1
ACQUISITION AGREEMENT
BY AND AMONG
XXXXXXXXXXX INTERNATIONAL, INC.
AND
XXXXXX INTERNATIONAL INC.,
XXXXXX ENERGY SERVICES, INC.,
XXXXXX INTERNATIONAL SALES CORPORATION
COLOMBIA PETROLEUM SERVICES CORP.
INTERNATIONAL PETROLEUM SERVICES, INC.
XXXXXX ENVIRONMENTAL REMEDIATION TECHNOLOGIES, INC.
XXXXXX WORLDWIDE SERVICES, CORP.
AIR DRILLING INTERNATIONAL, INC.
AND
AIR DRILLING SERVICES, INC.
MAY 21, 1999
2
TABLE OF CONTENTS
ARTICLE I THE TRANSACTIONS......................................................................1
1.1 Closing Date..........................................................................1
1.2 The Transactions......................................................................2
ARTICLE II REPRESENTATIONS AND WARRANTIES........................................................2
2.1 Representations and Warranties of Weatherford.........................................2
(a) Organization.................................................2
(b) Authorization and Validity of Agreement
and Issuance of Weatherford Shares...........................2
(c) Ownership of Xxxxxx Notes....................................3
(d) No Conflict..................................................3
(e) Commission Filings...........................................3
(f) Disclosure Statement.........................................3
2.2 Representations and Warranties of Xxxxxx..............................................4
(a) Organization.................................................4
(b) Xxxxxx Subsidiaries..........................................4
(c) Capitalization...............................................4
(d) Authorization and Validity of Agreement......................5
(e) No Approvals or Notices Required; No Conflict
with Instruments to which Xxxxxx is a Party..................6
(f) Commission Filings; Financial Statements.....................6
(g) Disclosure Statement.........................................7
(h) Conduct of Business in the Ordinary Course;
Absence of Certain Changes and Events........................7
(i) Litigation...................................................8
(j) Employee Benefit Plans.......................................8
(k) Taxes.......................................................10
(l) Environmental Matters.......................................11
(m) Severance Payments..........................................12
(n) Brokers.....................................................12
(o) Compliance with Laws........................................12
(p) Contracts...................................................12
(q) Title to Property...........................................13
(r) Insurance Policies..........................................14
(s) Loans.......................................................14
ARTICLE III COVENANTS OF XXXXXX..................................................................14
3.1 Certain Covenants Concerning the Prospective Bankruptcy Cases........................14
3.2 Conduct of Business by Xxxxxx Pending the Closing Date...............................15
ARTICLE IV COVENANTS OF WEATHERFORD PRIOR TO THE EFFECTIVE TIME.................................18
4.1 Reservation of Weatherford Stock.....................................................18
4.2 Stock Exchange Listing...............................................................18
ARTICLE V ADDITIONAL AGREEMENTS................................................................18
-i-
3
5.1 Filings; Consents; Reasonable Efforts................................................18
5.2 Notification of Certain Matters......................................................19
5.3 Certain Fees and Expenses............................................................19
ARTICLE VI CONDITIONS...........................................................................20
6.1 Conditions to Obligations of Each Party..............................................20
6.2 Additional Conditions to Obligations of Weatherford..................................21
6.3 Additional Conditions to Obligations of Xxxxxx.......................................23
ARTICLE VII GENERAL PROVISIONS...................................................................23
7.1 Survival of Representations and Warranties...........................................23
7.2 Public Statements....................................................................23
7.3 Assignment...........................................................................23
7.4 Notices..............................................................................23
7.5 Governing Law........................................................................24
7.6 Severability.........................................................................24
7.7 Counterparts.........................................................................24
7.8 Headings.............................................................................24
7.9 Confidentiality Agreements...........................................................25
7.10 Entire Agreement: Third Party Beneficiaries..........................................25
7.11 Waiver and Amendment.................................................................25
EXHIBIT A - Joint Plan of Reorganization
-ii-
4
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT dated as of May 21, 1999 (this "Agreement"),
is made and entered into by and among Xxxxxxxxxxx International, Inc., a
Delaware corporation ("Weatherford"), Xxxxxx International Inc., a Delaware
corporation ("Xxxxxx"), and the subsidiaries of Xxxxxx set forth on the
signature pages hereof (the "Subsidiary Parties").
WHEREAS, subject to and in accordance with the terms and conditions of
this Agreement, the respective Boards of Directors of Weatherford, Dailey, and
the Subsidiary Parties have approved an acquisition of Xxxxxx by Weatherford
(the "Acquisition"), in connection with which (i) all of Xxxxxx'x outstanding 9
1/2% Senior Notes due 2008 (the "Xxxxxx Notes") will be cancelled, and the
holders thereof (the "Xxxxxx Noteholders") will receive in exchange shares of
the common stock, $1.00 par value per share, of Weatherford ("Weatherford Common
Stock"), having an aggregate market value of $185,000,000, (ii) all of the
issued and outstanding shares of Class A common stock, $0.01 par value per
share, of Xxxxxx ("Xxxxxx Class A Common Stock") and Class B Common Stock, $0.01
par value per share, of Xxxxxx ("Xxxxxx Class B Common Stock" and collectively
with the Xxxxxx Class A Common Stock, the "Xxxxxx Common Stock") will be
cancelled, and the holders thereof will receive in exchange shares of
Weatherford Common Stock having an aggregate market value of $10,000,000, and
(iii) Xxxxxx shall issue 1,000 newly-issued shares of common stock of Xxxxxx
(the "New Xxxxxx Stock") to Weatherford, in each case as more fully described
herein (together with the other transactions contemplated by this Agreement, the
"Transactions");
WHEREAS, Weatherford is a Xxxxxx Noteholder;
WHEREAS, following the execution of this Agreement by the parties
hereto, each of Xxxxxx and the Subsidiary Parties will file a voluntary petition
for relief (the "Bankruptcy Cases") under Chapter 11 of the United States
Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court
for the District of Delaware (the "Bankruptcy Court"), together with a Joint
Plan of Reorganization in the form attached hereto as Exhibit A (the "Plan") and
to which this Agreement shall be an Exhibit and a Disclosure Statement (as
defined herein); and
WHEREAS, the parties hereto desire to set forth certain
representations, warranties and covenants made by each to the other as an
inducement to the consummation of the Transactions;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained, the parties hereto
hereby agree as follows:
ARTICLE I
THE TRANSACTIONS
1.1 CLOSING DATE. The closing of the Transactions (the "Closing") shall
take place at the offices of Xxxxxxx & Xxxxx L.L.P, Houston, Texas, as soon as
practicable after the confirmation of the Plan by the Bankruptcy Court and the
satisfaction or waiver of each of the conditions set forth in Article VI hereof
or at such other time and place and on such other date as Weatherford and Xxxxxx
shall agree; provided that each of the closing conditions set forth in Article
VI hereof shall have been satisfied or waived at or prior to such time. The date
on which the Closing occurs is herein referred to as the "Closing Date."
-1-
5
1.2 THE TRANSACTIONS. Subject to the terms and conditions of this
Agreement and consistent with the terms of the Plan, on the Closing Date:
(a) (i) As more fully described in the Plan, holders of
allowed interests under the Plan, based upon
ownership of Xxxxxx Common Stock, shall share pro
rata according to share ownership in the
Weatherford-Old DII Equity Consideration (as defined
in the Plan).
(ii) As more fully described in the Plan, holders of
allowed claims under the Plan, based upon ownership
of the Xxxxxx Notes, shall share pro rata in the
Weatherford- Senior Note Holder Consideration (as
defined in the Plan).
(b) Xxxxxx shall issue to Weatherford 1,000 shares of New
Xxxxxx Stock, whereupon Weatherford shall become the
sole stockholder of Xxxxxx.
(c) Any outstanding Xxxxxx Options (as defined herein)
shall be canceled pursuant to the Plan, and all
Xxxxxx Option Plans (as defined herein) shall
automatically be terminated.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF WEATHERFORD. Weatherford hereby
represents and warrants to Xxxxxx and the Subsidiary Parties that:
(a) Organization. Weatherford is a corporation duly
incorporated, validly existing and in good standing under the laws of
the state of Delaware. Weatherford has all requisite corporate power
and corporate authority to own, lease and operate all of its properties
and assets and to carry on its business as now being conducted, except
where the failure to be so organized, existing or in good standing
would not have a material adverse effect on the financial condition of
Weatherford and its subsidiaries, taken as a whole (a "Xxxxxxxxxxx
XXX"). Weatherford is duly qualified to do business, and is in good
standing, in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary, except in such jurisdictions where the failure
to be duly qualified would not have a Xxxxxxxxxxx XXX. Weatherford has
heretofore delivered to Xxxxxx true and complete copies of
Xxxxxxxxxxx'x Restated Certificate of Incorporation, as amended (the
"Weatherford Certificate"), and Xxxxxxxxxxx'x bylaws as in existence on
the date hereof.
(b) Authorization and Validity of Agreement and Issuance of
Weatherford Shares. The execution and delivery by Weatherford of this
Agreement and the consummation by Weatherford of the transactions
contemplated hereby (including the issuance of shares of Xxxxxxxxxxx'x
Common Stock in accordance with the terms of this Agreement and the
Plan) have been duly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by Weatherford and is
the legal valid and binding obligation of Weatherford, enforceable
against Weatherford in accordance with its terms, subject to the
approval of the Bankruptcy Court. Upon issuance of the
-2-
6
shares of Weatherford Common Stock to be issued pursuant to the terms
of this Agreement and the Plan, such shares shall be validly issued,
fully paid and non-assessable.
(c) Ownership of Xxxxxx Notes. Weatherford has, and on the
Closing Date will have, good and valid title to at least $60,550,000
aggregate principal amount of Xxxxxx Notes, free and clear of all liens
and encumbrances.
(d) No Conflict. The execution and delivery of this Agreement
does not, and the consummation of the Transactions will not, conflict
with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of or "put" right with
respect to any obligation or to loss of a material benefit under, or
result in the creation of any lien or encumbrance upon any of the
properties or assets of Weatherford under, any provision of (i) the
Weatherford Certificate or bylaws of Weatherford, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease, guaranty or
other financial assurance agreement or other agreement, instrument,
permit, concession, franchise or license applicable to Weatherford, and
(iii) subject to governmental filing and other matters referred to in
the following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation or arbitration award applicable to
Weatherford, other than, in the case of clause (ii), any such
conflicts, violations, defaults, rights or liens or encumbrances that
individually or in the aggregate would not have a Xxxxxxxxxxx XXX. No
consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or
commission or other governmental authority or agency, domestic or
foreign, including local authorities (a "Governmental Entity"), is
required by or with respect to Weatherford in connection with the
execution and delivery of this Agreement by Weatherford or the
consummation by Weatherford of the Transactions, except for (i) the
approval of the Plan by the Bankruptcy Court, (ii) the filing of a
pre-merger notification and report form by Weatherford under the HSR
Act, and (iii) such other consents, approvals, orders, authorizations,
registrations, declarations, filings and notices as are set forth in
Schedule 2.1(d).
(e) Commission Filings. Weatherford has filed all reports and
documents required to filed with the Securities and Exchange Commission
(the "Commission") since December 31, 1997. All reports, registration
statements and other filings (including all notes, exhibits and
schedules thereto and documents incorporated by reference therein)
filed by Weatherford with the Commission since December 31, 1997,
through the date of this Agreement, together with any amendments
thereto, are sometimes collectively referred to as the "Weatherford
Commission Filings." As of the respective dates of their filing with
the Commission or, if any such Weatherford Commission Filings were
amended, as of the date of the filing of such amendment, the
Weatherford Commission Filings complied, and as of the Closing Date
will comply, in all material respects with the applicable requirements
of the Securities Act of 1933 (the "Securities Act") or the Securities
Exchange Act of 1934 (the "Exchange Act"), as the case may be, and the
applicable rules and regulations of the Commission thereunder, and did
not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(f) Disclosure Statement. The information provided by
Weatherford in writing expressly for inclusion in the Disclosure
Statement (as defined herein) will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
-3-
7
2.2 REPRESENTATIONS AND WARRANTIES OF XXXXXX. Xxxxxx and the Subsidiary
Parties hereby jointly and severally represent and warrant to Weatherford that:
(a) Organization. Xxxxxx is a corporation duly organized,
validly existing and in good standing under the laws of the state of
Delaware. Xxxxxx has all requisite corporate power and corporate
authority and all necessary governmental authorizations to own, lease
and operate all of its properties and assets and to carry on its
business as now being conducted, except where the failure to be so
organized, existing or in good standing or to have such governmental
authority would not (i) have a material adverse effect on the assets,
properties, business, operations, or condition (financial or otherwise)
of Xxxxxx and the Xxxxxx Subsidiaries (as defined below), taken as a
whole or (ii) prevent or materially adversely affect the ability of
Xxxxxx to perform and comply with its obligations under this Agreement,
or any other agreement to be executed and delivered in connection with
the Transactions (a "Xxxxxx XXX"). Xxxxxx is duly qualified as a
foreign corporation to transact business, and is in good standing, in
each jurisdiction in which the property owned, leased or operated by it
or the nature of the business conducted by it makes such qualification
necessary, except in such jurisdictions where the failure to be duly
qualified does not and would not have a Xxxxxx XXX. Xxxxxx is in
compliance with all applicable laws, judgments, orders, rules and
regulations, domestic and foreign, except where failure to be in such
compliance would not have a Xxxxxx XXX. Xxxxxx has heretofore delivered
to Weatherford true and complete copies of Xxxxxx'x Certificate of
Incorporation (the "Xxxxxx Certificate") and bylaws, as in existence on
the date hereof.
(b) Xxxxxx Subsidiaries. Schedule 2.2(b) sets forth a list of
all corporations, partnerships, limited liability companies and other
entities of which Xxxxxx owns, directly or indirectly, an equity
interest (such entities referred to herein as the "Xxxxxx
Subsidiaries"). The Xxxxxx Subsidiaries are duly organized, validly
existing and in good standing under the laws of their respective
jurisdictions of organization and have the requisite power and
authority (as a corporation, partnership, limited liability company or
otherwise) to carry on their respective businesses as they are now
being conducted and to own, operate and lease the assets they now own,
operate or hold under lease, except where the failure to be so
organized, existing or in good standing would not have a Xxxxxx XXX.
The Xxxxxx Subsidiaries are duly qualified to transact business and are
in good standing in each jurisdiction in which the nature of their
respective businesses or the ownership or leasing of their respective
properties makes such qualification necessary, other than in such
jurisdictions where the failure to be so qualified or in good standing
would not have a Xxxxxx XXX. All the outstanding shares of capital
stock or other ownership interests of the Xxxxxx Subsidiaries have been
duly authorized and validly issued and are fully paid and
non-assessable and were not issued in violation of any preemptive
rights or other preferential rights of subscription or purchase of any
person. All such stock and ownership interests are owned of record and
beneficially by Xxxxxx or by an Xxxxxx Subsidiary, free and clear of
all liens, pledges, security interests, charges, claims, rights of
third parties and other encumbrances of any kind or nature. Xxxxxx has
heretofore delivered to Weatherford true and complete copies of each
respective Xxxxxx Subsidiary's organizational documents, as in
existence on the date hereof.
(c) Capitalization.
(i) The authorized capital stock of Xxxxxx consists
of 20,000,000 shares of Xxxxxx Class A Common Stock,
10,000,000 shares of Xxxxxx Class B Common Stock, and
5,000,000 shares of preferred stock, $0.01 par value per share
("Xxxxxx Preferred Stock"). As of the date of this Agreement,
there were 5,129,004 shares of Xxxxxx Class A Common
-4-
8
Stock issued and outstanding, 5,000,000 shares of Xxxxxx Class
B Common Stock issued and outstanding and 574,651 shares of
Xxxxxx Common Stock were held as treasury shares. There are no
outstanding shares of Xxxxxx Preferred Stock. A total of
976,031 shares of Xxxxxx Common Stock have been reserved for
issuance pursuant to the stock options and warrants described
in Section 2.2(c)(ii). All issued and outstanding shares of
Xxxxxx Common Stock are validly issued, fully paid and
nonassessable, were not issued in violation of any preemptive
rights or other preferential rights of subscription or
purchase of any person, and no holder thereof is entitled to
preemptive rights. Xxxxxx is not a party to, and is not aware
of, (i) any voting agreement, voting trust or similar
agreement or arrangement relating to any class or series of
its capital stock, or (ii) except for agreements that are
filed (or incorporated by reference) as exhibits to Xxxxxx'x
Annual Report on Form 10-K for the year ended December 31,
1998 (the "1998 10-K"), any agreement or arrangement providing
for registration rights with respect to any capital stock or
other securities of Xxxxxx.
(ii) Schedule 2.2(c)(ii) sets forth a list of all
existing plans pursuant to which options to purchase shares of
Xxxxxx Common Stock may be issued (the "Xxxxxx Option Plans").
Each unexpired and unexercised option to purchase shares of
Xxxxxx Common Stock (the "Xxxxxx Options") granted under each
Xxxxxx Option Plan or otherwise that has an exercise price of
less than $3.75 is identified on Schedule 2.2(c)(ii). Other
than as set forth in this Section 2.2(c) or in Schedule
2.2(c)(ii), there are not now and at the Effective Time there
will not be any (A) shares of capital stock or other equity
securities of Xxxxxx outstanding other than Xxxxxx Common
Stock issued pursuant to the exercise of the Xxxxxx Options or
(B) outstanding options (other than the Xxxxxx 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 Xxxxxx, or contracts, understandings
or arrangements to which Xxxxxx is a party, or by which it is
or may be bound, to issue additional shares of its capital
stock (other than the issuance of the New Xxxxxx Stock
pursuant to this Agreement and the Plan) or options, warrants,
scrip or rights to subscribe for, or securities or rights
convertible into or exchangeable for, any additional shares of
its capital stock.
(d) Authorization and Validity of Agreement. Xxxxxx and each
Subsidiary Party has all requisite corporate power and authority to
enter into this Agreement, the Plan, the Technology Transfer Agreement,
dated as of May 18, 1999, among Dailey, Weatherford, Xxxxxx X. Xxxxx
and Xxxxx Engineering & Manufacturing Inc. (the "Technology
Agreement"), and the other agreements and instruments contemplated to
be executed and delivered by it in connection with the Transactions
(collectively with the Technology Agreement, the "Other Agreements")
and to perform its respective obligations hereunder and thereunder,
subject only to the confirmation of the Plan by the Bankruptcy Court.
The execution and delivery by Xxxxxx and each Subsidiary Party of this
Agreement and any of the Other Agreements to which it is a party and
the consummation by it of the Transactions have been duly authorized by
all necessary corporate action. This Agreement has been duly executed
and delivered by Xxxxxx and each Subsidiary Party and is the valid and
binding obligation of Xxxxxx and each Subsidiary Party enforceable
against it in accordance with its terms. The Other Agreements, when
executed and delivered by Xxxxxx and each Subsidiary Party, will
constitute valid and binding obligations of Xxxxxx and each Subsidiary
Party, enforceable against it in accordance with their respective
terms.
-5-
9
(e) No Approvals or Notices Required; No Conflict with
Instruments to which Xxxxxx is a Party. The execution and delivery of
this Agreement and the Other Agreements do not, and the consummation of
the Transactions and compliance with the provisions hereof and thereof
will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of or "put"
right with respect to any obligation or to loss of a material benefit
under, or result in the creation of any lien or encumbrance upon any of
the properties or assets of Xxxxxx or any of the Xxxxxx Subsidiaries
under, any provision of (i) the Xxxxxx Certificate or bylaws of Xxxxxx
or any of the Xxxxxx Subsidiaries, (ii) except as set forth in Schedule
2.2(e), any loan or credit agreement, note, bond, mortgage, indenture,
lease, guaranty or other financial assurance agreement or other
agreement, instrument, permit, concession, franchise or license
applicable to Xxxxxx or any of the Xxxxxx Subsidiaries or any of their
respective properties or assets, and (iii) subject to governmental
filing and other matters referred to in the following sentence, any
judgment, order, decree, statute, law, ordinance, rule or regulation or
arbitration award applicable to Xxxxxx or any of the Xxxxxx
Subsidiaries or their respective properties or assets, other than (A),
in the case of clause (ii), any such conflicts, violations, defaults,
rights or liens or encumbrances that individually or in the aggregate
would not have a Xxxxxx XXX and (B) conflicts or defaults arising
solely out of the filing of the Bankruptcy Cases. No consent, approval,
order or authorization of, or registration, declaration or filing with,
any Governmental Entity is required by or with respect to Xxxxxx or any
of the Xxxxxx Subsidiaries in connection with the execution and
delivery of this Agreement by Xxxxxx or the consummation by Xxxxxx of
the Transactions, except for (i) confirmation of the Plan by the
Bankruptcy Court, (ii) the filing of a pre-merger notification and
report form by Xxxxxx under the HSR Act and (iii) such other consents,
approvals, orders, authorizations, registrations, declarations, filings
and notices as are set forth in Schedule 2.2(e).
(f) Commission Filings; Financial Statements. Xxxxxx has filed
all reports, registration statements and other filings, together with
any amendments required to be made with respect thereto, that it has
been required to file with the Commission. All reports, registration
statements and other filings (including all notes, exhibits and
schedules thereto and documents incorporated by reference therein)
filed by Xxxxxx with the Commission since August 31, 1996, through the
date of this Agreement, together with any amendments thereto, are
sometimes collectively referred to as the "Xxxxxx Commission Filings."
Xxxxxx has heretofore delivered to Xxxxxxxxxxx copies of the Xxxxxx
Commission Filings. As of the respective dates of their filing with the
Commission or, if any such Xxxxxx Commission Filings were amended, as
of the date of the filing of such amendment, the Xxxxxx Commission
Filings complied, and as of the Closing Date will comply, in all
material respects with the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations of the Commission
thereunder, and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading. All
documents required to be filed as exhibits to Xxxxxx Commission Filings
pursuant to the Exchange Act and the Securities Act and the rules and
regulations thereunder have been so filed.
Each of the consolidated financial statements (including any
related notes or schedules) included in the Xxxxxx Commission Filings
(i) was prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be noted
therein or in the notes or schedules thereto) and (ii) except for
non-compliance that would not have a Xxxxxx XXX, complied with the
rules and regulations of the Commission. Such consolidated financial
statements included in
-6-
10
the Xxxxxx Commission Filings fairly present the consolidated financial
position of Xxxxxx as of the dates thereof and the results of
operations, cash flows and changes in stockholders' equity for the
periods then ended (subject, in the case of the unaudited interim
financial statements, to the exclusion of normal year-end audit
adjustments and footnote disclosures). As of the date hereof, Xxxxxx
has no liabilities, absolute or contingent, that may reasonably be
expected to have a Xxxxxx XXX, that are not reflected in the Xxxxxx
Commission Filings, except (i) those incurred in the ordinary course of
business consistent with past operations and not relating to the
borrowing of money (ii) those set forth in Schedule 2.2(f) or (iii)
those identified in Xxxxxx'x draft Form 10-Q (printer's edgarized
proof, as of May 18, 1999, at 4:16 a.m.) for the three months ended
March 31, 1999, which has been previously provided to Xxxxxxxxxxx (the
"Draft 10-Q").
(g) Disclosure Statement. The disclosure statement to be filed
by Xxxxxx and the Subsidiary Parties with the Bankruptcy Court pursuant
to Section 1125 of the Bankruptcy Code and in accordance with Section
3.1(a) hereof, is herein called the "Disclosure Statement." The
Disclosure Statement will not, as of the date as of which it speaks,
contain an untrue statement of a material fact or omit to state a
material fact required to make the statements therein, in light of the
circumstances under which they are made, not misleading and will
describe accurately in all material respects the business and
operations of Xxxxxx and the Xxxxxx Subsidiaries and the provisions of
the Plan and this Agreement and will, as of the date of mailing of the
Bankruptcy Court-approved Disclosure Statement and other ballot
materials to the creditors and shareholders of Xxxxxx, contain
"adequate information" (as defined in Section 1125(a)(1) of the
Bankruptcy Code) with respect to the Plan, Xxxxxx and the Subsidiary
Parties and will describe accurately in all material respects the
provisions of the Plan and this Agreement.
(h) Conduct of Business in the Ordinary Course; Absence of
Certain Changes and Events. Since December 31, 1998, except as
contemplated by this Agreement or as disclosed in the Xxxxxx Commission
Filings or the Draft 10-Q or set forth in Schedule 2.2(h), Xxxxxx and
the Xxxxxx Subsidiaries have conducted their respective businesses only
in the ordinary and usual course in accordance with past practice, and
there has not been: (i) a Xxxxxx XXX; (ii) to the knowledge of Xxxxxx,
any other condition, event or development that reasonably may be
expected to result in a Xxxxxx XXX; (iii) any change by Xxxxxx in its
accounting methods, principles or practices; (iv) any revaluation by
Xxxxxx of any of its assets, including, without limitation, writing
down the value of inventory or writing off notes or accounts receivable
other than in the ordinary course of business and consistent with past
practice; (v) any entry by Xxxxxx into any commitment or transaction
that would be material to Xxxxxx; (vi) any declaration, setting aside
or payment of any dividends or distributions in respect of the Xxxxxx
Common Stock or any redemption, purchase or other acquisition of any of
its securities; (vii) any damage, destruction or loss (whether or not
covered by insurance) materially adversely affecting the properties or
business of Xxxxxx; (viii) any increase in indebtedness of borrowed
money other than borrowing under existing credit facilities, the amount
of which is disclosed in Schedule 2.2(h); (ix) any granting of a
security interest or lien or encumbrance on any property or assets of
Xxxxxx, other than (A) liens or encumbrances for taxes not due and
payable and (B) inchoate mechanics', warehousemen's and other statutory
liens or encumbrances incurred in the ordinary course of business; or
(x) any increase in or establishment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing,
stock option (including, without limitation, the granting of stock
options, stock appreciation rights, performance awards or restricted
stock awards), stock purchase or other employee benefit plan or any
other increase in the compensation payable or
-7-
11
to become payable to any directors, officers or key employees of Xxxxxx
or the Xxxxxx Subsidiaries or for which Xxxxxx or any of the Xxxxxx
Subsidiaries would be responsible.
(i) Litigation. Except as disclosed in the Xxxxxx Commission
Filings or the Draft 10-Q or as set forth in Schedule 2.2(i), there are
no claims, actions, suits, investigations, inquiries or proceedings
(collectively, "Demands"), pending or, to the knowledge of Xxxxxx,
threatened against Xxxxxx or any of the Xxxxxx Subsidiaries or any of
their respective properties at law or in equity, or any of their
employee benefit plans or fiduciaries of such plans, before or by any
Governmental Entity, wherever located (i) that exist today or (ii) that
would otherwise, if adversely determined, have a Xxxxxx XXX. Neither
Xxxxxx nor any of the Xxxxxx Subsidiaries are subject to any judicial,
governmental or administrative order, writ, judgment, injunction or
decree.
(j) Employee Benefit Plans.
(i) Schedule 2.2(j) provides a description of each of
the following that is sponsored, maintained or contributed to
by, or to which there is any liability (secondary, contingent
or otherwise) of, Xxxxxx, any Xxxxxx Subsidiary or any
corporation, trade, business or entity under common control
with Xxxxxx or any Xxxxxx Subsidiary within the meaning of
Section 414(b),(c),(m) or (o) of the Internal Revenue Code of
1986, as amended (the "Code"), or Section 4001 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")
(a "Xxxxxx ERISA Affiliate"), for the benefit of its employees
(or former employees) or directors (or former directors), or
has been so sponsored, maintained or contributed to within
three years prior to the Closing Date:
(A) each "employee benefit plan" (each a
"Benefit Plan"), as such term is defined in Section
3(3) of ERISA; and
(B) each stock option plan, collective
bargaining agreement, bonus plan or arrangement,
incentive award plan or arrangement, vacation policy,
severance pay plan or other arrangement, policy or
agreement, deferred compensation agreement or
arrangement, executive compensation or supplemental
income arrangement, consulting agreement, employment
agreement and each other employee benefit plan,
agreement, arrangement, program, practice or
understanding that is not described in Section
2.2(j)(i)(A) ("Benefit Program or Agreement").
True and complete copies of each of the Benefit Plans and
Benefit Programs or Agreements, related trusts, if applicable,
and all amendments thereto, together with (i) the Forms 5500,
as applicable, for the three most recent plan years, (ii) all
current summary plan descriptions for each such Benefit Plan,
and (iii) the most recent Internal Revenue Service
determination letters for each such Benefit Plan, as
applicable, and all correspondence with the Internal Revenue
Service and the Department of Labor within the past thirty-six
months relating to such Benefit Plans, Benefit Programs and
Agreements have been furnished to Xxxxxxxxxxx.
(ii) Except as otherwise set forth in Schedule
2.2(j),
(A) None of the Benefit Plans are subject to
Title IV of ERISA or Section 412 of the Code; no plan
is a multiemployer plan within the meaning of
-8-
12
Section 3(37) of ERISA; each Benefit Plan is a single
employer plan; and no Benefit Plan has engaged in any
transaction described in Sections 406 and 407 of
ERISA (unless exempt under Section 408) or Section
4975 of the Code (unless exempt), which in the
aggregate would have a Xxxxxx XXX;
(B) Each Benefit Plan and each Benefit
Program or Agreement has been administered,
maintained and operated in all material respects in
accordance with the terms thereof and in compliance
with its governing documents and applicable law
(including, where applicable, ERISA and the Code and
timely filing of Form 5500's for each year);
(C) There is no matter pending with respect
to any of the Benefit Plans before any governmental
agency, and there are no actions, suits or claims
pending (other than routine claims for benefits) or,
to the knowledge of Xxxxxx, threatened against, or
with respect to, any of the Benefit Plans or Benefit
Programs or Agreements or its assets;
(D) No act, omission or transaction has
occurred which would result in imposition on Xxxxxx
or any Xxxxxx ERISA Affiliate of breach of fiduciary
duty liability damages under Section 409 of ERISA, a
civil penalty assessed pursuant to subsections (c),
(i) or (l) of Section 502 of ERISA or a tax imposed
pursuant to Chapter 43 of Subtitle D of the Code,
which in the aggregate would have a Xxxxxx XXX;
(E) The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby will not require Xxxxxx or any
Xxxxxx ERISA Affiliate to make a larger contribution
to, or pay greater benefits under, any Benefit Plan
or Benefit Program or Agreement than it otherwise
would or create or give rise to any additional vested
rights or service credits under any Benefit Plan or
Benefit Program or Agreement or cause the companies
to make accelerated payments; and
(F) Each Benefit Plan intended to be a
"qualified plan" under Section 401(a) of the Code is
so qualified.
(iii) Except as set forth in Schedule 2.2(j),
termination of employment of any employee of Xxxxxx or any
Xxxxxx Sub immediately after consummation of the Transactions
would not result in payments under the Benefit Plans or
Benefit Programs or Agreements which, in the aggregate, would
result in imposition of the sanctions imposed under Sections
280G and 4999 of the Code.
(iv) Each Benefit Plan may be unilaterally amended or
terminated in its entirety without liability except as to
benefits accrued thereunder prior to such amendment or
termination.
(v) Except as set forth in Schedule 2.2(j), none of
the employees of Xxxxxx or any Xxxxxx Sub are subject to union
or collective bargaining agreements.
-9-
13
(vi) None of Xxxxxx or any of the Xxxxxx ERISA
Affiliates has agreed or is obligated to provide retiree
medical coverage, other than COBRA-required coverage, and each
of such companies has fully complied with all obligations
under COBRA applicable to it.
(k) Taxes. Except as set forth in Schedule 2.2(k),
(i) all returns and reports, including, without
limitation, information and withholding returns and reports
("Tax Returns"), of or relating to any foreign, federal, state
or local tax, assessment or other governmental charge ("Taxes"
or a "Tax") that are required to be filed on or before the
Closing Date by or with respect to Xxxxxx or any Xxxxxx
Subsidiary, have been or will be duly and timely filed, all
such Tax Returns are or will be true, correct and complete in
all material respects, and all Taxes, including interest and
penalties, due and payable whether or not shown on any such
Tax Return have been or will be duly and timely paid or
adequately provided for in reserves established by Xxxxxx in
its consolidated financial statements or any such Xxxxxx
Subsidiary, except where the failure to file Tax Returns or to
pay or provide for Taxes would not result in a Xxxxxx XXX;
(ii) the charges, accruals and reserves for Taxes
with respect to Xxxxxx and the Xxxxxx Subsidiaries reflected
in the consolidated financial statements included in the
Xxxxxx Commission Filings have been prepared in accordance
with generally accepted accounting principles and are
sufficient to cover the payment of all material Taxes,
including any penalties or interest thereon and whether or not
assessed or disputed, that are, or are hereafter found to be,
or to have been, due with respect to the operations of Xxxxxx
or any Xxxxxx Subsidiary through the periods covered thereby
and Xxxxxx and any Xxxxxx Subsidiary has (and as of the
Closing Date will have) made all estimated tax payments
required with respect to Taxes for Tax Returns not yet due;
(iii) there is no action, suit, proceeding, audit or
claim now proposed or pending against or with respect to
Xxxxxx or any Xxxxxx Subsidiary in respect to any Taxes, and
no material assessment, deficiency or adjustment has been
asserted or proposed with respect to any Tax Return of or with
respect to Xxxxxx or any Xxxxxx Subsidiary that has not been
adequately provided for in reserves established by Xxxxxx or
such Xxxxxx Subsidiary;
(iv) no waiver or extension of any statute of
limitations or the period of assessment or collection of any
Taxes relating to any federal, state, local or foreign Tax
matter has been given by or requested from Xxxxxx or any
Xxxxxx Subsidiary and no power of attorney with respect to any
such Taxes has been filed or entered into with any
Governmental Authority, in either case that will be
outstanding as of the Effective Time and the time for filing
any Tax Return relating to Xxxxxx has not been extended to a
date later than the date of this Agreement;
(v) except for statutory liens or encumbrances for
current Taxes not yet delinquent, no liens or encumbrances for
Taxes exist upon the assets of Xxxxxx or any Xxxxxx
Subsidiary;
(vi) none of Xxxxxx or any Xxxxxx Subsidiary is a
party to or bound by or has an obligation under any written
Tax separation, sharing or similar agreement or arrangement;
-10-
14
(vii) at the time of the spin-off of MacLaw Holdings,
Inc. by Xxxxxxxx Administrative Services, Inc. and at the time
of the acquisition of Xxxxxxxx Administrative Services, Inc.
by Xxxxxx, there was no plan or intention to acquire directly
or indirectly stock representing a 50 percent or greater
interest in MacLaw Holdings, Inc. or Xxxxxx within the meaning
of Section 355(e) of the Code.
(l) Environmental Matters. Except as set forth in Schedule
2.2(l), (i) the properties, operations and activities of Xxxxxx and
each of the Xxxxxx Subsidiaries comply in all material respects with
all applicable Environmental Laws; (ii) assuming no change in permitted
activities and timely notification of change of ownership, all the
material environmental permits of Xxxxxx are transferable; (iii) none
of Xxxxxx or any of the Xxxxxx Subsidiaries is subject to any existing,
pending or, to the knowledge of Xxxxxx, threatened action, suit,
investigation, inquiry, removal, remediation or corrective action
requirements, citation, outstanding administrative order, judicial
decree or proceeding by or before any governmental authority under any
Environmental Law; (iv) except where the failure would not have a
Xxxxxx XXX, all notices, permits, licenses, or similar authorizations,
if any, required to be obtained or filed by Xxxxxx under any
Environmental Law in connection with any aspect of the business of
Xxxxxx or any Xxxxxx Subsidiary, including without limitation those
relating to the treatment, storage, disposal or release of a hazardous
substance or solid waste, have been duly obtained or filed and will
remain valid and in effect after the Closing Date, and Xxxxxx and each
Xxxxxx Subsidiary is in compliance with the terms and conditions of all
such notices, permits, licenses and similar authorizations; (v) Xxxxxx
and each of the Xxxxxx Subsidiaries has satisfied and is currently in
compliance with all financial responsibility requirements applicable to
its operations and imposed by any governmental authority under any
other Environmental Law, and none of such parties has received any
notice of noncompliance with any such requirements; (vi) there are no
physical or environmental conditions existing on any property currently
owned, leased or operated or previously owned, leased or operated by
Xxxxxx or any entity in which it has or had ownership interest that
could reasonably be expected to give rise to any on-site or off-site
remedial obligations under any Environmental Laws; and (vii) to
Xxxxxx'x knowledge, since the effective date of the relevant
requirements of applicable Environmental Laws, all hazardous substances
or solid wastes generated by Xxxxxx or any Xxxxxx Subsidiary or used in
connection with their properties or operations have been transported
only by carriers authorized under Environmental Laws to transport such
substances and wastes, and disposed of only at treatment, storage, and
disposal facilities authorized under environmental laws to treat, store
or dispose of such substances and wastes, and, to the knowledge of
Xxxxxx, such carriers and facilities have been and are operating in
compliance with such authorizations and are not the subject of any
existing, pending, or threatened action, investigation, inquiry, or
corrective action measures by any governmental authority in connection
with any Environmental Laws.
For purposes of this Agreement, the term "Environmental Laws"
shall mean any and all laws, statutes, ordinances, rules, regulations,
orders or determinations of any Governmental Authority pertaining to
health or the environment currently in effect in any and all
jurisdictions in which the party in question and its subsidiaries own
property or conduct business, including without limitation, the Clean
Air Act, as amended, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980, as amended ("CERCLA"), the
Federal Water Pollution Control Act, as amended, the Occupational
Safety and Health Act of 1970, as amended, the Resource Conservation
and Recovery Act of 1976, as amended ("RCRA"), the Safe Drinking Water
Act, as amended, the Toxic Substances Control Act, as amended, the
Hazardous & Solid Waste Amendments Act of 1984, as amended, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the
Hazardous Materials
-11-
15
Transportation Act, as amended, the Oil Pollution Act of 1990 ("OPA"),
any state laws pertaining to the handling of oil and gas exploration
and production wastes or the use, maintenance, and closure of pits and
impoundments, and all other environmental conservation or protection
laws. For purposes of this Agreement, the terms "hazardous substance"
and "release" have the meanings specified in CERCLA and shall also
include PCBs, asbestos, crude oil and refined products; provided,
however, that to the extent the laws of the state in which the property
is located establish a meaning for "hazardous substance," "release,"
"solid waste" or "disposal" that is broader than that specified in
CERCLA, such broader meaning shall apply. For purposes of this
Agreement, the term "Governmental Authority" includes the United
States, any foreign jurisdiction, the state, county, city and political
subdivisions in which the party in question owns or leases property or
conducts business, and any agency, department, commission, board,
bureau or instrumentality of any of them.
(m) Severance Payments. Except as set forth in Schedule
2.2(m), neither Xxxxxx nor any of the Xxxxxx Subsidiaries will have any
liability or obligation to pay a severance payment or similar
obligation to any of their respective employees, officers or directors
as a result of the Transactions, nor will any of such persons be
entitled to an increase in severance payments or other benefits as a
result of the Transactions in the event of the subsequent termination
of their employment.
(n) Brokers. Except as set forth in Schedule 2.2(n), no
broker, investment banker, or other Person acting on behalf of Xxxxxx
is or will be entitled to any broker's, finder's or other similar fee
or commission in connection with the Transactions.
(o) Compliance with Laws. Xxxxxx and each of the Xxxxxx
Subsidiaries hold all required, necessary or applicable permits,
licenses, variances, exemptions, orders, franchises and approvals of
all Governmental Entities, except where the failure to so hold could
not reasonably be expected to have a Xxxxxx XXX (the "Xxxxxx Permits").
All applications with respect to such Xxxxxx Permits, were complete and
correct in all material respects when made and Xxxxxx does not know of
any reason why any of such permits, licenses, variances, exemptions,
orders, franchises and approvals would be subject to cancellation.
Xxxxxx and each of the Xxxxxx Subsidiaries are in compliance with the
terms of the Xxxxxx Permits except where the failure to so comply could
not reasonably be expected to have a Xxxxxx XXX. None of Xxxxxx or any
of the Xxxxxx Subsidiaries has violated or failed to comply with any
statute, law, ordinance, regulation, rule, permit or order of any
Federal, state or local government, domestic or foreign, or any
Governmental Entity, any arbitration award or any judgment, decree or
order of any court or other Governmental Entity, applicable to Xxxxxx
or any of the Xxxxxx Subsidiaries or their respective business, assets
or operations, except for violations and failures to comply that would
not have a Xxxxxx XXX.
(p) Contracts.
(i) Schedule 2.2(p) contains a complete list of the
following contracts, agreements, arrangements and commitments:
(A) all employment or consulting contracts or agreements to
which Xxxxxx or any of the Xxxxxx Subsidiaries is
contractually obligated; (B) current leases, sales contracts
and other agreements with respect to any real property of
Xxxxxx or any of the Xxxxxx Subsidiaries or to which Xxxxxx or
any of the Xxxxxx Subsidiaries is contractually obligated and
current leases, sales contracts or other agreements with
respect to personal property of Xxxxxx or any of the Xxxxxx
Subsidiaries or to which Xxxxxx or any of the Xxxxxx
Subsidiaries is contractually obligated, in each case having
(1) a remaining term
-12-
16
of greater than one year or (2) total payments that may be
required of Xxxxxx or the Xxxxxx Subsidiaries exceeding
$50,000; (C) contracts or commitments for capital expenditures
or acquisitions in excess of $500,000 to which Xxxxxx or any
of the Xxxxxx Subsidiaries is obligated; (D) agreements,
contracts, indentures or other instruments relating to the
borrowing of money, or the guarantee of any obligation for the
borrowing of money, to which Xxxxxx or any of the Xxxxxx
Subsidiaries is a party or any of their respective properties
is bound; (E) contracts or agreements or amendments thereto
that would be required to be filed as an exhibit to an Annual
Report on Form 10-K filed by Xxxxxx as of the date hereof that
has not been filed as an exhibit to Xxxxxx'x Annual Report on
Form 10-K for the fiscal year ended December 31, 1998, filed
by Xxxxxx with the Commission or any report filed with the
Commission under the Exchange Act since such date; (F) all
material indemnification and guaranty or other similar
obligations (other than those obligations which occur in the
ordinary course of business) to which Xxxxxx or any of the
Xxxxxx Subsidiaries is bound; (G) any outstanding bonds,
letters of credit posted or guaranteed by Xxxxxx or any of the
Xxxxxx Subsidiaries with respect to any Person, other than
those that do not exceed $500,000 in the aggregate (H) any
covenants not to compete or other obligations affecting Xxxxxx
or any Xxxxxx Subsidiary that would materially restrict any of
them or their affiliates from engaging in any business or
activity; and (I) contracts under which Xxxxxx or any Xxxxxx
Subsidiary has received any material advance, "take-or-pay" or
other similar payments and that entitle purchasers to receive
deliveries without paying at such time the contract price
therefor.
(ii) True and correct copies of all the instruments
described in Schedule 2.2(p) have been furnished or made
available to Xxxxxxxxxxx. Except as noted in Schedule 2.2(p),
all such agreements, arrangements or commitments are valid and
subsisting and each of Xxxxxx and the Xxxxxx Subsidiaries, to
the extent each is a party, has duly performed its obligations
thereunder in all material respects to the extent such
obligations have accrued, and no breach or default exists
thereunder by Xxxxxx or the Xxxxxx Subsidiaries or, to the
knowledge of Xxxxxx, any other party thereto. There are no
material liabilities of any of the parties to any of the
contracts between Xxxxxx or any of the Xxxxxx Subsidiaries and
third parties arising from any breach of or default in any
provision thereof, other than such breaches that, individually
or in the aggregate, could not reasonably be expected to have
a Xxxxxx XXX, or that would permit the acceleration of any
obligation of any party thereto or the creation of a lien or
encumbrance upon any asset of Xxxxxx or any of the Xxxxxx
Subsidiaries.
(iii) The Subsidiary Parties are the only Xxxxxx
Subsidiaries that have guaranteed the Xxxxxx Notes or are
required to do so pursuant to the indenture for the Xxxxxx
Notes.
(q) Title to Property.
(i) Xxxxxx and each of the Xxxxxx Subsidiaries have
good and indefeasible title to, or valid leasehold interests
in, all of their properties and assets including all real
property and all other properties (tangible or intangible,
real or personal) carried on their books as an asset or used
exclusively by them in their business.
-13-
17
(ii) Except as set forth in Schedule 2.2(q)(ii),
Xxxxxx and each of the Xxxxxx Subsidiaries has complied in all
material respects with the terms of all leases to which it is
a party and under which it is in occupancy, and all such
leases are in full force and effect. Xxxxxx and each of the
Xxxxxx Subsidiaries enjoys peaceful and undisturbed possession
under all such leases.
(r) Insurance Policies. Schedule 2.2(r) contains a correct and
complete description of all insurance policies of Xxxxxx covering
Xxxxxx and the Xxxxxx Subsidiaries, any employees or other agents of
Xxxxxx and the Xxxxxx Subsidiaries or any assets of Xxxxxx and the
Xxxxxx Subsidiaries. Each such policy is in full force and effect, is
with responsible insurance carriers and is substantially equivalent in
coverage and amount to policies covering companies of the size of
Xxxxxx and in the business in which Xxxxxx and the Xxxxxx Subsidiaries
is engaged, in light of the risk to which such companies and their
employees, businesses, properties and other assets may be exposed. All
retroactive premium adjustments under any worker's compensation policy
of Xxxxxx or any of the Xxxxxx Subsidiaries have been recorded in
Xxxxxx'x financial statements in accordance with generally accepted
accounting principles and are reflected in the financial statements
contained in the Xxxxxx Commission Filings.
(s) Loans. Schedule 2.2(s) sets forth all existing loans,
advances or other extensions of credit (excluding accounts receivable
arising in the ordinary course of business) by Xxxxxx or the Xxxxxx
Subsidiaries to any party, including intercompany loans, advances,
guaranties or extensions of credit.
(t) Voting Requirements. Xxxxxx has taken all action to assure
that no state takeover statute or similar statute or regulation,
including, without limitation ss.203 of the Delaware General
Corporation Law, shall apply to the Transactions or to Weatherford.
Xxxxxx has also taken such other action with respect to any other
anti-takeover provisions in its by-laws or Certificate of Incorporation
to the extent necessary to consummate the Transactions on the terms set
forth in this Agreement.
ARTICLE III
COVENANTS OF XXXXXX
3.1 CERTAIN COVENANTS CONCERNING THE PROSPECTIVE BANKRUPTCY CASES.
(a) On or before June 1, 1999, each of Xxxxxx and the
Subsidiary Parties shall file the Bankruptcy Cases, together with the
Plan substantially in the form attached as Exhibit A hereto and to
which this Agreement shall be an Exhibit and the Disclosure Statement,
with the Bankruptcy Court pursuant to Chapter 11 of the United States
Bankruptcy Code (the "Bankruptcy Code"). Weatherford and its counsel
shall be given reasonable opportunity to review and comment upon drafts
of the Disclosure Statement before its filing.
(b) Xxxxxx and the Subsidiary Parties shall seek Bankruptcy
Court approval of the Disclosure Statement as expeditiously as
permitted by the Bankruptcy Code, the Federal Rules of Bankruptcy
Procedure and the local rules, if any, of the Bankruptcy Court.
-14-
18
(c) Subject to their fiduciary obligations as debtors in
possession in the Bankruptcy Cases, Xxxxxx and the Subsidiary Parties
shall exercise all reasonable efforts diligently and in good faith to
cause the Plan to be confirmed by the Bankruptcy Court as promptly as
practicable and in substantially the form of Exhibit A hereto. Xxxxxx
shall not amend or permit the Plan to be amended without the prior
written consent of Weatherford and, upon the reasonable request of
Weatherford, shall promptly file with the Bankruptcy Court all such
amendments to the Plan, the Disclosure Statement or any exhibit to
either as are necessary in order to give effect to the provisions of
this Agreement. Subject to confirmation of the Plan, Xxxxxx and the
Xxxxxx Subsidiaries shall take all action not inconsistent with the
provisions of this Agreement that is necessary or appropriate in order
to effect the consummation of the Plan and the Transactions.
(d) Neither Xxxxxx nor any Xxxxxx Subsidiaries shall have
filed any motion or other pleading, or otherwise shall have brought any
action or proceeding, challenging or objecting to the Xxxxxx Note
Claims of the holders of the Xxxxxx Notes that are signatories to that
certain agreement among such signatories and Xxxxxx and the Subsidiary
Parties (each a "Consenting Noteholder" and collectively, the
"Consenting Noteholders") or otherwise seeking any recovery from, or
injunctive relief against, a Consenting Noteholder (other than with
respect to any alleged or actual breach by a Consenting Noteholder of
the terms of this Agreement);
3.2 CONDUCT OF BUSINESS BY XXXXXX PENDING THE CLOSING DATE. Xxxxxx
covenants and agrees that, from the date of this Agreement until the Closing
Date, unless Weatherford shall otherwise agree in writing or as otherwise
expressly and specifically contemplated by this Agreement or expressly and
specifically permitted in the Plan:
(a) The business of Xxxxxx and the Xxxxxx Subsidiaries shall
be conducted only in, and Xxxxxx and the Xxxxxx Subsidiaries shall not
take any action except in, the ordinary course of business and
consistent with past practice;
(b) Xxxxxx and the Xxxxxx Subsidiaries shall not, except as
contemplated hereby or by the Plan, directly or indirectly do any of
the following: (i) issue, sell, pledge, dispose of or encumber any
capital stock or grant or issue any right to acquire any capital stock;
(ii) split, combine or reclassify any outstanding capital stock, or
declare, set aside or pay any dividend payable in cash, stock, property
or otherwise with respect to its capital stock whether now or hereafter
outstanding; (iii) redeem, purchase or acquire or offer to acquire any
of its capital stock or outstanding indebtedness; (iv) acquire, agree
to acquire or make any offer to acquire for cash or other
consideration, any equity interest in or assets of any corporation,
partnership, joint venture or other entity; or (v) enter into any
contract, agreement, commitment or arrangement with respect to any of
the matters set forth in this Section 3.2(b);
(c) Xxxxxx and the Xxxxxx Subsidiaries shall not enter into
any contract regarding its business having a term greater than 120 days
or involving an amount in excess of $500,000 nor commit to do the same;
provided, however, that Weatherford shall not unreasonably withhold any
consent sought by Xxxxxx or any of the Xxxxxx Subsidiaries with respect
to this covenant;
(d) Xxxxxx and the Xxxxxx Subsidiaries shall not become bound
by any agreement or obligation in an amount in excess of $500,000 in
the aggregate for all such agreements and obligations;
-15-
19
provided, however, that Weatherford shall not unreasonably withhold any
consent sought by Xxxxxx or any of the Xxxxxx Subsidiaries with respect
to this covenant;
(e) Neither Xxxxxx nor any of the Xxxxxx Subsidiaries shall
(i) increase the compensation payable or to become payable to its
officers or employees, except for increases in compensation of
non-officer employees in accordance with past practices in salaries or
wages of employees of Xxxxxx or any of the Xxxxxx Subsidiaries who are
not officers of Xxxxxx or any of the Xxxxxx Subsidiaries, (ii) grant
any severance or termination pay to any director, officer or other
employee of Xxxxxx or any of the Xxxxxx Subsidiaries, (iii) enter into
or amend any employment or severance agreement with any director,
officer or other employee of Xxxxxx or any of the Xxxxxx Subsidiaries
or (iv) establish, adopt, enter into, extend, or, except as set forth
on Schedule 3.2(e), amend or terminate any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted
stock, pension, retirement, deferred compensation, employment,
termination, severance or other agreement, trust, fund, policy or
arrangement for the benefit of any director, officer or employee;
(f) Neither Xxxxxx nor any of the Xxxxxx Subsidiaries shall
enter into any collective bargaining agreement or any agreement to
change or modify any existing collective bargaining agreement, except
for such changes or modifications as may be required by law;
(g) Neither Xxxxxx nor any of the Xxxxxx Subsidiaries shall
merge or consolidate with any corporation or business entity, acquire
control or acquire any capital shares of other securities of any other
corporation or business entity, or take any steps incident to or in
furtherance of any such actions, whether by entering into an agreement
providing therefor or otherwise;
(h) Neither Xxxxxx nor any of the Xxxxxx Subsidiaries shall
enter, or agree to enter, into any contract or agreement (i) granting
any rights of first refusal or similar preferential rights to purchase
any assets or rights of Xxxxxx or any of the Xxxxxx Subsidiaries, other
than in the ordinary course of business with respect to non-material
assets or rights, (ii) requiring the consent of any party to the
consummation of any of the transactions contemplated by this Agreement
or the Plan, or (iii) that if effective on the date hereof would be
required to be identified as a disclosure pursuant to Schedule 2.2(p);
(i) Neither Xxxxxx nor any of the Xxxxxx Subsidiaries shall
sell, lease, mortgage, pledge, xxxxx x xxxx or encumbrance on or
otherwise encumber or otherwise dispose of any of Xxxxxx'x or the
Xxxxxx Subsidiaries' properties or assets, except sales of inventory
and rental of equipment in the ordinary course of business consistent
with past practice, or cancel any material liabilities owed to it, or
agree to do any of the foregoing;
(j) Except as disclosed in Schedule 3.2(j), neither Xxxxxx nor
any of the Xxxxxx Subsidiaries shall, directly or indirectly, incur any
indebtedness for borrowed money or guarantee any such indebtedness of
another person, issue or sell any debt securities or warrants or other
rights to acquire any debt securities of Xxxxxx or any of the Xxxxxx
Subsidiaries, guarantee any debt securities of another person (other
than endorsements of drafts, checks and notes in the ordinary course of
business), enter into any "keep well" or other agreement to maintain
any financial statement condition of another person or enter into any
arrangement having the economic effect of any of the foregoing or make
or permit to remain outstanding any loans, advances or capital
contributions to, or investments in, any other person, other than to
Xxxxxx or any Subsidiary Party;
-16-
20
(k) Neither Xxxxxx nor any of the Xxxxxx Subsidiaries shall
make any election relating to Taxes or settle or compromise any
material federal, state, local or foreign income tax liability;
(l) Neither Xxxxxx nor any of the Xxxxxx Subsidiaries shall
change any accounting principle or practices used by it except as
required by generally accepted accounting principles;
(m) Xxxxxx shall use its reasonable efforts to (i) preserve
intact the business organization of Xxxxxx and the Xxxxxx Subsidiaries,
(ii) maintain in effect any material authorizations or similar rights
of Xxxxxx and the Xxxxxx Subsidiaries, (iii) preserve the goodwill of
those having material business relationships with Xxxxxx and the Xxxxxx
Subsidiaries; (iv) maintain and keep each of Xxxxxx'x and the Xxxxxx
Subsidiaries' properties in the same repair and condition as presently
exists, except for deterioration due to ordinary wear and tear and
damage due to casualty; and (v) maintain in full force and effect
insurance comparable in amount and scope of coverage to that currently
maintained by it;
(n) Xxxxxx shall, and shall cause the Xxxxxx Subsidiaries to,
perform their respective obligations under any contracts and agreements
to which it is a party or to which any of its assets is subject, except
to the extent such failure to perform would not have a Xxxxxx XXX;
(o) Neither Xxxxxx nor any of the Xxxxxx Subsidiaries shall
(i) settle any unsecured claims in the Bankruptcy Cases without
Xxxxxxxxxxx'x prior written consent or (ii) reject any executory
contracts with respect to which the damages resulting from such
rejection would exceed $50,000;
(p) Upon Xxxxxxxxxxx'x written request, Xxxxxx and the
Subsidiary Parties shall file and prosecute claims and objections in
the Bankruptcy Cases;
(q) Neither Xxxxxx nor any of the Xxxxxx Subsidiaries shall
amend or otherwise change its Certificate of Incorporation or bylaws or
equivalent organizational documents;
(r) Neither Xxxxxx nor any of the Xxxxxx Subsidiaries shall
take any action that would prevent or impede any party to this
Agreement from obtaining any consent or approval the receipt of which
is a condition to the consummation of the Plan;
(s) Neither Xxxxxx nor any of the Xxxxxx Subsidiaries shall
enter into any agreement or arrangement that would limit or otherwise
restrict Xxxxxx or any of the Xxxxxx Subsidiaries or any successor
thereto or, after consummation of the Plan, Weatherford or any
subsidiary thereof or any successor thereto, from engaging or competing
in any line of business or in any geographic area;
(t) Neither Xxxxxx nor any of the Xxxxxx Subsidiaries shall
take any action that is inconsistent with the terms of the Plan;
(u) Xxxxxx shall not authorize any of, or commit or agree to
take any of, or permit any Xxxxxx Subsidiary to take any of, the
foregoing actions to the extent prohibited by the foregoing and shall
not, and shall not permit any of the Xxxxxx Subsidiaries to, take any
action that would, or that reasonably could be expected to, result in
any of the representations and warranties set forth in this Agreement
becoming untrue or any of the conditions to the Acquisition set forth
in Article VI not being satisfied. Xxxxxx promptly shall advise
Weatherford orally and in writing of any change or event
-17-
21
having, or which, insofar as reasonably can be foreseen, would have, a
material adverse effect on Xxxxxx and the Xxxxxx Subsidiaries, taken as
a whole, or cause a Xxxxxx XXX; and
(v) Prior to the time the Bankruptcy Cases, the Plan and the
Disclosure Statement are filed with the Bankruptcy Court, Xxxxxx shall
not, nor shall Xxxxxx authorize or knowingly permit any affiliate,
officer, director, employee, subsidiary, investment banker, attorney,
advisor, agent or representative (collectively, any "Affiliate") of
Xxxxxx to, directly or indirectly, (i) solicit, initiate or encourage
the submission of any Alternative Transaction (as defined in Section
5.3(a)), (ii) enter into any agreement with respect to any Alternative
Transaction, or (iii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or
take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to,
any Alternative Transaction. Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in the
preceding sentence by any Affiliate of Xxxxxx, whether or not such
Affiliate is purporting to act on behalf of Xxxxxx, shall be deemed to
be a material breach of this Agreement by Xxxxxx.
In addition to the obligations of Xxxxxx set forth in the
foregoing paragraph, Xxxxxx shall promptly advise Weatherford orally
and in writing of any Alternative Transaction or any inquiry with
respect to or which could lead to any Alternative Transaction, the
material terms and conditions of such inquiry or Alternative
Transaction (including any proposed financing for such Alternative
Transaction), and the identity of the person proposing such Alternative
Transaction. Xxxxxx will keep Weatherford fully informed of the status
and details of any such proposed Alternative Transaction.
ARTICLE IV
COVENANTS OF WEATHERFORD PRIOR TO THE EFFECTIVE TIME
4.1 RESERVATION OF WEATHERFORD STOCK. Weatherford shall reserve for
issuance, out of its authorized but unissued capital stock, such number of
shares of Weatherford Common Stock as may be issuable pursuant to this Agreement
upon consummation of the Acquisition.
4.2 STOCK EXCHANGE LISTING. Weatherford shall use its best efforts to
cause the shares of Weatherford Common Stock to be issued in the Acquisition to
be approved for listing on the NYSE, subject to official notice of issuance,
prior to the Closing Date.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 FILINGS; CONSENTS; REASONABLE EFFORTS. Subject to the terms and
conditions of this Agreement, Xxxxxx and Weatherford shall (i) make all
necessary filings with respect to the Plan and this Agreement under the HSR Act,
the Securities Act, the Exchange Act, and applicable blue sky or similar
securities laws and shall use all reasonable efforts to obtain required
approvals and clearances with respect thereto; (ii) use reasonable efforts to
obtain all consents, waivers, approvals, authorizations, and orders required in
connection with the authorization, execution, and delivery of this Agreement and
the consummation
-18-
22
of the Plan; and (iii) use reasonable efforts to take, or cause to be taken, all
appropriate action, and do, or cause to be done, all things necessary, proper,
or advisable to consummate the Plan and make effective as promptly as
practicable the Transactions, including (with respect to Xxxxxx) causing any
Xxxxxx Subsidiary that is not a Subsidiary Party to authorize and execute any
Other Agreements.
5.2 NOTIFICATION OF CERTAIN MATTERS. Xxxxxx shall give prompt notice to
Weatherford, and Weatherford shall give prompt notice to Xxxxxx, orally and in
writing, of (i) the occurrence, or failure to occur, of any event which
occurrence or failure would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate at any time from the date
hereof to the Effective Time; and (ii) any material failure of Xxxxxx or
Weatherford, as the case may be, or any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
compiled with or satisfied by it hereunder.
5.3 CERTAIN FEES AND EXPENSES. In the event that the Transactions and
the Plan are not consummated under one of the circumstances set forth below
(other than as a result of the breach of this Agreement by Weatherford), then
Xxxxxx and the Xxxxxx Subsidiaries, jointly and severally, shall reimburse
Weatherford for its reasonable out-of-pocket fees and expenses (including
reasonable attorneys' fees and disbursements at such attorneys' normal hourly
rates) incurred in connection this Agreement, the Plan, the Transactions and the
Bankruptcy Cases, and shall also make the indicated payment to Weatherford to
compensate Weatherford for its time and expense incurred in connection with this
Agreement:
(a) If the Transactions and the Plan are not consummated
because of the failure of the condition set forth in Section 6.2(d) to
occur, Xxxxxx shall issue to Weatherford 2,000,000 shares of Xxxxxx
Class A Common, provided that if such failure is the result of an
injunction or similar order issued by a Governmental Entity of
competent jurisdiction and such injunction or order is subsequently
dissolved or rescinded, Weatherford shall promptly return such shares
to Xxxxxx; in addition, if this Agreement is terminated by Weatherford
because of the failure of the condition in Section 6.2(d) to be
satisfied, and if within one year of such termination of this
Agreement, an agreement or an agreement in principle is reached, a
tender or exchange offer is commenced or a bankruptcy plan is filed, in
any such case that results in an Alternative Transaction that is
ultimately consummated, Xxxxxx and the Xxxxxx Subsidiaries shall also
pay to Weatherford the amount of $6,000,000 as a condition to and upon
consummation of the Alternative Transaction; for purposes of this
Agreement, "Alternative Transaction" means (A) any merger,
reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction
involving Xxxxxx or any of the Xxxxxx Subsidiaries where the
shareholders of Xxxxxx cease to own at least 60% of the voting power
and equity of the surviving entity, (B) the acquisition from Xxxxxx or
any of its affiliates in any manner, directly or indirectly, of a
greater than 35% voting or equity interest in Xxxxxx or the acquisition
of in excess of $25 million in assets or businesses of Xxxxxx and the
Xxxxxx Subsidiaries, on a consolidated basis or a sale of a material
portion of Xxxxxx'x jar business or underbalanced or air drilling
businesses, (C) the acquisition from the stockholders of Xxxxxx, by
tender offer, exchange offer or otherwise, of more than 35% of any
class of common stock of Xxxxxx then outstanding, or (D) any plan of
reorganization providing for any of the foregoing, unless such plan of
reorganization contemplates only the conversion of creditor claims into
equity of Xxxxxx and does not provide for any third-party additional
equity or debt (except for working capital or capital facility
financing);
-19-
23
(b) If the Transactions and the Plan are not consummated
because any of the conditions set forth in Sections 6.1 or 6.2 hereof,
excluding the conditions set forth in Section 6.2(b) and 6.2(d), fails
to be satisfied or waived, Xxxxxx and the Xxxxxx Subsidiaries shall pay
to Weatherford the amount of $6,000,000 provided, however, that if the
failure of the condition contained in Section 6.2(e) to be satisfied is
the result of Xxxxxx'x breach of its covenant contained in Section
3.2(v), then Xxxxxxxxxxx'x remedies shall be limited to such $6,000,000
plus the reimbursement of its reasonable out-of-pocket fees and
expenses as set forth above in this Section 5.3; or
(c) If the Transactions and the Plan are not consummated
because the condition set forth in Section 6.2(b) fails to be satisfied
or waived, Xxxxxx and the Xxxxxx Subsidiaries shall not be required to
pay any amounts other than the reimbursement provided for by this
Section 5.3.
ARTICLE VI
CONDITIONS
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective obligations
of each party to consummate the Agreement and the Transactions shall be subject
to the fulfillment of the following conditions:
(a) (i) none of the Bankruptcy Cases shall have been dismissed
or converted to a case under chapter 7 of the Bankruptcy Code, (ii) the
Plan shall incorporate the terms of this Agreement and (iii) the Plan
shall have been confirmed pursuant to an order of the Bankruptcy Court,
which order shall have become final, non-appealable and not subject to
further review (the "Confirmation Order") in accordance with the
provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy
Procedure and the local rules of the Bankruptcy Court.
(b) The waiting period (and any extension thereof) applicable
to the consummation of the Acquisition under the HSR Act shall have
expired or been terminated;
(c) No order shall have been entered and remain in effect in
any action or proceeding before any foreign, federal or state court or
governmental agency or other foreign, federal or state regulatory or
administrative agency or commission that would prevent or make illegal
the consummation of the Transactions or the Plan;
(d) There shall have been obtained any and all material
permits, approvals and consents of any governmental body, commission or
agency that reasonably may be deemed necessary so that the consummation
of the Plan and the transactions contemplated thereby will be in
compliance with applicable laws, the failure to comply with which would
have a Xxxxxx XXX or Xxxxxxxxxxx XXX; and
(e) The receipt of all approvals and consents of third persons
the granting of which is necessary for the consummation of the Plan or
the Transactions contemplated in connection therewith.
-20-
24
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF WEATHERFORD. The obligation
of Weatherford to consummate the Agreement and the Transactions is, at the
option of Weatherford, also subject to the fulfillment at or prior to the
Closing Date of the following conditions:
(a) The representations and warranties of Xxxxxx and the
Xxxxxx Subsidiaries in this Agreement shall be true and correct on the
Closing Date as if made on and as of that date, except for changes that
do not constitute a breach or violation of Section 3.2 hereof, or with
the prior written consent of Weatherford;
(b) There shall have been no material adverse change in the
assets, properties, business, operations, or condition (financial or
otherwise) of Xxxxxx and the Xxxxxx Subsidiaries (taken as a whole),
other than those changes arising out of the filing of the Bankruptcy
Cases and the Plan (including any adverse effect on the interest of Air
Drilling Services, Inc. in International Nitrogen Services, LLC),
provided, however, that a continuation of trends of the type and
magnitude as reflected in the consolidated financial statements
contained in the Xxxxxx Commission Filings filed since January 1, 1998
and the Draft 10-Q shall not be considered to be such a material
adverse change;
(c) There shall be no liability or claim existing with respect
to Xxxxxx or any Subsidiary Party that is material to Xxxxxx and the
Subsidiary Parties, taken as a whole, other than such liabilities or
claims the nature and amount of which have been disclosed in all
material respects in this Agreement as of the date hereof;
(d) (i) the Xxxxxx Noteholders shall not have elected to
exercise their right to terminate their obligations under the Agreement
dated May 21, 1999, among Weatherford, Dailey, the Subsidiary Parties,
X. X. Xxxxxxxx, and certain Xxxxxx Noteholders (the "Voting
Agreement"), which right arose as a result of Xxxxxx'x failure to
timely file the Bankruptcy Cases, the Plan and the Disclosure Statement
on or before June 1, 1999, and (ii) Weatherford shall not have notified
Xxxxxx of its election to terminate this Agreement pursuant to this
Section 6.2(d) by noon, Houston time on June 3, 1999 based on
Xxxxxxxxxxx'x determination in its sole discretion that Xxxxxx and the
Subsidiary Parties have not made or are not making a good faith effort
to file the Bankruptcy Cases, the Plan and the Disclosure Statement on
or prior to June 1, 1999;
(e) All of the other terms, conditions, covenants and
agreements to be complied with or performed by Xxxxxx under this
Agreement on or before the Closing Date shall have been duly complied
with or performed in all material respects;
(f) Unless otherwise agreed to in writing by Weatherford, on
or before September 30, 1999 the Confirmation Order shall have become a
final non-appealable (and not subject to pending appeal) order that,
among other things, (A) approves the terms of this Agreement and
Xxxxxx'x execution, delivery and performance of this Agreement, the
Technology Agreement, and all other agreements contemplated by this
Agreement; (B) approves the sale of the New Xxxxxx Stock to Weatherford
free and clear of all liens, claims, interests, rights of others and
encumbrances of every kind; (C) includes an express finding that
Weatherford is a "good faith purchaser" of the New Xxxxxx Stock; (D)
includes an express finding that Weatherford has acted in good faith
with respect to the Acquisition pursuant to Section 363(m) of the
Bankruptcy Code; (E) expressly effects the assumption of this Agreement
by Xxxxxx and the Subsidiary Parties, and of the
-21-
25
Technology Agreement by Xxxxxx pursuant to Section 365(a) of the
Bankruptcy Code; (F) enjoins and restrains all creditors of Xxxxxx or
any of the Subsidiary Parties from asserting any lien, claim, interest
or encumbrance (other than any lien, claim, interest or encumbrance
that cannot be removed under the Bankruptcy Code) that any of them has
or had against the Xxxxxx Stock or any of the assets of Xxxxxx or the
Subsidiary Parties; (G) includes a reservation, pursuant to the Plan,
of jurisdiction by the Bankruptcy Court to implement and enforce this
Agreement and Xxxxxxxxxxx'x peaceful use and enjoyment of the assets of
Xxxxxx or any of the Subsidiary Parties after the Closing Date, free
and clear of all liens, claims, and encumbrances to the fullest extent
permitted under the Bankruptcy Code; (H) terminates the automatic stay
under Section 362 of the Bankruptcy Code to the extent necessary to
permit Weatherford to enforce the terms of this Agreement; (I) releases
Weatherford and its post-closing affiliates, representatives, employees
and agents from any claims related to or arising in the Bankruptcy Case
through the Closing Date other than claims arising under this
Agreement; (J) provides that the transfer of the Xxxxxx Stock to
Weatherford is exempt from any tax to the fullest extent permitted by
Section 1146 of the Bankruptcy Code; (K) provides that the issuance of
Weatherford Common Stock pursuant to the Plan in accordance with the
terms of this Agreement is exempt from registration under the
Securities Act and all applicable state and local securities laws; and
(L) any other matter that Weatherford shall reasonably determine is
necessary or appropriate to effect the transactions contemplated by,
and to carry out the intent of, this Agreement;
(g) The Disclosure Statement, the Plan and the Confirmation
Order shall (i) incorporate, and otherwise be consistent in all
material respects with, the terms of this Agreement and (ii) be in form
and substance reasonably satisfactory to Weatherford;
(h) Xxxxxx shall deliver to Weatherford customary closing
documents, each of which shall be dated as of the Closing Date, duly
executed and in a form reasonably satisfactory to Weatherford,
including a certificate of Xxxxxx'x president or a vice president
confirming all of the matters set forth in Sections 6.2(a)-(c);
(i) The Lease Modification Agreement between Xxxxxx and
Xxxxxxxx International, Inc., in substantially the form as attached to
the Plan, shall have been entered into by such parties and shall remain
in effect;
(j) There shall not have occurred (i) any suspension or
limitation on trading in securities generally on the New York Stock
Exchange or the establishment of minimum prices on such Exchange, (ii)
a declaration of a banking moratorium either by Federal or New York
State authorities or (iii) any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is
such as to make it, in the sole judgment of Weatherford, impractical or
inadvisable to proceed with the consummation of the transactions
contemplated hereby to be consummated at the Closing Date; and
(k) the Voting Agreement shall not have been terminated on or
before September 30, 1999.
-22-
26
6.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF XXXXXX. The obligation of
Xxxxxx to consummate the transactions contemplated by this Agreement is, at the
option of Xxxxxx, also subject to the fulfillment at or prior to the Closing
Date of the following conditions:
(a) The representations and warranties of Weatherford
contained in Section 2.1 shall be accurate as of the date of this
Agreement and (except to the extent such representations and warranties
speak specifically as of an earlier date) as of the Closing Date as
though such representations and warranties had been made at and as of
that time; all the terms, covenants and conditions of this Agreement to
be complied with and performed by Weatherford on or before the Closing
Date shall have been duly complied with and performed in all material
respects; and a certificate to the foregoing effect dated the Closing
Date and signed by any vice president or senior vice president of
Weatherford shall have been delivered to Xxxxxx; and
(b) The Bankruptcy Court shall have entered an order of
confirmation of the Plan with respect to all debtors in the Bankruptcy
Cases, which order shall have become a final order.
ARTICLE VII
GENERAL PROVISIONS
7.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties in this Agreement shall survive the confirmation of the Plan and the
Closing Date.
7.2 PUBLIC STATEMENTS. Xxxxxx and Weatherford agree to consult with
each other prior to issuing any press release or otherwise making any public
statement with respect to the transactions contemplated hereby.
7.3 ASSIGNMENT. This Agreement shall inure to the benefit of and will
be binding upon the parties hereto and their respective legal representatives,
successors and permitted assigns.
7.4 NOTICES. All notices, requests, demands, claims and other
communications which are required to be or may be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (i) delivered
in Person or by courier, (ii) sent by telecopy or facsimile transmission, answer
back requested, or (iii) mailed, certified first class mail, postage prepaid,
return receipt requested, to the parties hereto at the following addresses:
if to Xxxxxx:
Xxxxxx International, Inc.
0000 X. Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Al Kite
Facsimile: 000-000-0000
-23-
27
with a copy to:
Xxxxxx and Xxxxx, LLP
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxxx
Facsimile: 713-547-2600
if to Weatherford or Sub:
Xxxxxxxxxxx International, Inc.
000 Xxxx Xxx Xxxx., Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxx
Facsimile: 000-000-0000
with a copy to:
Xxxxxxx & Xxxxx L.L.P.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Facsimile: 000-000-0000
or to such other address as any party shall have furnished to the other by
notice given in accordance with this Section 7.4. Such notices shall be
effective, (i) if delivered in Person or by courier, upon actual receipt by the
intended recipient, (ii) if sent by telecopy or facsimile transmission, when the
answer back is received, or (iii) if mailed, upon the earlier of five days after
deposit in the mail and the date of delivery as shown by the return receipt
therefor.
7.5 GOVERNING LAW. All questions arising out of this Agreement and the
rights and obligations created herein, or its validity, existence,
interpretation, performance or breach shall be governed by the laws of the State
of Delaware, without regard to conflict of laws principles.
7.6 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provision, covenants and
restrictions of this Agreement shall continue in full force and effect and shall
in no way be affected, impaired or invalidated.
7.7 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be an original, but all of which together shall constitute one
and the same agreement.
7.8 HEADINGS. The Section headings herein are for convenience only and
shall not affect the construction hereof.
-24-
28
7.9 CONFIDENTIALITY AGREEMENTS. The Confidentiality Agreements entered
into between Weatherford and Xxxxxx on August 12, 1998, and May 12, 1999 (the
"Confidentiality Agreements") are hereby incorporated by reference herein and
made a part hereof.
7.10 ENTIRE AGREEMENT: THIRD PARTY BENEFICIARIES. This Agreement, the
Other Agreements and the Confidentiality Agreements constitute the entire
agreement and supersede all other prior agreements and understandings, both oral
and written, among the parties or any of them, with respect to the subject
matter hereof and neither this nor any document delivered in connection with
this Agreement confers upon any Person not a party hereto any rights or remedies
hereunder.
7.11 WAIVER AND AMENDMENT. Any provision of this Agreement may be
waived at any time by the party that is, or whose stockholders are, entitled to
the benefits thereof. This Agreement may not be amended or supplemented at any
time, except by an instrument in writing signed on behalf of each party hereto.
The waiver by any party hereto of any condition or of a breach of another
provision of this Agreement shall not operate or be construed as a waiver of any
other condition or subsequent breach. The waiver by any party hereto of any of
the conditions precedent to its obligations under this Agreement shall not
preclude it from seeking redress for breach of this Agreement other than with
respect to the condition so waived.
-25-
29
IN WITNESS WHEREOF, each of the parties caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
WEATHERFORD
XXXXXXXXXXX INTERNATIONAL, INC.
By: /s/ XXXXXX X. XXXX
----------------------------
Name: Xxxxxx X. Xxxx
Title: Senior Vice President
XXXXXX
XXXXXX INTERNATIONAL INC.
By: /s/ X. X. XXXXXXXX
----------------------------
Name: X. X. Xxxxxxxx
Title: Chairman of the Board
SUBSIDIARY PARTIES
XXXXXX ENERGY SERVICES, INC.
By: /s/ Xx X. XXXX
----------------------------
Name: Xx X. Xxxx
Title: President
30
XXXXXX INTERNATIONAL SALES
CORPORATION
By: /s/ Xx X. XXXX
----------------------------
Name: Xx X. Xxxx
Title: President
COLOMBIA PETROLEUM SERVICES
CORP.
By: /s/ Xx X. XXXX
----------------------------
Name: Xx X. Xxxx
Title: President
INTERNATIONAL PETROLEUM
SERVICES, INC.
By: /s/ Xx X. XXXX
----------------------------
Name: Xx X. Xxxx
Title: President
XXXXXX ENVIRONMENTAL
REMEDIATION TECHNOLOGIES
By: /s/ Xx X. XXXX
----------------------------
Name: Xx X. Xxxx
Title: President
31
XXXXXX WORLDWIDE SERVICES, CORP.
By: /s/ Xx X. XXXX
----------------------------
Name: Xx X. Xxxx
Title: President
AIR DRILLING INTERNATIONAL, INC.
By: /s/ Xx X. XXXX
----------------------------
Name: Xx X. Xxxx
Title: President
AIR DRILLING SERVICES, INC.
By: /s/ Xx X. XXXX
----------------------------
Name: Xx X. Xxxx
Title: President
