1
TAX ALLOCATION AGREEMENT
BY AND BETWEEN
▇▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL, INC.
AND
GRANT PRIDECO, INC.
, 1999
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TABLE OF CONTENTS
1. Grant Group...................................................... -2-
2. Tax Returns...................................................... -2-
3. Obligation for Payment of Taxes.................................. -4-
4. No Weatherford Tax Payments...................................... -5-
5. Grant Tax Payments............................................... -5-
6. Tax Credits; Deferred Intercompany Gains......................... -6-
7. Grant Tax Carryovers............................................. -7-
8. Tax Audits....................................................... -7-
9. Proposed Adjustments............................................. -7-
10. Notice of Settlement or Compromise............................... -8-
11. Grant's Right to Contest......................................... -8-
12. Subsequent Adjustments or Refunds................................ -9-
13. Grant Spin-Off Tax Indemnity..................................... -9-
14. Future Actions.................................................. -10-
15. Combined, Consolidated or Unitary Basis Returns................. -10-
16. Earnings and Profits Information................................ -10-
17. Retention of Records............................................ -11-
18. Expenses........................................................ -11-
19. Definitions..................................................... -11-
"After-Tax Basis"............................................... -11-
"Agreed Rate"................................................... -11-
"Code" ....................................................... -12-
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"Distribution Agreement"........................................ -12-
"Grant"......................................................... -12-
"Grant Group"................................................... -12-
"Interim Period"................................................ -12-
"Returns"....................................................... -12-
"Ruling"........................................................ -12-
"Short Period".................................................. -12-
"Spin-Off"...................................................... -12-
"Spin-Off Date"................................................. -12-
"Spin-Off Tax".................................................. -12-
"Tax Authority"................................................. -13-
"Taxes"......................................................... -13-
"Transfer Tax".................................................. -13-
"Weatherford"................................................... -13-
"Weatherford Group"............................................. -13-
"WEI"........................................................... -13-
20. Notices......................................................... -13-
21. Binding Effect; Successors...................................... -14-
22. Severability.................................................... -15-
23. Entire Agreement................................................ -15-
24. Governing Law................................................... -15-
25. Arbitration..................................................... -16-
EXHIBIT A - MEMBERS OF THE GRANT GROUP
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TAX ALLOCATION AGREEMENT
THIS TAX ALLOCATION AGREEMENT, made and entered into as of the ____ day
of ____________, ____, by and between ▇▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL, INC., a
Delaware corporation ("Weatherford"), and GRANT PRIDECO, INC., a Delaware
corporation ("Grant").
W I T N E S S E T H:
WHEREAS, Weatherford is the common parent of an affiliated group of
corporations (hereinafter referred to as the "Weatherford Group") within the
meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), which affiliated group includes (x) corporations owned by Weatherford
(then known as EVI, Inc.) and (y) corporations owned by Weatherford Enterra,
Inc., a Delaware corporation ("WEI"), on May 27, 1998, the date on which WEI
merged with and into Weatherford, and (z) corporations acquired by Weatherford
or other members of the Weatherford Group subsequent to May 27, 1998, and the
members of the Weatherford Group have heretofore joined in filing consolidated
Federal income Tax Returns;
WHEREAS, prior to May 27, 1998, Weatherford and its eligible
subsidiaries joined in filing consolidated Federal income Tax Returns as an
affiliated group and WEI and its eligible subsidiaries joined in filing
consolidated Federal income Tax Returns as an affiliated group;
WHEREAS, Grant and its subsidiaries have been members of the
Weatherford Group;
WHEREAS, on or about ____________ __, ____, certain
assets associated with the drilling products business conducted by the
Weatherford Group, including the stock of certain subsidiaries included in the
Weatherford Group and engaged in the drilling products business, will be
contributed to the capital of Grant or otherwise acquired by Grant or one or
more of its subsidiaries;
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WHEREAS, Weatherford, on or about ____________ __, ____ (the "Spin-Off
Date"), will distribute to its stockholders all of the outstanding stock of
Grant (the "Spin-Off"), and thereafter Grant and its subsidiaries will no longer
be members of the Weatherford Group for Federal income Tax purposes; and
WHEREAS, the parties desire to provide for the sharing of the Federal,
state, local and foreign income Tax liabilities and benefits accrued prior to
the Spin-Off between Weatherford and its subsidiaries and Grant and its
subsidiaries;
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant Group. For purposes of this Agreement, the "Grant Group" shall
mean (i) Grant, (ii) Grant's subsidiaries, and (iii) those corporations and
other entities whose stock or ownership interests will be contributed to Grant
prior to the Spin-Off Date, all of such subsidiaries of Grant and such
corporations and other entities being listed on Exhibit A attached hereto.
Unless otherwise specified, whenever items of income, gain, loss, deduction,
credit, or other Tax attributes of Grant are referred to in this Agreement, the
reference shall be to the collective amounts of such items for the Grant Group
as defined herein.
2. Tax Returns. Weatherford shall prepare and file or cause to be
prepared and filed timely all appropriate Returns in respect of Grant and the
other members of the Grant Group that (i) are required to be filed on or before
the Spin-Off Date; or (ii) are required to be filed after the Spin-Off Date that
(A) are required to include, on a consolidated, combined or unitary basis, the
operations of Grant or any other member of the Grant Group for any Tax period
ending on or before the Spin-Off Date; or (B) are required to be filed by Grant
or any other member of the Grant Group on a separate return basis for any Tax
period ending on or before the Spin-Off Date. To the extent
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requested by ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ shall participate in the filing of and shall
file any required Returns with respect to any Tax period that ends on or before
the Spin-Off Date. Grant shall prepare or cause to be prepared the schedules in
respect of Grant and other members of the Grant Group containing the information
necessary for Weatherford to prepare any consolidated, combined or unitary
Returns. If Weatherford, after consulting with Grant, files any such
consolidated, combined or unitary Return using information with respect to Grant
and the other members of the Grant Group that is different from the information
prepared and furnished by Grant and Weatherford and ▇▇▇▇▇ thereafter are unable
to resolve such difference, such difference shall constitute a claim for
purposes of Paragraph 25 of this Agreement. Grant shall also prepare or cause to
be prepared and shall file or cause to be filed all other Returns required of
Grant or any other members of the Grant Group, or in respect of its or any of
their activities, for any Tax period ending after the Spin-Off Date that
includes the operations of Grant or any other member of the Grant Group prior to
the Spin-Off Date. The parties hereto will, to the extent permitted by
applicable law, elect with the relevant Tax Authority to treat for all purposes
the Spin-Off Date as the last day of a Tax period of Grant and the other members
of the Grant Group, and such period shall be treated as a "Short Period" for
purposes of this Agreement. In any case where applicable law does not permit
Grant to treat the Spin-Off Date as the last day of a Short Period, then for
purposes of this Agreement, the portion of such Taxes that is attributable to
the operations of Grant and the other members of the Grant Group for such
Interim Period (as defined below) shall be (i) in the case of Taxes that are not
based in whole or in part on income or gross receipts, the total amount of such
Taxes for the period in question multiplied by a fraction, the numerator of
which is the number of days in the Interim Period, and the denominator of which
is the total number of days in the entire period in question, and (ii) in the
case of Taxes that
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are based in whole or in part on income or gross receipts, the Taxes that would
be due with respect to the Interim Period, if such Interim Period were a Short
Period. "Interim Period" means with respect to any Taxes imposed on Grant or any
other members of the Grant Group on a periodic basis for which the Spin-Off Date
is not the last day of a Short Period, the period of time beginning on the first
day of the actual Tax period that includes (but does not end on) the Spin-Off
Date and ending on and including the Spin-Off Date. Any franchise Tax shall be
allocated to the Tax period or portion thereof during which the right to do
business obtained by the payment of such franchise Tax relates, regardless of
whether such franchise Tax is measured by income, operations, assets or capital
relating to another Tax period.
3. Obligation for Payment of Taxes. Weatherford shall be entitled to
receive from Grant amounts calculated in accordance with Paragraphs 5 and 12
hereof. Except as otherwise provided in Paragraph 5, the amounts, if any, that
Grant shall be obligated to pay Weatherford pursuant to Paragraph 5, with
respect to Tax periods of the Weatherford Group ending on or prior to the
Spin-Off Date, shall be paid within 120 days after the Spin-Off Date. This
initial settlement shall be based on the Returns as they have been filed and
shall include any amendments of or adjustments to such Returns that have been
finally settled. Except as otherwise provided in Paragraph 5, any amounts that
Grant shall be obligated to pay Weatherford pursuant to Paragraph 5 with respect
to Tax periods of the Weatherford Group ending after the Spin-Off Date shall be
paid within 30 days after filing of the Returns for such Tax periods. In the
event of an adjustment to the amount of payment for any Tax period as determined
under Paragraph 12, Weatherford shall be entitled to receive from Grant such
payment within 30 days after payment of a deficiency to or receipt of a refund
from the Tax Authority. In the event of an adjustment under Paragraph 12
resulting in no additional payment to
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or receipt of a refund from the Tax Authority, settlement shall be made within
30 days after filing of the amended Return or final settlement of the
adjustment.
4. No Weatherford Tax Payments. Except as otherwise provided in
Paragraph 12 hereof, Weatherford shall not be obligated to pay Grant for any Tax
credits of the Grant Group or any losses or deductions of the Grant Group used
by the Weatherford Group to reduce its Federal income Tax liability or Federal
taxable income for any Tax period ending on or before the Spin-Off Date. For
purposes of these computations, the allocation of Tax attributes to the Grant
Group and absorption thereof by the Weatherford Group for each Tax period shall
be determined in accordance with the Treasury Regulations under Section 1502 of
the Code, applied in a manner consistent with practices and methods followed in
reporting the Federal income Tax liability of the Weatherford Group for such Tax
periods. In any instance where a Tax attribute must be characterized, the
characterization prescribed by the aforementioned Treasury Regulations will
control.
5. Grant Tax Payments. For each Tax period of the Weatherford Group
which includes income of the Grant Group, Grant shall be obligated to pay
Weatherford an amount equal to the product of (i) the net taxable income of the
Grant Group included in the consolidated Federal income Tax Return of the
Weatherford Group for such period, multiplied by (ii) the highest marginal
statutory Federal corporate income Tax rate applicable to such income for such
period; provided, however, that no payment shall be required pursuant to this
Paragraph 5 to the extent such payments have previously been made by the Grant
Group to members of the Weatherford Group other than the Grant Group under any
Tax sharing agreement or arrangement (whether written or oral) or any other
similar system of payments with respect to Federal income Taxes of the
Weatherford Group in existence prior to the Spin-Off Date. For purposes of these
computations, the allocation of Tax
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attributes to the Weatherford Group and absorption thereof by the Grant Group
for each Tax period shall be determined in accordance with the Treasury
Regulations under Section 1502 of the Code, applied in a manner consistent with
practices and methods followed in reporting the Federal income Tax liability of
the Weatherford Group for such Tax periods. In any instance where a Tax
attribute must be characterized, the characterization prescribed by the
aforementioned Treasury Regulations will control. To the extent, if any, that
the amount of Taxes Weatherford is required to pay with respect to the net
taxable income of the Grant Group for a Tax period is less than the amount
calculated as owed by Grant to Weatherford under this Paragraph 5, the amount
owed by Grant to Weatherford shall be (i) reduced to the extent that such
difference is attributable to Tax benefits of the Weatherford Group used which
would have otherwise expired unused but for the fact that the Grant Group had
net taxable income for such Tax period, or (ii) deferred to the extent such
difference is attributable to Tax benefits of the Weatherford Group used which
would have otherwise carried forward to a subsequent year or years but for the
fact that the Grant Group had net taxable income for such Tax period. In the
event an amount otherwise payable by Grant to Weatherford is deferred pursuant
to clause (ii) of the immediately preceding sentence, such amount shall be paid
by Grant to Weatherford within 30 days after the filing of the Tax Return for
the Tax period in which such Tax benefits of the Weatherford Group previously
used would have been used.
6. Tax Credits; Deferred Intercompany Gains. For purpose of the
calculations under this Agreement, any loss of Tax credits resulting from or
attributable to the transfer of assets to Grant or any other member of the Grant
Group in connection with the Spin-Off shall be ignored and all calculations
shall be made as though all such tax credits were available for use by the
Weatherford Group. In the event any deferred intercompany gain attributable to
assets transferred to Grant or any
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other members of the Grant Group by other members of the Weatherford Group is
recognized by the Weatherford Group by reason of the Spin-Off, such deferred
intercompany gain, if any, shall be deemed to be gain of the Grant Group for its
taxable year ending on the Spin-Off Date for purposes of all calculations under
this Agreement.
7. Grant Tax Carryovers. Notwithstanding anything in this Agreement to
the contrary, no payment shall be made by Grant to Weatherford with respect to
items of loss or other Tax benefits apportioned to and carried over by the Grant
Group, under the Treasury Regulations governing Federal consolidated income Tax
Returns, after the Spin-Off, regardless of whether such Tax benefits are used by
the Grant Group to reduce its Federal income Tax liability after the Spin-Off.
Weatherford agrees to cooperate with Grant in determining the amount of such
items of loss or other Tax benefits apportioned to and carried over by the Grant
Group after the Spin-Off.
8. Tax Audits. In the event of an audit by any Tax Authority of a
Return filed by Weatherford for any Tax period ending prior to or on the
Spin-Off Date (or any Tax period thereafter in which a carryforward of the Grant
Group's Tax benefits is used), Weatherford shall give Grant timely and
reasonable notice of such audit proceedings and Grant will provide all necessary
information and other assistance reasonably requested by Weatherford with
respect to issues concerning the activities of the Grant Group. All
communications with any such Tax Authority and its employees concerning any such
audit will be made by Weatherford unless otherwise agreed between the parties
hereto.
9. Proposed Adjustments. Weatherford shall give prompt notice to Grant
of any adjustment or adjustments proposed by any Tax Authority relating to the
activities of the Grant Group for any Tax period ending prior to or on the
Spin-Off Date. After consulting with Grant,
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Weatherford shall determine in its sole discretion the nature of all action to
be taken to contest such proposed adjustment, including whether any such action
shall initially be contested by way of judicial or administrative proceedings,
or both, whether any such proposed adjustment shall be contested by resisting
payment thereof or by paying the same and seeking a refund thereof, and if
Weatherford shall undertake to contest such proposed adjustment, the court or
other judicial body before which such action will be commenced. Weatherford
shall have full control over any contest or administrative proceeding pursuant
to this Paragraph, but Grant, at its expense and subject to approval of
Weatherford, may participate in any proceedings contesting any proposed
adjustment relating to the activities of the Grant Group.
10. Notice of Settlement or Compromise. Weatherford shall give prompt
notice to Grant of any proposal made to it at the time of an audit or otherwise,
to settle or compromise issues relating to the Tax liabilities of the Grant
Group for any Tax period ending prior to or on the Spin-Off Date. Weatherford
will not accept or offer any settlement or compromise of such issues without the
consent of Grant, and such consent shall not be unreasonably withheld. If, in
▇▇▇▇▇▇▇▇▇▇▇'▇ opinion, Grant unreasonably withholds such consent, Weatherford
shall have the right to settle or compromise such issues on the basis contained
in the notice to Grant. If Grant thereafter desires to dispute such settlement
or compromise, Grant's claim with respect thereto shall constitute a claim for
purposes of Paragraph 25 of this Agreement.
11. Grant's Right to Contest. Should Weatherford decline or cease to
contest any proposed adjustment relating to the activities of the Grant Group
for any Tax period ending prior to or on the Spin-Off Date, Weatherford shall so
notify Grant. Grant may, at its expense and only with ▇▇▇▇▇▇▇▇▇▇▇'▇ prior
consent, contest such proposed adjustments; but in no event shall Grant be
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permitted to accept or offer any settlement or compromise that would require the
settlement or compromise of issues relating to the Tax liabilities of members of
the Weatherford Group other than the Grant Group.
12. Subsequent Adjustments or Refunds. With respect to any Tax period
of the Weatherford Group for which Weatherford received from Grant a payment
pursuant to Paragraph 5 or this Paragraph 12, if the filing of an amended income
Tax Return, final determination of any adjustment made by any Tax Authority or
the receipt of a refund by Weatherford occurs with respect to such period and
such event would cause a difference in the amount of payment required for such
period as previously calculated pursuant to Paragraph 5 or this Paragraph 12,
Weatherford shall give Grant prompt notice of such difference and Weatherford
shall be obligated to pay or entitled to receive from Grant the amount of such
difference. The amount shall include interest at the applicable deficiency
interest rate imposed by the Tax Authority if the adjustment results in the
payment of Tax to or receipt of Tax from the Tax Authority.
13. Grant Spin-Off Tax Indemnity. Notwithstanding any other provision
of this Agreement to the contrary, Grant shall be liable for, shall pay and
shall indemnify and hold Weatherford and the other members of the Weatherford
Group harmless, on an After-Tax Basis, against (A) any Transfer Taxes and other
Taxes which may be imposed or assessed as a result of the contribution by
Weatherford to the capital of Grant or the acquisition (by sale or purchase or
otherwise) by Grant or one or more of the other members of the Grant Group of
assets associated with the drilling products business conducted by the
Weatherford Group, including the stock of certain subsidiaries included in the
Weatherford Group and engaged in the drilling products business, and (B) any
Spin-Off Tax. In determining the amount of, and the time of payment of, any such
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Transfer Taxes, other Taxes or Spin-Off Tax owed by Grant to Weatherford, the
principles set forth in the last two sentences of Paragraph 5 shall apply.
14. Future Actions. The parties agree not to take any action
inconsistent with any information, covenant or representation provided to the
Internal Revenue Service in connection with obtaining the Ruling. In addition,
Grant agrees that, during the three-year period following the Spin-Off, it will
not engage in any transaction that could adversely affect the tax treatment of
the Spin- Off, unless Grant delivers to Weatherford a supplemental ruling from
the Internal Revenue Service or a tax opinion acceptable to Weatherford of
nationally recognized tax counsel to the effect that the proposed transaction
would not adversely affect the tax treatment of the Spin-Off.
15. Combined, Consolidated or Unitary Basis Returns. The parties
acknowledge that certain state, local or foreign Tax Authorities may require, or
one of the parties may desire, to file amended or original state, local or
foreign income Tax Returns on a combined, consolidated or unitary basis. Such
filing may result in an aggregate decrease in the state, local or foreign income
Tax of both parties; however, one party may suffer a Tax increase compared to
its state, local or foreign income Tax liability calculated on a separate
company basis, while the other party enjoys a Tax decrease. In any such event,
the parties intend that the required calculations for determining which party
owes Taxes to the other with respect thereto be made by utilizing the principles
set forth in Paragraphs 3, 4, 5 and 12 hereof.
16. Earnings and Profits Information. The parties agree to share such
information as is necessary to properly allocate the earnings and profits of the
Grant Group in accordance with the Code and Treasury Regulations for Tax periods
prior to or ending on the Spin-Off Date. After the Spin-Off, Weatherford agrees
to provide Grant and Grant's independent auditors with such
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information as is necessary to verify amounts received or receivable by Grant
under this Agreement. Grant agrees to make available to Weatherford, upon
request, all Federal, state, local and foreign Tax Returns, work papers and
other documents pertaining to the activities of the Grant Group prior to the
Spin-Off.
17. Retention of Records. Each party hereto agrees, to the extent
potentially relevant to the other party, to (1) retain records, documents,
accounting and other information (including computer data) necessary for the
preparation and filing of all Returns or the audit of such Returns, and (2) give
to the other party reasonable access to such records, documents, accounting
data, Returns and related books and records and other information (including
computer data) and to its personnel (insuring their cooperation) and premises,
for purposes of the review or audit of such Returns to the extent relevant to an
obligation or liability of a party under this Agreement.
18. Expenses. Each party will bear its own expenses in complying with
this Agreement, including but not limited to the cost of employee work hours.
The sharing of fees and expenses of nonemployees and independent contractors
mutually engaged by the parties shall be agreed upon before such persons are
engaged.
19. Definitions.
(a) "After-Tax Basis" means, with respect to any payment, an
amount calculated by taking into account the Tax consequences of the receipt of
such payment, as well as any Tax benefit associated with the liability giving
rise to the payment, in each case calculated on a present value basis using the
Agreed Rate.
(b) "Agreed Rate" means the annual rate of interest quoted,
from time to time, by ______________________, N.A. in Houston, Texas as its
prime rate of interest for the purpose
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of determining the interest rates charged by it for United States dollar
commercial loans made in the United States.
(c) "Code" has the meaning set forth in the first recital
hereof.
(d) "Distribution Agreement" means that certain Distribution
Agreement dated as of _______________, 1999, by and between Weatherford and
▇▇▇▇▇, as the same may be amended or otherwise modified from time to time
pursuant to the terms thereof.
(e) "Grant" has the meaning set forth in the preamble hereto.
(f) "Grant Group" has the meaning set forth in Section 1
hereof.
(g) "Interim Period" has the meaning set forth in Section 2
hereof.
(h) "Returns" means all returns, declarations, reports,
statements and other documents required to be filed in respect of Taxes, and the
term "Return" means any one of the foregoing Returns.
(i) "Ruling" means the private letter ruling to be issued by
the Internal Revenue Service with respect to the Spin-Off and relating to the
tax consequences associated with the distribution of all outstanding shares of
Grant common stock.
(j) "Short Period" has the meaning set forth in Section 2
hereof.
(k) "Spin-Off" has the meaning set forth in the fifth recital
hereof.
(l) "Spin-Off Date" has the meaning set forth in the fifth
recital hereof.
(m) "Spin-Off Tax" means any Tax to which Weatherford or any
member of the Weatherford Group is subject as a result of the application of any
provision of the Code to the Spin-Off, including without limitation, Section
311(b), Section 355(c)(2), Section 355(e) or Section 361(c)(2) of the Code (or
any corresponding or similar provision of state, local or foreign law), other
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than any such Tax which results solely from the fact that one or more persons
acquire directly or indirectly stock representing a 50-percent or greater
interest in Weatherford after the Spin-Off and such acquisition is subject to
Section 355(e) of the Code.
(n) "Tax Authority" means the United States Internal Revenue
Service or any other comparable state, local or foreign governmental authority.
(o) "Taxes" means all federal, state, local, foreign and other
taxes, charges, fees, duties, levies, imposts, customs or other assessments,
including, without limitation, all net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, profit share, license,
value added, withholding, payroll, employment, excise, estimated, severance,
stamp, occupation, premium, property, windfall profits, or other taxes, fees,
assessments, customs, duties, levies, imposts, or charges of any kind
whatsoever, together with any interest, penalties, additions to tax, fines or
other additional amounts imposed thereon or related thereto, and the term "Tax"
means any one of the foregoing Taxes.
(p) "Transfer Tax" means any excise, sales, use, transfer,
documentary, filing, recordation or other similar tax or fee, together with any
interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties.
(q) "Weatherford" has the meaning set forth in the preamble
hereto.
(r) "Weatherford Group" has the meaning set forth in the first
recital hereto.
(s) "WEI" has the meaning set forth in the first recital
hereto.
20. Notices. All notices and other communications to be given or made
hereunder shall be in writing and shall be (a) personally delivered with signed
receipt obtained acknowledging delivery; (b) transmitted by postage prepaid
registered mail, return receipt requested (air mail if
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international); or (c) transmitted by facsimile; to a party at the address set
out below (or at such other address as it may have provided notification for the
purposes hereof to the other party hereto in accordance with this Section).
If to Grant: Grant Prideco, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
If to Weatherford: ▇▇▇▇▇▇▇▇▇▇▇ International, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
With a copy to:
Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇. Binding Effect; Successors. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and any
successor, by merger, acquisition of assets or otherwise, to either of the
parties hereto (including but not limited to any successor of Weatherford or
▇▇▇▇▇ succeeding to the Tax attributes of ▇▇▇▇▇▇▇▇▇▇▇ or Grant under Section 381
of the Code), to the same extent as if such successor had been an original party
to this Agreement. In addition, in the event of any acquisition of the assets of
Grant in which gain or loss is not recognized, in whole or in part, for Federal
income Tax purposes, Grant shall ensure that any purchaser of such assets shall
assume the obligations set forth in this Agreement.
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22. Severability. Any provision of this Agreement that is determined by
arbitration as provided herein or a court of competent jurisdiction to be
invalid, illegal or unenforceable shall be ineffective to the extent of such
invalidity, illegality or unenforceability, without affecting in any way the
remaining provisions hereof in such jurisdiction or rendering that or any other
provision of this Agreement invalid, illegal or unenforceable, so long as the
material purposes of this Agreement can be determined and effectuated. Should
any provision of this Agreement be so declared invalid, illegal or
unenforceable, the parties shall agree on a valid provision to substitute for
it.
23. Entire Agreement. This Agreement, including the exhibit and other
writings referred to herein or delivered pursuant hereto, constitutes the entire
agreement between Weatherford and ▇▇▇▇▇ with respect to the subject matter
hereof and supersedes all other agreements, representations, warranties,
statements, promises and undertakings, whether oral or written, with respect to
the subject matter hereof, including, without limitation, any and all Tax
sharing agreements or arrangements (whether oral or written) between Weatherford
and the other members of the ▇▇▇▇▇▇▇▇▇▇▇ Group (other than the Grant Group) on
the one hand and Grant and the other members of the Grant Group on the other
hand, that require payments or indemnities to be made with respect to Taxes.
This Agreement may not be amended, altered or modified except by a writing
signed by duly authorized officers of Weatherford and ▇▇▇▇▇.
24. Governing Law. All questions arising out of this Agreement and the
rights and obligations created herein, or its validity, existence,
interpretation, performance or breach, shall be governed by and construed in
accordance with the internal laws of the State of Texas, without regard to or
the application of the rules of conflicts of laws set forth in such laws.
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25. Arbitration. The parties agree that any claim arising out of or
related to this Agreement shall be governed by the dispute resolution,
arbitration and choice of forum provisions set forth in Section ___ of the
Distribution Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
▇▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL, INC.
By:
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Name:
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Title:
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GRANT PRIDECO INC.
By:
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Name:
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Title:
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-16-