1 EXHIBIT B AGREEMENT AND PLAN OF MERGER

1
EXHIBIT B

AGREEMENT AND PLAN OF MERGER

Between

Xxxxxxxxxxx International Incorporated

and

Enterra Corporation

June 23, 1995

(As amended August 28, 1995)
2

TABLE OF CONTENTS

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 00

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(x) 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

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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

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AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger, dated as of the 23rd day of June, 1995
(the "Agreement"), is between Xxxxxxxxxxx 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 "Xxxxxxxxxxx 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 &
Xxxxxxxx L.L.P., 0000 XxXxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 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

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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 Xxxxxxxxxxx, 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

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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
Xxxxxxxxxxx'x 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 Xxxxxxxxxxx'x 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 Xxxxxxxxxxx, Enterra, the Surviving Corporation or
Xxxxxxxxxxx'x 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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(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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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 Xxxxxxxxxxx'x
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 Xxxxxxxxxxx'x 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

-6-
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 Xxxxxxxxxxx, will (i) conflict with
Xxxxxxxxxxx'x 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 Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx"), (X) 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 Xxxxxxxxxxx; 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

-7-
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 Xxxxxxxxxxx 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 Xxxxxxxxxxx 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
"Xxxxxxxxxxx Commission Filings". Weatherford has heretofore
delivered to Enterra copies of the Xxxxxxxxxxx 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 Xxxxxxxxxxx
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 Xxxxxxxxxxx
Subsidiaries have been included in the Xxxxxxxxxxx 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 Xxxxxxxxxxx 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

-8-
13

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 Xxxxxxxxxxx
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 Xxxxxxxxxxx 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 Xxxxxxxxxxx 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 Xxxxxxxxxxx Commission Filings filed with the Commission since
that date, Weatherford and the Xxxxxxxxxxx Subsidiaries have
conducted their business only in the ordinary and usual course, and
there has not been (i) any Material Adverse Change in Xxxxxxxxxxx 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 Xxxxxxxxxxx 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 Xxxxxxxxxxx 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 Xxxxxxxxxxx Common
Stock, or any redemption, purchase or other acquisition of any of its
securities or any securities of any of the Xxxxxxxxxxx Subsidiaries;
(vi) any damage, destruction or loss (whether or not covered by
insurance) materially adversely affecting the properties or business
of Weatherford and the Xxxxxxxxxxx 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 Xxxxxxxxxxx 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,

-9-
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 Xxxxxxxxxxx or any
of the Weatherford Subsidiaries.

(g) Certain Fees. Neither Weatherford nor any of its officers,
directors or employees, on behalf of Xxxxxxxxxxx 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 Xxxxxxxxxxx
Commission Filings, there are no claims, actions, suits,
investigations or proceedings pending or, to the knowledge of
Weatherford, threatened against or affecting Xxxxxxxxxxx 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 Xxxxxxxxxxx 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 "Xxxxxxxxxxx
Welfare Plans");

(ii) each "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA) (the "Xxxxxxxxxxx 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 Xxxxxxxxxxx
Welfare Plans and the Xxxxxxxxxxx Pension Plans, the
"Xxxxxxxxxxx Benefit Plans"),

-10-
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 Xxxxxxxxxxx
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
Xxxxxxxxxxx Group that, in either case, may subject the Xxxxxxxxxxx
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
Xxxxxxxxxxx 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

-11-
16

to the Closing. No Weatherford Benefit Plan will cause the
Xxxxxxxxxxx Group to have liability for severance pay as a result of
this Agreement. The Xxxxxxxxxxx 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 Xxxxxxxxxxx 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 Xxxxxxxxxxx
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 Xxxxxxxxxxx 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
Xxxxxxxxxxx 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 Xxxxxxxxxxx Group made
contributions at any time during the six years prior to the Closing
Date. Neither the Xxxxxxxxxxx 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.

Xxxxxxxxxxx'x 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

-12-
17

charge ("Taxes" or a "Tax") that are required to be filed on or
before the Closing Date by or with respect to Xxxxxxxxxxx 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 Xxxxxxxxxxx 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 Xxxxxxxxxxx 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 Xxxxxxxxxxx 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 Xxxxxxxxxxx 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 Xxxxxxxxxxx Subsidiaries
through the periods covered thereby.

(k) Environmental.

(i) There are no facts, conditions or circumstances known
to Weatherford that could cause Xxxxxxxxxxx or any Weatherford
Subsidiary to incur any loss, liability, damage, cost or
expense, either individually or in the aggregate, in excess of
Xxxxxxxxxxx'x charges, accruals and reserves for environmental
matters reflected on Xxxxxxxxxxx'x 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
Xxxxxxxxxxx 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.

-13-
18

(l) No Severance Payments. None of Xxxxxxxxxxx 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 Xxxxxxxxxxx Disclosure Letter sets forth
all policies of insurance currently in effect relating to the
business or operations of Weatherford and the Xxxxxxxxxxx
Subsidiaries.

(o) Title to Property. Except as set forth in the Xxxxxxxxxxx
Commission Filings, Weatherford and each of the Xxxxxxxxxxx
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. Xxxxxxx Xxxxx & 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

-14-
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

-15-
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

-16-
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 Xxxxxxxxxxx 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 Xxxxxxxxxxx and the Xxxxxxxxxxx Subsidiaries furnished by
or on behalf of Xxxxxxxxxxx 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 Xxxxxxxxxxx and
the Xxxxxxxxxxx Subsidiaries furnished by or on behalf of Xxxxxxxxxxx
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 Xxxxxxxxxxx and the Xxxxxxxxxxx Subsidiaries furnished
by or on behalf of Xxxxxxxxxxx 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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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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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 Xxxxxxxxxxx, 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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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.

-20-
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

-21-
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. Xxxxxxx & 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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27
ARTICLE III
COVENANTS OF XXXXXXXXXXX PRIOR TO THE EFFECTIVE TIME

3.1 Conduct of Business by Xxxxxxxxxxx Pending the Merger. Xxxxxxxxxxx
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 Xxxxxxxxxxx Disclosure
Letter:

(a) The business of Xxxxxxxxxxx and the Xxxxxxxxxxx Subsidiaries
shall be conducted only in, and Xxxxxxxxxxx and the Xxxxxxxxxxx
Subsidiaries shall not take any action except in, the ordinary course of
business;

(b) Xxxxxxxxxxx shall not, and shall not permit any of the
Weatherford Subsidiaries to:

(i) split, combine or reclassify any outstanding capital stock
of Xxxxxxxxxxx, or authorize, declare, set aside or pay any dividend
payable in cash, stock, property or otherwise in respect of the
capital stock of Xxxxxxxxxxx;

(ii) authorize or pay any extraordinary bonuses to employees;

(iii) grant any stock options or rights to acquire
Xxxxxxxxxxx Common Stock or common stock of any of the Xxxxxxxxxxx
Subsidiaries to any person or entity, other than options to purchase
Xxxxxxxxxxx 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 Xxxxxxxxxxx or, except to Xxxxxxxxxxx
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
Xxxxxxxxxxx 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
Xxxxxxxxxxx Common Stock;

(vii) enter into, or grant any material change in, employment,
compensation, benefit, severance, consulting or stay-bonus,
arrangements;

-23-
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 Xxxxxxxxxxx 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
Xxxxxxxxxxx or any of the Weatherford Subsidiaries in which
Weatherford, either directly or indirectly, has less than a 100%
equity interest; or

(xiii) take, and Xxxxxxxxxxx shall use its reasonable efforts
to prevent any affiliate of Xxxxxxxxxxx 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) Xxxxxxxxxxx shall use all reasonable efforts (i) to preserve
intact the business organization of Xxxxxxxxxxx and each of the
Xxxxxxxxxxx Subsidiaries whose stock is pledged under existing credit
facilities, (ii) to maintain in effect any material franchises,
authorizations or similar rights of Xxxxxxxxxxx and each of the
Xxxxxxxxxxx Subsidiaries, (iii) to keep available the services of the
current officers and key employees of Xxxxxxxxxxx and each of the
Xxxxxxxxxxx Subsidiaries, (iv) to preserve its goodwill with those having
material business relationships with Xxxxxxxxxxx and the Xxxxxxxxxxx
Subsidiaries, (v) to maintain and keep the material properties of
Xxxxxxxxxxx and each of the Xxxxxxxxxxx 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 Xxxxxxxxxxx and the Xxxxxxxxxxx
Subsidiaries; and

(d) Xxxxxxxxxxx shall not, and shall not permit any of the
Xxxxxxxxxxx Subsidiaries to, take any action that would, or that
reasonably could be expected

-24-
29

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. Xxxxxxxxxxx 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 Xxxxxxxxxxx.

3.2 Access to Information. From the date hereof to the Effective Time,
Xxxxxxxxxxx shall, and shall cause the Xxxxxxxxxxx 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, Xxxxxxxxxxx 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 Xxxxxxxxxxx, a
Xxxxxxxxxxx Subsidiary or a former subsidiary of Xxxxxxxxxxx.

3.3 Affiliates' Agreements. Xxxxxxxxxxx will use its reasonable efforts
to cause each stockholder who, in the opinion of counsel to Xxxxxxxxxxx, is an
"affiliate" of Xxxxxxxxxxx to enter into an agreement substantially in the form
of Exhibit 3.3.

3.4 Reservation of Xxxxxxxxxxx Common Stock. Xxxxxxxxxxx shall reserve
for issuance, out of its authorized but unissued capital stock, such number of
shares of Xxxxxxxxxxx Common Stock as may be issuable upon consummation of the
Merger.

3.5 Stock Exchange Listing. Xxxxxxxxxxx shall use all reasonable efforts
to cause the shares of Xxxxxxxxxxx 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 Xxxxxxxxxxx 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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30

(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;

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31

(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 Xxxxxxxxxxx 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 Xxxxxxxxxxx complete access during normal business hours to
its officers, employees, representatives, properties, books and records, and
shall furnish Xxxxxxxxxxx all financial, operating and other data and
information as Xxxxxxxxxxx, 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 Xxxxxxxxxxx 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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32
ARTICLE V
ADDITIONAL AGREEMENTS

5.1 Joint Proxy Statement/Prospectus; Registration Statement. As
promptly as practicable after the execution of this Agreement, Xxxxxxxxxxx and
Enterra shall prepare and file with the Commission preliminary proxy materials
that shall constitute the joint proxy statement (the "Proxy Statement") of
Xxxxxxxxxxx and Enterra and the registration statement with respect to the
Xxxxxxxxxxx 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, Xxxxxxxxxxx
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 Xxxxxxxxxxx and the stockholders of Enterra
and the issuance by Xxxxxxxxxxx of Xxxxxxxxxxx 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 Xxxxxxxxxxx
recommended that the stockholders of Xxxxxxxxxxx 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 Xxxxxxxxxxx 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 Xxxxxxxxxxx, in form and
substance reasonably satisfactory to Xxxxxxxxxxx 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) Xxxxxxxxxxx shall use its reasonable efforts to cause to be
delivered to Enterra a letter of Xxxxxx Xxxxxxxx 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) Xxxxxxxxxxx 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 Xxxxxxxxxxx (i) shall recommend at such meeting that the
stockholders of Xxxxxxxxxxx vote to adopt and approve the Merger and this
Agreement, (ii) shall use its reasonable efforts to solicit from
stockholders of Xxxxxxxxxxx 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) Xxxxxxxxxxx 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
Xxxxxxxxxxx, and Xxxxxxxxxxx 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
Xxxxxxxxxxx, 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 Xxxxxxxxxxx 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, Xxxxxxxxxxx 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 Xxxxxxxxxxx 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
Xxxxxxxxxxx and the Surviving Corporation who will represent such
Indemnified Party, and Xxxxxxxxxxx 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, Xxxxxxxxxxx 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 Xxxxxxxxxxx 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 Xxxxxxxxxxx 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, Xxxxxxxxxxx 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. Xxxxxxxxxxx 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 Xxxxxxxxxxx stock option
plan, to purchase that number of shares of Xxxxxxxxxxx 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. Xxxxxxxxxxx shall take all corporate action
necessary (a) to reserve for issuance a sufficient number of shares of
Xxxxxxxxxxx Common Stock for delivery upon exercise of such Enterra Options,
(b) to ensure that all shares of Xxxxxxxxxxx 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 Xxxxxxxxxxx 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, Xxxxxxxxxxx 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
Xxxxxxxxxxx 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, Xxxxxxxxxxx
agrees that participation in the Xxxxxxxxxxx Benefit Plans, as then in
effect, shall be made available to all Xxxxxxxxxxx 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 Xxxxxxxxxxx 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 Xxxxxxxxxxx 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) Xxxxxxxxxxx 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.
Xxxxxxxxxxx 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. Xxxxxxxxxxx
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) Xxxxxxxxxxx shall promptly disclose to Enterra in writing (i)
any information set forth in the Xxxxxxxxxxx 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 Xxxxxxxxxxx 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 Xxxxxxxxxxx'x 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. Xxxxxxx X. Xxxxxxxx and
Xxxxxx X. Xxxxxx, Xx., 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
Xxxxxx, 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. Xxxxxxx Xxxxx, Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxxx,
Xxxxxx X. Xxxxxxx, J. Xxxxxx Xxxxxx and Xxxxxxx X. Xxxxxxxxxx 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. Xxxx Xxxx 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
Xx. Xxxx 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 Xxxxxx Xxxxxxxxxx a fee in the
amount set forth in Exhibit 5.21. If Xx. Xxxxxxxxxx' fee set forth in Exhibit
5.21 shall make the Merger ineligible for pooling-of-interests accounting
treatment under Accounting Principles Xxxxxxxx Xx. 00, Xxxxxxxxxxx agrees to
use its best efforts to negotiate an alternative package with Xx. Xxxxxxxxxx.

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 Xxxxxxxxxxx
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 Xxxxxx Xxxxxxxx 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
Xxxxxx Xxxxxxxx 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 Xxxxxxxxxxx'x
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 Xxxxxx, Xxxxx & Xxxxxxx,
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
Xxxxxxx Xxxxx & 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 & Xxxxxxxx
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. Xxxx Xxxx 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 Xxxxxx Xxxxxxxx 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
Xxxxxx Xxxxxxxx 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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Xxxxxxxxxxx'x 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 & Xxxxxxxx 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
Xxxxxx Xxxxxxxx LLP pursuant to Section 5.2(b) and on or prior to the
Closing Date an additional letter from Xxxxxx Xxxxxxxx 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
Xxxxxxx & 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 Xxxxxx, Xxxxx & Xxxxxxx,
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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46

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 Xxxxxxxxxxx'x 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 Xxxxxxxxxxx'x
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 Xxxxxxxxxxx'x 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;

(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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51

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 Xxxxxxxxxxx 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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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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if to Enterra: Enterra Corporation
00000 Xxxxxxxxx Xxxxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: D. Xxxx Xxxx, Chairman of the
Board, President and Chief Executive
Officer
Fax: (000) 000-0000

with a required copy to: Xxxxxx, Xxxxx & Bockius
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxx
Fax: (000) 000-0000

if to Weatherford: Xxxxxxxxxxx International Incorporated
0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx Xxxxxxxxxx, Chairman of
the Board, President and Chief Executive
Officer
Fax: (000) 000-0000

with a required copy to: Fulbright & Xxxxxxxx L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
Fax: (000) 000-0000

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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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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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.

XXXXXXXXXXX INTERNATIONAL INCORPORATED

By: /s/ Xxxxxx Xxxxxxxxxx
-------------------------------------------
Xxxxxx Xxxxxxxxxx
Chairman of the Board, President and
Chief Executive Officer

ENTERRA CORPORATION

By: /s/ D. Xxxx Xxxx
-------------------------------------------
D. Xxxx Xxxx
Chairman of the Board, President and
Chief Executive Officer

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Table of Contents

1 EXHIBIT B AGREEMENT AND PLAN OF MERGER

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