|
Ireland
|
001-36504
|
98-0606750
|
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(I.R.S. Employer Identification No.)
|
Weststrasse 1, 6340 Baar, Switzerland
|
CH 6340
|
(Address of principal executive offices)
|
(Zip Code)
|
|
|
|
|
(Former name or former address, if changed since last report)
|
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
Ordinary Shares, par value $0.
0
01 per share
|
WFT
|
New York Stock Exchange
|
|
•
|
The Company’s existing unsecured notes will be cancelled and exchanged for (a) 99% of the common stock of the reorganized Company (the “
New Common Stock
”) and (b) $1.25 billion of new tranche B senior unsecured notes to be issued by the reorganized Company with a seven-year maturity. Holders of the Company’s unsecured notes shall have the option to convert up to $500 million of the tranche B senior unsecured notes to New Common Stock at the mid-point of plan equity value. The tranche B senior unsecured notes will be pari passu with the tranche A senior unsecured notes described below.
|
•
|
The Company’s existing secured funded debt and unsecured revolving credit facility debt will be repaid in full in cash in connection with the Transaction.
|
•
|
All trade claims against the Company (whether arising prior to or after the commencement of the Cases) will be paid in full in the ordinary course of business.
|
•
|
The Company’s existing equity will be cancelled and exchanged for (a) 1% of the New Common Stock, and (b) three-year warrants to purchase 10% of the New Common Stock (the “
Warrants
”). The strike price of the Warrants will be set at an equity value at which the Consenting Creditors would receive a recovery equal to par plus accrued and unpaid interest as of the date of the commencement of the Cases in respect of their existing unsecured notes and all other general unsecured claims that are pari passu with the existing unsecured notes.
|
•
|
The Company’s DIP Facilities (as defined below) will be repaid or refinanced in full upon consummation of the Transaction through the Company’s (a) entry into an undrawn first lien exit revolving credit facility in the principal amount of up to $1.0 billion and (b) issuance of up to $1.25 billion of new tranche A senior unsecured notes with a five-year maturity, which notes issuance will be fully backstopped by certain of the Consenting Creditors.
|
|
|
|
(d)
|
|
Exhibits
|
|
|
Weatherford International plc
|
Date:
|
May 13, 2019
|
|
|
|
|
|
By:
|
/s/ Christina M. Ibrahim
|
|
Name:
|
Christina M. Ibrahim
|
|
Title:
|
Executive Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary
|
(a)
|
Each Debtor has duly executed and delivered signatures pages to this Agreement; and
|
(b)
|
Consenting Noteholders holding, in the aggregate, at least 50% of the outstanding aggregate principal amount of all Notes Claims have duly executed and delivered signatures pages to this Agreement.
|
(a)
|
The Debtors shall, as soon as practicable but subject to the satisfaction or waiver of the conditions precedent contained in the Definitive Documentation, effectuate the Restructuring through confirmation and consummation of the Plan and the execution and delivery of the Definitive Documentation, in each case on terms and conditions consistent with the Term Sheet, in the Cases.
|
(b)
|
Where the provisions of this Agreement and the Term Sheet refer or apply to the Chapter 11 Cases, the Bankruptcy Court and/or the Plan (including Definitive Documentation (as defined below) and any other documentation relating or relevant thereto) or events, circumstances or procedures in the
|
(a)
|
The definitive documents and agreements governing the Restructuring (collectively, the “
Definitive Documentation
”) shall include:
|
(i)
|
the Plan;
|
(ii)
|
the Scheme of Arrangement;
|
(iii)
|
an order confirming the Plan (the “
Confirmation Order
”);
|
(iv)
|
an order of an Irish court approving the Scheme of Arrangement;
|
(v)
|
the disclosure statement with respect to the Plan, the other solicitation materials in respect of the Plan (such materials, collectively, the “
Solicitation Materials
”), and an order entered by the Bankruptcy Court approving the Disclosure Statement and Solicitation Materials as containing, among other things, “adequate information” as required by section 1125 of the Bankruptcy Code (the “
Disclosure Statement Order
”);
|
(vi)
|
a motion seeking approval of the Debtors’ incurrence of post- petition debt financing (the “
DIP Motion
”) and the credit agreement with respect thereto (the “
DIP Credit Agreement
”); the interim and final orders granting the DIP Motion (the “
Interim DIP Order
” and “
Final DIP Order
”, respectively, and collectively, the “
DIP Orders
” and together with the DIP Motion and DIP Credit Agreement, the “
DIP Financing Documents
”);
|
(vii)
|
a motion by the Debtors seeking Bankruptcy Court approval to assume this Agreement pursuant to section 365(a) of the Bankruptcy Code (the “
RSA Motion
”);
|
(viii)
|
an order approving the RSA Motion (the “
RSA Order
”);
|
(ix)
|
the agreement with respect to the post-Plan Effective Date financing, and any agreements, commitment letters, documents, or instruments related thereto (the “
Exit Facility Documents
”);
|
(x)
|
the warrant agreement and any related agreements and documentation (the “
Warrant Documents
”);
|
(xi)
|
any list of material executory contracts and unexpired leases to be assumed, assumed and assigned, or rejected;
|
(xii)
|
any supplement to the Plan (the “
Plan Supplement
”) including, without limitation, any constitutional, organizational and other documents of the Debtors setting forth the rights of stockholders after the Plan Effective Date, including, but not limited to, any charters, bylaws, operating agreements, stockholders’ or unitholders’ agreements, registration rights agreements, or other similar agreements (the “
Corporate Governance Documents
”); and
|
(xiii)
|
any document or filing identified in the Term Sheet as being subject to approval or consent rights under
Section 4(b)
of this Agreement.
|
(b)
|
The Definitive Documentation remains subject to negotiation and completion and shall, upon completion, contain terms, conditions, representations, warranties, and covenants consistent with the terms of this Agreement and the Term Sheet. Except where otherwise specified in this Agreement or the Term Sheet or agreed to in writing by the Parties, the Definitive Documentation (other than the Corporate Governance Documents) shall otherwise be in form and substance reasonably acceptable to the Debtors, on the one hand, and the Required Consenting Noteholders
1
, on the other hand;
provided
,
however
, that:
|
|
|
|
(i)
|
The Corporate Governance Documents shall, in each case, be consistent with the Term Sheet and otherwise satisfactory to the Required Consenting Noteholders in their sole discretion;
|
(ii)
|
The Exit Facility Documents shall, in each case, be consistent with the Term Sheet and (A) otherwise satisfactory to the Debtors and the lenders under the Exit Facility Documents, each in their sole discretion and (B) otherwise reasonably satisfactory to the Required Consenting Noteholders; and
|
(iii)
|
The DIP Financing Documents shall, in each case, be consistent with the Term Sheet and (A) otherwise satisfactory to the Debtors and the lenders under the DIP Financing Documents, each in their sole discretion and (B) otherwise reasonably satisfactory to the Required Consenting Noteholders.
|
(c)
|
The Debtors shall use good faith efforts to provide to the Consenting Noteholders’ legal counsel drafts of all motions or applications, including proposed orders, and other documents that the Debtors intend to file with the Bankruptcy Court not less than three (3) Business Days
2
before the date when the Debtors intend to file any such motion, application or document, including for the avoidance of doubt, all first day motions and orders;
p
rovided,
h
owever, that in the event that three (3) Business Days’ notice is impossible or impracticable under the circumstances, the Debtors shall provide draft copies of any motions, applications, including proposed orders and any other documents the Debtors intend to file with the Bankruptcy Court to the Consenting Noteholders’ legal counsel as soon as otherwise practicable before the date when the Debtors intend to file any such motion, application or document. The Debtors shall notify the Consenting Noteholders’ legal counsel telephonically or by electronic mail to advise them of the documents to be filed and the facts that make the provision of advance copies not less than three (3) Business Days before submission impossible or impracticable.
|
(a)
|
use commercially reasonable best efforts to support and cooperate with the other Parties to this Agreement and use reasonable best efforts to take or cause to be taken all actions reasonably necessary to consummate the
|
|
|
|
(b)
|
negotiate in good faith any terms of the Definitive Documentation that are subject to negotiation as of the RSA Effective Date.
|
(a)
|
Each Consenting Noteholder agrees, severally and not jointly, as applicable, from the RSA Effective Date until the occurrence of a Termination Date (as defined in
Section 12
of this Agreement) with respect to the Consenting Noteholders, so long as it remains the legal owner, beneficial owner and/or investment advisor or manager of or with power and/or authority to bind any Notes Claims, to use commercially reasonable efforts to:
|
(i)
|
(A) subject to receipt of the Disclosure Statement, vote all of its Notes Claims against, or interests in, as applicable, the Debtors now or hereafter owned by such Consenting Noteholder (or which such Consenting Noteholder now or hereafter has voting control over) to accept the Plan and Scheme of Arrangement in accordance with the applicable procedures set forth in the Disclosure Statement and the Solicitation Materials that meet the requirements of applicable law, including sections 1125 and 1126 of the Bankruptcy Code and any similar laws applicable to the Examinership Proceeding; (B) timely return a duly-executed ballot in connection therewith; and (C) not “opt out” of or object to any releases or exculpation provided under the Plan (and, to the extent required by such ballot, affirmatively “opt in” to such releases and exculpation);
|
(ii)
|
not withdraw, amend, change, or revoke (or seek to withdraw, amend, change, or revoke) its tender, consent, or vote with respect to the Plan;
provided
,
however
, that the tender, consent or votes of the Consenting Noteholders shall be immediately revoked and deemed void
ab initio
upon the occurrence of the Termination Date;
|
(iii)
|
not (A) object to, delay, impede, or take any other action (including to instruct or direct the Indenture Trustee) to interfere with the prompt consummation of the Restructuring or the Definitive Documentation (including the entry by the Bankruptcy Court of an order approving the Disclosure Statement and the Confirmation Order, if applicable); (B) propose, file, support, or vote for any restructuring, workout, reorganization, liquidation, or chapter 11 plan for any of the Debtors or their subsidiaries (the Debtors and their subsidiaries, collectively, the “
Weatherford Parties
”), other than the Restructuring and the Plan; or (C) encourage or support any other person or entity to do any of the foregoing;
|
(iv)
|
not take any other action, including, without limitation, initiating or joining in any legal proceeding or filing any pleading, that is inconsistent with its obligations under this Agreement, that could hinder, delay, or prevent the timely consummation of the Restructuring and the confirmation and consummation of the Plan and entry of the Confirmation Order;
|
(v)
|
not direct any indenture trustee to take any action inconsistent with such Consenting Noteholder’s obligations under this Agreement, and, if any indenture trustee takes any action inconsistent with such Consenting Noteholder’s obligations under this Agreement, such Consenting Noteholder shall (consistent with the terms of the Indentures) use its commercially reasonable efforts (which shall exclude the provision of any indemnity) to direct such indenture trustee (as applicable) to cease and refrain from taking such action; and
|
(vi)
|
to the extent any legal or structural impediment arises that would prevent, hinder or delay the consummation of the Plan, use commercially reasonable efforts to negotiate with the Debtors in good faith in an effort to agree to appropriate additional or alternative provisions or alternative implementation mechanics to address any such impediment;
provided
, that the economic outcome for the Consenting Noteholders and other material terms of this Agreement must be substantially preserved in such alternate provisions or implementation mechanics.
|
(b)
|
Notwithstanding the foregoing, nothing in this Agreement shall limit, condition or restrict, in any way, any applicable Consenting Noteholders acting in their capacity as a lender under the DIP Credit Agreement from (i) exercising any rights and remedies under the DIP Financing Documents, (ii) waiving or forbearing with respect to any Default or Event of Default under and as defined in the DIP Financing Documents, (iii) amending, modifying or supplementing the DIP Financing Documents (or any related credit documents); or (iv) refusing to make additional advances under the DIP Financing Documents, in each case, in their sole and absolute discretion, subject to the terms of the DIP Financing Documents.
|
(c)
|
The foregoing sub-clause (a) of this Section 6 will not limit any of the following Consenting Noteholder rights:
|
(i)
|
rights in any applicable bankruptcy, insolvency, foreclosure or similar proceeding, including the right to appear as a party in interest in any matter to be adjudicated in order to be heard concerning any matter arising in the Cases, in each case provided that such appearance and the positions advocated in connection therewith are not inconsistent with this Agreement (including the Term Sheet) and
|
(ii)
|
rights under any applicable credit agreement, indenture, other loan document, or any other contract, stipulation, or applicable law, and nothing herein shall constitute a waiver or amendment of any provision thereof, provided that the exercise of such rights is not inconsistent with the terms of this Agreement solely during the time in which this Agreement is in effect and does not hinder, delay or prevent consummation of the Plan or the Restructuring;
|
(iii)
|
rights to purchase, sell or enter into any transactions in connection with the Notes Claims subject to the terms of this Agreement, including a Transfer pursuant to
Section 13
hereof;
|
(iv)
|
rights to consult with other Consenting Noteholders, the Debtors, or any other party in interest in the Cases, provided, that such action is not inconsistent with this Agreement (including the Term Sheet) and does not hinder, delay or prevent consummation of the Plan or the Restructuring;
|
(v)
|
rights to direct or request the amendment or supplementation of any proof of claim filed by or on behalf of the Consenting Noteholders including the proofs of claim filed by the Indenture Trustee;
|
(vi)
|
rights to object to any proof of claim that is not related to Notes Claims held by the Consenting Noteholders, or to any settlement or proposed allowance of any such proof of claim to the extent consistent with this Agreement and the Term Sheet; or
|
(vii)
|
rights to enforce any right, remedy, condition, consent or approval requirement under this Agreement, the Term Sheet or any of the Definitive Documentation.
|
(a)
|
Use reasonable best efforts to implement the Restructuring in accordance with the applicable milestones set forth in
Schedule 1
hereto (collectively, the “
Milestones
”), which Milestones may only be extended in accordance with
Section 28
of this Agreement;
|
(b)
|
cause the Weatherford Parties to support and take all steps reasonably necessary and desirable to consummate the Restructuring in accordance with this Agreement and the Term Sheet;
|
(c)
|
prepare, or cause to be prepared, the Definitive Documentation and any related documents, and distribute such documents concurrently to the other
|
(d)
|
use commercially reasonable efforts to negotiate commitment agreements in respect of the DIP Term Loan and the Tranche A Exit Senior Unsecured Notes (each as defined in the Term Sheet) with the DIP Lenders and the Exit Lenders (each as defined in the Term Sheet);
|
(e)
|
file with the Bankruptcy Court, as soon as reasonably practicable, but in no event later than the dates set forth in the Milestones (as such Milestones may otherwise be extended in accordance with the terms hereof), the Plan and the Disclosure Statement;
|
(f)
|
(i) support and take all actions reasonably necessary to facilitate the solicitation, confirmation, and consummation of the Plan; and (ii) not take any action or commence or continue any proceeding that is inconsistent with, or that would delay or impede the solicitation, confirmation, or consummation of the Plan;
|
(g)
|
(i) support and take all actions reasonably necessary to facilitate the approval of the RSA Motion; and (ii) not take any action that is inconsistent with, or that would delay or impede the approval of, the RSA Motion.
|
(h)
|
not undertake any action that is inconsistent with this Agreement, or which could unreasonably hinder, delay or prevent the timely consummation of the Restructuring and the Definitive Documentation, including, without limitation, filing any motion to reject this Agreement in the Bankruptcy Court;
|
(i)
|
support and take all actions as are reasonably necessary and appropriate to obtain any and all required regulatory and/or third-party approvals to consummate the Restructuring;
|
(j)
|
timely pay all fees and expenses as set forth in
Section 15
of this Agreement;
|
(k)
|
timely file a formal objection to any motion filed with the Bankruptcy Court by a third party seeking the entry of an order (i) directing the appointment of a trustee or examiner (with expanded powers beyond those set forth in sections 1106(a)(3) and (4) of the Bankruptcy Code), (ii) converting the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code, or (iii) dismissing the Chapter 11 Cases;
|
(l)
|
timely file a formal objection to any motion filed with the Bankruptcy Court by a third party seeking the entry of an order modifying or terminating the Debtors’ exclusive right to file and/or solicit acceptances of a plan of reorganization, as applicable;
|
(m)
|
not seek, solicit, or support any dissolution, winding up, liquidation, reorganization, assignment for the benefit of creditors, merger, transaction, consolidation, business combination, joint venture, partnership, sale of substantially all assets, any debt or equity financing or re-financing, or restructuring of the Weatherford Parties (including, for the avoidance of doubt, a transaction premised on an asset sale under section 363 of the Bankruptcy Code), other than the Plan and Restructuring, and to not cause or allow any of their agents or representatives to solicit any agreements relating to an Alternative Transaction (as defined below);
|
(n)
|
not seek to amend or modify, or file a pleading seeking authority to amend or modify, the Definitive Documentation in a manner that is inconsistent with this Agreement or the Term Sheet;
|
(o)
|
not file any pleading inconsistent with the Restructuring or the terms of this Agreement or the Term Sheet;
|
(p)
|
to the extent any legal or structural impediment arises that would prevent, hinder or delay the consummation of the Plan, use commercially reasonable efforts to negotiate with the Consenting Noteholders in good faith in an effort to agree to appropriate additional or alternative provisions or alternative implementation mechanics to address any such impediment; provided, that the economic outcome for the Consenting Noteholders and other material terms of this Agreement must be substantially preserved in such alternate provisions or implementation mechanics;
|
(q)
|
provide, and direct their employees, officers, advisors and other representatives to provide, to the Consenting Noteholders’ and their legal and financial advisors (i) reasonable access to the Weatherford Parties’ books and records during normal business hours on reasonable advance notice to the Weatherford Parties’ representatives and without disruption to the operation of the Weatherford Parties’ business, (ii) reasonable access to the management and advisors of the Weatherford Parties’ on reasonable advance notice to such persons and without disruption to the operation of the Weatherford Parties’ business, and (iii) such other information as reasonably requested; and
|
(r)
|
consult in good faith with the Noteholder Committee as regards WIL- Ireland’s proposed approach to and structuring of the Examinership Proceedings and the Scheme of Arrangement, and any and all documents relating to the procedure therefor and implementation thereof
|
(a)
|
The failure of the Debtors to meet any Milestone;
|
(b)
|
The Bankruptcy Court enters an order converting one or more of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code or dismissing any of the Chapter 11 Cases;
|
(c)
|
The Bankruptcy Court enters an order appointing a trustee, receiver, or examiner with expanded powers beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code in one or more of the Chapter 11 Cases;
|
(d)
|
The Definitive Documentation does not conform to the Term Sheet or otherwise does not satisfy the consent requirements set forth in
Section 4(b)
hereof;
|
(e)
|
Any Debtor files with the Bankruptcy Court any motion or application seeking authority to sell any material assets (other than any sales
|
(f)
|
Any Debtor materially breaches its obligations under this Agreement, which breach is not cured within five (5) Business Days after the giving of written notice of such breach, or files, publicly announces, or informs the Consenting Noteholders of its intention to file a chapter 11 plan that contains terms and conditions that: (i) do not provide the Consenting Noteholders with the economic recovery set forth in the Term Sheet or (ii) are not otherwise consistent with this Agreement and the Term Sheet;
|
(g)
|
A material breach by any Debtor of any representation, warranty, or covenant of such Debtor set forth in this Agreement that (to the extent curable) remains uncured for a period of five (5) Business Days after written notice and a description of such breach is provided to the Debtors;
|
(h)
|
Either (i) any Debtor files with the Bankruptcy Court a motion, application, or adversary proceeding (or any Debtor supports any such motion, application, or adversary proceeding filed or commenced by any third party)
|
(i)
|
If the Bankruptcy Court or other governmental authority with jurisdiction shall have issued any order, injunction, or other decree or taken any other action, in each case, which has become final and non-appealable and which restrains, enjoins, or otherwise prohibits the implementation of the Restructuring or the effect of which would render the Plan incapable of consummation on the terms set forth in this Agreement and the Term Sheet;
|
(j)
|
Any Debtor terminates its obligations under and in accordance with this Agreement;
|
(k)
|
Since the date of this Agreement, any effect, change, condition, circumstance, development or event that, individually or in the aggregate has had, or would reasonably be expected to have, a material adverse effect on the assets, liabilities, properties, business or condition (financial or otherwise) of the Weatherford Parties taken as a whole, other than any effect, change, condition, circumstance or event (i) that has occurred prior to the date of this Agreement or that contributed to or gave rise to the filing of the Chapter 11 Cases, (ii) arising from the filing of any of the Cases, or (iii) arising from compliance with the terms of this Agreement, including,
|
(l)
|
The Consenting Noteholders shall have completed their due diligence investigation of the Weatherford Parties, and shall, in their sole discretion, not be satisfied with the results of such due diligence investigation,
p
rovided,
h
owever, that this termination right shall terminate and have no further force or effect on the earlier of: (i) the date that the Debtors commence the solicitation of votes for the Plan and (ii) July 1, 2019;
|
(m)
|
If the Debtors consummate the DIP Term Loan financing or exit financing contemplated by the DIP Financing Documents and the Exit Facility Documents with any party other than the DIP Lenders and the Exit Lenders, respectively;
|
(n)
|
The failure of the Debtors to execute commitment agreements in respect of the DIP Term Loan and Exit Senior Secured Notes with DIP Lenders and the Exit Lenders, respectively, on or before July 2, 2019; and
|
(o)
|
If the Bankruptcy Court enters an order in the Chapter 11 Cases terminating any of the Debtors’ exclusive right to file a plan or plans of reorganization pursuant to section 1121 of the Bankruptcy Code.
|
(a)
|
A breach by a Consenting Noteholder of any representation, warranty, or covenant of such Consenting Noteholder set forth in this Agreement that would reasonably be expected to have a material adverse impact on the timely consummation of the Restructuring and that (to the extent curable) remains uncured for a period of five (5) Business Days after written notice and a description of such breach is provided to the Consenting Noteholders;
provided
,
however
, that so long as non-breaching Consenting Noteholders party hereto continue to hold at least 50% of the outstanding Notes Claims, such termination shall be effective only with respect to such breaching Consenting Noteholder(s);
|
(b)
|
The failure of the DIP Lenders and the Exit Lenders to execute commitment agreements in respect of the DIP Term Loan and Exit Senior Secured Notes on or before July 2, 2019;
|
(c)
|
Subject to the prior notice required in the last paragraph of
Section 7
, if the Board of Directors of WIL-Ireland desires to terminate this Agreement pursuant to the exercise of its fiduciary duties, upon the advice of outside
|
(d)
|
The Bankruptcy Court enters an order converting one or more of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code or dismissing any of the Chapter 11 Cases,
provided
, that the Debtors shall have opposed the entry of such order, including by arguing against such entry in the Bankruptcy Court;
|
(e)
|
The Bankruptcy Court enters an order appointing a trustee, receiver, or examiner with expanded powers beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code in one or more of the Chapter 11 Cases,
provided
, that the Debtors shall have opposed the entry of such order, including by arguing against such entry in the Bankruptcy Court; or
|
(f)
|
If the Bankruptcy Court or other governmental authority with jurisdiction shall have issued any order, injunction, or other decree or taken any other action, in each case, which has become final and non-appealable and which restrains, enjoins, or otherwise prohibits the implementation of the Restructuring or the effect of which would render the Plan incapable of consummation on the terms set forth in this Agreement and the Term Sheet.
|
(a)
|
Such Consenting Noteholder has transferred all (but not less than all) of its Notes Claims in accordance with
Section 13
of this Agreement (such termination shall be effective on the date on which such Consenting Noteholder has effected such transfer, satisfied the requirements of
Section
13
and provided the written notice required above in this
Section 1
0);
|
(b)
|
This Agreement is amended without its consent in such a way as to alter any of the material terms hereof in a manner that is disproportionately adverse to such Consenting Noteholder as compared to similarly situated Consenting Noteholders by giving ten (10) Business Days’ written notice to the Debtors and the other Consenting Noteholders;
provided
, that such written notice shall be given by the applicable Consenting Noteholder within five (5) Business Days of such amendment, filing, or execution; or
|
(c)
|
Any of the economic terms provided for in
Schedule 2
hereto are amended or modified without the written consent of such Consenting Noteholder.
|
(a)
|
No Consenting Noteholder shall (i) sell, transfer, assign, pledge, grant a participation interest in, or otherwise dispose of, directly or indirectly, any of its right, title, or interest in respect of any of such Consenting Noteholder’s Notes Claims against any Debtor, as applicable, in whole or in part, or (ii) deposit any of such Consenting Noteholder’s claims against any Debtor, as applicable, into a voting trust, or grant any proxies, or enter into a voting agreement with respect to any such claims or interests (the actions described in
Clauses (i)
and
(ii)
are collectively referred to herein as a “
Transfer
” and the Consenting Noteholder making such Transfer is referred to herein as the “
Transferor
”), unless such Transfer is to another Consenting Noteholder or any other entity (a “
Transferee
”) that first agrees in writing to be bound by the terms of this Agreement by executing and delivering to the Debtors a Transferee Joinder substantially in the form attached hereto as
Exhibit B
(the “
Transferee Joinder
”). With respect to claims against or interests in a Debtor held by the relevant Transferee upon consummation of a Transfer in accordance herewith, such Transferee is deemed to make all of the representations, warranties, and covenants of a Consenting Noteholder set forth in this Agreement as of the date of such
|
|
|
|
(b)
|
Notwithstanding anything to the contrary herein, (i) the foregoing
Clause
|
|
|
|
(a)
|
Each Consenting Noteholder hereby represents and warrants on a several and not joint basis, for itself and not for any other person or entity, that the following statements are true, correct, and complete, to the best of its actual knowledge, as of the RSA Effective Date:
|
(i)
|
it has the requisite organizational power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement;
|
(ii)
|
the execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate or other organizational action on its part;
|
(iii)
|
the execution, delivery, and performance by it of this Agreement does not (A) violate any provision of law, rule, or regulation applicable to it or any of its affiliates, or its certificate of incorporation, or bylaws, or other organizational documents, or those of any of its affiliates, or (B) result in a breach of, or constitute (with due notice or lapse of time or both) a default (other than, for the avoidance of doubt, a breach or default that would be triggered as a result of the Chapter 11 Cases or any Debtor’s undertaking to implement the Restructuring through the Chapter 11 Cases) under any material contractual obligation to which it or any of its affiliates is a party;
|
(iv)
|
the execution and delivery by it of this Agreement does not require any registration or filing with, the consent or approval of, notice to, or any other action with any federal, state, or other governmental authority or regulatory body, other than, for the avoidance of doubt,
|
(v)
|
subject to the provisions of sections 1125 and 1126 of the Bankruptcy Code, this Agreement is the legally valid and binding obligation of it, enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, or other similar laws relating to or limiting creditors’ rights generally, or by equitable principles relating to enforceability;
|
(vi)
|
it has sufficient knowledge and experience to evaluate properly the terms and conditions of this Agreement and the Term Sheet, and has been afforded the opportunity to discuss the Plan and other information concerning the Weatherford Parties with the Weatherford Parties’ representatives, and to consult with its legal and financial advisors with respect to its investment decision to execute this Agreement, and it has made its own analysis and decision to enter into this Agreement and otherwise investigated this matter to its full satisfaction;
|
(vii)
|
it (A) either (1) is the sole owner of the claims and interests identified next to its name on
Annex A
attached hereto, with respect to each Consenting Noteholder and in the amounts set forth therein, or (2) has all necessary investment or voting discretion with respect to the claims and interests identified next to its name on
Annex A
, and has the power and authority to bind the owner(s) of such claims and interests to the terms of this Agreement; (B) is entitled (for its own accounts or for the accounts of such other owners) to all of the rights and economic benefits of such claims and interests; and (C) in the case of each Consenting Noteholder, does not directly or indirectly own or control any principal amount of notes issued pursuant to the Indentures or other claims not arising under the Indentures or constituting Notes Claims against or interests in any Debtor other than as identified next to its name on
Annex A
attached hereto (which annex, for the avoidance of doubt, shall not be publically disclosed or filed);
|
(viii)
|
other than pursuant to this Agreement, the claims and interests identified on
Annex A
are free and clear of any pledge, lien, security interest, charge, claim, equity, option, proxy, voting restriction, right of first refusal, or other limitation on disposition or encumbrance of any kind, that would adversely affect in any material way such Consenting Noteholder’s performance of its obligations contained in this Agreement at the time such obligations are required to be performed;
|
(b)
|
Each Debtor hereby represents and warrants on a joint and several basis (and not on behalf of any other person or entity other than the Debtors) that the following statements are true, correct, and complete as of the RSA Effective Date:
|
(i)
|
it has the requisite corporate or other organizational power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement, including the corporate or other organization power and authority to cause the Weatherford Parties to comply with this Agreement and implement the Restructuring;
|
(ii)
|
the execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate or other organizational action on its part;
|
(iii)
|
the execution and delivery by it of this Agreement does not violate its certificates of incorporation, or bylaws, or other organizational documents, or those of any of its affiliates;
|
(iv)
|
the execution and delivery by it of this Agreement does not require any registration or filing with, the consent or approval of, notice to, or any other action with any federal, state, or other governmental authority or regulatory body, other than, for the avoidance of doubt, the actions with governmental authorities or regulatory bodies required in connection with implementation of the Restructuring;
|
(v)
|
subject to the provisions of sections 1125 and 1126 of the Bankruptcy Code, this Agreement is the legally valid and binding obligation of it, enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, or other similar laws relating to or limiting creditors’ rights generally, or by equitable principles relating to enforceability;
|
(vi)
|
WIL-Ireland has filed or furnished, as applicable, all forms, filings, registrations, submissions, statements, certifications, reports, and documents required to be filed or furnished by it with the U.S. Securities and Exchange Commission (the “
SEC
”) under the U.S. Securities Exchange Act of 1934, as amended, or the U.S. Securities Act of 1933, as amended (collectively,
“
SEC
Fi
lings”), since December 31, 2016 (the SEC Filings since December 31, 2016 and through the RSA Effective Date, including any amendments thereto, the
“
Com
pany R
eports”). As of their respective dates (or, if amended prior to the date hereof, as of the date of such amendment), each of the Company Reports, as amended, complied in all material respects with the applicable requirements of the Exchange Act and
|
(vii)
|
the Weatherford Parties’ consolidated financial statements (including, in each case, any notes thereto) contained in the Company Reports were prepared: (i) in accordance with generally accepted accounting principles in the United States of America
(
“GAAP”) applied on a historically consistent basis throughout the periods indicated (except as may be indicated in the notes thereto or, in the case of interim consolidated financial statements, where information and footnotes contained in such financial statements are not required under the rules of the SEC to be in compliance with GAAP) and (ii) in compliance, as of their respective dates of filing with the SEC, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, and in each case, such consolidated financial statements fairly presented, in all material respects, the consolidated financial position, results of operations, changes in stockholder’s equity and cash flows of the Weatherford Parties, as applicable, and its consolidated subsidiaries as of the respective dates thereof and for the respective periods covered thereby (subject, in the case of unaudited statements, to normal year-end adjustments); and
|
(viii)
|
it has sufficient knowledge and experience to evaluate properly the terms and conditions of this Agreement and the Term Sheet, and has been afforded the opportunity to consult with its legal and financial advisors with respect to its decision to execute this Agreement, and it has made its own analysis and decision to enter into this Agreement and otherwise investigated this matter to its full satisfaction.
|
(a)
|
If to any Debtor:
|
(b)
|
If to any Consenting Noteholder:
|
(a)
|
Except as expressly provided in this Agreement, nothing herein is intended to, or does, in any manner waive, limit, impair, or restrict the ability of any Party to protect and preserve its rights, remedies, and interests, including without limitation, its claims against any of the other Parties.
|
(a)
|
Without limiting
Clause (a)
of this
Section 29
in any way, if the Restructuring are not consummated in the manner and on the timeline set forth in this Agreement, or if this Agreement is terminated for any reason in accordance with its terms, nothing shall be construed herein as a waiver by any Party of any or all of such Party’s rights, remedies, claims, and defenses and the Parties expressly reserve any and all of their respective rights, remedies, claims, and defenses, subject to
Section 19
of this Agreement. This Agreement, the Plan, and any related document shall in no event be construed as or be deemed to be evidence of an admission or concession on the part of any Party of any claim or fault or liability or damages whatsoever. Each of the Parties denies any and all wrongdoing or liability of any kind and does not concede any infirmity in the claims or defenses which it has asserted or could assert.
|
WEATHERFORD INTERNATIONAL PLC
|
||
|
|
|
By:
|
/s/ Christoph Bausch
|
|
Name:
|
Christoph Bausch
|
|
Title:
|
Executive Vice President and
Chief Financial Officer
|
|
|
|
|
|
|
|
WEATHERFORD INTERNATIONAL LTD.
|
||
|
|
|
By:
|
/s/ Christoph Bausch
|
|
Name:
|
Christoph Bausch
|
|
Title:
|
President and Chief Financial Officer
|
|
|
|
|
|
|
|
WEATHERFORD INTERNATIONAL LLC
|
||
|
|
|
By:
|
/s/ Stuart Fraser
|
|
Name:
|
Stuart Fraser
|
|
Title:
|
Chief Financial Officer
|
|
|
|
|
|
|
|
(a)
|
the Debtors shall commence the Chapter 11 Cases by filing bankruptcy petitions with the Bankruptcy Court no later than July 15, 2019 (such filing date, the “
Petition Date
”);
|
(b)
|
within one (1) calendar day after the Petition Date, the Debtors shall file with the Bankruptcy Court the RSA Motion;
|
(c)
|
the Interim DIP Order shall be entered by no later than July 18, 2019;
|
(d)
|
within one (1) calendar day after the Petition Date, the Debtors shall file with the Bankruptcy Court: (i) the Plan and Disclosure Statement, (ii) the other Solicitation Materials and (iii) a motion (the “
Disclosure Statement and Solicitation Motion
”) seeking, among other things: (A) approval of the Disclosure Statement; (B) approval of procedures for soliciting, receiving, and tabulating votes on the Plan and for filing objections to the Plan; and (C) to schedule the hearing to consider approval of the Disclosure Statement and Solicitation Motion and the Disclosure Statement Order and confirmation of the Plan (the “
Confirmation Hearing
”);
|
(e)
|
within thirty (30) days after entry of Interim DIP Order, the Final DIP Order shall be entered;
|
(f)
|
the Bankruptcy Court shall have entered the RSA Order no later than August 31, 2019;
|
(g)
|
WIL-Ireland shall have commenced the Examinership Proceeding by no later than the earlier of (i) two calendar days after the Bankruptcy Court has entered into the RSA Order or (ii) September 1, 2019 (the “
Examinership Commencement Date
”);
|
(h)
|
the Confirmation Order shall be entered by no later than September 15, 2019, subject to availability of the Bankruptcy Court (the “
Confirmation Date
”);
|
(i)
|
an order of the Irish Court approving the Scheme of Arrangement shall be entered by no later than 70 calendar days after the Examinership Commencement Date; and
|
(j)
|
no later than fifteen (15) calendar days after entry of the Confirmation Order by the Bankruptcy Court and entry of the order of the Irish Court approving the Scheme of Arrangement, the Debtors shall consummate the transactions contemplated by the Plan (the date of such consummation, the “
Plan Effective Date
”).
|
1.
|
Any change in the Tranche B Equity Conversion, over-allotment process with respect to the Tranche B Equity Conversion, and the contemplated distribution on account of the Unsecured Notes Claims as provided in the Term Sheet.
|
2.
|
Any change in the ranking of the Tranche A Exit Senior Unsecured Notes as provided in the Term Sheet or the Issue, Maturity Date, Interest Rate or Backstop Fee for the Tranche A Exit Senior Unsecured Notes each as provided in the Tranche A Exit Senior Unsecured Notes Term Sheet (as defined in the Term Sheet).
|
3.
|
Any change in the ranking of the Tranche B Exit Senior Unsecured Notes as provided in the Term Sheet or Issue, Maturity Date, Interest Rate or Backstop Fee for the Tranche B Exit Senior Unsecured Notes each as provided in the Tranche B Exit Senior Unsecured Notes Term Sheet (as defined in the Term Sheet).
|
Overview
|
|
Restructuring Summary
|
The Weatherford Entities and certain Noteholders (as defined below) (such holders, the “
Consenting Noteholders
”) have agreed to support the Restructuring. As described in greater detail herein, the Consenting Noteholders agree to exchange their Unsecured Notes (as
|
|
Loan
”) in an aggregate principal amount outstanding of approximately $298,000,000, plus accrued and unpaid interest.
•
Indebtedness under that certain 364-Day Revolving Credit Agreement, dated as of August 16, 2018 (as may be amended, supplemented, amended and restated, or otherwise modified from time to time, the “
364-Day Credit Agreement
”), among WIL- Bermuda, as borrower, the other borrowers party thereto, the Company, JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “
364-Day Administrative Agent
”), and the lenders from time to time party thereto, comprised of a senior secured second lien revolving credit facility (the “
364-Day Revolving Credit Facility
”) in an aggregate principal amount outstanding of approximately $317,000,000, plus accrued and unpaid interest.
•
Indebtedness under that certain Amended and Restated Credit Agreement, dated as of May 9, 2016 (as may be amended, supplemented, amended and restated, or otherwise modified from time to time, the “
A&R Credit Agreement
”), among WOFS Assurance Limited and WIL-Bermuda, as borrowers, the Company, JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “
A&R Administrative Agent
”, together with the First Lien Administrative Agent and the 364-Day Administrative Agent, collectively the “
Agents
”), and the lenders from time to time party thereto, comprised of a revolving credit facility (the “
A&R Revolving Credit Facility
”) in an aggregate principal amount outstanding of approximately $324,000,000, plus accrued and unpaid interest.
•
Indebtedness under that certain indenture, dated as of October 1, 2003 (as may be amended, supplemented, amended and restated, or otherwise modified from time to time, the “
WIL-Bermuda Indenture
”), by and among WIL-Bermuda, as issuer, Weatherford International, LLC (“
WIL-Delaware
”), and the Company, and Deutsche Bank Trust Company Americas, a New York banking corporation, as trustee (the “
Indenture Trustee
”), comprised of:
i.
the 5.125% Senior Notes due 2020 in an aggregate principal amount outstanding of approximately $365,000,000, plus accrued and unpaid interest;
ii.
the 7.750% Senior Notes due 2021 in an aggregate principal amount outstanding of approximately $750,000,000, plus accrued and unpaid interest;
|
|
iii.
the 5.875% Exchangeable Senior Notes due 2021 in an aggregate principal amount outstanding of approximately $1,265,000,000, plus accrued and unpaid interest;
iv.
the 4.500% Senior Notes due 2022 in an aggregate principal amount outstanding of approximately $646,000,000, plus accrued and unpaid interest;
v.
the 8.250% Senior Notes due 2023 in an aggregate principal amount outstanding of approximately $750,000,000, plus accrued and unpaid interest;
vi.
the 9.875% Senior Notes due 2024 in an aggregate principal amount outstanding of approximately $790,000,000, plus accrued and unpaid interest;
vii.
the 6.500% Senior Notes due 2036 in an aggregate principal amount outstanding of approximately $453,000,000, plus accrued and unpaid interest;
viii.
the 7.000% Senior Notes due 2038 in an aggregate principal amount outstanding of approximately $461,000,000, plus accrued and unpaid interest;
ix.
the 9.875% Senior Notes due 2039 in an aggregate principal amount outstanding of approximately $250,000,000, plus accrued and unpaid interest;
x.
the 6.750% Senior Notes due 2040 in an aggregate principal amount outstanding of approximately $463,000,000, plus accrued and unpaid interest; and
xi.
the 5.950% Senior Notes due 2042 in an aggregate principal amount outstanding of approximately $375,000,000, plus accrued and unpaid interest (collectively the “
WIL-Bermuda Notes
and the holders of such notes, the “
WIL-Bermuda Noteholders
”).
•
Indebtedness under that certain indenture, dated as of June 18, 2007 (as may be amended, supplemented, amended and restated, or otherwise modified from time to time, the “
WIL-Delaware Indenture
”), by and among WIL-Delaware, as issuer, WIL- Bermuda, and the Company, and the Indenture Trustee, comprised of:
i.
the 9.875% Senior Notes due 2025 in an aggregate principal amount outstanding of approximately $600,000,000, plus accrued and unpaid interest; and
ii.
the 6.800% Senior Notes due 2037 in an aggregate principal amount outstanding of approximately $259,000,000, plus
|
|
accrued and unpaid interest (collectively the “
WIL-Delaware Notes
and, together with the WIL-Bermuda Notes, the “
Unsecured Notes
”, and the holders of such notes, the “
WIL- Delaware Noteholders
” and, together with the WIL-Bermuda Noteholders, the “
Noteholders
”).
•
Equity interests in the Company, including ordinary shares (“
Common Stock
” and interests convertible into, exchangeable for, or otherwise entitling the holders thereof to receive, Common Stock, or other equity interests, such interests together with Common Stock, the “
Existing Equity Interests
”, and the holders of the Existing Equity Interests, the “
Existing Equityholders
”).
•
Direct and indirect interests in certain of the Company’s direct and indirect subsidiaries, other than the Existing Equity Interests (such interests, the “Intercompany Interests”).
•
“
First Lien Term Loan Claims
” shall mean any and all Claims arising under or related to the Term Loan Agreement in respect of the First Lien Term Loans.
•
“
364-Day Revolving Credit Claims
” shall mean any and all Claims arising under or related to the 364-Day Credit Agreement in respect of the 364-Day Revolving Credit Facility.
•
“
Unsecured Revolving Credit Claims
” shall mean any and all Claims arising under or related to the A&R Credit Agreement in respect of the A&R Revolving Credit Facility.
•
“
Unsecured Notes Claims
” shall mean any and all Claims arising under or related to: (i) the WIL-Bermuda Indenture in respect of the WIL-Bermuda Notes and (ii) the WIL-Delaware Indenture in respect of the WIL-Delaware Notes.
|
DIP Facility
|
A postpetition debtor-in-possession financing facility (the “
DIP Facility
”) provided by certain lenders (collectively, the “
DIP Lenders
”) consisting of:
● Up to $750,000,000 first lien DIP revolving credit facility provided by certain banks/lenders (the “
DIP Revolver Loan
”)
● $1,000,000,000 DIP term loan facility provided by certain of the Consenting Noteholders and fully backstopped by certain of the Consenting Noteholders (the “
DIP Term Loan
”).
The terms of the DIP Term Loan shall be consistent with the DIP Term Sheet attached as
Exhibit A
hereto and acceptable to the Debtors and the DIP Lenders, and otherwise reasonably satisfactory to Required Consenting Noteholders.
|
364-Day Revolving Credit Claims
|
The 364-Day Revolving Credit Claims (including accrued but unpaid interest) shall be paid in full in cash from the proceeds of the DIP Facility upon entry of an interim order of the Bankruptcy Court approving the DIP Facility.
|
Unsecured Revolving Credit Claims
|
The Unsecured Revolving Credit Claims (including accrued but unpaid interest) shall be paid in full in cash on the Effective Date. Any letters of credit issued as of the Petition Date shall either be cash collateralized under or rolled into the DIP Facility.
|
Unsecured Notes Claims
|
Holders of the Unsecured Notes Claims shall receive their
pro rata
share of: (i) 99.0% of the newly issued common stock (the “
New Common Stock
”) of the Reorganized Company, subject to dilution on account of the equity issued pursuant to the Management Incentive Plan, the Tranche B Equity Conversion, the New Common Stock issuable in respect of the Warrants (each as defined below); and
(ii) the Tranche B Exit Senior Unsecured Notes,
provided
,
however
, that each Holder of Unsecured Notes Claims shall have the option, in its sole discretion, to convert its
pro rata
share of the Tranche B Exit Senior Unsecured Notes into New Common Stock (the “
Tranche B Equity Conversion
”) at the mid-point of the equity value range set forth in the disclosure statement related to the Chapter 11 Plan (the “
Disclosure Statement
”),
provided further
that the aggregate principal amount of Tranche B Exit Senior Unsecured Notes converted to New Common Stock shall not exceed $500,000,000. There shall be an over-allotment mechanism for all Holders of Unsecured Notes Claims should Holders of Unsecured Notes Claims elect to convert less than $500,000,000 of Tranche B Exit Senior Unsecured Notes.
|
General Unsecured Claims
|
Holders of General Unsecured Claims shall be paid in the ordinary course of business in accordance with the terms and conditions of the particular transaction giving rise to such claim.
|
Existing Equity Interests in the Company
|
All Existing Equity Interests shall be discharged, cancelled, released, and extinguished. The Existing Equityholders will receive their
pro rata
share of: (i) 1.0% of the New Common Stock, subject to dilution on account of the equity issued pursuant to the Management Incentive Plan, the Tranche B Equity Conversion, and the New Common Stock issuable in respect of the Warrants; and (ii) 3-year warrants for 10.0% of the New Common Stock, subject to dilution on account of the equity issued pursuant to the Management Incentive Plan and the Tranche B Equity Conversion, with a strike price to be set at an equity value at which the Noteholders would receive a recovery equal to par plus accrued and unpaid interest as of the date of the commencement of the Chapter 11 Cases in respect of the Unsecured Notes and all other General Unsecured Claims that are
pari passu
with the Unsecured Notes (the “
Warrants
”).
|
|
|
|
|
express interest in serving on the Board of Directors of the Reorganized Company.
|
Management Incentive Plan
|
As soon as reasonably practicable after the Effective Date, the Reorganized Company will adopt a management incentive plan, which management incentive plan shall reserve up to 5.0% of the New Common Stock in the Reorganized Company on a fully diluted basis, and which shall be on the terms and conditions (including any and all awards granted thereunder) to be determined at the discretion of the New Board (including, without limitation, with respect to the participants, allocation, timing, and the form and structure of the options, warrants, and/or equity compensation (the “
Management Incentive Plan
”).
|
SEC Reporting
|
The Reorganized Company shall continue as a public reporting company under applicable U.S. securities laws. The Reorganized Company shall continue to file annual, quarterly and current reports in accordance with the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
|
Stock Exchange
|
The Company shall use commercially reasonable efforts to list the New Common Stock for trading on The NASDAQ Capital Market, the NASDAQ Global Market, the New York Stock Exchange or any other national securities exchange reasonably acceptable to the Company and the Noteholder Committee with such listing to be effective on the Effective Date.
|
Restructuring Fees and Expenses
|
The Debtors shall pay all reasonable and documented fees and out of pocket expenses of one primary counsel to the Noteholder Committee, Akin Gump Strauss Hauer & Feld LLP (“
Akin
”), one local counsel to the Noteholder Committee, and one financial advisor to the Noteholder Committee, Evercore Group L.L.C. (“
Evercore
”), in each case, that are due and owing after receipt of applicable invoices, without any requirement for the filing of fee or retention applications in the Chapter 11 Cases, and in accordance with the terms of the applicable engagement letters, with any balance(s) paid on the Effective Date (collectively, the “
Restructuring Expenses
”).
|
Tax Matters
|
The parties will work together in good faith and will use commercially reasonable efforts to structure and implement the Restructuring and the transactions related thereto in a tax efficient and cost-effective manner for the Company and the Noteholders to the extent practicable. The parties intend to structure the Restructuring to preserve favorable tax attributes to the extent practicable and not materially adverse to the Company or the Noteholders.
|
Employment Agreements; Other Employee Matters
|
All officers and other employees of the Company and its subsidiaries immediately prior to the Effective Date shall be retained in their existing positions following the Effective Date.
|
|
The employment agreements and severance policies, and all employment and service provider, compensation, bonus, retention, equity, benefit, pension and/or welfare plans and similar plans, policies, programs, agreements and arrangements of the Company and its direct and indirect subsidiaries and its affiliates applicable to the Company’s, any of its direct or indirect subsidiaries’, or its affiliates’ current or former officers, directors, members, partners, employees, service providers, or retirees (collectively, the “
Employment Plans
”), shall be maintained, continued in full force and effect and assumed by the Company (and assigned to the Reorganized Company, if necessary) and/or its direct or indirect subsidiaries and/or its affiliates pursuant to section 365(a) of the Bankruptcy Code, either by a separate motion filed with the Bankruptcy Court or pursuant to the terms of the Chapter 11 Plan. All claims arising from the Employment Plans shall be unimpaired. For the avoidance of doubt, the Consenting Noteholders are conducting diligence on, among other things, all arrangements providing for potential material payments (whether incentive, severance, change in control or other similar payments) to members of senior management (the “
Executive Arrangements
”) and the parties agree to work in good faith to address any amendments or other changes with respect thereto requested by the Consenting Noteholders. The parties further agree that the execution of the RSA does not constitute a change of control under any Executive Arrangement.
|
Definitive Documents
|
This Term Sheet does not include a description of all of the terms, conditions, and other provisions that will be contained in the definitive documentation governing the Restructuring. The documents implementing the Restructuring shall be consistent with this Term Sheet and the RSA, as applicable, and shall be subject to the consent requirements set forth in the RSA (collectively, the “
Definitive Documents
”).
|
Governing Law and Forum
|
New York governing law and consent to exclusive New York jurisdiction. Notwithstanding the preceding sentence, upon the commencement of the Chapter 11 Cases, the Bankruptcy Court shall have exclusive jurisdiction over all matters arising out of or in connection with the Restructuring.
|
Conditions Precedent to Consummation of the Chapter 11 Plan
|
The Chapter 11 Plan shall contain customary conditions to effectiveness in form and substance to be agreed upon by the Weatherford Entities and the Required Consenting Noteholders, including, without limitation:
● The Chapter 11 Plan and all documentation with respect to the Chapter 11 Plan and all documents contained in any supplement thereto, including any exhibits, schedules, amendments, modifications or supplements thereto, which shall be in form and
|
|
substance acceptable to the Debtors and the Required Consenting Noteholders, and otherwise consistent with the terms and conditions described in this Term Sheet or the RSA;
•
Any Corporate Governance Documents, which shall be in form and substance acceptable to the Required Consenting Noteholders in their sole discretion, shall have become effective (or shall become effective concurrently with effectiveness of the Plan);
•
Any documents governing the Tranche A Exit Senior Unsecured Notes, which shall be in form and substance acceptable to the Debtors and the Exit Lenders, each in their sole discretion, and otherwise reasonably satisfactory to the Required Consenting Noteholders, shall have become effective (or shall become effective concurrently with effectiveness of the Chapter 11 Plan) and all conditions precedent to issuance of the Tranche A Exit Senior Unsecured Notes shall have been satisfied or waived;
•
Any documents governing the Tranche B Exit Senior Unsecured Notes, which shall be in form and substance acceptable to the Debtors and the Required Consenting Noteholders, shall have become effective (or shall become effective concurrently with effectiveness of the Chapter 11 Plan) and all conditions precedent to issuance of the Tranche B Exit Senior Unsecured Notes shall have been satisfied or waived;
•
The Bankruptcy Court shall have entered the DIP Orders, in form and substance acceptable to the Debtors and the DIP Lenders approving the DIP Facility, and otherwise reasonably satisfactory to Required Consenting Noteholders;
•
The Bankruptcy Court shall have entered an order in form and substance reasonably acceptable to the Debtors and the Required Consenting Noteholders approving the Disclosure Statement;
•
The order confirming the Chapter 11 Plan, in form and substance reasonably acceptable to the Debtors and the Required Consenting Noteholders and otherwise consistent with the terms and conditions described in this Term Sheet or the RSA, as applicable, shall have been entered and shall have become a final order that is not stayed;
•
The Scheme of Arrangement shall have been approved by the Irish court overseeing the Examinership Proceeding and shall have become effective in accordance with its terms (or shall become effective concurrently with effectiveness of the Chapter 11 Plan); and
•
The Debtors shall have paid the Restructuring Expenses in full, in cash.
|
D&O Liability Insurance Policies & Indemnification
|
The Weatherford Entities shall maintain and continue in full force and effect all insurance policies (and purchase any related tail policies providing for coverage for at least a six-year period after the Effective Date) for directors’, managers’, and officers’ liability (the “
D&O Liability Insurance Policies
”). All indemnification provisions in existence as of the date of the RSA for directors, managers, and officers of the Weatherford Entities (whether in by-laws, certificate of formation or incorporation, board resolutions, employment contracts, or otherwise, such indemnification provisions, “
Indemnification
P
rovisions”) shall be reinstated and remain intact and irrevocable and shall survive the Effective Date. All claims arising from the D&O Liability Insurance Policies and such Indemnification Provisions shall survive the Effective Date and be unimpaired under the Chapter 11 Plan and Scheme of Arrangement.
|
Releases
|
The Chapter 11 Plan shall include customary releases (including third party releases) and exculpation provisions, in each case, to the fullest extent permitted by law, for the benefit of the Weatherford Entities, the Agents, the Indenture Trustee, the Noteholder Committee, the Consenting Noteholders, the DIP Lenders, the Exit Lenders and the Weatherford Entities’ current and former officers and directors and each of such preceding entities’ directors, officers, current and former shareholders (regardless of whether such interests are held directly or indirectly), partners, managers, officers, principals, members, employees, agents, affiliates, advisory board members, parents, subsidiaries, predecessors, successors, heirs, executors and assignees, attorneys, financial advisors, investment bankers, accountants, consultants, and other professionals or representatives, each solely in their capacities as such, subject to a carveout for any act or omission that constitutes actual fraud, gross negligence, or willful misconduct as determined by final order of a court of competent jurisdiction.
Such release shall include, without limitation, any and all claims, obligations, rights, suits, damages, causes of action, remedies, and liabilities whatsoever, whether known or unknown, foreseen or unforeseen, existing or hereinafter arising, in law, equity, or otherwise, including any derivative claims and avoidance actions, of the Weatherford Entities, whether known or unknown, foreseen or unforeseen, existing or hereinafter arising, in law, equity, or otherwise, that the Weatherford Entities would have been legally entitled to assert in their own right (whether individually or collectively), or on behalf of the holder of any claim or equity interest (whether individually or collectively) or other entity, based in whole or in part upon any act or omission, transaction, or other occurrence or circumstances existing or taking place at any time prior to or on the Effective Date arising from or related in any way in whole or in part to the Weatherford Entities, the purchase, sale, or rescission of the
|
|
purchase or sale of any security of the Company, the subject matter of, or the transactions or events giving rise to, any claim against or equity interest in the Weatherford Entities that is treated hereunder, or the negotiation, formulation, or preparation of the Definitive Documentation or related agreements, instruments, or other documents.
|
Borrowers:
|
Weatherford International PLC (“
WIL-Ireland
”), Weatherford International Ltd. (“
WIL-Bermuda
”) and Weatherford International, LLC (“
WIL-Delaware
”, and collectively with WIL-Ireland and WIL- Bermuda, the “
Borrowers
”).
|
Guarantors:
|
All of the Borrowers’ direct and indirect subsidiaries that are guarantors under the DIP Revolver Loan (collectively, the “Guarantors”); provided that, notwithstanding the foregoing, the identity of the actual Guarantors shall be satisfactory to both the DIP Commitment Parties and the Borrowers. The guarantors shall be non-debtors.
|
Facility:
|
$1.0 billion aggregate principal amount debtor-in-possession term loan credit facility (the “
DIP Term Loan
”).
|
Security:
|
The DIP Term Loan will be secured by the same assets as, and on a pari passu basis with, the DIP Revolver Loan; provided that, notwithstanding the foregoing, the assets that shall constitute collateral for the DIP Term Loan shall be satisfactory to both the DIP Commitment Parties and the Borrowers.
|
Priority:
|
The DIP Term Loans shall constitute a super-priority administrative claim of the Borrowers.
|
Use of Proceeds:
|
Working capital, general corporate purposes, payment of restructuring transaction fees and expenses and payment of certain prepetition debt as set forth in the RSA.
|
Lenders:
|
Certain members of the Noteholder Committee shall provide commitments for the DIP Term Loan (the “
DIP Commitment Parties
”) on terms consistent with this term sheet and otherwise acceptable to the DIP Commitment Parties and the Borrowers.
|
Issue Price:
|
99.5%
|
Structuring Fee:
|
1.25% payable to the DIP Commitment Parties at a time to be agreed in the definitive commitment documentation; provided that such time shall be prior to the commencement of the Chapter 11 Cases.
|
Maturity Date:
|
The earlier of the Effective Date and 12 months.
|
Interest Rate:
|
LIBOR + 3.00% (with 1% LIBOR floor).
|
Default Rate:
|
Additional 2.00%.
|
MFN:
|
If the all-in yield (including interest rate and upfront fees, OID, structuring fees, commitment fees and other similar fees, equated to yield based on customary financial conventions) of the DIP Revolver Loan exceeds that of the DIP Term Loan on the date of the closing of the DIP Revolver Loan (or thereafter if there is an increase in the all-in yield as a result of any flex provisions that are in effect on the date of the closing of the DIP Revolver Loan (if any)), then the all-in yield of the DIP Term Loan will be increased such that the all-in yield of the DIP Term Loan would equal that of the DIP Revolver Loan
|
Amortization:
|
None.
|
Call Protection:
|
None.
|
Ratings:
|
None.
|
Representations and Warranties:
|
Customary for DIP financings of this type.
|
Affirmative Covenants:
|
Customary for DIP financings of this type, including, without limitation, reporting covenant for annual audited financial statements, quarterly unaudited financial statements and rolling 13-week cash flow of the Borrowers, including bi-monthly variance report and forecast (only available to private-side lenders) to be updated on a monthly basis (but no budget variance covenant).
|
Negative Covenants:
|
Customary for DIP financings of this type.
|
Financial Covenant:
|
Minimum liquidity covenant of $150 million, which shall be the sum of the unrestricted cash of the Borrowers and Guarantors and DIP Revolver Loan availability.
|
Milestones:
|
None.
|
Amendments:
|
100% approval for pricing changes, maturity extensions, voting rights and other customary “sacred rights” for DIP facilities of this type.
Greater than 50% approval for other amendments and waivers.
|
Expenses:
|
All reasonable out-of-pocket expenses (including, without limitation, reasonable fees, disbursements and other charges of one outside counsel for the agent, one outside counsel for the lenders taken as a whole and one local counsel as reasonably required in each applicable jurisdiction) of the agent and lenders under the DIP Term Loan in connection with the negotiation and execution of the DIP Term Loan and the transactions contemplated thereby shall be paid by the Borrowers from time to time.
|
Governing Law:
|
New York.
|
Issuer:
|
Weatherford International, LLC (“
WIL-Delaware
”)
1
.
|
Guarantors:
|
Weatherford International PLC, Weatherford International Ltd. and all of the guarantors of the Exit Revolver (the “
Guarantors
”).
|
Issue:
|
Up to $1.25 billion aggregate principal amount of senior unsecured notes (the “
Tranche A Exit Senior Unsecured Notes
”).
|
Security:
|
None.
|
Distribution:
|
144A-for-life.
2
|
Use of Proceeds:
|
Working capital, general corporate purposes, payment of transaction fees and expenses and repayment of outstanding amounts under DIP Facilities.
|
Holders/Backstop Commitments:
|
Certain members of the Noteholder Committee will fully backstop the Tranche A Exit Senior Unsecured Notes (the “
Exit Backstop Parties
”).
|
Backstop Fees:
|
5.00%, payable to the Exit Backstop Parties on a date to be agreed in the definitive backstop agreement; provided that such time shall be prior to the commencement of the Chapter 11 Cases.
|
Maturity Date:
|
5 years from the Effective Date of the Chapter 11 Plan.
|
Interest Rate:
|
8.00% in the event the Tranche A Exit Senior Unsecured Notes are rated Ba2 or better by Moody’s Investors Services, Inc. (“Moody’s”), and 9.00% in the event the Tranche A Exit Senior Unsecured Notes are rated Ba3 or worse by Moody’s, in each case
plus
flex as set forth on
Annex
A
hereto.
|
Default Rate:
|
Additional 2.00%.
|
|
|
|
Call Protection:
|
● Prior to the second anniversary of the issuance date, par,
plus
accrued interest
plus
a customary make whole premium using a discount rate equal to the treasury rate on a comparable treasury note
plus
50 basis points;
● On or after the second anniversary but prior to the third anniversary of the issuance date, the prepayment amount shall be at 100% of par
plus
one-half of the interest rate, plus accrued interest;
● On or after the third anniversary but prior to the fourth anniversary of the issuance date, the prepayment amount shall be at 100% of par
plus
one-quarter of the interest rate, plus accrued interest; and
● On or after the fourth anniversary of issuance, the prepayment amount shall be at par
plus
accrued interest.
Notwithstanding the foregoing, the Issuer shall be permitted to redeem up to $500 million of the Tranche A Exit Senior Unsecured Notes at 103% of par
plus
accrued interest.
|
Representations and Warranties:
|
Customary for exit financings of this type to be included in a customary securities purchase agreement to be executed among the Issuer, the Guarantors, the Exit Backstop Parties and any other purchasers of Exit Senior Secured Notes at the time of initial issuance.
|
Affirmative Covenants:
|
Customary for exit financings of this type, including, without limitation, standard public company financial reporting requirements.
|
Negative Covenants:
|
Customary for exit financings of this type, including but not limited to restrictions on debt, liens, restricted payments, asset sales and investments. Debt covenant shall permit, among other things, up to a
$1.0 billion first lien Exit Revolver and $1.25 billion of New Unsecured Notes (Tranche B) (
plus
, in each case, interest and fees accrued thereon).
|
Financial Covenants:
|
None.
|
Amendments:
|
100% approval for pricing changes, maturity extensions, voting rights and other customary “sacred rights” for exit financings of this type.
Greater than 50.0% approval for other amendments and waivers.
|
Expenses:
|
All reasonable and documented out-of-pocket expenses (including, without limitation, reasonable fees, disbursements and other charges of one outside counsel for the trustee, one outside counsel for the Exit Backstop Parties taken as a whole and one local counsel as reasonably required in each applicable jurisdiction) of the trustee and Exit Backstop Parties in connection with the negotiation and issuance of the Exit Senior Secured Notes and the transactions contemplated thereby shall be paid by the Issuer from time to time.
|
Issuers:
|
Weatherford International, LLC
1
.
|
Guarantors:
|
Weatherford International plc, Weatherford International Ltd. and all of
|
Facility:
|
Up to $1,250,000,000 aggregate principal amount of senior unsecured notes (the “Tranche B Exit Senior Unsecured Notes”).
|
Security:
|
None.
|
Maturity Date:
|
7 years after the Effective Date of the Plan.
|
Interest Rate:
|
8.00%
|
Default Rate:
|
Additional 2.00%.
|
Amortization:
|
None.
|
Call Protection:
|
·
|
•
|
Prior to the third anniversary of the issuance date, par,
plus
|
•
|
On or after the third anniversary but prior to the fourth anniversary of the issuance date, the prepayment amount shall be at 100% of par
plus
three-quarters of the interest rate, plus accrued interest;
|
•
|
On or after the fourth anniversary but prior to the fifth anniversary of the issuance date, the prepayment amount shall be at 100% of par
plus
one-half of the interest rate, plus accrued interest;
|
•
|
On or after the fifth anniversary but prior to the sixth anniversary of the issuance date, the prepayment amount shall be at 100% of par
plus
one-quarter of the interest rate, plus accrued interest; and
|
•
|
On or after the sixth anniversary of issuance, the prepayment amount shall be at par
plus
accrued interest.
|
|
|
|
Affirmative Covenants:
|
Customary for financings of this type, including, without limitation,
|
Negative Covenants:
|
Customary for financings of this type, including but not limited to
|
Financial Covenant:
|
None.
|
Amendments:
|
100% approval for pricing changes, maturity extensions, voting rights
|
[JOINING PARTY]
|
||
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
News Release
|
CONTACTS
|
|
|
|
Christoph Bausch
|
+1.713.836.4615
|
Executive Vice President and Chief Financial Officer
|
|
|
|
Karen David-Green
|
+1.713.836.7430
|
Senior Vice President, Stakeholder Engagement and Chief Marketing Officer
|
|