-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JveNjIa4AntGpiAT4P33hEqKhrYBh5P/ndox3lKUcOztDqLteQaL3IsISdwBltSy R2FEqYZLYK3r61A/c5n9ig== 0000950129-02-004241.txt : 20020814 0000950129-02-004241.hdr.sgml : 20020814 20020814181538 ACCESSION NUMBER: 0000950129-02-004241 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEATHERFORD INTERNATIONAL INC /NEW/ CENTRAL INDEX KEY: 0000032908 STANDARD INDUSTRIAL CLASSIFICATION: OIL & GAS FILED MACHINERY & EQUIPMENT [3533] IRS NUMBER: 042515019 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-13086 FILM NUMBER: 02738303 BUSINESS ADDRESS: STREET 1: 515 POST OAK BLVD STREET 2: SUITE 600 CITY: HOUSTON STATE: TX ZIP: 77027-3415 BUSINESS PHONE: 7132978400 MAIL ADDRESS: STREET 1: 5 POST OAK PARK STREET 2: STE 1760 CITY: HOUSTON STATE: TX ZIP: 77027-3415 FORMER COMPANY: FORMER CONFORMED NAME: EVI INC DATE OF NAME CHANGE: 19980226 FORMER COMPANY: FORMER CONFORMED NAME: ENERGY VENTURES INC /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: EVI WEATHERFORD INC DATE OF NAME CHANGE: 19980528 10-Q 1 h99033e10vq.txt WEATHERFORD INTERNATIONAL, INC. - JUNE 30, 2002 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2002 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number 1-13086 WEATHERFORD INTERNATIONAL, INC. -------------------------------- (Exact name of Registrant as specified in its Charter) Delaware 04-2515019 ------------------------------- -------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 515 Post Oak Boulevard, Suite 600, Houston, Texas 77027-3415 - ------------------------------------------------- ---------------------- (Address of principal executive offices) (Zip Code) (713) 693-4000 -------------------------------------------------- (Registrant's telephone number, include area code) - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Title of Class Outstanding at August 9, 2002 -------------- ----------------------------- Common Stock, par value $1.00 130,127,314 Registrant meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced disclosure format. EXPLANATORY STATEMENT On June 26, 2002, Weatherford International Ltd., a Bermuda exempted company (which we refer to as Weatherford Bermuda in this explanatory statement), became the parent holding company of Weatherford International, Inc., a Delaware Corporation (which we refer to as Weatherford Delaware in this explanatory statement) as the result of a corporate reorganization effected through the merger of a subsidiary with and into Weatherford Delaware. Weatherford Delaware common stock ceased to be publicly traded. Each share of Weatherford Delaware issued immediately prior to the effective time of the merger automatically converted into the right to receive a common share of Weatherford Bermuda. Thus, the stockholders of Weatherford Delaware became the shareholders of Weatherford Bermuda which, together with its subsidiaries, continues to be engaged in the same business that Weatherford Delaware and its subsidiaries were engaged in before the merger. For periods subsequent to June 26, 2002, please also refer to the periodic and other reports filed with the Securities and Exchange Commission by Weatherford Bermuda (Commission File No. 001-31339) subsequent to June 26, 2002. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS WEATHERFORD INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT PAR VALUE)
JUNE 30, DECEMBER 31, 2002 2001 ------------ ------------ (UNAUDITED) ASSETS Current Assets: Cash and Cash Equivalents ................................................. $ 48,410 $ 88,832 Accounts Receivable, Net of Allowance for Uncollectible Accounts of $18,204 and $18,021, Respectively ........................... 516,316 462,145 Inventories ............................................................... 528,452 504,986 Receivable from Parent .................................................... 224 -- Prepaids .................................................................. 44,657 33,088 Other Current Assets ...................................................... 134,368 142,282 ------------ ------------ 1,272,427 1,231,333 ------------ ------------ Property, Plant and Equipment, Net ........................................... 1,077,913 1,039,616 Goodwill, Net ................................................................ 1,401,542 1,383,272 Other Intangible Assets, Net ................................................. 255,440 104,825 Equity Investments in Unconsolidated Affiliates .............................. 10,643 483,038 Shares Held in Parent ........................................................ 266,330 -- Long-Term Note Receivable from Parent ........................................ 299,063 -- Other Assets ................................................................. 51,172 54,278 ------------ ------------ $ 4,634,530 $ 4,296,362 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Short-Term Borrowings and Current Portion of Long-Term Debt ............... $ 315,648 $ 190,229 Accounts Payable .......................................................... 190,690 219,630 Other Current Liabilities ................................................. 329,336 349,738 ------------ ------------ 835,674 759,597 ------------ ------------ Long-Term Debt ............................................................... 571,244 572,733 Zero Coupon Convertible Senior Debentures .................................... 532,429 524,561 Deferred Tax Liabilities ..................................................... 95,792 94,967 Other Liabilities ............................................................ 96,758 103,764 5% Convertible Subordinated Preferred Equivalent Debentures ..................................................... 402,500 402,500 Commitments and Contingencies Stockholders' Equity: Common Stock, $1 Par Value, Authorized 250,000 Shares, Issued 130,127 and 129,852 Shares, Respectively ........................................ 130,127 129,852 Capital in Excess of Par Value ............................................ 1,970,251 1,912,528 Treasury Stock, Net ....................................................... -- (294,986) Retained Earnings ......................................................... 165,674 268,050 Accumulated Other Comprehensive Loss ...................................... (165,919) (177,204) ------------ ------------ 2,100,133 1,838,240 ------------ ------------ $ 4,634,530 $ 4,296,362 ============ ============
The accompanying notes are an integral part of these condensed consolidated financial statements. 1 WEATHERFORD INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, ---------------------------- ---------------------------- 2002 2001 2002 2001 ----------- ----------- ----------- ----------- Revenues: Products .......................................... $ 301,804 $ 241,864 $ 570,979 $ 475,738 Services and Rentals .............................. 292,062 331,136 591,136 623,420 ----------- ----------- ----------- ----------- 593,866 573,000 1,162,115 1,099,158 Costs and Expenses: Cost of Products .................................. 195,164 149,472 375,348 303,508 Cost of Services and Rentals ...................... 202,080 208,249 397,573 396,227 Research and Development .......................... 18,539 12,022 35,523 22,258 Selling, General and Administrative Attributable to Segments ..................................... 89,501 90,751 172,426 175,152 Corporate General and Administrative .............. 14,806 9,947 24,086 19,666 Equity in Earnings of Unconsolidated Affiliates ... (6,137) (5,003) (12,990) (7,761) Loss on Sale to Parent ............................ 186,460 -- 186,460 -- ----------- ----------- ----------- ----------- Operating Income (Loss) ................................ (106,547) 107,562 (16,311) 190,108 ----------- ----------- ----------- ----------- Other Income (Expense): Interest Expense, Net ............................. (20,041) (17,724) (40,997) (32,105) Interest Income from Parent ....................... 224 -- 224 -- Other, Net ........................................ (1,215) (233) (1,974) (414) ----------- ----------- ----------- ----------- Income (Loss) Before Income Taxes ...................... (127,579) 89,605 (59,058) 157,589 Provision for Income Taxes ............................. (20,016) (33,169) (43,318) (57,643) ----------- ----------- ----------- ----------- Net Income (Loss) ...................................... $ (147,595) $ 56,436 $ (102,376) $ 99,946 =========== =========== =========== ===========
The accompanying notes are an integral part of these condensed consolidated financial statements. 2 WEATHERFORD INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS)
SIX MONTHS ENDED JUNE 30, ------------------------------ 2002 2001 ------------ ------------ Cash Flows from Operating Activities: Net Income (Loss) ................................................ $ (102,376) $ 99,946 Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities: Depreciation and Amortization ................................. 103,340 97,387 Amortization of Original Issue Discount ....................... 7,868 7,637 Equity in Earnings of Unconsolidated Affiliates ............... (12,990) (7,761) Loss on Sale to Parent ........................................ 186,460 -- Deferred Income Tax Provision (Benefit) ....................... 2,927 (4,743) Interest Charged to Parent .................................... (224) -- Gain on Sales of Assets ....................................... (5,260) (6,142) Change in Operating Assets and Liabilities, Net of Effect of Businesses Acquired ...................................... (102,268) (143,506) ------------ ------------ Net Cash Provided by Operating Activities ................... 77,477 42,818 ------------ ------------ Cash Flows from Investing Activities: Acquisition of Businesses, Net of Cash Acquired .................. (18,130) (186,592) Capital Expenditures for Property, Plant and Equipment ........... (124,842) (153,909) Acquisition of License ........................................... (65,000) -- Acquisition of Minority Interest ................................. -- (206,500) Capital Contribution to Parent ................................... (12) -- Proceeds from Sales of Assets .................................... 19,934 12,672 ------------ ------------ Net Cash Used by Investing Activities ....................... (188,050) (534,329) ------------ ------------ Cash Flows from Financing Activities: Borrowings on Short-Term Debt, Net ............................... 104,731 377,073 Repayments of Long-Term Debt, Net ................................ (5,735) (6,065) Repayment on Asset Securitization ................................ (50,090) -- Proceeds from Exercise of Stock Options .......................... 23,946 7,115 Acquisition of Treasury Stock .................................... (1,850) (2,304) Other ............................................................ (851) -- ------------ ------------ Net Cash Provided by Financing Activities ................... 70,151 375,819 ------------ ------------ Net Decrease in Cash and Cash Equivalents .......................... (40,422) (115,692) Cash and Cash Equivalents at Beginning of Period ................... 88,832 153,808 ------------ ------------ Cash and Cash Equivalents at End of Period ......................... $ 48,410 $ 38,116 ============ ============ Supplemental Cash Flow Information: Interest Paid .................................................... $ 36,369 $ 23,160 Income Taxes Paid, Net of Refunds ................................ 19,458 37,822
The accompanying notes are an integral part of these condensed consolidated financial statements. 3 WEATHERFORD INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (IN THOUSANDS)
THREE MONTHS SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, ---------------------------- ---------------------------- 2002 2001 2002 2001 ----------- ----------- ----------- ----------- Net Income (Loss) ................................ $ (147,595) $ 56,436 $ (102,376) $ 99,946 Other Comprehensive Income (Loss): Foreign Currency Translation Adjustment ..... 29,548 (9,468) 11,285 (29,338) ----------- ----------- ----------- ----------- Comprehensive Income (Loss) ...................... $ (118,047) $ 46,968 $ (91,091) $ 70,608 =========== =========== =========== ===========
The accompanying notes are an integral part of these condensed consolidated financial statements. 4 WEATHERFORD INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. GENERAL Effective June 26, 2002, Weatherford International, Inc. became a wholly owned subsidiary of Weatherford International Ltd. (the "Parent"), a newly formed Bermuda company, following a corporate reorganization (See Note 2). At the time of the corporate reorganization, Weatherford International, Inc.'s common stock, $1.00 par value ("Common Stock") ceased to be publicly traded. The condensed consolidated financial statements of Weatherford International, Inc. and subsidiaries (the "Company") included herein are unaudited; however, they include all adjustments of a normal recurring nature which, in the opinion of management, are necessary to present fairly the Company's Condensed Consolidated Balance Sheet at June 30, 2002, Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2002 and 2001, and Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2002 and 2001. Although the Company believes that the disclosures in these financial statements are adequate to make the interim information presented not misleading, certain information relating to the Company's organization and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States has been condensed or omitted in this Form 10-Q pursuant to Securities and Exchange Commission rules and regulations. These financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2001 and the notes thereto included in the Company's Annual Report on Form 10-K. The results of operations for the three and six month periods ended June 30, 2002 are not necessarily indicative of the results expected for the full year. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain reclassifications of prior year balances have been made to conform such amounts to corresponding current year classifications. 2. CORPORATE REORGANIZATION Effective June 26, 2002, the Company became a wholly owned subsidiary of Weatherford International Ltd., a newly formed Bermuda company following a corporate reorganization. The reorganization was accomplished through a merger of a newly formed subsidiary into the Company. The Company, the surviving entity, continues to exist as an indirect, wholly owned subsidiary of the Parent. The Parent and its subsidiaries continue to conduct the business previously conducted by the Company. The reorganization has been accounted for as a reorganization of entities under common control. Upon consummation of the reorganization, the Common Stock ceased to be publicly traded and automatically converted into the right to receive the Parent's common shares. The shares previously recorded as Treasury Stock, Net on the Company's Condensed Consolidated Balance Sheet are now presented as Shares Held in Parent. In conjunction with the merger, Parent fully and unconditionally guaranteed the following obligations of the Company: (1) the three-year multi-currency revolving credit facility, (2) the five-year unsecured credit agreement, (3) the $200.0 million, 7 1/4% Senior Notes due 2006 (the "7 1/4% Senior Notes"), (4) the $350.0 million, 6 5/8% Senior Notes due 2011, (5) the Zero Coupon Convertible Senior Debentures due 2020 (the "Zero Coupon Debentures") and (6) the 5% Convertible Subordinated Preferred Equivalent Debentures due 2027 (the "Convertible Preferred Debentures"). In addition, Weatherford International, Inc. and Parent fully and unconditionally guaranteed certain domestic subsidiaries' performance obligations relating to the asset securitization (See Note 7), including their payment obligations. The Company incurred $4.5 million, $3.0 million after taxes, in expenses during the three and six months ended June 30, 2002 related to the reorganization. The transaction expenses relate to professional services and are reflected in Corporate General and Administrative Expenses in the accompanying Condensed Consolidated Statements of Operations. 5 WEATHERFORD INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 3. SALE OF INVESTMENT Effective June 26, 2002, WEUS Holding, Inc., a wholly owned subsidiary of the Company, sold its equity investment in Universal Compression Holdings, Inc. ("Universal") to Parent for a note receivable of $299.1 million, the fair market value at the date of sale. The difference between the carrying value and fair market value at the date of sale is recorded as Loss on Sale to Parent on the accompanying Condensed Consolidated Statements of Operations; however, as this is a transfer of assets among related parties under common control, no loss was recorded in the consolidated financial statements of Weatherford International Ltd. Interest income of $0.2 million related to the note is reflected in Interest Income from Parent in the accompanying Condensed Consolidated Statements of Operations. 4. GOODWILL In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible Assets. SFAS No. 142 provides for the non-amortization of goodwill and other intangible assets with indefinite lives and requires that such assets be tested for impairment at least on an annual basis. The Company adopted SFAS No. 142 effective January 1, 2002 and has applied the non-amortization provision. During the second quarter of 2002, the Company completed the transitional goodwill impairment test prescribed in SFAS No. 142 with respect to existing goodwill at the date of adoption. The transitional goodwill impairment test involved a comparison of the fair value of each of the Company's reporting units, as defined under SFAS 142, with its carrying amount. As the carrying amount of each reporting unit did not exceed its fair value, none of the Company's goodwill was impaired. The following table provides comparative net income (loss) information had the non-amortization provision been in effect for all periods presented:
THREE MONTHS SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, ------------------------------ ------------------------------ 2002 2001 2002 2001 ------------ ------------ ------------ ------------ (in thousands) Reported net income (loss) ............... $ (147,595) $ 56,436 $ (102,376) $ 99,946 Goodwill amortization, net of taxes ...... -- 8,744 -- 17,077 ------------ ------------ ------------ ------------ Adjusted net income (loss) ............... $ (147,595) $ 65,180 $ (102,376) $ 117,023 ============ ============ ============ ============
5. INTANGIBLE ASSETS The Company has trademarks associated with its 2001 acquisition of the Johnson Screens division from Vivendi Environnement, which are considered to have indefinite lives as the Company has the ability and intent to renew indefinitely. These trademarks are classified in Other Intangible Assets, Net on the accompanying Condensed Consolidated Balance Sheets and had a carrying value of $8.0 million at June 30, 2002 and $9.7 million at December 31, 2001. The estimated fair market value of intangible assets obtained through acquisitions are based on preliminary information which is subject to change when final valuations are obtained. 6 WEATHERFORD INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) The Company amortizes identifiable intangible assets, excluding goodwill and indefinite-lived intangibles, on a straight-line basis over the years expected to be benefited, ranging from 3 to 20 years. The components of these other intangible assets are as follows:
JUNE 30, 2002 DECEMBER 31, 2001 ----------------------------------- --------------------------------- CARRYING ACCUMULATED CARRYING ACCUMULATED VALUE AMORTIZATION NET VALUE AMORTIZATION NET -------- ------------ -------- -------- ------------ ------- (in thousands) Patents ................ $ 69,275 $(11,928) $ 57,347 $ 62,135 $ (9,623) $52,512 Licenses ............... 188,213 (8,616) 179,597 35,915 (5,929) 29,986 Covenants not to compete .............. 16,361 (6,879) 9,482 16,255 (5,364) 10,891 Other ................... 1,550 (536) 1,014 2,423 (697) 1,726 -------- -------- -------- -------- -------- ------- $275,399 $(27,959) $247,440 $116,728 $(21,613) $95,115 ======== ======== ======== ======== ======== =======
Amortization expense was $4.0 million and $6.3 million for the three and six months ended June 30, 2002, respectively. Estimated amortization expense for the carrying amount of intangible assets as of June 30, 2002 is expected to be $9.4 million for the remainder of 2002, $18.0 million for 2003, $17.7 million for 2004, $16.9 million for 2005 and $15.9 million for 2006. On March 1, 2002, the Company obtained a worldwide license to Shell Technology Ventures' ("Shell") expandable technology. Expandable technology refers to both slotted and solid expandables, related tools and accessories and specialized expansion systems. Under the terms of the agreement, the Company received a global license to Shell's existing and future expandable tubular intellectual property and immediate access to the U.S. market for use of its Completion Systems Division's Expandable Sand Screen (ESS)(TM) system for consideration that included $65.0 million in cash, a $20.0 million promissory note and $60.0 million of warrants to purchase common shares of our Parent. The $20.0 million promissory note is classified as Short-Term Borrowings and Current Portion of Long-Term Debt on the accompanying Condensed Consolidated Balance Sheets. In addition, the Company received a 50% reduction in the royalty rate it historically paid on Shell licensed technology sales. This license is being amortized over the life of the agreement, which is 17 years. 6. INVENTORIES Inventories by category are as follows:
JUNE 30, DECEMBER 31, 2002 2001 ------------ ------------ (in thousands) Raw materials, components and supplies ......... $ 146,092 $ 143,142 Work in process ................................ 50,454 49,544 Finished goods ................................. 331,906 312,300 ------------ ------------ $ 528,452 $ 504,986 ============ ============
Work in process and finished goods inventories include the cost of material, labor and plant overhead. 7 WEATHERFORD INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 7. ASSET SECURITIZATION In July 2001, the Company entered into a one-year agreement with a financial institution to sell, on a continuous basis, an undivided interest in a specific pool of domestic accounts receivable. It is permitted to securitize up to $150.0 million under this agreement. The one-year term was extended through August 2002, and the Company is currently in the process of renewing this agreement. If Weatherford International, Inc.'s or Parent's credit rating falls below BBB- from Standard and Poor's or Baa3 from Moody's, the financial institution has no further obligation to purchase the accounts receivables. In connection with the reorganization, Weatherford International, Inc. and Parent fully and unconditionally guaranteed certain domestic subsidiaries' performance obligations relating to the asset securitization including their payment obligations. The Company currently pays a program fee on participating interests at a variable rate based on the financial institution's commercial paper rate plus other fees. Program fees totaled $0.6 million and $1.3 million for the three and six months ended June 30, 2002, respectively and are included in Interest Expense, Net on the accompanying Condensed Consolidated Statements of Operations. The Company had received $90.7 million for purchased interests as of June 30, 2002 and $140.8 million as of December 31, 2001. 8. SHORT-TERM DEBT
JUNE 30, DECEMBER 31, 2002 2001 ------------ ------------ (in thousands) 2001 Multi-currency revolving credit facility ................... $ 64,018 $ 90,896 1998 Revolving credit facility .................................. 150,000 50,048 Note payable .................................................... 20,000 -- Short-term bank loans ........................................... 54,212 22,528 ------------ ------------ Total short-term borrowings ..................................... 288,230 163,472 Current portion of long-term debt ............................... 27,418 26,757 ------------ ------------ Short-Term Borrowings and Current Portion of Long-Term Debt ..... $ 315,648 $ 190,229 ============ ============
In April 2001, the Company entered into a $250.0 million, three-year multi-currency revolving credit facility, with commitment capacity of up to $400.0 million. As of June 30, 2002, the Company had $186.0 million available under this agreement. The Company entered into a five-year unsecured credit agreement in May 1998, which provides for borrowings of up to an aggregate of $250.0 million, consisting of a $200.0 million U.S. credit facility and a $50.0 million Canadian credit facility. As of June 30, 2002, the Company had $65.7 million available under this facility due to amounts outstanding and $34.3 million being used to secure outstanding letters of credit. The Company also engages in unsecured short-term borrowings with various institutions pursuant to uncommitted facilities. As of June 30, 2002, the Company had $54.2 million in unsecured short-term borrowings outstanding under these arrangements with interest rates ranging from 1.09% to 8.25%. 9. INTEREST RATE SWAPS As of June 30, 2002, the Company had in effect two interest rate swap agreements, entered into on November 15, 2001 and January 8, 2002, to reduce the Company's exposure to changes in the fair value of the 7 1/4% Senior Notes and to take advantage of interest rates available in the current economic environment. Under these agreements, on May 15 and November 15 of each year until maturity, the Company will receive interest at the fixed rate of 7 1/4% and will pay floating rate based on 6-month LIBOR. The hedges are considered perfectly effective against changes in the fair value of the debt due to changes in the benchmark interest rate over its term. In accordance with SFAS No. 133, the shortcut method applies and there is no need to periodically reassess the effectiveness of the hedge during the term of the swaps. The swap agreements are recorded at fair market value and classified in Other Assets and Other Liabilities with the offset to Long-Term Debt on the accompanying Condensed Consolidated Balance Sheets. The aggregate fair market value of the swaps was a net asset of $2.9 million as of June 30, 2002. 8 WEATHERFORD INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 10. SUPPLEMENTAL CASH FLOW INFORMATION The following summarizes investing activities relating to acquisitions integrated into the Company for the periods shown:
SIX MONTHS ENDED JUNE 30, ------------------------------ 2002 2001 ------------ ------------ (in thousands) Fair value of assets, net of cash acquired ........................ $ 15,053 $ 226,449 Goodwill .......................................................... 12,918 228,912 Total liabilities, including minority interest .................... (9,841) (78,507) Common Stock issued ............................................... -- (190,262) ------------ ------------ Cash consideration, net of cash acquired .......................... $ 18,130 $ 186,592 ============ ============
During the six months ended June 30, 2002, there were noncash-investing activities of $8.6 million related to the receipt of 187,094 shares of Common Stock initially issued in the 2001 acquisition of Orwell plc. The shares were received as a settlement of a purchase price adjustment and were subsequently converted into shares of Parent in connection with the reorganization. During the six months ended June 30, 2002 and 2001, there were noncash-financing activities of $12.7 million and $7.0 million, respectively, relating to tax benefits received from the exercise of nonqualified stock options. These benefits were recorded as a reduction of income taxes payable and an increase to Capital in Excess of Par Value on the accompanying Condensed Consolidated Balance Sheets. During the six months ended June 30, 2002, there were additional noncash-financing activities related to the Company's interest rate swaps of $6.0 million (See Note 9). 11. SEGMENT INFORMATION Business Segments The Company is a diversified international energy service and manufacturing company that provides a variety of services and equipment to the exploration, production and transmission sectors of the oil and gas industry. The Company operates in virtually every oil and gas exploration and production region in the world. The Company divides its business segments into three separate groups as defined by the chief operating decision maker: Drilling and Intervention Services, Completion Systems and Artificial Lift Systems. The Company also historically operated a Compression Services segment, which was merged into a subsidiary of Universal on February 9, 2001 in exchange for 13.75 million shares of Universal common stock. The amounts reported for this segment include results through the date of the merger. The Company's Drilling and Intervention Services segment provides a wide range of oilfield products and services, including downhole drilling and intervention services, proprietary drilling equipment and rentals, well installation services, cementing products and underbalanced drilling services. The Company's Completion Systems segment provides completion products and systems including expandable systems, intelligent well technology, packers, liner hangers, well screens, flow control and inflatable packers. The Company's Artificial Lift Systems segment designs, manufactures, sells and services a complete line of artificial lift equipment, including progressing cavity pumps, reciprocating rod lift systems, gas lift systems, electrical submersible pumps, hydraulic lift systems and other lift systems. This segment also offers well optimization, remote monitoring and control services and non-oil and gas screens. The Company's Compression Services segment historically packaged, rented and sold parts and provided services for gas compressor units over a broad horsepower range. 9 WEATHERFORD INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) Financial information by industry segment for each of the three and six months ended June 30, 2002 and 2001 is summarized below. The accounting policies of the segments are the same as those of the Company.
THREE MONTHS SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, ------------------------------ ------------------------------ 2002 2001 2002 2001 ------------ ------------ ------------ ------------ (in thousands) Revenues from unaffiliated customers: Drilling and Intervention Services ..... $ 309,389 $ 338,306 $ 622,738 $ 622,904 Completion Systems ..................... 104,804 86,857 197,116 160,969 Artificial Lift Systems ................ 179,673 147,837 342,261 288,346 Compression Services ................... -- -- -- 26,939 ------------ ------------ ------------ ------------ $ 593,866 $ 573,000 $ 1,162,115 $ 1,099,158 ============ ============ ============ ============ EBITDA (a): Drilling and Intervention Services ..... $ 94,965 $ 119,366 $ 197,433 $ 217,470 Completion Systems ..................... 16,132 14,381 28,766 25,287 Artificial Lift Systems ................ 30,046 27,245 57,118 50,024 Compression Services ................... -- -- -- 3,587 Corporate (b) .......................... (194,384) (3,211) (196,288) (8,873) ------------ ------------ ------------ ------------ $ (53,241) $ 157,781 $ 87,029 $ 287,495 ============ ============ ============ ============ Depreciation and amortization: Drilling and Intervention Services ..... $ 38,020 $ 34,678 $ 75,549 $ 62,427 Completion Systems ..................... 8,464 6,883 14,900 13,946 Artificial Lift Systems ................ 6,077 6,925 11,623 13,798 Compression Services ................... -- -- -- 4,184 Corporate (b) .......................... 745 1,733 1,268 3,032 ------------ ------------ ------------ ------------ $ 53,306 $ 50,219 $ 103,340 $ 97,387 ============ ============ ============ ============ Operating income (loss): Drilling and Intervention Services ..... $ 56,945 $ 84,688 $ 121,884 $ 155,043 Completion Systems ..................... 7,668 7,498 13,866 11,341 Artificial Lift Systems ................ 23,969 20,320 45,495 36,226 Compression Services ................... -- -- -- (597) Corporate (b) .......................... (195,129) (4,944) (197,556) (11,905) ------------ ------------ ------------ ------------ $ (106,547) $ 107,562 $ (16,311) $ 190,108 ============ ============ ============ ============
(a) The Company evaluates performance and allocates resources based on EBITDA, which is calculated as operating income adding back depreciation and amortization. Calculations of EBITDA should not be viewed as a substitute to calculations under accounting principles generally accepted in the United States, in particular cash flows from operations, operating income and net income. In addition, EBITDA calculations by one company may not be comparable to those of another company. (b) Includes Equity Earnings of Unconsolidated Affiliates and Loss on Sale to Parent. As of June 30, 2002, total assets were $2,008.6 million for Drilling and Intervention Services, $1,017.1 million for Completion Systems, $928.8 million for Artificial Lift Systems and $680.0 million for Corporate. Total assets as of December 31, 2001, were $1,976.4 million for Drilling and Intervention Services, $863.9 million for Completion Systems, $920.5 million for Artificial Lift Systems and $535.6 million for Corporate. Net goodwill as of June 30, 2002 was $604.4 million for Drilling and Intervention Services, $420.6 million for Completion Systems and $376.5 million for Artificial Lift Systems. As of December 31, 2001, net goodwill was $593.0 million for Drilling and Intervention Services, $421.8 million for Completion Systems and $368.5 million for Artificial Lift Systems. Amounts included in goodwill related to recent acquisitions are based on preliminary information and are subject to change when final information is obtained. 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL Effective June 26, 2002, we became a wholly owned subsidiary of Weatherford International Ltd., a newly formed Bermuda company, following a corporate reorganization. At the time of the reorganization, our common stock ceased to be publicly traded and our stockholders received the right to exchange our common stock for common shares of Weatherford International Ltd., a publicly traded entity. The reorganization has been accounted for as a reorganization of entities under common control. Our business is conducted through three principal operating divisions: (1) Drilling and Intervention Services, (2) Completion Systems and (3) Artificial Lift Systems. In addition to these operations, we historically operated a Compression Services Division. On February 9, 2001, we completed the merger of essentially all of our Compression Services Division into a subsidiary of Universal Compression Holdings, Inc. in exchange for 13.75 million shares of Universal, or approximately 45% of Universal's outstanding common stock. In connection with the corporate reorganization, we sold this investment to Weatherford International Ltd. The following is a discussion of our results of operations for the six months ended June 30, 2002 and 2001. This discussion should be read in conjunction with our financial statements that are included with this report and our financial statements and related Management's Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2001 included in our Annual Report on Form 10-K. This discussion should also be read in conjunction with Weatherford International Ltd.'s financial statements and related Management's Discussion and Analysis of Financial Condition and Results of Operations for the three and six months ended June 30, 2002 and 2001 included in their Quarterly Report on Form 10-Q. This discussion of our results and financial condition includes various forward-looking statements about our markets, the demand for our products and services and our future results. These statements are based on certain assumptions that we consider reasonable. For information about these assumptions, you should refer to the section entitled "Forward-Looking Statements." We acquire numerous companies every year and focus on integration efforts so that we may realize the benefits each acquisition provides. We are therefore unable to provide certain information regarding our results excluding the impact of acquisitions due to the integration of these acquisitions into our operations. Comparative six months revenue trends excluding acquisitions only exclude those 2001 acquisitions for which revenue information has been separately maintained. All 2002 acquisitions have been fully integrated and we are therefore unable to exclude the impact of those acquisitions. MARKET TRENDS AND OUTLOOK Our businesses serve the oil and gas industry. All of our businesses are affected by changes in the worldwide demand and price of oil and natural gas. Certain of our products and services, such as our well installation services and well completion services, are dependent on the level of exploration and development activity and particularly on the completion phase of the well lifecycle. Other products and services, such as our artificial lift systems, are dependent on production activity. We currently estimate that around two-thirds of our operations are reliant on drilling activity, with the remainder focused on production and reservoir enhancement activity. The following chart sets forth certain statistics that are reflective of historical market conditions:
HENRY HUB NORTH AMERICAN INTERNATIONAL WTI OIL(1) GAS(2) RIG COUNT(3) RIG COUNT(3) ------------ ------------ -------------- ------------- June 30, 2002 ................ $ 26.86 $ 3.245 1,047 730 December 31, 2001 ............ 19.84 2.570 1,185 747 June 30, 2001 ................ 26.25 3.096 1,565 756
(1) Price per barrel of West Texas Intermediate crude oil as of June 30 and December 31 - Source: Applied Reasoning, Inc. (2) Price per MM/BTU as of June 30 and December 31 - Source: Oil World (3) Average rig count for the applicable month - Source: Baker Hughes Rig Count The oil and gas industry has been subject to extreme volatility in the last few years. During 2000, due to the supply and demand imbalances that caused the increase in the price of oil and gas, we experienced steady improvements in the demand for our products and services, which continued through the first seven months of 2001. 11 In the U.S., rig activity began to decline in the third quarter of 2001. The U.S. rig count peaked at 1,293 rigs in July 2001 and declined to a low of 738 rigs in April 2002. Since April, we have seen marginal increases in the rig count and by July 2002, the U.S. rig count had improved to 859 rigs. Natural gas prices declined from a high of $9.82 per mcf in 2001 to a low of $1.91 in late January 2002 and increased to $2.95 by the end of July. The slight increase in rig count indicates a possible initial sign of recovery; however, we expect any recovery to be at a slow pace and segmented between regions throughout the United States. Drilling activity outside North America is somewhat less volatile than the North American market. Due to the significant investment and complexity surrounding international projects, drilling decisions relating to such projects tend to be evaluated and monitored with a longer-term perspective in regard to oil and natural gas pricing as most contracts span two to three years. Overall, international rig activity remained relatively constant throughout 2001 and has decreased slightly during the second quarter of 2002, from a monthly average of 766 in September 2001 to 730 in June 2002. Our customers' international spending is expected to improve modestly during 2002; however, we expect international demand for our products and services to exceed the expected industry-wide increase in international market activity, as we leverage our technology offerings and expand our market share. In general, we expect the markets and our business strategies to affect our businesses as follows: DRILLING AND INTERVENTION SERVICES AND COMPLETION SYSTEMS. These divisions are expected to see slight improvements in the third quarter and through year-end as compared to the first half of the year in the Eastern Hemisphere markets, with the exception of the United Kingdom and Norway, where we anticipate depressed activity through the fourth quarter. We expect the increase in revenue will be supported by increased activity, as well as market share gains through our technology product offerings, specifically underbalanced drilling systems and expandable products. We expect our Latin American operations to remain flat, compared to current levels, throughout the remainder of 2002 while U.S. markets are expected to recover slightly with improvements predominantly occurring in the fourth quarter. ARTIFICIAL LIFT SYSTEMS. Our Artificial Lift Systems Division will continue to see revenue improvements in the Eastern Hemisphere markets on a year-on-year basis as we leverage our global footprint. We anticipate the Latin American markets will remain depressed throughout the remainder of the year. We expect slight improvements in North America, supported by higher demand with respect to heavy oil production activities in Canada. This division is also expected to continue to benefit from any shift in priority that our customers place on oil projects rather than natural gas projects in light of the low natural gas prices. Overall, the level of market improvements for our businesses in 2002 will continue to be heavily dependent on the timing and strength of the recovery in the North American markets, our gains in market share outside North America and the acceptance of our new technologies. Although we believe that the activity levels in the North American markets may be in the early stages of recovery, the speed and extent of any recovery is difficult to predict in light of the volatile nature of our business. In addition, the continued strength of the industry is uncertain and will be highly dependent on many external factors, such as world economic conditions, member country compliance with Organization of Petroleum Exporting Countries quotas and weather conditions. The extreme volatility of our markets makes predictions regarding future results difficult. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements. We prepare these financial statements in conformity with accounting principles generally accepted in the United States. As such, we are required to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. We base our estimates on historical experience, available information and various other assumptions that we believe to be reasonable under the circumstances. On an on-going basis, we evaluate our estimates, including those related to bad debts, inventory, intangible assets and goodwill, income taxes and contingent liabilities. Actual results may differ from these estimates under different assumptions or conditions. The accounting policies that we believe are the most critical to our reporting of results of operations and financial position are as follows: 12 Accounts Receivable We perform ongoing credit evaluations of our customers and adjust credit limits based upon payment history and the customer's current credit worthiness, as determined by our review of their current credit information. We continuously monitor collections and payments from our customers and maintain a provision for estimated uncollectible accounts based upon our historical experience and any specific customer collection issues that we have identified. While such credit losses have historically been within our expectations and the provisions established, we cannot give any assurances that we will continue to experience the same credit loss rates that we have in the past. The cyclical nature of our industry may affect our customers' operating performance and cash flows, which could impact our ability to collect on these obligations. In addition, many of our customers are located in certain international areas that are inherently subject to risks of economic, political and civil instabilities, which may impact our ability to collect these accounts receivables. Goodwill and Other Intangible Assets We adopted Statement of Financial Accounting Standard ("SFAS") No. 142, Goodwill and Other Intangible Assets, as of January 1, 2002. As a result, we no longer amortize goodwill and indefinite-lived intangible assets but continue to amortize other acquisition-related intangibles. We have completed the transitional goodwill impairment test and have determined that no impairment exists. We will perform a similar review of goodwill valuation annually, or earlier if indicators of potential impairment exist. If for any reason the fair value of our goodwill or that of any of our reporting units declines below the carrying value in the future, we may incur charges for impairment of goodwill. Income Taxes We provide for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes. This standard takes into account the differences between financial statement treatment and tax treatment of certain transactions. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates is recognized as income or expense in the period that includes the enactment date. Our deferred tax calculation requires us to make certain estimates about our future operations. Changes in state, federal and foreign tax laws, as well as changes in our financial condition, could affect these estimates. Valuation Allowance for Deferred Tax Assets We record a valuation allowance to reduce our deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will expire before realization of the benefit or that future deductibility is not probable. The ultimate realization of the deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character in the future. Revenue Recognition Revenues from product sales are recognized when all of the following criteria have been met: a) evidence of an agreement exists, b) delivery to and acceptance by the customer has occurred, c) the price to the customer is fixed and determinable and d) collectibility is reasonably assured. Revenues from rental and service agreements are recognized as earned, over the rental period and when services have been rendered. The associated costs and expenses are recognized as incurred. 13 SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2001 The following charts contain selected financial data comparing our results for the six months ended June 30, 2002 and June 30, 2001: COMPARATIVE FINANCIAL DATA
SIX MONTHS ENDED JUNE 30, --------------------------------- 2002 2001 ------------ ------------ (in thousands, except percentages and per share data) Revenues ............................................................. $ 1,162,115 $ 1,099,158 Gross Profit ......................................................... 389,194 399,423 Gross Profit % ....................................................... 33.5% 36.3% Research and Development ............................................. $ 35,523 $ 22,258 Selling, General and Administrative Attributable to Segments ......... 172,426 175,152 Corporate General and Administrative.................................. 24,086 (a) 19,666 Operating Income (Loss) .............................................. (16,311)(a)(b) 190,108 Net Income (Loss) .................................................... (102,376)(a)(b) 99,946 Net Income (Loss) Excluding Goodwill Amortization, Net of Taxes ...... (102,376)(a)(b) 117,023 EBITDA (c) ........................................................... 87,029 (a)(b) 287,495 Cash Provided by Operating Activities ................................ 77,477 42,818
(a) Includes $4.5 million of transaction costs related to our reincorporation. The net after tax impact of these charges was $3.0 million. (b) Includes $186.5 million related to the Loss on Sale to Parent of our equity investment in Universal. (c) EBITDA is calculated by taking operating income and adding back depreciation and amortization. We have included an EBITDA calculation because when we look at the performance of our businesses, we give consideration to their EBITDA. Calculations of EBITDA should not be viewed as substitutes to calculations under accounting principles generally accepted in the United States, in particular cash flows from operations, operating income and net income. In addition, EBITDA calculations by one company may not be comparable to another company's calculation. SALES BY GEOGRAPHIC REGION
SIX MONTHS ENDED JUNE 30, --------------------------------- 2002 2001 ------------ ------------ REGION: U.S. ................................... 34% 42% Canada ................................. 13 16 Latin America .......................... 9 11 Europe and West Africa ................. 19 13 Middle East and North Africa ........... 12 8 Asia Pacific ........................... 13 10 ------------ ------------ Total .............................. 100% 100% ============ ============
A discussion of our consolidated results for the six months ended June 30, 2002 compared to the six months ended June 30, 2001 follows: o Consolidated revenues for the first six months of 2002, excluding our historical compression results and incremental revenues from our 2001 acquisitions, declined slightly over the same period of 2001. On the same basis, revenues in North America decreased more than $120 million, while international revenues increased more than $100 million. o Gross profit as a percentage of revenues decreased from 36.3% for the first half of 2001 to 33.5% in the first half of 2002. The decline is primarily attributable to pricing pressures and lower volumes in a depressed U.S. market and a shift in our product mix. o Research and development expenses increased 59.6% primarily due to costs incurred to develop our technology-related product lines. 14 o Selling, general and administrative expenses attributable to segments decreased as a percentage of revenues from 15.9% for the first half of 2001 to 14.8% in the same period this year. The decline is primarily related to the non-amortization of goodwill in 2002. Goodwill amortization attributable to the segments for the six months ended June 30, 2001 was $16.7 million. o Our equity in earnings in unconsolidated affiliates for the first six months of 2002 was $5.2 million higher than the comparable period last year. The increase is primarily related to the full period of equity income related to our investment in Universal acquired in February 2001, and held through the date of sale, and the non-amortization of goodwill related to this investment. o Interest expense, net for the six months ended June 30, 2002 increased $8.9 million from the same period last year primarily due to the interest associated with our $350 million 6 5/8% senior notes issued in November 2001, partially offset by the benefit associated with our interest rate swaps on our $200 million 7 1/4% senior notes. o Excluding the Loss on Sale to Parent of $186.5 million for which no tax benefit was recognized, our effective tax rate for the six months ended June 30, 2002 was 34.0%, compared to 36.6% for the same period of 2001. The decrease was primarily due to the impact of non-amortization of goodwill on earnings before tax in 2002. SEGMENT RESULTS DRILLING AND INTERVENTION SERVICES The following chart sets forth data regarding the results of our Drilling and Intervention Services Division for the six months ended June 30, 2002 and 2001:
SIX MONTHS ENDED JUNE 30, ------------------------------ 2002 2001 ------------ ------------ (in thousands, except percentages) Revenues ......................................... $ 622,738 $ 622,904 Gross Profit ..................................... 202,337 237,510 Gross Profit % ................................... 32.5% 38.1% Research and Development ......................... $ 11,757 $ 10,875 Selling, General and Administrative .............. 68,696 71,592 Operating Income ................................. 121,884 155,043 EBITDA ........................................... 197,433 217,470
A discussion of the results of our Drilling and Intervention Services Division for the six months ended June 30, 2002 compared to the six months ended June 30, 2001 follows: o Our North American revenues for the first six months of 2002 declined by 23.3%, or 25.5% excluding the incremental revenues from our 2001 acquisitions. A decrease in the six-month average North American rig count of 31.9% contributed to the decline in revenues in this region. Our international revenues increased 29.4%, or 22.0% excluding incremental revenues from our 2001 acquisitions, compared to a relatively flat international rig count. o Gross profit as a percentage of revenues declined 14.7% in the first half of 2002 from the same period last year. The decline in margins primarily reflects the impact of the pricing pressures and lower volumes felt in the U.S. market, as well as a change in product mix. o Selling, general and administrative expenses as a percentage of revenues declined from 11.5% in the first six months of 2001 to 11.0% in the first six months of 2002. The decline is primarily related to the non-amortization of goodwill partially offset by costs associated with the expansion of our underbalanced services infrastructure. Goodwill amortization for this period in 2001 was $6.4 million. 15 COMPLETION SYSTEMS The following chart sets forth data regarding the results of our Completion Systems Division for the six months ended June 30, 2002 and 2001:
SIX MONTHS ENDED JUNE 30, ------------------------------ 2002 2001 ------------ ------------ (in thousands, except percentages) Revenues .................................... $ 197,116 $ 160,969 Gross Profit ................................ 67,779 53,964 Gross Profit % .............................. 34.4% 33.5% Research and Development .................... $ 20,139 $ 9,503 Selling, General and Administrative ......... 33,774 33,120 Operating Income ............................ 13,866 11,341 EBITDA ...................................... 28,766 25,287
A discussion of the results of our Completion Systems Division for the six months ended June 30, 2002 compared to the six months ended June 30, 2001 follows: o Our North American revenues increased 2.1%, or decreased 16.0% excluding incremental revenues associated with our 2001 non-technology acquisitions. Our international revenues increased 38.9%, or 24.9% excluding incremental revenues from these acquisitions. Our 2001 non-technology acquisitions contributed more than $25 million in incremental revenues in the first half of 2002. o Research and development expenses increased 111.9% in the first six months of 2002 compared to the same period of 2001. This increase primarily relates to this division's focus on the development of new technology-related product lines, specifically expandables and optical sensing. o Selling, general and administrative expenses decreased as a percentage of revenues from 20.6% in the first half of 2001 to 17.1% in the same period this year primarily due to the non-amortization of goodwill in 2002. Goodwill amortization for this period of 2001 was $4.9 million. ARTIFICIAL LIFT SYSTEMS The following chart sets forth data regarding the results of our Artificial Lift Systems Division for the six months ended June 30, 2002 and 2001.
SIX MONTHS ENDED JUNE 30, ------------------------------ 2002 2001 ------------ ------------ (in thousands, except percentages) Revenues ......................................... $ 342,261 $ 288,346 Gross Profit ..................................... 119,078 103,909 Gross Profit % ................................... 34.8% 36.0% Research and Development ......................... $ 3,627 $ 1,794 Selling, General and Administrative .............. 69,956 65,889 Operating Income ................................. 45,495 36,226 EBITDA ........................................... 57,118 50,024
A discussion of the results of our Artificial Lift Systems Division as reflected above for the six months ended June 30, 2002 compared to the six months ended June 30, 2001 follows: o North American revenues increased 5.6%, or decreased 10.8% excluding incremental revenues from our 2001 acquisitions. International revenues increased 46.4%, or 19.6% excluding these acquisitions. Our 2001 acquisitions contributed more than $56 million of incremental revenues in the first six months of 2002. o Gross profit as a percentage of revenues decreased from 36.0% in the first half of 2001 to 34.8% in the same period this year. This decline was primarily related to a change in product mix. 16 o Selling, general and administrative expenses decreased as a percentage of revenue from 22.9% in the first six months of 2001 to 20.4% in the comparable period in 2002. The decrease was primarily attributable to increased revenues and the non-amortization of goodwill. Goodwill amortization for the first half of 2001 was $4.6 million. COMPRESSION SERVICES On February 9, 2001, we completed the merger of essentially all of our Compression Services Division into a subsidiary of Universal in exchange for 13.75 million shares of Universal common stock, which approximated 48% of Universal's then outstanding shares. Subsequent to the merger, Universal issued additional shares of common stock and our ownership declined to 45%. During 2001, up to the merger date, the Compression Services Division contributed $26.9 million of revenues, $3.6 million of EBITDA and an operating loss of $0.6 million to our consolidated results. Subsequent to the merger date we began recording equity in earnings of unconsolidated affiliates based on our portion of Universal's net income. The compression businesses that were not included in the merger have been combined with our Artificial Lift Systems Division. CORPORATE REORGANIZATION On June 26, 2002 our stockholders and our Board of Directors approved the corporate reorganization, and Weatherford International Ltd., a newly formed Bermuda company, became our parent holding company. Upon consummation of the merger, our shares ceased to be publicly traded and automatically converted into the right to receive common shares of Weatherford International Ltd. Immediately after the reorganization, we sold our equity investment in Universal to Weatherford International Ltd. for a note receivable of $299.1 million, the fair market value at the date of sale. The sale resulted in a loss of $186.5 million, the difference between fair market value at the date of sale and the carrying value; however, since this was a transfer of assets among related parties under common control, no loss was recorded in the consolidated financial statements of Weatherford International Ltd. LIQUIDITY AND CAPITAL RESOURCES Our current sources of capital are current reserves of cash, cash generated from operations, proceeds from our asset securitization and borrowings under bank lines of credit. We are currently reviewing acquisitions in our markets. Depending on the size and timing of an acquisition, we could require additional capital in the form of either debt, equity or both. In conjunction with the merger, Weatherford International Ltd. fully and unconditionally guaranteed our obligations as follows: (1) the three-year multi-currency revolving credit facility, (2) the five-year unsecured credit agreement, (3) the 7 1/4% Senior Notes, (4) the 6 5/8% Senior Notes, (5) the Zero Coupon Debentures and (6) the Convertible Preferred Debentures. In addition, we and Weatherford International Ltd. fully and unconditionally guaranteed certain domestic subsidiaries' performance obligations relating to the asset securitization, including their payment obligations. CASH FLOWS As of June 30, 2002, our cash and cash equivalents were $48.4 million, a net decrease of $40.4 million from December 31, 2001, which was primarily attributable to the following: o Cash inflows from operating activities of $77.5 million; o Capital expenditures for property, plant and equipment of $124.8 million; o Acquisition of the Shell license for $65.0 million; o Acquisition of new businesses of approximately $18.1 million in cash, net of cash acquired; o Proceeds from the sales of assets of $19.9 million; o Borrowings, net of repayments, on long-term debt and short-term facilities of $99.0 million; o Repayment on our asset securitization of $50.1 million; and o Proceeds from stock option activity of $23.9 million. 17 SOURCE OF LIQUIDITY Our operating cash flow is directly related to our business and the segments in which we operate. Should market conditions deteriorate, or should we experience unforeseen declines in results of operations, cash flows may be reduced. We anticipate that we will rely primarily upon existing cash balances and cash flows from operating activities to maintain liquidity and fulfill obligations of our current operations. We may also use lines of credit to maintain liquidity for short term needs. Banking Facilities In April 2001, we entered into a $250.0 million, three-year multi-currency revolving credit facility, with commitment capacity of up to $400.0 million. As of June 30, 2002, $186.0 million was available under this credit facility. We have a five-year unsecured revolving credit facility, dated May 1998, that allows borrowing of up to $250.0 million at any time. The facility consists of a $200.0 million U.S. credit facility and a $50.0 million Canadian credit facility. As of June 30, 2002, $65.7 million was available under this facility due to amounts outstanding and $34.3 million, which was used to secure outstanding letters of credit. These credit facilities contain customary affirmative and negative covenants, including a maximum debt to capitalization ratio, a minimum interest coverage ratio, a limitation on liens, a limitation on incurrence of indebtedness and a limitation on asset dispositions. The covenants apply to Weatherford International Ltd., the guarantor of these obligations. We are in compliance with all covenants set forth in the credit facilities. The committed revolving credit facilities do not contain any provision, which makes their availability dependent upon our credit ratings; however, the interest rates are dependent upon the credit rating of our long-term senior debt. We also have unsecured short-term borrowings with various institutions pursuant to uncommitted facilities and bid note arrangements. At June 30, 2002, we had $54.2 million in unsecured short-term borrowings outstanding under these arrangements with interest rates ranging from 1.09% to 8.25%. Asset Securitization In July 2001, we entered into a one-year agreement with a financial institution to sell, on a continuous basis, an undivided interest in a specific pool of our domestic accounts receivable. The one-year term was extended through August 2002 and we are currently in the process of renewing this agreement. We are permitted to securitize up to $150.0 million under this agreement. If our or Weatherford International Ltd.'s credit rating falls below BBB- from Standard and Poor's or Baa3 from Moody's, the financial institution has no further obligation to purchase the accounts receivables. We currently pay a program fee on participating interests at a variable rate based on the financial institution's commercial paper rate plus other fees. Program fees totaled $1.3 million for the six months ended June 30, 2002. We had received $90.7 million for purchased interests as of June 30, 2002. In connection with the reorganization, we and Weatherford International Ltd. fully and unconditionally guaranteed certain domestic subsidiaries' performance obligations relating to the asset securitization including their payment obligations. CONTRACTUAL OBLIGATIONS Our contractual obligations at June 30, 2002, and the effect such obligations are expected to have on our liquidity and cash flow in future periods have not changed materially, other than as detailed below, since December 31, 2001. Derivative Instruments As of June 30, 2002, we had in effect two interest rate swap agreements to manage the exposure on our $200.0 million 7 1/4% Senior Notes. The objective of the swaps is to protect the debt against changes in fair value and to take advantage of the interest rates available in the current economic environment. Under these agreements, on May 15 and November 15 of each year until maturity, we will receive interest at the fixed rate of 7 1/4% and will pay a floating rate based on 6-month LIBOR. The interest rate differential to be received or paid on the swaps is recognized over the life of the swaps as an adjustment to interest expense. As of June 30, 2002, the aggregate fair market value of the swap agreements was a $2.9 million net asset. 18 Capital Expenditures Our capital expenditures for property, plant and equipment during the six months ended June 30, 2002 were $124.8 million and primarily related to our new technologies, drilling equipment, fishing tools and tubular service equipment. Capital expenditures for 2002 are expected to be approximately $250.0 million. Our depreciation expense during the six months ended June 30, 2002 was $97.0 million. Shell License On March 1, 2002, we obtained a worldwide license to Shell Technology Ventures' expandable technology. Expandable technology refers to both slotted and solid expandables, related tools and accessories and specialized expansion systems. Under the terms of the agreement, we received a global license to Shell's expandable tubular intellectual property, existing and future, and immediate access to the U.S. market for use of our Completion System Division's Expandable Sand Screen (ESS)(TM) system for consideration that includes $65.0 million in cash, a $20.0 million promissory note and $60.0 million of warrants to purchase common shares of Weatherford International Ltd. In addition, we received a 50% reduction in the royalty rate we historically paid for Shell licensed-technology sales. The license will be amortized over the life of the agreement, which is 17 years. Zero Coupon Convertible Senior Debentures On June 30, 2000, we completed the private placement of $910 million face amount of Zero Coupon Debentures. These Debentures were issued at $501.6 million providing the holders with an annual 3% yield to maturity. As of June 30, 2002, the amount recorded on our balance sheet was $532.4 million, net of original issue discount. Holders may convert the Zero Coupon Debentures into shares of Weatherford International Ltd. at any time before maturity at a conversion rate of 9.9970 shares per $1,000 principal amount at maturity or an initial conversion price of $55.1425 per share. The effective conversion price will increase as the accreted value of the Zero Coupon Debentures increases. We may redeem the Zero Coupon Debentures on or after June 30, 2005 at the accreted discounted amount at the time of redemption as provided for in the indenture agreement. The holders also may require us to repurchase the Zero Coupon Debentures on June 30, 2005, June 30, 2010, and June 30, 2015 at the accreted discounted amount at the time of redemption. We may, at our election, repurchase the debentures in cash, common shares of Weatherford International Ltd. or a combination thereof. EXPOSURES INDUSTRY EXPOSURE The concentration of our customers in the energy industry may impact our overall exposure to credit risk, either positively or negatively, in that customers may be similarly affected by prolonged changes in economic and industry conditions. We perform ongoing credit evaluations of our customers and do not generally require collateral in support of our trade receivables. We maintain reserves for potential credit losses and, generally, actual historical losses have been consistent with our expectations. LITIGATION AND ENVIRONMENTAL EXPOSURE In the ordinary course of business, we become the subject of various claims and litigation. We maintain insurance to cover many of our potential losses and we are subject to various self-retentions and deductibles with respect to our insurance. Although we are subject to various ongoing items of litigation, we do not believe that any of the items of litigation that we are currently subject to will result in any material uninsured losses to us. However, it is possible that an unexpected judgment could be rendered against us in cases in which we could be uninsured and beyond the amounts that we currently have reserved or anticipate incurring. We are also subject to various federal, state and local laws and regulations relating to the energy industry in general and the environment in particular. Environmental laws have in recent years become more stringent and have generally sought to impose greater liability on a larger number of potentially responsible parties. While we are not currently aware of any situation involving an environmental claim which would be likely to have a material adverse effect on our business, it is always possible that an environmental claim with respect to one or more of our current 19 businesses or a business or property that one of our predecessors owned or used could arise that could involve the expenditure of a material amount of funds. TERRORISM EXPOSURE The terrorist attacks that took place in the U.S. on September 11, 2001 were unprecedented events that have created many economic and political uncertainties, some of which may materially impact our businesses. The long-term effects of the September 11, 2001 attacks on our businesses are unknown. The potential for future terrorist attacks, the national and international responses to terrorist attacks and other acts of war or hostility have created many economic and political uncertainties, which could adversely affect our businesses for the short- or long-term in ways that cannot presently be predicted. INTERNATIONAL EXPOSURE Like most multinational oilfield service companies, we have operations in certain international areas, including parts of the Middle East, North and West Africa, Latin America, the Asia-Pacific region and the Commonwealth of Independent States that are inherently subject to risks of war, political disruption, civil disturbance and change in global trade policies that may: o disrupt oil and gas exploration and production activities; o negatively impact results of operations; o restrict the movement of funds; o inhibit our ability to collect receivables; o lead to U.S. government or international sanctions; and o limit access to markets for periods of time. CURRENCY EXPOSURE A single European currency ("the Euro") was introduced on January 1, 1999, at which time the conversion rates between legacy currencies and the Euro were set for 11 participating member countries. However, the legacy currencies in those countries continued to be used as legal tender through January 1, 2002. Thereafter, the legacy currencies were canceled, and the Euro bills and coins are now used. The transition to the Euro did not have a significant impact on our condensed consolidated financial statements or our business operations. Approximately 27.9% of our net assets are located outside the U.S. and are carried on our books in local currencies. Changes in those currencies in relation to the U.S. Dollar result in translation adjustments, which are reflected as accumulated other comprehensive loss in the stockholders' equity section on our Condensed Consolidated Balance Sheets. We recorded a $11.3 million adjustment to our equity account for the six months ended June 30, 2002 primarily to reflect the net impact of the decline in the Argentinean Peso and Brazilian Real against the U.S. Dollar and the strengthening of the Canadian Dollar, Norwegian Kroner and British Pound against the U.S. Dollar. Changes in currencies also result in the recognition of remeasurement and transactional gains and losses in our Condensed Consolidated Statements of Operations. FORWARD-LOOKING STATEMENTS This report as well as other filings made by us and Weatherford International Ltd. with the Securities and Exchange Commission and our releases issued to the public contain various statements relating to our future results, including certain projections and business trends. We believe these statements constitute "Forward-Looking Statements" as defined in the Private Securities Litigation Reform Act of 1995. Certain of the risks and uncertainties may cause actual results to be materially different from projected results contained in forward-looking statements in this report and in our other disclosures. These risks and uncertainties include, but are not limited to, the following: A downturn in market conditions could affect projected results. Any material changes in oil and gas supply and demand balance, oil and gas prices, rig count or other market trends would affect our results and would likely affect the forward-looking information provided by us. The oil and gas industry is extremely volatile and subject to change based on political and economic factors outside our control. Through the beginning of 2002, there was a general decrease in prices for oil and natural gas, reflecting diminished demand attributable to political and economic issues. In the last few months, there has been a modest increase and stabilization of 20 prices for oil and natural gas. In addition, the United States economy and most foreign economies appear to have stabilized in the last few months despite their weakening in the prior periods. If an extended regional and/or worldwide recession would occur, it would result in even lower demand and lower prices for oil and gas, which would adversely affect our revenues and income. At this time, we have assumed that any material declines during 2002 will be limited to North and Latin America. Furthermore, our forward-looking statements regarding our drilling and completion products and services assume a modest improvement in the international rig count during 2002 and that no extended material declines in the North American rig count will occur. Our results are dependent upon our ability to react to the current market environment. During the fourth quarter of 2001 and 2002 to date, we have implemented a number of programs intended to reduce costs and align our cost structure with the current market environment. Our forward-looking statements assume these measures will generate the savings expected and, if the markets continue to decline, that any additional actions we pursue will be adequate to achieve the desired savings. A material disruption in our manufacturing could adversely affect some divisions of our business. Our forward-looking statements assume that any manufacturing expansion and consolidation will be completed without any material disruptions. If there are any disruptions or excess costs associated with manufacturing changes, our results could be adversely affected. Our success is dependent upon the integration of acquisitions. During 2001, we consummated acquisitions of several product lines and businesses, including the acquisition of Johnson Screens. The success of our acquisitions will be dependent on our ability to integrate the product lines and businesses with our existing businesses and eliminate duplicative costs. We incur various duplicative costs during the integration of the operations of acquired businesses into our operations. Our forward-looking statements assume the successful integration of the operations of the acquired businesses and their contribution to our results during 2002; however, there can be no assurance that the expected benefits of these acquisitions will materialize. Integration of acquisitions is something that cannot occur in the short-term and that requires constant effort at the local level to be successful. Accordingly, there can be no assurance as to the ultimate success of these integration efforts. Our long-term growth strategy is dependent upon technological advances. Our ability to succeed with our long-term growth strategy is dependent in part on the technological competitiveness of our products and services. A central aspect of our growth strategy is to enhance the technology of our current products and services, to obtain new technologically-advanced value-added products through internal research and development and/or acquisitions and to then expand the markets for the technology through the leverage of our worldwide infrastructure. These technological advances include, but are not limited to, our underbalanced drilling technology, expandable technology, production optimization and fiber optic sensor technology. Our forward-looking statements have assumed above average growth from these new products and services. Unanticipated changes in tax laws related to corporate reorganization could have an adverse effect on our corporate reorganization. Any change in tax laws, tax treaties or tax regulations or the interpretation or enforcement thereof or differing interpretation or enforcement of applicable law by the U.S. Internal Revenue Service or other taxing authorities would likely affect our corporate reorganization. The U.S. Congress introduced legislation with retroactive effects, which could substantially reduce or eliminate the tax benefits resulting from the reorganization. Unanticipated costs or nonrealization of expected benefits from our corporate reorganization could affect our projected results. An inability to realize expected benefits of the reorganization within the anticipated time frame, or at all, would likely affect the anticipated impact of our corporate reorganization. Similarly, any cost or difficulty related to the reorganization and related transactions, which could be greater than expected or thought, would also affect our corporate reorganization. Currency fluctuations could have a material adverse financial impact. A material decline in currency rates in our markets could affect our future results as well as affect the carrying values of our assets. World currencies have been subject to much volatility. Our forward-looking statements assume no material impact from future changes in currencies. Political disturbances, war, terrorist attacks and changes in global trade policies could adversely impact our operations. We have assumed that there will be no material political disturbances, war, or terrorist attacks and that there will be no material changes in global trade policies. 21 Unexpected litigation and legal disputes could have a material adverse financial impact. If we experience unexpected litigation or unexpected results in our existing litigation that have a material effect on our financial results, the accuracy of the forward-looking statements would be affected. Our forward-looking statements assume that there will be no such unexpected litigation or results. Finally, our future results will depend upon various other risks and uncertainties, including, but not limited to, those detailed in our and Weatherford International Ltd.'s other filings with the SEC. For additional information regarding risks and uncertainties, see our and Weatherford International Ltd.'s other current year filings with the SEC under the Securities Exchange Act of 1934, as amended, and the Securities Act of 1933, as amended, available free of charge at the SEC's website at www.sec.gov. 22 PART II. OTHER INFORMATION ITEM 5. OTHER INFORMATION Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes--Oxley Act of 2002, the certifications of Bernard J. Duroc-Danner, Chief Executive Officer of the Company, and Lisa W. Rodriguez, Chief Financial Officer of the Company, are filed with this Form 10-Q as Exhibit Numbers 99.1 and 99.2. Copies of these certifications are available on the Company's website at www.weatherford.com. In addition, the sworn statements/certifications of Mr. Duroc-Danner and Ms. Rodriguez, as required by Securities and Exchange Commission Order No. 4-460 and pursuant to Section 21(a)(1) of the Securities Exchange Act of 1934, were filed with the Securities and Exchange Commission on August 9, 2002 as Exhibit Numbers 99.1 and 99.2 to the Company's Form 8-K. Copies of these certifications are also available on the Company's website at www.weatherford.com. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: EXHIBIT NUMBER DESCRIPTION 2.1 Agreement and Plan of Merger dated May 8, 2002, among Weatherford International, Inc., Weatherford Merger, Inc., Weatherford International Ltd. and Weatherford U.S. Holdings LLC (incorporated by reference to Exhibit 2.1 to Amendment No. 1 to Weatherford International Ltd.'s Registration Statement on Form S-4 (Reg. No. 333-85644) filed on May 22, 2002). +3.1 Amended and Restated Certificate of Incorporation of Weatherford International, Inc. +3.2 Bylaws of Weatherford International, Inc. 4.1 See Exhibits 3.1 and 3.2 for provisions of the Amended and Restated Certificate of Incorporation and Bylaws of Weatherford International, Inc. defining the rights of security holders. 4.2 Amending Agreement dated June 26, 2002, by and among Weatherford International, Inc., Weatherford International Ltd., Weatherford Canada Ltd., Weatherford ER Acquireco Inc., Jamie E. Biluk, N. Scott A. Biluk, A. Lynn Biluk and Tracy L. Biluk (incorporated by reference to Exhibit 4.4 to Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (Reg. No. 333-82634) filed on July 5, 2002). +4.3 Amendment No. 1 dated May 17, 2002, to Credit Agreement dated April 26, 2001, among Weatherford International, Inc., Weatherford Eurasia Limited, Weatherford Eurasia B.V., Weatherford International Ltd., the Lenders defined therein and Bank One, N.A., as Administrative Agent. +4.4 Amendment No. 1 dated May 17, 2002, to Amended and Restated Credit Agreement dated May 27, 1998, among Weatherford International, Inc., Weatherford Canada Ltd., Weatherford International Ltd., the Lenders defined therein, JPMorgan Chase Bank, as Administrative Agent for the U.S. Lenders, and The Bank of Nova Scotia, as Documentation Agent for the Lenders and as Agent for the Canadian Lenders. +4.5 Waiver and Omnibus Amendment dated June 26, 2002, to Sale Agreement dated July 2, 2001, and Purchase Agreement dated July 2, 2001, among W1 Receivables, L.P., Weatherford International, Inc., Bank One, NA (Main Office Chicago), individually and as Agent, Jupiter Securitization Corporation, Weatherford Artificial Lift Systems, Inc., Weatherford U.S., L.P. and Weatherford International Ltd. +4.6 Waiver and Amendment No. 1 dated May 14, 2002, to Purchase Agreement dated July 2, 2001, among W1 Receivables, L.P., Weatherford International, Inc., Bank One, NA (Main Office Chicago), individually and as Agent, and Jupiter Securitization Corporation. +4.7 Fourth Supplemental Indenture dated June 26, 2002, among Weatherford International, Inc., Weatherford International Ltd. and The Bank of New York (as successor in interest to Bank of Montreal Trust Company). +4.8 Second Supplemental Indenture dated June 26, 2002, among Weatherford International, Inc., Weatherford International Ltd. and JP Morgan Chase Bank. 23 +10.1 Assumption and General Amendment of Directors' Stock Option and Benefit Programs and General Amendment of Employee Stock Option and Benefit Programs of Weatherford International, Inc. dated June 26, 2002. +99.1 Certification of Chief Executive Officer. +99.2 Certification of Chief Financial Officer. - ---------- + Filed herewith. (b) Reports on Form 8-K: 1) Current Report on Form 8-K dated April 5, 2002, announcing the approval of the Company's corporate restructuring plan. 2) Current Report on Form 8-K dated April 23, 2002, announcing the Company's earnings for the quarter ended March 31, 2002. 3) Current Report on Form 8-K dated June 26, 2002, announcing the corporate reorganization of the Company, changing its domicile from Delaware to Bermuda under the name of Weatherford International Ltd. 24 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Weatherford International, Inc. By: /s/ Bernard J. Duroc-Danner --------------------------------------------- Bernard J. Duroc-Danner Chief Executive Officer, Chairman of the Board and Director (Principal Executive Officer) /s/ Lisa W. Rodriguez --------------------------------------------- Lisa W. Rodriguez Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) Date: August 14, 2002 25 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 2.1 Agreement and Plan of Merger dated May 8, 2002, among Weatherford International, Inc., Weatherford Merger, Inc., Weatherford International Ltd. and Weatherford U.S. Holdings LLC (incorporated by reference to Exhibit 2.1 to Amendment No. 1 to Weatherford International Ltd.'s Registration Statement on Form S-4 (Reg. No. 333-85644) filed on May 22, 2002). +3.1 Amended and Restated Certificate of Incorporation of Weatherford International, Inc. +3.2 Bylaws of Weatherford International, Inc. 4.1 See Exhibits 3.1 and 3.2 for provisions of the Amended and Restated Certificate of Incorporation and Bylaws of Weatherford International, Inc. defining the rights of security holders. 4.2 Amending Agreement dated June 26, 2002, by and among Weatherford International, Inc., Weatherford International Ltd., Weatherford Canada Ltd., Weatherford ER Acquireco Inc., Jamie E. Biluk, N. Scott A. Biluk, A. Lynn Biluk and Tracy L. Biluk (incorporated by reference to Exhibit 4.4 to Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (Reg. No. 333-82634) filed on July 5, 2002). +4.3 Amendment No. 1 dated May 17, 2002, to Credit Agreement dated April 26, 2001, among Weatherford International, Inc., Weatherford Eurasia Limited, Weatherford Eurasia B.V., Weatherford International Ltd., the Lenders defined therein and Bank One, N.A., as Administrative Agent. +4.4 Amendment No. 1 dated May 17, 2002, to Amended and Restated Credit Agreement dated May 27, 1998, among Weatherford International, Inc., Weatherford Canada Ltd., Weatherford International Ltd., the Lenders defined therein, JPMorgan Chase Bank, as Administrative Agent for the U.S. Lenders, and The Bank of Nova Scotia, as Documentation Agent for the Lenders and as Agent for the Canadian Lenders. +4.5 Waiver and Omnibus Amendment dated June 26, 2002, to Sale Agreement dated July 2, 2001, and Purchase Agreement dated July 2, 2001, among W1 Receivables, L.P., Weatherford International, Inc., Bank One, NA (Main Office Chicago), individually and as Agent, Jupiter Securitization Corporation, Weatherford Artificial Lift Systems, Inc., Weatherford U.S., L.P. and Weatherford International Ltd. +4.6 Waiver and Amendment No. 1 dated May 14, 2002, to Purchase Agreement dated July 2, 2001, among W1 Receivables, L.P., Weatherford International, Inc., Bank One, NA (Main Office Chicago), individually and as Agent, and Jupiter Securitization Corporation. +4.7 Fourth Supplemental Indenture dated June 26, 2002, among Weatherford International, Inc., Weatherford International Ltd. and The Bank of New York (as successor in interest to Bank of Montreal Trust Company). +4.8 Second Supplemental Indenture dated June 26, 2002, among Weatherford International, Inc., Weatherford International Ltd. and JP Morgan Chase Bank. +10.1 Assumption and General Amendment of Directors' Stock Option and Benefit Programs and General Amendment of Employee Stock Option and Benefit Programs of Weatherford International, Inc. dated June 26, 2002. +99.1 Certification of Chief Executive Officer. +99.2 Certification of Chief Financial Officer.
- -------------- + Filed herewith. EX-3.1 3 h99033exv3w1.txt AMENDED CERTIFICATE OF INCORPORATION EXHIBIT 3.1 CERTIFICATE OF MERGER MERGING WEATHERFORD MERGER, INC., A DELAWARE CORPORATION, WITH AND INTO WEATHERFORD INTERNATIONAL, INC., A DELAWARE CORPORATION. Pursuant to the provisions of Section 251 of the General Corporation Law of the State of Delaware (the "DGCL"), the undersigned certifies as follows concerning the merger (the "Merger") of Weatherford Merger, Inc., a Delaware corporation ("Merger Sub"), with and into Weatherford International, Inc., a Delaware corporation ("Weatherford International"), with Weatherford International continuing as the surviving corporation in the Merger (the "Surviving Corporation"). 1. The Agreement and Plan of Merger, dated as of May 8, 2002 (the "Merger Agreement"), has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with Section 251 of the DGCL. 2. The Merger contemplated in the Merger Agreement and this Certificate of Merger will be effective at 5:00 p.m. on June 26, 2002 (the "Effective Time"). 3. The name of the Surviving Corporation shall be Weatherford International, Inc. 4. In accordance with the Merger Agreement and the DGCL, and to give effect to the changes required by the Merger Agreement, the Amended and Restated Certificate of Incorporation of the Surviving Corporation is hereby amended and restated to read in its entirety as follows: "First: The name of the Corporation is Weatherford International, Inc. Second: The address of the Corporation's registered office in the State of Delaware is 2711 Centerville Road, Suite 400 in the City of Wilmington, County of New Castle. The name of the Corporation's registered agent at such address is Corporation Service Company. Third: The nature of the business and purpose to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. Fourth: The total number of shares of stock that the Corporation shall have authority to issue is One Thousand (1,000) shares of Common Stock, with a par value of $1.00 per share. Fifth: The Corporation shall have perpetual existence. Sixth: Election of directors need not be by written ballot unless the bylaws of the Corporation shall so provide. Seventh: All of the powers of the Corporation, insofar as the same may be lawfully vested by this Amended and Restated Certificate of Incorporation in the Board of Directors of the Corporation, are herby conferred upon the Board of Directors of the Corporation. In furtherance and not in limitation of the foregoing provisions of this Article Seventh, and for the purpose of the orderly management of the business and the conduct of the affairs of the Corporation, the Board of Directors of the Corporation shall have the power to adopt, amend or repeal from time to time the by-laws of the Corporation, subject to the right of the stockholders of the Corporation entitled to vote thereon to adopt, amend or repeal bylaws of the Corporation. Eighth: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation." 5. The executed Merger Agreement is on file at the principal place of business of the Surviving Corporation, 515 Post Oak Boulevard, Suite 600, Houston, Texas 77027. 6. A copy of the Merger Agreement will be furnished by the Surviving Corporation, on request and without cost, to any stockholder of Merger Sub or Weatherford International. -2- IN WITNESS WHEREOF, Weatherford International, Inc. has caused this Certificate to be signed by one of its duly authorized officers this 26th day of June, 2002. WEATHERFORD INTERNATIONAL, INC. By: /s/ BURT M. MARTIN ---------------------------------- Name: Burt M. Martin -------------------------------- Title: Senior Vice President ------------------------------- EX-3.2 4 h99033exv3w2.txt BYLAWS EXHIBIT 3.2 WEATHERFORD INTERNATIONAL, INC. BY-LAWS AMENDED & RESTATED ON JUNE 26, 2002 ARTICLE I OFFICES SECTION 1.01. Registered Office. The registered office of the corporation in the State of Delaware shall be in the City of Wilmington, County of New Castle, and the name of its registered agent shall be The Corporation Service Company. SECTION 1.02. Other Offices. The corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS SECTION 2.01. Place of Meeting. All meetings of stockholders for the election of directors shall be held at such place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. SECTION 2.02. Annual Meeting. The annual meeting of stockholders shall be held at such date and time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. SECTION 2.03. Voting List. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice, or if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. SECTION 2.04. Special Meeting. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation, may be called by the Chairman of the Board or by the President of the corporation or by the Board of Directors or by written order of a majority of the directors and shall be called by the President or the Secretary at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purposes of the proposed meeting. The Chairman of the Board or the President of the corporation or directors so calling, or the stockholders so requesting, any such meeting shall fix the time and any place, either within or without the State of Delaware, as the place for holding such meeting. SECTION 2.05. Notice of Meeting. Written notice of the annual, and each special meeting of stockholders, stating the time, place, and purpose or purposes thereof, shall be given to each stockholder entitled to vote thereat, not less than 10 nor more than 60 days before the meeting. SECTION 2.06. Quorum. The holders of a majority of the shares of the corporation's capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at any meeting of stockholders for the transaction of business, except as otherwise provided by statute or by the Certificate of Incorporation. Notwithstanding the other provisions of the Certificate of Incorporation or these by-laws, the holders of a majority of the shares of the corporation's capital stock entitled to vote thereat, present in person or represented by proxy, whether or not a quorum is present, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. SECTION 2.07. Voting. When a quorum is present at any meeting of the stockholders, the vote of the holders of a majority of the shares of the corporation's capital stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which, by express provision of the statutes, of the Certificate of Incorporation or of these by-laws, a different vote is required, in which case such express provision shall govern and control the decision of such question. Every stockholder having the right to vote shall be entitled to vote in person, or by proxy appointed by an instrument in writing subscribed by such stockholder, bearing a date not more than three years prior to voting, unless such instrument provides for a longer period, and filed with the Secretary of the corporation before, or at the time of, the meeting. If such instrument shall designate two or more persons to act as proxies, unless such instrument shall provide the contrary, a majority of such persons present at any meeting at which their powers thereunder are to be exercised shall have and may exercise all the powers of voting or giving consents thereby conferred, or if only one be present, then such powers may be exercised by that one; or, if an even number attend and a majority do not agree on any particular issue, each proxy so attending shall be entitled to exercise such powers in respect of the same portion of the shares as he is of the proxies representing such shares. -2- SECTION 2.08. Consent of Stockholders. Whenever the vote of stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action by any provision of the statutes, the meeting and vote of stockholders may be dispensed with if all the stockholders who would have been entitled to vote upon the action if such meeting were held shall consent in writing to such corporate action being taken; or on the written consent of the holders of shares of the corporation's capital stock having not less than the minimum percentage of the vote required by statute for the proposed corporate action, and provided that prompt notice must be given to all stockholders of the taking of corporate action without a meeting and by less than unanimous written consent. SECTION 2.09. Voting of Stock of Certain Holders. Shares of the corporation's capital stock standing in the name of another corporation, domestic or foreign, may be voted by such officer, agent, or proxy as the by-laws of such corporation may prescribe, or in the absence of such provision, as the Board of Directors of such corporation may determine. Shares standing in the name of a deceased person may be voted by the executor or administrator of such deceased person, either in person or by proxy. Shares standing in the name of a guardian, conservator, or trustee may be voted by such fiduciary, either in person or by proxy, but no such fiduciary shall be entitled to vote shares held in such fiduciary capacity without a transfer of such shares into the name of such fiduciary. Shares standing in the name of a receiver may be voted by such receiver. A stockholder whose shares are pledged shall be entitled to vote such shares, unless in the transfer by the pledgor on the books of the corporation, he has expressly empowered the pledgee to vote thereon, in which case only the pledgee, or his proxy, may represent the stock and vote thereon. SECTION 2.10. Treasury Stock. The corporation shall not vote, directly or indirectly, shares of its own capital stock owned by it; and such shares shall not be counted in determining the total number of outstanding shares of the corporation's capital stock. SECTION 2.11. Fixing Record Date. The Board of Directors may fix in advance a date, which shall not be more than 60 days nor less than 10 days preceding the date of any meeting of stockholders, nor more than 60 days preceding the date for payment of any dividend or distribution, or the date for the allotment of rights, or the date when any change, or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining a consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such dividend or distribution, or to receive any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give such consent, and in such case such stockholders and only such stockholders as shall be stockholders of record on the date so fixed, shall be entitled to such notice of, and to vote at, any such meeting and any adjournment thereof, or to receive payment of such dividend or distribution, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the corporation after any such record date fixed as aforesaid. -3- ARTICLE III BOARD OF DIRECTORS SECTION 3.01. Powers. The business and affairs of the corporation shall be managed by its Board of Directors, which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these by-laws directed or required to be exercised or done by the stockholders. SECTION 3.02. Number, Election and Term. The number of directors that shall constitute the whole Board of Directors shall be not less than one. Such number of directors shall from time to time be fixed and determined by the directors and shall be set forth in the notice of any meeting of stockholders held for the purpose of electing directors. The directors shall be elected at the annual meeting of stockholders, except as provided in Section 3.03, and each director elected shall hold office until his successor shall be elected and shall qualify. Directors need not be residents of Delaware or stockholders of the corporation. SECTION 3.03. Vacancies, Additional Directors, and Removal From Office. If any vacancy occurs in the Board of Directors caused by death, resignation, retirement, disqualification, or removal from office of any director, or otherwise, or if any new directorship is created by an increase in the authorized number of directors, a majority of the directors then in office, though less than a quorum, or a sole remaining director, may choose a successor or fill the newly created directorship; and a director so chosen shall hold office until the next election and until his successor shall be duly elected and shall qualify, unless sooner displaced. Any director may be removed either for or without cause at any special meeting of stockholders duly called and held for such purpose. SECTION 3.04. Regular Meeting. A regular meeting of the Board of Directors shall be held each year, without other notice than this by-law, at the place of, and immediately following, the annual meeting of stockholders; and other regular meetings of the Board of Directors shall be held each year, at such time and place as the Board of Directors may provide, by resolution, either within or without the State of Delaware, without other notice than such resolution. SECTION 3.05. Special Meeting. A special meeting of the Board of Directors may be called by the Chairman of the Board of Directors or by the President of the corporation and shall be called by the Secretary on the written request of any two directors. The Chairman or President so calling, or the directors so requesting, any such meeting shall fix the time and any place, either within or without the State of Delaware, as the place for holding such meeting. SECTION 3.06. Notice of Special Meeting. Written notice of special meetings of the Board of Directors shall be given to each director at least 48 hours prior to the time of such meeting. Any director may waive notice of any meeting. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be -4- specified in the notice or waiver of notice of such meeting, except that notice shall be given of any proposed amendment to the by-laws if it is to be adopted at any special meeting or with respect to any other matter where notice is required by statute. SECTION 3.07. Quorum. A majority of the Board of Directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute, by the Certificate of Incorporation or by these by-laws. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. SECTION 3.08. Action Without Meeting. Unless otherwise restricted by the Certificate of Incorporation or these by-laws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof as provided in Article IV of these by-laws, may be taken without a meeting, if a written consent thereto is signed by all members of the Board of Directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board of Directors or such committee. SECTION 3.09. Compensation. Directors, as such, shall not be entitled to any stated salary for their services unless voted by the stockholders or the Board of Directors; but by resolution of the Board of Directors, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board of Directors or any meeting of a committee of directors. No provision of these by-laws shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefor. ARTICLE IV COMMITTEE OF DIRECTORS SECTION 4.01. Designation, Powers and Name. The Board of Directors may, by resolution passed by a majority of the whole Board of Directors, designate one or more committees, including, if they shall so determine, an Executive Committee, each such committee to consist of two or more of the directors of the corporation. The committee shall have and may exercise such of the powers of the Board of Directors in the management of the business and affairs of the corporation as may be provided in such resolution. The committee may authorize the seal of the corporation to be affixed to all papers that may require it. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of any member of such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Such committee or committees shall have -5- such name or names and such limitations of authority as may be determined from time to time by resolution adopted by the Board of Directors. SECTION 4.02. Minutes. Each committee of directors shall keep regular minutes of its proceedings and report the same to the Board of Directors when required. SECTION 4.03. Compensation. Members of special or standing committees may be allowed compensation for attending committee meetings, if the Board of Directors shall so determine. ARTICLE V NOTICE SECTION 5.01. Methods of Giving Notice. Whenever under the provisions of applicable statutes, the Certificate of Incorporation or these by-laws, notice is required to be given to any director, member of any committee, or stockholder, such notice shall be in writing and delivered personally or mailed to such director, member, or stockholder; provided that in the case of a director or a member of any committee such notice may be given orally or by telephone or telegram. If mailed, notice to a director, member of a committee, or stockholder shall be deemed to be given when deposited in the United States mail first class in a sealed envelope, with postage thereon prepaid, addressed, in the case of a stockholder, to the stockholder at the stockholder's address as it appears on the records of the corporation or, in the case of a director or a member of a committee, to such person at his business address. If sent by telegraph, notice to a director or member of a committee shall be deemed to be given when the telegram, so addressed, is delivered to the telegraph company. SECTION 5.02. Written Waiver. Whenever any notice is required to be given under the provisions of an applicable statute, the Certificate of Incorporation, or these by-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. ARTICLE VI OFFICERS SECTION 6.01. Officers. The officers of the corporation shall be elected by the board of directors and shall consist of a president and a secretary, neither of whom need be a member of the board of directors. Two or more offices may be held by the same person. The board of directors may also elect a chairman of the board, a vice chairman of the board, a treasurer, and one or more executive vice presidents, senior vice presidents, vice presidents, controllers, assistant secretaries and assistant treasurers. The board of directors may appoint such other officers and assistant officers and agents as it shall deem necessary, who shall hold their offices for such terms and shall have such authority and exercise such powers and perform such duties as shall be determined from time to time by the board by resolution -6- not inconsistent with these by-laws. The Chairman and Vice Chairman of the Board shall be elected from among the directors. With the foregoing exceptions, none of the other officers need be a director, and none of the officers need be a stockholder of the corporation. SECTION 6.02. Election and Term of Office. The officers of the corporation shall be elected annually by the Board of Directors at its first regular meeting held after the annual meeting of stockholders or as soon thereafter as conveniently possible. Each officer shall hold office until his successor shall have been chosen and shall have qualified or until his death or the effective date of his resignation or removal, or until he shall cease to be a director in the case of the Chairman and the Vice Chairman. SECTION 6.03. Removal and Resignation. Any officer or agent elected or appointed by the Board of Directors may be removed without cause by the affirmative vote of a majority of the Board of Directors whenever, in its judgment, the best interests of the corporation shall be served thereby, but such removal shall be without prejudice to the contractual rights, if any, of the person so removed. Any officer may resign at any time by giving written notice to the corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. SECTION 6.04. Vacancies. Any vacancy occurring in any office of the corporation by death, resignation, removal, or otherwise, may be filled by the Board of Directors for the unexpired portion of the term. SECTION 6.05. Salaries. The salaries of all officers and agents of the corporation shall be fixed by the Board of Directors or pursuant to its direction; and no officer shall be prevented from receiving such salary by reason of his also being a director. SECTION 6.06. Chairman of the Board. The Chairman of the Board, if one is elected, shall preside at all meetings of the board of directors and shall have such other powers and duties as may from time to time be prescribed by the board of directors, upon written directions given to him pursuant to resolutions duly adopted by the board of directors. SECTION 6.07. Vice Chairman of the Board. The Vice Chairman of the Board, if one is elected, shall, in the absence or disability of the Chairman of the Board, perform the duties and have the authority and exercise the powers of the Chairman of the Board. He shall perform such other duties and have such other authority and powers as the board of directors may from time to time prescribe or as the chairman of the board may from time to time delegate. SECTION 6.08. President. The President shall be the chief executive officer of the corporation and, subject to the control of the Board of Directors, shall in general supervise and control the business and affairs of the corporation. In the absence of the Chairman of the Board or the Vice Chairman of the Board (if such offices are created by the Board), the President shall preside at all meetings of the Board of Directors and of the stockholders. He may also preside at any such meeting attended by the Chairman or Vice Chairman of the Board if he is so designated by the Chairman, or in the Chairman's -7- absence by the Vice Chairman. He shall have the power to appoint and remove subordinate officers, agents and employees, except those elected or appointed by the Board of Directors. He may sign with the Secretary or any other officer of the corporation thereunto authorized by the Board of Directors, certificates for shares of the corporation and any deeds, bonds, mortgages, contracts, checks, notes, drafts, or other instruments that the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof has been expressly delegated by these by-laws or by the Board of Directors to some other officer or agent of the corporation, or shall be required by law to be otherwise executed. He shall vote, or give a proxy to any other officer of the corporation to vote, all shares of stock of any other corporation standing in the name of the corporation and in general he shall perform all other duties normally incident to the office of President and such other duties as may be prescribed by the stockholders, the Board of Directors, or the Executive Committee from time to time. SECTION 6.09. Vice Presidents. In the absence of the President, or in the event of his inability or refusal to act, the Vice Presidents (in order of their seniority) shall perform the duties and exercise the powers of the President. Any Vice President may sign, with the Secretary or Assistant Secretary, certificates for shares of the corporation. The Vice Presidents shall perform such other duties as from time to time may be assigned to them by the President, the Board of Directors or the Executive Committee. SECTION 6.10. Secretary. The Secretary shall (a) keep the minutes of the meetings of the stockholders, the Board of Directors and committees of directors; (b) see that all notices are duly given in accordance with the provisions of these by-laws and as required by law; (c) be custodian of the corporate records and of the seal of the corporation, and see that the seal of the corporation or a facsimile thereof is affixed to all certificates for shares prior to the issue thereof and to all documents, the execution of which on behalf of the corporation under its seal is duly authorized in accordance with the provisions of these by-laws; (d) keep or cause to be kept a register of the post office address of each stockholder which shall be furnished by such stockholder; (e) sign with the President, or an Executive Vice President or Vice President, certificates for shares of the corporation, the issue of which shall have been authorized by resolution of the Board of Directors; (f) have general charge of the stock transfer books of the corporation; and (g) in general, perform all duties normally incident to the office of Secretary and such other duties as from time to time may be assigned to him by the President, the Board of Directors or the Executive Committee. SECTION 6.11. Treasurer. If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board of Directors shall determine. He shall (a) have charge and custody of and be responsible for all funds and securities of the corporation; (b) receive and give receipts for moneys due and payable to the corporation from any source whatsoever and deposit all such moneys in the name of the corporation in such banks, trust companies, or other depositories as shall be selected in accordance with the provisions of Section 7.03 of these by-laws; (c) prepare, or cause to be prepared, for submission at each regular meeting of the Board of Directors, at each annual meeting of the stockholders, and at such other times as may be required by the Board of Directors, the President or the Executive Committee, a statement of financial condition of the corporation in such detail as may be required; and (d) in general, perform all the duties incident to the office -8- of Treasurer and such other duties as from time to time may be assigned to him by the President, the Board of Directors or the Executive Committee. SECTION 6.12. Assistant Secretary or Treasurer. The Assistant Secretaries and Assistant Treasurers shall, in general, perform such duties as shall be assigned to them by the Secretary or the Treasurer, respectively, or by the President, the Board of Directors, or the Executive Committee. The Assistant Secretaries and Assistant Treasurers shall, in the absence of the Secretary or Treasurer, respectively, perform all functions and duties which such absent officers may delegate, but such delegation shall not relieve the absent officer from the responsibilities and liabilities of his office. The Assistant Secretaries may sign, with the President or a Vice President, certificates for shares of the corporation, the issue of which shall have been authorized by a resolution of the Board of Directors. The Assistant Treasurers shall respectively, if required by the Board of Directors, give bonds for the faithful discharge of their duties in such sums and with such sureties as the Board of Directors shall determine. ARTICLE VII CONTRACTS, CHECKS AND DEPOSITS SECTION 7.01. Contracts. Subject to the provisions of Section 6.01, the Board of Directors may authorize any officer, officers, agent, or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. SECTION 7.02. Checks. All checks, demands, drafts, or other orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officer or officers or such agent or agents of the corporation, and in such manner, as shall be determined by the Board of Directors. SECTION 7.03. Deposits. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies, or other depositories as the Board of Directors may select. ARTICLE VIII CERTIFICATES OF STOCK SECTION 8.01. Issuance. Each stockholder of this corporation shall be entitled to a certificate or certificates showing the number of shares of capital stock registered in his name on the books of the corporation. The certificates shall be in such form as may be determined by the Board of Directors, shall be issued in numerical order and shall be entered in the books of the corporation as they are issued. They shall exhibit the holder's name and number of shares and shall be signed by the President or a Vice President and by the Secretary or an Assistant Secretary. If any certificate is countersigned -9- (1) by a transfer agent other than the corporation or any employee of the corporation, or (2) by a registrar other than the corporation or any employee of the corporation, any other signature on the certificate may be a facsimile. If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the designations, preferences, and relative participating, optional, or other special rights of each class of stock or series thereof and the qualifications, limitations, or restrictions of such preferences and rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class of stock; provided that, except as otherwise provided by statute, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish to each stockholder who so requests the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations, or restrictions of such preferences and rights. All certificates surrendered to the corporation for transfer shall be canceled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and canceled, except that in the case of a lost, stolen, destroyed, or mutilated certificate a new one may be issued therefor upon such terms and with such indemnity, if any, to the corporation as the Board of Directors may prescribe. Certificates shall not be issued representing fractional shares of stock. SECTION 8.02. Lost Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require (1) the owner of such lost, stolen, or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require, (2) such owner to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate or certificates alleged to have been lost, stolen, or destroyed, or (3) both. SECTION 8.03. Transfers. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction upon its books. Transfers of shares shall be made only on the books of the corporation by the registered holder thereof, or by his attorney thereunto authorized by power of attorney and filed with the Secretary of the corporation or the Transfer Agent. SECTION 8.04. Registered Stockholders. The corporation shall be entitled to treat the holder of record of any share or shares of the corporation's capital stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware. -10- ARTICLE IX DIVIDENDS SECTION 9.01. Declaration. Dividends with respect to the shares of the corporation's capital stock, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to applicable law. Dividends may be paid in cash, in property, or in shares of capital stock, subject to the provisions of the Certificate of Incorporation. SECTION 9.02. Reserve. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the Board of Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the Board of Directors shall think conducive to the interest of the corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created. ARTICLE X INDEMNIFICATION SECTION 10.01. Third Party Actions. The corporation may indemnify any director and any officer of the corporation and any other person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. -11- SECTION 10.02. Actions by or in the Right of the Corporation. The corporation may indemnify any director and any officer of the corporation and any other person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the Court of Chancery or such other court shall deem proper. SECTION 10.03. Mandatory Indemnification. To the extent that a director, officer, employee, or agent of the corporation has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in Sections 10.01 and 10.02, or in defense of any claim, issue, or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. SECTION 10.04. Determination of Conduct. The determination that a director, officer, employee, or agent has met the applicable standard of conduct set forth in Sections 10.01 and 10.02 (unless indemnification is ordered by a court) shall be made (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit, or proceeding, or (2) if such quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the stockholders. SECTION 10.05. Payment of Expenses in Advance. Expenses incurred in defending a civil or criminal action, suit, or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit, or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee, or agent to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation as authorized in this Article X. SECTION 10.06. Indemnity Not Exclusive. The indemnification and advancement of expenses provided or granted hereunder shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate of Incorporation, any other by-law, agreement, vote of stockholders, or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. SECTION 10.07. Definitions. For purposes of this Article X: (a) "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a -12- consolidation or merger that, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee, or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, shall stand in the same position under this Article X with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued; (b) "other enterprises" shall include employee benefit plans; (c) "fines" shall include any excise taxes assessed on a person with respect to any employee benefit plan; (d) "serving at the request of the corporation" shall include any service as a director, officer, employee, or agent of the corporation that imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants or beneficiaries; and (e) a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this Article X. SECTION 10.08. Continuation of Indemnity. The indemnification and advancement of expenses provided or granted hereunder shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person. ARTICLE XI MISCELLANEOUS SECTION 11.01. Seal. The corporate seal, if one is authorized by the Board of Directors, shall have inscribed thereon the name of the corporation, and the words "Corporate Seal, Delaware." The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced. SECTION 11.02. Books. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at the offices of the corporation in Houston, Texas, or at such other place or places as may be designated from time to time by the Board of Directors. -13- ARTICLE XII AMENDMENT These by-laws may be altered, amended, or repealed by a majority of the number of directors then constituting the Board of Directors at any regular meeting of the Board of Directors without prior notice, or at any special meeting of the Board of Directors if notice of such alteration, amendment, or repeal be contained in the notice of such special meeting. -14- EX-4.3 5 h99033exv4w3.txt AMEND.NO.1 TO CREDIT AGREEMENT EXHIBIT 4.3 AMENDMENT NO. 1 This Amendment No. 1 dated as of May 17, 2002 ("Amendment") is among Weatherford International, Inc., a Delaware corporation (the "U.S. Borrower"), Weatherford Eurasia Limited, a corporation organized under the laws of the United Kingdom (the "U.K. Borrower"), Weatherford Eurasia B.V., a corporation organized under the laws of the Netherlands (the "Dutch Borrower" and, collectively with the U.S. Borrower and the U.K. Borrower, the "Borrowers"), Weatherford International Ltd., a Bermuda exempted company (the "Bermuda Parent"), the lenders from time to time party to the Credit Agreement described below ("Lenders"), and Bank One, NA, as administrative agent for the Lenders ("Administrative Agent"). INTRODUCTION A. The U.S. Borrower, the U.K. Borrower, the Dutch Borrower, the Administrative Agent, and the Lenders are parties to the Credit Agreement dated as of April 26, 2001 (the "Credit Agreement"). B. The U.S. Borrower has requested that the Lenders agree to make certain amendments to the Credit Agreement in connection with the proposed merger of the U.S. Borrower into a newly formed acquisition company, which is a wholly owned subsidiary of Weatherford U.S. Holdings LLC, a Delaware limited liability company ("U.S. Holdings"), which is in turn a wholly owned subsidiary of the Bermuda Parent, whose common shares will be exchanged on a one-for-one basis with outstanding shares of common stock of the U.S. Borrower (the "Reorganization"). C. Subject to the terms hereof, the Lenders and the Administrative Agent agree to the amendments and extension contained herein. THEREFORE, the U.S. Borrower, the U.K. Borrower, the Dutch Borrower, the Bermuda Parent, the Administrative Agent, and the Lenders hereby agree as follows: Section 1. Definitions. Unless otherwise defined in this Amendment, terms used in this Amendment which are defined in the Credit Agreement shall have the meanings assigned to such terms in the Credit Agreement. All references to definitions, Sections, and Articles to be amended shall be references to such definitions, Sections, and Articles in the Credit Agreement. Section 2. Amendments. The Credit Agreement is hereby amended as follows: (a) The Bermuda Parent shall be added as a party to the Credit Agreement, as a Guarantor. (b) The following definitions shall be added in alphabetical order to Section 1.01: "Bermuda Parent" means Weatherford International Ltd., a Bermuda exempted company. "Borrower Obligations" means the Obligations of the U.S. Borrower and of the Subsidiary Borrowers. "Guarantors" mean the Bermuda Parent and U.S. Borrower as guarantors of the Guaranteed Obligations. "Guaranty" means the guaranty contained in Article XI. "Merger Date" means the date upon which the reorganization described in the Agreement and Plan of Merger among the Bermuda Parent, the U.S. Borrower, U.S. Holdings, and Weatherford Merger Inc. becomes effective in accordance with the terms of such agreement. "U.S. Holdings" means Weatherford U.S. Holdings LLC, a Delaware limited liability company. (c) The definitions of "Subsidiary Borrower Obligations" and "U.S. Borrower Guaranty" in Section 1.01 shall be deleted. (d) The following definitions shall be amended to read in their entirety as follows: "Change of Control" means an event or series of events by which (a) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act as in effect on the Execution Date) or related persons constituting a "group" (as such term is used in Rule 13d-5 under the Exchange Act in effect on the Execution Date) is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, as in effect on the Execution Date, except that a person or such group shall be deemed to have "beneficial ownership" of all shares that any such person or such group has the right to acquire without condition, other than the passage of time, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 50% or more of the total voting power of the Voting Stock of the Bermuda Parent, U.S. Holdings, or the U.S. Borrower; (b) the Bermuda Parent, U.S. Holdings, or the U.S. Borrower consolidates with or merges into another Person or conveys, transfers or leases all or substantially all of its assets to any Person, or any Person consolidates with, or merges into, the Bermuda Parent, U.S. Holdings, or the U.S. Borrower in a transaction not otherwise permitted by Section 8.02; (c) the Bermuda Parent, U.S. Holdings, or the U.S. Borrower conveys, transfers or leases all or substantially all of its assets to any Person; (d) the stockholders of the Bermuda Parent, U.S. Holdings, or the U.S. Borrower approve any plan of liquidation or dissolution of the Bermuda Parent, U.S. Holdings, or the U.S. Borrower; or (e) during any period of twelve consecutive months, individuals who, at the beginning of such period, constituted the Board of Directors of the Bermuda Parent, U.S. Holdings, or the U.S. Borrower (together with any new directors whose election by such Board of Directors or whose nomination for election by the stockholders of the Bermuda Parent, U.S. Holdings, or the U.S. Borrower, as applicable, was -2- approved by a vote of not less than a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Bermuda Parent, U.S. Holdings, or the U.S. Borrower, as applicable, then in office. "Consolidated EBITDA" means, for any Person, for any period, the Consolidated Net Income of such Person and its consolidated Subsidiaries for such period, increased (to the extent deducted in determining Consolidated Net Income) by the sum of (a) all income taxes (including state franchise taxes or similar taxes based on income) of such Person and its consolidated Subsidiaries paid or accrued according to GAAP for such period; (b) Consolidated Interest Expense of such Person and its consolidated Subsidiaries for such period; (c) depreciation and amortization of such Person and its consolidated Subsidiaries for such period determined in accordance with GAAP; and (d) other non-cash charges (excluding any such non-cash charges to the extent they require an accrual of, or reserve for, cash charges for any future periods) for such period determined in accordance with GAAP, and decreased (to the extent added in determining Consolidated Net Income) by any non-cash credits for such period determined in accordance with GAAP. "Consolidated Indebtedness" means, for any Person, at the date of any determination thereof, Indebtedness of such Person and its consolidated Subsidiaries (other than Interest Rate Risk Indebtedness, Derivatives Obligations, and contingent obligations in respect of letters of credit) determined on a consolidated basis in accordance with GAAP. "Consolidated Interest Expense" means (without duplication), for any Person, for any period, the aggregate amount of interest, whether expensed or capitalized, paid, accrued or scheduled to be paid or accrued during such period in respect of (i) all Indebtedness of such Person and its consolidated Subsidiaries, plus (ii) the October 1997 Debentures, all determined on a consolidated basis in accordance with GAAP "Interest Coverage Ratio" means, for any Person, at the end of each fiscal quarter of such Person, the ratio of (a) Consolidated EBITDA of such Person for the fiscal quarter then ended and for the immediately preceding three fiscal quarters to (b) Consolidated Interest Expense of such Person (excluding interest accrued in respect of the October 1997 Debentures but not actually paid in cash) for such four fiscal quarters. "Material Subsidiary" means, at any date, (a) a consolidated Subsidiary the Capital Stock of which is owned by the Bermuda Parent and/or one or more of its Subsidiaries and that either (i) has total assets in excess of 5% of the total assets of the Bermuda Parent and its consolidated Subsidiaries, in each case as determined in accordance with GAAP or (ii) has gross net revenues in excess of 5% of the consolidated gross revenues of the Bermuda Parent and its consolidated -3- Subsidiaries based, in each case, on the most recent audited consolidated financial statements of the Bermuda Parent. "Net Worth" means, for any Person, at the date of any determination thereof, on a consolidated basis, the sum of (a) the par value or stated value of its Capital Stock, plus (b) capital in excess of par or stated value of shares of its Capital Stock, plus (or minus in the case of a deficit), (c) retained earnings or accumulated deficit, as the case may be, plus (d) and any other account which, in accordance with GAAP, constitutes stockholders' equity, excluding (e) any treasury stock, and (f) the effects upon net worth resulting from the translation of foreign currency denominated assets into Dollars. "Obligors" means each Borrower and each Guarantor. "Permitted Liens" means, without duplication, (a) Liens, not otherwise permitted under any other provision of this definition, securing Indebtedness permitted under this Agreement in an aggregate principal amount at any time outstanding which does not exceed 12% of the Bermuda Parent's Net Worth; (b) Liens for taxes or unpaid utilities not yet delinquent or which are being contested in good faith by appropriate proceedings; provided that adequate reserves with respect thereto are maintained on the books of the Bermuda Parent or its Subsidiaries, as the case may be, in conformity with GAAP; (c) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the ordinary course of business and not overdue for a period of more than 60 days or which are being contested in good faith by appropriate proceedings; (d) pledges or deposits or deemed trusts in connection with workers' compensation, unemployment insurance, pension, employment or other social security legislation; (e) easements, rights-of-way, use restrictions, minor defects or irregularities in title, reservations (including reservations in any original grant from any government of any land or interests therein and statutory exceptions to title) and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the Bermuda Parent or any of its Subsidiaries; (f) judgment and attachment Liens not giving rise to an Event of Default or Liens created by or existing from any litigation or legal proceeding that are currently being contested in good faith by appropriate proceedings, promptly -4- instituted and diligently conducted, and for which adequate reserves have been made to the extent required by GAAP; (g) Liens on the assets of any entity or asset existing at the time such asset or entity is acquired by the Bermuda Parent or any of its Subsidiaries, whether by merger, consolidation, purchase of assets or otherwise; provided that such Liens (i) are not created, incurred or assumed by such entity in contemplation of such entity's being acquired by Bermuda Parent or any of its Subsidiaries; (ii) do not extend to any other assets of the Bermuda Parent or any of its Subsidiaries; and (iii) the Indebtedness secured by such Lien is permitted pursuant to this Agreement; (h) Liens securing Indebtedness of the Bermuda Parent or its Subsidiaries not prohibited by Section 8.04 incurred to finance the acquisition of fixed or capital assets, provided that (A) such Liens shall be created not more than 90 days after the acquisition of such fixed or capital assets, (B) such Liens do not at any time encumber any property other than the property financed by such Indebtedness and (C) the Liens are not modified to secure other Indebtedness and the amount of Indebtedness secured thereby is not increased; (i) Liens incurred to secure the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return-of-money bonds and other obligations of a like nature incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money); (j) leases or subleases granted to others not interfering in any material respect with the business of the Bermuda Parent or any of its Subsidiaries; (k) Liens to secure obligations arising from statutory or regulatory requirements; (l) any interest or title of a lessor in property subject to any Capitalized Lease Obligation or operating lease which, in each case, is permitted under this Agreement; (m) Liens in favor of collecting or payor banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of the Bermuda Parent or any of its Subsidiaries on deposit with or in possession of such bank; and (n) any renewal or refinancing of or substitution for, or any extension or modification of any maturity date for any Indebtedness secured by, any Lien permitted by any of the preceding clauses; provided that the debt secured is not increased nor the Lien extended to any additional assets. -5- "Total Capitalization" means, for any Person, at the date of any determination thereof, the sum of (a) Consolidated Indebtedness of such Person, plus (b) Net Worth of such Person, plus (c) the outstanding principal amount of the October 1997 Debentures at such date. (e) In the definition of "consolidated", the words "or the Bermuda Parent, as applicable" shall be inserted after the words "U.S. Borrower". (f) The definition of "Consolidated Net Income" shall be amended as follows: (1) in the first sentence of such definition, the words "of the U.S. Borrower means, for any period, the net income or loss of the U.S. Borrower" shall be replaced with the words "means, for any Person, for any period, the net income or loss of such Person"; and (2) in clauses (c) and (d) of such definition, each time the words "the U.S. Borrower" appear, they shall be replaced with the words "such Person for whom Consolidated Net Income is to be determined". (g) In the definition of "Debt Rating", the words "or the Bermuda Parent" shall be inserted after the first instance of the words "U.S. Borrower", and the words "or the Bermuda Parent, as applicable" shall be inserted after the second such instance. (h) In the definition of "Loan Documents", the words "U.S. Borrower" shall be deleted. (i) In the definition of "Material Adverse Effect", the words "U.S. Borrower" shall be replaced with the words "Bermuda Parent". (j) In the definitions of "Performance Level I", "Performance Level II", "Performance Level III", and "Performance Level IV", the words "and the Bermuda Parent each" shall be inserted after the words "U.S. Borrower". (k) The definition of "Subsidiary" is amended to add the words "or the Bermuda Parent, as applicable" to the end of the definition. (l) Section 1.03 shall be amended as follows: (1) in the first sentence of such Section, the words "by the U.S. Borrower" shall be deleted; and (2) in the second sentence of such definition, the words "and the Bermuda Parent" shall be inserted after each occurrence of the words "U.S. Borrower". (m) Article VI is amended and restated in its entirety to read as set forth in Exhibit A to this Amendment. -6- (n) Article VII is amended and restated in its entirety to read as set forth in Exhibit B to this Amendment. (o) Article VIII is amended and restated in its entirety to read as set forth in Exhibit C to this Amendment. (p) Article IX is amended and restated in its entirety to read as set forth in Exhibit D to this Amendment. (q) Article XI is amended and restated in its entirety to read as set forth in Exhibit E to this Amendment. (r) Schedule 6.01 to the Credit Agreement shall be replaced in its entirety by Schedule 6.01 attached hereto. Section 3. Representations and Warranties of U.S. Borrower, U.K. Borrower, Dutch Borrower, and Bermuda Parent. The U.S. Borrower, the U.K. Borrower, the Dutch Borrower, and the Bermuda Parent represent and warrant to the Administrative Agent and the Lenders that: (a) the representations and warranties set forth in the Credit Agreement, as amended by this Amendment, and in the other Loan Documents are true and correct in all material respects as of the date of this Amendment; (b) (i) the execution, delivery and performance of this Amendment are within the corporate power and authority of the U.S. Borrower, the U.K. Borrower, the Dutch Borrower, and the Bermuda Parent and have been duly authorized by appropriate proceedings and (ii) this Amendment constitutes a legal, valid, and binding obligation of the U.S. Borrower, the U.K. Borrower, the Dutch Borrower, and the Bermuda Parent, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the rights of creditors generally and general principles of equity; and (c) as of the effectiveness of this Amendment, no Default or Event of Default has occurred and is continuing. Section 4. Reaffirmation of Guaranty. The U.S. Borrower and the Bermuda Parent, each as a Guarantor (as defined in the Credit Agreement, as amended hereby) hereby ratifies, confirms, and acknowledges the obligations under its Guaranty are, after giving effect to this Amendment, in full force and effect and each such Guarantor continues to unconditionally and irrevocably guarantee the full and punctual payment and performance, when due, whether at stated maturity or earlier by acceleration or otherwise, all of the Guaranteed Obligations, as such Guaranteed Obligations have been amended by this Amendment. Each of the Guarantors hereby acknowledges that the delivery of this reaffirmation does not indicate or establish an approval or consent requirement by any of the Guarantors under the Guaranty, the Credit Agreement or any other Loan Document in connection with the execution and delivery of amendments to the Credit Agreement, the Notes or any of the other Loan Documents. -7- Section 5. Effectiveness. This Amendment shall become effective as of the date of this Amendment, and the Credit Agreement shall be amended as provided in this Amendment, upon the occurrence of the following conditions precedent: (a) the U.S. Borrower, the U.K. Borrower, the Dutch Borrower, the Bermuda Parent, the Administrative Agent, and the Majority Lenders shall have delivered duly and validly executed originals of this Amendment to the Administrative Agent; (b) the representations and warranties in this Amendment shall be true and correct in all material respects; (c) the Administrative Agent shall have received (i) a favorable opinion of U.S. counsel for the U.S. Borrower and (ii) a favorable opinion of Bermuda counsel for the Bermuda Parent, each in form and substance reasonably satisfactory to the Administrative Agent; and (d) the Agreement and Plan of Merger (the "Merger Agreement"), among the Bermuda Parent, the U.S. Borrower, U.S. Holdings, and Weatherford Merger Inc., a Delaware corporation, has become effective in accordance with its terms, and the Reorganization contemplated therein has been consummated. Section 6. Effect on Loan Documents. (a) Except as amended herein, the Credit Agreement and the Loan Documents remain in full force and effect as originally executed. Nothing herein shall act as a waiver of any of the Administrative Agent's or Lenders' rights under the Loan Documents, as amended, including the waiver of any Default or Event of Default, however denominated. (b) This Amendment is a Loan Document for the purposes of the provisions of the other Loan Documents. Without limiting the foregoing, any breach of representations, warranties, and covenants under this Amendment may be a Default or Event of Default under other Loan Documents. Section 7. Choice of Law. This Amendment shall be governed by and construed and enforced in accordance with the laws of the State of Texas and of the United States of America. Section 8. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original. [The remainder of this page has been left blank intentionally.] -8- EXECUTED to be effective as of the date first above written. WEATHERFORD INTERNATIONAL, INC. By: /s/ BURT M. MARTIN ------------------------------------- Name: Burt M. Martin ----------------------------------- Title: Senior Vice President, General ---------------------------------- Counsel and Secretary -------------------------------- ATHERFORD EURASIA LIMITED By: /s/ BURT M. MARTIN ------------------------------------- Name: Burt M. Martin ----------------------------------- Title: Director ---------------------------------- WEATHERFORD EURASIA B.V. By: /s/ BURT M. MARTIN ------------------------------------- Name: Burt M. Martin ----------------------------------- Title: Director ---------------------------------- WEATHERFORD INTERNATIONAL LTD. By: /s/ BURT M. MARTIN ------------------------------------- Name: Burt M. Martin ----------------------------------- Title: Director ---------------------------------- BANK ONE, NA, as Administrative Agent and as a Lender By: /s/ HELEN A. CARR ------------------------------------- Name: Helen A. Carr ----------------------------------- Title: First Vice President ---------------------------------- ABN AMRO BANK N.V., as a Lender By: /s/ JEFFERY G. WHITE ------------------------------------- Name: Jeffery G. White ----------------------------------- Title: Vice President ---------------------------------- By: /s/ JOHN REED ------------------------------------- Name: John Reed ----------------------------------- Title: Vice President ---------------------------------- ROYAL BANK OF CANADA, as a Lender By: /s/ JASON YORK ------------------------------------- Name: Jason York ----------------------------------- Title: Manager ---------------------------------- The Royal Bank of Scotland plc, as a Lender By: /s/ KEITH JOHNSON ----------------------------------------- Name: Keith Johnson --------------------------------------- Title: Senior Vice President -------------------------------------- THE BANK OF TOKYO-MITSUBISHI, LTD., as a Lender By: /s/ JOHN MCGHEE ----------------------------------------- Name: John McGhee --------------------------------------- Title: Vice President & Manager -------------------------------------- CHRISTIANIA BANK OG KREDITKASSE ASA. as a Lender By: ----------------------------------------- Name: --------------------------------------- Title: -------------------------------------- WACHOVIA BANK, NATIONAL ASSOCIATION, as a Lender By: /s/ JAMES KIPP ----------------------------------------- Name: James Kipp --------------------------------------- Title: Managing Director -------------------------------------- MIZUHO CORPORATE BANK, LTD., as a Lender By: ----------------------------------------- Name: --------------------------------------- Title: -------------------------------------- SUNTRUST BANK, as a Lender By: /s/ JOSEPH M. MCCREERY ----------------------------------------- Name: Joseph M. McCreery --------------------------------------- Title: Vice President -------------------------------------- ARAB BANK PLC - NEW YORK BRANCH, as a Lender By: /s/ SAMER TAMIMI ----------------------------------------- Name: Samer Tamimi --------------------------------------- Title: Vice President -------------------------------------- BANK OF NEW YORK, as a Lender By: /s/ PETER W. KELLER ----------------------------------------- Name: Peter W. Keller --------------------------------------- Title: Vice President -------------------------------------- BANCA NAZIONALE DEL LAVORO S.P.A. - NEW YORK BRANCH, as a Lender By: ----------------------------------------- Name: --------------------------------------- Title: -------------------------------------- By: ----------------------------------------- Name: --------------------------------------- Title: -------------------------------------- JPMORGAN CHASE BANK, as a Lender By: /s/ BETH LAWRENCE ----------------------------------------- Name: Beth Lawrence --------------------------------------- Title: Managing Director -------------------------------------- WELLS FARGO BANK TEXAS, N.A., as a Lender By: /s/ SCOTT GILDEA ----------------------------------------- Name: Scott Gildea --------------------------------------- Title: Assistant Vice President -------------------------------------- EXHIBIT A ARTICLE VI REPRESENTATIONS AND WARRANTIES To induce the Lenders to enter into this Agreement and to make the Loans, the Bermuda Parent and the U.S. Borrower represent and warrant as to themselves and the other Obligors (such representations and warranties to survive any investigation and the making of the Loans) to the Lenders and the Administrative Agent as follows: SECTION 6.01. Organization and Qualification. Each Obligor and each Material Subsidiary (a) is a corporation, partnership, or entity having limited liability that is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, (b) has the corporate, partnership or other power and authority to own its property and to carry on its business as now conducted and (c) is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the failure to be so qualified would, together with all such other failures of the Obligors and their Subsidiaries, have a Material Adverse Effect. As of the Execution Date, the corporations and other entities named in Schedule 6.01 are all of the Material Subsidiaries, such Schedule (x) accurately reflects (i) the direct owner of the Capital Stock of each such Subsidiary and (ii) the percentage of the issued and outstanding Capital Stock of each such Subsidiary owned by each Obligor, and (y) accurately sets forth the jurisdictions of their respective incorporation or organization and jurisdictions in which they are required to be qualified as foreign corporations, foreign partnerships or other foreign entities to do business. SECTION 6.02. Authorization, Validity, Etc. Each Obligor has the corporate, partnership or other power and authority to execute, deliver and perform its obligations hereunder and under the other Loan Documents to which it is a party and, in the case of each Borrower, to obtain the Loans, and all such action has been duly authorized by all necessary corporate, partnership or other proceedings on its part or on its behalf. This Agreement has been duly and validly executed and delivered by or on behalf of each Obligor party hereto and constitutes valid and legally binding agreements of such Obligor enforceable against such Obligor in accordance with the terms hereof, and the Notes and the other Loan Documents to which such Obligor is a party, when duly executed and delivered by or on behalf of such Obligor, will constitute valid and legally binding obligations of such Obligor enforceable in accordance with the respective terms thereof and of this Agreement, except, in each case, (a) as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to or affecting the enforcement of creditors' rights generally, and by general principles of equity which may limit the right to obtain equitable remedies (regardless of whether such enforceability is a proceeding in equity or at law) and (b) as to the enforceability of provisions for indemnification for violation of applicable securities laws, limitations thereon arising as a matter of law or public policy. SECTION 6.03. Governmental Consents, Etc. No authorization, consent, approval, license or exemption of or filing or registration with any Governmental Authority, is necessary for the valid execution, delivery or performance by any Obligor of any Loan Document to which it is a party, except those that have been obtained and such matters relating to performance as would ordinarily be done in the ordinary course of business after the Execution Date. SECTION 6.04. Conflicting or Adverse Agreements or Restrictions. Neither the execution, delivery and performance by any Obligor of the Loan Documents to which it is a party, nor compliance with the terms and provisions thereof, nor the extensions of credit contemplated by the Loan Documents, (a) will breach or violate any applicable Requirement of Law, (b) will result in any breach or violation of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of its property or assets pursuant to the terms of any indenture, mortgage, deed of trust, agreement or other instrument to which it or any of its consolidated Subsidiaries is party or by which any property or asset of it or any of its consolidated Subsidiaries is bound or to which it is subject, except for breaches, violations and defaults under clauses (a) and (b) that collectively for all Obligors will not have a Material Adverse Effect or (c) will violate any provision of the organizational documents of any Obligor. SECTION 6.05. Title to Assets. Each Obligor and each consolidated Subsidiary of the Bermuda Parent has good and indefeasible title to its assets, except for such defects in title as would not in the aggregate have a Material Adverse Effect. As of the Effective Date, the property of the Obligors and their Subsidiaries is subject to no Liens, except Permitted Liens. SECTION 6.06. Litigation. Except for actions, suits or proceedings described in the filings made by the U.S. Borrower or the Bermuda Parent with the Securities and Exchange Commission pursuant to the Exchange Act, as of the Effective Date there are no actions, suits or proceedings pending for which service of process has been accomplished or, to the best knowledge of any Obligor, threatened with respect to any Obligor, the Loan Documents or any transactions contemplated therein that are reasonably likely to have (individually or collectively) a Material Adverse Effect. SECTION 6.07. Information; Financial Statements. All information heretofore furnished by the U.S. Borrower and the Bermuda Parent to the Administrative Agent or any Lender in connection with this Agreement, as affected by the disclosures made herein, in the other Loan Documents and in the filings made by the U.S. Borrower and the Bermuda Parent with the Securities and Exchange Commission pursuant to the Exchange Act, did not as of the date thereof and will not as of the date of the initial Credit Event hereunder, when read together and taken as a whole, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not misleading in any material respect. As of any date prior to the Merger Date, there has been no material adverse change since December 31, 2000 in the financial condition, business or operations of the U.S. Borrower and its Subsidiaries taken as a whole which could reasonably be expected to have a Material Adverse Effect. As of the Merger Date or any date thereafter, there has been no material adverse change since the Merger Date in the financial condition, business or operations of the Bermuda Parent and its Subsidiaries taken as a whole which could reasonably be expected to have a Material Adverse Effect. -2- SECTION 6.08. Investment Company Act. Neither the Bermuda Parent nor any of its Subsidiaries is, or is regulated as an "investment company," as such term is defined in the Investment Company Act of 1940, as amended. SECTION 6.09. Public Utility Holding Company Act. Neither the Bermuda Parent nor any of its Subsidiaries is a non-exempt "holding company," or subject to regulation as such, or, to the knowledge of any Obligor's officers, an "affiliate" of a "holding company" or a "subsidiary company" of a "holding company," within the meaning of the Public Utility Holding Company Act of 1935, as amended. SECTION 6.10. ERISA. (a) The U.S. Borrower, and each ERISA Affiliate has maintained and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not reasonably be expected to have a Material Adverse Effect. Neither the U.S. Borrower nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in Section 3 of ERISA), and no event, transaction or condition has occurred or exists that would reasonably be expected to result in the incurrence of any such liability by the U.S. Borrower or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the U.S. Borrower or any ERISA Affiliate pursuant to Title I or IV of ERISA Sections 401(a)(29) or 412 of the Code, other than such liabilities or Liens as would in the aggregate reasonably be expected to have a Material Adverse Effect. (b) No accumulated funding deficiency (as defined in Section 412 of the Code or Section 302 of ERISA), in excess of $25,000,000, whether or not waived, exists or is expected to be incurred with respect to any Plan. (c) The U.S. Borrower and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that in the aggregate would reasonably be expected to have a Material Adverse Effect. (d) All contributions have been timely made to all employee benefit plans, as defined in Section 3 of ERISA, except for such failures as would not reasonably be expected to have a Material Adverse Effect. SECTION 6.11. Tax Returns and Payments. Each Obligor and each Material Subsidiary has caused to be filed all federal income tax returns and other material tax returns, statements and reports (or obtained extensions with respect thereto) which are required to be filed and have paid or deposited or made adequate provision in accordance with GAAP for the payment of all taxes (including estimated taxes shown on such returns, statements and reports) which are shown to be due pursuant to such returns, except where the failure to pay such taxes (collectively for the Obligors and the Material Subsidiaries, taken as a whole) would not have a Material Adverse Effect. No material income tax liability of any Obligor or any Material Subsidiary has been asserted by the Internal Revenue Service of the United States or any other -3- Governmental Authority for any taxes in excess of those already paid, except for taxes which are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP have been created on the books of the Obligors and their Subsidiaries. SECTION 6.12. Requirements of Law; Environmental Matters. (a) The Obligors and each of their consolidated Subsidiaries are in compliance with all Requirements of Law, applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all Governmental Authorities in respect of the conduct of its business and the ownership of their property, except for such noncompliances which, in the aggregate, would not have a Material Adverse Effect. (b) The U.S. Borrower monitors, in the ordinary course of its business, the effect of existing Environmental Laws, and each claim asserted against it, any other Obligor, or any of their Subsidiaries by any Governmental Authority alleging potential liability or responsibility for violation of any Environmental Law, on its business operations and properties. As a result thereof, the U.S. Borrower has reasonably concluded that such Environmental Laws and any such claims would not, in the aggregate, have a Material Adverse Effect. SECTION 6.13. Purpose of Loans. (a) All proceeds of the Loans will be used by a Borrower for the purposes set forth in Section 2.06. (b) None of the proceeds of the Loans under this Agreement were or will be used directly or indirectly for the purpose of buying or carrying any "margin stock" within the meaning of Regulation U (herein called "margin stock") or for the purpose of reducing or retiring any indebtedness which was originally incurred to buy or carry a margin stock, or for any other purpose which might constitute this transaction a "purpose" credit within the meaning of Regulation U. Neither any Obligor nor any agent acting on its behalf has taken or will take any action which might cause this Agreement or any other Loan Document to violate Regulation T, U or X, or any other regulation of the Board or to violate the Exchange Act. Margin stock did not on the Execution Date, and does not now, constitute more than 25% of the assets of the U.S. Borrower or any other Obligor. SECTION 6.14. Designation of this Agreement and the Obligations. The Obligations under this Agreement and under the other Loan Documents constitute "Designated Senior Indebtedness" (as such phrase is used in the October 1997 Debenture Indenture) and are pari passu to Indebtedness under the May 1996 Debenture Indenture. SECTION 6.15. No Default. No Default or Event of Default has occurred and is continuing. -4- EXHIBIT B ARTICLE VII AFFIRMATIVE COVENANTS Each of the Bermuda Parent and the U.S. Borrower covenants and agrees that prior to the termination of this Agreement it will duly and faithfully perform, and cause its Subsidiaries to perform, each and all of the following covenants: SECTION 7.01. Information Covenants. Each of the Bermuda Parent and the U.S. Borrower will furnish or cause to be furnished to the Administrative Agent and each Lender: (a) As soon as available, and in any event within 60 days after the end of each of the first three quarterly accounting periods in each fiscal year the Form 10-Q, or its equivalent, of the U.S. Borrower or Bermuda Parent, as applicable. (b) As soon as available, and in any event within 120 days after the close of each fiscal year, the Form 10-K, or its equivalent, of the U.S. Borrower or Bermuda Parent, as applicable, for such fiscal year and certified by Ernst & Young LLP or other independent certified public accountants of recognized national standing reasonably acceptable to the Administrative Agent and the Majority Lenders, whose certification shall be without qualification or limitation. (c) Promptly upon the mailing thereof to the shareholders of the Bermuda Parent generally, copies of all financial statements, reports and proxy statements so mailed and copies of all press releases. (d) Promptly, and in any event within ten Business Days after any Responsible Officer of any Obligor obtains knowledge of (i) any event or condition which would reasonably be expected to have a Material Adverse Effect; or (ii) any event or condition which constitutes a Default or an Event of Default; or (iii) the occurrence of a Change of Control or Change of Control Event; a notice of such event or condition, specifying the nature thereof. (e) At the time of the delivery of the financial statements provided for (i) in Sections 7.01(a) and (b), a certificate of a Responsible Officer of the U.S. Borrower and/or the Bermuda Parent, as applicable, in the form of Exhibit 7.01 to the effect that no Default or Event of Default exists or, if any Default or Event of Default does exist, specifying the nature and extent thereof, which certificate shall also set forth calculations required to establish whether the U.S. Borrower and/or the Bermuda Parent, as applicable, was in compliance with the provisions of Article VIII as at the end of such fiscal quarter or fiscal year, as the case may be and (ii) in Section 7.01(b), to the extent there has been any change in the information previously furnished to the Administrative Agent and the Lenders on Schedule 6.01, a revised Schedule 6.01. (f) Promptly, and in any event within 30 days after any Responsible Officer of any Obligor obtains knowledge thereof, notice: (i) of the occurrence or expected occurrence of any material Reportable Event with respect to any Plan, a failure to make any material required contribution to a Plan, any Lien in favor of the PBGC or a Plan, or any withdrawal from, or the termination, reorganization or insolvency (within the meaning of such terms as used in ERISA) of any Multiemployer Plan, or (ii) of the institution of proceedings or the taking of any other action by the PBGC or the U.S. Borrower or any ERISA Affiliate or any Multiemployer Plan with respect to the withdrawal from, or the terminating, reorganization or insolvency (within the meaning of such terms as used in ERISA) of, any Plan which termination, reorganization or insolvency would reasonably be expected to have a Material Adverse Effect, except that no notice shall be required with respect to the merger of a defined contribution plan of one ERISA Affiliate into a defined contribution plan of another ERISA Affiliate. (g) From time to time and with reasonable promptness, such other information or documents (financial or otherwise) with respect to the Bermuda Parent, the U.S. Borrower or any of their Subsidiaries as the Administrative Agent or any Lender through the Administrative Agent may reasonably request. SECTION 7.02. Books, Records and Inspections. Each of the Bermuda Parent and the U.S. Borrower will, and will cause each of its Material Subsidiaries to, permit, or cause to be permitted, any Lender, upon written notice, to visit and inspect any of the properties of each of the Bermuda Parent and the U.S. Borrower and their Subsidiaries, to examine the corporate books and financial records of each of the Bermuda Parent and the U.S. Borrower and their Subsidiaries and to discuss the affairs, finances and accounts of any such corporations with a Responsible Officer of each of the Bermuda Parent and the U.S. Borrower and such Subsidiaries, all at such reasonable times and as often as such Lender(s), through the Administrative Agent, may reasonably request. SECTION 7.03. Insurance and Maintenance of Properties. Each of the Bermuda Parent and the U.S. Borrower will, and will cause each of the Obligors to, maintain or cause to be maintained, with financially sound and reputable insurers, insurance with respect to its property and business against such liabilities, casualties, risks and contingencies (including business interruption insurance) and in such types and amounts as is customary in the case of Persons engaged in the same or similar businesses and similarly situated. -2- SECTION 7.04. Payment of Taxes and other Claims. Each Obligor will, and will cause each of the Material Subsidiaries and each Subsidiary Borrower to, pay or discharge or cause to be paid or discharged, before the same shall become delinquent, all taxes, assessments and governmental charges levied or imposed upon such Obligor or such Material Subsidiary or Subsidiary Borrower, as applicable, or upon the income, profits or property of such Obligor or such Material Subsidiary or Subsidiary Borrower, as applicable, except for (i) such taxes, assessments as would not, individually or in the aggregate, have a Material Adverse Effect and (ii) any such tax, assessment or governmental charge whose amount, applicability or validity is being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP. SECTION 7.05. Existence. Except as expressly permitted pursuant to Section 8.02, the Bermuda Parent and the U.S. Borrower will, and will cause each of the Obligors to, do all things necessary to preserve and keep in full force and effect the corporate, partnership or other existence, rights and franchises of the Bermuda Parent and the U.S. Borrower and each of the Obligors, as applicable. SECTION 7.06. ERISA Information and Compliance. Except with respect to matters described in clauses (a), (c) and (d) below which would not reasonably be expected to have a Material Adverse Effect, the U.S. Borrower will promptly furnish to Administrative Agent: (a) immediately upon receipt, a copy of any notice of complete or partial withdrawal liability under ERISA and any notice from the PBGC under ERISA of an intent to terminate or appoint a trustee to administer any Plan, (b) if requested by the Administrative Agent, promptly after the filing thereof with the United States Secretary of Labor or the PBGC or the Internal Revenue Service, copies of each annual and other report with respect to each Plan or any trust created thereunder, (c) immediately upon becoming aware of the occurrence of any Reportable Event, or of any "prohibited transaction", as such term is defined in Section 4975 of the Code, in connection with any Plan or any trust created thereunder, a written notice signed by a Responsible Officer of the applicable Borrower or the applicable ERISA Affiliate specifying the nature thereof, what action the applicable Borrower or the applicable ERISA Affiliate is taking or proposes to take with respect thereto, and, when known, any action taken by the PBGC, the Internal Revenue Service, the Department of Labor or any other applicable Governmental Authority with respect thereto, (d) promptly after the filing or receiving thereof by any Borrower or any ERISA Affiliate, any notice of the institution of any proceedings or other actions which may result in the termination of any Plan, and (e) each request for waiver of the funding standards or extension of the amortization periods required by ERISA or Section 412 of the Code promptly after the request is submitted by Borrower or any ERISA Affiliate to the Secretary of the Treasury, the Department of Labor, the Internal Revenue Service or any other applicable Governmental Authority. The U.S. Borrower covenants that it shall and shall cause each ERISA Affiliate to comply, with respect to each Plan and Multiemployer Plan, with all applicable provisions of ERISA and the Code, except to the extent that any failure to comply would not reasonably be expected to have a Material Adverse Effect. SECTION 7.07. Capital Adequacy. If any Lender determines in good faith that compliance with any law or regulation or any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law) implemented or effective after -3- the Effective Date affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and that the amount of such capital is increased by or based upon the existence of such Lender's commitment to lend or other commitments of this type, then, upon demand by such Lender (with a copy of any such demand to the Administrative Agent), the U.S. Borrower shall immediately pay to Administrative Agent for the account of such Lender, from time to time as specified by such Lender, additional amounts (without duplication of any other amounts payable in respect of increased costs) sufficient to compensate such Lender, in light of such circumstances, with respect to such Lender, to the extent that such Lender reasonably determines such increase in capital to be allocable to the existence of such Lender's commitment to lend under this Agreement. A certificate as to such amount and detailing the calculation of such costs shall be submitted to the U.S. Borrower by such Lender, such certificate to be presumed correct for all purposes, absent manifest error. SECTION 7.08. Subsidiaries. The Bermuda Parent covenants that the Subsidiaries identified on Schedule 6.01 are the only Material Subsidiaries as of the Execution Date. Should any Subsidiary, subsequent to the date hereof, become a Material Subsidiary, the Bermuda Parent shall deliver to the Administrative Agent and the Lenders a revised Schedule 6.01 as provided in Section 7.01(e). -4- EXHIBIT C ARTICLE VIII NEGATIVE COVENANTS Each of the Bermuda Parent and the U.S. Borrower covenants and agrees with the Administrative Agent and the Lenders that prior to the termination of this Agreement it will duly and faithfully perform, and cause its Subsidiaries to perform, each and all of the following covenants: SECTION 8.01. Material Change in Business. The Bermuda Parent will not, and will not permit its Material Subsidiaries to, engage in any material business substantially different from those carried on by the U.S. Borrower and its consolidated Subsidiaries taken as a whole on the date hereof. SECTION 8.02. Consolidation, Merger, or Sale of Assets, Etc. The Bermuda Parent will not, and will not permit any other Obligor to, wind up, liquidate or dissolve its affairs, or effect any merger or consolidation, and the Bermuda Parent will not, and will not permit any consolidated Subsidiary to, sell, lease or otherwise dispose of all or substantially all of its property or assets (other than sales of inventory in the ordinary course of business) except that this Section 8.02 shall not prohibit any of the following transactions, or any agreement to effect the same: (a) if, at the time thereof and immediately after giving effect thereto, no Event of Default or Default shall have occurred and be continuing, the merger of any other Person with and into the Bermuda Parent or any of its Subsidiaries, if (i) in any transaction involving the Bermuda Parent or the U.S. Borrower, the Bermuda Parent or the U.S. Borrower, as applicable, is the surviving Person, (ii) in any other transaction, a Wholly-Owned Subsidiary is the surviving entity, and (iii) in either case, the Bermuda Parent, the U.S. Borrower, and their Subsidiaries shall be in compliance, on a pro forma basis after giving effect to such transaction, with the covenants contained in this Article VIII recomputed as of the last day of the most recently ended fiscal quarter of the Bermuda Parent, the U.S. Borrower, and their Subsidiaries as if such transaction had occurred on the first day of each relevant period for testing such compliance, and the U.S. Borrower (with respect to any merger with a Person not a consolidated Subsidiary of the Bermuda Parent) shall have delivered to the Administrative Agent an officer's certificate to such effect, together with all relevant financial information and calculations demonstrating such compliance; (b) transactions and transfers of assets among or between Obligors and/or Wholly-Owned Subsidiaries or among and between Wholly-Owned Subsidiaries, in each case, not prohibited by Section 8.07; and (c) dispositions not otherwise permitted hereunder which are made for fair market value; provided that (i) at the time of any disposition, no Default or Event of Default shall exist or shall result from such disposition, (ii) the aggregate sales price from such disposition shall be paid in cash or otherwise on payment terms satisfactory to the applicable Obligor or Subsidiary, and (iii) the aggregate book value of all assets of the Bermuda Parent and its Subsidiaries, taken as a whole, shall not be reduced at any time to an amount which is less than 80% of the aggregate book value of all assets of the U.S. Borrower and its Subsidiaries, taken as a whole, on December 31, 2000, as reflected on the U.S. Borrower's balance sheet dated December 31, 2000. SECTION 8.03. Liens. Each of the Bermuda Parent and the U.S. Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to any property or assets of any kind (real or personal, tangible or intangible) of any Obligor or any such Subsidiary whether now owned or hereafter acquired, except Permitted Liens. SECTION 8.04. Indebtedness. (a) Each of the Bermuda Parent and the U.S. Borrower will not create, incur or assume, or permit any of its Subsidiaries to create, incur or assume any Indebtedness, unless each of the Bermuda Parent, the U.S. Borrower, and their Subsidiaries shall be in compliance, on a pro forma basis after giving effect to such transactions, with the covenants contained in this Article VIII recomputed as of the last day of the most recently ended fiscal quarter of each of the Bermuda Parent, the U.S. Borrower, and their Subsidiaries as if the transaction in question had occurred on the first day of each relevant period for testing such compliance. (b) Notwithstanding Section 8.04(a), the aggregate principal amount of all Indebtedness of all foreign Subsidiaries (other than Indebtedness under this Agreement) at any time outstanding to any Person other than the U.S. Borrower and the Subsidiaries shall not exceed 12% of the Bermuda Parent's Net Worth at such time. SECTION 8.05. Ownership of Obligors. The Bermuda Parent shall not at any time cease to own, beneficially and of record, directly or indirectly, 100% of the Capital Stock or other equity interest (except for directors' qualifying shares) of the U.S. Borrower and U.S. Holdings. The U.S. Borrower shall not at any time cease to own, beneficially and of record, directly or indirectly, 100% of the Capital Stock or other equity interest (except for directors' qualifying shares) of each Subsidiary Borrower. SECTION 8.06. Financial Covenants. (a) The Bermuda Parent will not permit its Consolidated Indebtedness to exceed 50% of its Total Capitalization at the end of any fiscal quarter. (b) The Bermuda Parent will not permit its Interest Coverage Ratio at the end of any fiscal quarter to be less than 3.0 to 1.0. SECTION 8.07. Limitation on Transactions with Affiliates. Each of the Bermuda Parent and the U.S. Borrower will not, and will not permit any of their consolidated Subsidiaries to, directly or indirectly, conduct any business or enter into, renew, extend or permit to exist any transaction (including the purchase, sale, lease or exchange of any assets or the rendering of any service) or series of related transactions with any Person who is not either (i) a Borrower or one of the Bermuda Parent's consolidated Subsidiaries or (ii) Weatherford\Al-Rushaid Limited, -2- Weatherford Saudi Arabia Limited, or Universal Compression Holdings, Inc., on terms that are less favorable to the Bermuda Parent or such consolidated Subsidiary, as the case may be, than would be available in a comparable arm's length transaction. Notwithstanding the foregoing, the restrictions set forth in this covenant will not apply to (i) the payment of reasonable and customary regular fees to directors of the Bermuda Parent or the U.S. Borrower who are not employees of the Bermuda Parent or the U.S. Borrower; (ii) loans and advances to officers, directors and employees of the Bermuda Parent or the U.S. Borrower and their respective Subsidiaries for travel, entertainment and moving and other relocation expenses made in direct furtherance and in the ordinary course of business of the Bermuda Parent, the U.S. Borrower, and their respective Subsidiaries; (iii) any other transaction with any employee, officer or director of the Bermuda Parent, the U.S. Borrower or any of their respective Subsidiaries pursuant to employee benefit or compensation arrangements entered into in the ordinary course of business and approved by, as applicable, the Board of Directors of the Bermuda Parent, the Board of Directors of the U.S. Borrower, or the Board of Directors of such Subsidiary permitted by this Agreement; and (iv) customary underwriting or similar transactions with an investment banking Affiliate. SECTION 8.08. Restrictions on Subsidiary Dividends. Each of the Bermuda Parent and the U.S. Borrower will not and will not permit any of its consolidated Subsidiaries to enter into any agreement or contract which limits or restricts in any way the payment of any dividends or distributions by any consolidated Subsidiary of any Obligor to such Obligor or to another consolidated Subsidiary of such Obligor. SECTION 8.09. Debentures. Except as expressly permitted in writing by the Majority Lenders, no Obligor will amend, modify or obtain or grant a waiver of any provision of the October 1997 Debentures, the October 1997 Debenture Indenture, the May 1996 Debentures, or the May 1996 Debenture Indenture if such amendment, modification or waiver would be adverse to the Lenders. SECTION 8.10. The Debenture Indentures. No Obligor will take any action that could result in the Obligations' failing to be classified as (a) "Designated Senior Indebtedness" (as such phrase is used in the October 1997 Debenture Indenture) or (b) pari passu to Indebtedness under the May 1996 Debenture Indenture. -3- EXHIBIT D ARTICLE IX EVENTS OF DEFAULT AND REMEDIES SECTION 9.01. Events of Default and Remedies. If any of the following events ("Events of Default") shall occur and be continuing: (a) (i) the principal on any Note shall not be paid on the date on which such payment is due, or (ii) any payment of interest on any such Note or any other amount due hereunder or any other Loan Document shall not be paid within five calendar days following the date on which such payment of interest or such other amount is due; or (b) any representation or warranty made or, for purposes of Article V, deemed made by or on behalf of any Obligor herein, at the direction of any Obligor or by any Obligor in any other Loan Document or in any document, certificate or financial statement delivered in connection with this Agreement or any other Loan Document shall prove to have been incorrect in any material respect when made or deemed made or reaffirmed, as the case may be; or (c) any Obligor shall fail to perform or observe any covenant contained in Article VIII or fails to give any notice required by Section 7.01(d) or (e); or (d) any Obligor shall fail to perform or observe any other term, covenant or agreement contained in this Agreement (other than those specified in Section 9.01(a), Section 9.01(b) or Section 9.01(c)) or any other Loan Document to which it is a party and, in any event, such failure shall remain unremedied for 30 calendar days after the earlier of (i) written notice of such failure shall have been given to a Responsible Officer of the U.S. Borrower by the Administrative Agent or any Lender or, (ii) a Responsible Officer of any Obligor becomes aware of such failure; or (e) the Bermuda Parent or any of its Subsidiaries (i) fails to make (whether as primary obligor or as guarantor or other surety) any principal payment of or interest or premium, if any, on any Indebtedness or the October 1997 Debentures beyond any period of grace provided with respect thereto (not to exceed 30 days), provided that the aggregate amount of all Indebtedness as to which such a payment default shall occur and be continuing is equal to or exceeds $25,000,000, or (ii) defaults under any agreement or any instrument which governs the rights and remedies of Persons holding Indebtedness of the Bermuda Parent or any of its Subsidiaries with an aggregate face amount which is equal to or exceeds $25,000,000; or (f) the entry by a court having jurisdiction in the premises of (i) a decree or order for relief in respect of any Obligor or any Material Subsidiary in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or (ii) a decree or order adjudging any Obligor or any Material Subsidiary bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of any Obligor or any Material Subsidiary under any applicable federal, state or foreign law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of any Obligor or any Material Subsidiary of any substantial part of its property, or ordering the winding up or liquidation of its affairs, the continuance of any such decree or order for relief or any such other decree or order that shall be unstayed and in effect for a period of 60 consecutive days; or (g) the commencement by any Obligor or any Material Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by any Obligor or any Material Subsidiary to the entry of a decree or order for relief in respect of any Obligor or such Material Subsidiary in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by any Obligor or any Material Subsidiary of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign law, or the consent by any Obligor or any Material Subsidiary to the filing of such petition or the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of such Obligor or such Material Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the consent to, approval of or the admission by any Obligor or any Material Subsidiary in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by any Obligor or any Material Subsidiary in furtherance of any such action; or (h) there shall be commenced against any Obligor or any Material Subsidiary any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against the assets of the any Obligor or any Material Subsidiaries which equals or exceeds $25,000,000 in value and which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (i) any Loan Document shall (other than with the consent of the Administrative Agent and the Lenders), at any time after its execution and delivery and for any reason, cease to be in full force and effect in any material respect, or shall be declared to be null and void, or the validity or enforceability thereof shall be contested by any Obligor or any Obligor shall deny that it has any or further liability or obligation thereunder; or (j) any Plan shall incur an "accumulated funding deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA) which (individually or collectively) exceeds $25,000,000, whether or not waived, or a waiver of the minimum funding standard or extension of any amortization period is sought or granted under Section 412 of the Code with respect to a Plan; any proceeding shall have occurred or is reasonably likely to occur by the PBGC under Section 4069(a) of ERISA to impose liability on the U.S. Borrower, any consolidated Subsidiary or an ERISA Affiliate which (individually or collectively) exceeds $25,000,000; any required contribution to a Plan or Multiemployer Plan in excess of $25,000,000 shall not have been made within 15 days of the date such contribution is due; or the U.S. Borrower, any consolidated Subsidiary or any ERISA Affiliate has incurred or is reasonably likely to incur a liability to or on -2- account of a Plan or Multiemployer Plan under Section 515, 4062, 4063, 4064, 4201 or 4204 of ERISA, and there shall result (individually or collectively) from any such event or events a material risk of either (i) the imposition of a Lien(s) upon, or the granting of a security interest(s) in, the assets of the U.S. Borrower, any consolidated Subsidiary and/or an ERISA Affiliate securing an amount(s) equal to or exceeding $25,000,000, or (ii) the U.S. Borrower, any consolidated Subsidiary and/or an ERISA Affiliate incurring a liability(ies) or obligation(s) with respect thereto equal to or exceeding $25,000,000; or (k) a judgment or order shall be entered against any Obligor or any Material Subsidiary, which with other outstanding judgments and orders entered against the Obligors and the Material Subsidiaries equals or exceeds $25,000,000 in the aggregate (to the extent not covered by insurance as to which the respective insurer has acknowledged coverage), and (i) within 60 days after entry thereof such judgment shall not have been discharged or execution thereof stayed pending appeal or, within 60 days after the expiration of any such stay, such judgment shall not have been discharged, or (ii) any enforcement proceeding shall have been commenced (and not stayed) by any creditor upon such judgment; then, in any such event, and at any time thereafter if any Event of Default shall then be continuing, the Administrative Agent may (and at the direction of the Majority Lenders, shall) do any or all of the following: (i) without notice to any Borrower or any other Person, declare the Commitments terminated (whereupon the Commitments shall be terminated) and/or accelerate the Termination Date to a date as early as the date of termination of the Commitments; (ii) declare the principal amount then outstanding of and the unpaid accrued interest on the Loans and all fees and all other amounts payable hereunder, under the Notes and under the other Loan Documents to be forthwith due and payable, whereupon such amounts shall be and become immediately due and payable, without notice (including notice of acceleration and notice of intent to accelerate), presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by each Borrower; provided, that in the case of the occurrence of an Event of Default with respect to any Obligor referred to in Section 9.01(f) or Section 9.01(g), the Commitments shall be automatically terminated and the principal amount then outstanding of and unpaid accrued interest on the Loans and all fees and all other amounts payable hereunder, under the Notes and under the other Loan Documents shall be and become automatically and immediately due and payable, without notice (including notice of acceleration and notice of intent to accelerate), presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by each Borrower; and (iii) exercise any or all other rights and remedies available to the Administrative Agent or any Lenders under the Loan Documents, at law or in equity. SECTION 9.02. Right of Setoff. Upon the occurrence and during the continuance of any Event of Default, each Lender is hereby authorized at any time and from time to time, without notice to any Obligor (any such notice being expressly waived by each Obligor), -3- to setoff and apply any and all deposits (general or special, time or demand, provisional or final but excluding the funds held in accounts clearly designated as escrow or trust accounts held by any Obligor for the benefit of Persons which are not Affiliates of any Obligor), whether or not such setoff results in any loss of interest or other penalty, and including without limitation all certificates of deposit, at any time held, and any other funds or property at any time held, and other indebtedness at any time owing by such Lender to or for the credit or the account of any Obligor against any and all of the Obligations irrespective of whether or not such Lender or the Administrative Agent will have made any demand under this Agreement, the Notes or any other Loan Document. Should the right of any Lender to realize funds in any manner set forth above be challenged and any application of such funds be reversed, whether by court order or otherwise, the Lenders shall make restitution or refund to the applicable Obligor, as the case may be, pro rata in accordance with their Commitments. Each Lender agrees to promptly notify the each Borrower and the Administrative Agent after any such setoff and application, provided that the failure to give such notice will not affect the validity of such setoff and application. The rights of the Administrative Agent and the Lenders under this Section are in addition to other rights and remedies (including without limitation other rights of setoff) which the Administrative Agent or the Lenders may have. This Section is subject to the terms and provisions of Section 4.05 and Section 12.18. SECTION 9.03. Preservation of Security for Unmatured Obligations. In the event that, following (a) the occurrence of an Event of Default and the exercise of any rights available to the Administrative Agent or any Lender under the Loan Documents, and (b) payment in full of the principal amount then outstanding of and the accrued interest on the Loans and fees and all other amounts payable hereunder and under the Loan Documents shall remain outstanding and undrawn upon, the Administrative Agent shall be entitled to hold (and each Borrower and each other Obligor hereby grants and conveys to the Administrative Agent a security interest in and to) all cash or other proceeds realized or arising out of the exercise of any rights available under the Loan Documents, at law or in equity. Such proceeds shall be held for the ratable benefit of the Lenders. The rights, titles, benefits, privileges, duties and obligations of the Administrative Agent with respect thereto shall be governed by the terms and provisions of this Agreement. The Administrative Agent may, but shall have no obligation to, invest any such proceeds in such manner as the Administrative Agent, in the exercise of its sole discretion, deems appropriate. Nothing in this Section shall cause or permit an increase in the maximum amount of the Obligations permitted to be outstanding from time to time under this Agreement. SECTION 9.04. Other Remedies. No remedy conferred herein or in any of the other Loan Documents is to be exclusive of any other remedy, and each and every remedy contained herein or in any other Loan Document shall be cumulative and shall be in addition to every other remedy given hereunder and under the other Loan Documents now or hereafter existing at law or in equity or by statute or otherwise. SECTION 9.05. Currency Conversion After Maturity. At any time following the occurrence of an Event of Default and the acceleration of the maturity of the Obligations owed to the Lenders hereunder, the Lenders shall be entitled to convert, with two (2) Business Days' prior notice to the applicable Borrower, any and all or any part of the then unpaid and outstanding Loans denominated in a currency other than Dollars into Loans denominated in -4- Dollars. Any such conversion shall be calculated so that the principal amount of the resulting Loans shall be the Dollar Equivalent of the principal amount of the Loan being converted on the date of conversion. Any accrued and unpaid interest denominated in such currency other than Dollars at the time of any such conversion shall be similarly converted to Dollars, and such converted Loans and accrued and unpaid interest thereon shall thereafter bear interest in accordance with the terms hereof. SECTION 9.06. Application of Moneys During Continuation of Event of Default. (a) So long as an Event of Default of which the Administrative Agent shall have given notice to the Lenders shall continue, all moneys received by the Administrative Agent (i) from any Obligor under the Loan Documents shall, except as otherwise required by law, be distributed by the Administrative Agent on the dates selected by the Administrative Agent as follows: first, to payment of the unreimbursed expenses for which the Administrative Agent or any Lender is to be reimbursed pursuant to Section 13.03 and to any unpaid fees owing to the Administrative Agent; second, to the ratable payment of accrued but unpaid interest on the Obligations; third, to the ratable payment of unpaid principal of the Obligations; fourth, to the ratable payment of all other amounts payable by the Obligors hereunder; fifth, to the ratable payment of all other Obligations, until all Obligations shall have been paid in full; and finally, to payment to the Obligors, or their respective successors or assigns, or as a court of competent jurisdiction may direct, of any surplus then remaining from such proceeds. (b) The term "unpaid" as used in this Section 9.06 shall mean all Obligations outstanding as of any such distribution date as to which prior distributions have not been made, after giving effect to any adjustments which are made pursuant to Section 9.02 of which the Administrative Agent shall have been notified. -5- EXHIBIT E ARTICLE XI GUARANTY SECTION 11.01 Guaranty. (a) In consideration of, and in order to induce the Lenders to make Loans to the Subsidiary Borrowers and the U.S. Borrower, the Guarantors hereby absolutely, unconditionally and irrevocably guarantee in favor of all of the Lenders, the punctual payment and performance when due, whether at stated maturity, by acceleration or otherwise, of the Borrower Obligations and all covenants of the Borrowers, now or hereafter existing under this Agreement and the other Loan Documents to which any Borrower is a party, whether for principal, interest (including interest accruing or becoming owing both prior to and subsequent to the commencement of any proceeding against or with respect to such Borrower under any applicable Bankruptcy Code, fees, commissions, expenses (including reasonable attorneys' fees and expenses)), indemnities, or otherwise (all such obligations being, as applicable, the "Guaranteed Obligations"). Each of the Guarantors agrees to pay any and all expenses incurred by each Lender and the Administrative Agent in enforcing this Guaranty against any of the Guarantors. (b) This Guaranty is an absolute, unconditional, present and continuing guaranty of payment and not of collection and is in no way conditioned upon any attempt to collect from any Obligor or any other action, occurrence or circumstance whatsoever. SECTION 11.02. Continuing Guaranty. (a) Each Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of this Agreement and the other Loan Documents. Each Guarantor agrees that, to the maximum extent permitted by applicable law, the Guaranteed Obligations and Loan Documents to which any Borrower is a party may be extended or renewed, and indebtedness thereunder repaid and reborrowed in whole or in part, without notice to or assent by any of the Guarantors, and that each Guarantor will remain bound upon this Guaranty notwithstanding any extension, renewal or other alteration of any of the Guaranteed Obligations or such Loan Documents or any repayment and reborrowing of Loans to any Borrower. The obligations of each Guarantor under this Guaranty are joint and several and absolute and unconditional irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of the other Guarantors under this Agreement or any other Loan Document or any substitution, release or exchange of any other guarantee of or security for the Obligations. To the maximum extent permitted by applicable law, except as otherwise expressly provided in this Agreement or any other Loan Document to which any Guarantor is a party, the obligations of each Guarantor under this Guaranty shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms hereof under any circumstances whatsoever, including: (i) any modification, amendment, supplement, renewal, extension for any period, increase, decrease, alteration or rearrangement of all or any part of the Guaranteed Obligations, or of this Agreement or any other Loan Document executed in connection herewith, or any contract or understanding among the Bermuda Parent, U.S. Holdings, U.S. Borrower, the U.K. Borrower, the Dutch Borrower, any other Subsidiary Borrower, any Obligor, the Administrative Agent and/or the Lenders, or any other Person, pertaining to the Guaranteed Obligations; (ii) any adjustment, indulgence, forbearance or compromise that might be granted or given by the Lenders to any Guarantor, any Obligor or any other Person liable on the Guaranteed Obligations; (iii) the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of any Guarantor, the U.S. Borrower, the U.K. Borrower, the Dutch Borrower, any other Subsidiary Borrower, or any other Person at any time liable for the payment of all or part of the Guaranteed Obligations; or any dissolution of any Guarantor or any Borrower, or any sale, lease or transfer of any or all of the assets of any Guarantor or any Borrower, or any changes in the shareholders of any Guarantor or any Borrower, or any reorganization of any Guarantor or any Borrower; (iv) the invalidity, illegality or unenforceability of all or any part of the Guaranteed Obligations, or any document or agreement executed in connection with the Guaranteed Obligations, for any reason whatsoever, including the fact that (A) the Guaranteed Obligations, or any part thereof, exceed the amount permitted by law, (B) the act of creating the Guaranteed Obligations, or any part thereof is ultra vires, (C) the officers or representatives executing the documents or otherwise creating the Guaranteed Obligations acted in excess of their authority, (D) the Guaranteed Obligations or any part thereof violate applicable usury laws, (E) any Guarantor or any Borrower has valid defenses, claims, and offsets (whether at law or in equity, by agreement or by statute) which render the Guaranteed Obligations wholly or partially uncollectible from any Guarantor or any Borrower, (F) the creation, performance, or repayment of the Guaranteed Obligations (or execution, delivery and performance of any document or instrument representing any part of the Guaranteed Obligations or executed in connection with any of the Guaranteed Obligations, or given to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible, legally impossible or unenforceable, or (G) this Agreement, any other Loan Document, or any other document or instrument pertaining to any of the Guaranteed Obligations has been forged or otherwise is irregular or not genuine or authentic; (v) any full or partial release of the liability of any Guarantor or any Borrower on the Guaranteed Obligations or any part thereof, or any other Person now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee, or assure the payment of the Guaranteed Obligations or any part thereof; it being recognized, acknowledged, and agreed by each Guarantor that such Guarantor may be required to pay the Guaranteed Obligations in full without assistance or support of any other Person, and that such Guarantor has not been induced to enter into this Guaranty on the basis of a contemplation, belief, understanding or agreement that any other Person will be liable to perform the Guaranteed Obligations or that the Administrative Agent or any Lender will look to any other Person to perform the Guaranteed Obligations; (vi) the taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or any part of the Guaranteed Obligations; -2- (vii) any release, surrender, exchange, subordination, deterioration, waste, loss or impairment of any collateral, property or security, at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations; (viii) the failure of the Administrative Agent, the Lenders or any other Person to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral, property or security; (ix) the fact that any collateral, security or Lien contemplated or intended to be given, created or granted as security for the repayment of the Guaranteed Obligations shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other Lien; it being recognized and agreed by each Guarantor that such Guarantor is not entering into this Guaranty in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectibility or value of any of the collateral for the Guaranteed Obligations; (x) any payment by any Borrower or any Guarantor to the Administrative Agent or any Lender is held to constitute a preference under bankruptcy laws, or for any other reason either the Administrative Agent or any Lender is required to refund such payment or pay such amount to such Borrower, such Guarantor, or any other Person; or (xi) any other action taken or omitted to be taken with respect to this Agreement, any other Loan Document, the Guaranteed Obligations, or the security and collateral therefor, whether or not such action or omission prejudices Guarantors or increases the likelihood that the Guarantors will be required to pay the Guaranteed Obligations pursuant to the terms hereof; it being the unambiguous and unequivocal intention of each Guarantor that such Guarantor shall be obligated to pay the Guaranteed Obligations when due, notwithstanding any occurrence, circumstance, event, action, or omission whatsoever, whether contemplated or uncontemplated, and whether or not otherwise or particularly described herein, except for the full and final payment and satisfaction of the Guaranteed Obligations after the termination of all of the Commitments. (b) Each Guarantor further agrees that, to the fullest extent permitted by law, as between any of the Guarantors, on the one hand, and the Lenders and the Administrative Agent, on the other hand, (i) the maturity of any of the Guaranteed Obligations may be accelerated as provided in Article IX for the purposes of this Guaranty, notwithstanding any stay, injunction, or other prohibition preventing such acceleration of the Guaranteed Obligations, and (ii) in the event of any acceleration of any Guaranteed Obligations as provided in Article IX, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guaranty. SECTION 11.03. Effect of Debtor Relief Laws. If after receipt of any payment of, or proceeds of any security applied (or intended to be applied) to the payment of all or any -3- part of the Guaranteed Obligations, the Administrative Agent or any Lender is for any reason compelled to surrender or voluntarily surrenders, such payment or proceeds to any Person (a) because such payment or application of proceeds is or may be avoided, invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, fraudulent conveyance, fraudulent transfer, impermissible set-off or a diversion of trust funds or (b) for any other reason, including (i) any judgment, decree or order of any court or administrative body having jurisdiction over the Administrative Agent, any Lender or any of their respective properties or (ii) any settlement or compromise of any such claim effected by the Administrative Agent or any Lender with any such claimant (including any of the Borrowers), then the Guaranteed Obligations or any part thereof intended to be satisfied shall be reinstated and continue, and this Guaranty shall continue in full force as if such payment or proceeds have not been received, notwithstanding any revocation thereof or the cancellation of any instrument evidencing any of the Guaranteed Obligations or otherwise; and each Guarantor shall be liable to pay the Administrative Agent and the Lenders, and hereby do indemnify the Administrative Agent and the Lenders and hold them harmless for the amount of such payment or proceeds so surrendered and all reasonable expenses (including reasonable attorneys' fees, court costs and expenses attributable thereto) incurred by the Administrative Agent or any such Lender in the defense of any claim made against it that any payment or proceeds received by the Administrative Agent or any such Lender in respect of all or part of the Guaranteed Obligations must be surrendered. The provisions of this paragraph shall survive the termination of this Guaranty and any satisfaction and discharge of any Borrower by virtue of any payment, court order, or any law. SECTION 11.04. Waiver. Each Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Guaranty and waives presentment, demand for payment, notice of intent to accelerate, notice of dishonor or nonpayment and any requirement that the Administrative Agent or any Lender institute suit, collection proceedings or take any other action to collect any of the Guaranteed Obligations, including any requirement that the Administrative Agent or any Lender protect, secure, perfect or insure any Lien against any property subject thereto or exhaust any right or take any action against any Borrower or any other Person or any collateral (it being the intention of the Administrative Agent, the Lenders, and the Guarantors that this Guaranty is to be a guaranty of payment and not of collection). It shall not be necessary for the Administrative Agent or any Lender, in order to enforce any payment by any Guarantor hereunder, to institute suit or exhaust its rights and remedies against any other Guarantor, the U.S. Borrower, the U.K. Borrower, the Dutch Borrower, any other Subsidiary Borrower, or any other Person, including others liable to pay the Guaranteed Obligations, or to enforce its rights against any security ever given to secure payment thereof. Each Guarantor hereby expressly waives to the maximum extent permitted by applicable law each and every right to which it may be entitled by virtue of the suretyship laws of the State of Texas or any other state in which it may be located, including any and all rights it may have pursuant to Rule 31, Texas Rules of Civil Procedure, Section 17.001 of the Texas Civil Practice and Remedies Code and Chapter 34 of the Texas Business and Commerce Code. Each Guarantor hereby waives marshaling of assets and liabilities, notice by the Administrative Agent or any Lender of any indebtedness or liability to which such Lender applies or may apply any amounts received by such Lender, and of the creation, advancement, increase, existence, extension, renewal, rearrangement or modification of the Guaranteed Obligations. Each Guarantor expressly waives, to the extent permitted by applicable law, the -4- benefit of any and all laws providing for exemption of property from execution or for valuation and appraisal upon foreclosure. SECTION 11.05. Full Force and Effect. This Guaranty is a continuing guaranty and shall remain in full force and effect until all of the Guaranteed Obligations under this Agreement and the other Loan Documents to which any Borrower is a party and all other amounts payable under this Guaranty have been paid in full (after the termination of the Commitments). All rights, remedies and powers provided in this Guaranty may be exercised, and all waivers contained in this Guaranty may be enforced, only to the extent that the exercise or enforcement thereof does not violate any provisions of applicable law which may not be waived. -5- SCHEDULE 6.01 MATERIAL SUBSIDIARIES [see attached] EX-4.4 6 h99033exv4w4.txt AMEND.NO.1 TO AMENDED CREDIT AGREEMENT EXHIBIT 4.4 AMENDMENT NO. 1 This Amendment No. 1 dated as of May 17, 2002 ("Amendment") is among Weatherford International, Inc., a Delaware corporation (the "U.S. Borrower"), Weatherford Canada Ltd., an Alberta corporation (the "Canadian Borrower" and, together with the U.S. Borrower, the "Borrowers"), Weatherford International Ltd., a Bermuda exempted company (the "Bermuda Parent"), the lenders from time to time party to the Credit Agreement described below ("Lenders"), JPMorgan Chase Bank, as administrative agent for the U.S. Lenders (the "U.S. Administrative Agent"), The Bank of Nova Scotia, as documentation agent for the Lenders and as agent for the Canadian Lenders (the "Canadian Agent" and, together with the U.S. Administrative Agent, the "Agents"). INTRODUCTION A. The Borrowers, the Agents, and the Lenders are parties to the Credit Agreement dated as of May 27, 1998 (the "Credit Agreement"). B. The U.S. Borrower and the Canadian Borrower have requested that the Lenders agree to make certain amendments to the Credit Agreement in connection with the proposed merger of the U.S. Borrower into a newly formed acquisition company, which is a wholly owned subsidiary of Weatherford U.S. Holdings LLC, a Delaware limited liability company ("U.S. Holdings"), which is in turn a wholly owned subsidiary of the Bermuda Parent, whose common shares will be exchanged on a one-for-one basis with outstanding shares of common stock of the U.S. Borrower (the "Reorganization"). C. Subject to the terms hereof, the Lenders and the Agents agree to the amendments and extension contained herein. THEREFORE, the Borrowers, the Bermuda Parent, the Agents, and the Lenders hereby agree as follows: Section 1. Definitions. Unless otherwise defined in this Amendment, terms used in this Amendment which are defined in the Credit Agreement shall have the meanings assigned to such terms in the Credit Agreement. Section 2. Amendments. The Credit Agreement is hereby amended as follows: (a) The Bermuda Parent shall be added as a party to the Credit Agreement, as a Guarantor. (b) The following definitions shall be added in alphabetical order to Section 1.01: "Bermuda Parent" means Weatherford International Ltd., a Bermuda exempted company. "Borrower Obligations" means the Obligations of the Borrowers. "Guarantors" mean the Bermuda Parent and U. S. Borrower as guarantors of the Guaranteed Obligations. "Guaranteed Obligations" has the meaning specified in Section 11.01. "Guaranty" means the guaranty contained in Article XI. "2002 Merger Date" means the date upon which, pursuant to the Agreement and Plan of Merger among the Bermuda Parent, the U. S. Borrower, U. S. Holdings, and Weatherford Merger Inc., becomes effective in accordance with its terms. "U. S. Holdings" means Weatherford U. S. Holdings LLC, a Delaware limited liability company. (c) The definitions of "Canadian Borrower Guaranteed Obligations" and "U. S. Borrower Guaranty" in Section 1.01 shall be deleted. (d) The following definitions shall be added to read in their entirety as follows: "Change of Control" means an event or series of events by which (a) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act as in effect on the Execution Date) or related persons constituting a "group" (as such term is used in Rule 13d-5 under the Exchange Act in effect on the Execution Date) is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, as in effect on the Execution Date, except that a person or such group shall be deemed to have "beneficial ownership" of all shares that any such person or such group has the right to acquire without condition, other than the passage of time, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 50% or more of the total voting power of the Voting Stock of the Bermuda Parent, U.S. Holdings, or the U.S. Borrower; (b) the Bermuda Parent, U.S. Holdings, or the U.S. Borrower consolidates with or merges into another Person or conveys, transfers or leases all or substantially all of its assets to any Person, or any Person consolidates with, or merges into, the Bermuda Parent, U.S. Holdings, or the U.S. Borrower in a transaction not otherwise permitted by Section 8.02; (c) the Bermuda Parent, U.S. Holdings, or the U.S. Borrower conveys, transfers or leases all or substantially all of its assets to any Person; (d) the stockholders of the Bermuda Parent, U.S. Holdings, or the U.S. Borrower approve any plan of liquidation or dissolution of the Bermuda Parent, U.S. Holdings, or the U.S. Borrower; or (e) during any period of twelve consecutive months, individuals who, at the beginning of such period, constituted the Board of Directors of the Bermuda Parent, U.S. Holdings, or the U.S. Borrower (together with any new directors whose election by such Board of Directors or whose nomination for election by the stockholders of the Bermuda Parent, U.S. Holdings, or the U.S. Borrower, as applicable, was approved by a vote of not less than a majority of the directors then still in office who were either directors at the beginning of such period or whose election or -2- nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Bermuda Parent, U.S. Holdings, or the U.S. Borrower, as applicable, then in office. "Consolidated EBITDA" means, for any Person, for any period, the Consolidated Net Income of such Person and its consolidated Subsidiaries for such period, increased (to the extent deducted in determining Consolidated Net Income) by the sum of (a) all income taxes (including state franchise or similar taxes based on income) of such Person and its consolidated Subsidiaries paid or accrued according to GAAP for such period; (b) Consolidated Interest Expense of such Person and its consolidated Subsidiaries for such period; (c) depreciation and amortization of such Person and its consolidated Subsidiaries for such period determined in accordance with GAAP; and (d) other non-cash charges (excluding any such non-cash charges to the extent they require an accrual of, or reserve for, cash charges for any future periods) for such period determined in accordance with GAAP, and decreased (to the extent added in determining Consolidated Net Income) by any non-cash credits for such period determined in accordance with GAAP. "Consolidated Indebtedness" means, for any Person, at the date of any determination thereof, Indebtedness of such Person and its consolidated Subsidiaries (other than Interest Rate Risk Indebtedness, Derivatives Obligations, and contingent obligations in respect of letters of credit) determined on a consolidated basis in accordance with GAAP. "Consolidated Interest Expense" means (without duplication), for any Person, for any period, the aggregate amount of interest, whether expensed or capitalized, paid, accrued or scheduled to be paid or accrued during such period in respect of (i) all Indebtedness of such Person and its consolidated Subsidiaries, plus (ii) the Debentures, all determined on a consolidated basis in accordance with GAAP. "Interest Coverage Ratio" means, for any Person, at the end of each fiscal quarter of such Person, the ratio of (a) Consolidated EBITDA of such Person for the fiscal quarter then ended and for the immediately preceding three fiscal quarters to (b) Consolidated Interest Expense of such Person (excluding interest accrued in respect of the October 1997 Debentures but not actually paid in cash) for such four fiscal quarters. "Material Subsidiary" means, at any date, (a) a consolidated Subsidiary the Capital Stock of which is owned by the Bermuda Parent and/or one or more of its Subsidiaries and that either (i) has total assets in excess of 5% of the total assets of the Bermuda Parent and its consolidated Subsidiaries, in each case as determined in accordance with GAAP or (ii) has gross net revenues in excess of 5% of the consolidated gross revenues of the Bermuda Parent and its consolidated Subsidiaries based, in each case, on the most recent audited consolidated financial statements of the Bermuda Parent. -3- "Net Worth" means, for any Person, at the date of any determination thereof, on a consolidated basis, the sum of (a) the par value or stated value of its Capital Stock, plus (b) capital in excess of par or stated value of shares of its Capital Stock, plus (or minus in the case of a deficit), (c) retained earnings or accumulated deficit, as the case may be, plus (d) and any other account which, in accordance with GAAP, constitutes stockholders' equity, excluding (e) any treasury stock, and (f) the effects upon net worth resulting from the translation of foreign currency denominated assets into Dollars. "Obligors" means each Borrower and each Guarantor of the Guaranteed Obligations. "Permitted Liens" means, without duplication, (a) Liens, not otherwise permitted under any other provision of this definition, securing Indebtedness permitted under this Agreement in an aggregate principal amount at any time outstanding which does not exceed 12% of the Bermuda Parent's Net Worth; (b) Liens for taxes or unpaid utilities not yet delinquent or which are being contested in good faith by appropriate proceedings; provided that adequate reserves with respect thereto are maintained on the books of the Bermuda Parent or its Subsidiaries, as the case may be, in conformity with GAAP; (c) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the ordinary course of business and not overdue for a period of more than 60 days or which are being contested in good faith by appropriate proceedings; (d) pledges or deposits or deemed trusts in connection with workers' compensation, unemployment insurance, pension, employment or other social security legislation; (e) easements, rights-of-way, use restrictions, minor defects or irregularities in title, reservations (including reservations in any original grant from any government of any land or interests therein and statutory exceptions to title) and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the Bermuda Parent or any of its Subsidiaries; (f) judgment and attachment Liens not giving rise to an Event of Default or Liens created by or existing from any litigation or legal proceeding that are currently being contested in good faith by appropriate proceedings, promptly instituted and diligently conducted, and for which adequate reserves have been made to the extent required by GAAP; (g) Liens on the assets of any entity or asset existing at the time such asset or entity is acquired by the Bermuda Parent or any of its Subsidiaries, whether by merger, consolidation, purchase of assets or otherwise; provided that such Liens (i) are not created, -4- incurred or assumed by such entity in contemplation of such entity's being acquired by Bermuda Parent or any of its Subsidiaries; (ii) do not extend to any other assets of the Bermuda Parent or any of its Subsidiaries; and (iii) the Indebtedness secured by such Lien is permitted pursuant to this Agreement; (h) Liens securing Indebtedness of the Bermuda Parent or its Subsidiaries not prohibited by Section 8.04 incurred to finance the acquisition of fixed or capital assets, provided that (A) such Liens shall be created not more than 90 days after the acquisition of such fixed or capital assets, (B) such Liens do not at any time encumber any property other than the property financed by such Indebtedness and (C) the Liens are not modified to secure other Indebtedness and the amount of Indebtedness secured thereby is not increased; (i) Liens incurred to secure the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return-of-money bonds and other obligations of a like nature incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money); (j) leases or subleases granted to others not interfering in any material respect with the business of the Bermuda Parent or any of its Subsidiaries; (k) Liens to secure obligations arising from statutory or regulatory requirements; (l) any interest or title of a lessor in property subject to any Capitalized Lease Obligation or operating lease which, in each case, is permitted under this Agreement; (m) Liens in favor of collecting or payor banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of the Bermuda Parent or any of its Subsidiaries on deposit with or in possession of such bank; (n) any renewal or refinancing of or substitution for, or any extension or modification of any maturity date for any Indebtedness secured by, any Lien permitted by any of the preceding clauses; provided that the debt secured is not increased nor the Lien extended to any additional assets; and (o) Liens granted or Letters of Credit issued in connection with the obligations of Grant Prideco, Inc. incurred in connection with the TBT Leases. "Total Capitalization" means, for any Person, at the date of any determination thereof, the sum of (a) Consolidated Indebtedness of such Person, plus (b) Net Worth of such Person, plus (c) the outstanding principal amount of the October 1997 Debentures at such date. (e) In the definition of "Commitment Fee Percentage", the words "U.S. Borrower's Debt Rating" and "U.S. Borrower Debt Rating" shall be replaced with the words "Debt Rating". (f) In the definition of "consolidated", the words "U.S. Borrower" shall be replaced with the words "another Person for whom consolidated financial statements are to be prepared". -5- (g) The first sentence of the definition of "Consolidated Net Income" is amended to replace the words "of the U.S. Borrower means, for any period, the net income or loss of the U.S. Borrower" with the words "means, for any Person, for any period, the net income or loss of such Person". In clauses (c) and (d) of the definition of "Consolidated Net Income", the words "the U.S. Borrower" shall be replaced with the words "such applicable Person". (h) In the definition of "Loan Documents", the words "U.S. Borrower" shall be deleted. (i) In the definition of "Margin Percentage", the words "U.S. Borrower Debt Rating" shall be replaced with the words "Debt Rating". (j) In the definition of "Material Adverse Effect", the words "U.S. Borrower" shall be replaced with the words "Bermuda Parent". (k) In the definitions of "Performance Level I", "Performance Level II", "Performance Level III", and "Performance Level IV", the words "and the Bermuda Parent each" shall be inserted after the words "U.S. Borrower" and the words "Debt Rating" shall replace the words "U.S. Borrower Debt Rating". (l) The definition of "Subsidiary" is amended to add the words "or the Bermuda Parent, as applicable" to the end of the definition. (m) The words "U.S. Borrower" in the term "U.S. Borrower Debt Rating" shall be deleted and in the resulting definition of "Debt Rating", the words "or the Bermuda Parent" shall be inserted after the first instance of the words "U.S. Borrower", and the words "or the Bermuda Parent, as applicable" shall be inserted after the second such instance. (n) In the first sentence of Section 1.03, the words "by the U.S. Borrower or the Canadian Borrower, as the case may be," shall be deleted. (o) Article VI is amended and restated in its entirety to read as set forth in Exhibit A to this Amendment. (p) Article VII is amended and restated in its entirety to read as set forth in Exhibit B to this Amendment. (q) Article VIII is amended and restated in its entirety to read as set forth in Exhibit C to this Amendment. (r) Article IX is amended and restated in its entirety to read as set forth in Exhibit D to this Amendment. (s) Article XI is amended and restated in its entirety to read as set forth in Exhibit E to this Amendment. (t) Schedule 6.01 to the Credit Agreement shall be replaced in its entirety by Schedule 6.01 attached hereto. -6- Section 3. Representations and Warranties of the U.S Borrower, Canadian Borrower, and Bermuda Parent. The U.S. Borrower, the Canadian Borrower, and the Bermuda Parent represent and warrant to the Agents and the Lenders that: (a) the representations and warranties set forth in the Credit Agreement, as amended by this Amendment, and in the other Loan Documents are true and correct in all material respects as of the date of this Amendment; (b) (i) the execution, delivery and performance of this Amendment are within the corporate power and authority of the U.S. Borrower, the Canadian Borrower, and the Bermuda Parent and have been duly authorized by appropriate proceedings and (ii) this Amendment constitutes a legal, valid, and binding obligation of the U.S. Borrower, the Canadian Borrower, and the Bermuda Parent, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the rights of creditors generally and general principles of equity; and (c) as of the effectiveness of this Amendment, no Default or Event of Default has occurred and is continuing. Section 4. Reaffirmation of Guaranty. The U.S. Borrower and the Bermuda Parent, each as a Guarantor (as defined in the Credit Agreement, as amended hereby) hereby ratifies, confirms, and acknowledges the obligations under its Guaranty are, after giving effect to this Amendment, in full force and effect and each such Guarantor continues to unconditionally and irrevocably guarantee the full and punctual payment and performance, when due, whether at stated maturity or earlier by acceleration or otherwise, all of the Guaranteed Obligations, as such Guaranteed Obligations have been amended by this Amendment. Each of the Guarantors hereby acknowledges that the delivery of this reaffirmation does not indicate or establish an approval or consent requirement by any of the Guarantors under the Guaranty, the Credit Agreement or any other Loan Document in connection with the execution and delivery of amendments to the Credit Agreement, the Notes or any of the other Loan Documents. Section 5. Effectiveness. This Amendment shall become effective as of the date of this Amendment, and the Credit Agreement shall be amended as provided in this Amendment, upon the occurrence of the following conditions precedent: (a) the U.S. Borrower, the Canadian Borrower, the Bermuda Parent, the Agents, and the Majority Lenders shall have delivered duly and validly executed originals of this Amendment to the Agents; (b) the representations and warranties in this Amendment shall be true and correct in all material respects; (c) the U.S. Administrative Agent shall have received (i) a favorable opinion of U.S. counsel for the U.S. Borrower and (ii) a favorable opinion of Bermuda counsel for the Bermuda Parent, each in form and substance reasonably satisfactory to the U.S. Administrative Agent; and (d) the Agreement and Plan of Merger (the "Merger Agreement"), among the Bermuda Parent, the U.S. Borrower, U.S. Holdings, and Weatherford Merger Inc., a Delaware -7- corporation, has become effective in accordance with its terms, and the Reorganization contemplated therein has been consummated. Section 6. Effect on Loan Documents. (a) Except as amended herein, the Credit Agreement and the Loan Documents remain in full force and effect as originally executed. Nothing herein shall act as a waiver of any of the Agents' or Lenders' rights under the Loan Documents, as amended, including the waiver of any Default or Event of Default, however denominated. (b) This Amendment is a Loan Document for the purposes of the provisions of the other Loan Documents. Without limiting the foregoing, any breach of representations, warranties, and covenants under this Amendment may be a Default or Event of Default under other Loan Documents. Section 7. Choice of Law. This Amendment shall be governed by and construed and enforced in accordance with the laws of the State of Texas and of the United States of America. Section 8. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original. [The remainder of this page has been left blank intentionally.] -8- EXECUTED to be effective as of the date first above written. WEATHERFORD INTERNATIONAL, INC. By: /s/ BURT M. MARTIN ------------------------------------ Name: Burt M. Martin ---------------------------------- Title: Senior Vice President, General ------------------------------- Counsel and Secretary ------------------------------- WEATHERFORD CANADA LTD. By: /s/ BURT M. MARTIN ----------------------------------------- Name: Burt M. Martin --------------------------------------- Title: Senior Vice President and Secretary -------------------------------------- WEATHERFORD INTERNATIONAL LTD. By: /s/ BURT M. MARTIN ----------------------------------- Name: Burt M. Martin --------------------------------- Title: Director -------------------------------- JPMORGAN CHASE BANK, as U.S. Administrative Agent and as a U.S. Lender By: /s/ BETH LAWRENCE -------------------------------------- Name: Beth Lawrence ------------------------------------ Title: Managing Director ----------------------------------- By: -------------------------------------- Name: ------------------------------------ Title: ----------------------------------- THE BANK OF NOVA SCOTIA, as Canadian Agent, as Documentation Agent, as a U.S. Lender and as a Canadian Lender By: /s/ R.B. CRATH ------------------------------------- Name: R.B. Crath ----------------------------------- Title: Director ---------------------------------- By: ------------------------------------- Name: ----------------------------------- Title: ---------------------------------- ABN AMRO BANK N.V., as Syndication Agent and as a U.S. Lender By: /s/ JEFFERY G. WHITE ------------------------------------ Name: Jeffery G. White ---------------------------------- Title: Vice President --------------------------------- By: /s/ JOHN REED ------------------------------------ Name: John Reed ---------------------------------- Title: Vice President --------------------------------- THE BANK OF NEW YORK, as a U.S. Lender By: /s/ CRAIG J. ANDERSON ----------------------------------- Name: Craig J. Anderson --------------------------------- Title: Vice President --------------------------------- By: ------------------------------------- Name: ----------------------------------- Title: ---------------------------------- BANK ONE , NA, as a U.S.Lender By: ------------------------------------- Name: ----------------------------------- Title: ---------------------------------- By: ------------------------------------- Name: ----------------------------------- Title: ---------------------------------- WACHOVIA BANK, NATIONAL ASSOCIATION as a U.S. Lender By: /s/ - illegible ------------------------------------ Name: ---------------------------------- Title: --------------------------------- STANDARD CHARTERED BANK, as a U.S. Lender By: /s/ RAGHUNANDAN MENON ----------------------------------- Name: Raghunandan Menon ---------------------------------- Title: Sr. Vice President --------------------------------- By: /s/ PRADEEP IYER ------------------------------------ Name: Pradeep Iyer ---------------------------------- Title: Sr. Credit Officer --------------------------------- WELLS FARGO BANK TEXAS, N.A., as a Lender By: /s/ SCOTT GILDEA ------------------------------------ Name: Scott Gildea ---------------------------------- Title: Assistant Vice President --------------------------------- EXHIBIT A ARTICLE VI REPRESENTATIONS AND WARRANTIES To induce the Lenders to enter into this Agreement and to make the Loans and issue or participate in the Letters of Credit and accept and purchase Bankers' Acceptances, each Obligor represents and warrants as to itself and the Bermuda Parent and the U.S. Borrower represent and warrant as to themselves and the other Obligors (such representations and warranties to survive any investigation and the making of the Loans and the issuance of any Letters of Credit and the acceptance and purchase of any Bankers' Acceptances) to the Lenders and the Agents as follows: SECTION 6.01. Organization and Qualification. Each Obligor and each Material Subsidiary (a) is a corporation, partnership or entity having limited liability that is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, (b) has the corporate, partnership or other power and authority to own its property and to carry on its business as now conducted and (c) is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the failure to be so qualified would, together with all such other failures of the Obligors and their Subsidiaries, have a Material Adverse Effect. As of the Execution Date, the corporations and other entities named in Schedule 6.01 are all of the Material Subsidiaries, such Schedule (x) accurately reflects (i) the direct owner of the Capital Stock of each such Subsidiary and (ii) the percentage of the issued and outstanding Capital Stock of each such Subsidiary owned by each Obligor, and (y) accurately sets forth the jurisdictions of their respective incorporation or organization and jurisdictions in which they are required to be qualified as foreign corporations, foreign partnerships or other foreign entities to do business. SECTION 6.02. Authorization, Validity, Etc. Each Obligor has the corporate, partnership or other power and authority to execute, deliver and perform its obligations hereunder and under the other Loan Documents to which it is a party and, in the case of each Borrower, to obtain the Loans, the issuance of Letters of Credit and the acceptance and purchase of Bankers' Acceptances hereunder, and all such action has been duly authorized by all necessary corporate, partnership or other proceedings on its part or on its behalf. This Agreement has been duly and validly executed and delivered by or on behalf of each Obligor party hereto and constitutes valid and legally binding agreements of such Obligor enforceable against such Obligor in accordance with the terms hereof, and the Notes and the other Loan Documents to which such Obligor is a party, when duly executed and delivered by or on behalf of such Obligor, will constitute valid and legally binding obligations of such Obligor enforceable in accordance with the respective terms thereof and of this Agreement, except, in each case, (a) as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to or affecting the enforcement of creditors' rights generally, and by general principles of equity which may limit the right to obtain equitable remedies (regardless of whether such enforceability is a proceeding in equity or at law) and (b) as to the enforceability of provisions for indemnification for violation of applicable securities laws, limitations thereon arising as a matter of law or public policy. SECTION 6.03. Governmental Consents, Etc. No authorization, consent, approval, license or exemption of or filing or registration with any Governmental Authority, is necessary for the valid execution, delivery or performance by any Obligor of any Loan Document to which it is a party, except those that have been obtained and such matters relating to performance as would ordinarily be done in the ordinary course of business after the Execution Date. SECTION 6.04. Conflicting or Adverse Agreements or Restrictions. Neither the execution, delivery and performance by any Obligor of the Loan Documents to which it is a party, nor compliance with the terms and provisions thereof, nor the extensions of credit contemplated by the Loan Documents, (a) will breach or violate any applicable Requirement of Law, (b) will result in any breach or violation of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of its property or assets pursuant to the terms of any indenture, mortgage, deed of trust, agreement or other instrument to which it or any of its consolidated Subsidiaries is party or by which any property or asset of it or any of its consolidated Subsidiaries is bound or to which it is subject, except for breaches, violations and defaults under clauses (a) and (b) that collectively for all Obligors will not have a Material Adverse Effect or (c) will violate any provision of the organic documents of any Obligor. SECTION 6.05. Title to Assets. Each Obligor and each consolidated Subsidiary of the Bermuda Parent has good and indefeasible title to its assets, except for such defects in title as would not in the aggregate have a Material Adverse Effect. As of the Effective Date, the property of the Obligor and their Subsidiaries is subject to no Liens, except Permitted Liens and immaterial Liens. SECTION 6.06. Litigation. Except for actions, suits or proceedings described in the filings made by the U.S. Borrower or the Bermuda Parent with the Securities and Exchange Commission pursuant to the Exchange Act, as of the Effective Date there are no actions, suits or proceedings pending for which service of process has been accomplished or, to the best knowledge of any Obligor, threatened with respect to any Obligor, the Loan Documents or any transactions contemplated therein that are reasonably likely to have (individually or collectively) a Material Adverse Effect. SECTION 6.07. Information; Financial Statements. All information heretofore furnished by the U.S. Borrower and the Bermuda Parent to the Agents or any Lender in connection with this Agreement, as affected by the disclosures made herein, in the other Loan Documents and in the filings made by the U.S. Borrower and the Bermuda Parent with the Securities and Exchange Commission pursuant to the Exchange Act, did not as of the date thereof and will not as of the date of the initial Credit Event hereunder, when read together and -2- taken as a whole, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not misleading in any material respect. As of any date prior to the 2002 Merger Date, there has been no material adverse change since December 31, 1997 in the financial condition, business or operations of the U.S. Borrower and its Subsidiaries taken as a whole which could reasonably be expected to have a Material Adverse Effect. As of the 2002 Merger Date or any date thereafter, there has been no material adverse change since the 2002 Merger Date in the financial condition, business or operations of the Bermuda Parent and its Subsidiaries taken as a whole which could reasonably be expected to have a Material Adverse Effect. SECTION 6.08. Investment Company Act. Neither the Bermuda Parent nor any of its Subsidiaries is, or is regulated as an "investment company," as such term is defined in the Investment Company Act of 1940, as amended. SECTION 6.09. Public Utility Holding Company Act. Neither the Bermuda Parent nor any of its Subsidiaries is a non-exempt "holding company," or subject to regulation as such, or, to the knowledge of any Obligor's officers, an "affiliate" of a "holding company" or a "subsidiary company" of a "holding company," within the meaning of the Public Utility Holding Company Act of 1935, as amended. SECTION 6.10. ERISA. (a) The U.S. Borrower, and each ERISA Affiliate has maintained and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not reasonably be expected to have a Material Adverse Effect. Neither the U.S. Borrower nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in Section 3 of ERISA), and no event, transaction or condition has occurred or exists that would reasonably be expected to result in the incurrence of any such liability by the U.S. Borrower or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the U.S. Borrower or any ERISA Affiliate pursuant to Title I or IV of ERISA Sections 401(a)(29) or 412 of the Code, other than such liabilities or Liens as would in the aggregate reasonably be expected to have a Material Adverse Effect. (b) No accumulated funding deficiency (as defined in Section 412 of the Code or Section 302 of ERISA), in excess of $25,000,000, whether or not waived, exists or is expected to be incurred with respect to any Plan. (c) The U.S. Borrower and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that in the aggregate would reasonably be expected to have a Material Adverse Effect. -3- (d) All contributions have been timely made to all employee benefit plans, as defined in Section 3 of ERISA, except for such failures as would not reasonably be expected to have a Material Adverse Effect. SECTION 6.11. Tax Returns and Payments. Each Obligor and the Material Subsidiaries have caused to be filed all federal income tax returns and other material tax returns, statements and reports (or obtained extensions with respect thereto) which are required to be filed and have paid or deposited or made adequate provision in accordance with GAAP for the payment of all taxes (including estimated taxes shown on such returns, statements and reports) which are shown to be due pursuant to such returns, except where the failure to pay such taxes (collectively for the Obligors and the Material Subsidiaries) would not have a Material Adverse Effect. No material income tax liability of any Obligor or the Material Subsidiaries has been asserted by the Internal Revenue Service of the United States or any other Governmental Authority for any taxes in excess of those already paid, except for taxes which are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP have been created on the books of the Obligors and their Subsidiaries. SECTION 6.12. Requirements of Law; Environmental Matters. (a) The Obligors and each of their consolidated Subsidiaries are in compliance with all Requirements of Law, applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all Governmental Authorities in respect of the conduct of their business and the ownership of their property, except for such noncompliances which, in the aggregate would not have a Material Adverse Effect. (b) The U.S. Borrower monitors, in the ordinary course of its business, the effect of existing Environmental Laws, and each claim asserted against it, any other Obligor, or any of their Subsidiaries by any Governmental Authority alleging potential liability or responsibility for violation of any Environmental Law, on its business operations and properties. As a result thereof, the U.S. Borrower has reasonably concluded that such Environmental Laws and any such claims would not, in the aggregate, have a Material Adverse Effect. SECTION 6.13. Purpose of Loans. (a) All proceeds of the Loans and Bankers' Acceptances will be used by a Borrower for the purposes set forth in Section 2.08. (b) None of the proceeds of the Loans under the 1998 Chase Credit Agreement or this Agreement were or will be used directly or indirectly for the purpose of buying or carrying any "margin stock" within the meaning of Regulation G or Regulation U (herein called "margin stock") or for the purpose of reducing or retiring any indebtedness (including the indebtedness repaid with the proceeds of the loans made under the 1998 Chase Credit Agreement) which was originally incurred to buy or carry a margin stock, or for any other purpose which might constitute this transaction a "purpose" credit within the meaning of Regulation G or Regulation U. Neither any Obligor nor any agent acting on its behalf has taken or will take any action which might cause this Agreement or any other Loan Document to violate -4- Regulation G, T, U or X, or any other regulation of the Board or to violate the Exchange Act. Margin stock did not on the Execution Date, and does not constitute more than 25% of the assets of the U.S. Borrower or any other Obligor. SECTION 6.14. Designation of this Agreement and the Obligations. The Indebtedness evidenced by this Agreement constitutes a refinancing of the 1996 Chase Credit Agreement which was subsequently refinanced by the 1998 Chase Credit Agreement. This Agreement constitutes the "principal bank credit agreement" of the U.S. Borrower, and the Obligations hereunder and under the other Loan Documents constitute "Designated Senior Indebtedness" as such phrases are used in the Debenture Indenture. SECTION 6.15. Year 2000 Compliance. The U.S. Borrower has developed a plan to ensure that the systems of the U.S. Borrower and its Material Subsidiaries are compliant with the requirements to process transactions in the year 2000. The U.S. Borrower and its Material Subsidiaries plan to achieve year 2000 compliance through a combination of upgrading to new releases of existing software and replacement of existing software with new fully compliant systems by mid-1999. The expenses and capital expenditures of the U.S. Borrower and its Material Subsidiaries associated with achieving year 2000 compliance would not reasonably be expected to have a Material Adverse Effect. The U.S. Borrower and its Material Subsidiaries are currently gathering information from their key suppliers, vendors and financial institutions regarding year 2000 compliance. -5- EXHIBIT B ARTICLE VII AFFIRMATIVE COVENANTS Each Obligor covenants and agrees for itself, and each of the U.S. Borrower and the Bermuda Parent covenants and agrees with respect to the Canadian Borrower and each of the other Obligors, that prior to the termination of this Agreement it will duly and faithfully perform, and cause its respective Subsidiaries to perform, each and all of the following covenants: SECTION 7.01. Information Covenants. Each of the Bermuda Parent and the U.S. Borrower will furnish or cause to be furnished to the Agents and each Lender: (a) As soon as available, and in any event within 60 days after the end of each of the first three quarterly accounting periods in each fiscal year the Form 10-Q, or its equivalent, of the U.S. Borrower or Bermuda Parent, as applicable. (b) As soon as available, and in any event within 120 days after the close of each fiscal year, the Form 10-K, or its equivalent, of the U.S. Borrower or Bermuda Parent, as applicable for such fiscal year and certified by Ernst & Young LLP or other independent certified public accountants of recognized national standing reasonably acceptable to the Agents and the Majority Lenders, whose certification shall be without qualification or limitation. (c) As soon as available, and in any event within 120 days after the close of each fiscal year, the consolidated balance sheet of the Canadian Borrower and its consolidated Subsidiaries as at the end of such fiscal year and the related consolidated unaudited statement of income, retained earnings and cash flows for such fiscal year, and setting forth, in each case, comparative consolidated figures for the prior fiscal year, all of which shall be certified by a Responsible Officer of the Canadian Borrower. (d) Promptly upon the mailing thereof to the shareholders of the Bermuda Parent generally, copies of all financial statements, reports and proxy statements so mailed and copies of all press releases. (e) Promptly, and in any event within ten Business Days after any Responsible Officer of any Obligor obtains knowledge of (i) any event or condition which would reasonably be expected to have a Material Adverse Effect; or (ii) any event or condition which constitutes a Default or an Event of Default; or (iii) the occurrence of a Change of Control or Change of Control Event; a notice of such event or condition, specifying the nature thereof. (f) At the time of the delivery of the financial statements provided for (i) in Sections 7.01(a) and (b), a certificate of a Responsible Officer of the U.S. Borrower and/or the Bermuda Parent, as applicable, in the form of Exhibit 7.01 to the effect that no Default or Event of Default exists or, if any Default or Event of Default does exist, specifying the nature and extent thereof, which certificate shall also set forth calculations required to establish whether the U.S. Borrower and/or the Bermuda Parent, as applicable, was in compliance with the provisions of Article VIII as at the end of such fiscal quarter or fiscal year, as the case may be and (ii) in Section 7.01(b), to the extent there has been any change in the information previously furnished to the Agents and the Lenders on Schedule 6.01, a revised Schedule 6.01. (g) At the time of the delivery of the financial statements provided for in Section 7.01(c), a certificate of a Responsible Officer of the Canadian Borrower to the effect that no Default or Event of Default exists with respect to the Canadian Borrower or, if any such Default or Event of Default does exist, specifying the nature and extent thereof and the action that is being taken or that is proposed to be taken with respect thereto. (h) Promptly, and in any event within 30 days after any Responsible Officer of any Obligor obtains knowledge thereof, notice: (i) of the occurrence or expected occurrence of any material Reportable Event with respect to any Plan, a failure to make any material required contribution to a Plan, any Lien in favor of the PBGC or a Plan, or any withdrawal from, or the termination, reorganization or insolvency (within the meaning of such terms as used in ERISA) of any Multiemployer Plan, or (ii) of the institution of proceedings or the taking of any other action by the PBGC or the U.S. Borrower or any ERISA Affiliate or any Multiemployer Plan with respect to the withdrawal from, or the terminating, reorganization or insolvency (within the meaning of such terms as used in ERISA) of, any Plan which termination, reorganization or insolvency would reasonably be expected to have a Material Adverse Effect, except that no notice shall be required with respect to the merger of a defined contribution plan of one ERISA Affiliate into a defined contribution plan of another ERISA Affiliate. -2- (i) From time to time and with reasonable promptness, such other information or documents (financial or otherwise) with respect to the Bermuda Parent, the U.S. Borrower or any of their Subsidiaries as either Agent or any Lender through the applicable Agent may reasonably request. SECTION 7.02. Books, Records and Inspections. Each Obligor will permit, or cause to be permitted, any Lender, upon written notice, to visit and inspect any of the properties of each of the Bermuda Parent and the U.S. Borrower and their Subsidiaries, to examine the corporate books and financial records of each of the Bermuda Parent and the U.S. Borrower and their Subsidiaries and to discuss the affairs, finances and accounts of any such entities with a Responsible Officer of each of the Bermuda Parent and the U.S. Borrower and such Subsidiaries, all at such reasonable times and as often as such Lender(s), through the applicable Agent, may reasonably request. SECTION 7.03. Insurance and Maintenance of Properties. The Obligors will maintain or cause to be maintained, with financially sound and reputable insurers, insurance with respect to its property and business against such liabilities, casualties, risks and contingencies (including business interruption insurance) and in such types and amounts as is customary in the case of Persons engaged in the same or similar businesses and similarly situated. SECTION 7.04. Payment of Taxes and other Claims. Each Obligor will, and will cause each of the Material Subsidiaries to, pay or discharge or cause to be paid or discharged, before the same shall become delinquent, all taxes, assessments and governmental charges levied or imposed upon such Obligor or such Material Subsidiary or upon the income, profits or property of such Obligor or such Material Subsidiary except for (i) such taxes, assessments as would not, individually or in the aggregate, have a Material Adverse Effect and (ii) any such tax, assessment or governmental charge whose amount, applicability or validity is being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP. SECTION 7.05. Existence. Except as expressly permitted pursuant to Section 8.02, each Obligor will do all things necessary to preserve and keep in full force and effect the corporate, partnership or other existence, rights and franchises of such Obligor. SECTION 7.06. ERISA Information and Compliance. Except with respect to matters described in clauses (a), (c) and (d) below which would not reasonably be expected to have a Material Adverse Effect, promptly furnish to Agents: (a) immediately upon receipt, a copy of any notice of complete or partial withdrawal liability under ERISA and any notice from the PBGC under ERISA of an intent to terminate or appoint a trustee to administer any Plan, (b) if requested by either Agent, promptly after the filing thereof with the United States Secretary of Labor or the PBGC or the Internal Revenue Service or any Governmental Authority having jurisdiction under Canadian Pension Legislation, copies of each annual and other report with respect to each Plan or any trust created thereunder, (c) immediately upon becoming aware of the -3- occurrence of any Reportable Event, or of any "prohibited transaction", as such term is defined in Section 4975 of the Code, in connection with any Plan or any trust created thereunder, a written notice signed by a Responsible Officer of the applicable Borrower or the applicable ERISA Affiliate specifying the nature thereof, what action the applicable Borrower or the applicable ERISA Affiliate is taking or proposes to take with respect thereto, and, when known, any action taken by the PBGC, the Internal Revenue Service, the Department of Labor or any other applicable Governmental Authority with respect thereto, (d) promptly after the filing or receiving thereof by either Borrower or any ERISA Affiliate, any notice of the institution of any proceedings or other actions which may result in the termination of any Plan, and (e) each request for waiver of the funding standards or extension of the amortization periods required by ERISA or Section 412 of the Code or Canadian Pension Legislation promptly after the request is submitted by Borrower or any ERISA Affiliate to the Secretary of the Treasury, the Department of Labor, the Internal Revenue Service or any other applicable Governmental Authority. Each Borrower covenants that it shall and shall cause each ERISA Affiliate to comply, with respect to each Plan and Multiemployer Plan, with all applicable provisions of ERISA, the Code and Canadian Pension Legislation, except to the extent that any failure to comply would not reasonably be expected to have a Material Adverse Effect. SECTION 7.07. Capital Adequacy. If any Lender shall have determined that the adoption after the Effective Date or effectiveness after the Effective Date (whether or not previously announced) of any applicable law, rule, regulation or treaty regarding capital adequacy, or any change therein after the Effective Date, or any change in the interpretation or administration thereof after the Effective Date by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender with any request or directive after the Effective Date regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency has or would have the effect of reducing the rate of return on such Lender's capital as a consequence of its obligations hereunder, under the Letters of Credit, the Notes or other Obligations held by it to a level below that which such Lender could have achieved but for such adoption, change or compliance (taking into consideration such Lender's policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, upon satisfaction of the conditions precedent set forth in this Section, after demand by such Lender (with a copy to the appropriate Agent) as provided below, pay (subject to Section 12.18) to such Lender such additional amount or amounts as will compensate such Lender for such reduction. The certificate of any Lender setting forth such amount or amounts as shall be necessary to compensate it and the basis thereof and reasons therefor shall be delivered as soon as practicable to the U.S. Borrower or the Canadian Borrower, as the case may be, and shall be presumed correct, absent manifest error. The U.S. Borrower or the Canadian Borrower, as the case may be, shall pay the amount shown as due on any such certificate within forty-five (45) Business Days after the delivery of such certificate. In preparing such certificate, a Lender may employ such assumptions and allocations of costs and expenses as it shall in good faith deem reasonable and may use any reasonable averaging and attribution method. SECTION 7.08. Subsidiaries. The Bermuda Parent covenants that the Subsidiaries identified on Schedule 6.01 are the only Material Subsidiaries as of the Execution -4- Date. Should any Subsidiary, subsequent to the date hereof, become a Material Subsidiary, the Bermuda Parent shall deliver to the Agents and the Lenders a revised Schedule 6.01 as provided in Section 7.01(f). -5- EXHIBIT C ARTICLE VIII NEGATIVE COVENANTS Each of the Bermuda Parent, the U.S. Borrower and the Canadian Borrower covenants and agrees with the Agents and the Lenders that prior to the termination of this Agreement it will duly and faithfully perform, and cause its respective Subsidiaries to perform, each and all of the following covenants: SECTION 8.01. Material Change in Business. The Bermuda Parent will not, and will not permit its Material Subsidiaries to, engage in any material business substantially different from those carried on by the U.S. Borrower and its consolidated Subsidiaries taken as a whole on the date hereof. SECTION 8.02. Consolidation, Merger, Sale or Purchase of Assets, Etc. The Bermuda Parent will not, and will not permit any other Obligor to, wind up, liquidate or dissolve its affairs, or effect any merger or consolidation, and the Bermuda Parent will not, and will not permit any consolidated Subsidiary to, sell, lease or otherwise dispose of all or substantially all of its property or assets (other than sales of inventory in the ordinary course of business) except that this Section 8.02 shall not prohibit any of the following transactions, or any agreement to effect the same: (a) if, at the time thereof and immediately after giving effect thereto, no Event of Default or Default shall have occurred and be continuing, the merger of any other Person with and into the Bermuda Parent or any of its Subsidiaries, if, (i) in any transaction involving the Bermuda Parent or the U.S. Borrower, the Bermuda Parent or the U.S. Borrower, as applicable, is the surviving Person; (ii) in any transaction involving the Canadian Borrower, the Canadian Borrower is the surviving entity, or (iii) in any other transaction, a Wholly-Owned Subsidiary is the surviving entity and the Bermuda Parent, the U.S. Borrower and their Subsidiaries shall be in compliance, on a pro forma basis after giving effect to such transaction, with the covenants contained in this Article VIII recomputed as of the last day of the most recently ended fiscal quarter of the Bermuda Parent, the U.S. Borrower and their Subsidiaries as if such transaction had occurred on the first day of each relevant period for testing such compliance, and the U.S. Borrower (with respect to any merger with a Person not a consolidated Subsidiary of the Bermuda Parent) shall have delivered to the Agents an officer's certificate to such effect, together with all relevant financial information and calculations demonstrating such compliance; (b) transactions and transfers of assets among or between Obligors and/or Wholly-Owned Subsidiaries or among and between Wholly-Owned Subsidiaries, in each case, not prohibited by Section 8.07; and (c) dispositions not otherwise permitted hereunder which are made for fair market value; provided that (i) at the time of any disposition, no Default or Event of Default shall exist or shall result from such disposition, (ii) the aggregate sales price from such disposition shall be paid in cash or otherwise on payment terms satisfactory to the applicable Obligor or Subsidiary, and (iii) the aggregate book value of all assets of the Bermuda Parent and its Subsidiaries, taken as a whole, shall not be reduced at any time to an amount which is less than 80% of the aggregate book value of all assets of the U.S. Borrower, the Canadian Borrower and their Subsidiaries, taken as a whole, on March 31, 1998, as reflected on the U.S. Borrower's pro forma balance sheet dated March 31, 1998. SECTION 8.03. Liens. Each of the Bermuda Parent and the Borrowers will not, and will not permit any of their respective Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to any property or assets of any kind (real or personal, tangible or intangible) of any Obligor or any such Subsidiary whether now owned or hereafter acquired, except Permitted Liens. SECTION 8.04. Indebtedness. (a) Each of the Bermuda Parent and the Borrowers will not create, incur or assume, or permit any of their respective Subsidiaries to create, incur or assume any Indebtedness, unless each of the Bermuda Parent, the U.S. Borrower and their Subsidiaries shall be in compliance, on a pro forma basis after giving effect to such transactions, with the covenants contained in this Article VIII recomputed as of the last day of the most recently ended fiscal quarter of each of the Bermuda Parent, the U.S. Borrower and their Subsidiaries as if the transaction in question had occurred on the first day of each relevant period for testing such compliance. (b) Notwithstanding Section 8.04(a), the aggregate principal amount of all Indebtedness of all foreign Subsidiaries (other than the Canadian Borrower) at any time outstanding to any Person other than the U. S. Borrower and the Subsidiaries shall not exceed 12% of the Bermuda Parent's Net Worth at such time. SECTION 8.05. Ownership of Obligors. The Bermuda Parent shall not at any time cease to own, beneficially and of record, directly or indirectly, 100% of the Capital Stock or other equity interest (except for directors' qualifying shares) of the U.S. Borrower and U.S. Holdings. The U.S. Borrower shall not at any time cease to own, beneficially and of record, directly or indirectly, 100% of the Capital Stock (except for director's qualifying shares) of the Canadian Borrower. SECTION 8.06. Financial Covenants. (a) The Bermuda Parent will not permit its Consolidated Indebtedness to exceed 50% of its Total Capitalization at the end of any fiscal quarter. -2- (b) The Bermuda Parent will not permit its Interest Coverage Ratio at the end of any fiscal quarter to be less than 3.0 to 1.0. SECTION 8.07. Limitation on Transactions with Affiliates. Each of the Bermuda Parent and the U.S. Borrower will not, and will not permit any of their consolidated Subsidiaries to, directly or indirectly, conduct any business or enter into, renew, extend or permit to exist any transaction (including the purchase, sale, lease or exchange of any assets or the rendering of any service) or series of related transactions with any Person who is not either (i) a Borrower or one of the Bermuda Parent's consolidated Subsidiaries or (ii) Weatherford\Al-Rushaid Limited or Weatherford Saudi Arabia Limited, on terms that are less favorable to the Bermuda Parent or such consolidated Subsidiary, as the case may be, than would be available in a comparable arm's length transaction. Notwithstanding the foregoing, the restrictions set forth in this covenant will not apply to (i) the payment of reasonable and customary regular fees to directors of the Bermuda Parent or the U.S. Borrower who are not employees of the Bermuda Parent or the U.S. Borrower; (ii) loans and advances to officers, directors and employees of the Bermuda Parent or the U.S. Borrower and their respective Subsidiaries for travel, entertainment and moving and other relocation expenses made in direct furtherance and in the ordinary course of business of the Bermuda Parent, the U.S. Borrower and their respective Subsidiaries; (iii) any other transaction with any employee, officer or director of the Bermuda Parent, the U.S. Borrower or any of their respective Subsidiaries pursuant to employee benefit or compensation arrangements entered into in the ordinary course of business and approved by, as applicable, the Board of Directors of the Bermuda Parent, the Board of Directors of the U.S. Borrower, or the Board of Directors of such Subsidiary permitted by this Agreement; and (iv) customary underwriting or similar transactions with an investment banking Affiliate. SECTION 8.08. Restrictions on Subsidiary Dividends. Each of the Bermuda Parent and the U.S. Borrower will not and will not permit any of its consolidated Subsidiaries to enter into any agreement or contract which limits or restricts in any way the payment of any dividends or distributions by any consolidated Subsidiary of any Obligor to such Obligor or to another consolidated Subsidiary of such Obligor. SECTION 8.09. Debentures. Except as expressly permitted in writing by the Majority Lenders, no Obligor will amend, modify or obtain or grant a waiver of any provision of the Debentures or the Debenture Indenture with respect to the Debentures if such amendment, modification or waiver would be adverse to the Lenders. SECTION 8.10. The Debenture Indenture. No Obligor will take any action that could result in this Agreement failing to be the U.S. Borrower's "principal bank credit agreement" (as such phrase is used in the Debenture Indenture). -3- EXHIBIT D ARTICLE IX EVENTS OF DEFAULT AND REMEDIES SECTION 9.01. Events of Default and Remedies. If any of the following events ("Events of Default") shall occur and be continuing: (a) (i) any installment of principal on any Note or any Reimbursement Obligation shall not be paid on the date on which such payment is due, or (ii) any payment of interest on any such Note or Reimbursement Obligation or any other amount due hereunder or any other Loan Document shall not be paid within five calendar days following the date on which such payment of interest or such other amount is due; or (b) any representation or warranty made or, for purposes of Article V, deemed made by or on behalf of any Obligor herein, at the direction of any Obligor or by any Obligor in any other Loan Document or in any document, certificate or financial statement delivered in connection with this Agreement or any other Loan Document shall prove to have been incorrect in any material respect when made or deemed made or reaffirmed, as the case may be; or (c) any Obligor shall fail to perform or observe any covenant contained in Article VIII or fails to give any notice required by Section 7.01(e); or (d) any Obligor shall fail to perform or observe any other term, covenant or agreement contained in this Agreement (other than those specified in Section 9.01(a), Section 9.01(b) or Section 9.01(c)) or any other Loan Document to which it is a party and, in any event, such failure shall remain unremedied for 30 calendar days after the earlier of (i) written notice of such failure shall have been given to a Responsible Officer of the U.S. Borrower by either Agent or any Lender or, (ii) a Responsible Officer of any Obligor becomes aware of such failure; or (e) the Bermuda Parent or any Material Subsidiary (i) fails to make (whether as primary obligor or as guarantor or other surety) any principal payment of or interest or premium, if any, on any Indebtedness or the Debentures (other than the Obligations) beyond any period of grace provided with respect thereto (not to exceed 30 days), provided that the aggregate amount of all Indebtedness as to which such a payment default shall occur and be continuing is equal to or exceeds $25,000,000, or (ii) fails to duly observe, perform or comply with any agreement with any Person or any term or condition of any instrument, if such failure, either individually or in the aggregate, shall have caused or shall have the ability to cause the acceleration of the payment of Indebtedness with an aggregate face amount which is equal to or exceeds $25,000,000; or (f) the entry by a court having jurisdiction in the premises of (i) a decree or order for relief in respect of the Bermuda Parent, the U.S. Borrower or any Material Subsidiary in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or (ii) a decree or order adjudging the Bermuda Parent, the U.S. Borrower or any Material Subsidiary bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Bermuda Parent, the U.S. Borrower or any Material Subsidiary under any applicable federal, state or foreign law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Bermuda Parent, the U.S. Borrower or any Material Subsidiary of any substantial part of its property, or ordering the winding up or liquidation of its affairs, the continuance of any such decree or order for relief or any such other decree or order that shall be unstayed and in effect for a period of 60 consecutive days; or (g) the commencement by the Bermuda Parent, the U.S. Borrower or any Material Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by the Bermuda Parent, the U.S. Borrower or any Material Subsidiary to the entry of a decree or order for relief in respect of the Bermuda Parent, the U.S. Borrower or such Material Subsidiary in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by the Bermuda parent, the U.S. Borrower or any Material Subsidiary of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign law, or the consent by the Bermuda Parent, the U.S. Borrower or any Material Subsidiary to the filing of such petition or the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Bermuda Parent, the U.S. Borrower or such Material Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the consent to, approval of or the admission by the Bermuda Parent, the U.S. Borrower or any Material Subsidiary in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Bermuda Parent, the U.S. Borrower or any Material Subsidiary in furtherance of any such action; or (h) there shall be commenced against the Bermuda Parent, the U.S. Borrower or any Material Subsidiary any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against the assets of the Bermuda Parent, the U.S. Borrower or any Material Subsidiaries which equals or exceeds $25,000,000 in value and which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (i) any Loan Document shall (other than with the consent of the Agents and the Lenders), at any time after its execution and delivery and for any reason, cease to be in full force and effect in any material respect, or shall be declared to be null and void, or the validity or -2- enforceability thereof shall be contested by any Obligor or any Obligor shall deny that it has any or further liability or obligation thereunder; or (j) any Plan shall incur an "accumulated funding deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA) which (individually or collectively) exceeds $25,000,000, whether or not waived, or a waiver of the minimum funding standard or extension of any amortization period is sought or granted under Section 412 of the Code with respect to a Plan; any proceeding shall have occurred or is reasonably likely to occur by the PBGC under Section 4069(a) of ERISA to impose liability on the U.S. Borrower, any consolidated Subsidiary or an ERISA Affiliate which (individually or collectively) exceeds $25,000,000; any required contribution to a Plan or Multiemployer Plan in excess of $25,000,000 shall not have been made within 15 days of the date such contribution is due; or the U.S. Borrower, any consolidated Subsidiary or any ERISA Affiliate has incurred or is reasonably likely to incur a liability to or on account of a Plan or Multiemployer Plan under Section 515, 4062, 4063, 4064, 4201 or 4204 of ERISA, and there shall result (individually or collectively) from any such event or events a material risk of either (i) the imposition of a Lien(s) upon, or the granting of a security interest(s) in, the assets of the U.S. Borrower, any consolidated Subsidiary and/or an ERISA Affiliate securing an amount(s) equal to or exceeding $25,000,000, or (ii) the U.S. Borrower, any consolidated Subsidiary and/or an ERISA Affiliate incurring a liability(ies) or obligation(s) with respect thereto equal to or exceeding $25,000,000; or (k) a judgment or order shall be entered against the Bermuda Parent, the U.S. Borrower or any Material Subsidiary, which with other outstanding judgments and orders entered against the U.S. Borrower and the Material Subsidiaries equals or exceeds $25,000,000 in the aggregate (to the extent not covered by insurance as to which the respective insurer has acknowledged coverage), and (i) within 60 days after entry thereof such judgment shall not have been discharged or execution thereof stayed pending appeal or, within 60 days after the expiration of any such stay, such judgment shall not have been discharged, or (ii) any enforcement proceeding shall have been commenced (and not stayed) by any creditor upon such judgment; then, in any such event, and at any time thereafter if any Event of Default shall then be continuing, the U.S. Administrative Agent (or in the case of clause (iii) below, the Canadian Agent) may (and at the direction of the Majority Lenders, shall) do any or all of the following: (i) without notice to the U.S. Borrower, the Canadian Borrower or any other Person, declare the U.S. Commitments and the Canadian Commitments terminated (whereupon the U.S. Commitments and the Canadian Commitments shall be terminated) and/or accelerate the Termination Date to a date as early as the date of termination of the Commitments; (ii) terminate any Letter of Credit allowing for such termination, by sending a notice of termination as provided therein and require the applicable Borrower to -3- provide Cover for outstanding Letters of Credit, and each Borrower agrees to provide such Cover; (iii) require the Canadian Borrower to provide Cover for all outstanding Bankers Acceptance Liabilities, and the Canadian Borrower agrees to provide such Cover; (iv) declare the principal amount then outstanding of and the unpaid accrued interest on the Loans and Reimbursement Obligations and all fees and all other amounts payable hereunder, under the Notes and under the other Loan Documents to be forthwith due and payable, whereupon such amounts shall be and become immediately due and payable, without notice (including notice of acceleration and notice of intent to accelerate), presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by the U.S. Borrower and the Canadian Borrower; provided, that in the case of the occurrence of an Event of Default with respect to any Obligor referred to in Section 9.01(f) or Section 9.01(g), the Commitments shall be automatically terminated and the principal amount then outstanding of and unpaid accrued interest on the Loans and the Reimbursement Obligations and all fees and all other amounts payable hereunder, under the Notes and under the other Loan Documents shall be and become automatically and immediately due and payable, without notice (including notice of acceleration and notice of intent to accelerate), presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by the U.S. Borrower and the Canadian Borrower; (v) increase the interest rate on all amounts then outstanding and the rate of all fees due in respect of Letters of Credit to the Past Due Rate; and (vi) exercise any or all other rights and remedies available to either Agent or any Lenders under the Loan Documents, at law or in equity. SECTION 9.02. Right of Setoff. Upon the occurrence and during the continuance of any Event of Default, each Lender is hereby authorized at any time and from time to time, without notice to any Obligor (any such notice being expressly waived by each Obligor), to setoff and apply any and all deposits (general or special, time or demand, provisional or final but excluding the funds held in accounts clearly designated as escrow or trust accounts held by any Obligor for the benefit of Persons which are not Affiliates of any Obligor), whether or not such setoff results in any loss of interest or other penalty, and including without limitation all certificates of deposit, at any time held, and any other funds or property at any time held, and other indebtedness at any time owing by such Lender to or for the credit or the account of any Obligor against any and all of the Obligations irrespective of whether or not such Lender or either Agent will have made any demand under this Agreement, the Notes or any other Loan Document. Should the right of any Lender to realize funds in any manner set forth hereinabove be challenged and any application of such funds be reversed, whether by court order or -4- otherwise, the Lenders shall make restitution or refund to the applicable Obligor, as the case may be, pro rata in accordance with their U.S. Commitments or the Canadian Commitments, as the case may be. Each Lender agrees to promptly notify the U.S. Borrower, the Canadian Borrower and the Agents after any such setoff and application, provided that the failure to give such notice will not affect the validity of such setoff and application. The rights of Agents and the Lenders under this Section are in addition to other rights and remedies (including without limitation other rights of setoff) which the Agents or the Lenders may have. This Section is subject to the terms and provisions of Section 4.05 and Section 12.18. Any amounts realized under this Section 9.02 which constitute an asset of the Canadian Borrower shall only be applied to the payment of the Canadian Obligations. SECTION 9.03. Preservation of Security for Unmatured Obligations. In the event that, following (a) the occurrence of an Event of Default and the exercise of any rights available to either Agent or any Lender under the Loan Documents, and (b) payment in full of the principal amount then outstanding of and the accrued interest on the Loans and Reimbursement Obligations and fees and all other amounts payable hereunder and under the Loan Documents and any Letters of Credit or Bankers' Acceptances shall remain outstanding and undrawn upon, the applicable Agent shall be entitled to hold (and each Borrower and each other Obligor hereby grants and conveys to each Agent a security interest in and to) all cash or other proceeds realized or arising out of the exercise of any rights available under the Loan Documents, at law or in equity, including, without limitation, the proceeds of any foreclosure, as collateral for the payment of any amounts due or to become due under or in respect of such Letters of Credit and/or such Bankers' Acceptances. Such proceeds shall be held for the ratable benefit of the U.S. Lenders or the Canadian Lenders, as the case may be. The rights, titles, benefits, privileges, duties and obligations of the applicable Agent with respect thereto shall be governed by the terms and provisions of this Agreement. The applicable Agent may, but shall have no obligation to, invest any such proceeds in such manner as such Agent, in the exercise of its sole discretion, deems appropriate. Such proceeds shall be applied to Reimbursement Obligations arising in respect of any such Letters of Credit, the payment of any Lender's obligations under any such Letter of Credit and/or the Obligations relating to any such Bankers' Acceptance when such Letter of Credit is drawn upon or such Bankers' Acceptance matures, as the case may be. Nothing in this Section shall cause or permit an increase in the maximum amount of the Obligations permitted to be outstanding from time to time under this Agreement. Any amounts realized under this Section 9.03 which constitute an asset of the Canadian Borrower shall only be applied to the payment of the Canadian Obligations. SECTION 9.04. Other Remedies. No remedy conferred herein or in any of the other Loan Documents is to be exclusive of any other remedy, and each and every remedy contained herein or in any other Loan Document shall be cumulative and shall be in addition to every other remedy given hereunder and under the other Loan Documents now or hereafter existing at law or in equity or by statute or otherwise. SECTION 9.05. Currency Conversion After Maturity. At any time following the occurrence of an Event of Default and the acceleration of the maturity of the Obligations owed to -5- the Canadian Lenders hereunder, the Canadian Lenders shall be entitled to convert, with two (2) Business Days' prior notice to the Canadian Borrower, any and all or any part of the then unpaid and outstanding LIBOR Borrowings and Base Rate Borrowings of the Canadian Borrower to Canadian Prime Loans. Any such conversion shall be calculated so that the resulting Canadian Prime Loans shall be the equivalent on the date of conversion of the amount of Dollars so converted. Any accrued and unpaid interest denominated in Dollars at the time of any such conversion shall be similarly converted to Canadian Dollars, and such Canadian Prime Loans and accrued and unpaid interest thereon shall thereafter bear interest in accordance with the terms hereof. SECTION 9.06. Application of Moneys During Continuation of Event of Default. (a) So long as an Event of Default of which the Agent shall have given notice to the Lenders shall continue, all moneys received by the Agent (i) from any Obligor under the Loan Documents shall, except as otherwise required by law, be distributed by the Agent on the dates selected by the Agent as follows: first, to payment of the unreimbursed expenses for which either Agent or any Lender is to be reimbursed pursuant to Section 13.03 and to any unpaid fees owing to the Agents; second, to the ratable payment of accrued but unpaid interest on the Obligations; third, to the ratable payment of unpaid principal of the Obligations; fourth, to the ratable payment of all other amounts payable by the Obligors hereunder; fifth, to the ratable payment of all other Obligations, until all Obligations shall have been paid in full; and finally, to payment to the Obligors, or their respective successors or assigns, or as a court of competent jurisdiction may direct, of any surplus then remaining from such proceeds. (b) The term "unpaid" as used in this Section 9.06 shall mean all Obligations outstanding as of any such distribution date (including any amounts unpaid under clause (v) of the last sentence of Section 9.01) as to which prior distributions have not been made, after giving effect to any adjustments which are made pursuant to Section 9.02 of which the Agents shall have been notified. -6- EXHIBIT E ARTICLE XI GUARANTY SECTION 11.01 Guaranty. (a) In consideration of, and in order to induce (i) the Canadian Lenders to make Canadian Loans to, and to accept and purchase Bankers' Acceptances from, the Canadian Borrower, (ii) the issuance of Letters of Credit for the account of any Borrower and (iii) the U.S. Lenders to make U.S. Loans to the U.S. Borrower, the Guarantors hereby absolutely, unconditionally and irrevocably guarantee in favor of all of the Lenders, the punctual payment and performance when due, whether at stated maturity, by acceleration or otherwise, of the Borrower Obligations and all covenants of the Borrowers, now or hereafter existing under this Agreement and the other Loan Documents to which any Borrower is a party, whether for principal, interest (including interest accruing or becoming owing both prior to and subsequent to the commencement of any proceeding against or with respect to such Borrower under any applicable Bankruptcy Code, fees, commissions, expenses (including reasonable attorneys' fees and expenses) or otherwise (all such obligations being the "Guaranteed Obligations"). Each of the Guarantors agrees to pay any and all expenses incurred by each Lender and each Agent in enforcing this Guaranty against any of the Guarantors. (b) This Guaranty is an absolute, unconditional, present and continuing guaranty of payment and not of collectibility and is in no way conditioned upon any attempt to collect from any Obligor or any other action, occurrence or circumstance whatsoever. SECTION 11.02. Continuing Guaranty. (a) Each Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of this Agreement and the other Loan Documents. Each Guarantor agrees that, to the maximum extent permitted by applicable law, the Guaranteed Obligations and Loan Documents to which any Borrower is a party may be extended or renewed, and indebtedness thereunder repaid and reborrowed in whole or in part, without notice to or assent by any of the Guarantors, and that each Guarantor will remain bound upon this Guaranty notwithstanding any extension, renewal or other alteration of the Guaranteed Obligations or such Loan Documents, or any repayment and reborrowing of Loans to any Borrower, or the expiration of the Letters of Credit. The obligations of each Guarantor under this Guaranty are joint and several and absolute and unconditional irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of the other Guarantors under this Agreement or any other Loan Document or any substitution, release or exchange of any other guarantee of or security for the Obligations. To the maximum extent permitted by applicable law, except as otherwise expressly provided in this Agreement or any other Loan Document to which any Guarantor is a party, the obligations of each Guarantor under this Guaranty shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms hereof under any circumstances whatsoever, including: (i) any modification, amendment, supplement, renewal, extension for any period, increase, decrease, alteration or rearrangement of all or any part of the Guaranteed Obligations, or of this Agreement or any other Loan Document executed in connection herewith, or any contract or understanding among the Bermuda Parent, U.S. Holdings, U.S. Borrower, the Canadian Borrower, either Agent and/or the Lenders, or any other Person, pertaining to the Guaranteed Obligations; (ii) any adjustment, indulgence, forbearance or compromise that might be granted or given by the Lenders to any Guarantor, any Obligor, or any other Person liable on the Guaranteed Obligations; (iii) the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of any Guarantor, the U.S. Borrower, the Canadian Borrower or any other Person at any time liable for the payment of all or part of the Guaranteed Obligations; or any dissolution of any Guarantor or any Borrower or any sale, lease or transfer of any or all of the assets of any Guarantor or any Borrower, or any changes in the shareholders of any Guarantor or any Borrower, or any reorganization of any Guarantor or any Borrower; (iv) the invalidity, illegality or unenforceability of all or any part of the Guaranteed Obligations, or any document or agreement executed in connection with the Guaranteed Obligations, for any reason whatsoever, including the fact that (A) the Guaranteed Obligations, or any part thereof, exceeds the amount permitted by law, (B) the act of creating the Guaranteed Obligations or any part thereof is ultra vires, (C) the officers or representatives executing the documents or otherwise creating the Guaranteed Obligations acted in excess of their authority, (D) the Guaranteed Obligations or any part thereof violate applicable usury laws, (E) any Guarantor or any Borrower has valid defenses, claims and offsets (whether at law or in equity, by agreement or by statute) which render the Guaranteed Obligations wholly or partially uncollectible from any Guarantor or any Borrower, (F) the creation, performance or repayment of the Guaranteed Obligations (or execution, delivery and performance of any document or instrument representing part of the Guaranteed Obligations or executed in connection with the Guaranteed Obligations, or given to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible, legally impossible or unenforceable, or (G) this Agreement, any other Loan Document, or any other document or instrument pertaining to the Guaranteed Obligations has been forged or otherwise is irregular or not genuine or authentic; (v) any full or partial release of the liability of any Guarantor or any Borrower on the Guaranteed Obligations or any part thereof, or any other Person now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations or any part thereof; it being recognized, acknowledged and agreed by each Guarantor that such Guarantor may be required to pay the Guaranteed Obligations in full without assistance or support of any other Person, and that such Guarantor has not been induced to enter into this Guaranty on the basis of a contemplation, belief, understanding or agreement that any other Person will be liable to perform the Guaranteed Obligations, or that any Agent or any Lender will look to any other Person to perform the Guaranteed Obligations; (vi) the taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or any part of the Guaranteed Obligations; -2- (vii) any release, surrender, exchange, subordination, deterioration, waste, loss or impairment of any collateral, property or security, at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations; (viii) the failure of either Agent, the Lenders or any other Person to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral, property or security; (ix) the fact that any collateral, security or Lien contemplated or intended to be given, created or granted as security for the repayment of the Guaranteed Obligations shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other Lien; it being recognized and agreed by each Guarantor that such Guarantor is not entering into this Guaranty in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectibility or value of any of the collateral for the Guaranteed Obligations; (x) any payment by any Borrower or any Guarantor to either Agent or any Lender is held to constitute a preference under bankruptcy laws, or for any other reason either an Agent or any Lender is required to refund such payment or pay such amount to such Borrower, such Guarantor, or any other Person; or (xi) any other action taken or omitted to be taken with respect to this Agreement, any other Loan Document, the Guaranteed Obligations, or the security and collateral therefor, whether or not such action or omission prejudices the Guarantors or increases the likelihood that the Guarantors will be required to pay the Guaranteed Obligations pursuant to the terms hereof; it being the unambiguous and unequivocal intention of each Guarantor that such Guarantor shall be obligated to pay the Guaranteed Obligations when due, notwithstanding any occurrence, circumstance, event, action, or omission whatsoever, whether contemplated or uncontemplated, and whether or not otherwise or particularly described herein, except for the full and final payment and satisfaction of the Guaranteed Obligations after the termination of all of the Commitments and the expiration or termination of the Letters of Credit. (b) Each Guarantor further agrees that, to the fullest extent permitted by law, as between any of the Guarantors, on the one hand, and the Lenders and the Agents, on the other hand, (i) the maturity of the Guaranteed Obligations may be accelerated as provided in Article IX for the purposes of this Guaranty, notwithstanding any stay, injunction or other prohibition preventing such acceleration of the Guaranteed Obligations, and (ii) in the event of any acceleration of the Guaranteed Obligations as provided in Article IX, the Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guaranty. SECTION 11.03. Effect of Debtor Relief Laws. If after receipt of any payment of, or proceeds of any security applied (or intended to be applied) to the payment of all or any part of the Guaranteed Obligations, either Agent, the applicable Issuer or any Lender is for any -3- reason compelled to surrender or voluntarily surrenders, such payment or proceeds to any Person (a) because such payment or application of proceeds is or may be avoided, invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, fraudulent conveyance, fraudulent transfer, impermissible set-off or a diversion of trust funds or (b) for any other reason, including (i) any judgment, decree or order of any court or administrative body having jurisdiction over either Agent, the applicable Issuer, any Lender or any of their respective properties or (ii) any settlement or compromise of any such claim effected by either Agent, the Issuer of any Letters of Credit or any Lender with any such claimant (including any of the Borrowers), then the Guaranteed Obligations or part thereof intended to be satisfied shall be reinstated and continue, and this Guaranty shall continue in full force as if such payment or proceeds have not been received, notwithstanding any revocation thereof or the cancellation of any instrument evidencing any of the Guaranteed Obligations or otherwise; and each Guarantor shall be liable to pay the Agents, the Issuer of any Letters of Credit and the Lenders, and hereby do indemnify the Agents, the Issuer of any Letters of Credit and the Lenders and hold them harmless for the amount of such payment or proceeds so surrendered and all reasonable expenses (including reasonable attorneys' fees, court costs and expenses attributable thereto) incurred by either Agent, such Issuer or any such Lender in the defense of any claim made against it that any payment or proceeds received by the such Agent, such Issuer or any such Lender in respect of all or part of the Guaranteed Obligations must be surrendered. The provisions of this paragraph shall survive the termination of this Guaranty, and any satisfaction and discharge of any Borrower by virtue of any payment, court order or any law. SECTION 11.04. Waiver. Each Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Guaranty and waives presentment, demand for payment, notice of intent to accelerate, notice of dishonor or nonpayment and any requirement that either Agent or any Lender institute suit, collection proceedings or take any other action to collect the Guaranteed Obligations, including any requirement that either Agent or any Lender protect, secure, perfect or insure any Lien against any property subject thereto or exhaust any right or take any action against any Borrower or any other Person or any collateral (it being the intention of the Agents, the Lenders and the Guarantors that this Guaranty is to be a guaranty of payment and not of collection). It shall not be necessary for either Agent or any Lender, in order to enforce any payment by any Guarantor hereunder, to institute suit or exhaust its rights and remedies against any other Guarantor, any Borrower or any other Person, including others liable to pay the Guaranteed Obligations, or to enforce its rights against any security ever given to secure payment thereof. Each Guarantor hereby expressly waives to the maximum extent permitted by applicable law each and every right to which it may be entitled by virtue of the suretyship laws of the State of Texas or any other state in which it may be located, including any and all rights it may have pursuant to Rule 31, Texas Rules of Civil Procedure, Section 17.001 of the Texas Civil Practice and Remedies Code and Chapter 34 of the Texas Business and Commerce Code. Each Guarantor hereby waives marshaling of assets and liabilities, notice by either Agent or any Lender of any indebtedness or liability to which such Lender applies or may apply any amounts received by such Lender, and of the creation, advancement, increase, existence, extension, renewal, rearrangement or modification of the Guaranteed Obligations. Each Guarantor expressly waives, to the extent permitted by applicable law, the benefit of any and all laws providing for exemption of property from execution or for valuation and appraisal upon foreclosure. -4- SECTION 11.05. Full Force and Effect. This Guaranty is a continuing guaranty and shall remain in full force and effect until all of the Guaranteed Obligations under this Agreement and the other Loan Documents to which any Borrower is a party and all other amounts payable under this Guaranty have been paid in full (after the termination of the Commitments and the termination or expiration of the Letters of Credit). All rights, remedies and powers provided in this Guaranty may be exercised, and all waivers contained in this Guaranty may be enforced, only to the extent that the exercise or enforcement thereof does not violate any provisions of applicable law which may not be waived. -5- SCHEDULE 6.01 MATERIAL SUBSIDIARIES EX-4.5 7 h99033exv4w5.txt WAIVER & OMNIBUS AMEND.TO SALE AGREEMENT EXHIBIT 4.5 WAIVER AND OMNIBUS AMENDMENT THIS WAIVER AND OMNIBUS AMENDMENT (this "OMNIBUS AMENDMENT"), dated as of June 26, 2002 is among W1 Receivables, L.P., a Texas limited partnership ("W1R"), Weatherford International, Inc., a Delaware corporation ("WEATHERFORD"), Bank One, NA (Main Office Chicago), individually ("BANK ONE"), Jupiter Securitization Corporation ("CONDUIT" and, together with Bank One, the "PURCHASERS"), Bank One, NA (Main Office Chicago), as agent for the Purchasers (the "AGENT"), Weatherford Artificial Lift Systems, Inc., a Delaware corporation ("WEATHERFORD ALS"), Weatherford U.S., L.P., a Louisiana limited partnership ("WEATHERFORD U.S." and together with Weatherford ALS, the "INITIAL ORIGINATORS"), and Weatherford International Ltd., a Bermuda exempted company (the "BERMUDA PARENT"). PRELIMINARY STATEMENTS Initial Originators, as sellers, and W1R, as purchaser, are parties to that certain U.S. RECEIVABLES SALE AGREEMENT dated as of July 2, 2001 (the "SALE AGREEMENT"); W1R, as seller, Weatherford, as Initial Servicer, the Purchasers, and the Agent are parties to that certain U.S. Receivables Purchase Agreement dated as of July 2, 2001 (as previously amended and otherwise modified, the "PURCHASE AGREEMENT"); Weatherford, as performance guarantor, is a party of that certain Performance Undertaking dated as of July 2, 2001 in favor of W1R (the "PERFORMANCE UNDERTAKING"); Seller has requested that the Agent and the Purchasers extend the Liquidity Termination Date to August 30, 2002; Weatherford, the Bermuda Parent, Weatherford U.S. Holdings, L.L.C., a Delaware limited liability company and wholly owned subsidiary of Weatherford ("U.S. HOLDINGS") and Weatherford Merger Inc., a Delaware corporation ("MERGER SUB") and indirect wholly owned subsidiary of the Bermuda Parent have entered into an Agreement and Plan of Merger dated as of May 8, 2002 (the "MERGER AGREEMENT") for the purpose of reorganizing and pursuant to which the Merger Sub will merge with and into Weatherford, with Weatherford surviving as an indirect subsidiary of the Bermuda Parent whose common shares will be exchanged on a one-for-one basis with outstanding shares of common stock of Weatherford (the "REORGANIZATION"); The Reorganization may give rise to a Termination Event under the Sale Agreement and an Amortization Event under the Purchase Agreement by reason 1 of a Change of Control (as defined in Exhibit A to the Sale Agreement) and by reason of other events; and The Agent, the Purchasers and W1R are willing to waive such Termination Event and Amortization Event and to agree to certain amendments to the Sale Agreement, the Purchase Agreement and the Performance Undertaking subject to the terms and conditions as hereinafter set forth. NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: SECTION 1. Defined Terms. Unless defined elsewhere herein, capitalized terms used in this Omnibus Amendment shall have the meanings assigned to such terms in the Sale Agreement or in the Purchase Agreement, as the case may be. SECTION 2. The Sale Agreement Waivers. Immediately upon the effectiveness of this Omnibus Amendment, the Agent and the Purchasers (each as assignee of W1R) and W1R hereby (i) waive compliance with Section 6.1(e) of the Sale Agreement to the extent, and solely to the extent, necessary to permit the Reorganization and (ii) agree that the Reorganization and the other transactions contemplated by the Merger Agreement shall not constitute a Termination Event. SECTION 3. The Sale Agreement Amendments. The Sale Agreement is hereby amended as follows: (a) Section 2.1(e) of the Sale Agreement is hereby amended by replacing the word "Weatherford's" with the phrase "Weatherford's or the Bermuda Parent's". (b) Section 2.1(m) of the Sale Agreement is hereby amended by replacing the phrase "the Performance Guarantor and its Subsidiaries" with the phrase "any Performance Guarantor and its Subsidiaries". (c) Section 2.1(o) of the Sale Agreement is hereby amended by replacing the word "Weatherford" with the phrase "Each of Weatherford and the Bermuda Parent". (d) The introductory phrase of Section 4.1(a) of the Sale Agreement is hereby amended by replacing the word "Weatherford" with the phrase "Each of Weatherford and the Bermuda Parent". (e) Sections 4.1(a)(i), (ii), (iii) and (v) of the Sale Agreement are hereby further amended by replacing the word "Weatherford" with the phrase "Weatherford and the Bermuda Parent, as the case may be" each time such word appears in Sections 4.1(a)(i), (ii), (iii) and (v). 2 (f) The introductory phrase of Section 4.1(b) of the Sale Agreement is hereby amended by replacing the word "Weatherford" with the phrase "Each of Weatherford and the Bermuda Parent". (g) Section 4.1(b)(ii) of the Sale Agreement is hereby amended by replacing the word "Weatherford" with the phrase "the Bermuda Parent". (h) Section 4.1(j) of the Sale Agreement is hereby amended by replacing the word "Weatherford" with the phrase "Weatherford or the Bermuda Parent". (i) Sections 4.2(f), 5.1, 5.2, 8.1, and 8.11 of the Sale Agreement are hereby amended by replacing the phrase "Section 8.5" with the phrase "Section 8.12" each time such phrase appears in those Sections. (j) Section 6.1 of the Sale Agreement is hereby amended by replacing the phrase "the Performance Guarantor" with the phrase "any Performance Guarantor" each time such phrase appears in Section 6.1. (k) Section 8.3(a) of the Sale Agreement is hereby amended by replacing the word "Weatherford's" with the phrase "Weatherford's or the Bermuda Parent's". (l) The following definitions set forth in Exhibit A to the Sale Agreement are hereby amended and restated in their entirety to read as follows: "CHANGE OF CONTROL" means (a) the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 50% or more of the outstanding Equity Interests of Weatherford, the Bermuda Parent or (b) any of Weatherford or the Bermuda Parent ceases to own, directly or indirectly, 100% of the outstanding Equity Interests of any Originator. "PERFORMANCE GUARANTOR" means each of Weatherford and the Bermuda Parent. "PERFORMANCE UNDERTAKING" means an undertaking in the form attached to the U.S. Receivables Purchase Agreement as an exhibit, and shall include an Amended and Restated Performance Undertaking dated as of June 26, 2002 duly executed by each of the Performance Guarantors. (m) Exhibit A to the Sale Agreement is hereby further amended by adding the following definitions thereto in their proper alphabetical order: "BERMUDA PARENT" means Weatherford International Ltd., a Bermuda exempted company. "MERGER AGREEMENT" means that certain Agreement and Plan of Merger among the Bermuda Parent, Weatherford, U.S. Holdings, and Merger Sub dated as of May 8, 2002. 3 "MERGER SUB" means Weatherford Merger Inc., a Delaware corporation. "REORGANIZATION" means the consummation of the transactions contemplated by the Merger Agreement, including the exchange of outstanding common stock of Weatherford on a one-for-one basis with the outstanding common stock of the Bermuda Parent pursuant to and in accordance with the Merger Agreement. "U.S. HOLDINGS" means Weatherford U.S. Holdings LLC, a Delaware limited liability company. (n) The definition of "SALE TERMINATION DATE" set forth in Exhibit A to the Sale Agreement is hereby amended by replacing the phrase "the Performance Guarantor" with the phrase "any Performance Guarantor". (o) The definition of "TRANSACTION DOCUMENTS" set forth in Exhibit A to the Sale Agreement is hereby amended by replacing the phrase "the Performance Guarantor" with the phrase "the Performance Guarantors". SECTION 4. The Purchase Agreement Waivers. Immediately upon the effectiveness of this Omnibus Amendment, the Agent and the Purchasers hereby: (a) waive compliance with: (i) Section 9.1(f)(ii) of the Agreement for the three months ending May 31, 2002 and the three months ending June 30, 2002; and (ii) Section 9.1(g) of the Sale Agreement to the extent, and solely to the extent, necessary to permit the Reorganization; and (b) agree that the Reorganization and the other transactions contemplated by the Merger Agreement shall not constitute an Amortization Event. SECTION 5. The Purchase Agreement Amendments. The Purchase Agreement is hereby amended as follows: (a) Section 5.1(e) of the Purchase Agreement is hereby amended by replacing the word "Weatherford's" with the phrase "Weatherford's and the Bermuda Parent's". (b) Section 5.1(m) of the Purchase Agreement is hereby amended and restated in its entirety to read as follows: (m) Material Adverse Effect (i) Each of the initial Servicer and the Bermuda Parent represents and warrants that (in the case of initial Servicer, since December 31, 2000), no event has occurred that would have a material adverse effect on the financial condition or operations of the initial Servicer and its Subsidiaries or the Bermuda Parent and its Subsidiaries, respectively, in each case taken as a whole, or the ability of the initial Servicer to perform its obligations under this Agreement or the ability of the Bermuda Parent to perform its obligations under its Performance Undertaking, 4 respectively, and (ii) Seller represents and warrants that since the date of this Agreement, no event has occurred that would have a material adverse effect on (A) the financial condition or operations of Seller, or (B) the ability of Seller to perform its obligations under the Transaction Documents. (c) Section 5.1(o) of the Purchase Agreement is hereby amended by replacing the word "Weatherford" with the phrase "Each of Weatherford and the Bermuda Parent". (d) Sections 7.1(a)(i)-(ii) of the Purchase Agreement are hereby amended by replacing the word "Weatherford" with the phrase "Weatherford and the Bermuda Parent, as the case may be" each time such word appears in Sections 7.1(a) (i)-(ii), (e) Section 7.1(b)(ii) of the Purchase Agreement is hereby amended by replacing the word "Weatherford" with the phrase "the Bermuda Parent" each time such word appears in Section 7.1(b)(ii). (f) Section 7.1(b)(v) of the Purchase Agreement is hereby amended by replacing the word "Weatherford's" with the phrase "Weatherford's or the Bermuda Parent's". (g) Section 7.1(c) of the Purchase Agreement is hereby amended by replacing the word "Weatherford" with the phrase "Weatherford or the Bermuda Parent". (h) Section 7.1(i) of the Purchase Agreement is hereby amended by replacing the word "Weatherford" with the phrase "Weatherford and the Bermuda Parent". (i) Section 7.2(a) of the Purchase Agreement is hereby amended by replacing the word "Weatherford" with the phrase "Weatherford or the Bermuda Parent". (j) Section 8.1(a) of the Purchase Agreement is hereby amended and restated in its entirety to read as follows: (a) The servicing, administration and collection of the Receivables shall be conducted by such Person (the "SERVICER") so designated from time to time in accordance with this Section 8.1. Weatherford is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer pursuant to the terms of this Agreement and agrees to perform such duties and obligations after the Reorganization. The Agent may at any time following the occurrence of an Amortization Event designate as Servicer any Person to succeed Weatherford or any successor Servicer. (k) Sections 9.1(k) and 9.1(l) of the Purchase Agreement are hereby amended by replacing the phrase "Performance Guarantor" with the phrase "any Performance Guarantor" each time such phrase appears in Sections 9.1(k) and 9.1(l). (l) Section 14.6 of the Purchase Agreement is hereby amended by replacing the phrase "the Servicer" with the phrase "the Servicer, the Bermuda Parent". (m) The following definition set forth in Exhibit I to the Purchase Agreement are hereby amended and restated in its entirety to read as follows: 5 "CHANGE OF CONTROL" means (a) a "Change of Control" under and as defined in the U.S. Receivables Sale Agreement shall occur with respect to Weatherford or the Bermuda Parent, (b) Weatherford or the Bermuda Parent ceases to own, directly or indirectly, at least a majority of the Equity Interests of any Material Originator, or (c) Weatherford or the Bermuda Parent ceases to own, directly or indirectly, 100% of the outstanding Equity Interests of Seller; PROVIDED, HOWEVER, that a Permitted Restructuring shall not constitute a Change of Control under this Agreement. "LIQUIDITY TERMINATION DATE" means August 30, 2002. "MATERIAL ORIGINATOR" means any Originator who, in any period of 12 consecutive months, has generated more than 10% of the total U.S. Receivables of U.S. Holdings and its Subsidiaries. "PERMITTED RESTRUCTURING" means (a) with respect to any Originator, any merger, consolidation or similar combination of an Originator (i) with another Originator, (ii) with and into a newly formed entity that is (A) domiciled in the United States of America, and (B) wholly-owned, directly or indirectly, by Weatherford and the Bermuda Parent, with no assets (other than its initial paid-in capital) and no liabilities (other than minimal organization costs) for the purpose of changing its legal form from a corporation, partnership or limited liability company domiciled in one state of the United States to a corporation, partnership or limited liability company domiciled in another state, from a corporation to a partnership or limited liability company, from a partnership to a corporation or limited liability company, or from a limited liability company to a partnership or corporation, as the case may be, (iii) with any Person engaged in a similar line of business as such Originator which would not, after giving effect to such merger, consolidation or similar combination, cause such Originator to be the Originator of Receivables with an aggregate Outstanding Balance of more than 10% of the aggregate Outstanding Balance thereof immediately prior to such merger, consolidation or similar combination, and/or (iv) with any other Person to whom the Agent gives its prior written consent, SO LONG AS: (1) the successor or surviving entity unconditionally assumes such Originator's (or Originators') respective obligations under the Transaction Documents to which it is (or they are) a party immediately prior to giving effect to such combination, (2) prior to the effectiveness of such combination, all UCC financing statements necessary to maintain the validity, perfection and priority of Seller's ownership interest in the Receivables and Related Security acquired or to be acquired from such Originator or Originators under the U.S. Receivables Sale Agreement, and the Agent's ownership or security interest therein, have been duly executed and filed in all necessary jurisdictions, and (3) if the surviving entity in such combination(s) is not an existing party to the U.S. Receivables Sale Agreement, all other documents required to be delivered in connection with a Joinder Agreement under the U.S. Receivables Sale Agreement have been duly executed and delivered substantially contemporaneously with such combination(s), and (b) with respect to Weatherford and the Bermuda Parent, any merger, consolidation or similar combination of Weatherford or the Bermuda Parent, as the case may be, with another Person so long as after giving effect thereto: (i) the survivor unconditionally and expressly assumes, in writing, all of Weatherford's or the Bermuda Parent's obligations, as the case may be, under the Transaction Documents to which Weatherford or the 6 Bermuda Parent, as the case may be, was a party immediately prior to such merger, consolidation or combination, and (ii) the survivor has senior unsecured long-term debt ratings of at least "BBB-" from Standard & Poor's Ratings Group and "Baa3" from Moody's Investors Services, Inc. "SELLER PARTIES" means (a) Seller, (b) at any time while it is Servicer and/or Performance Guarantor, Weatherford, and (c) at any time while it is a Performance Guarantor, the Bermuda Parent. SECTION 6. Representations and Warranties. In order to induce the Agent and the Purchasers to enter into this Omnibus Amendment, each of the Seller Parties (which, for the purposes of this Omnibus Amendment, shall include the Bermuda Parent) and each of the Initial Originators hereby represents and warrants to the Agent and the Purchasers that (a) each of such Seller Party's and such Initial Originator's representations and warranties contained in Article II of the Sale Agreement and Article V of the Purchase Agreement is true and correct as of the date hereof, (b) the execution and delivery by such Seller Party and such Initial Originator of this Omnibus Amendment, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority and have been duly authorized by all necessary corporate or limited partnership, as applicable, action on its part, and (c) this Omnibus Amendment has been duly executed and delivered by such Seller Party and such Initial Originator and constitutes the legal, valid and binding obligation of such Seller Party and such Initial Originator enforceable against such Seller Party and such Initial Originator in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). SECTION 7. Condition Precedent. This Omnibus Amendment shall become effective as of the date first above written upon receipt by the Agent of: (a) counterparts of this Omnibus Amendment duly executed by each of the parties hereto; (b) counterparts of the amended and restated Performance Undertaking in form and substance satisfactory to the Agent duly executed by Weatherford and the Bermuda Parent (the "AMENDED AND RESTATED PERFORMANCE UNDERTAKING"); (c) evidence of the payment to the Agent in immediately available funds of an amount equal to all legal fees and expenses of the Agent to the extent then invoiced; (d) favorable opinions of a Bermuda legal counsel for the Bermuda Parent and U.S. legal counsel for Weatherford reasonably acceptable to the Agent and the Purchasers which addresses the following matters and such other matters as the Agent and the Purchasers may reasonably request: 7 (i) Each of the Bermuda Parent and Weatherford is a corporation duly incorporated, validly existing, and in good standing under the laws of its jurisdiction of incorporation; (ii) The Bermuda Parent is not required to qualify in the State of Texas; (iii) The execution and delivery by the Bermuda Parent and Weatherford of this Omnibus Amendment, the Amended and Restated Performance Undertaking and each other Transaction Document to which they are a party and their performance of their obligations thereunder have been duly authorized by all necessary corporate action and proceedings on the part of the Bermuda Parent and Weatherford and will not: (A) require any action by or in respect of, or filing with, any governmental body, agency or official; (B) violate, or constitute a default under, any provision of applicable law or regulation or of its articles or certificate of incorporation or bylaws or of any agreement, judgment, injunction, order, decree or other instrument binding upon the Bermuda Parent and Weatherford; or (C) result in the creation or imposition of any Adverse Claim on assets of Weatherford, the Bermuda Parent or any of its Subsidiaries. (iv) Each of this Omnibus Amendment, the Amended and Restated Performance Undertaking and each other Transaction Document to which the Bermuda Parent and Weatherford are a party has been duly executed and delivered by the Bermuda Parent and Weatherford and constitutes the legal, valid, and binding obligation of the Bermuda Parent and Weatherford enforceable in accordance with its terms, except to the extent the enforcement thereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally and subject also to the availability of equitable remedies if equitable remedies are sought; (e) executed copies of (i) all consents from and authorizations by any Persons and (ii) all waivers and amendments to existing credit facilities, that are necessary in connection with the Reorganization; (f) executed copies of (i) all consents from and authorizations by any Persons and (ii) all waivers and amendments to existing credit facilities, that are necessary in connection with the Reorganization; (g) copy of the Resolutions of the Board of Directors or comparable body of the Bermuda Parent and Weatherford, certified by its Secretary authorizing the Bermuda Parent's and Weatherford's execution, delivery and performance of this Omnibus Amendment, the Amended and Restated Performance Undertaking and the other documents to be delivered by the Bermuda Parent and Weatherford hereunder; (h) Certificate of Incorporation of the Bermuda Parent and Weatherford certified by the Secretary of State or comparable office of its jurisdiction of organization; 8 (i) Good Standing Certificate or equivalent for the Bermuda Parent and Weatherford issued by the Secretaries of State or comparable office of its jurisdiction of organization and, in the case of Weatherford, issued by the Secretary of State of Texas; and (j) a certificate of the Secretary of the Bermuda Parent and Weatherford certifying (i) the names and signatures of the officers authorized on its behalf to execute this Omnibus Amendment, the the Amended and Restated Performance Undertaking and any other documents to be delivered by it hereunder and (ii) a copy of the Bermuda Parent's Organic Documents. SECTION 8. Miscellaneous. (a) THIS OMNIBUS AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK. (b) EACH OF SELLER PARTIES and the Initial OriginatorS HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS OMNIBUS AMENDMENT. (c) EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS OMNIBUS AMENDMENT. (d) Except as expressly modified hereby, the Sale Agreement, the Purchase Agreement and the other Transaction Documents remain unaltered and in full force and effect. Each of the Sale Agreement, the Purchase Agreement and the other Transaction Documents is hereby ratified and confirmed. This Omnibus Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy). (e) This Omnibus Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. [signature pages follow] 9 IN WITNESS WHEREOF, the parties hereto have caused this Omnibus Amendment to be executed and delivered by their duly authorized officers as of the date hereof. W1 RECEIVABLES, L.P. BY: W1 GENERAL PARTNER, INC., ITS SOLE GENERAL PARTNER By: /s/ BURT M. MARTIN -------------------------------------------------- Name: Burt M. Martin Title: President WEATHERFORD INTERNATIONAL, INC., AS SERVICER AND PERFORMANCE GUARANTOR By: /s/ BURT M. MARTIN -------------------------------------------------- Name: Burt M. Martin Title: Senior Vice President, General Counsel & Secretary WEATHERFORD ARTIFICIAL LIFT SYSTEMS, INC. By: /s/ BURT M. MARTIN -------------------------------------------------- Name: Burt M. Martin Title: Senior Vice President and Secretary WEATHERFORD U.S., L.P. BY: WUS HOLDING, LLC, ITS GENERAL PARTNER By: /s/ BURT M. MARTIN -------------------------------------------------- Name: Burt M. Martin Title: Senior Vice President and Secretary WEATHERFORD INTERNATIONAL LTD., AS PERFORMANCE GUARANTOR By: /s/ BURT M. MARTIN -------------------------------------------------- Name: Burt M. Martin Title: Senior Vice President, General Counsel and Secretary 10 JUPITER SECURITIZATION CORPORATION By: /s/ LEO V. LOUGHEAD -------------------------------------------------- Leo V. Loughead, Authorized Signer BANK ONE, NA (MAIN OFFICE CHICAGO), AS A FINANCIAL INSTITUTION AND AS AGENT By: /s/ LEO V. LOUGHEAD -------------------------------------------------- Leo V. Loughead, Director, Capital Markets Each of the undersigned (i) acknowledges the receipt of a copy of the Sale Agreement, (ii) agrees to be bound by the provisions of, and agrees that each is jointly and severally liable for all of the obligations under, the Sale Agreement applicable to the undersigned (including in its capacity as a Performance Guarantor and including those in Sections 4.1(a) and 4.1(b) of the Sale Agreement) and hereby expressly assumes all such obligations, and (iii) confirms that the representations and warranties in the Sale Agreement applicable to the undersigned (including those in Section 2.1(m) of the Sale Agreement) are true and correct WEATHERFORD INTERNATIONAL, INC. By: /s/ BURT M. MARTIN -------------------------------------------------- Name: Burt M. Martin Title: Senior Vice President, General Counsel & Secretary WEATHERFORD INTERNATIONAL LTD. By: /s/ BURT M. MARTIN -------------------------------------------------- Name: Burt M. Martin Title: Senior Vice President, General Counsel and Secretary The undersigned (i) acknowledges the receipt of a copy of the Purchase Agreement and the other Transaction Documents, (ii) agrees to be bound by the provisions of, and agrees that it is liable for all of the obligations under, the Purchase Agreement applicable to the undersigned (including in its capacity as a Seller Party) and hereby expressly assumes all such obligations, and (iii) confirms that the representations and warranties in the Purchase Agreement applicable to the undersigned (including those in Section 5.1(m) of the Purchase Agreement) are true and correct. WEATHERFORD INTERNATIONAL LTD. By: /s/ BURT M. MARTIN -------------------------------------------------- Name: Burt M. Martin Title: Senior Vice President, General Counsel and Secretary 11 Without limitation of any of the foregoing, the undersigned agrees to be bound by the provisions of, and agrees that it is liable for the obligations under, Section 14.4(c) the Purchase Agreement as a Seller Party and hereby expressly assumes all such obligations. IN WITNESS WHEREOF, THE COMMON SEAL OF WEATHERFORD INTERNATIONAL LTD. WAS AFFIXED HERETO IN THE PRESENCE OF: /s/ BURT M. MARTIN - ----------------------------------------------------- Name: Burt M. Martin Title: Senior Vice President, General Counsel and Secretary 12 EX-4.6 8 h99033exv4w6.txt WAIVER & AMEND.NO.1 TO PURCHASE AGREEMENT EXHIBIT 4.6 WAIVER AND AMENDMENT NO. 1 THIS WAIVER AND AMENDMENT NO. 1 (this "WAIVER AND AMENDMENT"), dated as of May 14, 2002, is among W1 Receivables, L.P., a Texas limited partnership ("SELLER"), Weatherford International, Inc., a Delaware corporation, as initial Servicer and Performance Guarantor, Bank One, NA (Main Office Chicago), individually ("BANK ONE"), Jupiter Securitization Corporation ("CONDUIT" and, together with Bank One, the "PURCHASERS") and Bank One, NA (Main Office Chicago), as agent for the Purchasers (the "AGENT"), and pertains to that certain U.S. Receivables Purchase Agreement dated as of July 2, 2001 by and among the parties hereto other than the Performance Guarantor (the "AGREEMENT"). Unless defined elsewhere herein, capitalized terms used in this Waiver and Amendment shall have the meanings assigned to such terms in the Agreement. PRELIMINARY STATEMENTS Seller has requested that the Agent and the Purchasers waive an Amortization Event under the Agreement; and The Agent and the Purchasers are willing to waive such Amortization Event provided that the Seller Parties agree to amend the definition of "LOSS RESERVE" as hereinafter set forth. NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Section 1. Waiver. The Agent and the Purchasers hereby waive compliance with Section 9.1(f)(ii) of the Agreement for the three months ending March 31, 2002 and the three months ending April 30, 2002. Section 2. Amendment. The definition of "LOSS RESERVE" set forth in Exhibit I to the Agreement is hereby amended and restated in its entirety to read as follows: "LOSS RESERVE" means, on any date, an amount equal to 15.0% multiplied by the Net Receivables Balance as of the close of business of the Servicer on such date. Section 3. Representations and Warranties. In order to induce the Agent and the Purchasers to enter into this Waiver and Amendment, each of the Seller Parties hereby represents and warrants to the Agent and the Purchasers that (a) each of such Seller Party's representations and warranties contained in Article V of the Agreement is true and correct as of the date hereof, (b) the execution and delivery by such Seller Party of this Waiver and Amendment, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority and have been duly authorized by all necessary corporate or limited partnership, as applicable, action on its part, and (c) this Waiver and Amendment has been duly executed and delivered by such Seller Party and constitutes the legal, valid and binding obligation of such Seller Party enforceable against such Seller Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). Section 4. Condition Precedent. This Waiver and Amendment shall become effective as of the date first above written upon receipt by the Agent of counterparts hereof duly executed by each of the parties hereto. Section 5. Miscellaneous. (a) THIS WAIVER AND AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK. (b) EACH SELLER PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS WAIVER AND AMENDMENT. (c) EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS WAIVER AND AMENDMENT. (d) Except as expressly modified hereby, the Agreement remains unaltered and in full force and effect. Each of the Agreement and the Performance Undertaking is hereby ratified and confirmed. This Waiver and Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy). (e) This Waiver and Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. [signature pages follow] IN WITNESS WHEREOF, the parties hereto have caused this Waiver and Amendment to be executed and delivered by their duly authorized officers as of the date hereof. W1 RECEIVABLES, L.P. BY: W1 GENERAL PARTNER, INC., ITS GENERAL PARTNER By: /s/ JAMES M. HUDGINS ------------------------------------------------ Name: Title: WEATHERFORD INTERNATIONAL, INC., AS SERVICER AND PERFORMANCE GUARANTOR By: /s/ JAMES M. HUDGINS ------------------------------------------------ Name: Title: 3 JUPITER SECURITIZATION CORPORATION By: /s/ LEO V. LOUGHEAD ------------------------------------------------ Leo V. Loughead, Authorized Signer BANK ONE, NA (MAIN OFFICE CHICAGO), AS A FINANCIAL INSTITUTION AND AS AGENT By: /s/ LEO V. LOUGHEAD ------------------------------------------------ Leo V. Loughead, Director, Capital Markets EX-4.7 9 h99033exv4w7.txt FOURTH SUPPLEMENTAL INDENTURE EXHIBIT 4.7 ================================================================================ FOURTH SUPPLEMENTAL INDENTURE AMONG WEATHERFORD INTERNATIONAL, INC. WEATHERFORD INTERNATIONAL LTD. AND THE BANK OF NEW YORK AS TRUSTEE ---------- DATED AS OF JUNE 26, 2002 TO INDENTURE DATED AS OF MAY 17, 1996 ---------- ================================================================================ TABLE OF CONTENTS ARTICLE ONE AMENDMENTS TO THE INDENTURE...........................................................................2 SECTION 101 Applicability of Amendments........................................................................2 SECTION 102 Definitions........................................................................................3 SECTION 103 Notices............................................................................................3 SECTION 104 Additional Events of Default.......................................................................3 SECTION 105 Trustee Matters....................................................................................5 SECTION 106 Defeasance and Covenant Defeasance.................................................................5 SECTION 107 Guarantee..........................................................................................5 ARTICLE TWO SECURITIES TO WHICH ARTICLE ONE APPLICABLE...........................................................10 SECTION 201 Securities to which Article One Applicable........................................................10 ARTICLE THREE CONVERSION RIGHTS..................................................................................10 SECTION 301 Conversion Rights.................................................................................10 ARTICLE FOUR MISCELLANEOUS PROVISIONS............................................................................11 SECTION 401 Integral Part.....................................................................................11 SECTION 402 General Definitions...............................................................................11 SECTION 403 Adoption, Ratification and Confirmation...........................................................11 SECTION 404 Trust Indenture Act Controls......................................................................11 SECTION 405 Governing Law.....................................................................................11 SECTION 406 Severability......................................................................................11 SECTION 407 Counterpart Originals.............................................................................12 SECTION 408 Successors........................................................................................12 SECTION 409 Table of Contents, Headings, etc..................................................................12 SECTION 410 Benefit of Fourth Supplemental Indenture..........................................................12 SECTION 411 Acceptance by Trustee.............................................................................12
-i- THIS FOURTH SUPPLEMENTAL INDENTURE, dated as of June 26, 2002, among Weatherford International, Inc., a Delaware corporation (the "Company"), Weatherford International Ltd., a Bermuda exempted company ("Guarantor"), and The Bank of New York (as successor in interest to Bank of Montreal Trust Company) (the "Trustee"). RECITALS OF THE COMPANY WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture, dated as of May 17, 1996, as supplemented by the First Supplemental Indenture thereto, dated as of May 27, 1998, the Second Supplemental Indenture thereto, dated as of June 30, 2000 (the "Second Supplemental Indenture"), and the Third Supplemental Indenture thereto, dated as of November 16, 2001 (the "Third Supplemental Indenture", and such indenture as so supplemented, the "Indenture"), providing for the issuance from time to time of one or more series of the Company's Securities; and WHEREAS, the Company has, in accordance with an Officer's Certificate dated as of May 28, 1996, previously issued $200 million original aggregate principal amount of its 7 1/4% Notes due May 15, 2006 (the "7 1/4% Notes"); and WHEREAS, the Company has, in accordance with the Second Supplemental Indenture, previously issued $910 million aggregate original principal amount of its Zero Coupon Convertible Debentures due June 30, 2020 (the "Zero Coupon Debentures"); and WHEREAS, the Company has, in accordance with the Third Supplemental Indenture, previously issued $350 million aggregate original principal amount of its 6 5/8% Notes due 2011 (the "6 5/8% Notes"); and WHEREAS, pursuant to the Agreement and Plan of Merger dated as of May 8, 2002 (the "Merger Agreement") among the Guarantor, Weatherford U.S. Holdings, L.L.C., a Delaware limited liability company and an indirect, wholly owned subsidiary of the Guarantor, Weatherford Merger Inc., a Delaware corporation and an indirect, wholly owned subsidiary of the Guarantor ("Sub"), and the Company, Sub has agreed to merge with and into the Company (the "Merger"), with the Company being the surviving corporation in the Merger, following which the Company will be an indirect, wholly owned subsidiary of the Guarantor; and WHEREAS, in connection with such reorganization, the Guarantor has determined that it will be in the best interests of and beneficial to the Guarantor to enter into this Fourth Supplemental Indenture for the purposes of providing a guarantee of the 7 1/4% Notes, the Zero Coupon Debentures and the 6 5/8% Notes in accordance with the terms of this Fourth Supplemental Indenture; and WHEREAS, pursuant to the Merger Agreement, as of the effective time of the Merger (the "Effective Time"), each outstanding share of common stock of the Company ("Company Common Stock") shall be converted into the right to receive one validly issued, fully paid and nonassessable common share of the Guarantor ("Guarantor Common Shares"); and WHEREAS, pursuant to Section 1511 of the Indenture, as a result of the Merger, the Company is required to execute and deliver to the Trustee a supplemental indenture providing (i) that the Zero Coupon Debentures shall be convertible into Guarantor Common Shares and (ii) for adjustments of the Conversion Rate which shall be as nearly equivalent as may be practicable to the adjustments provided for in Article FIFTEEN of the Indenture; and WHEREAS, Section 901(9) of the Indenture permits the execution of supplemental indentures without the consent of any Holders to make provision with respect to the requirements of Article FIFTEEN of the Indenture; and WHEREAS, Sections 901(2) and 901(3) of the Indenture permit the execution of supplemental indentures without the consent of any Holders to add any additional Events of Default with respect to, and to add to the covenants of the Company for the benefit of, all or any series of Securities; and WHEREAS, Section 901(5) of the Indenture permits the execution of supplemental indentures without the consent of any Holders to add to, change or eliminate any provisions of the Indenture in respect of one or more series of Securities; provided, that any such change or elimination does not adversely affect in any material respect any outstanding Security of any series created prior to the execution of such supplemental indenture; and WHEREAS, the Company, pursuant to the foregoing authority, proposes in and by this Fourth Supplemental Indenture to supplement and amend the Indenture in certain respects; and WHEREAS, all things necessary have been done to make this Fourth Supplemental Indenture a valid agreement of the Company and the Guarantor, in accordance with its terms. NOW THEREFORE: In consideration of the premises provided for herein, the Company, the Guarantor and the Trustee mutually covenant and agree as follows: ARTICLE ONE AMENDMENTS TO THE INDENTURE SECTION 101 Applicability of Amendments. The amendments contained in this Article ONE of this Fourth Supplemental Indenture shall apply only to any series of Securities issued under the Indenture which have specifically been made subject to such amendments, and not to any other series of Securities issued under the Indenture, and any covenants provided in this Article ONE of this Fourth Supplemental Indenture are expressly being included solely for the benefit of such Securities and not for the benefit of any other series of Securities issued under the Indenture. These amendments shall be effective for so long as there remain Outstanding any Securities of a series to which the provisions of this Article ONE apply. -2- SECTION 102 Definitions. Section 101 of the Indenture is hereby amended, subject to Section 201 of this Fourth Supplemental Indenture, by inserting in their appropriate alphabetical positions, the following additional definitions: "Bankruptcy Law" shall mean the United States Bankruptcy Code, 11 U.S.C. Section 101 et seq., any successor thereto and any other law, rule or regulation, applicable in the premises, providing for or with respect to the liquidation, dissolution, marshaling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment, rehabilitation or relief of debtors or any of their respective assets or liabilities. "Guarantees" shall have the meaning specified in Section 1801 hereof. "Guarantor" shall mean Weatherford International Ltd., a Bermuda exempted company, until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Guarantor" shall mean such successor Person. "Indenture Obligations" shall have the meaning specified in Section 1801 hereof. "6 5/8% Notes" shall mean the 6 5/8% Notes due 2011 of the Company, issued and Outstanding from time to time under this Indenture. "7 1/4% Notes" shall mean the 7 1/4% Notes due May 15, 2006 of the Company, issued and Outstanding from time to time under this Indenture. "Zero Coupon Debentures" shall mean the Zero Coupon Convertible Debentures due June 30, 2020 of the Company, issued and Outstanding from time to time under this Indenture. SECTION 103 Notices. Section 105 of the Indenture is hereby amended, subject to Section 201 of this Fourth Supplemental Indenture, by (a) deleting the period following existing subsection (ii) thereof and inserting in its place ", or", and (b) adding the following subsection (3) after said existing subsection (2): "(3) the Guarantor by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Guarantor addressed to it at: Weatherford International Ltd., c/o Weatherford International, Inc., 515 Post Oak Blvd., Suite 600, Houston, Texas 77027, to the attention of its Treasurer, or at any other address previously furnished in writing to the Trustee by the Guarantor." SECTION 104 Additional Events of Default. Section 501 of the Indenture is hereby amended, subject to Section 201 of this Fourth Supplemental Indenture, by (a) inserting in existing subsections (4) and (7) thereof, following the -3- words "to the Company" each time said words appear therein, the words "and the Guarantor", (b) adding the following subsections (8), (9), (10) and (11) after existing subsection (7), and (c) redesignating existing subsection (8) as subsection (12): "(8) default in the performance, or breach, of any covenant or warranty of the Guarantor in this Indenture, and continuation of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company and the Guarantor by the Trustee or to the Company and the Guarantor and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (9) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Guarantor in an involuntary case or proceeding under any applicable Federal or state bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Guarantor as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Guarantor under any applicable Federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Guarantor or of any substantial part of the property of the Guarantor, or ordering the winding up or liquidation of its affairs, and the continuation of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; or (10) the commencement by the Guarantor of a voluntary case or proceeding under any applicable Federal or state bankruptcy, insolvency, reorganization or other similar law for the relief of debtors or of any other case or proceeding to be adjudicated as bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Guarantor in an involuntary case or proceeding under any applicable Federal or state bankruptcy, insolvency, reorganization or other similar law for the relief of debtors or the commencement of any bankruptcy or insolvency case or proceeding against the Guarantor, or the filing by the Guarantor of a petition or answer or consent seeking reorganization, arrangement, adjustment or composition of or in respect of the Guarantor under any applicable Federal or state law, or the consent by the Guarantor to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Guarantor or of any substantial part of the property of the Guarantor, or the making by the Guarantor of an assignment for the benefit of creditors, or the admission by the Guarantor in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Guarantor in furtherance of any such action; or (11) the Guarantee in respect of the Securities of that series ceases to be in full force and effect or becomes unenforceable or invalid or is declared null and void (other than in accordance with the terms of such Guarantee) or the Guarantor denies or disaffirms its obligations under such Guarantee; or" -4- SECTION 105 Trustee Matters. Section 605 of the Indenture is hereby amended, subject to Section 201 of this Fourth Supplemental Indenture, by adding the following sentence at the end of Section 605: "The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company or the Guarantor, in its individual or any other capacity, may become the owner or pledgee of Securities and coupons and, subject to Sections 608 and 613, may otherwise deal with the Guarantor with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent." SECTION 106 Defeasance and Covenant Defeasance. Article THIRTEEN of the Indenture is hereby amended, subject to Section 201 of this Fourth Supplemental Indenture, by adding the following Section 1307 after existing Section 1306: "SECTION 1307 Effects of Defeasance on Guarantor. Upon any defeasance in accordance with Section 1302 hereof of the Securities of a series to which this Section 1307 has been made applicable, the Guarantor shall be discharged from its obligations hereunder in respect of the Securities of such series to the same extent and subject to the same conditions as the Company is released from its obligations hereunder in respect of the Securities of such series. Upon any covenant defeasance in accordance with Section 1303 hereof of the Securities of a series to which this Section 1307 has been made applicable, the Guarantor shall be discharged from its obligations under Section 1905(a) hereof in respect of the Securities of such series to the same extent and subject to the same conditions as the Company is released from its obligations in respect of the Securities of such series under Section 801 hereof." SECTION 107 Guarantee. The Indenture is hereby amended, subject to Section 201 of this Fourth Supplemental Indenture, by adding the following Article NINETEEN to the Indenture following existing Article EIGHTEEN: "ARTICLE NINETEEN GUARANTEES OF SECURITIES SECTION 1901 Unconditional Guarantees. (a) For value received, the Guarantor hereby fully, irrevocably, unconditionally and absolutely guarantees to the Holders of Securities of each series to which this Article NINETEEN has been made applicable and to the Trustee the due and punctual payment of the principal of, and premium, if any, and interest on such Securities, Liquidated Damages, if any, and all other amounts due and payable under this Indenture and such Securities by the Company to the Trustee or such Holders (including, without limitation, all costs and expenses (including reasonable legal fees and disbursements) incurred by the Trustee or such Holders in connection with the enforcement of this Indenture and the -5- Guarantees) (collectively, the 'Indenture Obligations'), when and as such principal, premium, if any, interest, Liquidated Damages, if any, and other amounts shall become due and payable, whether at the Stated Maturity, upon redemption or by declaration of acceleration or otherwise, according to the terms of such Securities and this Indenture. The guarantees by the Guarantor set forth in this Article NINETEEN are referred to herein as the 'Guarantees'. Without limiting the generality of the foregoing, the Guarantor's liability shall extend to all amounts that constitute part of the Indenture Obligations and would be owed by the Company to the Trustee or such Holders under this Indenture and such Securities but for the fact that they are unenforceable, reduced, limited, impaired, suspended or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Company. (b) Failing payment when due of any amount guaranteed pursuant to the Guarantees, for whatever reason, the Guarantor will be obligated to pay the same immediately to the Trustee, without set-off or counterclaim or other reduction whatsoever (whether for taxes, withholding or otherwise). Each Guarantee hereunder is intended to be a general, unsecured, senior obligation of the Guarantor and will rank pari passu in right of payment with all indebtedness of the Guarantor that is not, by its terms, expressly subordinated in right of payment to the Guarantee of the Guarantor. The Guarantor hereby agrees that, to the fullest extent permitted by applicable law, its obligations hereunder shall be full, irrevocable, unconditional and absolute, irrespective of the validity, regularity or enforceability of such Securities, the Guarantees or this Indenture, the absence of any action to enforce the same, any waiver or consent by any such Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of the Guarantor. The Guarantor hereby agrees that in the event of a default in payment of the principal of, or premium, if any, or interest on such Securities, or Liquidated Damages, if any, or any other amounts payable under this Indenture and such Securities by the Company to the Trustee or the Holders thereof, whether at the Stated Maturity, upon redemption or by declaration of acceleration or otherwise, legal proceedings may be instituted by the Trustee on behalf of such Holders or, subject to Section 5.06 hereof, by such Holders, on the terms and conditions set forth in this Indenture, directly against the Guarantor to enforce the Guarantees without first proceeding against the Company. (c) To the fullest extent permitted by applicable law, the obligations of the Guarantor under this Article NINETEEN shall be as aforesaid full, irrevocable, unconditional and absolute and shall not be impaired, modified, discharged, released or limited by any occurrence or condition whatsoever, including, without limitation, (i) any compromise, settlement, release, waiver, renewal, extension, indulgence or modification of, or any change in, any of the obligations and liabilities of the Company or the Guarantor contained in any of such Securities or this Indenture, (ii) any impairment, modification, release or limitation of the liability of the Company, the Guarantor or any of their estates in bankruptcy, or any remedy for the enforcement thereof, resulting from the operation of any present or future provision of any applicable Bankruptcy Law, as amended, or other statute or from the decision of any court, (iii) the assertion or exercise by the Trustee or any such Holder of any rights or remedies under any of such Securities -6- or this Indenture or their delay in or failure to assert or exercise any such rights or remedies, (iv) the assignment or the purported assignment of any property as security for any of such Securities, including all or any part of the rights of the Company or the Guarantor under this Indenture, (v) the extension of the time for payment by the Company or the Guarantor of any payments or other sums or any part thereof owing or payable under any of the terms and provisions of any of such Securities or this Indenture or of the time for performance by the Company or the Guarantor of any other obligations under or arising out of any such terms and provisions or the extension or the renewal of any thereof, (vi) the modification or amendment (whether material or otherwise) of any duty, agreement or obligation of the Company or the Guarantor set forth in this Indenture, (vii) the voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all of the assets, marshaling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment, rehabilitation or relief of, or other similar proceeding affecting, the Company or the Guarantor or any of their respective assets, or the disaffirmance of any of such Securities, the Guarantees or this Indenture in any such proceeding, (viii) the release or discharge of the Company or the Guarantor from the performance or observance of any agreement, covenant, term or condition contained in any of such instruments by operation of law, (ix) the unenforceability of any of such Securities, the Guarantees or this Indenture, (x) any change in the name, business, capital structure, corporate existence, or ownership of the Company or the Guarantor, or (xi) any other circumstance which might otherwise constitute a defense available to, or a legal or equitable discharge of, a surety or the Guarantor. (d) To the fullest extent permitted by applicable law, the Guarantor hereby (i) waives diligence, presentment, demand of payment, notice of acceptance, filing of claims with a court in the event of the merger, insolvency or bankruptcy of the Company or the Guarantor, and all demands and notices whatsoever, (ii) acknowledges that any agreement, instrument or document evidencing the Guarantees may be transferred and that the benefit of its obligations hereunder shall extend to each holder of any agreement, instrument or document evidencing the Guarantees without notice to them and (iii) covenants that its Guarantee will not be discharged except by complete performance of the Guarantees. To the fullest extent permitted by applicable law, the Guarantor further agrees that if at any time all or any part of any payment theretofore applied by any Person to any Guarantee is, or must be, rescinded or returned for any reason whatsoever, including without limitation, the insolvency, bankruptcy or reorganization of the Guarantor, such Guarantee shall, to the extent that such payment is or must be rescinded or returned, be deemed to have continued in existence notwithstanding such application, and the Guarantees shall continue to be effective or be reinstated, as the case may be, as though such application had not been made. (e) The Guarantor shall be subrogated to all rights of the Holders and the Trustee against the Company in respect of any amounts paid by the Guarantor pursuant to the provisions of this Indenture; provided, however, that the Guarantor shall not be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation with respect to any of such Securities until all of such Securities and the Guarantees thereof shall have been indefeasibly paid in full or discharged. -7- (f) A director, officer, employee or stockholder, as such, of the Guarantor shall not have any liability for any obligations of the Guarantor under this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. (g) No failure to exercise and no delay in exercising, on the part of the Trustee or the Holders, any right, power, privilege or remedy under this Article NINETEEN and the Guarantees shall operate as a waiver thereof, nor shall any single or partial exercise of any rights, power, privilege or remedy preclude any other or further exercise thereof, or the exercise of any other rights, powers, privileges or remedies. The rights and remedies herein provided for are cumulative and not exclusive of any rights or remedies provided in law or equity. Nothing contained in this Article NINETEEN shall limit the right of the Trustee or the Holders to take any action to accelerate the maturity of such Securities pursuant to Article Five or to pursue any rights or remedies hereunder or under applicable law. SECTION 1902 Execution and Delivery of Notation of Guarantees. To further evidence the Guarantees, the Guarantor hereby agrees that a notation of such Guarantees may be endorsed on each Security of a series to which this Article NINETEEN has been made applicable authenticated and delivered by the Trustee and executed by either manual or facsimile signature of an officer of the Guarantor. The Guarantor hereby agrees that its Guarantees shall remain in full force and effect notwithstanding any failure to endorse on any such Security a notation relating to the Guarantee thereof. If an officer of the Guarantor whose signature is on this Indenture or a Security no longer holds that office at the time the Trustee authenticates such Security or at any time thereafter, the Guarantor's Guarantee of such Security shall be valid nevertheless. The delivery by the Trustee of any Security of a series to which this Article NINETEEN has been made applicable, after the authentication thereof under this Indenture, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Guarantor. SECTION 1903 Reports by Guarantor. In addition to the certificates delivered to the Trustee pursuant to Section 1904, the Guarantor shall file with the Trustee and the Commission, and transmit to Holders of Outstanding Securities of each series to which this Article NINETEEN has been made applicable, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission. -8- SECTION 1904 Statement by Officer as to Default. The Guarantor shall, so long as any Securities of a series to which this Article NINETEEN has been made applicable are Outstanding, deliver to the Trustee, within 120 days after the end of each fiscal year of the Company beginning in 2002, a brief certificate from the principal executive officer, principal financial officer or principal accounting officer as to his or her knowledge of the Guarantor's compliance with all conditions and covenants under this Indenture. For purposes of this Section 1904, such compliance shall be determined without regard to any period of grace or requirement of notice under this Indenture. Such certificate shall comply with Section 314(a)(4) of the Trust Indenture Act. SECTION 1905 Limitations on Merger and Consolidation of Guarantor. (a) The Guarantor shall, so long as any Securities to which this Article NINETEEN has been made applicable are Outstanding, not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any other Person, unless: (1) The Person formed by such consolidation or into which the Guarantor is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Guarantor substantially as an entirety shall be an exempted company, corporation, partnership, limited liability company or trust and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the obligations of the Guarantor hereunder; (2) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and (3) the Guarantor has delivered to the Trustee an officers' certificate of the Guarantor and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and such supplemental indenture comply with this Section 1905(a) and that all conditions precedent herein provided for relating to such transaction have been complied with. (b) Upon any consolidation of the Guarantor with, or merger of the Guarantor into, any other Person or any conveyance, transfer or lease of the properties and assets of the Guarantor substantially as an entirety to any other Person in accordance with Section 1905(a), the successor Person formed by such consolidation or into which the Guarantor is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Guarantor under this Indenture with the same effect as if such successor Person had been named as the Guarantor herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and such Securities and coupons and may liquidate and dissolve." -9- ARTICLE TWO SECURITIES TO WHICH ARTICLE ONE APPLICABLE SECTION 201 Securities to which Article One Applicable. The Company and Guarantor hereby agree in accordance with Sections 901(2), 901(3) and 901(5) of the Indenture that the amendments to the Indenture set forth in Article ONE of this Fourth Supplemental Indenture are hereby made applicable to the 7 1/4% Notes, the Zero Coupon Debentures and the 6 5/8% Notes, and only to the Securities of these specified series. ARTICLE THREE CONVERSION RIGHTS SECTION 301 Conversion Rights. The Company and Guarantor hereby agree in accordance with Section 1511 of the Indenture that the holder of each Zero Coupon Debenture outstanding at the Effective Time shall have the right to convert such Zero Coupon Debenture into the number of Guarantor Common Shares equal to the number of shares of Company Common Stock deliverable upon conversion of such Zero Coupon Debenture immediately prior to the effective time of the Merger. Guarantor hereby agrees in accordance with Section 1511 of the Indenture to make any subsequent adjustments of the Conversion Rate which shall be as nearly equivalent as may be practicable to the adjustments provided for in Article FIFTEEN of the Indenture, and for such purpose (a) from and after the effective time of the Merger all references in Article FIFTEEN of the Indenture to "Common Stock", or to actions taken by or in respect of, or other circumstances existing with respect to, the Company (in respect of the Common Stock or otherwise) that require (or exempt the Company from making any) adjustment of the number of shares of such Common Stock issuable upon conversion of Zero Coupon Debentures and/or the Conversion Rate, or change of the securities or other property into which Zero Coupon Debentures shall be convertible shall, insofar as the same relate to or affect the convertibility, or conversion, of Zero Coupon Debentures, or the terms thereof, or the securities or other property into which Zero Coupon Debentures shall be convertible, be deemed to mean and refer to Guarantor Common Shares or actions taken by or in respect of, or circumstances existing with respect to, the Guarantor (in respect of the Guarantor Common Shares or otherwise), as the case may be, mutatis mutandis; (b) the references to the Company in each proviso in Section 1502, the third sentence of Section 1506(b), clause (y) of the first sentence of Section 1506(d)(2), Section 1508, and clauses (1), (2) and (3) of Section 1510, shall be deemed to be references to the Guarantor, mutatis mutandis; (c) the Guarantor shall assume the obligations of the Company under Section 1503, and its covenants in Section 1505, the fourth sentence of Section 1506(b), and the last independent clause of the penultimate sentence of Section 1506(f), and shall join with the Company in the supplemental indenture referred to in the first paragraph of Section 1511, of the Indenture; and (d)(i) the term "Board of Directors" as used in Sections 1506(a),1506(c), 1506(d)(2), 1506(d)(3) and 1506(e) shall be deemed to mean and refer to the Guarantor's board of directors, and the Company shall file with the Trustee a certified copy of their resolution containing any determination made pursuant -10- thereto, and (ii) the Guarantor shall have the rights (and its board of directors shall make the determinations) provided for in Sections 1506(f) and 1513 of the Indenture. ARTICLE FOUR MISCELLANEOUS PROVISIONS SECTION 401 Integral Part. This Fourth Supplemental Indenture constitutes an integral part of the Indenture to the extent provided in Section 201 hereof. SECTION 402 General Definitions. For all purposes of this Fourth Supplemental Indenture, capitalized terms used herein without definition shall have the meanings specified in the Indenture. SECTION 403 Adoption, Ratification and Confirmation. The Indenture, as supplemented and amended by this Fourth Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed, and this Fourth Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. The provisions of this Fourth Supplemental Indenture shall, subject to the terms hereof, supersede the provisions of the Indenture to the extent the Indenture is inconsistent herewith. SECTION 404 Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by operation of TIA Section 318(c), the imposed duties shall control. SECTION 405 Governing Law. THIS FOURTH SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SECTION 406 Severability. In case any provision in this Fourth Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall, to the fullest extent permitted by applicable law, not in any way be affected or impaired thereby. -11- SECTION 407 Counterpart Originals. The parties may sign any number of copies of this Fourth Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. SECTION 408 Successors. All agreements of the Company or the Guarantor in this Fourth Supplemental Indenture shall bind its successors. All agreements of the Trustee in this Fourth Supplemental Indenture shall bind its successors. SECTION 409 Table of Contents, Headings, etc. The table of contents, cross-reference table and headings of the Articles and Sections of this Fourth Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. SECTION 410 Benefit of Fourth Supplemental Indenture. Nothing in this Fourth Supplemental Indenture, express or implied, shall give to any Person, other than the parties hereto, any Security Registrar, any Paying Agent and their successors hereunder, and the Holders of Securities of any series to which the amendments of the Indenture set forth in Article ONE hereof have been made applicable, any benefit or any legal or equitable right, remedy or claim under this Fourth Supplemental Indenture. SECTION 411 Acceptance by Trustee. The Trustee accepts the amendments to the Indenture effected by this Fourth Supplemental Indenture and agrees to execute the trusts created by the Indenture as hereby amended, but only upon the terms and conditions set forth in this Fourth Supplemental Indenture and the Indenture. Without limiting the generality of the foregoing, the Trustee assumes no responsibility for the correctness of the recitals contained herein, which shall be taken as the statements of the Company and the Guarantor and except as provided in the Indenture the Trustee shall not be responsible or accountable in any way whatsoever for or with respect to the validity or execution or sufficiency of this Fourth Supplemental Indenture and the Trustee makes no representation with respect thereto. -12- IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be duly executed as of the day and year first written above. WEATHERFORD INTERNATIONAL, INC. By: /s/ BURT M. MARTIN -------------------------------- Name: Burt M. Martin Title: Senior Vice President WEATHERFORD INTERNATIONAL LTD. By: /s/ BURT M. MARTIN -------------------------------- Name: Burt M. Martin Title: Director THE BANK OF NEW YORK By: /s/ BARBARA A. BEVELAQUA -------------------------------- Name: Barbara A. Bevelaqua Title: Vice President -13- EX-4.8 10 h99033exv4w8.txt SECOND SUPPLEMENTAL INDENTURE EXHIBIT 4.8 ================================================================================ SECOND SUPPLEMENTAL INDENTURE AMONG WEATHERFORD INTERNATIONAL, INC. WEATHERFORD INTERNATIONAL LTD. AND JPMORGAN CHASE BANK AS TRUSTEE ---------- DATED AS OF JUNE 26, 2002 TO INDENTURE DATED AS OF OCTOBER 15, 1997 ---------- ================================================================================ TABLE OF CONTENTS ARTICLE ONE CONVERSION RIGHTS.....................................................................................2 SECTION 101 Conversion Rights..................................................................................2 ARTICLE TWO ADDITIONAL EVENTS OF DEFAULT..........................................................................3 SECTION 201 Additional Events of Default.......................................................................3 SECTION 202 Additional Definitions.............................................................................4 ARTICLE THREE MISCELLANEOUS PROVISIONS............................................................................4 SECTION 301 Integral Part......................................................................................4 SECTION 302 General Definitions................................................................................4 SECTION 303 Adoption, Ratification and Confirmation............................................................4 SECTION 304 Trust Indenture Act Controls.......................................................................5 SECTION 305 Governing Law......................................................................................5 SECTION 306 Severability.......................................................................................5 SECTION 307 Counterpart Originals..............................................................................5 SECTION 308 Successors.........................................................................................5 SECTION 309 Table of Contents, Headings, etc...................................................................5 SECTION 310 Benefit of Second Supplemental Indenture...........................................................5 SECTION 311 Acceptance by Trustee..............................................................................6
-i- THIS SECOND SUPPLEMENTAL INDENTURE, dated as of June 26, 2002, among Weatherford International, Inc., a Delaware corporation (the "Company"), Weatherford International Ltd., a Bermuda exempted company ("Parent"), and JPMorgan Chase Bank (the "Trustee"). RECITALS OF THE COMPANY WHEREAS, the Company, formerly known as EVI, Inc., has heretofore executed and delivered to the Trustee an Indenture (the "Base Indenture"), dated as of October 15, 1997, as supplemented by the First Supplemental Indenture thereto (the "First Supplemental Indenture"), dated as of October 28, 1997 (the Base Indenture, as so supplemented, is referred to herein as the "Indenture"), providing for the issuance from time to time of one or more series of the Company's Debentures (as said term is defined therein); and WHEREAS, the Company has, in accordance with the First Supplemental Indenture, previously issued $402,500,000 aggregate original principal amount of its 5% Convertible Subordinated Preferred Equivalent Debentures due 2027 (the "Convertible Debentures"); and WHEREAS, pursuant to the Agreement and Plan of Merger dated as of May 8, 2002 (the "Merger Agreement") among Parent, Weatherford U.S. Holdings, L.L.C., a Delaware limited liability company and an indirect, wholly owned subsidiary of Parent, Weatherford Merger Inc., a Delaware corporation and an indirect, wholly owned subsidiary of Parent ("Sub"), and the Company, Sub has agreed to merge with and into the Company (the "Merger"), with the Company being the surviving corporation in the Merger, following which the Company will be an indirect, wholly owned subsidiary of Parent; WHEREAS, pursuant to the Merger Agreement, as of the effective time of the Merger (the "Effective Time"), each outstanding share of common stock of the Company ("Company Common Stock") shall be converted into the right to receive one validly issued, fully paid and nonassessable common share of Parent ("Parent Common Shares"); WHEREAS, pursuant to Section 14.9 of the Base Indenture and Section 6.4 of the First Supplemental Indenture, as a result of the Merger, the Company is required to execute and deliver to the Trustee a supplemental indenture providing (i) that the Convertible Debentures shall be convertible into Parent Common Shares and (ii) for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in the Indenture and the Convertible Debentures; WHEREAS, in connection with such Merger, the Parent has determined that it will be in the best interests of and beneficial to the Parent to enter into, and is effective as of the date hereof entering into, that certain Convertible Debenture Guarantee Agreement for the purpose of providing a guarantee of the Convertible Debentures; and WHEREAS, Section 9.1(h) of the Base Indenture permits the execution of supplemental indentures without the consent of any Holders to make provision with respect to the conversion rights of Holders pursuant to the requirements of Article XIV of the Base Indenture, including providing for the conversion of the Debentures into any security or property other than Company Common Stock; and WHEREAS, Sections 9.1(b) and 9.1(c) of the Base Indenture permit the execution of supplemental indentures without the consent of any Holders to add any additional Events of Default with respect to, and to add to the covenants of the Company for the benefit of, all or any series of Debentures; and WHEREAS, the Company, pursuant to the foregoing authority, proposes in and by this Second Supplemental Indenture to supplement and amend the Indenture in certain respects; and WHEREAS, all things necessary have been done to make this Second Supplemental Indenture a valid agreement of the Company and the Parent, in accordance with its terms. NOW THEREFORE: In consideration of the premises provided for herein, the Company, the Parent and the Trustee mutually covenant and agree as follows: ARTICLE ONE CONVERSION RIGHTS SECTION 101 Conversion Rights. The Company and Parent hereby agree in accordance with Section 14.9 of the Base Indenture and Section 6.4 of the First Supplemental Indenture that the holder of each Convertible Debenture outstanding at the effective time of the Merger shall have the right to convert such Convertible Debenture into the number of Parent Common Shares equal to the number of shares of Company Common Stock which would have been deliverable upon conversion of such Convertible Debenture immediately prior to the effective time of the Merger. Parent hereby agrees in accordance with Section 14.9 of the Base Indenture and Section 6.4 of the First Supplemental Indenture to issue and deliver certificates evidencing such shares and make any subsequent adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in the Debentures and, to the extent relevant thereto, Article XIV of the Base Indenture and Article VI of the First Supplemental Indenture, and for such purpose (a) from and after the effective time of the Merger all references in Article XIV of the Base Indenture and Article VI of the First Supplemental Indenture to "Common Stock of the Company" or "Common Stock", or to actions taken by or in respect of the Company (in respect of the Common Stock or otherwise) that require adjustment of the number of shares of such Common Stock issuable upon conversion of Convertible Debentures and/or the Conversion Price, or change of the securities or other property into which Convertible Debentures shall be convertible shall, insofar as the same relate to or affect the convertibility, or conversion, of Convertible Debentures, or the terms thereof, or the securities or other property into which Convertible Debentures shall be convertible, be deemed to mean and refer to Parent Common Shares or actions taken by or in respect of the Parent (in respect of the Parent Common Shares or otherwise), as the case may be, mutatis mutandis, (b) the Parent shall assume the obligations of the Company under Section 14.6, and its covenant in Section 14.8, of the Base Indenture, and (c) the references to the Company in the penultimate sentence of Section 14.10 of the Base -2- Indenture, and Section 6.2(b) and the last sentence of Section 6.8, of the First Supplemental Indenture, shall be deemed to mean and include the Parent as well as the Company. ARTICLE TWO ADDITIONAL EVENTS OF DEFAULT SECTION 201 Additional Events of Default. Section 5.1 of the Indenture is hereby amended by adding the following subsections (g), (h), (i) and (j) after existing subsection (f), and redesignating existing subsection (g) as subsection (k): "(g) with respect to the Debentures guaranteed under the Convertible Debenture Guaranty Agreement, any default in the performance, or breach, of any covenant or warranty of the Guarantor in the Convertible Debenture Guaranty Agreement, and continuation of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company, the Guarantor and the Trustee by the Convertible Debenture Guarantee Trustee or to the Company, the Guarantor, the Trustee and the Convertible Debenture Guarantee Trustee by the Holders of at least 25% in principal amount of the Outstanding Debentures of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (h) with respect to the Debentures guaranteed under the Convertible Debenture Guaranty Agreement, the entry by a court having jurisdiction in the premises of a decree or order for relief in respect of the Guarantor in an involuntary case or proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law, whether domestic or foreign, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Guarantor or of any substantial part of the property of the Guarantor, or ordering the winding up or liquidation of its affairs, and the continuation of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or (i) with respect to the Debentures guaranteed under the Convertible Debenture Guaranty Agreement, the commencement by the Guarantor of a voluntary case or proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law, whether domestic or foreign, or of any other case or proceeding to be adjudicated as bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Guarantor in an involuntary case or proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law, whether domestic or foreign, or the commencement of any bankruptcy or insolvency case or proceeding against the Guarantor, or the filing by the Guarantor of a petition or answer or consent seeking reorganization, arrangement, adjustment or composition of or in respect of the Guarantor under any applicable law, whether domestic or foreign, or the consent by the Guarantor to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Guarantor or of any substantial part of the property of the Guarantor, or the making by the Guarantor of an assignment for the benefit of creditors; or -3- (j) with respect to the Debentures guaranteed under the Convertible Debenture Guaranty Agreement, the Guarantee in respect of the Debentures of that series ceases to be in full force and effect or becomes unenforceable or invalid or is declared null and void (other than in accordance with the terms of such Guarantee) or the Guarantor denies or disaffirms its obligations under such Guarantee; or" SECTION 202 Additional Definitions. Section 1.1 of the Indenture is hereby amended to include certain definitions of terms used in the additional Events of Default described in Section 201 of this Second Supplemental Indenture by inserting in their appropriate alphabetical positions, the following additional definitions: "'Convertible Debenture Guarantee Agreement' shall mean that certain Convertible Debenture Guarantee Agreement between the Guarantor and the Convertible Debenture Guarantee Trustee dated as of June 26, 2002, as amended from time to time." "'Convertible Debenture Guarantee Trustee' shall mean JPMorgan Chase Bank, as trustee under the Convertible Debenture Guarantee Agreement, until a successor Person shall have become such pursuant to the applicable provisions of the Convertible Debenture Guarantee Agreement, and thereafter 'Convertible Debenture Guarantee Trustee' shall mean such successor Person." "'Guarantee' shall mean the unconditional guarantee of the Convertible Debentures under the Convertible Debenture Guarantee Agreement by the Guarantor." "'Guarantor' shall mean Weatherford International Ltd., a Bermuda exempted company, until a successor Person shall have become such pursuant to the applicable provisions of the Convertible Debenture Guarantee Agreement, and thereafter 'Guarantor' shall mean such successor Person." ARTICLE THREE MISCELLANEOUS PROVISIONS SECTION 301 Integral Part. This Second Supplemental Indenture constitutes an integral part of the Indenture. SECTION 302 General Definitions. For all purposes of this Second Supplemental Indenture, capitalized terms used herein without definition shall have the meanings specified in the Indenture. SECTION 303 Adoption, Ratification and Confirmation. The Indenture, as supplemented and amended by this Second Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed, and this Second Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein -4- provided. The provisions of this Second Supplemental Indenture shall, subject to the terms hereof, supersede the provisions of the Indenture to the extent the Indenture is inconsistent herewith. SECTION 304 Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by operation of TIA Section 318(c), the imposed duties shall control. SECTION 305 Governing Law. THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF. SECTION 306 Severability. In case any provision in this Second Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall, to the fullest extent permitted by applicable law, not in any way be affected or impaired thereby. SECTION 307 Counterpart Originals. The parties may sign any number of copies of this Second Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. SECTION 308 Successors. All agreements of the Company or the Parent in this Second Supplemental Indenture shall bind its respective successors. All agreements of the Trustee in this Second Supplemental Indenture shall bind its successors. SECTION 309 Table of Contents, Headings, etc. The table of contents, cross-reference table and headings of the Articles and Sections of this Second Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. SECTION 310 Benefit of Second Supplemental Indenture. Nothing in this Second Supplemental Indenture, express or implied, shall give to any Person, other than the parties hereto, any Security Registrar, any Paying Agent and their successors hereunder, and the Holders of the Securities, any benefit or any legal or equitable right, remedy or claim under this Second Supplemental Indenture. -5- SECTION 311 Acceptance by Trustee. The Trustee accepts the amendments to the Indenture effected by this Second Supplemental Indenture and agrees to execute the trusts created by the Indenture as hereby amended, but only upon the terms and conditions set forth in this Second Supplemental Indenture and the Indenture. Without limiting the generality of the foregoing, the Trustee assumes no responsibility for the correctness of the recitals contained herein, which shall be taken as the statements of the Company and except as provided in the Indenture the Trustee shall not be responsible or accountable in any way whatsoever for or with respect to the validity or execution or sufficiency of this Second Supplemental Indenture and the Trustee makes no representation with respect thereto. IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed as of the day and year first written above. WEATHERFORD INTERNATIONAL, INC. By: /s/ BURT M. MARTIN ----------------------------------------- Name: Burt M. Martin Title: Senior Vice President WEATHERFORD INTERNATIONAL LTD. By: /s/ BURT M. MARTIN ----------------------------------------- Name: Burt M. Martin Title: Director JPMORGAN CHASE BANK By: /s/ W.B. DODGE ----------------------------------------- Name: W.B. Dodge Title: Vice President -6- EX-10.1 11 h99033exv10w1.txt ASSUMPTION & GENERAL AMEND.OF DIRCTORS' STOCK PLAN EXHIBIT 10.1 ASSUMPTION AND GENERAL AMENDMENT OF DIRECTORS' STOCK OPTION AND BENEFIT PROGRAMS AND GENERAL AMENDMENT OF EMPLOYEE STOCK OPTION AND BENEFIT PROGRAMS OF WEATHERFORD INTERNATIONAL, INC. THIS ASSUMPTION AND GENERAL AMENDMENT INSTRUMENT is hereby made effective this 26th day of June, 2002 to be effective as hereinafter set forth. WITNESSETH: WHEREAS, pursuant to that certain Agreement and Plan of Merger (the "Agreement"), dated as of May 8, 2002, among Weatherford International Ltd., a Bermuda exempted company ("Weatherford Bermuda"), Weatherford International, Inc., a Delaware corporation ("Weatherford Delaware"), Weatherford U.S. Holdings, L.L.C., a Delaware limited liability company ("U.S. Holdings") and Weatherford Merger Inc., a Delaware corporation ("Merger Sub") and a newly formed, indirect wholly-owned subsidiary of Weatherford Bermuda and a direct wholly-owned subsidiary of U.S. Holdings, the respective Boards of Directors of Weatherford Bermuda, Weatherford Delaware, U.S. Holdings and Merger Sub deem it advisable and in the best interests of their respective stockholders to reorganize such that Weatherford Bermuda will become the ultimate parent of the Weatherford group of companies through the merger of Merger Sub with and into Weatherford Delaware; and WHEREAS, subject to the approval of the stockholders of Weatherford Delaware, the respective Boards of Directors of Weatherford Bermuda, Weatherford Delaware, U.S. Holdings and Merger Sub (and the stockholders of Weatherford Bermuda, U.S. Holdings and Merger Sub) have each approved the merger of Merger Sub with and into Weatherford Delaware, pursuant to which Weatherford Delaware will be the surviving company in the merger and become a wholly-owned, indirect subsidiary of Weatherford Bermuda (and a wholly-owned, direct subsidiary of U.S. Holdings), upon the terms and subject to the conditions set forth in the Agreement (the "Merger"), and whereby each issued share of common stock, par value US$1.00 per share, of Weatherford Delaware ("Weatherford Delaware Common Stock"), including those shares of Weatherford Delaware Common Stock held by Weatherford Delaware or any direct or indirect wholly-owned subsidiary of Weatherford Delaware, shall be automatically converted into the right to receive one common share, par value US$1.00 per share, of Weatherford Bermuda ("Weatherford Bermuda Common Shares"); and WHEREAS, Weatherford Delaware currently maintains and sponsors (i) the Weatherford International Incorporated 1987 Stock Option Plan, as amended and restated, the Weatherford Enterra, Inc. 1991 Stock Option Plan, as amended and restated, the Weatherford Enterra, Inc. Amended and Restated Employee Stock Purchase Plan, the Weatherford Enterra, Inc. Restricted Stock Incentive Plan, as amended and restated, the Weatherford International, Inc. Executive Deferred Compensation Stock Ownership Plan and Related Trust Agreement, the Energy Ventures, Inc. Employee Stock Option Plan, the Weatherford International, Inc. 1998 Employee Stock Option Plan, the Amendment to Stock Option Programs, and certain other plans and agreements providing for the grant or award to its officers and employees of options or other rights to purchase or receive Weatherford Delaware Common Stock (the "Employee Stock Plans") and (ii) the Weatherford International, Inc. Non-Employee Director Deferred Compensation Plan and the Amended and Restated Non-Employee Director Stock Option Plan, and certain other plans and agreements providing for the grant or award to its directors of options or other rights to purchase or receive Weatherford Delaware Common Stock (the "Director Stock Plans"); and WHEREAS, the Agreement provides that, following the Merger, Weatherford Delaware shall continue to maintain and sponsor the Employee Stock Plans and Weatherford Bermuda shall assume the rights and obligations of Weatherford Delaware under the Employee Stock Plans and the Director Stock Plans and that the outstanding options and other awards under the Employee Stock Plans and Director Stock Plans shall be exercisable or issuable upon the same terms and conditions as under such plans and the agreements relating thereto immediately prior to the effective time of the Merger, except that upon the exercise or issuance of such options or awards, Weatherford Bermuda Common Shares shall be issuable in lieu of shares of Weatherford Delaware Common Stock so that the number of Weatherford Bermuda Common Shares issuable upon the exercise or issuance of such an option or award immediately after the Effective Time and the option price of each such option or award shall be the number of shares and option price in effect immediately prior to the Effective Time (as defined in the Agreement) and all options or awards issued under the Employee Stock Plans and Director Stock Plans after the Effective Time shall entitle the holder thereof to purchase Weatherford Bermuda Common Shares in accordance with the terms of the Employee Stock Plans and Director Stock Plans; and WHEREAS, the Agreement further provides that, following the Merger, (i) Weatherford Delaware shall continue to sponsor and maintain each employee benefit and program to which Weatherford Delaware is then a party (the "Employee Benefit Plans"), (ii) Weatherford Bermuda shall assume the rights and obligations of Weatherford Delaware under each director benefit plan and program to which Weatherford Delaware is then a party (the "Director Benefit Plans") and (iii) to the extent any Employee Benefit Plan or Director Benefit Plan provides for the issuance or purchase of, or otherwise relates to, Weatherford Delaware Common Stock, after the Effective Time, such plan shall be deemed to provide for the issuance or purchase of, or otherwise relate to, Weatherford Bermuda Common Shares; and WHEREAS, the consummation of the Merger requires, among other things, the adoption of this Agreement by the affirmative vote of the holders of a majority of the outstanding Weatherford Delaware Common Stock entitled to vote on such adoption (the "Weatherford Delaware Stockholder Approval"); NOW, THEREFORE, subject to Weatherford Delaware Stockholder Approval, the Employee Stock Plans, the Director Stock Plans, the Employee Benefit Plans and the Director Benefit Plans are hereby amended to the extent necessary to provide as follows: 1. Weatherford International Ltd. hereby assumes the rights, duties, obligations of Weatherford International, Inc. under the Employee Stock Plans, and the rights, duties, obligations and sponsorship of Weatherford International, Inc. under the Director Stock Plans and the Director Benefit Plans, and each reference to "Weatherford International, Inc." or "Weatherford Enterra, Inc." (or any predecessor) in any Director Stock Plan and any Director Benefit -2- Plan is hereby deleted and "Weatherford International Ltd." is hereby substituted in place of such deleted reference. 2. Each direct or indirect reference to Weatherford Delaware Common Stock (i.e., common stock, par value U.S. $1.00 per share, of Weatherford International, Inc.) in any Employee Stock Plan, Director Stock Plan, Employee Benefit Plan or Director Benefit Plan is hereby deleted and Weatherford Bermuda Common Shares (i.e., common share, par value US $1.00 per share, of Weatherford International Ltd.) is hereby substituted in place of such deleted reference. 3. As amended hereby, each affected Employee Stock Plan, Employee Benefit Plan, Director Stock Plan and Director Benefit Plan is specifically ratified and reaffirmed. The undersigned, being duly authorized, on behalf of Weatherford International Ltd. and Weatherford International, Inc., have executed this Assumption and General Amendment Instrument on the date first set forth above, to be effective as of the Effective Time of the Merger. WEATHERFORD INTERNATIONAL LTD. ATTEST: By: /s/ KATHLEEN A. LOPEZ By: /s/ BURT M. MARTIN ---------------------------------- ----------------------------- Printed Name: Kathleen A. Lopez Printed Name: Burt M. Martin ------------------------ --------------------- Title: Executive Assistant Title: Director ------------------------------- ---------------------------- WEATHERFORD INTERNATIONAL INC. ATTEST: By: /s/ KATHLEEN A. LOPEZ By: /s/ BURT M. MARTIN ---------------------------------- ------------------------------- Printed Name: Kathleen A. Lopez Printed Name: Burt M. Martin ------------------------ --------------------- Title: Executive Assistant Title: Senior Vice President ------------------------------- ---------------------------- -3- EX-99.1 12 h99033exv99w1.txt CERTIFICATION OF CHIEF EXECUTIVE OFFICER EXHIBIT 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES--OXLEY ACT OF 2002 In connection with the Quarterly Report of Weatherford International, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Bernard J. Duroc-Danner, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes--Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Bernard J. Duroc-Danner - ------------------------------------- Name: Bernard J. Duroc-Danner Title: Chief Executive Officer Date: August 14, 2002 EX-99.2 13 h99033exv99w2.txt CERTIFICATION OF CHIEF FINANCIAL OFFICER EXHIBIT 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES--OXLEY ACT OF 2002 In connection with the Quarterly Report of Weatherford International, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Lisa W. Rodriguez, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes--Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Lisa W. Rodriguez - ------------------------------------- Name: Lisa W. Rodriguez Title: Chief Financial Officer Date: August 14, 2002 -----END PRIVACY-ENHANCED MESSAGE-----