware of any matters that prohibit the use of
"pooling of interests" accounting in connection with the Merger and (ii)
by KPMG Peat Marwick LLP that, in accordance with generally accepted
accounting principles and applicable rules and regulations of the
Commission, no conditions exist that would preclude
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Weatherford's accounting for the Merger with Enterra as a "pooling of
interests" as those conditions relate to Enterra;
(d) Weatherford shall have received, and furnished written copies to
Enterra of, the Weatherford affiliates' agreements pursuant to Section
3.3;
(e) Enterra shall have received from Fulbright & Jaworski L.L.P.,
counsel to Weatherford, an opinion dated the Effective Time covering the
matters set forth in Exhibit 6.3(e);
(f) Enterra shall have received a copy of the "comfort letter" of
Arthur Andersen LLP pursuant to Section 5.2(b) and on or prior to the
Closing Date an additional letter from Arthur Andersen LLP dated as of the
Closing Date, in form and substance reasonably satisfactory to Enterra,
stating that nothing has come to their attention, as of a date no earlier
than five days prior to the Closing Date, which would require any change
in their letter delivered pursuant to Section 5.2(b) if it were required
to be dated and delivered on the Closing Date;
(g) The Board of Directors of Enterra shall have received from
Simmons & Company International, Inc. a written opinion, dated as of the
date of this Agreement, in form and substance reasonably satisfactory to
the Board of Directors of Enterra, to the effect that the consideration to
be received by the holders of Enterra Common Stock in the Merger is fair
from a financial point of view to such holders, which opinion shall have
been confirmed in writing to such Board as of the date the Proxy Statement
is first mailed to the stockholders of Enterra and not subsequently
withdrawn;
(h) Enterra shall have received from Morgan, Lewis & Bockius,
counsel to Enterra, a written opinion dated as of the date that the Proxy
Statement is first mailed to stockholders of Enterra to the effect that
(i) the Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code, (ii)
Weatherford and Enterra will each be a party to that reorganization within
the meaning of Section 368(b) of the Code and (iii) the stockholders of
Enterra shall not recognize any gain or loss as a result of the Merger,
other than to the extent such stockholders receive cash in lieu of
fractional shares, and such opinion shall not have been withdrawn or
modified in any material respect;
(i) The shares of Weatherford Common Stock to be issued upon
consummation of the Merger shall have been approved for listing on the New
York Stock Exchange, subject to official notice of issuance; and
(j) Each of the Weatherford Change of Control Agreements set forth
on Exhibit 6.3(j)(i) shall be amended, pursuant to the form attached
hereto as Exhibit 6.3(j)(ii).
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ARTICLE VII
SPECIAL PROVISIONS AS TO CERTAIN MATTERS
7.1 No Solicitation by Weatherford.
(a) Weatherford shall not, nor shall it permit any of its
subsidiaries to, nor shall it authorize or permit any officer, director,
employee, investment banker, attorney or other advisor, agent or
representative of Weatherford or any of its subsidiaries to, directly or
indirectly, (i) solicit, initiate or encourage the submission of any
Weatherford Takeover Proposal (as hereinafter defined), (ii) enter into
any agreement with respect to any Weatherford Takeover Proposal, or (iii)
participate in any discussions or negotiations regarding, or furnish to
any person any information with respect to, the making of any proposal
that constitutes, or may reasonably be expected to lead to, any
Weatherford Takeover Proposal; provided, however, that prior to the vote
of stockholders of Weatherford for approval and adoption of this Agreement
and the Merger, Weatherford may take any actions described in the
foregoing clause (iii) to the extent that the Board of Directors of
Weatherford determines, in good faith after consultation with outside
counsel, that failure to take such actions could reasonably be expected to
result in a breach of the Board's fiduciary obligations. Without limiting
the foregoing, it is understood that any violation of the restrictions set
forth in the preceding sentence by any officer, director or employee of
Weatherford or any of the Weatherford Subsidiaries or any investment
banker, attorney or other advisor, agent or representative of Weatherford,
whether or not such person is purporting to act on behalf of Weatherford
or otherwise, shall be deemed to be a material breach of this Agreement by
Weatherford. For purposes of this Agreement, a "Weatherford Takeover
Proposal" means (i) any proposal or offer, other than a proposal or offer
by Enterra or any of its affiliates, for a merger or other business
combination involving Weatherford, (ii) any proposal or offer, other than
a proposal or offer by Enterra or any of its affiliates, to acquire from
Weatherford or any of its affiliates in any manner, directly or
indirectly, more than 30% of the voting stock of Weatherford or any
Weatherford Subsidiary or a material amount of the assets of Weatherford
and the Weatherford Subsidiaries, taken as a whole, or (iii) any proposal
or offer, other than a proposal or offer by Enterra or any of its
affiliates, to acquire from the stockholders of Weatherford by tender
offer, exchange offer or otherwise more than 30% of the outstanding voting
stock of Weatherford.
(b) Neither the Board of Directors of Weatherford nor any committee
thereof shall (i) withdraw or modify, or propose to withdraw or modify, in
a manner adverse to Enterra the approval or recommendation by the Board of
Directors of Weatherford or any such committee of this Agreement or the
Merger or take any action having such effect or (ii) approve or recommend,
or propose to approve or recommend, any Weatherford Takeover Proposal.
Notwithstanding the foregoing, if the Board of Directors of Weatherford
receives a Weatherford Takeover Proposal that, in the exercise of its
fiduciary obligations (as determined in good faith after consultation with
outside counsel), it
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determines to be a Weatherford Superior Proposal (as hereinafter defined),
the Board of Directors of Weatherford may withdraw or modify its approval
or recommendation of this Agreement or the Merger and may (subject to the
following sentence) terminate this Agreement, in each case at any time
after the fifth business day following Enterra's receipt of written notice
(a "Weatherford Notice of Superior Proposal") advising Enterra that the
Board of Directors of Weatherford has received a Weatherford Takeover
Proposal that it has determined to be a Weatherford Superior Proposal,
specifying the principal terms and conditions of such Weatherford Superior
Proposal and identifying the person making such Weatherford Superior
Proposal. Weatherford may terminate this Agreement pursuant to the
preceding sentence only if the stockholders of Weatherford shall not yet
have voted upon the Merger and Weatherford shall have paid to Enterra the
Termination Fee (as defined in Section 7.3(a)). Nothing contained herein
shall prohibit Weatherford from taking and disclosing to its stockholders
a position contemplated by Rule 14e-2(a) of the Exchange Act provided that
Weatherford does not withdraw or modify its position with respect to the
Merger or take any action having such effect or approve or recommend a
Weatherford Takeover Proposal. For purposes of this Agreement, a
"Weatherford Superior Proposal" means any bona fide Weatherford Takeover
Proposal to merge with or acquire, directly or indirectly, all of the
voting stock then outstanding or all or substantially all of the assets of
Weatherford, and otherwise on terms that the Board of Directors of
Weatherford determines in its good faith reasonable judgment (based on the
written advice of a financial advisor of nationally recognized reputation)
to be more favorable to Weatherford's stockholders than the Merger.
(c) If the Board of Directors of Weatherford or any committee
thereof shall (i) withdraw or modify, or propose to withdraw or modify, in
a manner adverse to Enterra the approval or recommendation by the Board of
Directors of Weatherford or any such committee of this Agreement or the
Merger or take any action having such effect or (ii) approve or recommend,
or propose to approve or recommend, any Weatherford Takeover Proposal,
Enterra may terminate this Agreement.
(d) In addition to the obligations of Weatherford set forth in
Section 7.1(b), Weatherford shall promptly advise Enterra orally and in
writing of any negotiations or discussions, entered into in reliance on
the proviso to the first sentence of Section 7.1(a).
7.2 No Solicitation by Enterra.
(a) Enterra shall not, nor shall it permit any of its subsidiaries
to, nor shall it authorize or permit any officer, director, employee,
investment banker, attorney or other advisor, agent or representative of
Enterra or any of its subsidiaries to, directly or indirectly, (i)
solicit, initiate or encourage the submission of any Enterra Takeover
Proposal (as hereinafter defined), (ii) enter into any agreement with
respect to any Enterra Takeover Proposal, or (iii) participate in any
discussions or negotiations regarding, or furnish to any
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person any information with respect to, the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Enterra
Takeover Proposal; provided, however, that prior to the vote of
stockholders of Enterra for approval and adoption of this Agreement and
the Merger, Enterra may take any actions described in the foregoing clause
(iii) to the extent that the Board of Directors of Enterra determines, in
good faith after consultation with outside counsel, that failure to take
such actions could reasonably be expected to result in a breach of the
Board's fiduciary obligations. Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in the
preceding sentence by any officer, director or employee of Enterra or any
of the Enterra Subsidiaries or any investment banker, attorney or other
advisor, agent or representative of Enterra, whether or not such person is
purporting to act on behalf of Enterra or otherwise, shall be deemed to be
a material breach of this Agreement by Enterra. For purposes of this
Agreement, an "Enterra Takeover Proposal" means (i) any proposal or offer,
other than a proposal or offer by Weatherford or any of its affiliates,
for a merger or other business combination involving Enterra, (ii) any
proposal or offer, other than a proposal or offer by Weatherford or any of
its affiliates, to acquire from Enterra or any of its affiliates in any
manner, directly or indirectly, more than 30% of the voting stock of
Enterra or any Enterra Subsidiary or a material amount of the assets of
Enterra and the Enterra Subsidiaries, taken as a whole, or (iii) any
proposal or offer, other than a proposal or offer by Weatherford or any of
its affiliates, to acquire from the stockholders of Enterra by tender
offer, exchange offer or otherwise more than 30% of the outstanding voting
stock of Enterra.
(b) Neither the Board of Directors of Enterra nor any committee
thereof shall (i) withdraw or modify, or propose to withdraw or modify, in
a manner adverse to Weatherford the approval or recommendation by the
Board of Directors of Enterra or any such committee of this Agreement or
the Merger or take any action having such effect or (ii) approve or
recommend, or propose to approve or recommend, any Enterra Takeover
Proposal. Notwithstanding the foregoing, if the Board of Directors of
Enterra receives an Enterra Takeover Proposal that, in the exercise of its
fiduciary obligations (as determined in good faith after consultation with
outside counsel), it determines to be an Enterra Superior Proposal (as
hereinafter defined), the Board of Directors of Enterra may withdraw or
modify its approval or recommendation of this Agreement or the Merger and
may (subject to the following sentence) terminate this Agreement, in each
case at any time after the fifth business day following Weatherford's
receipt of written notice (an "Enterra Notice of Superior Proposal")
advising Weatherford that the Board of Directors of Enterra has received
an Enterra Takeover Proposal that it has determined to be an Enterra
Superior Proposal, specifying the principal terms and conditions of such
Enterra Superior Proposal and identifying the person making such Enterra
Superior Proposal. Enterra may terminate this Agreement pursuant to the
preceding sentence only if the stockholders of Enterra shall not yet have
voted upon the Merger and Enterra shall have paid to Weatherford the
Termination Fee. Nothing contained herein shall prohibit Enterra from
taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) of the Exchange Act
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provided that Enterra does not withdraw or modify its position with
respect to the Merger or take any action having such effect or approve or
recommend an Enterra Takeover Proposal. For purposes of this Agreement,
an "Enterra Superior Proposal" means any bona fide Enterra Takeover
Proposal to merge with or acquire, directly or indirectly, all of the
voting stock then outstanding or all or substantially all of the assets of
Enterra, and otherwise on terms that the Board of Directors of Enterra
determines in its good faith reasonable judgment (based on the written
advice of a financial advisor of nationally recognized reputation) to be
more favorable to Enterra's stockholders than the Merger.
(c) If the Board of Directors of Enterra or any committee thereof
shall (i) withdraw or modify, or propose to withdraw or modify, in a
manner adverse to Weatherford the approval or recommendation by the Board
of Directors of Enterra or any such committee of this Agreement or the
Merger or take any action having such effect or (ii) approve or recommend,
or propose to approve or recommend, any Enterra Takeover Proposal,
Weatherford may terminate this Agreement.
(d) In addition to the obligations of Enterra set forth in Section
7.2(b), Enterra shall promptly advise Weatherford orally and in writing of
any negotiations or discussions, entered into in reliance on the proviso
to the first sentence of Section 7.2(a).
7.3 Fee and Expense Reimbursements.
(a) Weatherford agrees to pay Enterra a fee in immediately available
funds of $20,000,000 (the "Termination Fee") promptly upon the termination
of this Agreement if this Agreement is terminated by Enterra or
Weatherford pursuant to Section 8.1(j). Further, Weatherford agrees to pay
Enterra the Termination Fee if:
(i) this Agreement is terminated for any reason other than a
material breach by Enterra and, after the date hereof and before such
termination, a Weatherford Takeover Proposal shall have been made and
the stockholders of Weatherford shall not have approved the Merger;
or
(ii) Weatherford shall have terminated this Agreement pursuant
to Section 8.1(c) or Section 8.1(h) and, within six months after such
termination, Weatherford shall have entered into a definitive
agreement with any person (other than Enterra or any of its
affiliates) with respect to a Weatherford Takeover Proposal than is
more favorable to Weatherford's stockholders that the Merger.
The Termination Fee shall be payable promptly upon termination of this
Agreement if any of the events described in Section 7.3(a)(i) shall have
occurred prior to termination. The Termination Fee payable pursuant to
Section 7.3(a)(ii) shall be payable promptly upon the first occurrence of
the event following termination of this Agreement.
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(b) Enterra agrees to pay Weatherford the Termination Fee promptly
upon the termination of this Agreement if this Agreement is terminated by
Enterra or Weatherford pursuant to Section 8.1(k). Further, Enterra agrees
to pay Weatherford the Termination Fee if:
(i) this Agreement is terminated for any reason other than a
material breach by Weatherford and, after the date hereof and before
such termination, an Enterra Takeover Proposal shall have been made
and the stockholders of Enterra shall not have approved the Merger;
or
(ii) Enterra shall have terminated this Agreement pursuant to
Section 8.1(d) or Section 8.1(i) and, within six months after such
termination, Enterra shall have entered into a definitive agreement
with any person (other than Weatherford or any of its affiliates)
with respect to an Enterra Takeover Proposal that is more favorable
to Enterra's stockholders than the Merger.
The Termination Fee shall be payable promptly upon termination of this
Agreement if any of the events described in Section 7.3(b)(i) shall have
occurred prior to termination. The Termination Fee payable pursuant to
Section 7.3(b) (ii) shall be payable promptly upon the first occurrence of
the event following termination of this Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 Termination. This Agreement may be terminated and the Merger and the
other transactions contemplated herein may be abandoned at any time prior to
the Effective Time, whether prior to or after approval by the stockholders of
Weatherford or the stockholders of Enterra:
(a) by mutual consent of Weatherford and Enterra;
(b) by either Weatherford or Enterra if the Merger has not been
effected on or before December 31, 1995;
(c) by Weatherford if the condition set forth in Section 6.2(g) is
not satisfied;
(d) by Enterra if the condition set forth in Section 6.3(g) is not
satisfied;
(e) by Weatherford if a final, unappealable order shall have been
entered to restrain, enjoin or otherwise prevent, or awarding substantial
damages in connection with, a consummation of this Agreement or the
transactions contemplated in connection herewith, or there is pending by
any governmental body any suit challenging or seeking to restrain or
prohibit the consummation of the Merger or any of the other transactions
contemplated by
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this Agreement or seeking to obtain from Enterra or any of the Enterra
Subsidiaries any damages that are material in relation to Enterra and the
Enterra Subsidiaries, taken as a whole;
(f) by Enterra if a final, unappealable order shall have been
entered to restrain, enjoin or otherwise prevent, or awarding substantial
damages in connection with, a consummation of this Agreement or the
transactions contemplated in connection herewith, or there is pending by
any governmental body any suit challenging or seeking to restrain or
prohibit the consummation of the Merger or any of the other transactions
contemplated by this Agreement or seeking to obtain from Weatherford or
any of the Weatherford Subsidiaries any damages that are material in
relation to Weatherford and the Weatherford Subsidiaries, taken as a
whole;
(g) by either Weatherford or Enterra if the required approval of the
stockholders of Enterra or the stockholders of Weatherford for the
adoption and approval of the Merger and this Agreement is not received at
their respective stockholders' meetings;
(h) by Weatherford if (i) since the date of this Agreement there has
been a Material Adverse Change in Enterra or (ii) there has been a breach
of any representation or warranty set forth in subsection (b), (c), (e) or
(g) of Section 2.3, or there has been a breach of any other subsection of
Section 2.3 in any material respect (except to the extent qualified by
materiality, in which case such representations and warranties shall not
have been breached in any respect), by Enterra or Enterra fails to perform
in any material respect any of its covenants, agreements or obligations
under this Agreement;
(i) by Enterra if (i) since the date of this Agreement there has
been a Material Adverse Change in Weatherford or (ii) there has been a
breach of any representation or warranty set forth in subsection (b), (c),
(e) or (g) of Section 2.2, or there has been a breach of any other
subsection of Section 2.2 in any material respect (except to the extent
qualified by materiality, in which case such representations and
warranties shall not have been breached in any respect), by Weatherford or
Weatherford fails to perform in any material respect any of its covenants,
agreements or obligations under this Agreement;
(j) by Weatherford or Enterra to the extent permitted under Section
7.1; or
(k) by Weatherford or Enterra to the extent permitted under Section
7.2.
8.2 Effect of Termination. In the event of any termination of this
Agreement pursuant to Section 8.1, Weatherford and Enterra shall have no
obligation or liability to each other except that (i) the provisions of
Sections 5.8 and 7.3, this Article VIII and the obligations set forth in the
Confidentiality Agreement dated May 12, 1995, between Weatherford and Enterra
(the "Confidentiality Agreement") shall survive any such
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<PAGE> 52
termination, and (ii) in the case of termination pursuant to Section 8.1(h) or
8.1(i) only, nothing herein and no termination pursuant to such sections will
relieve any party from liability for any breach of this Agreement.
8.3 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;
provided that after this Agreement has been approved and adopted by the
stockholders of Weatherford and the stockholders of Enterra, this Agreement may
be amended only as may be permitted by applicable provisions of the DGCL. 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.
8.4 Nonsurvival of Representations, Warranties, Covenants and
Agreements. None of the representations, warranties, covenants or agreements in
this Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time, except for the terms of Article I, Sections 5.4,
6.7, 5.8, 5.9, 5.10, 5.12, 5.13, 5.18, 5.19(b) and 5.22, this Article VIII and
the agreements of the "affiliates" of Enterra and Weatherford delivered
pursuant to Section 6.2(d) and Section 6.3(d), respectively.
8.5 Public Statements. Enterra 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, and shall not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by law or applicable stock exchange
policy.
8.6 Binding Effect; 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. This Agreement shall
not be assignable by the parties hereto.
8.7 Notices. All notices, requests, demands, claims and other
communications that 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
(a) delivered in person or by courier, (b) sent by facsimile transmission,
answer back requested, or (c) mailed, certified first class mail, postage
prepaid, return receipt requested, to the parties hereto at the following
addresses:
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<PAGE> 53
if to Enterra: Enterra Corporation
13100 Northwest Freeway, Sixth Floor
Houston, Texas 77040
Attention: D. Dale Wood, Chairman of the
Board, President and Chief Executive
Officer
Fax: (713) 462-7816
with a required copy to: Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, Pennsylvania 19103-6993
Attention: David R. King
Fax: (215) 963-5299
if to Weatherford: Weatherford International Incorporated
1360 Post Oak Boulevard, Suite 1000
Houston, Texas 77056-3098
Attention: Philip Burguieres, Chairman of
the Board, President and Chief Executive
Officer
Fax: (713) 439-1152
with a required copy to: Fulbright & Jaworski L.L.P.
1301 McKinney, Suite 5100
Houston, Texas 77010-3095
Attention: Charles L. Strauss
Fax: (713) 651-5246
or to such other address or facsimile number as any party shall have furnished
to the other by notice given in accordance with this Section 8.7. Such notices
shall be effective, (i) if delivered in person or by courier, upon actual
receipt by the intended recipient, (ii) if sent by 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.
8.8 Governing Law; Jurisdiction. THIS AGREEMENT, THE SUBJECT MATTER
HEREOF AND ALL OF THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING, WITHOUT LIMITATION, VALIDITY, INTERPRETATION AND EFFECT,
BY THE LAWS OF THE STATE OF DELAWARE. EACH PARTY HERETO IRREVOCABLY SUBMITS TO
THE EXCLUSIVE JURISDICTION OF ANY COURT OF COMPETENT JURISDICTION IN THE STATE
OF DELAWARE AND THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE,
AND ANY OTHER COURT OF THE STATE OF DELAWARE AND THE UNITED STATES WITH
JURISDICTION TO HEAR APPEALS FROM ANY SUCH COURT, FOR THE PURPOSES OF ANY SUIT,
ACTION OR OTHER PROCEEDING OF ANY TYPE WHATSOEVER ARISING OUT OF THIS AGREEMENT
OR THE SUBJECT MATTER HEREOF OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY
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<PAGE> 54
BROUGHT BY ANY PARTY, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, HEREBY
WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR
OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT SUCH PARTY IS
NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT THE
SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE
OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT, OR THE
SUBJECT MATTER HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT. EACH PARTY
HERETO FURTHER AGREES NOT TO BRING OR PURSUE ANY SUCH SUIT, ACTION OF OTHER
PROCEEDING IN ANY OTHER COURTS OR JURISDICTION.
8.9 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, provisions, covenants and
restrictions of this Agreement shall continue in full force and effect and
shall in no way be affected, impaired or invalidated.
8.10 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.
8.11 Headings. The Section headings herein are for convenience only and
shall not affect the construction hereof.
8.12 Entire Agreement; Third Party Beneficiaries. This Agreement, the
exhibits attached hereto, the Weatherford Disclosure Letter (and Schedule
2.2(n) thereto), the Enterra Disclosure Letter (and the exhibits attached
thereto) and the Confidentiality Agreement constitute the entire agreement and
supersedes 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 documents delivered in connection with this
Agreement confers upon any person not a party hereto any rights or remedies
hereunder except as provided in Sections 5.9, 5.12, 5.13, 5.18 and 5.19(b)
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<PAGE> 55
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
WEATHERFORD INTERNATIONAL INCORPORATED
By: /s/ Philip Burguieres
-------------------------------------------
Philip Burguieres
Chairman of the Board, President and
Chief Executive Officer
ENTERRA CORPORATION
By: /s/ D. Dale Wood
-------------------------------------------
D. Dale Wood
Chairman of the Board, President and
Chief Executive Officer
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<PAGE> 1
(Amended as of August 28, 1995)
AGREEMENT
This Agreement, dated as of June 23, 1995 (this "Agreement"), among
WEATHERFORD INTERNATIONAL INCORPORATED, a Delaware corporation ("Weatherford")
and AMERICAN GAS & OIL INVESTORS, LIMITED PARTNERSHIP, a New York limited
partnership, AMGO II, LIMITED PARTNERSHIP, a New York limited partnership, AMGO
III, LIMITED PARTNERSHIP, a New York limited partnership, FIRST RESERVE SECURED
ENERGY ASSETS FUND, LIMITED PARTNERSHIP, a Delaware limited partnership, FIRST
RESERVE FUND V, LIMITED PARTNERSHIP, a Delaware limited partnership, FIRST
RESERVE FUND V-2, LIMITED PARTNERSHIP, a Delaware limited partnership and FIRST
RESERVE FUND VI, LIMITED PARTNERSHIP, a Delaware limited partnership (each a
"First Reserve Fund" and together the "First Reserve Funds") and First Reserve
Corporation, a Delaware corporation - ("FRC"). (The First Reserve Funds and
FRC, and all other persons or entities now or hereafter directly or indirectly
controlling, controlled by or under common control with any of the First
Reserve Funds or FRC, are referred to collectively as the "FRC Group.")
WITNESSETH:
WHEREAS, the First Reserve Funds currently own in the aggregate
approximately 11,212,349 shares of common stock, par value $1.00 per share
("Enterra Common Stock"), of Enterra Corporation, a Delaware corporation
("Enterra");
WHEREAS, the shares of Enterra Common Stock owned by the First Reserve
Funds currently are subject to the terms and conditions of that certain
Agreement dated as of May 2, 1994 among Enterra, the First Reserve Funds and
FRC (the "Enterra Standstill Agreement");
WHEREAS, pursuant to an agreement and plan of merger (the "Merger
Agreement") dated June 23, 1995 between Enterra and Weatherford, each share of
outstanding Enterra Common Stock shall, at the Effective Time (as defined in
the Merger Agreement), be converted, pursuant to a merger (the "Merger") of
Enterra with and into Weatherford, into 0.845 of a share (which number reflects
a one for two reverse stock split to be effected at the closing) of common
stock, par value $.10 per share, of Weatherford ("Weatherford Common Stock");
WHEREAS, pursuant to the terms of the Merger, the First Reserve Funds
will own, as of the Effective Time, in the aggregate 9,474,431 shares (which
number reflects a one for two)
<PAGE> 2
reverse stock split to be effected at the closing) of Weatherford Common Stock;
WHEREAS, Weatherford and the FRC Group are entering into this Agreement
to establish certain arrangements with respect to the relationships between
them after the Effective Time, which arrangements are substantially similar to
the arrangements provided for in the Enterra Standstill Agreement; and
WHEREAS, Weatherford and the FRC Group believe that these arrangements
will be in the best interests of Weatherford and all of its shareholders from
and after the Effective Time.
NOW, THEREFORE, intending to be legally bound as of the Effective Time,
the parties hereto agree as follows:
Section 1. Certain Definitions. As used in this Agreement, the
following terms shall have the following meanings:
1.1. "Weatherford Voting Securities" shall mean collectively
Weatherford Common Stock, Weatherford preferred stock, par value $1.00 per
share, if entitled to Vote generally for the election of directors or
otherwise, any other class or series of Weatherford securities that is entitled
to vote generally for the election of directors or otherwise, and any other
securities, warrants or options or rights of any nature (whether or not issued
by Weatherford) that are convertible into, exchangeable for, or exercisable for
the purchase of, or otherwise give the holder thereof any rights in respect of
Weatherford Common Stock, Weatherford preferred stock that is entitled to vote
generally for the election of directors or otherwise, or any other class or
series of Weatherford securities that is entitled to vote generally for the
election of directors or otherwise.
1.2. "Termination Date" shall mean August 12, 2004.
1.3. The "Combined Voting Power" at any measurement date shall mean the
total number of votes which could have been cast in an election of directors of
Weatherford had a meeting of the stockholders of Weatherford been duly held
based upon a record date as of the measurement date if all Weatherford Voting
Securities then outstanding and entitled to vote at such meeting were present
and voted to the fullest extent possible at such meeting.
1.4. "13D/G Group" shall mean two or more persons acting together for
the purpose of acquiring, holding, voting or disposing of Weatherford Voting
Securities, which persons would be required under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and regulations
promulgated
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<PAGE> 3
thereunder to file a statement on Schedule 13D or 13G with the Securities and
Exchange Commission (the "SEC") as a "person" within the meaning of Section
13(d)(3) of the Exchange Act if such persons beneficially owned sufficient
securities to require such a filing under the Exchange Act.
1.5. The concept of "beneficial ownership" and the terms "person" and
"group" shall have the meanings defined or adopted from time to time pursuant
to Regulation 13D-G adopted by the SEC under the Exchange Act.
Section 2. Representations and Warranties of Weatherford. Weatherford
represents and warrants that:
(a) Weatherford is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, with corporate
power to own its properties and to conduct its business as now conducted.
(b) As of June 21, 1995, the authorized capital stock of
Weatherford consists of (i) 80,000,000 shares of Weatherford Common Stock, of
which 54,276,632 shares were validly issued and outstanding, fully paid and
nonassessable and (ii) 1,000,000 shares of preferred stock, par value $1.00 per
share, of which no shares were issued and outstanding.
(c) Weatherford has full legal right, power and authority to enter
into this Agreement and perform its obligations hereunder. This Agreement has
been duly authorized, executed and delivered by Weatherford and constitutes a
legal, valid and binding agreement of Weatherford enforceable against
Weatherford in accordance with the terms hereof.
(d) Neither the execution and delivery of this Agreement nor the
performance of its obligations hereunder will conflict with or result in a
breach of or constitute a default under any law, rule, regulation, judgment,
order or decree of any court, arbitrator or governmental agency or
instrumentality or of its corporate charter or bylaws or of any agreement or
instrument to which it is a party or subject or by which its property is bound
or affected.
Section 3. Representations and Warranties of the FRC Group. Each of the
First Reserve Funds and FRC, jointly and severally, represents and warrants to
Weatherford as follows:
(a) Each First Reserve Fund is a validly existing partnership
under the laws of the jurisdiction of its organization, FRC is a validly
existing corporation under the laws of the jurisdiction of its incorporation,
and each First Reserve Fund and FRC has the full legal right, power and
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<PAGE> 4
authority to enter into this Agreement and perform their respective obligations
hereunder.
(b) This Agreement has been duly authorized, executed and
delivered by each First Reserve Fund and by FRC, and this Agreement constitutes
the legal, valid and binding agreement of the FRC Group, enforceable against
the members of the FRC Group in accordance with the terms hereof.
(c) Neither the execution and delivery of this Agreement nor the
performance of their obligations hereunder will conflict with or result in a
breach of or constitute a default under any law, rule, regulation, judgment,
order or decree of any court, arbitrator or governmental agency or
instrumentality or of any agreement or instrument to which any First Reserve
Fund or FRC is bound or affected, or of the partnership agreements of any of
the First Reserve Funds, or of the charter and bylaws of FRC.
(d) As of the date of this Agreement and as of the Effective Time,
(i) each First Reserve Fund owns and will own of record the shares of Enterra
Common stock set forth opposite its respective name on the signature page of
this Agreement, (ii) there are and will be no beneficial owners of such shares
of Enterra Common Stock other than the First Reserve Funds and FRC, (iii) such
shares of Enterra Common Stock represent and will represent all of the shares
of Enterra Common Stock owned of record or beneficially by the First Reserve
Funds and FRC, and (iv) such shares of Enterra Common Stock are and will be
owned of record and beneficially by the First Reserve Funds and FRC, free and
clear of all pledges, liens, claims, security interests and other charges or
defects in title of any nature whatsoever. No shares of Weatherford Common
Stock are currently, and as of the Effective Time no shares of Weatherford
Common Stock will be, beneficially owned by any member of the FRC Group, except
for those shares of Weatherford Common stock issuable in the Merger upon
conversion of such shares of Enterra Common Stock.
Section 4. Covenants with Respect to Weatherford Voting Securities and
Other Matters. Prior to the Termination Date and subject to the further
provisions hereof:
4.1. Acquisition of Weatherford Voting Securities. No member of the
FRC Group shall, directly or indirectly, acquire, offer to acquire, agree to
acquire, become the beneficial owner of or obtain any rights in respect of any
Weatherford Voting Securities, by purchase or otherwise, or take any action in
furtherance thereof, if the effect of such acquisition, agreement or other
action would be (either immediately or upon consummation of any such
acquisition, agreement or other action, or expiration of any period of time
provided in any such acquisition, agreement or other action) (i) to increase
the aggregate beneficial ownership of Weatherford Voting Securities by the FRC
Group to
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<PAGE> 5
such number of Weatherford Voting Securities that represents or possesses 20%
or more of the Combined Voting Power of Weatherford Voting securities, or (ii)
to increase the aggregate beneficial ownership of any class or series of
Weatherford Voting Securities by the FRC Group to greater than 20% of such
class or series. Notwithstanding the foregoing maximum percentage limitation,
(A) no member of the FRC Group shall be obligated to dispose of any Weatherford
Voting Securities beneficially owned in violation of such maximum percentage
limitations if, and solely to the extent that, the aggregate beneficial
ownership of the FRC Group is or will be increased solely as a result of a
recapitalization of Weatherford, a repurchase of any Weatherford Voting
Securities by Weatherford or any of its subsidiaries, or any other action taken
by Weatherford or its affiliates (except the FRC Group), if such
recapitalization, repurchase or other action was approved by a majority of the
directors then in office who were not designated by the FRC Group, and (B) if
any other person or group beneficially owns or acquires beneficial ownership of
Weatherford Voting Securities representing greater than 20% of the Combined
Voting Power, the applicable maximum percentage shall be increased to such
greater percentage. For purposes of calculating the maximum percentage
limitations, all Weatherford Voting Securities that are the subject of an
agreement, arrangement or understanding pursuant to which the FRC Group or any
member thereof has the right to obtain beneficial ownership of such
securities in the future shall also be deemed to be beneficially owned by the
FRC Group or the applicable member thereof.
4.2. Distribution of Weatherford Voting Securities. Each member of the
FRC Group covenants that it shall not, directly or indirectly, sell, transfer
any beneficial interest in, pledge, hypothecate or otherwise dispose of any
Weatherford Voting Security, except by conversion, exchange or exercise of such
Weatherford Voting Securities pursuant to their terms in a manner not otherwise
in violation of Section 4.1 hereof, in response to certain tender or exchange
offers as permitted by Section 4.6(b) hereof, or pursuant to:
(i) a bona fide pledge of or the granting of a security interest
or any other lien or encumbrance in such Weatherford Voting Securities
to a lender that is not a member of the FRC Group to secure a bona fide
loan for money borrowed made to one or more members of the FRC Group
with full recourse to the borrower or borrowers, the foreclosure of such
pledge or security interest or any other lien or encumbrance that may be
placed involuntarily upon any Weatherford Voting Securities, or the
subsequent sale or other disposition of such Weatherford Voting
Securities by such lender or its agent;
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<PAGE> 6
(ii) a transfer, assignment, sale or disposition of such
Weatherford Voting Securities within the FRC Group to a member of the
FRC Group that has signed this Agreement;
(iii) a distribution of Weatherford Voting Securities to any
partner of a First Reserve Fund; provided that any distributee that is a
member of the FRC Group has signed this Agreement; and provided, further
that any arrangements coordinated or initiated by FRC to assist limited
partners in the sale of Weatherford Voting Securities distributed to
them must comply with the provisions of this section 4.2;
(iv) sale in a public offering registered under the Act pursuant
to the registration rights provided in Section 6 hereof;
(v) sales in broker's transactions, effected on the New York Stock
Exchange or any other securities exchange on which the Weatherford
Voting Securities are listed or in any other public trading market in
which the Weatherford Voting Securities are then being traded, in
compliance with the provisions of Rule 144 under the Act, ("Rule 144"),
including the volume restrictions set forth in such rule (excluding for
purposes of this clause (v) sales pursuant to the provisions of
paragraph (k) of Rule 144, which sales are included under (vi) below);
(vi) sales pursuant to paragraph (k) of Rule 144;
(vii) other negotiated sales of Weatherford Voting Securities; or
(viii) as provided in Section 4.6(b).
Notwithstanding the previous sentence, (A) in effecting any sale, transfer of
any beneficial interest in or other disposition of Weatherford Voting
Securities pursuant to clause (iv) above, the members of the FRC Group
selling, transferring or disposing such Weatherford Voting Securities shall use
their reasonable best efforts to refrain from selling, transferring or
disposing of such number of Weatherford Voting Securities as represent 3% or
more of the Combined Voting Power to any one person or group, (B) no single
sale, transfer of beneficial interest in or other disposition of any
Weatherford Voting Securities may be made by any member of the FRC Group, and
no related group of such sales, transfers or dispositions shall be made by the
FRC Group, pursuant to clauses (iii), (vi) and (vii) above if such number of
Weatherford Voting Securities as represent 5% or more of the
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<PAGE> 7
Combined Voting Power are being sold, transferred or disposed of to any one
person or group; and (C) no sale, transfer of any beneficial interest in or
other disposition of Weatherford Voting Securities shall be made pursuant to
clauses (iii), (vi) and (vii) above to any one person or group who, upon
consummation of such sale, transfer or disposition of Weatherford Voting
Securities would, directly or indirectly, have beneficial ownership of or the
right to acquire beneficial ownership of such number of Weatherford Voting
Securities as represent 10% or more of the Combined Voting Power.
4.3. Voting Trusts. No member of the FRC Group shall deposit any
Weatherford Voting Securities in a voting trust or subject any Weatherford
Voting Securities to any arrangement or agreement with respect to the voting of
such securities unless all the parties to such voting trust, arrangement or
agreement are members of the FRC Group who have executed this Agreement.
4.4. Proxy Solicitations, etc. No members of the FRC Group shall
solicit proxies, assist any other person in the solicitation of proxies, become
a "participant" in a "solicitation," or assist any "participant" in a
"solicitation" (as such terns are defined in Rule 14a-1 of Regulation 14A under
the Exchange Act) in opposition to the recommendation of a majority of the
directors of Weatherford then in office who were not designated by the FRC
Group, or recommend or request that any other person take any such actions, or
submit any proposal for the vote of stockholders of Weatherford.
4.5. Stock Pooling. No member of the FRC Group shall join a
partnership, limited partnership, syndicate or other group, or otherwise act in
concert with any other person, for the purpose of acquiring, holding, voting or
disposing of any Weatherford Voting Securities, or otherwise become a member of
a 13D/G Group other than the FRC Group itself.
4.6. Takeover Offers.
(a) Each member of the FRC Group covenants and agrees not to (i)
publicly suggest or announce its willingness or desire to engage in a
transaction or group of transactions or have another person engage in a
transaction or group of transactions that would result in a change of control
of Weatherford, (ii) present to Weatherford or to any third party any proposal
that can reasonably be expected to result in a change of control of
Weatherford, or (iii) initiate, induce or attempt to induce or give
encouragement to any other person to initiate any proposal that can reasonably
be expected to result in a change of control of Weatherford.
(b) Subject to compliance with Section 4.6(a) above, on and after
the eleventh business day after commencement
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<PAGE> 8
of a tender or exchange offer made by a person who is not a member of the FRC
Group for outstanding Weatherford Voting Securities (a "Qualifying Offer"),
any member of the FRC Group may tender or exchange any Weatherford Voting
Securities beneficially owned by it pursuant to such Qualifying Offer if the
Qualifying Offer shall have been approved, or not opposed, by the board of
directors of Weatherford. If a Qualifying Offer is opposed by the board of
directors of Weatherford, then, from and after the eleventh business day after
commencement of such Qualifying Offer, any member of the FRC Group may tender
or exchange shares of Weatherford Voting Securities pursuant to such Qualifying
Offer only if (i) no tender or exchange of, or indication of an intention to
tender or exchange, Weatherford Voting Securities is made by any member of the
FRC Group earlier than 24 hours prior to the expiration of any time after which
Weatherford Voting Securities tendered may be treated less favorably than
Weatherford Voting Securities tendered or exchanged prior thereto, and (ii) a
binding agreement is reached with the bidder or offeror prior to any tender or
exchange specifying that only such number of Weatherford Voting Securities
submitted for tender or exchange shall be accepted by the bidder or offeror as
are equal to (A) the percentage of such Weatherford Voting Securities not
beneficially owned by the FRC Group that have been tendered or exchanged,
multiplied by (B) the total number of such Weatherford Voting Securities
beneficially owned by the member of the FRC Group.
4.7. Pledge of Covered Securities. Each member of the FRC Group shall
promptly give notice to Weatherford of any margin call, demand for additional
security or collateral, or threat to enforce any pledge or security interest in
or with respect to any Weatherford Voting Security owned of record or
beneficially by it.
Section 5. Voting of Weatherford Voting Securities and Other Related
Matters.
(a) Each member of the FRC Group that is a holder of record of
Weatherford Voting Securities shall be present, and each member of the FRC
Group that is a beneficial owner of Weatherford Voting Securities shall cause
the holder of record to be present, in person or by proxy, at all meetings of
stockholders of Weatherford so that all Weatherford Voting Securities owned of
record or beneficially by the FRC Group may be counted for the purpose of
determining the presence of a quorum at such meetings.
(b) Upon the Effective Time, the number of directors of
Weatherford shall be established as 10 directors, and two individuals
designated by the FRC Group shall be elected as directors of Weatherford,
subject to the provisions of this Agreement. The parties hereto agree that the
number of directors
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<PAGE> 9
of Weatherford may not be increased above 10 without the approval of a (i) a
majority of the directors and (ii) all of the directors designated by the FRC
Group. From and after the Effective Time, the FRC Group and the directors
designated by the FRC Group shall take no action to reduce the number of
directors of Weatherford below 10 directors.
(c) For purposes of this Agreement, directors "designated by the
FRC Group" shall include directors designated by the FRC Group as set forth in
Section 5.22 of the Merger Agreement or designated by certain members of the
FRC Group as anticipated by this Section 5, and any other directors of
Weatherford affiliated or associated with any member of the FRC Group.
(d) From and after the Effective Time, as long as the FRC Group
beneficially owns at least 15% of the Combined Voting Power of all Weatherford
Voting Securities, two of (i) First Reserve Secured Energy Assets Fund, Limited
Partnership, (ii) First Reserve Fund V, Limited Partnership, (iii) First
Reserve Fund V-2, Limited Partnership and (iv) First Reserve Fund VI, Limited
Partnership (the "Designating First Reserve Funds") as shall be selected by FRC
shall have the right to designate one director of Weatherford, for a total of
two directors of Weatherford (it being understood that the FRC Group shall not
have more than two designees on the board of directors of Weatherford at any
time); provided, however, that:
(i) At any time when the FRC Group beneficially owns less than
15% but at least 10% of the Combined Voting Power of all Weatherford
Voting Securities, one of the Designating First Reserve Funds, to be
selected by FRC, shall lose its right to designate a director of
Weatherford, and such Designating First Reserve Fund shall cause its
designee on the board of directors of Weatherford to resign forthwith
such that only one designee of the FRC Group remains on the board of
directors of Weatherford; and
(ii) At any time when the FRC Group beneficially owns less than
10% of the Combined Voting Power of all Weatherford Voting Securities,
none of the FRC Group shall have the right to designate any directors of
Weatherford, and the Designating First Reserve Fund whose designee
remains on Weatherford's board of directors shall cause its designee to
resign forthwith such that no designee of the FRC Group remains on the
board of directors of Weatherford, it being understood that at any time
that the FRC Group beneficially owns less than 10% of the Combined
Voting Power of Weatherford Voting Securities no member of the FRC
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Group shall seek representation on the board of directors of Weatherford.
(e) Weatherford shall take all necessary or appropriate action to
(i) assist in the nomination for election as directors of those persons
designated by the Designating First Reserve Funds as are entitled to election
to the board of directors of Weatherford pursuant to the provisions of this
Section 5, (ii) have at least one of the designees of the FRC Group serve on
each committee of the board of directors of Weatherford as long as the
Designating First Reserve Funds have designated at least two directors pursuant
to the provisions of this Section 5 and (iii) where two designees of the FRC
Group are serving as directors of Weatherford, have each such designee serve in
different classes of directors. The Designating First Reserve Funds shall
cause their designees on the board of directors of Weatherford to take all
necessary or appropriate action to assist in the nomination for election as
directors of such other nominees as may be selected by a majority of the
directors of Weatherford then in office who were not designated by the
Designating First Reserve Funds, and the FRC Group shall vote all Weatherford
Voting Securities owned of record by any member of the FRC Group, and shall
cause all Weatherford Voting Securities owned beneficially by any member of the
FRC Group to be voted, for the election of such other nominees as well as for
the election of all nominees of the Designating First Reserve Funds designated
by them pursuant to this Section 5.
(f) At any time that one of the Designating First Reserve Funds
does not have a representative serving as a director of Weatherford, an
individual designated by such Designating First Reserve Fund shall have the
right to attend all meetings of the board of directors in a nonvoting observer
capacity, to receive notice of such meetings and to receive the information
provided by Weatherford to its board of directors; provided, however, that
Weatherford may require as a condition precedent to any of such person's rights
under this section that such person agree to hold in confidence and trust and
to act in a fiduciary manner with respect to all information received in
connection with board meetings or otherwise; and, provided further, that
Weatherford reserves the right not to provide information to such person, and
to exclude such person from any meeting or portion thereof, if delivery of such
information or attendance at such meeting would adversely affect the attorney-
client privilege between Weatherford and its counsel. The observer right
provided in this Section 5(f) may be exercised (i) only if (and then only so
long as) the Designating First Reserve Fund has been advised in writing by
counsel to such fund that exercise of this right is reasonably necessary for
such Designating First Reserve Fund to qualify through its investment in
Weatherford as a "venture capital operating company" as such term is defined in
applicable U.S. Department of Labor
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regulations. Notwithstanding the above, the FRC Group agrees to use its
reasonable best efforts to cause the Designating First Reserve Funds to qualify
as a "venture capital operating company" under these regulations without
exercise of its rights under this Section.
(g) Except as set forth in Section 5(e) above in respect of the
election of directors of Weatherford, each member of the FRC Group shall vote
all Weatherford Voting Securities owned of record by any member of the FRC
Group, and shall cause all Weatherford Voting Securities owned beneficially by
any member of the FRC Group to be voted, at the sole election of such members
of the FRC Group, either (i) in accordance with the recommendations of a
majority of the board of directors, or (ii) in the same proportions for,
against and abstaining in respect of any matter as the holders of record of
Weatherford Voting Securities other than those beneficially owned by the FRC
Group that are entitled to vote on such matter vote their Weatherford Voting
Securities.
6. Registration Rights. Weatherford covenants and agrees as follows:
6.1. Definitions. For purposes of this Section 6:
(a) The term "register," "registered" and "registration" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Act.
(b) The term "Registrable Securities" means (i) the Weatherford
Common Stock issuable to the First Reserve Funds as of the Effective Time in
connection with the Merger, and (ii) any Weatherford Common Stock issued as (or
issuable upon the conversion, exchange or exercise of any warrant, right or
other security which is issued as) a dividend or other distribution with
respect to such Weatherford Common Stock; provided, however, that Weatherford
Common Stock sold, transferred or disposed of in accordance with Section 4.2 of
the Agreement to a person to whom registration rights may not be assigned
pursuant to Section 6.13 of the Agreement shall no longer thereafter be
considered Registrable Securities.
(c) The term "Holder" means any member of the FRC Group that
(i) has signed this Agreement and (ii) owns of record Registrable Securities.
(d) The term "Form S-3" means such form under the Act as in effect
on the date hereof or any registration form under the Act subsequently adopted
by the SEC which permits inclusion or incorporation of substantially all the
required information regarding Weatherford by reference to other documents
filed by Weatherford with the SEC.
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6.2. Request for Registration.
(a) If, at any time commencing three months after the Effective
Time of the Merger, Weatherford shall receive a written request from the
Holders of at least 25% of the Registrable Securities then outstanding that
Weatherford file a registration statement under the Act covering the
registration of at least 25% of the Registrable Securities then outstanding (or
a lesser percent if the anticipated aggregate offering price, net of
underwriting discounts and commissions, would exceed $25,000,000), then
Weatherford shall, within 10 days after the receipt thereof, give written
notice of such request to all Holders, and shall, subject to the limitations of
Section 6.2(b), effect as soon as practicable, and in any event within 45 days
after the receipt of such request, the registration under the Act of all
Registrable Securities which the Holders request to be registered within 15
days after the mailing of such notice by Weatherford in accordance with Section
10.3. It is understood that all calculations in this Agreement in respect of a
specified percentage of Registrable Securities then outstanding are to be made
only in respect of the total number of such Registrable Securities, as defined
in Section 6.1(b) above, then outstanding, and not in respect of the total
number of shares of Weatherford Common Stock then outstanding.
(b) If the Holders initiating the registration request hereunder
("Initiating Holders") intend to distribute the Registrable Securities covered
by their request by means of an underwriting, they shall so advise Weatherford
as a part of their request made pursuant to this Section 6.2 and Weatherford
shall include such information in the written notice referred to in subsection
6.2(a). In such event, the right of any Holder to include Registrable
Securities in such registration shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute Registrable Securities through such
underwriting shall (together with Weatherford as provided in subsection 6.4(e))
enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by Weatherford and reasonably
acceptable to a majority in interest of the Initiating Holders. Weatherford at
its sole discretion may offer a right to participate in any registration
statement filed pursuant to this Section 6.2 to other stockholders of
Weatherford Common Stock, and may itself participate in any registration
statement filed pursuant to this Section 6.2 hereof. However, notwithstanding
any other provision of this Section 6.2, if the offering is an underwritten
offering and the lead managing underwriter advises the Initiating Holders in
writing that marketing factors require a limitation of the number of shares of
Weatherford Common Stock to be underwritten, then the total number of shares of
Common Stock to be
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<PAGE> 13
underwritten shall be reduced, with such reduction coming first from selling
stockholders who are not Holders, and then from Weatherford. If further
reduction is required, Weatherford shall so advise all Holders of Registrable
Securities that would have otherwise been underwritten pursuant hereto, and the
number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities sought to be registered by each Holder.
(c) Weatherford is obligated to effect only four such
registrations pursuant to this Section 6.2.
(d) Notwithstanding the foregoing, if Weatherford shall furnish to
Holders requesting a registration statement pursuant to this Section 6.2, a
certificate signed by the President of Weatherford stating that in the good
faith judgment of a majority of the directors of Weatherford then in office who
were not designated by the FRC Group, it would be materially detrimental to
Weatherford for such registration statement to be filed, Weatherford shall have
the right to defer such filing for a period of not more than 60 days after
receipt of the request of the Initiating Holders; provided, however, that
Weatherford may not utilize this right more than once in any 12-month period.
6.3. Piggyback Registration. If (but without any obligation to do so)
Weatherford proposes to register any of its Common Stock under the Act in
connection with the public offering of such Common Stock by Weatherford solely
for cash (other than a registration relating solely to the sale of securities
to participants in a dividend reinvestment plan, stock plan or employee benefit
plan; a registration relating solely to the issuance of securities in
connection with an acquisition; or a registration on any form which does not
permit inclusion of selling stockholders), or Weatherford proposes to register
any of its securities on behalf of a holder exercising demand registration
rights similar to those set forth in Section 6.2 above, Weatherford shall, at
such time, promptly give each Holder written notice of such registration. Upon
the written request of each Holder given within 15 days after mailing of such
notice by Weatherford in accordance with Section 10.3, Weatherford shall,
subject to the provisions of Section 6.8, cause to be registered under the Act
all of the Registrable Securities that each such Holder has requested to be
registered.
6.4. Obligations of Weatherford. Whenever required under this Section
6 to effect the registration of any Registrable Securities, Weatherford shall,
as expeditiously as reasonably possible:
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<PAGE> 14
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to 90 days.
(b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that Weatherford shall not be required to qualify to do business or to
file a general consent to service of process in any such states of
jurisdictions.
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the underwriters of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, and then use its best efforts to promptly correct such statement or
omission. Notwithstanding the foregoing and anything to the contrary set forth
in this Section, each Holder acknowledges that there may occasionally be times
when Weatherford must suspend the use of the prospectus forming a part of the
registration statement until such time as an amendment to the registration
statement has been filed by Weatherford and declared effective by the SEC, or
until such time as Weatherford has filed an appropriate report with the
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<PAGE> 15
SEC pursuant to the Exchange Act. Each Holder hereby covenants that it will
not sell any shares of Common Stock pursuant to said prospectus during the
period commencing at the time at which Weatherford gives the Holder notice of
the suspension of the use of said prospectus and ending at the time Weatherford
gives the Holder notice that it may thereafter effect sales pursuant to said
prospectus. Weatherford shall only be able to suspend the use of said
prospectus for periods aggregating no more than 30 days in respect of any
registration.
6.5 Furnish Information. It shall be a condition precedent to the
obligations of Weatherford to take any action pursuant to this Section 6 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to Weatherford such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such
securities as shall be required to affect the registration of such Holder's
Registrable Securities and as may be required from time to time to keep such
registration current.
6.6. Expenses of Demand Registration. All expenses incurred by or on
behalf of Weatherford in connection with registrations, filings or
qualifications pursuant to Section 6.2, including, without limitation, all
registration, filing and qualification fees, printers' and accounting fees, and
fees and disbursements of counsel for Weatherford, shall be borne by
Weatherford; provided, however, that Weatherford shall not be required to pay
for any expenses of any registration proceeding begun pursuant to Section 6.2
if the registration request is subsequently withdrawn at the request of the
Holders of a majority of the Registrable Securities to be registered (in which
case all participating Holders shall reimburse Weatherford promptly for all
such reasonable expenses), unless the Holders of a majority of the Registrable
Securities agree to forfeit their right to one demand registration pursuant to
Section 6.2. In no event shall Weatherford be obligated to bear underwriting
discounts and commissions and the fees and expenses of counsel to the selling
Holders.
6.7. Expenses of Piggyback Registration. Weatherford shall bear and
pay all expenses incurred by or on behalf of Weatherford in connection with any
registration, filing or qualification of Registrable Securities with respect to
the registrations pursuant to Section 6.3 for each Holder, including, without
limitation, all registration, filing, and qualification fees, printing and
accounting fees and fees and disbursements of counsel for Weatherford relating
or allocable thereto, but excluding underwriting discounts and commissions
relating to Registrable Securities and the fees and disbursements of counsel
for the selling Holders.
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<PAGE> 16
6.8. Underwriting Requirements. In connection with any offering
involving an underwriting of shares being issued by Weatherford, Weatherford
shall not be required under Section 6.3 to include any of the Holders'
Registrable Securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between Weatherford and the underwriters selected
by it. If the total amount of securities, including Registrable Securities,
requested by Holders and other stockholders to be included in such offering
exceeds the amount of securities sold other than by Weatherford that the
underwriters reasonably believe compatible with the success of the offering,
then Weatherford shall be required to include in the offering only that number
of such securities, including Registrable Securities, which the underwriters
believe will not jeopardize the success of the offering. To achieve any
necessary reduction in the securities to be sold, the securities to be excluded
from the offering shall first be selected (in each case, pro rata among such
class of holders according to the total amount of securities proposed to be
included in the registration statement or in such other proportions as shall
mutually be agreed to by such class of holders) in the following order:
(i) first, securities being included on behalf of holders other than
members of the FRC Group shall be excluded, except as provided in (iii) below;
(ii) next, if additional securities must be excluded, Registrable Securities
included pursuant to Section 6.3 shall be excluded; (iii) thereafter, if
additional securities must be excluded, securities included on behalf of a
holder exercising demand registration rights similar to those set forth in
Section 6.2 shall be excluded, and (iv) finally, if additional securities must
be excluded, securities offered by Weatherford shall be excluded.
6.9. Delay of Registration. No Holder shall have any right to obtain
or seek an injunction restraining or otherwise delaying any such registration
as the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 6.
6.10. Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 6:
(a) To the extent permitted by law, Weatherford will indemnify and
hold harmless each Holder and the affiliates of such Holder, and their
respective directors, officers, general and limited partners, agents and
representatives (and the directors, officers, affiliates and controlling
persons thereof), and each other person, if any, who controls such Holder
within the meaning of the Act or the Exchange Act, against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are
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<PAGE> 17
based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any preliminary prospectus (but only if such is not corrected in the
final prospectus) contained therein or any amendments or supplements thereto,
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading (but only if such is not corrected in the final prospectus), or
(iii) any violation or alleged violation by Weatherford in connection with the
registration of Registrable Securities under the Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the Act, the
Exchange Act or any state securities law; and Weatherford will pay to each such
Holder, affiliate or controlling person, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this Section 6.10(a) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent of
Weatherford (which consent shall not be unreasonably withheld), nor shall
Weatherford be liable in any such case for any such loss, claim, damage,
liability, or action to the extent that it arises out of or is based upon a
violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
any such Holder or controlling person.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless Weatherford, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls Weatherford within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing
persons may become subject, under the Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereto) arise out of or are based upon any Violation, in each case
to the extent (and only to the extent) that such Violation occurs in reliance
upon and in conformity with written information furnished by such Holder
expressly for use in connection with such registration; and each such Holder
will pay, as incurred, any legal or other expenses reasonably incurred by any
person intended to be indemnified pursuant to this subsection 6.10(b), in
connection with investigating or defending any such lose, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 6.10(b) shall not apply to amounts paid in settlement of any
such loss,
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claim, damage, liability or action if such settlement is effected without the
consent of the Holder, which consent shall not be unreasonably withheld;
provided, that, in no event shall any indemnity under this Section 6.10(b)
exceed the gross proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 6.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 6.10,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties. The failure to deliver written notice to the
indemnifying party within a reasonable time after the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 6.10, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 6.10. The indemnified party
shall have the right, but not the obligation, to participate in the defense of
any action referred to above through counsel of its own choosing and shall have
the right, but not the obligation, to assert any and all separate defenses,
cross claims or counterclaims which it may have, and the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i) the
employment of such counsel has been specifically authorized in advance by the
indemnifying party, (ii) there is a conflict of interest that prevents counsel
for the indemnifying party from adequately representing the interests of the
indemnified party, (iii) the indemnifying party does not employ counsel that is
reasonably satisfactory to the indemnified party, or (iv) the indemnifying
party fails to assume the defense or does not reasonably contest such action in
good faith, in which case, if the indemnified party notifies the indemnifying
party that it elects to employ separate counsel, the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party and the reasonable fees and expenses of such separate counsel
shall be borne by the indemnifying party; provided, however, that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm (in addition to any local counsel) for
all indemnified parties.
(d) The obligations of Weatherford and the Holders under this
Section 6.10 shall survive the completion of
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any offering of Registrable Securities in a registration statement under this
Section 6.
6.11. Reports Under the Exchange Act. With a view to making available
to the Holders the benefits of Rule 144 and any other rule or regulation of the
SEC that may at any time permit a Holder to sell securities of Weatherford to
the public without registration or pursuant to a registration on Form S-3,
Weatherford agrees to:
(a) use its best efforts to make and keep public information
available, as those terms are understood and defined in Rule 144;
(b) use its best efforts to file with the SEC in a timely manner
all reports and other documents required under the Act and the Exchange Act;
and
(c) furnish to any Holder forthwith upon request (i) a written
statement by Weatherford as to its compliance with the reporting requirements
of Rule 144, or as to whether it qualifies as a registrant whose securities may
be resold pursuant to Form S-3, (ii) a copy of the most recent annual or
quarterly report of Weatherford and such other reports and documents so filed
by Weatherford, and (iii) such other information as may be reasonably requested
in availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
6.12. Form S-3 Registration. In case Weatherford shall receive from
any Holder or Holders of at least 10% of the Registrable Securities then
outstanding (or a lesser percent if the anticipated aggregate offering price,
net of discounts and commissions, would exceed $1,000,000) a written request or
requests that Weatherford effect a registration on Form S-3 not involving an
underwriting and any related qualification or compliance with respect to all or
a part of the Registrable Securities owned by such Holder or Holders,
Weatherford will:
(a) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or
Holders joining in such request as are specified in a written request given
within 15 days after receipt of such written notice from Weatherford; provided,
however, that
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Weatherford shall not be obligated to effect any such registration,
qualification or compliance, pursuant to this Section 6.12: (1) if Form S-3 is
not available for such offering by the Holders; (2) if the Holders, together
with the holders of any other securities of Weatherford entitled to include
securities in such registration, propose to sell Registrable Securities and
such other securities (if any) at an aggregate price to the public (net of any
discounts or commissions) of less than $1,000,000; (3) if Weatherford shall
furnish to the Holders a certificate signed by the President of Weatherford
stating that in the good faith judgment of a majority of the directors of
Weatherford then in office who were not designated by the FRC Group, it would
be materially detrimental to Weatherford for such Form S-3 Registration to be
effected at such time, in which event Weatherford shall have the right to defer
the filing of the Form S-3 registration statement for a period of not more than
60 days after receipt of the request of the Holder or Holders under this
Section 6.12; provided, however, that Weatherford shall not utilize this right
more than once in any 12-month period; (4) if Weatherford has, within the
12-month period preceding the date of such request, already effected a
registration on Form S-3 for the Holders pursuant to this Section 6.12; or (5)
in any particular jurisdiction in which Weatherford would be required to
qualify to do business or to execute a general consent to service of process in
effecting such registration, qualification or compliance.
(c) Subject to the foregoing, Weatherford shall file a
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. All expenses incurred by or on behalf of
Weatherford in connection with the registrations requested pursuant to Section
6.12, including (without limitation) all registration, filing, qualification,
printer's and accounting fees and the fees and disbursements of counsel for
Weatherford, shall be borne by Weatherford, except that any discounts or
commissions associated with Registrable Securities and the fees and
disbursements of counsel for the selling Holder or Holders shall be borne by
the Holder or Holders participating in the Form S-3 Registration.
Registrations effected pursuant to this Section 6.12 shall not be counted as
demands for registration or registrations effected pursuant to Sections 6.2.
6.13. No Assignment of Registration Rights. The rights to cause
Weatherford to register Registrable Securities pursuant to this Section 6 may
only be assigned by a Holder to a transferee or assignee of any Registrable
Securities if (i) such transferee or assignee is a member of the FRC Group that
has executed this Agreement, and (ii) immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Act.
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6.14. Limitations on Subsequent Registration Rights. From and after
the date of this Agreement, Weatherford shall not, without the prior
written consent of the Holders of a majority of the outstanding Registrable
Securities (or, prior to the Effective Time of the Merger, without the prior
written consent of FRC), enter into any agreement with any holder or
prospective holder of any securities of Weatherford which would allow such
holder or prospective holder to include such securities in any registration
filed under Sections 6.2 or 6.3 hereof, unless under the terms of such
agreement, such holder or prospective holder may include such securities in any
such registration only to the extent that the inclusion of its securities will
not reduce the amount of the Registrable Securities of the Holders which is
included.
6.15. Waiver Procedures. The observance by Weatherford of any
provision of this Section 6 may be waived (either generally or in a particular
instance and either retroactively or prospectively) with the written consent of
the holders of a majority of the Registrable Securities then outstanding, and
any waiver effected in accordance with this paragraph shall be binding upon
each Holder of Registrable Securities.
6.16. "Market Stand-off" Agreement. Any Holder of Registrable
Securities, if requested by an underwriter of any registered public offering of
Weatherford securities being sold in a firm commitment underwriting, agrees not
to sell or otherwise transfer or dispose of any Common Stock (or other
Weatherford voting Securities) held by such Holder other than shares of
Registrable Securities included in the registration, during a period of up to
90 days following the effective date of the registration statement, provided
that all other persons selling securities in such underwritten public offering
and all officers and directors of Weatherford shall enter into similar
agreements. Such agreement shall be in writing in the form reasonably
satisfactory to Weatherford and such underwriter. Weatherford may impose
stop-transfer instructions with respect to the securities subject to the
foregoing restriction until the end of the required stand-off period.
Section 7. Term of Agreement; Certain Provisions Regarding Termination.
(a) Except as otherwise provided in (b) below, the respective
covenants and agreements of the FRC Group and Weatherford contained in this
Agreement will continue in full force and effect until the Termination Date,
and all of the representations and warranties set forth herein shall be
continuing representations and warranties. Upon the Termination Date, all of
the obligations of Weatherford and the FRC Group hereunder shall terminate,
except solely the obligations of the
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<PAGE> 22
parties pursuant to Section 6.10 in respect of registrations completed prior to
the Termination Date.
(b) If the FRC Group shall, at any time, sell or otherwise dispose
of Weatherford Voting Securities in compliance with the terms and provisions of
this Agreement so that the FRC Group beneficially owns in the aggregate shares
representing less than 10% of the Combined Voting Power, all covenants,
agreements, obligations and rights of the FRC Group and Weatherford contained
in Sections 4.2 (except that no single sale, transfer of any beneficial
interest in or other disposition of Weatherford Voting Securities, and no
related group of such sales, transfers or dispositions, shall be made by the
FRC Group if such sales, transfers or dispositions (i) involve such number of
Weatherford Voting Securities as represent 5% or more of the Combined Voting
Power, or (ii) are to or with any one person or related group of persons who,
upon consummation of such sale, transfer or disposition have beneficial
ownership of such number of Weatherford Voting Securities as represent 10% or
more of the Combined Voting Power), 4.3, 4.4, 4.5, 4.7, 5, 6 and 8 hereof shall
cease until such time as the FRC Group shall again purchase or otherwise
acquire beneficial ownership of Weatherford Voting Securities representing 10%
or more of the Combined Voting Power. From and after such times as the FRC
Group beneficially owns in the aggregate Weatherford Voting Securities
representing 10% or more of the Combined Voting Power, all restrictions upon
and covenants of the FRC Group and Weatherford set forth in this Agreement
shall again be applicable until the Termination Date. All percentages in this
Section shall be calculated in accordance with the provisions of Section 4.1.
Section 8. Legend and Stop Transfer Order. To assist in effectuating
the provisions of this Agreement, the FRC Group hereby consents (i) to the
placement, in connection with the Merger or otherwise within 10 business days
after any Weatherford Voting Securities become subject to the provisions of
this Agreement, of the following legend on all certificates representing
ownership of Weatherford Voting Securities owned of record by any member of the
FRC Group or by any person where a member of the FRC Group is the beneficial
owner thereof, until such shares are sold, transferred or disposed in a manner
permitted hereby to a person who is not then a member of the FRC Group:
The shares represented by this certificate are subject to the provisions
of an Agreement among Weatherford Corporation, First Reserve Corporation
and certain limited partnerships under control of or common control with
First Reserve Corporation, and may not be sold, transferred, pledged,
hypothecated or otherwise disposed of except in accordance
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<PAGE> 23
therewith. Copies of said Agreement are on file at the office of the
Corporate Secretary of Weatherford Corporation.
; and (ii) to the entry of stop transfer orders with the transfer agent or
agents of Weatherford Voting Securities against the transfer of Weatherford
Voting Securities except in compliance with the requirements of this Agreement,
or if Weatherford acts as its own transfer agent with respect to any
Weatherford Voting Securities, to the refusal by Weatherford to transfer any
such securities except in compliance with the requirements of this Agreement.
Weatherford agrees to remove promptly all legends and stop transfer orders with
respect to the transfer of Weatherford Voting Securities being made to a person
who is not then a member of the FRC Group in compliance with the provisions of
this Agreement.
Section 9. Remedies.
(a) The FRC Group acknowledges and agrees that (i) the provisions
of this Agreement are reasonable and necessary to protect the proper and
legitimate interests of the parties hereto, and (ii) Weatherford and the FRC
Group would be irreparably damaged in the event any of the provisions of this
Agreement were not performed by the other parties hereto in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that
the non-breaching party shall be entitled to preliminary and permanent
injunctive relief to prevent breaches of the provisions of this Agreement,
without the necessity of proving actual damages or of posting any bond, and to
enforce specifically the terms and provisions hereof and thereof in any court
of the United States or any state thereof having jurisdiction, which rights
shall be cumulative and in addition to any other remedy to which such
non-breaching party may be entitled hereunder or at law or equity.
(b) In addition to any other remedy Weatherford may have under
this Agreement or in law or equity, if the FRC Group shall acquire or transfer
any Weatherford Voting Securities in violation of this Agreement, such
Weatherford Voting Securities which are in excess of the number permitted to be
owned or controlled by the FRC Group or which have been transferred by the FRC
Group in violation of the provisions of this Agreement may not be voted by the
owner thereof or any proxy therefor.
10. General Provisions.
10.1. Consent to Jurisdiction; Service of Process. THIS AGREEMENT SHALL
BE GOVERNED BY AND INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PROVISIONS.
EACH OF THE
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<PAGE> 24
PARTIES IRREVOCABLY AND UNCONDITIONALLY (A) AGREES THAT ANY SUIT, ACTION OR
OTHER LEGAL PROCEEDING (COLLECTIVELY, "SUIT") ARISING OUT OF THIS AGREEMENT
SHALL BE BROUGHT AND ADJUDICATED IN THE UNITED STATES DISTRICT COURT FOR
DELAWARE, OR, IF SUCH COURT WILL NOT ACCEPT JURISDICTION, IN ANY COURT OF
COMPETENT CIVIL JURISDICTION SITTING IN NEW CASTLE COUNTY, DELAWARE, (B)
SUBMITS TO THE JURISDICTION OF ANY SUCH COURT FOR THE PURPOSES OF ANY SUCH SUIT
AND (C) WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR
OTHERWISE IN ANY SUCH SUIT, ANY CLAIM THAT IT IS NOT SUBJECT TO THE
JURISDICTION OF THE ABOVE COURTS, THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT
FORUM OR THAT THE VENUE OF SUCH SUIT TO IMPROPER. EACH OF THE PARTIES ALSO
IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO THE SERVICE OF ANY PROCESS,
PLEADINGS, NOTICES OR OTHER PAPERS IN A MANNER PERMITTED BY THE NOTICE
PROVISIONS OF SECTION 10.3 HEREOF.
10.2. Joint and Several Obligations. All of the obligations of the FRC
Group hereunder shall be joint and several. Each member of the FRC Group that
shall become or have the right to become the beneficial owner, within the
meaning and scope of Section 4.1 hereof, of Weatherford Voting Securities
shall, within 10 days of becoming such owner or holder, execute and deliver to
Weatherford a joinder agreement, agreeing to be legally bound by this Agreement
to the same extent as if named as a member of the FRC Group herein.
10.3. Notices. All notices, consents, requests, instructions,
approvals and other communications provided for herein and all legal process in
regard hereto shall be in writing and shall be decreed to be validly given,
made or served when delivered personally or deposited in the U.S. mail, postage
prepaid, for delivery by express, registered or certified mail, or delivered to
a recognized overnight courier service, addressed as follows:
If to Weatherford:
Weatherford International Incorporated
1360 Post Oak Boulevard, Suite 1000
Houston, Texas 77056-3098
Attn: Chairman, President and
Chief Executive Officer
With a required copy to:
Fulbright & Jaworski L.L.P.
1301 McKinney, Suite 5100
Houston, Texas 77010-3095
Attn: Charles L. Strauss, Esq.
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<PAGE> 25
If to any member of the First Reserve Group:
First Reserve Corporation
475 Steamboat Road
Greenwich, Connecticut 06830
Attn: President and Chief Executive Officer
With a required copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3909
Attn: Robert L. Friedman, Esq.
or to such other address as may be specified on a notice given pursuant to this
Section 10.3.
10.4. 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, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. The parties agree that they will use their
best efforts at all times to support and defend this Agreement.
10.5. Amendments. This Agreement may be amended only by an agreement
in writing signed by each of the parties hereto; provided, however, that any
amendment executed by Weatherford must prior thereto be approved by a majority
of the directors of Weatherford then in office who were not designated by the
FRC Group.
10.6. Descriptive Headings. Descriptive headings are for convenience
only and shall not control or affect the meaning or construction of any
provision of this Agreement.
10.7. Counterparts. This Agreement shall become binding when one or
more counterparts hereof, individually or taken together, bears the signatures
of each of the parties hereto. This Agreement may be executed in any number of
counterparts, each of which shall be an original as against the party whose
signature appears thereon, or on whose behalf such counterpart is executed, but
all of which taken together shall be one and the same statement.
10.8. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the successors and assigns of the
parties hereto.
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<PAGE> 26
IN WITNESS WHEREOF, the parties hereto intending to be legally bound
have duly executed this Agreement, all as of the day and year first above
written.
WEATHERFORD INTERNATIONAL
INCORPORATED
By: /s/ Philip Burguieres
---------------------
Philip Burguieres
Chairman, President and
Chief Executive Officer
FIRST RESERVE CORPORATION
By: /s/ William E. Macaulay
-----------------------
William E. Macaulay
President and Chief
Executive Officer
NUMBER OF SHARES OF FIRST RESERVE FUNDS:
ENTERRA COMMON STOCK
HELD ON THE DATE HEREOF:
1,993,529 AMERICAN GAS & OIL INVESTORS,
LIMITED PARTNERSHIP
1,233,907 AMGO II, LIMITED PARTNERSHIP
597,408 AMGO III, LIMITED PARTNERSHIP
2,323,562 FIRST RESERVE SECURED ENERGY ASSETS
FUND, LIMITED PARTNERSHIP
3,355,254 FIRST RESERVE FUND V, LIMITED
PARTNERSHIP
838,427 FIRST RESERVE FUND V-2, LIMITED
PARTNERSHIP
870,262 FIRST RESERVE FUND VI, LIMITED
PARTNERSHIP
By: FIRST RESERVE CORPORATION,
Managing General Partner
of each of the First Reserve
Funds
By: /s/ William E. Macaulay
-----------------------
William E. Macaulay
President and
Chief Executive Officer
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