EXHIBIT 10.4
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON THE
EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR UNDER ANY APPLICABLE STATE SECURITIES LAWS.
NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, BY SALE, ASSIGNMENT, PLEDGE OR OTHERWISE, IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
IN ADDITION, THIS WARRANT AND SUCH SHARES ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER DESCRIBED IN SECTION 9 HEREOF.
WARRANT
To purchase 3,232,214 shares of Common Stock, par value $1.00 per share, of
WEATHERFORD INTERNATIONAL, INC.
Date of Issuance: February 28, 2002
Issued to: Shell Technology Ventures Inc.
WARRANT
to purchase 3,232,214 shares of Common Stock, par value $1.00 per share, of
Weatherford International, Inc.
For value received, WEATHERFORD INTERNATIONAL, INC., a
Delaware corporation (the "Company"), hereby grants to SHELL TECHNOLOGY VENTURES
INC., a Delaware corporation ("STVI"), effective as of the February 28, 2002
(the "Issue Date"), subject to the terms hereof, the right to purchase from the
Company at the Purchase Price at any time or from time to time during the
Exercise Period, each as hereinafter set forth, up to 3,232,214 shares of the
common stock of the Company, par value $1.00 per share, (the "Common Stock"),
subject to adjustment as provided herein.
1. DEFINITIONS.
"Affiliate" means:
(a) in respect of a Person other than STVI,
any company or legal entity:
(i) which Controls either directly or indirectly such
Person; or
(ii) which is Controlled directly or indirectly by
such Person; or
(iii) which is directly or indirectly Controlled by a
company or entity which directly or indirectly
Controls such Person.
For the purposes of this paragraph (a), "Control" and
its derivatives means the right to exercise 50%
(fifty percent) or more of the voting rights
exercisable at a general meeting of the shareholders
(or its equivalent) of such company or entity.
(b) in respect of STVI:
(i) N.V. Koninklijke Nederlandsche Petroleum
Maatschappij (a Dutch company), The "Shell" Transport
and Trading Company, p.l.c. (an English company) and
any company other than STVI that is for the time
being directly or indirectly affiliated with the two
first mentioned companies or either of them.
For the purpose of this paragraph (i ), a particular
company is:
(A) directly affiliated with another company or
companies if the latter hold/holds shares carrying
50% (fifty percent) or more of the votes exercisable
at a general meeting of shareholders (or its
equivalent) of the particular company; and
(B) indirectly affiliated with a company or companies
(in this definition referred to as "the parent
company or companies") if a series of companies can
be specified,
Exhibit D-1
beginning with the parent company or companies and
ending with the particular company, so related that
each company of the series, except the parent company
or companies, is directly affiliated with one or more
companies earlier in the series.
"BLACK-SCHOLES AMOUNT" shall have the definition assigned to
such term in Section 3(b) of this Warrant.
"BLACK-SCHOLES MODEL" means the Black-Scholes model for
valuing the price of a derivative security, as would be applied by an
internationally recognized investment banking firm.
"CLOSING PRICE" shall have the definition assigned to such
term in Section 2(b)(ii) of this Warrant.
"COMMISSION" shall mean the United States Securities and
Exchange Commission.
"COMMON STOCK" shall have the definition assigned to such term
in the first paragraph of this Warrant.
"COMPANY" shall have the definition assigned to such term in
the first paragraph of this Warrant.
"CONFIDENTIAL OFFER PRICE" shall have the definition assigned
to such term in Section 10(b) of this Warrant.
"CONFIDENTIAL PURCHASE OFFER" shall have the definition
assigned to such term in Section 10(b) of this Warrant.
"CONVERSION DATE" shall have the definition assigned to such
term in Section 3(b) of this Warrant.
"CORRECTIVE FILING" shall have the definition assigned to such
term in Section 12(d) of this Warrant.
"DEMAND REQUEST" shall have the definition assigned to such
term in Section 12(a) of this Warrant.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"EXERCISE DATE" shall have the definition assigned to such
term in Section 2(a) of this Warrant.
"EXERCISE NOTICE" shall have the definition assigned to such
term in Section 2(a) of this Warrant.
"EXERCISE PERIOD" shall have the definition assigned to such
term in Section 2(e) of this Warrant.
"FILING NOTICE" shall have the definition assigned to such
term in Section 12(d) of this Warrant.
"ISSUE DATE" shall have the definition assigned to such term
in the first paragraph of this Warrant.
"LOCK-UP EXPIRATION DATE" shall have the definition assigned
to such term in Section 12(d)(i) of this Warrant.
"LOSSES" shall have the definition assigned to such term in
Section 9(f) of this Warrant.
"MATERIAL EVENT NOTICE" shall have the definition assigned to
such term in Section 12(d) of this Warrant.
"NET CASH SETTLEMENT" shall have the definition assigned to
such term in Section 2(b)(iii) of this Warrant.
"NET SHARE SETTLEMENT" shall have the definition assigned to
such term in Section 2(b)(ii) of this Warrant.
Exhibit D-1
"NYSE" shall have the definition assigned to such term in
Section 2(b)(ii) of this Warrant.
"PERSON" means an individual, corporation, partnership, joint
venture, association, joint stock company, trust, limited liability company,
unincorporated organization or government agency or any political subdivision
thereof.
"PHYSICAL DELIVERY" shall have the definition assigned to such
term in Section 2(b)(i) of this Warrant.
"PROHIBITED TRANSFEREE" shall have the definition assigned to
such term in Section 9(c)(i) of this Warrant.
"PURCHASE PRICE" shall have the definition assigned to such
term in Section 2(d) of this Warrant.
"REINCORPORATION TRANSACTION" shall have the definition
assigned to such term in Section 5(b) of this Warrant.
"RESPONSE PERIOD" shall have the definition assigned to such
term in Section 10(b) of this Warrant.
"ROUTINE FILING" shall have the definition assigned to such
term in Section 12(d) of this Warrant.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SHELF EFFECTIVE DATE" shall have the definition assigned to
such term in Section 12(b) of this Warrant.
"SHELF REGISTRATION PERIOD" shall have the definition assigned
to such term in Section 12(b) of this Warrant.
"SHELF REGISTRATION STATEMENT" shall have the definition
assigned to such term in Section 12(a) of this Warrant.
"STVI" shall have the definition assigned to such term in the
first paragraph of this Warrant.
"STVI AFFILIATE" shall have the definition assigned to such
term in Section 3(c) of this Warrant.
"TOTAL NUMBER OF SHARES" shall mean 3,232,214 shares of Common
Stock, as adjusted pursuant to Section 5 hereof.
"TRANSFER NOTICE" shall have the definition assigned to such
term in Section 10(a) of this Warrant.
"WARRANT HOLDER" shall have the definition assigned to such
term in Section 2(a) of this Warrant.
2. EXERCISE OF WARRANT.
(a) METHOD OF EXERCISE. This Warrant may be exercised in whole
or in part at any time and from time to time during the Exercise Period, by STVI
or any permitted subsequent holder of this Warrant under Section 9 hereof (the
"Warrant Holder") by (i) surrender of this Warrant, with the form of exercise
notice attached hereto as Exhibit A duly executed by such Warrant Holder (the
"Exercise Notice") indicating whether the Warrant Holder desires to effect
settlement through Physical Delivery, Net Share Settlement, Net Cash Settlement
(in each case as defined in Section 2(b) below) or a combination thereof, to the
Company at its principal office or (ii) telecopying to the Company at the number
provided below an executed and completed Exercise Notice to the Company;
provided, however, this Warrant may not be exercised under any circumstances for
less than 33 1/3% of the Total Number of Shares; provided, further, that if the
remaining unexercised balance of the Warrant is less than 33 1/3% of the Total
Number of Shares, the Warrant may be exercised for the entire amount of such
remaining unexercised balance. Each date on which an Exercise Notice is received
by the Company in accordance with clause (i) and each date on which the Exercise
Notice is telecopied to the Company in accordance with clause (ii)
Exhibit D-1
above shall be deemed an "Exercise Date". In the either case, the Warrant Holder
shall surrender this Warrant, and in the event of Physical Delivery make payment
of the full amount of the Purchase Price due to the Company, before the Company
shall be obligated to deliver to the Warrant Holder of the shares of Common
Stock issuable upon such exercise or, in the event of Net Cash Settlement, the
payment relating thereto.
(b) SETTLEMENT. The Company will effect the settlement of the
exercise of this Warrant by the Warrant Holder in the manner indicated by the
Warrant Holder in the Exercise Notice, except with respect to settlement through
Net Cash Settlement. If the Warrant Holder indicates in such Exercise Notice
that it desires to effect the settlement of such exercise, in full or in part,
through a Net Cash Settlement, the Company, in its sole discretion, may elect to
effect such settlement through a Net Cash Settlement with respect to the full
amount requested or only as to a portion thereof or the Company may decline to
effect any portion of such settlement through a Net Cash Settlement. In the
event the Company elects not to effect such settlement through Net Cash
Settlement as to the full amount so requested, the Company shall give notice to
such effect to the Warrant Holder within five (5) business days of receipt of
the Exercise Notice, and the Warrant Holder may submit a new Exercise Notice;
provided, however, that if a new Exercise Notice is submitted (x) the Warrant
holder shall not be entitled to elect in such new Exercise Notice to effect such
settlement through a Net Cash Settlement and (y) the Exercise Date for purposes
of such new Exercise Notice shall be deemed to be the Exercise Date with respect
to the original Exercise Notice submitted to the Company.
(i) Physical Delivery. In the event the Warrant
Holder desires to settle the exercise of this Warrant, in full or in
part, by taking physical delivery of shares of Common Stock upon cash
payment of the Purchase Price ("Physical Delivery"), the Warrant Holder
shall so indicate in the Exercise Notice and shall make payment of the
Purchase Price on the Exercise Date, or in the case of clause (ii) of
paragraph (a) above no later than two (2) business days thereafter, by
certified or cashier's check or bank draft payable to the order of the
Company in immediately available funds or by wire transfer of same day
funds to an account designated by the Company with respect to each
share of Common Stock for which this Warrant is exercised and Physical
Delivery is requested. If the amount of the payment received by the
Company is less than the Purchase Price for the number of shares of
Common Stock for which Physical Delivery is requested, the Company will
notify the Warrant Holder of the deficiency and the Warrant Holder
shall make payment in that amount within two (2) business days of its
receipt of such notice. If the payment exceeds the Purchase Price for
such number of shares of Common Stock, the Company will refund the
excess to the Warrant Holder within five (5) business days of receipt.
The shares of Common Stock to be issued and delivered to the Warrant
Holder upon Physical Delivery shall be issued and delivered as provided
in Section 4 below.
(ii) Net Share Settlement. In the event the Warrant
Holder desires to settle the exercise of this Warrant, in full or in
part, through a net, or "cashless", exercise by using shares of Common
Stock that it would otherwise receive upon such exercise as payment of
the Purchase Price ("Net Share Settlement"), the Warrant Holder shall
so indicate in the Exercise Notice and shall include therewith a
calculation of the number of shares of Common Stock to be issued upon
such exercise in accordance with the terms of this clause (ii);
provided, however, the Company shall have the right to confirm the
accuracy of such calculation (which confirmation shall not unreasonably
delay the issuance of such shares of Common Stock). The number of
shares of Common Stock to be issued to the Warrant Holder in the case
of Net Share Settlement shall be determined by:
(A) multiplying the number of shares of
Common Stock for which this Warrant is being
exercised and which are to be settled
through Net Share Settlement times the
remainder of the average closing sales price
of one share of Common Stock on the New York
Stock Exchange (the "NYSE") for the ten (10)
trading days ending with the day immediately
prior to the Exercise Date (the "Closing
Price") minus the per share Purchase Price;
and
(B) dividing the product calculated in
clause (A) by the Closing Price.
Exhibit D-1
The shares of Common Stock to be issued and delivered to the Warrant
Holder upon Net Share Settlement shall be issued and delivered as
provided in Section 4 below.
(iii) Net Cash Settlement. In the event the Warrant
Holder desires to settle the exercise of this Warrant, in full or in
part, by receiving cash in lieu of any shares of Common Stock, net of
the Purchase Price ("Net Cash Settlement"), the Warrant Holder shall so
indicate in the Exercise Notice and shall include therewith a
calculation of the amount of the payment to be made to the Warrant
Holder in accordance with the terms of this clause (iii); provided,
however, the Company shall have the right to confirm the accuracy of
such calculation (which confirmation shall not unreasonably delay such
payment). The Company, in its sole discretion, may elect to effect such
Net Cash Settlement, with respect to the full amount requested or a
portion thereof, or the Company may decline to effect any portion such
settlement through a Net Cash Settlement. The amount to be paid by the
Company to the Warrant Holder in the case of Net Cash Settlement shall
be determined by:
multiplying the number of shares of Common Stock for which
this Warrant is being exercised and which are to be settled
through Net Cash Settlement times the remainder of the Closing
Price minus the per share Purchase Price.
The Company shall make any payment of such Net Cash Settlement amount
to the Warrant Holder by certified or cashier's check or bank draft
payable to the order of the Warrant Holder in immediately available
funds or by wire transfer of same day funds to an account designated by
the Warrant Holder as soon as practicable following receipt of the
Exercise Notice and confirmation of the accompanying calculation of the
Net Cash Settlement Amount.
(c) REPLACEMENT WARRANT. If this Warrant is not exercised in
full, the number of shares of Common Stock for which this Warrant is exercisable
shall be reduced by the number of such shares of Common Stock for which this
Warrant was so exercised, and the Company shall forthwith issue and deliver to
or upon the order of the Warrant Holder a new Warrant of like tenor in the name
of the Warrant Holder or as the Warrant Holder may request, reflecting such
adjusted number of shares of Common Stock for which this Warrant is exercisable;
provided, however, that if reissued in the name of a Person other than the
Warrant Holder, such reissuance shall only be made in compliance with Section 9
hereof and the Warrant Holder shall pay all transfer, stamp or other taxes in
respect of such reissuance to such Person to the extent: (i) such transferee
Person is not domiciled in the United States or (ii) this Warrant is exercised
by a Person that is not a Delaware corporation.
(d) PURCHASE PRICE. The initial purchase price for which
shares of Common Stock may be purchased upon the exercise of this Warrant shall
be $60.00 per share of Common Stock, or, in case an adjustment of such price has
taken place pursuant to the further provisions of Section 5, then at the price
as last adjusted and in effect on the Exercise Date (such price or such price as
last adjusted, as the case may be, being referred to herein as the "Purchase
Price").
(e) EXERCISE PERIOD. The Warrant Holder may exercise this
Warrant, in whole or in part (but not as to a fractional Warrant Share), at any
time and from time to time after 9:00 a.m. (Houston, Texas time) on the first
(1st) anniversary of the Issue Date and prior to 5:00 p.m. (Houston, Texas time)
on the tenth (10th) anniversary of the Issue Date (the "Exercise Period").
3. CONVERSION OF WARRANT.
(a) GENERAL. At any time after the third (3rd) anniversary of
the Issue Date, in lieu of exercise as described in Section 2 above and subject
to the provisions of this Section 3, the Warrant Holder may convert the Warrant
into shares of Common Stock by (i) surrendering this Warrant to the Company at
its principal office and (ii) delivering written notice to the Company
indicating its decision to convert this Warrant. The date on which a written
notice as described in clause (ii) above is received by the Company shall be a
"Conversion Date"; provided, however, the Warrant Holder shall surrender this
Warrant to the Company at its principal office before the
Exhibit D-1
Company shall be obligated to deliver to the Warrant Holder of the shares of
Common Stock issuable upon such conversion as provided in paragraph (b) below.
(b) VALUATION OF CONVERSION. Upon receipt of written notice
from the Warrant Holder and surrender of the Warrant as provided in paragraph
(a) above, the Warrant Holder shall be entitled to receive an amount equal to
the value of the Warrant (or portion thereof to be converted) on the Conversion
Date, as determined using the Black-Scholes Model (the "Black-Scholes Amount"),
payable in shares of Common Stock. The number of shares of Common Stock issuable
under this paragraph (b) will be determined by dividing the Black-Scholes Amount
by the average closing sales price of one share of Common Stock on the NYSE for
the ten (10) trading days ending with the day immediately prior to the
Conversion Date. The shares of Common Stock to be issued and delivered to the
Warrant Holder upon conversion shall be issued and delivered as provided in
Section 4 below. In the event the Warrant Holder and the Company are unable to
agree on the Black-Scholes Amount with in twenty (20) days of receipt of the
Conversion Date, the Warrant Holder and the Company shall within five (5) days
thereafter mutually select one of the internationally recognized investment
banking firms listed on Exhibit D hereto to calculate the Black-Scholes Amount.
In the event the Warrant Holder and the Company are unable to agree upon a firm
listed on Exhibit D within such five-day period, then the firm named on Exhibit
D as the "Default Firm" shall calculate the Black-Scholes Amount. Such
internationally recognized investment banking firm shall then have ten (10) days
to calculate the Black-Scholes Amount, and its calculation shall be final and
binding on the Warrant Holder and the Company. In the event an internationally
recognized investment banking firm is retained for the purposes of calculating
the Black-Scholes Amount, the Warrant Holder and the Company shall each pay
one-half of the cost thereof.
(c) LIMITATIONS TO CONVERSION RIGHT. Only STVI and any
permitted subsequent holder of this Warrant under Section 9 hereof that is an
Affiliate of STVI (including STVI, a "STVI Affiliate") shall be entitled to
convert the Warrant into shares of Common Stock as provided by this Section 3,
and the right of conversion provided to the Warrant Holder under this Section 3
is not transferable under any circumstances to any Person other than a STVI
Affiliate. The Warrant may only be converted in full and may not be converted in
part, except in the event the entire remaining balance of the Warrant is
converted. In the event that more than one entity is the registered holder of a
portion of this Warrant and any STVI Affiliate delivers notice to the Company
indicating its desire to convert the portion of this Warrant held by such
entity, if at such time any other STVI Affiliate(s) is also a registered holder
of a portion of this Warrant, such other STVI Affiliate(s) must also convert the
portion of this Warrant held by it. In the event that more than one STVI
Affiliate is to convert the portion of this Warrant owned by each such STVI
Affiliate and an internationally recognized investment banking firm is to
selected as provided in paragraph (b) above, such STVI Affiliates shall
collectively select no more than one firm. Any reference to the "Warrant Holder"
in this Section 3 shall refer only to a Warrant Holder that is an STVI
Affiliate.
(d) TRANSFER RESTRICTIONS. In addition to the other
restrictions described in Section 9, all shares of Common Stock issuable
pursuant to this Section 3 upon the conversion of this Warrant may not be sold,
assigned or otherwise transferred to a non-Affiliate of STVI prior to the second
anniversary of the Conversion Date.
4. ISSUANCE AND DELIVERY OF SHARES; NO RIGHTS AS SHAREHOLDER UNTIL
EXERCISE.
(a) ISSUANCE AND DELIVERY OF SHARES. As soon as practicable
after receipt by the Company of an Exercise Notice and this Warrant in
accordance with Section 2 above (or in the case of conversion in accordance with
Section 3 above, as soon as practicable following receipt by the Company of the
Warrant and agreement between the Company and the Warrant Holder as to the
Black-Scholes Amount), the Company will cause its transfer agent to issue in the
name of and deliver to the Warrant Holder (or such other Person(s) as the
Warrant Holder may designate, subject to the limitations on transfer contained
herein) a certificate or certificates representing the number of shares of
Common Stock to which the Warrant Holder shall be entitled on such exercise
pursuant to Section 2(b) above or upon conversion pursuant to Section 3 above,
as the case may be; provided, however, that the Warrant Holder shall pay all
transfer, stamp or other taxes in respect of the issuance of such certificate(s)
to any Person(s) other than the Warrant Holder to the extent: (i) such
transferee Person(s) is not domiciled in the United
Exhibit D-1
States or (ii) this Warrant is exercised by a Person that is not a Delaware
corporation. The shares of Common Stock issued and delivered to the Warrant
Holder (or such other Person(s) as the Warrant Holder may designate, subject to
the limitations on transfer contained herein) pursuant to this Section 4(a)
shall not be registered under the Securities Act or the laws of any state. Under
no circumstances shall the Company issue fractional shares of Common Stock; in
the event a calculation under Section 2 or Section 3 above, as the case may be,
would lead to the issuance of a fractional share of Common Stock, the number of
shares of Common Stock issuable upon such exercise shall be rounded up to the
next whole number of shares of Common Stock, to the extent such fraction is
one-half ( 1/2)or greater, and shall be rounded down to the next whole number of
shares of Common Stock, to the extent such fraction is less than one-half (
1/2).
(b) NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. The shares of
Common Stock issuable upon any exercise of this Warrant will be deemed to have
been issued to the Warrant Holder on the Exercise Date or the Conversion Date,
as the case may be, and the Warrant Holder will be deemed for all purposes to
have become the record holder of such shares of Common Stock on the Exercise
Date or the Conversion Date, as the case may be. Until any such Exercise Date or
the Conversion Date, as the case may be, this Warrant does not confer upon the
Warrant Holder any right whatsoever as a shareholder of the Company with respect
to any shares of Common Stock with respect to which this Warrant remains
unexercised.
5. ADJUSTMENT OF THE PURCHASE PRICE. At any time while this Warrant, or
any portion hereof, remains outstanding and unexpired, the Purchase Price and,
accordingly, the number of shares of Common Stock issuable upon exercise of this
Warrant, shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(a) REORGANIZATION, MERGER OR CONSOLIDATION. In the event the
Company reorganizes, merges, consolidates or otherwise combines with another
Person, or consummates any other transaction including, but not limited to a
spin-off, a split-off or a split-up, whereby all of the holders of Common Stock
will receive shares of common stock or other securities, property or assets of
the Company, its successor or Affiliate payable with respect to or in exchange
for each share of Common Stock held, lawful and adequate provisions shall be
made whereby the Warrant Holder shall have the right to receive, in the
Company's sole discretion, either (i) upon exercise of this Warrant, the number
of shares of stock or other securities, property or assets of the Company, its
successor or Affiliate resulting from such reorganization, merger, consolidation
or other transaction as may be issued or payable with respect to or in exchange
for a number of outstanding shares of Common Stock equal to the number of shares
of Common Stock immediately theretofore purchasable and receivable upon the
exercise of this Warrant, or (ii) a new warrant granted by the Company or its
successor, with rights no less favorable to the Warrant Holder than those
contained in this Warrant, giving such Warrant Holder the right to exercise such
new warrant and procure upon such exercise, in lieu of each Warrant Share
theretofore issuable upon exercise of the predecessor Warrant, the number of
shares of stock or other securities, property or assets described in clause (i)
hereof. The foregoing provisions of this Section 5(a) shall similarly apply to
successive reorganizations, mergers, consolidations or other applicable
transactions and to the stock or securities of any other Person that are at the
time receivable upon exercise of this Warrant.
(b) REINCORPORATION OF COMPANY. Notwithstanding Section 5(a)
above, in the event the Company shall consummate a merger, inversion or other
transaction for the purpose of reincorporating into another domestic or foreign
jurisdiction (a "Reincorporation Transaction"), the terms and provisions of this
Warrant shall remain in full force and effect with the sole exception that the
Warrant Holder shall be entitled to receive upon exercise of this Warrant the
same number of shares of common stock of the resulting, successor or resulting
parent corporation (which shall be publicly-traded on the NYSE) as the number of
shares of Common Stock the Warrant Holder is entitled to receive upon exercise
hereof. In the event of the consummation of such a Reincorporation Transaction
involving such a resulting parent corporation, this Warrant and all of the
rights and obligations of the Company hereunder shall immediately be assigned to
any such resulting parent corporation, effective as of the date of such
Reincorporation Transaction.
(c) RECLASSIFICATION, ETC. If the Company by reclassification
of securities or otherwise, shall change the Common Stock or any other
securities as to which purchase rights under this Warrant may exist into the
Exhibit D-1
same or a different number of securities of any other class or classes, this
Warrant shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with respect
to the securities that were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the Purchase
Price therefor shall be appropriately adjusted.
(d) SUBDIVISION OR COMBINATION OF SHARES; STOCK DIVIDENDS. In
the event the Company shall split, divide or combine its outstanding shares of
Common Stock or declare and pay a stock dividend on its outstanding shares of
Common Stock which consists of additional shares of Common Stock (including a
stock split effected in the form of a stock dividend), then the Purchase Price
shall be adjusted, as of the opening of business on the effective date of such
split, subdivision or combination or on the day after the day upon which such
dividend or other distribution is paid to shareholders, as the case may be, to
that price determined by multiplying the Purchase Price in effect immediately
prior to such payment or other distribution by a fraction:
(i) the numerator of which shall be the total number
of outstanding shares of Common Stock immediately prior to such
dividend or distribution; and
(ii) the denominator of which shall be the total
number of outstanding shares of Common Stock immediately after such
dividend or distribution.
(e) ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment of
the Purchase Price pursuant to any provisions of this Section 5, the number of
shares of Common Stock issuable hereunder shall be adjusted, by calculation to
the nearest one hundredth of a whole share, by multiplying the number of shares
of Common Stock issuable prior to an adjustment by a fraction of which:
(i) the numerator shall be the Purchase Price before
any adjustment pursuant to this Section 5; and
(ii) the denominator shall be the Purchase Price
after such adjustment,
provided, however, while adjustments in the number of shares will be calculated
to the nearest hundredth of a whole share, as specified in Section 4(a) above,
no fractional shares will be issued upon any exercise of this Warrant.
(f) LIQUIDATING DIVIDENDS. In the event the Company shall make
a distribution of its assets or evidences of indebtedness to the holders of its
Common Stock as a dividend in liquidation or other than as a dividend payable
out of earnings or surplus legally available for dividends under applicable law
or any distribution to such holders made in respect of the sale of all or
substantially all of the Company's assets (other than under the circumstances
provided for in the foregoing Sections 5(a) through 5(d) then the Warrant Holder
shall be entitled to receive upon such exercise of this Warrant, in addition to
the shares of Common Stock receivable in connection therewith, and without
payment of any consideration other than the Purchase Price multiplied by such
number of shares of Common Stock, an amount in cash equal to the value of such
distribution per share of Common Stock multiplied by such number of shares of
Common Stock (with no further adjustment being made following any event which
causes a subsequent adjustment in the number of shares of Common Stock
issuable), and an appropriate provision therefor shall be made a part of any
such distribution. The value of a distribution that is paid in other than cash
shall be determined in good faith by the Board of Directors of the Company or an
appropriate committee thereof.
(g) NO OTHER ADJUSTMENTS. Other than specifically as set forth
above in Sections 5(a) through 5(d), no adjustment shall be made to the Purchase
Price as a result of or pursuant to the granting or issuance by the Company of
additional shares of Common Stock, or any security convertible thereinto or
exercisable or exchangeable therefore, including without limitation (i) the
issuance of shares of Common Stock or any other security of the Company
(including securities convertible into or exchangeable for shares of Common
Stock) pursuant to an underwritten public offering or a private placement, (ii)
the issuance of shares of Common Stock or any other security of the Company
(including securities convertible into or exchangeable for shares of Common
Stock) as consideration in an acquisition transaction, (iii) the issuance of
shares of Common Stock or any other security of the Company (including
securities convertible into or exchangeable for shares of Common Stock) in
payment or satisfaction of any dividend upon any class of stock of the Company
with a preference as to dividends
Exhibit D-1
over the Common Stock and (iv) the issuance of stock options or restricted
shares of Common Stock to officers, employees or directors of, or consultants
to, the Company or any of its Affiliates.
(h) OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS
SECTION 5. The following provisions will be applicable to the making of
adjustments in any Purchase Price hereinabove provided in this Section 5:
(i) Minimum Adjustment Amount. Notwithstanding any
other provision of this Section 5, when calculating the adjustments
required by Sections 5(a) through 5(d), no adjustment of the Purchase
Price shall be made unless and until such adjustment either by itself
or with other adjustments not previously made increases or decreases
the Purchase Price in effect immediately prior to the making of such
adjustment by at least one percent (1%). Any adjustment representing a
change of less than such minimum amount (except as aforesaid) shall be
carried forward and made as soon as such adjustment, together with
other adjustments required by Sections 5(a) through 5(d) and not
previously made, would result in an adjustment of at least such minimum
amount. All adjustments to the Purchase Price required by Sections 5(a)
though 5(d) will be calculated to the nearest cent.
(ii) No Multiple Adjustments. In the event of any one
circumstance which may give rise to an adjustment to the Purchase Price
under one or more of Sections 5(a) through 5(d), the Company shall only
be required to apply the provisions of one of such subsections, such
subsection to be determined in its sole discretion.
(iii) Par Value. Before taking any action that would
cause an adjustment reducing the Purchase Price below the then par
value of one share of Common Stock, the Company shall take any
commercially reasonable corporate action that may be necessary in order
that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted Purchase Price.
6. CALCULATION OF ADJUSTMENTS. Upon each occurrence of an event causing
an adjustment the Purchase Price or number of shares of Common Stock issuable
upon exercise of this Warrant pursuant to Section 5 above, the Company will
promptly (a) calculate such adjustment and retain a record of such calculation
at its principal office and (b) deliver to the Warrant Holder a certificate
signed by an appropriate officer of the Company, setting forth in reasonable
detail the event requiring the adjustment, the method of calculation of the
adjustment, and the Purchase Price and number of shares of Common Stock
purchasable hereunder after giving effect to such adjustment. If Warrant Holder
does not agree with any adjustment calculated by the Company, then the Warrant
Holder may retain at its own expense a financial advisor to calculate the
adjustment in question, which calculation the Company will consider in good
faith.
7. REPRESENTATIONS AND WARRANTIES OF THE WARRANT HOLDER. The Warrant
Holder represents and warrants to the Company as follows:
(a) The Warrant Holder is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or an "investment advisor" within the meaning
of the Investment Advisers Act of 1940, as amended.
(b) The Warrant Holder has read, reviewed and understands the
information, and any permitted subsequent Warrant Holder will have read,
reviewed and understood the information contained in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2000, filed with the
Commission on April 2, 2001 and the information contained in all subsequent
filings made by the Company with the Commission pursuant to the Securities Act
and the Exchange Act.
(c) The Warrant Holder is an "Accredited Investor" within the meaning
of Rule 501 of Regulation D under the Securities Act. The Warrant Holder
understands that this Warrant is an investment that is speculative in nature.
The Warrant Holder is experienced in investment and business matters,
understands fully the nature of the
Exhibit D-1
risk involved in its investment in this Warrant and any shares of Common Stock
which it may receive upon exercise hereof and understands that it may lose all
of its investment in this Warrant.
(d) The Warrant Holder has sought such accounting, legal and tax advice
as it considers necessary to make an informed investment decision with respect
to this Warrant and the shares of Common Stock which it may receive upon
exercise thereof. The Warrant Holder understands that there can be no assurance
as to the federal or state tax result of an investment in this Warrant or any
upon exercise thereof.
(e) The Warrant Holder is acquiring this Warrant and any shares of
Common Stock which it may receive upon exercise thereof for its own account and
not with a view to the resale or distribution of all or any part thereof in
violation of applicable securities laws.
8. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Warrant Holder as follows:
(a) The Company is a corporation validly existing and in good standing
under the laws of the State of Delaware, and has the power and authority to
execute and deliver this Warrant and to perform its obligations hereunder.
(b) The execution, delivery and performance by the Company of this
Warrant and the issuance of shares of Common Stock upon exercise of this Warrant
have been duly authorized by all necessary corporate action on the past of the
Company, and do not and will not violate or result in a breach of the Company's
bylaws or its certificate of incorporation.
(c) This Warrant has been duly executed and delivered by the Company
and constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with the terms hereof, except as
such enforceability may limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other laws of general
application relating to or affecting creditors' rights and to general equitable
principles.
(d) The Company has authorized and reserved for issuance, and shall at
all times as this Warrant is exercisable keep authorized and reserved for
issuance, solely for issuance and delivery hereunder, such requisite number of
shares of Common Stock as shall from time to time be issuable upon exercise
hereof. From the date hereof through the last date on which this Warrant is
exercisable, the Company shall use commercially reasonable efforts to insure
that such shares of Common Stock have been reserved for listing on the NYSE,
subject to official notice of issuance.
(e) Upon exercise of this Warrant and issuance and delivery of shares
of Common Stock to the Warrant Holder, such shares of Common Stock will be duly
authorized, validly issued, fully paid and non-assessable.
9. RESTRICTIONS ON TRANSFER.
(a) GENERAL. This Warrant and the shares of Common Stock that
may be issued hereunder shall not be transferred by the Warrant Holder or any
subsequent permitted holder of all or a part of this Warrant except in
compliance with the provisions of this Section 9, which conditions are intended
to ensure compliance with the Securities Act and applicable state securities
laws with respect to the transfer of this Warrant, in whole or in part, or any
such shares of Common Stock. The Warrant Holder acknowledges that this Warrant
has not been registered under the Securities Act, and agrees not to sell,
pledge, distribute, offer for sale, transfer or otherwise dispose of this
Warrant or any shares of Common Stock issued upon its exercise, except in
compliance with the provisions of this Section 9.
Exhibit D-1
(b) RESTRICTIVE LEGEND. Absent registration under the
Securities Act, this Warrant shall bear the legend set forth of the cover page
hereof. Unless a registration statement with respect to shares of Common Stock
issuable upon exercise of this Warrant is effective at the time, any shares of
Common Stock issued upon such exercise shall bear the following legend, in
addition to any other legend imposed by applicable state securities laws:
THE SHARES OF COMMON STOCK EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER ANY APPLICABLE STATE SECURITIES LAWS. SUCH
SHARES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, BY
SALE, ASSIGNMENT, PLEDGE OR OTHERWISE, IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. IN
ADDITION, SUCH SHARES ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER DESCRIBED IN SECTION 9 OF THE WARRANT, DATED FEBRUARY
28, 2002, ISSUED BY WEATHERFORD INTERNATIONAL, INC.
(c) PROHIBITED TRANSFEREES. The Warrant Holder may sell,
assign or otherwise transfer this Warrant, in whole or in part, and any shares
of Common Stock issued upon exercise hereof to any Person, subject to the
following conditions:
(i) the Warrant Holder (and any subsequent permitted
holder of this Warrant) may not transfer the Warrant to any of the
Persons listed on Exhibit C hereto or any Affiliate of any such Person
(each, a "Prohibited Transferee"); and
(ii) the Company may in its sole discretion request
that the Warrant Holder deliver an opinion of counsel satisfactory to
the Company that the proposed transfer does not violate any applicable
federal or state securities laws.
Notwithstanding anything to the contrary contained in this Section 9(c) or in
Section 9(e), the Warrant Holder may sell, assign or otherwise transfer this
Warrant, in whole or in part, and any shares of Common Stock issued upon
exercise hereof to any Prohibited Transferee or any Affiliate thereof if any
such Person initiates a public tender offer to acquire shares of Common Stock
that is subject to Section 14(d) of the Exchange Act.
(d) BLACKOUT PERIODS. Notwithstanding the provisions of this
Section 9 and Section 10 below, at any time the Company would be entitled to
deliver a Material Event Notice or a Filing Notice (each as defined in Section
12) or the Company would otherwise be entitled to suspend the sale or
distribution of shares of Common Stock registered on a Shelf Registration
Statement under Section 12(d), the Company may provide written notice to the
Warrant Holder who, upon receipt thereof, shall be prohibited from engaging in
any marketing or selling efforts relating to this Warrant, or any portion
hereof, or with respect to any shares of Common Stock issued upon its exercise
or from contacting any non-Affiliate of STVI in connection therewith or from
consummating with a non-Affiliate of STVI any sale, assignment or other transfer
of this Warrant, in full or in part, or any shares of Common Stock issued upon
its exercise until the expiration of the period specified in Section 12(d) or
upon receipt of written permission from the Company; provided, however, that in
the event the Company provides such notice during the 180-day period specified
in Section 10(e) below, such period shall be extended by the number of days any
prohibition on transfer shall be in effect pursuant to this Section 9(d).
(e) FURTHER LIMITATIONS UPON TRANSFER OF WARRANT. This
Warrant, or any portion hereof, may not be sold, assigned or otherwise
transferred to a non-Affiliate of STVI prior to the third anniversary of the
Issue Date. After the third anniversary of the Issue Date, this Warrant, or any
portion hereof, may be sold, assigned or otherwise transferred, subject to the
following limitations: (i) prior to any such sale, assignment or other transfer
to a non-Affiliate of STVI, the Warrant Holder shall first deliver a Transfer
Notice (as defined in Section 10(a)) and otherwise comply with the provisions of
Section 10 and (ii) any proposed sale, assignment or other transfer of the of
the Warrant, in full or in part, must relate to not less than 33 1/3% of the
Total Number of Shares, unless exercised for
Exhibit D-1
the remaining unexercised balance of the Total Number of Shares. In addition,
the Warrant Holder's right of conversion described in Section 3 of this Warrant
may not be transferred to a non-Affiliate of STVI and upon the sale, transfer or
assignment of this Warrant (or any portion thereof) to a non-Affiliate of STVI,
Section 3 shall be deemed to be null and void and deleted from this Warrant or
from the transferred portion thereof, as the case may be.
(f) Indemnification. Except as provided in Section 12(e), the
Warrant Holder agrees to indemnify, with respect to any offer or sale,
assignment or other transfer of this Warrant, in full or in part (and any
marketing or selling efforts undertaken or materials prepared by or on behalf of
the Warrant Holder in connection therewith), to the fullest extent permitted by
law, the Company, its directors and officers and each person who controls the
Company (within the meaning of the Securities Act) against any losses, claims,
liabilities (joint or several), damages, fines, costs and expenses
(collectively, "Losses") (including, without limitation, reasonable fees and
expenses of legal counsel) arising out of or resulting from any such offer or
sale or such marketing or selling efforts so undertaken or materials so
prepared, except insofar as such Losses arise out of or result from any untrue
or alleged untrue statement of a material fact or any omission or alleged
omission of a material fact required to be stated in any reports filed by the
Company under the Exchange Act.
(g) GOVERNMENTAL AND OTHER APPROVALS; COSTS AND EXPENSES. Any
transfer of this Warrant, in full or in part (including under Section 10), or
any shares of Common Stock issued upon its exercise, shall be subject to the
receipt of any and all necessary governmental and other third party approvals,
authorizations, waivers and consents which may be required to be obtained by
this Warrant Holder and/or the proposed transferee(s). Subject to Section 10(d),
the Company shall not be required to make any filings with any governmental
authorities or otherwise take any action that may be deemed to be necessary or
advisable in connection with obtaining any such approvals, authorizations,
waivers and consents or be required to bear any costs and expenses in connection
therewith.
(h) SURVIVAL OF THIS WARRANT. Except as described in this
Section 9, upon any transfer of this Warrant, in full or in part, by the Warrant
Holder, the terms and provisions of this Warrant and obligations of the Warrant
Holder hereunder shall become the legal, valid and binding obligations of such
transferee(s).
(i) REGISTRATION RIGHTS. Notwithstanding any other provision
of this Warrant, the shares of Common Stock issuable upon exercise of this
Warrant are subject to registration rights as described in Section 12 below and
may be resold under a Shelf Registration Statement (as defined in Section 12)
upon the effectiveness thereof without regard to the restrictions on transfer
contained in this Section 9 and Section 10.
10. RIGHT OF FIRST OFFER.
(a) TRANSFER NOTICE. If the Warrant Holder desires to sell the
Warrant, in whole or in part, to a Person who is a non-Affiliate, the Warrant
Holder shall first give written notice (a "Transfer Notice") to the Company of
such fact; provided, however, if the Warrant Holder desires to sell the Warrant
in part, such part must relate to no less than 33 1/3% of the Total Number of
Shares. Following the delivery of each Transfer Notice, the Warrant Holder shall
not be entitled to deliver any additional Transfer Notices during the pendency
of any 180-day period referred to in Section 10(e) below. For purposes of this
Section 10, except where specifically provided, the term "Warrant" shall mean
the Warrant, or such lesser portion of the Warrant specified in any Transfer
Notice.
(b) CONFIDENTIAL PURCHASE OFFER. Upon Warrant Holder's
delivery of a Transfer Notice, the Company shall have twenty (20) days (the
"Response Period") to make a confidential written offer to Warrant Holder to
purchase the Warrant (the "Confidential Purchase Offer") for a purchase price
(the "Confidential Offer Price") determined by the Company; provided, however,
that the Company may only offer to purchase that portion of the Warrant
indicated in the Transfer Notice; provided, further, that the terms of such
Confidential Purchase Offer (including the identity of the Company, the portion
of the Warrant to which the Confidential Purchase Offer applies and the
Confidential Offer Price) shall be kept confidential by the Warrant Holder and
shall not be disclosed to any third party (including any subsequent purchaser of
the Warrant under subsection (e) below).
Exhibit D-1
(c) CLOSING OF CONFIDENTIAL PURCHASE OFFER. The Warrant Holder
shall have ten (10) days to accept or reject the Confidential Purchase Offer. If
Warrant Holder elects to accept the Confidential Purchase Offer, the closing of
the sale of the Warrant will be held at a location to be mutually agreed, and on
a date which is not more than ten business (10) days after the Warrant Holder
notifies the Company that it has accepted the Company's offer to purchase the
Warrant. At the closing, the Company will deliver the Confidential Offer Price
to the Warrant Holder by certified or cashier's check or bank draft payable to
the order of the Warrant Holder in immediately available funds or by wire
transfer of same day funds to an account specified by the Warrant Holder, and
the Warrant Holder will deliver the Warrant to the Company, free and clear of
any and all liens, encumbrances and adverse claims.
(d) GOVERNMENTAL AND OTHER APPROVALS; COSTS AND EXPENSES. If
any governmental or other third party approval, authorization, waiver or consent
is required to be obtained prior to the closing referred to in subsection (c)
above, the Company will make any such filings with governmental authorities
and/or to take any such related actions. In the event the Company and the
Warrant Holder do make any filings with governmental authorities and take any
related actions, the Company and the Warrant Holder shall each bear their own
respective costs and expenses associated therewith.
(e) NO PURCHASE BY THE COMPANY / SALE TO THIRD PARTY. If at
the end of the Response Period, the Company has not delivered an offer to
purchase the Warrant in accordance with subsection (b) above, or if such an
offer has been delivered but the Warrant Holder, by written notice given within
ten (10) days of its receipt thereof, has declined such offer, then, the Warrant
Holder shall be entitled for a period of one-hundred eighty (180) days beginning
the day after the expiration of the Response Period to sell the Warrant to a
permitted transferee pursuant to Section 9 hereof at a price that is greater
than the Confidential Offer Price, or if no offer has been made by the Company,
at any price. The Company shall co-operate and not impede, or take any action
intended to impede, the sale of the Warrant and shall use reasonable efforts to
facilitate the sale of the Warrant, provided the Warrant Holder has otherwise
complied with the terms of this Warrant.
(f) CONSUMMATION OF SALE TO THIRD PARTY. Upon any sale of this
Warrant to a third party pursuant to subsection (d) above, the Warrant Holder
shall provide written notice the Company of the consummation thereof and shall
as soon as practicable thereafter furnish written evidence of such consummation
(including the date, price and other terms thereof) to the Company; provided,
however, any such sale shall only be registered on the books of the Company upon
full compliance by the Warrant Holder and such transferee with Sections 9 and 12
hereof.
(g) FAILURE OF THE WARRANT HOLDER TO CONSUMMATE SALE OF THE
WARRANT. If, at the end of the 180- day period referred to in subsection (d)
above, the sale of the Warrant has not been completed, Warrant Holder shall no
longer be permitted to sell or cause the sale of the Warrant in whole or in part
without again complying with all of the provisions set forth in this Section 10.
(h) FAILURE OF THE COMPANY TO CONSUMMATE PURCHASE OF THE
WARRANT. Notwithstanding the foregoing, in the event that, through no fault of
the Warrant Holder, the Company fails to close the purchase of the Warrant on
the date specified pursuant to subsection (c) above, the Warrant Holder shall be
entitled, for a period of one-hundred eighty (180) days from the closing date
originally set pursuant to subsection (c), to sell or cause the sale of the
Warrant at any price to any permitted transferee pursuant to Section 9 of this
Warrant without having to further comply with the provisions set forth in
clauses (a) and (b) of this Section 10.
11. TRANSFER OF THIS WARRANT ON THE BOOKS OF THE COMPANY.
(a) Subject to the restrictions on transfer provided for in
Section 9 above:
(i) this Warrant shall be issued in registered form
and the Company shall keep at its principal executive office a register or
ledger in which, subject to such reasonable regulations as it may prescribe
Exhibit D-1
and at its expense (other than transfer taxes, if any), the Company shall
provide for the registration and transfer of this Warrant.
(ii) title to this Warrant may be transferred, in
whole or in part, by endorsement (by the holder hereof properly executing the
Assignment (in the form of Exhibit B hereto) and delivery to the Company at its
principal office in the same manner as in the case of a negotiable instrument
transferable by endorsement and delivery;
(iii) any Person in possession of this Warrant
properly endorsed is authorized to represent himself as absolute owner hereof
and is empowered to transfer absolute title hereto by endorsement and delivery
hereof to a bona fide purchaser hereof for value; each prior taker or owner
waives and renounces all of his equities or rights in this Warrant in favor of
each such bona fide purchaser, and each such bona fide purchaser shall acquire
absolute title hereto and to all rights represented hereby;
(iv) until this Warrant is transferred on the books
of the Company, the Company may treat the registered holder hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to the
contrary; and
(v) any transfer tax relating to such transfer shall
be paid by the Warrant Holder.
(b) On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant, and (in
the case of any such loss, theft or destruction of this Warrant) on delivery of
any indemnity agreement or security reasonably satisfactory in form and amount
to the Company or (in the case of any such mutilation) on surrender and
cancellation of this Warrant and at the Warrant Holder's expense, the Company
will execute and deliver to the Warrant Holder, in lieu thereof, a new Warrant
of like tenor.
12. REGISTRATION RIGHTS WITH RESPECT TO SHARES.
(a) DEMAND REQUEST. Subject to the limitations in contained in
this Section 12, at any time during the Exercise Period the following conditions
are met:
(i) this Warrant has been exercised by the Warrant
Holder with respect to at least 33 1/3% of the Total Number of Shares;
and
(ii) all of the shares of Common Stock received upon
such exercise(s) are not eligible for resale pursuant to Rule 144(k)
under the Securities Act,
the Warrant Holder may request in writing (a "Demand Request") that the Company
prepare and file a "shelf" registration statement (a "Shelf Registration
Statement") on Form S-3 (or other appropriate form) pursuant to Rule 415 under
the Securities Act with respect to dispositions of shares of Common Stock for
resale from time to time; provided, however, the Company shall not be required
to file a Shelf Registration Statement that registers less than 33 1/3% of the
Total Number of Shares. A maximum of three (3) Demand Requests are available, in
aggregate, under this Warrant.
(b) SHELF REGISTRATION STATEMENT. Upon receipt of a Demand
Request, and if the conditions set forth in clauses (i) and (ii) of paragraph
(a) above have been met, the Company shall file a Shelf Registration Statement
with the Commission within 30 business days and will use commercially reasonable
efforts to cause the Shelf Registration Statement to be declared effective as
promptly as is practicable after such filing and, subject to Section 12(c)
below, shall use commercially reasonable efforts to keep the Shelf Registration
Statement effective, supplemented and amended to the extent necessary to assure
that it is available for resale of the shares of Common Stock by the Warrant
Holder and that it conforms with the requirements of this Agreement, the
Securities Act, and the rules and regulations promulgated by the Commission
thereunder, in each case during the entire period (the "Shelf Registration
Period") beginning on the date such Shelf Registration Statement shall first be
declared effective under the Securities Act (the "Shelf Effective Date") and
ending on the earlier to occur of (A) the first anniversary
Exhibit D-1
of the Shelf Effective Date and (B) the date on which all of the shares of
Common Stock registered under the Shelf Registration Statement become eligible
for resale pursuant to Rule 144(k) under the Securities Act.
(c) INFORMATION SUPPLIED BY WARRANT HOLDER. The Warrant Holder
shall furnish to the Company in writing, as soon as practicable after the date
of the Demand Request but not later than five (5) business days prior to the
initial filing of the Shelf Registration Statement, any of the information
specified in Items 507 and 508 of Regulation S-K under the Securities Act, or
any other information reasonably requested by the Company for inclusion in the
Shelf Registration Statement pursuant to the Securities Act or the rules and
regulations promulgated by the Commission thereunder. The Warrant Holder shall
promptly furnish to the Company any such information upon the Company's request
for inclusion in any new prospectus or prospectus supplement or post-effective
amendment.
(d) LIMITATIONS. If during the Shelf Registration Period, the
Company believes that an event or events have occurred which, in the good faith
opinion of the Company, require the filing of a new prospectus or prospectus
supplement or post-effective amendment in order that the prospectus not contain
any misstatement of a material fact or not omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading (a
"Corrective Filing"), the Company shall promptly so notify the Warrant Holder (a
"Material Event Notice"), and the Company shall prepare and file with the
Commission and deliver to the Warrant Holder such Corrective Filing, as promptly
as practicable but in any event within ten (10) business days after the date a
Material Event Notice is given, except that the Company may delay such filing
for such number of days, not to exceed seventy-five (75) days, if the Company
determines that (x) the public disclosure of any of the information requiring
the Corrective Filing is impractical or would have a material adverse effect on
the Company, or (y) the filing of such Corrective Filing would have a
significant disruptive effect on any material transaction then pending;
provided, however, that such delay shall not be longer than is reasonably
required, in the Company's sole judgment, to avoid such material adverse effect
or significant disruptive effect. If any new prospectus or prospectus supplement
or post-effective amendment is required in connection with the Shelf
Registration Statement other than a Corrective Filing (any such filing, other
than a Corrective Filing, is herein called a "Routine Filing"), the Company will
so notify the Warrant Holder in writing (a "Filing Notice") and shall prepare
and file with the Commission and deliver to the Warrant Holder such Routine
Filing as promptly as practicable but in any event within ten (10) days after
the date the Filing Notice is given. The Warrant Holder may make sales of shares
of Common Stock under the Shelf Registration Statement during the Shelf
Registration Period, but if the Warrant Holder has received a Material Event
Notice or Filing Notice, sales may not be made from the time such notice is
received by the Warrant Holder until the date on which the Corrective Filing or
Routine Filing, as the case may be, has been filed or if the Corrective Filing
or Routine Filing is a post-effective amendment, the date the post-effective
amendment has become effective under the Securities Act, of which date the
Company shall give prompt notice to the Holders.
In addition, notwithstanding anything to the contrary contained in this Section
12, the Company shall be permitted, on written notice to the Warrant Holder, to
suspend the period of sale or distribution of shares of Common Stock at any
time:
(i) in the case of an underwritten public offering of
securities for the account of the Company (A) not involving a "shelf"
registration statement filed pursuant to Rule 415 under the Securities
Act, during the period beginning ten (10) days prior to the estimated
date of filing of a registration statement pertaining to such offering
and ending upon the expiration of any "lock up" period reasonably
requested by the underwriters of such public offering with respect to
shares of Common Stock held by directors and executive officers of the
Company (the "Lock-up Expiration Date") or (B) involving a "shelf"
registration statement filed pursuant to Rule 415 under the Securities
Act, during the period beginning ten (10) days prior to the date of any
preliminary prospectus supplement relating to such offering (or in the
event no preliminary prospectus supplement is used, fifteen (15) days
prior to the pricing of such offering) and ending on the Lock-up
Expiration Date;
Exhibit D-1
(ii) during any period in which the Company is in
possession of material non-public information concerning it or its
business and affairs, the public disclosure of which, in the good faith
judgment of the Company, would have a material adverse effect on the
Company; or
(iii) during any period if the Company is engaged in
any material acquisition, transaction or disposition transaction that
would, in the good faith judgment of the Company, be significantly
disrupted by a sale or distribution.
(e) INDEMNIFICATION.
(i) Indemnification by the Company. The Company
agrees to indemnify, with respect to a Shelf Registration Statement
filed by the Company, to the fullest extent permitted by law, the
Warrant Holder, its directors and officers and each person who controls
the Warrant Holder (within the meaning of the Securities Act) against
all Losses (including, without limitation, reasonable fees and expenses
of legal counsel) arising out of or resulting from any untrue or
alleged untrue statement of a material fact or any omission or alleged
omission of a material fact required to be stated in such Shelf
Registration Statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or necessary to make the
statements therein not misleading, except insofar as the same are
caused by or contained in any information furnished to the Company by
or on behalf of the Warrant Holder expressly for use therein.
(ii) Indemnification by the Warrant Holder. The
Warrant Holder agrees to indemnify, with respect to a Shelf
Registration Statement filed by the Company, to the fullest extent
permitted by law, the Company, its directors and officers and each
person who controls the Company (within the meaning of the Securities
Act) against any Losses (including, without limitation, reasonable fees
and expenses of legal counsel) arising out of or resulting from any
untrue or alleged untrue statement of a material fact or any omission
or alleged omission of a material fact required to be stated in such
Shelf Registration Statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or necessary to make the
statements therein not misleading, to the extent that such untrue
statement or omission is caused by or contained in any information
furnished by or on behalf of the Warrant Holder for use therein.
(f) EXCHANGE ACT REPORTS. The Company's filing of a report
under the Exchange Act that is incorporated by reference into the prospectus
shall be considered to be a Corrective Filing if such filing eliminates the
necessity of otherwise making a Corrective Filing.
(g) STOP TRANSFER INSTRUCTIONS. The Company may give such stop
transfer instructions to its transfer agent as it shall deem reasonably
necessary to prevent any sale of shares of Common Stock under the Shelf
Registration Statement at any time when the Holders are not permitted to make
such a sale pursuant to this Section 12.
(h) NO PIGGYBACK OR OTHER REGISTRATION RIGHTS. Other than as
set forth in this Section 12, the Warrant Holder shall have no registration
rights with respect to this Warrant or any shares of Common Stock issued upon
exercise hereof (including any "piggyback" registration rights).
13. CHOICE OF LAW. In all respects, including all matters of
construction, validity and performance, this Warrant and the obligations arising
hereunder shall be governed by, and construed and enforced in accordance with,
the laws of the State of Texas applicable to contracts made and performed in
such state, without regard to the principles thereof regarding conflict of laws,
and any applicable laws of the United States of America.
14. NOTICES. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and
shall be (i) personally served, (ii) deposited in the mail, registered or
certified, return receipt requested, postage prepaid, (iii) delivered by
reputable air courier service with charges
Exhibit D-1
prepaid, or (iv) transmitted by hand delivery, telegram or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile (with accurate confirmation generated by the
transmitting facsimile machine, so long as a hard copy is delivered by reputable
courier during regular business hours on the next business day) at the address
or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be:
Exhibit D-1
if to the Company, to:
Weatherford International, Inc.
515 Post Oak Boulevard, Suite 600
Houston, Texas 77027
Attention: Burt M. Martin
Phone: 713.693-4000
Facsimile: 713-693-4484
with a copy (which shall not constitute notice) to:
Andrews & Kurth, L.L.P.
600 Travis, Suite 4200
Houston, TX 77002
Attention: Robert V. Jewell
Telephone: 713-220-4200
Facsimile: 713-220-4285
if to the Warrant Holder, to:
Shell Technology Ventures Inc.
200 North Dairy Ashford
Houston, Texas 77079
Attention: Ricardo Rodriquez
Telephone: 713-241-6870
Facsimile: 713-241-0735
with a copy (which shall not constitute notice) to:
Shell Technology Ventures Ltd.
Volmerlaan 8
2280 GD Rijswijk-ZH
The Netherlands
Attention: Joe Ludwig, RIJ-VOL GR 107E
Telephone: 31 70 311 6613
Facsimile: 31 70 311 6660
Either party hereto may from time to time change its address or facsimile number
for notices under this Section 14 by giving at least ten (10) days' prior
written notice of such changed address or facsimile number to the other party
hereto.
15. ENTIRE AGREEMENT. This Warrant, including the Exhibits hereto, a
constitutes and contains the entire agreement and understanding of the parties
with respect to the subject matter hereof and supersede any and all prior
negotiations, correspondence, agreements, understandings, duties or obligations
between the parties respecting the subject matter hereof.
16. AMENDMENT. Any provision of this Warrant may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the
Company and the Warrant Holder. Any amendment or waiver effected in accordance
with this Section 16 shall be binding upon the Warrant Holder and the Company.
17. SEVERABILITY. In the event that any provision of this Warrant or
the application thereof, becomes or is declared by a court of competent
jurisdiction to the illegal, void or unenforceable, the remainder of this
Warrant will continue in full force and effect and the application of such
provision to other Persons or circumstances will be
Exhibit D-1
interpreted so as reasonably to effect the intent of the parties hereto. The
parties further agree to replace such void or unenforceable provisions of this
Warrant with a valid and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of such void or
unenforceable provision.
18. HEADINGS. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect any of the terms hereof.
* * * * *
Exhibit D-1
IN WITNESS WHEREOF, the parties hereto have caused this Warrant to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
WEATHERFORD INTERNATIONAL, INC.
By: /s/ Bernard J. Duroc-Danner
--------------------------------
Name: Bernard J. Duroc-Danner
--------------------------------
Title: Chairman, CEO & President
--------------------------------
SHELL TECHNOLOGY VENTURES INC.,
as Warrant Holder
By: /s/ Ricardo Rodriguez
--------------------------------
Name: Ricardo Rodriguez
--------------------------------
Title: Attorney In Fact
--------------------------------
Exhibit D-1