Document:

exv10w10

 

Exhibit 10.10

BASE CONTRACT FOR THE

SALE AND PURCHASE OF NATURAL GAS

This Base Contract is entered into as of the following date:
July 1, 2001, 9:00 a.m.

The parties to this Base Contract are
the following:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	EnerVest Monroe Marketing, Ltd.	 	and	 	Cargas Operating Company
	P. O. Box 219, Fairbanks, LA 71240	 	 	 	P.O. Box 2807, Monroe, LA 71207-2807
	Duns #

	 	 	 	 	 	 	 	 	Duns #	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Contract # EVM 01- 10	 	 	 	Contract # EVM 01-10
	Attn: Mr. Jimmy Pardue	 	 	 	Attn: Mr. Barrie Primos
	Phone: 318) 665-4506 Fax: 318) 665-4612	 	 	 	Phone: 318) 322-1661 Fax:318) 340-9204
	Federal Tax ID Number:	 	 	 	 	 	Federal Tax ID Number: 72-1326885
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Invoices and Payments:	 	 	 	 	 	 	 	 
	Same as above	 	 	 	Same as above
	Wire Transfer or ACH Nos. (if applicable)	 	 	 	Wire Transfer or ACH Nos. (if applicable)
	 	 	 	 	 

This Base Contract incorporates by reference for all purposes the General Terms and Conditions for
Short-Term Sale and Purchase of Natural Gas published by the Gas Industry Standards Board. The
parties hereby agree to the following provisions offered in said General Terms and Conditions
(select only one from each box, but see “Note” relating to Section 2.24):

	 	 	 	 	 	 	 
	Section 1.2

Transaction Procedure

	 	o Oral

þ Written
	 	Section 6.
Taxes
	 	o Buyer Pays At and After Delivery Point

þ Seller Pays Before and At Delivery Point
	 
	 	 	 	 	 	 
	Section 2.4
Confirm Deadline

	 	þ 2 Business Days after receipt (default)

o Business Days after receipt
	 	Section 7.2
Payment Date
	 	28th day of Month following Month of delivery.
	 
	 	 	 	 	 	 
	Section 2.5 Confirming Party

	 	o Seller

þ Buyer

o                                                            
	 	Section 7.2
Method of Payment
	 	o Wire Transfer (WT)

o Automated Clearinghouse (ACH)

þ Check
	 
	 	 	 	 	 	 
	Section 3.2
Performance Obl.	 	o Cover Standard

þ Spot Price Standard	 	Section 13.5
CHOICE OF LAW: Louisiana
	 
	 	 	 	 	 	 
	Section 2.24 -
Contract Price: The price for gas delivered
under this Base Contract shall be equal to the bid week
“Delivered to Pipeline” average of the Natural Gas Week,
Louisiana Gulf Coast Onshore Index and North Louisiana Index,
for the Month of actual deliveries, less $0.10, on a wet MMBtu
basis.	 	 	 	 

þ Special Provisions: This Base Contract is subject to all of the terms and conditions set
forth in the “Gas Transportation Agreement,” dated
effective July 1, 2001, between EnerVest Monroe Gathering, Ltd.
and Seller.

IN WITNESS WHEREOF, the parties hereto have executed this Base Contract in duplicate.

	 	 	 	 	 	 	 	 	 	 	 
	EnerVest Monroe Marketing, Ltd.	 	 	 	Cargas Operating Company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ Mark A. Houser
	 	 	 	By
	 	/s/ Barringer K. Primos	 	 
	 

	 	 

	 	 	 	 	 	 
Barringer
K. Primos

	 	 
	Title Vice President	 	 	 	Title President	 	 

DISCLAIMER: The purposes of this Contract are to facilitate trade, avoid misunderstandings
and make more definite the terms of contracts of purchase and sale of natural gas. This Contract
is intended for Interruptible transactions or Firm transactions of one month or less and may not
be suitable for Firm transactions of longer than one month. Further, GISB does not mandate the use
of this Contract by any party. GISB DISCLAIMS AND EXCLUDES, AND ANY USER OF THIS CONTRACT
ACKNOWLEDGES AND AGREES TO GISB’S DISCLAIMER OF, ANY AND ALL WARRANTIES, CONDITIONS OR
REPRESENTATIONS, EXPRESS OR IMPLIED, ORAL OR WRITTEN, WITH RESPECT TO THIS CONTRACT OR ANY PART
THEREOF, INCLUDING ANY AND ALL IMPLIED WARRANTIES OR CONDITIONS OF TITLE, NON-INFRINGEMENT,
MERCHANTABILITY, OR FITNESS OR SUITABILITY FOR ANY PARTICULAR PURPOSE (WHETHER OR NOT GISB KNOWS,
HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS OTHERWISE IN FACT AWARE OF ANY SUCH PURPOSE), WHETHER
ALLEGED TO ARISE BY LAW, BY REASON
OF CUSTOM OR USAGE IN THE TRADE, OR BY COURSE OF DEALING. EACH USER OF THIS CONTRACT ALSO AGREES
THAT UNDER NO CIRCUMSTANCES WILL GISB BE LIABLE FOR ANY DIRECT, SPECIAL, INCIDENTAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF ANY USE OF THIS CONTRACT.

			
	 	 	 
	Copyright © 1996-2001 Gas Industry Standards Board, Inc.

All rights reserved.
	 	GISB Standard 6.3.1

Ratified January 7, 2000

 

GENERAL TERMS AND CONDITIONS

BASE CONTRACT FOR THE

SALE AND PURCHASE OF NATURAL GAS

SECTION 1. PURPOSE AND PROCEDURES

1.1. These General Terms and Conditions are intended to facilitate purchase and sale
transactions of Gas on a Firm or Interruptible basis. “Buyer” refers to the party receiving Gas and
“Seller” refers to the party delivering Gas.

The parties have selected either the “Oral” version or the “Written” version of transaction
procedures as indicated on the Base Contract.

Oral Transaction Procedure:

1.2 The
parties will use the following Transaction Confirmation procedure. Any Gas purchase and
sale transaction may be effectuated in an EDI transmission or telephone conversation with the offer
and acceptance constituting the agreement of the parties. The parties shall be legally bound from
the time they so agree to transaction terms and may each rely thereon. Any such transaction shall
be considered a ”writing” and to have been “signed”. Notwithstanding the foregoing sentence, the
parties agree that Confirming by facsimile, EDI or mutually agreeable electronic means. Confirming
Party adopts its confirming letterhead, or the like, as its signature
on any Transaction
Confirmation as the identification and authentication of Confirming Party.

Written Transaction Procedure:

1.2 The parties will use the following Transaction Confirmation procedure. Should the parties come
to an agreement regarding a Gas purchase and sale transaction for a particular Delivery Period, the
Confirming Party shall, and the other party may, record that
agreement on a Transaction Confirmation
and communicate such Transaction Confirmation by facsimile, EDI or mutually agreeable electronic
means, to the other party by the close of the Business Day following the date of agreement. The
parties acknowledge that their agreement will not be binding until the exchange of non-conflicting
Transaction Confirmation or the passage of the Confirm Deadline without objection from the
receiving party, as provided in Section 1.3.

1.3 If a sending party’s Transaction Confirmation is materially different from the receiving
party’s understanding of the agreement referred to in Section 1.2., such receiving party shall
notify the sending party via facsimile by the Confirm Deadline, unless such receiving party has
previously sent a Transaction Confirmation to the sending party. The failure of the receiving party
to so notify the sending party in writing by the Confirm Deadline constitutes the receiving party’s
agreement to the terms of the transaction described in the sending
party’s Transaction Confirmation.
If there are any material differences between timely sent Transaction Confirmations governing the
same transaction, then neither Transaction Confirmation shall be binding until or unless such
differences are resolved including the use of any evidence that clearly resolves the differences in
the Transaction Confirmations. The entire agreement between the parties shall be those provisions
contained in both the Base Contract and any effective Transaction Confirmation. In the event of a
conflict among the terms of (i) a Transaction Confirmation, (ii) the Base Contract, and (iii) these
General Terms and Conditions, the terms of the documents shall govern
in the priority listed in this
sentence.

SECTION 2 DEFINITIONS

2.1. “Base Contract” shall mean a contract executed by the parties that incorporates these General
Terms and Conditions by reference, that specifies the agreed selections of provisions contained
herein, and that sets forth other information required herein.

2.2
“British thermal unit” or “Btu” shall have the meaning ascribed to it by the Receiving
Transporter.

2.3 “Business Day” shall mean any day except Saturday, Sunday or Federal Reserve Bank holidays.

2.4 “Confirm Deadline” shall mean 5.00 p.m. in the receiving party’s time zone on the second
Business Day following the Day a Transaction Confirmation is received, or if applicable, on the
Business Day agreed to by the parties in the Base Contract; provided, if the Transaction
Confirmation is time stamped after 5:00 p.m. in the receiving party’s time zone, it shall be deemed
received at the opening of the next Business Day.

2.5. “Confirming Party” shall mean the party designated in the Base Contract to prepare
and Forward Transaction Confirmations to the other party.

2.6. “Contract” shall mean the legally binding relationship established by (i) the
Base Contract, (ii) the provisions contained in any effective Transaction Confirmation and (iii)
the Gas Transportation Agreement.

2.7. “Contract Price” shall mean the amount expressed in U.S. Dollars per MMBtu, as
evidenced by the Contract Price on the Transaction Confirmation.

2.8. “Contract Quantity” shall mean the quantity of Gas to be delivered and taken as set
forth in the Transaction Confirmation.

2.9. “Cover Standard”, if applicable, shall mean that if there is an unexcused failure to
take or deliver any quantity of Gas pursuant to this Contract, then the non-defaulting party shall
use commercially reasonable efforts to obtain Gas or alternate fuels, or sell Gas, at a price
reasonable for the delivery or production area, as applicable, consistent with: the amount of
notice provided by the defaulting party; the immediacy of the Buyer’s Gas consumption needs or
Seller’s Gas sales requirements, as applicable; the quantities involved; and the anticipated length
of failure by the defaulting party.

			
	 	 	 
	Copyright © 1996-2001 Gas
Industry Standards Board, Inc.

All rights reserved.
	 	GISB Standard 6.3.1

Ratified January 7, 2000

 

 

2.10. “Day” shall mean a period of 24 consecutive hours, coextensive with a “day” as defined
by the Receiving Transporter in a particular transaction.

2.11. “Delivery Period” shall be the period during which deliveries are to be made as set
forth in the Transaction Confirmation.

2.12. “Delivery Point(s)” shall mean such point(s) as are mutually agreed upon between
Seller and Buyer as set forth in the Transaction Confirmation.

2.13. “EDI” shall mean an electronic data interchange pursuant to an agreement entered into
by the parties, specifically relating to the communication of Transaction Confirmations under this
Contract.

2.14. “EFP” shall mean the purchase, sale or exchange of natural Gas as the “physical” side
of an exchange for physical transaction involving gas futures contracts. EFP shall incorporate the
meaning and remedies of “Firm”.

2.15. “Firm” shall mean that either party may interrupt its performance without liability
only to the extent that such performance is prevented for reasons of Force Majeure; provided,
however, that during Force Majeure interruptions, the parry invoking Force Majeure may be
responsible for any Imbalance Charges as set forth in Section 4.3. related to its interruption
after the nomination is made to the Transporter and until the change in deliveries and/or receipts
is confirmed by the Transporter.

2.16. “Gas” shall mean any mixture of hydrocarbons and non-combustible gases in a gaseous
state consisting primarily of methane.

2.17. “Imbalance Charges” shall mean any fees, penalties, costs or charges (in cash or in
kind) assessed by a Transporter for failure to satisfy the Transporter’s balance and/or nomination
requirements.

2.18 “Interruptible” shall mean that either party may interrupt its performance at any time for
any reason, whether or not caused by an event of Force Majeure, with
no liability, except such
interrupting party may be responsible for any Imbalance Charges as set forth in Section 4.3 related
to its interruption after the nomination is made to the Transporter and until the change in
deliveries and/or receipts is confirmed by Transporter.

2.19 “MMBtu” shall mean one million British thermal units which is equivalent to one dekatherm.

2.20
“Month” shall mean the period beginning on the first Day of the calendar month and ending
immediately prior to the commencement of the first Day of the next
calendar month For the purpose of
measuring and paying for production, a Month may cover the period of time shown on the chart. For
example, if charts are pulled on the
29th of
that month, a Month for production shall mean
from the 29th of the month to the 29th of the next month.

2.21 “Payment Date” shall mean a date, selected by Buyer under the Gas Transportation Agreement
and Sections 7.1 or 7.2 below, on which payment is due to be mailed to Seller for Gas received by
Buyer in the previous Month.

2.22 “Receiving Transporter” shall mean the Transporter receiving Gas at a Delivery Point, or
absent such receiving Transporter, the Transporter delivering Gas at a Delivery Point.

2.23
“Scheduled Gas” shall mean the quantity of Gas confirmed by Transporter(s) for movement,
transportation or management, as further set forth in
Paragraph 3.2 (on a Interruptible basis) and
the Gas Transportation Agreement.

2.24 “Spot Price” as referred in Section 3.2 shall mean the price listed in the publication
specified by the parties in the Base Contract, under the listing applicable to the geographic
location closest in proximity to the Delivery Point(s) for the relevant Month; provided, if there is no single price
published for such location for such Month, but there is published a
range of prices, then the Spot
Price shall be average of such high and low prices. If no price or range, of prices is published
for such Month, then the Spot Price shall be the average of the following: (i) the price
(determined as stated above) for the first Month for which a price or range of prices is published
that next precedes the relevant Month; and (ii) the price (determined as stated above) for the
first Month for which a price or range of prices is published that next follows the relevant Month.

2.25 “Transaction Confirmation” shall mean the document, substantially in the form of Exhibit A,
setting forth the terms of a purchase and sale transaction formed pursuant to Section 1 for a
particular Delivery Period.

2.26 “Transporter(s)” shall mean all Gas gathering or pipeline companies, or local distribution
companies, acting in the capacity of a transporter, transporting Gas for Seller or Buyer upstream
or downstream, respectively, of the Delivery Point pursuant to a particular Transaction
Confirmation.

2.27. “Transportation Agreement” or “Gas Transportation Agreement” shall mean the Gas
Transportation Agreement between Seller and EnerVest Monroe Gathering, Ltd., dated effective July
1, 2001, governing the terms for transportation of all gas purchased
under this Contract. All of the
terms, conditions and provisions of the “Gas Transportation Agreement” are incorporated in this
Contract, just as if fully written herein. In the event of a conflict between the Base Contract,
the Transaction Confirmation and the Gas Transportation Agreement, the terms of the Gas
Transportation Agreement will control.

SECTION
3 PERFORMANCE OBLIGATION

3.1. Seller agrees to sell and deliver, and Buyer agrees to receive and purchase, the Contract
Quantity for a particular transaction in accordance with the terms of the Contract, Sales and
purchases will be on a Firm or Interruptible basis, as specified in the Transaction Confirmation.

The parties have selected the “Cover Standard” version or the “Spot Price Standard” version as
indicated on the Base Contract.

			
	 	 	 
	Copyright © 1996-2001 Gas
Industry Standards Board, Inc.

All rights reserved.
	 	GISB Standard 6.3.1

Ratified January 7, 2000

 

 

Cover Standard:

3.2 In addition to any liability for Imbalance Charges, which shall not be recovered twice by the
following remedy, the exclusive and sole remedy of the parties in the event of a breach of a Firm
obligation shall be recovery of the following: (i) in the event of a breach by Seller on any
Day(s), payment by Seller to Buyer in an amount equal to the positive difference, if any, between
the purchase price paid by Buyer utilizing the Cover Standard for replacement Gas or alternative
fuels and the Contract Price, adjusted for commercially reasonable differences in transportation
costs to or from the Delivery Point(s), multiplied by the difference between the Contract Quantity
and the quantity actually delivered by Seller for such Day(s); or (ii) in the event of a breach by
Buyer on any Day(s), payment by Buyer to Seller in the amount equal to the positive difference, if
any, between the Contract Price and the price received by Seller utilizing the Cover Standard for
the resale of such Gas, adjusted for commercially reasonable differences in transportation costs to
or from the Delivery Point(s), multiplied by the difference between the Contract Quantity and the
quantity actually taken by Buyer for such Day(s); or (iii) in the event that Buyer has used
commercially reasonable efforts to replace the Gas or Seller has used commercially reasonable
efforts to sell the Gas to a third party, and no such replacement or sale is available, then the
exclusive and sole remedy of the non-breaching party shall be any unfavorable difference between
the Contract Price and the Spot Price, adjusted for such transportation to the applicable Delivery
Point multiplied by the difference between the Contract Quantity and the quantity actually
delivered by Seller and received by Buyer for such Day(s).

Spot Price Standard: (Interruptible Basis)

3.2 In addition to any liability for Imbalance Charges, which shall not be recovered twice by the
following remedy, the exclusive and sole remedy of the parties in the event of a breach of a Firm
obligation shall be recovery of the following: (i) in the event of a breach by Seller on any
Day(s), payment by Seller to Buyer in an amount equal to the difference between the Contract
Quantity and the actual quantity delivered by Seller and received by Buyer for such Day(s),
multiplied by the positive difference, if any, obtained by subtracting the Contract Price from the
Spot Price; (ii) in the event of a breach by Buyer on any Day(s), payment by Buyer to Seller in an
amount equal to the difference between the Contract Quantity and the actual quantity delivered by
Seller and received by Buyer for such Day(s), multiplied by the positive difference, if any,
obtained by subtracting the applicable Spot Price from the Contract Price.

3.3. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN, IN NO EVENT WILL EITHER PARTY BE LIABLE
UNDER THIS CONTRACT, WHETHER IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), OR
OTHERWISE, FOR INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES.

SECTION
4. TRANSPORTATION, NOMINATIONS AND IMBALANCES

4.1. Seller shall have the sole responsibility for transporting the Gas to the Delivery Point(s)
and for delivering such Gas at a pressure sufficient to effect such delivery but not to exceed
the maximum operating pressure of the Receiving Transporter. Buyer shall have the sole
responsibility for transporting the Gas from the Delivery Point(s).

4.2. The parties shall coordinate their nomination activities, giving sufficient time to meet the
deadlines of the affected Transporter(s). Each party shall give the other party timely prior
notice, sufficient to meet the requirements of all Transporter(s) involved in the transaction,
of the quantities of Gas to be delivered and purchased each Day Should either party become
aware that actual deliveries at the Delivery Point(s) are greater or lesser than the Scheduled
Gas, such party shall promptly notify the other party.

4.3. The parties shall use commercially reasonable effort to avoid imposition of any Imbalance
Charges. If Buyer or Seller receives an invoice from a Transporter that includes Imbalance
Charges, the parties shall determine the validity as well as the cause of such Imbalance
Charges. If the Imbalance Charges were incurred as a result of Buyer’s actions or inactions
(which shall include, but shall not be limited
to, Buyer’s failure to accept quantities of Gas equal to the Scheduled Gas), then Buyer shall
pay for such Imbalance Charges, or reimburse Seller for such Imbalance Charges paid by Seller
to the Transporter. If the Imbalance Charges were incurred as a result of Seller’s actions or
inactions (which shall include, but shall not be limited to, Seller’s failure to deliver
quantities of Gas equal to the Scheduled Gas), then Seller shall pay for such Imbalance
Charges, or reimburse Buyer for such Imbalance Charges paid by Buyer to the Transporter.

SECTION 5. QUALITY AND MEASUREMENT

All Gas delivered by Seller shall meet the quality and heat content requirements of the Receiving
Transporter, and the Quality Specifications set forth in the Gas Transportation Agreement. The unit
of quantity measurement for purposes of this Contract shall be one MMBtu on a wet basis.
Measurement of Gas quantities hereunder shall be in accordance with the established procedures of
the Receiving Transporter.

SECTION 6. TAXES

The parties have selected either the “Buyer Pays At and After Delivery Point” version or the
“Seller Pays Before and At Delivery Point” version as indicated on the Base Contract.

Buyer Pays At and After Delivery Point:

Seller shall pay or cause to be paid all taxes, fees, levies, penalties licenses or charges imposed
by any government authority (“Taxes”) on or with respect to the Gas prior the Delivery
Points(s). Buyer shall pay or cause to be paid all Taxes on or with respect to the Gas at the
Delivery Point(s) and all Taxes after the Delivery Point(s). If a party is required to remit or pay
Taxes that are the other party’s

			
	 	 	 
	Copyright © 1996-2001 Gas
Industry Standards Board, Inc.

All rights reserved.
	 	GISB Standard 6.3.1

Ratified January 7, 2000

 

 

responsibility hereunder, the party responsible for such Taxes shall promptly reimburse the other
party for such Taxes. Any party entitled to an exemption from any such Taxes or charges shall
furnish the other party any necessary documentation thereof.

Seller Pays Before and At Delivery Point:

Seller shall pay or cause to be paid all taxes, fees, levies, penalties, licenses or charges
imposed by any government authority (“Taxes”) on or with respect to the Gas prior to the Delivery
Point(s) and Taxes at the Delivery Point(s). Buyer shall pay or cause to be paid all Taxes on or
with respect to the Gas after the Delivery Point(s). If a party is required to remit of pay Taxes
which are the other party’s responsibility hereunder, the party responsible for such Taxes shall
promptly reimburse the other party for such Taxes. Any party entitled to an exemption from any such
Taxes or charges shall furnish the other party any necessary documentation thereof.

SECTION 7. BILLING, PAYMENT AND AUDIT

7.1 Buyer shall pay Seller for gas by the 28th day of the Month following the Month of
delivery, by payment of a net check, which represents the amount due Seller after deducting all
Transportation Fees and other costs as further set forth in the Gas Transportation Agreement. The
net check will be accompanies by a statement showing the amount of Gas delivery and re-delivered in
the preceding Month and for any other applicable charges, providing supporting documentation
acceptable in industry practice to support the amount charged. If the actual quantity delivered is
not known due to the failure to timely deliver charts as provided in the Gas Transportation
Agreement, billing will be prepared based on the estimated quantity
of Scheduled Gas as allowed by the Gas Transportation Agreement.

7.2 If Buyer does not elect to send a net check for the purchased gas, less transportation fees and
other costs, as set forth in Section 7.1 above, Buyer shall remit the amount due in the manner
specified in the Base Contract, in immediately available funds, on or before the later of the
Payment Date; provided that if the Payment Date is not a Business Day, payment is due on the next
Business Day following that date. If Buyer fails to remit the full amount payable by it when due,
interest on the unpaid portion shall accrue at a rate equal to the lower of (i) the then-effective
prime rate of interest published under “Money Rates” by The Wall Street Journal, plus two percent
per annum from the date due until the date of payment; or (ii) the maximum applicable lawful
interest rate. If Buyer, in good faith, disputes the amount of any such statement or any part
thereof, Buyer must provide supporting documentation acceptable in industry practice to support the
amount paid or disputed. In any event, Buyer shall have the right to suspend payment, without interest, for any
Gas received to which Seller’s title is disputed, until such disputed are resolved to the
satisfaction of Buyer.

7.3 If the
event any payments are due Buyer hereunder, payment to Buyer shall be made in accordance with
Section 7.1 and 7.2 above.

7.4 A party shall have the right, at its own expense, upon reasonable notice and at reasonable
times, to examine the books and records of the other party only to the extent reasonable necessary
to verify the accuracy of any statement, charge, payment, or computation made under the Contract.
This examination right shall not be available with respect to proprietary information not directly
relevant to transactions under this Contract. All invoices and billings shall be conclusively
presumed final and accurate unless objected to in writing, with adequate explanation and/or
documentation, within two years after the Month of Gas delivery. All retroactive adjustments under
Section 7. shall be paid in full by the party owing payment
within 30 days of notice and substantiation of such inaccuracy.

SECTION 8. TITLE, WARRANTY AND INDEMNITY

8.1 Unless otherwise specifically agreed, title to the Gas shall pass from Seller to Buyer at the
Delivery Point(s). Seller shall have responsibility for and assume any liability with respect to
the Gas prior to its delivery to Buyer at the specified Delivery Point(s). Buyer shall have
responsibility for and assume any liability with respect to said Gas after its delivery to Buyer at
the Delivery Point(s).

8.2 Seller warrants that it will have the right to convey and will transfer good and merchantable
title to all Gas sold hereunder and delivered by it to Buyer, free and clear of all liens,
encumbrances, and claims.

8.3 Seller
agrees to indemnify Buyer and save it harmless from all losses, liabilities or claims
including attorneys’ fees and costs of court (“Claims”), from any and all persons, arising from
or out of claims of title, personal injury or property damage from said Gas or other charges
thereon which attach before title passed to Buyer. Buyer agrees to indemnify Seller and save it
harmless from all Claims, from any and all persons, arising from or out of claims regarding
payment, personal injury or property damage from said Gas or other charges thereon which
attach after title passes to Buyer.

8.4
Notwithstanding the other provision of this Section 8, as between Seller and Buyer, Seller
will be liable for all Claims to the extent that such arise from the failure of Gas delivered
by Seller to meet the quality requirements of Section 5.

SECTION 9. NOTICES

9.1. All Transaction Confirmations, invoices, payments and other communications made pursuant to
the Base Contract (“Notices”) shall be made to the addresses specified in writing by the respective
parties from time to time.

9.2. All Notices required hereunder may be sent by facsimile or mutually acceptable electronic
means, a nationally recognized overnight courier service, first class mail or hand delivered.

9.3. Notice shall be given when received on a Business Day by the addressee. In the absence of
proof of the actual receipt date, the following presumptions will apply. Notices sent by facsimile
shall be deemed to have been received upon the sending party’s receipt of its facsimile machine’s
confirmation of successful transmission, if the day on which such facsimile is received is not a
Business Day or is after five p.m. on a Business Day, then such facsimile shall be deemed to have
been received on the next following Business Day. Notice by overnight

			
	 	 	 
	Copyright © 1996-2001 Gas Industry Standards Board, Inc.
	 	GISB Standard 6.3.1
	All rights reserved.
	 	Ratified January 7, 2000

 

 

mail or courier shall be deemed to have been received on the next Business Day after it was
sent or such earlier time as is confirmed by the receiving party. Notice via first class mail
shall be considered delivered two Business Days after mailing.

SECTION 10. FINANCIAL RESPONSIBILITY

10.1. When reasonable grounds for insecurity of payment or title to the Gas arise, either party may
demand adequate assurance of performance. Adequate assurance shall mean sufficient security in the
form and for the term reasonably specified by the party demanding assurance, including, but not
limited to, a standby irrevocable letter of credit, a prepayment, a security interest in an asset
acceptable to the demanding party or a performance bond or guarantee by a creditworthy entity. In
the event either party shall (i) make an assignment or any general arrangement for the benefit of
creditors; (ii) default in the payment or other obligation to the other party, and fail to cure the
default within 10 Days after notice of default; (iii) file a petition or otherwise commence,
authorize, or acquiesce in the commencement of a proceeding or cause under any bankruptcy or
similar law for the protection of creditors or have such petition filed or proceeding commenced
against it; (iv) otherwise become bankrupt or insolvent (however evidenced); or (v) be unable to
pay its debts as they fall due because of insolvancy or legal impediment; then the other party
shall have the right to either withhold and/or suspend deliveries or payment, or terminate the
Contract if the default is not cured within 10 days after notice, in addition to any and all other
remedies available hereunder.

10.2. Each party reserves to itself all rights, set-offs, counterclaims, and other defenses which
it is or may be entitled to arising from the Contract.

SECTION 11. FORCE MAJEURE

11.1. Except with regard to a party’s obligation to make payment due under Section 7, and Imbalance
Charges under Section 4, neither party shall be liable to the other for failure to perform a Firm
obligation, to the extent such failure was caused by Force Majeure. The term “Force Majeure” as
employed herein means any cause not reasonably within the control of the party claiming suspension,
as further defined in Section 11.2.

11.2. Force Majeure shall include but not be limited to the following (i) physical events such as
acts of God, landslides, lightning, earthquakes, fires, storms or storm warnings, such as
hurricanes, which result in evacuation of the affected area, floods, washouts, explosions, breakage
or accident or necessity of repairs to machinery or equipment or lines of pipe; (ii) weather
related events affecting an entire geographic region, such as low temperatures which cause freezing
or failure of wells or lines of pipe; (iii) interruption of firm transportation and/or storage by
Transporters; (iv) acts of others such as strikes , lockouts or other industrial disturbances,
riots, sabotage, insurrections or wars; (v) failure of gathering or transmission pipelines; (vi)
the failure of Buyer’s gas purchaser to take any or all delivered gas; and (vii) governmental
actions such as necessity for compliance with any court order, law, statute, ordinance, or
regulation promulgated by a governmental authority having jurisdiction. Seller and Buyer shall make
reasonable efforts to avoid the adverse impacts of a Force Majeure and to resolve the event or
occurrence once it has occurred in order to resume performance.

11.3. Neither party shall be entitled to the benefit of the provisions of Force Majeure to the
extent performance or non- performance is caused by (i) the breach of any covenants or
obligations, due in accordance with this Contract, after such time when the breach could be
remedied with reasonable dispatch; or (ii) economic hardship.
The party claiming Force Majeure
shall not be excused from its responsibility for Imbalance Charges.

11.4. Notwithstanding anything to the contrary herein, the parties agree that the settlement of
strikes, lockouts or other industrial disturbances shall be entirely
within the sole discretion of
the party experiencing such disturbance.

11.5. The party whose performance is prevented by Force Majeure must provide notice to the other
party. Initial notice may be given orally; however, written notification with reasonably full
particulars of the event or occurrence is required as soon as
reasonably possible. Upon providing
written notification of Force Majeure to the other party, the affected party will be relieved of
its obligation to make or accept delivery of Gas as applicable to the extent and for the duration
of Force Majeure, and neither party shall be deemed to have failed in such obligations to the other
during such occurrence or event.

SECTION 12. TERM

This Contract is for an initial term of six (6) months, an thereafter may be terminated on 30
days’ written notice, which termination shall be effective on the 1st Day of the Month after the
30 Day written notice is received by the other party or until the expiration of the latest
Delivery Period of any Transaction Confirmation(s). After the end of the initial six month term,
the failure of either party to provide a Transaction Conformation will not result in cancellation,
and this Contract shall continue from Month to Month until such 30 day written notice is given, as
provided above. Buyer shall also have the right to cancel this Contract by giving 30 Day prior
notices, in the event that it becomes uneconomic to purchase gas under the terms of this Contract,
as determined in Buyer’s sole opinion. The rights of either party pursuant to Section 7.4, the
obligations to make payment hereunder and the obligation of either party to indemnify the other,
pursuant hereto shall survive the termination of the Base Contract, any Transaction Confirmation
and the Gas Transportation Agreement.

SECTION 13. MISCELLANEOUS

13.1. This Contract shall be binding upon and inure to the benefit of the successors, assigns,
personal representatives, and heirs of the respective parties hereto, and the covenants,
conditions, rights and obligations of this Contract shall run for the
full term of this Contract.
No assignment of this Contract by Seller, in whole or in part, will be made without the prior
written consent of Buyer, which consent will not be

			
	 	 	 
	Copyright © 1996-2001 Gas Industry Standards Board, Inc.
	 	GISB Standard 6.3.1
	All rights reserved.
	 	Ratified January 7, 2000

 

 

unreasonably withheld or delayed; provided, Seller may transfer its interest to any parent or
affiliate by assignment, merger or otherwise without the prior approval of the other party, if the
security of Buyer is not jeopardized, in Buyer’s opinion. Upon any transfer and assumption, the
transferor shall not be relieved of or discharged from any obligations hereunder.

13.2. If any provision in this Contract is determined to be invalid, void or unenforceable by any
court having jurisdiction, such determination shall not invalidate, void, or make unenforceable any
other provision, agreement or covenant of this Contract.

13.3. No waiver of any breach of this Contract shall be held to be a waiver of any other or
subsequent breach.

13.4. This Contract sets forth all understandings between the parties respecting each transaction
subject hereto, and any prior contracts, understandings and representations, whether oral or
written, relating to such transactions are merged into and superseded by this Contract and any
effective Transaction Confirmation(s). This Contract may be amended only by a writing executed by
both parties. The parties expressly terminate, in full, the prior Chart Integration Agreements
between Seller and Midcoast Marketing, Inc., which are believed to be dated June 1, 1997.

13.5. The
interpretation and performance of this Contract shall be governed by the laws of the state
specified by the parties in the Base Contract, excluding, however, any conflict of laws rule, which
would apply the law of another jurisdiction.

13.6. This Contract and all provisions herein will be subject to all applicable and valid statutes,
rules, orders and regulations of any Federal, State, or local governmental authority having
jurisdiction over the parties, their facilities, or Gas supply, this Contract or Transaction
Confirmation or any provisions thereof.

13.7. There is no third party beneficiary to this Contract.

13.8. Each party to this Contract represents and warrants that is has full and complete authority
to enter into and perform this Contract. Each person who executes this Contract on behalf of either
party represents and warrants that it has full and complete authority to do so and that such party
will be bound thereby.

			
	 	 	 
	Copyright © 1996-2001 Gas Industry Standards Board, Inc.
	 	GISB Standard 6.3.1
	All rights reserved.
	 	Ratified January 7, 2000

 

 

EXHIBIT A

TRANSACTION CONFIRMATION

FOR IMMEDIATE DELIVERY

EnerVest Monroe Marketing, Ltd.

P.O. Box 219

Fairbanks, La 71240

 

Date: July 1, 2001

Transaction Confirmation # : EVM 01-10

 

This Transaction Confirmation is subject to the Base Contract between Seller and Buyer dated
effective at 9:00 am, July 1, 2001. The terms of this Transaction Confirmation are binding unless
disputed in writing within 2 Business Days of receipt unless otherwise specified in the Base
Contract.

	 	 	 	 	 	 	 
	SELLER:

	 	Cargas Operating Company
	 	BUYER:
	 	EnerVest Monroe Marketing, Ltd.
	 

	 	P. O. Box 2807
	 	 	 	P.O. Box 219
	 

	 	Monroe, LA 71207-2807
	 	 	 	Fairbanks, La 71240
	 
	 

	 	Attn: Mr. Barringer K. Primos
	 	 	 	Attn: Jimmy Pardue
	 
	 

	 	Phone: 318)322-1661
	 	 	 	Phone: 318)665-4506
	 

	 	Fax: 318)340-9204
	 	 	 	Fax: 318)665-4612

Contract
Price: The price for gas delivered by Seller to the Delivery Point(s) shall be equal
to the bid week “Delivered to Pipeline” average of the Natural Gas Week, Louisiana Gulf Coast
Onshore Index and North Louisiana Index, for the Month of actual deliveries, less $0.10, on a wet
MMBtu basis.

	 	 	 
	Delivery
Period: Begin: 9:00 a.m., July 1, 2001

	 	End: 9:00 a.m.,
January 1, 2002, and
Month to Month
thereafter, unless
30 day notice is
given in accordance
with Section 12 of
the Base Contract. See
Section 12 for the
“Term” of the Base
Contract.

Performance Obligation and Contract Quantity: Interruptible, as further provided in the Gas
Transportation Agreement, concerning the Performance and Quality Obligations, among other things.

	 	 	 	 	 
	Firm (Fixed Quantity):

	 	Firm (Variable Quantity):
	 	þ Interruptible
	                    MMBtus/day

	 	                    MMBtus/day Minimum
	 	Up to available pipeline excess capacity
	 
	 	 	 	 
	     o EFP

	 	                    MMBtus/day Maximum
subject to
Section 4.2 at election of
o Buyer or o Seller	 	 

Delivery Point(s): Transporter’s Cargas Meter # 997847, as further described in the Gas
Transportation Agreement between Seller and EnerVest Monroe
Gathering, Ltd., dated effective July 1,
2001.

Special Conditions: The purchase of any gas is subject to and governed by the terms and conditions
set forth in the Gas Transportation Agreement between Seller and EnerVest Monroe Gathering, Ltd.,
dated effective July 1, 2001.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Seller: Cargas Operating Company	 	Buyer: EnerVest Monroe
Marketing, Ltd.	 	 
	 
	 	 	 	 	 	 	 	 
	By:  

	/s/ Barringer K. Primos
	 	By:
	 	/s/ Mark A. Houser	 	 
	 

	 
	 	 	 	 	 	 
	 

	Barringer K. Primos	 	 	 	Title: Vice President 	 	 
	Title: President	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date: June 21,
2001, but effective July 1, 2001	 	Date: June 22, 2001, but effective July 1, 2001	 	 
	 
	 	 	 	 	 	 	 	 

			
	Copyright © 1996-2001 Gas Industry Standards Board, Inc.

All rights reserved.
	 	GISB Standard 6.3.1

Ratified January 7, 2000

 

 

GAS TRANSPORTATION AGREEMENT

(Cargas Station)

EVM 01-10

     This GAS TRANSPORTATION AGREEMENT, including the attached Exhibits (herein collectively
called the “Agreement”), is made effective as of July 1, 2001 (the “Effective Date”), between
EnerVest Monroe Gathering, Ltd.., a Texas Limited Partnership, whose address is P. O. Box 219,
Fairbanks, LA 71240 (“Transporter”) and Cargas Operating Company, whose address is P.O. Box 2807,
Monroe, LA 71207-2807 (“Seller”).

ARTICLE I

DELIVERY OF GAS, QUALITY SPEC’S AND RE-DELIVERY

1.1
Delivery Point & Quality, Spec.’s: Seller desires to dedicate natural gas which it
owns or controls from various wells in Monroe Field, for transportation through the pipeline
system owned by Transporter (or companies with whom Transporter is affiliated), for re-delivery to
EnerVest Monroe Marketing, Ltd., Seller’s natural gas purchaser. Seller hereby agrees that:

	(a)	 	All gas produced from any wells behind the Meters listed on Exhibit A (herein called
“Dedicated Gas”), is dedicated to Transporter for transportation under this Agreement, as
described below;

	(b)	 	All Dedicated Gas will be delivered to Transporter’s Cargas Meter # 997847 (herein called the
“Delivery Point”), as further described on Exhibit A, in accordance with the terms set forth
on Exhibit B, and
	 
	(e)	 	All Dedicated Gas must meet or exceed the Quality Specifications set forth on Exhibit C.

1.2
Re-Delivery. Transporter will transport all Dedicated Gas that meets its Quality
Specifications to the Re-Delivery Point listed in Section “B” of Exhibit B, during times when
Transporter has excess capacity available in its pipelines, in accordance with the terms and
conditions of this Agreement. Seller understands that Transporter will redeliver gas in a
commingled stream to any one or more of the Re-Delivery Point chosen by Transporter or EnerVest
Monroe Marketing, Ltd.

ARTICLE II

DEDICATION, TRANSPORTATION AND MINIMUMS

2.1 Dedication: Subject to the Terms and Conditions set forth on Exhibit D, Seller hereby
commits and dedicates to Transporter, and Transporter agrees to gather and transport, all natural
gas and associated hydrocarbons produced from the wells behind the Meters listed on Exhibit A
(herein called “Dedicated Gas”). The term Dedicated Gas shall include all interests that Seller
owns, hereafter acquires or controls in the wells, from time to time, including gas under contract
with third parties giving Seller the right to market such third parties’ gas produced from the
wells. Transporter shall have the exclusive right to transport such Dedicated Gas for the term of
this Agreement, and any extension thereof.

2.2 Additional Gas or Wells. If Seller obtains any right, title, or interest (whether
by purchase, farm-in, assignment, marketing contract or otherwise), in any additional gas produced
from wells behind the Meters listed on Exhibit A, or in other wells in Monroe Field, Seller shall
immediately give Transporter notice of the additional interest. Within ten (10) working days after
Transporter receives Seller’s notice, it shall give Seller notice of its election to either accept
or decline transportation of the additional gas under the terms of this Agreement, for the
remaining term of this Agreement, including any extensions. Failure of Transporter to give notice
 within 10 days after receipt of notice from Seller shall be deemed an election to transport the
additional gas. If Seller fails to give notice or if additional gas is transported without
Transporter’s knowledge, Transporter shall nevertheless have the right to charge a transportation
rate for any gas transported, even though the additional gas or wells are not specifically made
subject to this Agreement.

2.3 Transportation Service. Transporter shall use reasonable efforts to accept, at the
Delivery Point, the volume of Dedicated Gas (and additional gas which Transporter elects to take)
that is owned or controlled by Seller. Transporter shall redeliver and transfer custody of an
equivalent volume of natural gas, to EnerVest Monroe Marketing, Ltd., at the Re-Delivery Point.
This transportation service is based on availability of capacity, and is therefore on an
interruptible basis. Notwithstanding anything to the contrary, Transporter shall not be obligated
to accept

 1

 

 

delivery of or transport volumes of gas in excess of the capacity of its pipeline system, or
during times of maintenance or repair, and shall have no liability for failure or refusal to accept
such gas. The Transportation Fee shall be calculated based upon the volume of gas, or other
substance, received by Transporter at the Delivery Point.

2.4 Available Capacity. Transportation services will be provided only if Transporter has
sufficient capacity available after transporting all gas and associated hydrocarbons owned by
Transporter, or a related company, partnership or other entity. Seller must also comply with any
Nomination Procedures of its gas purchaser or any other party. Transportation may be curtailed at
any time, without advance notice, due to equipment failure, inability or refusal of the
interconnected transmission pipeline(s) to take delivery of all or part of the gas, lack of
available excess capacity on the pipeline system, failure of Seller to properly Nominate any
volumes, or as a result of the failure of Seller to comply with the terms of this Agreement. In the
event that there is not sufficient capacity available for all gas dedicated to the pipeline system,
Transporter, in its sole determination, may elect to curtail all or any portion of the gas
committed under this Agreement. Seller acknowledges and understands that production owned or
controlled by EnerVest Monroe Partners, LP, EnerVest Monroe Limited Partnership or any related
company, partnership or entity, shall have a higher priority of transportation services. Seller
acknowledges that Transporter has not made any warranties or representations whatsoever
concerning the availability of excess capacity in the pipeline system or the ability to
consistently transport Seller’s gas.

2.5 Right to Commingle. Transporter shall be entitled to commingle all gas and associated
materials delivered into the pipeline system, including the commingling of Seller’s gas with gas
transported for Transporter, its related companies or others, and to transport the commingled
stream to the Re-Delivery Point.

ARTICLE III

TRANSPORTATION FEE

3.1
Rate . Seller agrees to pay Transporter a transportation fee
often cents (10¢)
for each Mcf of gas delivered to Seller’s purchaser (EnerVest Monroe Marketing, Ltd.) at the
Delivery Point (“Transportation Fee”). In order to obtain the rights to this fee, Seller must
compress all delivered gas, sufficient to enter Transporter’s pipeline and the gas must meet all
specifications set forth on Exhibits B, C and D. Transporter shall have the right and option to
obtain payment of the Transportation Fee, and any other costs, by electing to either (a) invoice
Seller for all fees and costs, or (b) collect the fees and costs by set off, Compensation,
deduction or collection from funds due to Seller from Transporter, related companies and/or third
parties, whether or not such fees or costs are directly related to or equally liquidated with the
funds from which they are deducted. It is anticipated that in the normal course of events,
Transporter and the gas purchaser (EnerVest Monroe Marketing, Ltd.), will send a net check to
Seller by the 28th day of each month. The net check will pay Seller an amount due for
gas purchased by EnerVest Monroe Marketing, Ltd., after deducting the Transportation Fee and other
costs (including any set off or compensation claims) from the purchase price for delivered gas. The
net check to Seller will be accompanied by a statement showing the volume of gas delivered into the
system and any other details for calculation of the net check paid to Seller. If Transporter elects
not to send a netted check that deducts the Transportation Fee and other costs, then Transporter
will mail or otherwise deliver invoices, or notice of amounts deducted, to Seller by the
15th day of each month, and Seller shall deliver to Transporter full payment of each
monthly invoice by the last day of the month in which the invoice is received. In the event Seller
fails to make timely payment, and the failure continues for five (5) days after written notice of
default is given Seller, then Transporter
may, at its option, suspend transportation services or terminate this Agreement upon written notice
to Seller. Seller may not reduce or offset any amounts due Transporter against any amounts
that Seller claims it is owed under this Agreement or any other agreement, debt or claim.

3.2 Taxes and Other Charges. Seller shall pay all taxes, fees or charges, now or
subsequently levied or assessed by any Governmental authority (State, local or Federal), for
production, severance, gathering, transportation, handling, sales, delivery or use of gas, from the
wellhead to the Delivery Point. Transporter shall pay all taxes, fees, costs or expenses arising
from the transportation of the Dedicated Gas under this Agreement.

2

 

ARTICLE IV

TERM

4.1 Term . The initial term of this Agreement is for six (6) months, commencing on the
Effective Date. This Agreement will automatically be extended from month to month thereafter,
unless canceled by either party, by the giving of advance written notice of termination at least
thirty (30) days prior to the anniversary of the Effective Date.

     Signed on the date shown below, but effective for all purposes as of the Effective Date shown in
the first paragraph of this Agreement.

	 	 	 	 	 	 	 	 	 
	 	 	TRANSPORTER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	ENERVEST MONROE GATHERING, LTD..	 	 
	Witnesses:
	 	 	 	 	 	 	 	 
	/s/ Cindy Mayza

	 	 	 	By:
	 	/s/ Mark A. Houser	 	 
	 

	 	 	 	 	 	 	 	 
	Cindy Mayza

	 	 	 	Name:
	 	Mark A. Houser	 	 
	 

	 	 	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	DATE SIGNED: June 22, 2001	 	 

					
	 	 	 	 	 
	 
	 	/s/ Lisa Renee Wilson

 

NOTARY PUBLIC
	 	 
	[SEAL]
	 	 
	 	 

	 	 	 	 	 	 	 	 	 
	 	 	SELLER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	CARGAS OPERATING COMPANY	 	 
	Witnesses:
	 	 	 	 	 	 	 	 
	Maggie Lytle

	 	 	 	By:
	 	/s/ Barringer K Primos	 	 
	 

	 	 	 	 	 	 	 	 
	[ILLEGIBLE]

	 	 	 	Name:
	 	Barringer K Primos	 	 
	 

	 	 	 	Title:
	 	President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	DATE SIGNED: June 21, 2001	 	 

					
	 	 	 	 	 
	 
	 	/s/ Don S. Mears

 

NOTARY PUBLIC

 [STAMP]
	 	 

3

 

EXHIBIT A

Cargas Transportation Agreement

All wells flowing behind the Cargas Meter Station No. 997847-01

4

 

EXHIBIT B

Cargas Transportation Agreement

Delivery,
Re-Delivery and Allocation

A. Delivery Point:

1.
Delivery Point and Reporting: Seller shall deliver all Dedicated Gas into
Transporter’s pipeline system at the inlet side of Transporter’s Cargas Meter # 997847, as listed
on Exhibit “A” (the “Delivery Point”). Seller shall retain custody of, and liability for, all
Dedicated Gas until it is delivered to Transporter at the Delivery Point. All Dedicated Gas shall
be delivered by Seller at a pressure sufficient (in Transporter’s opinion) for the gas to enter
Transporter’s pipeline system, at varying pressures that may exist from time to time. The delivery
pressures shall never exceed normal operating pressure of the pipeline system, as set from time to
time by Transporter. Seller shall install, at its cost, any pulsation dampeners or other
facilities, required for delivery of
gas at steady pressures. Any compression or other facilities required to accomplish delivery into
the pipeline system at the Delivery Point, shall be installed at the cost, risk and expense of the
Seller, but must be approved in advance by Transporter to meet its specifications and pressure
requirements.

2. Standards: All fundamental constants, observations, records and procedures
involved in the determining and/or verifying of the volume, quality and other characteristics of
gas delivered and redelivered, shall be in accordance with the standards and methods prescribed in
gas Measurement Committee Report No. 3, dated April, 1955, of the American Gas Association as now
and from time to time amended. The unit of volumes for all purposes of measurement shall be one
(1) cubic foot of gas at a temperature of sixty (60) degrees Fahrenheit and at an absolute pressure
of fifteen and twenty-five thousandths (15.025) pounds per square inch absolute. The average
atmospheric pressure shall be assumed to be fourteen and seven tenths (14.7) pounds per square
inch. Whenever conditions of temperature and pressure differ from such standard, conversion of
the volume from such conditions to the standard conditions shall be made in accordance with the
Ideal Gas Laws corrected for deviation of the gas from Boyle’s Law in accordance with the methods
and formulas prescribed in the American Gas Association’s manual for the determination of
supercompressibility factors for natural gas, as last amended and superseded.

3. Costs Associated with New Delivery Point: In the event that Seller desires to
deliver gas to Transporter at a point other than the Delivery Point listed on Exhibit A (“New
Delivery Point”), then Seller shall deliver written notice thereof to Transporter. Transporter,
in its own judgement, may deny such New Delivery Point. If Transporter elects to accept any New
Delivery Point, Transporter shall construct and install, when practical, such new facilities as are
necessary to accept delivery of gas at the New Delivery Point (the “New Facilities”). Seller
shall pay Transporter, in advance, for the estimated costs of the New Facilities, including but not
limited to all material and construction costs, and shall pay any additional amounts exceeding the
estimate within five (5) business days after Seller’s receipt of an invoice from Transporter. All
New Facilities shall be owned by Transporter, even though Seller pays for the New Facilities.

4. Meters. a). Testing: Transporter has (or will) install, own, control and
operate, at the Delivery Point, a measuring station equipped with meters and other necessary
equipment, by which the volumes of natural gas received for transportation shall be accurately
measured. Except as otherwise provided in this Agreement, the pulling, cleaning, repairing,
inspecting, testing, calibrating, adjusting, zeroing and the changing of charts on these meters
shall be performed by Transporter, in a reliable and accurate manner. Seller shall have the right
to be present at any time, and will have the right to set a confirmation meter or conduct any tests
to confirm or refute any information provided by Seller or the accuracy of any measurements. The
parties shall exercise reasonable care in the maintenance and operation of measuring equipment, so
as to avoid any inaccuracy in excess of 1%, in the determination of the volume of gas received at
the Delivery Point. Transporter shall have the right to adjust or disregard any charts or readings
that are inaccurate or unreliable.

b). Reporting and Integration: Transporter will not record volumes of water, air or other
non-combustible substance as a volume of natural gas. Seller shall have the right to audit the
integration work done by Transporter after the 15th of the month following production or seven (7)
working days after integration work is completed, which ever occurs last, provided they are
requested within the time allowed under this Agreement for audits. Seller will complete all use of
the charts and return them to Transporter within 30 days after receipt. Transporter will attempt to
have all charts integrated and volumes reported back to the Seller, or its gas purchaser, by the
15th
 day of the month, or sooner if available.

5. Confirmation and Auditing of Measurements: Either party shall have the right
to inspect, check, calibrate and take any other measures necessary to confirm that all meters
function properly, have been properly calibrated and are accurate measures of the volumes of gas
being produced and delivered to Transporter. Each party shall have the right to audit the records
of the other party to confirm that all meter readings were accurate. Seller shall be entitled to
install and operate at its own expense at the Delivery Point, any check meters or other equipment
needed to check or verify the amount of gas produced from the Dedicated Wells or delivered at the
Delivery Point. In addition to other remedies available under this
Agreement. Transporter shall
have the right, upon giving five (5) day written notice to Seller, to terminate all or part of this
Agreement, and cease taking gas from any Dedicated Wells, if Transporter determines that Seller has
willfully injected or allowed water, air or other foreign material to be introduced into the gas
stream, or taken any action to misrepresent or inaccurately measure, calculate or report volumes of
produced gas. Transporter and Seller will work together, where appropriate, to either confirm or
correct any charts, meters, calculations, integration or other information questioned by either
party.

6. No Foreign Materials: All volumes of water, air, foreign materials and gas
delivered by Seller that do not meet the quality specifications required by this Agreement or the
applicable gas purchaser, shall be excluded from the calculations of volumes used for allocation of
gas to Seller. Seller shall not install any mercury meters, whether at the wellhead, master meter
site or Delivery Point.

5

 

B. Re-Delivery:

1.
Re-Delivery Point: Transporter shall redeliver, to EnerVest Monroe Marketing, Ltd., or other
designated
gas purchaser, all volumes of Dedicated Gas that meets the Quality Specifications on Exhibit “C”,
at or near any of the following Re-Delivery Point(s) (collectively called the Re-Delivery Point):

	 	(a)	 	The interconnect of Transporter’s pipeline system at the Midcoast Gas Company DeSiard
Compressor Station
(at meter numbers 417849-01 and 417849-02),
	 
	 	(b)	 	The Interconnect of Transporter’s pipeline system, or pipelines owned by affiliated
companies, to the Koch
Sterlington Plant or related facilities, at meter number 401-01; or
	 
	 	(c)	 	Such other point of interconnection to be established by Transporter.

C. Transporter’s Facilities:

1. The Gathering System; Transporter agrees to utilize its pipeline gathering systems and
facilities that are
currently in place from the Delivery Point to the Re-Delivery Point, which were primarily part of
the “Core” pipeline in Monroe Field, Louisiana (referred to herein as the “pipeline system”).
Transporter has also arranged for transportation rights under that portion of the “Non-Core”
system which constitutes a regulated Intrastate transmission pipeline (downstream of intake to
field compressors), owned by EnerVest Monroe Pipeline, Ltd., for the delivery, re-delivery or
transmission to the Re-Delivery Point and for transmission of gas to alleviate bottlenecks or
other operational problems, where needed in the sole opinion of Transporter. To the extent allowed
by law and regulation, any charges to utilize the transportation rights on the Intrastate pipeline
of EnerVest Monroe Pipeline, Ltd. are included in the Transmission Fee and other charges set forth
in this Agreement. Transporter shall have no obligation to maintain a consistent pressure in the
pipeline system, and may change the vacuum on all or any portion of the pipeline system at any
times. Seller understands and agrees that Transporter will have the right to schedule all
maintenance and repair work to be performed as Transporter deems appropriate, and that portions of
the pipeline system affecting the Dedicated Wells may be shut in during times for maintenance or
repairs to the any portion of the pipeline system, or the Intrastate Transmission pipeline.
Transporter will have no liability of any nature to Seller which may be incurred as a result of
any maintenance or repair work, including but not limited to lost revenues, increased costs,
consequential damages or damage to any wells or equipment.

6

 

EXHIBIT C

(Cargas Station)

Quality Specifications

1.
Quality. Any gas which Seller causes to be delivered to Transporter at the Delivery
Point
shall meet the following quality specifications: (a) Shall be of pipeline quality and commercially
free of dust, gums, gum-forming constituents, and any other objectionable solid and/or liquid
matter, (b) Shall not contain more than one percent (1%) by volume of oxygen, (c) Shall not
contain more than twenty (20) grains of total sulfur, nor more than (1) grain of hydrogen sulfide
per one hundred (100) cubic feet, (d) Shall not contain more than eight percent (8%) by volume
of nitrogen, and (e) Shall have a gross heating value of not less than nine hundred forty (940) Btu
on a wet basis per cubic foot. Temperature of the gas shall not exceed one hundred twenty (120)
degrees Fahrenheit nor be less than forty (40) degrees Fahrenheit. The unit of volume for the
purpose of determining total heating value shall be one (1) cubic foot of gas saturated with water
vapor at a temperature of sixty (60) degrees Fahrenheit and an absolute pressure equivalent to
fifteen and twenty-five thousandths (15.025) pounds per square inch absolute.

2.
Failure to Meet Quality Specifications. If the gas fails to meet the quality
specifications
set forth above or the specifications of Seller’s gas purchaser, then Transporter may refuse to
take any such gas tendered, or shut in the particular wells that Transporter believes are producing
gas in violation of these quality specifications, until such gas is brought into conformity with
the
quality specifications required by this Agreement.

3. Non-Waiver. Failure to enforce the quality specifications set forth above, or any
waiver
with respect to any delivery or redelivery of gas hereunder shall not constitute a waiver of
Transporter’s right to enforce the quality requirements of this Agreement, with respect to any
other gas tendered for delivery to Transporter.

4. No
Liquid Hydrocarbons. Seller shall not deliver oil, condensate or other
liquid
hydrocarbons (including hydrocarbons in the gas stream that liquefy at the Delivery Point), at the
Delivery Point. Any oil, condensate or other liquid hydrocarbons captured, processed or saved by
Transporter from the gas stream shall belong to, and be owned by Transporter. Seller shall have
no right or claim in or to such liquid hydrocarbons or any proceeds from any sale.

7

 

EXHIBIT D

(Cargas Station)

Terms and Conditions

1. Force Majeure . In the event either party hereto is rendered unable,
wholly or in part, by reason of force
majeure, to carry out its obligations under this Agreement, other than to make any payments or
accounting, then the obligations of the affected by such force majeure, shall be suspended
during the continuance of any inability so caused, but for no longer period, and such cause
shall, so far as possible, be remedied with reasonable dispatch. Seller shall give Transporter
written notice of any force majeure condition, as soon as possible after the occurrence, along
with details of the event, actions taken to remedy the condition and an expected time for the
condition to cease. The term “force majeure” as employed herein shall mean acts of God, acts of
the public enemy, wars, blockades, insurrections, strikes or differences with workmen, riots,
storms, floods, high water, washouts, arrests and restraints, civil disturbances, freezing of
wells or lines of pipe, embargoes, expropriations of government or governmental authorities,
equipment repairs, maintenance or failure of Transporter’s pipeline system, the inability of
Transporter to acquire materials, supplies, permits and permissions necessary to perform any
work for maintenance or alteration of the pipeline system, and the failure of a gas purchaser
at the Re-Delivery Point to take delivery of gas. It is understood and agreed that the
settlement of any labor disputes shall be entirely within the discretion of the party having
the difficulty, and that the above requirement that any force majeure shall be remedied with
all reasonable dispatch shall not require the settlement of strike or lockouts by acceding to
the demands of the opposing party when such course is inadvisable in the discretion of the
party having the difficulty. It is expressly understood that during any emergency situations
(including but not limited to maintenance or repair), Transporter shall have the right to
curtail, reduce or cease taking any gas from Seller, all as to be determined in the sole
judgment of Transporter.

2. Responsibility for Claims. Seller shall be solely liable for, and shall indemnify,
defend and hold Transporter
harmless from any claim for damages (including property losses or injury to or death of any
person) arising out of or
in connection with the production of wells, processing and movement of gas to the Delivery Point
and for all
damages after the re-delivery of gas. Transporter shall be solely liable for, and shall
indemnify, defend and hold
Seller harmless from any damage, injury or death in connection with the transportation of
Seller’s Gas from the
Delivery Point to the Re-Delivery Point, except for damages caused by the fault, negligence,
misconduct or breach
of this Agreement by Seller, its employees, agents, designees or nominees. Seller agrees to
carry liability and other
insurance to secure its obligations and responsibilities to satisfy any such claims, in amounts
and with reputable
insurers that are acceptable to Transporter.

3. Access to Seller’s Premises . Transporter or its agent shall have the continuing
right of access to the
premises of Seller and to all metering points for all gas transported hereunder, and for all
purposes necessary for the
fulfillment and confirmation of information under this Agreement.

4. Inspection of Records . Each party shall have the right at all reasonable times
during business hours to
examine the records (including integration records), charts, meters, measuring equipment and
other pertinent data of
the other party, and their contractors, to the extent necessary to verify the accuracy of any
statement, charge,
computation or demand made under or pursuant to any of the provisions of this Agreement. If any
such examination
shall reveal, or if either party shall otherwise discover, any error or inaccuracy in its own or
the other party’s
statements, payments, measurements, integration, calculations or determinations, then proper
adjustment and
corrections thereof shall be made as promptly as practicable thereafter; provided that no
adjustment of any
statement, billing or payment shall be made after the lapse of two (2) years from the end of the
calendar year to
which such statement, billing or payment pertains.

5. No
Assignment. This Agreement may not be conveyed or assigned, in whole or part, by
the Seller without
the prior written consent of Transporter. Transporter shall have the right to withhold its
consent to an Assignment
based on its sole determination of the stability, financial condition and business reputation of
the proposed Assignee.
Any Assignment of this Agreement that is approved, shall be made subject to the terms and
conditions of this
Agreement, and the Assignee shall assume all liabilities and obligations of the signing parry
arising on and after the
effective date of any Assignment. No Assignment shall relieve a party of its obligation or
liabilities under this
Agreement, unless the other parties expressly consent in writing to the release.

6. Non-Waiver. No failure by any party to insist upon the strict performance of any
covenant, duty, agreement
or condition of this Agreement or to exercise any right or remedy consequent upon a breach
thereof shall not
constitute a waiver of any such breach or any other terms, condition, provision, obligation,
covenant, duty,
agreement or condition.

7. Warranty of Title . Seller warrants for itself, its successors and assigns, that it
will have, at the time of
delivery to Transporter, good title to or the right to the delivered gas, free and clear of all
liens, encumbrances and
claim. Seller agrees to defend, indemnify and save Transporter, its shareholders, officers,
directors, agents and
employees harmless from and against any and all suits, actions, debts, accounts, damages,
liabilities, losses, costs
and expenses (including, without limitation, court costs and attorneys’ fees) arising from or
out of (a) any adverse
claims of any person, (b) any claims for royalties, overriding royalties, security interests,
license fees or other
charges which are applicable to such delivery of gas and (c) any and all taxes or assessments
which may be levied
and assessed upon such delivery of gas.

8. Adjustment of Billing Errors. If at any time it is established that Seller has
overpaid or underpaid
Transporter, then within thirty (30) days after the final determination, Transporter shall
refund to Seller the amount
of any such overpayment or Seller shall pay to Transporter the amount of any such underpayment.
If the parties are
unable to agree on the adjustment of any claimed error, any resort by either of the parties to
legal procedure, either
by law, in equity or otherwise, shall be commenced within two (2) years after the end of the
calendar year in which
the alleged overpayment or underpayment was made, or shall thereafter be forever barred.

8

 

9.
Severability. In the event that any clause or provision in this Agreement shall,
for any reason, be deemed illegal, invalid or unenforceable, the remaining provisions and clauses
shall not be affected, impaired or invalidated and shall remain in full force and effect.

10. Time . All time limits provided for herein are of the essence of this Agreement.

11. No
Consequential Damages. Neither party shall be liable to the other for any
indirect, incidental,
consequential or punitive damages which may occur, in whole or in part, as a result of a party’s
performance or non-
performance of any of the terms and conditions of this Agreement. Seller waives any and all rights
to damages
resulting from the loss of any wells, gas or equipment, including loss of profits.

12. Collection Costs. In addition to other legal and ethical remedies provided by law, it
is agreed that if either
party does not comply with the terms, conditions or obligations of this Agreement, or any Exhibit,
and it should be
necessary to institute litigation for collection or to enforce any portion of this Agreement, the
defaulting party shall
be liable for all reasonable collection and litigation cost, including but not limited to attorney
fees, court cost and
interest.

13. 24 hour Contacts and Notice. For purposes of notice and emergency contacts, the
addresses of the
parties, until changed by written notice, shall be as follows:

	 	 	 
	Transporter:	 	Seller:
	EnerVest Monroe Gathering, Ltd.

	 	Cargas Operating Company
	P.O. Box 219

	 	P.O. Box 2807
	Fairbanks, Louisiana 71240

	 	Monroe, LA71207-2807
	Attn: Mr. Jimmy Pardue

	 	Attn: Mr. Barringer K. Primos
	Phone:
(318) 665-4506

	 	Phone: 318) 322-1661
	 

	 	Fax: 318) 340-9204
	Fax: (318) 665-4612

	 	24 Hour Contact: (318) 366-8464
	24 Hour Contact: (318) 665-4506

	 	Mr. Donald Womack

All emergency communications shall be made by phone or in person, followed by written
notification as soon as possible thereafter. Emergency situations shall be reported to the other
party at any time of the day or night, at the 24 Hour Contact phone number listed above. Any other
notices shall be made in writing, and may be given by U.S. Mail, Express Mail Services or by Fax.

14. Prior Agreements Canceled. This Agreement, including all Exhibits, constitutes the
entire agreement between the parties for the transportation of gas and for chart integration
services, for gas delivered at the Delivery Point, known as the Cargas Station. All prior
agreements that relate to transportation of gas or chart integration at the Cargas Station,
between Seller and Transporter, or Seller and any third party, are hereby canceled in full and
replaced by this Agreement. The prior agreements that are canceled include, but are not limited
to, the Chart Integration Services Agreement, dated June 1, 1997, between Seller and Mid Louisiana
Marketing Company, any the Partial Assignment from Midcoast Marketing, Inc., dated June 1, 1997,
and any Gas Transportation Agreements, including but not limited to any agreements with Midcoast
Marketing, Inc., Mid Louisiana Gas Company, Coho Fairbanks Gathering Company, or any related
companies.

9exv4w1

 

Exhibit 4.1

NEITHER THIS WARRANT NOR THE COMMON SHARES ISSUABLE UPON THE
EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER ANY APPLICABLE STATE SECURITIES
LAWS. NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, BY SALE, ASSIGNMENT, PLEDGE OR
OTHERWISE, IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. IN ADDITION, THIS WARRANT AND SUCH SHARES ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER DESCRIBED IN SECTION 9
HEREOF.

AMENDED AND RESTATED

WARRANT

To purchase 6,464,428 common shares, par value $1.00 per share, of

Weatherford International Ltd.

Dated As
of July 12, 2006

Issued to: Shell Technology Ventures Inc.

 

 

AMENDED AND RESTATED

WARRANT

to purchase 6,464,428 common shares, par value $1.00 per share, of

Weatherford International Ltd.

Whereas, Weatherford International, Inc., a Delaware corporation (“WII”), granted to
Shell Technology Ventures Inc., a Delaware corporation (“STVI”), on February 28, 2002 a
warrant (the “Original Warrant”) to purchase shares of WII, which subsequently through a change in
ownership of WII became a warrant to purchase common shares of Weatherford International Ltd.
(“Weatherford”), par value $1.00 per share, (the “Common Shares”); and

Whereas WII, Weatherford and STVI desire to amend and restate the Original Warrant in its entirety
to, among other things, reflect subsequent changes in the capital structure of Weatherford and
transfer to Weatherford the primary obligation for issuing Common Shares;

Whereas
effective as of July 12, 2006, WII has transferred to Weatherford all of its rights and
obligations under the Original Warrant;

Therefore, the parties agree that the Original Warrant is hereby amended and restated in its
entirety as of July 12, 2006, as follows, and that this Amended and Restated Warrant supersedes the
Original Warrant.

Weatherford hereby grants to STVI, subject to the terms hereof, the right to purchase from
Weatherford at the Purchase Price at any time or from time to time during the Exercise Period, each
as hereinafter set forth, up to 6,464,428 Common Shares, subject to adjustment as provided herein.

     1. Definitions.

     “Affiliate” shall mean any company or legal entity:

	 	(i)	 	which Controls either directly or indirectly such Person; or
	 
	 	(ii)	 	which is Controlled directly or indirectly by such Person; or
	 
	 	(iii)	 	which is directly or indirectly Controlled by a company or
entity which directly or indirectly Controls such Person.

For the purposes of this paragraph (a), “Control” and its derivatives means the right
to exercise 50% (fifty percent) or more of the voting rights exercisable at a general
meeting of the shareholders (or its equivalent) of such company or entity.

     “Closing Price” shall mean the average closing sales price of one Common Share on the New York
Stock Exchange (the “NYSE”) for the ten (10) trading days ending with the day immediately prior to
the relevant Exercise Date; provided that if an ex-dividend date occurs during such ten trading
days with respect to any dividend paid by Weatherford, then the amount of that dividend shall be
deducted from each of the closing sales prices on the trading days included in such period and
preceding the ex-dividend date for purposes of calculating the Closing Price.

     “Commission” shall mean the United States Securities and Exchange Commission.

     “Common Shares” shall have the definition assigned to such term in the first paragraph of this
Warrant.

2

 

     “Corrective Filing” shall have the definition assigned to such term in Section 12(d)
of this Warrant.

     “Demand Request” shall have the definition assigned to such term in Section 12(a) of
this Warrant.

     “Dividend Amount” means the gross amount (before the withholding or deduction of applicable
taxes) per share of any cash dividend declared by Weatherford.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

     “Exercise Date” shall have the definition assigned to such term in Section 2(a) of
this Warrant.

     “Exercise Notice” shall have the definition assigned to such term in Section 2(a) of
this Warrant.

     “Exercise Period” shall have the definition assigned to such term in Section 2(e) of
this Warrant.

     “Filing Notice” shall have the definition assigned to such term in Section 12(d) of
this Warrant.

     “Lock-up Expiration Date” shall have the definition assigned to such term in Section
12(d)(i) of this Warrant.

     “Losses” shall have the definition assigned to such term in Section 9(f) of this
Warrant.

     “Material Event Notice” shall have the definition assigned to such term in Section
12(d) of this Warrant.

     “Net Cash Settlement” shall have the definition assigned to such term in Section
2(b)(iii) of this Warrant.

     “Net Share Settlement” shall have the definition assigned to such term in Section
2(b)(ii) of this Warrant.

     “NYSE” shall have the definition assigned to such term in Section 2(b)(ii) of this
Warrant.

     “Person” means an individual, corporation, partnership, joint venture, association, joint
stock company, trust, limited liability company, unincorporated organization or government agency
or any political subdivision thereof.

     “Physical Delivery” shall have the definition assigned to such term in Section 2(b)(i)
of this Warrant.

     “Purchase Price” shall have the definition assigned to such term in Section 2(d) of
this Warrant.

     “Reincorporation Transaction” shall have the definition assigned to such term in Section
5(b) of this Warrant.

     “Routine Filing” shall have the definition assigned to such term in Section 12(d) of
this Warrant.

     “Securities Act” shall mean the Securities Act of 1933, as amended.

     “Shelf Effective Date” shall have the definition assigned to such term in Section
12(b) of this Warrant.

     “Shelf Registration Period” shall have the definition assigned to such term in Section
12(b) of this Warrant.

     “Shelf Registration Statement” shall have the definition assigned to such term in Section
12(a) of this Warrant.

     “STVI” shall have the definition assigned to such term in the first paragraph of this Warrant.

     “Total Number of Shares” shall mean 6,464,428 Common Shares, as adjusted pursuant to
Section 5 hereof.

     “Warrant” means this Amended and Restated Warrant.

     “Warrant Holder” shall have the definition assigned to such term in Section 2(a) of
this Warrant.

     “Weatherford” shall have the definition assigned to such term in the first paragraph of this
Warrant.

3

 

     “WII” shall have the definition assigned to such term in the first paragraph of this Warrant.

     2. Exercise of Warrant.

          (a) Method of Exercise. This Warrant may be exercised in whole or in part at any time
and from time to time during the Exercise Period, by STVI or any permitted subsequent holder of
this Warrant under Section 9 hereof (the “Warrant Holder”) by (i) surrender of this
Warrant, with the form of exercise notice attached hereto as Exhibit A duly executed by
such Warrant Holder (the “Exercise Notice”) indicating whether the Warrant Holder desires
to effect settlement through Physical Delivery, Net Share Settlement, Net Cash Settlement (in each
case as defined in Section 2(b) below) or a combination thereof, to Weatherford at its
principal office or (ii) telecopying to Weatherford at the number provided below an executed and
completed Exercise Notice to Weatherford; provided, however, this Warrant may not be exercised
under any circumstances for less than 331/3% of the Total Number of Shares; provided, further, that
if the remaining unexercised balance of the Warrant is less than 331/3% of the Total Number of
Shares, the Warrant may be exercised for the entire amount of such remaining unexercised balance.
Each date on which an Exercise Notice is received by Weatherford in accordance with clause (i) and
each date on which the Exercise Notice is telecopied to Weatherford in accordance with clause (ii)
above shall be deemed an “Exercise Date”. In the either case, the Warrant Holder shall
surrender this Warrant, and in the event of Physical Delivery make payment of the full amount of
the Purchase Price due to Weatherford, before Weatherford shall be obligated to deliver to the
Warrant Holder of the Common Shares issuable upon such exercise or, in the event of Net Cash
Settlement, the payment relating thereto.

          (b) Settlement. Weatherford will effect the settlement of the exercise of this
Warrant by the Warrant Holder in the manner indicated by the Warrant Holder in the Exercise Notice,
except with respect to settlement through Net Cash Settlement. If the Warrant Holder indicates in
such Exercise Notice that it desires to effect the settlement of such exercise, in full or in part,
through a Net Cash Settlement, Weatherford, in its sole discretion, may elect to effect such
settlement through a Net Cash Settlement with respect to the full amount requested or only as to a
portion thereof or Weatherford may decline to effect any portion of such settlement through a Net
Cash Settlement. If Weatherford elects not to effect such settlement through Net Cash Settlement
as to the full amount so requested, Weatherford shall give notice to such effect to the Warrant
Holder within five (5) business days of receipt of the Exercise Notice, and the Warrant Holder may
submit a new Exercise Notice; provided, however, that if a new Exercise Notice is submitted (x) the
Warrant holder shall not be entitled to elect in such new Exercise Notice to effect such settlement
through a Net Cash Settlement and (y) the Exercise Date for purposes of such new Exercise Notice
shall be deemed to be the Exercise Date with respect to the original Exercise Notice submitted to
Weatherford.

          (i) Physical Delivery. If the Warrant Holder desires to settle the exercise of
this Warrant, in full or in part, by taking physical delivery of Common Shares upon cash
payment of the Purchase Price (“Physical Delivery”), the Warrant Holder shall so
indicate in the Exercise Notice and shall make payment of the Purchase Price on the Exercise
Date, or in the case of clause (ii) of paragraph (a) above no later than two (2) business
days thereafter, by certified or cashier’s check or bank draft payable to the order of
Weatherford in immediately available funds or by wire transfer of same day funds to an
account designated by Weatherford with respect to each Common Share for which this Warrant
is exercised and Physical Delivery is requested. If the amount of the payment received by
Weatherford is less than the Purchase Price for the number of Common Shares for which
Physical Delivery is requested, Weatherford will notify the Warrant Holder of the deficiency
and the Warrant Holder shall make payment in that amount within two (2) business days of its
receipt of such notice. If the payment exceeds the Purchase Price for such number of Common
Shares, Weatherford will refund the excess to the Warrant Holder within five (5) business
days of receipt. The Common Shares to be issued and delivered to the Warrant Holder upon
Physical Delivery shall be issued as provided in Section 4 below.

          (ii) Net Share Settlement. If the Warrant Holder desires to settle the
exercise of this Warrant, in full or in part, through a net, or “cashless”, exercise by
using Common Shares that it would otherwise receive upon such exercise as payment of the
Purchase Price (“Net Share Settlement”), the Warrant Holder shall so indicate in the
Exercise Notice and shall include therewith a calculation of the number of Common Shares to
be issued upon such exercise in accordance with the terms of this clause (ii); provided,
however, Weatherford shall have the right to confirm the accuracy of such calculation (which

4

 

confirmation shall not unreasonably delay the issuance of such Common Shares). The
number of Common Shares to be issued and delivered to the Warrant Holder in the case of Net
Share Settlement shall be determined by:

(A) multiplying (I) the number of Common Shares for which this
Warrant is being exercised and which are to be settled through Net
Share Settlement times (II) the remainder of (a) the Closing Price
minus (b) the per share Purchase Price; and

(B) dividing the product calculated in clause (A) by the Closing
Price.

The Common Shares to be issued and delivered to the Warrant Holder upon Net Share Settlement
shall be delivered as provided in Section 4 below.

          (iii) Net Cash Settlement. If the Warrant Holder desires to settle the
exercise of this Warrant, in full or in part, by receiving cash in lieu of any Common
Shares, net of the Purchase Price (“Net Cash Settlement”), the Warrant Holder shall
so indicate in the Exercise Notice and shall include therewith a calculation of the amount
of the payment to be made to the Warrant Holder in accordance with the terms of this clause
(iii); provided, however, Weatherford shall have the right to confirm the accuracy of such
calculation (which confirmation shall not unreasonably delay such payment). Weatherford, in
its sole discretion, may elect to effect such Net Cash Settlement, with respect to the full
amount requested or a portion thereof, or Weatherford may decline to effect any portion such
settlement through a Net Cash Settlement. The amount to be paid by Weatherford to the
Warrant Holder in the case of Net Cash Settlement shall be determined by:

multiplying (I) the number of Common Shares for which this Warrant is being
exercised and which are to be settled through Net Cash Settlement times (II)(a) the
remainder of the Closing Price minus (b) the per share Purchase Price.

Weatherford shall make any payment of such Net Cash Settlement amount to the Warrant Holder
by certified or cashier’s check or bank draft payable to the order of the Warrant Holder in
immediately available funds or by wire transfer of same day funds to an account designated
by the Warrant Holder as soon as practicable following receipt of the Exercise Notice and
confirmation of the accompanying calculation of the Net Cash Settlement Amount.

          (c) Replacement Warrant. If this Warrant is not exercised in full, the number of
Common Shares for which this Warrant is exercisable shall be reduced by the number of such Common
Shares for which this Warrant was so exercised, and Weatherford shall forthwith issue and deliver
to or upon the order of the Warrant Holder a new Warrant of like tenor in the name of the Warrant
Holder or as the Warrant Holder may request, reflecting such adjusted number of Common Shares for
which this Warrant is exercisable; provided, however, that if reissued in the name of a Person
other than the Warrant Holder, such reissuance shall only be made in compliance with Section
9 hereof and the Warrant Holder shall pay all transfer, stamp or other taxes in respect of
such reissuance to such Person to the extent: (i) such transferee Person is not domiciled in the
United States or (ii) this Warrant is exercised by a Person that is not a Delaware corporation.

          (d) Purchase Price. The purchase price for which Common Shares may be purchased upon
the exercise of this Warrant shall be $30.00 per Common Share, or, in case an adjustment of such
price has taken place pursuant to the further provisions of Section 5, then at the price as
last adjusted and in effect on the Exercise Date (such price or such price as last adjusted, as the
case may be, being referred to herein as the “Purchase Price”).

          (e) Exercise Period. The Warrant Holder may exercise this Warrant, in whole or in
part (but not as to a fractional Common Share), at any time and from time to time prior to 5:00
p.m. (Houston, Texas time) on February 28, 2012 (the “Exercise Period”).

     3. Intentionally Deleted

     4. Issuance and Delivery of Shares; No Rights as Shareholder Until Exercise.

5

 

          (a) Issuance and Delivery of Shares. As soon as practicable after receipt by
Weatherford of an Exercise Notice and this Warrant in accordance with Section 2 above ,
Weatherford will cause its transfer agent to issue in the name of and deliver to the Warrant Holder
(or such other Person(s) as the Warrant Holder may designate, subject to the limitations on
transfer contained herein) a certificate or certificates representing the number of Common Shares
to which the Warrant Holder shall be entitled on such exercise pursuant to Section 2(b)
above; provided, however, that the Warrant Holder shall pay all transfer, stamp or other taxes
in respect of the issuance of such certificate(s) to any Person(s) other than the Warrant Holder to
the extent: (i) such transferee Person(s) is not domiciled in the United States or (ii) this
Warrant is exercised by a Person that is not a Delaware corporation. The Common Shares issued and
delivered to the Warrant Holder (or such other Person(s) as the Warrant Holder may designate,
subject to the limitations on transfer contained herein) pursuant to this Section 4(a)
shall not be registered under the Securities Act or the laws of any state. Under no circumstances
shall Weatherford issue fractional Common Shares; if a calculation under Section 2 above,
would lead to the issuance of a fractional Common Share, the number of Common Shares issuable upon
such exercise shall be rounded up to the next whole number of Common Shares, to the extent such
fraction is one-half (1/2) or greater, and shall be rounded down to the next whole number of Common
Shares, to the extent such fraction is less than one-half (1/2).

          (b) No Rights as Shareholder Until Exercise. The Common Shares issuable upon any
exercise of this Warrant will be deemed to have been delivered to the Warrant Holder on the
Exercise Date and the Warrant Holder will be deemed for all purposes to have become the record
holder of such Common Shares on the Exercise Date. Until any such Exercise Date, this Warrant does
not confer upon the Warrant Holder any right whatsoever as a shareholder of Weatherford with
respect to any Common Shares with respect to which this Warrant remains unexercised.

     5. Adjustment of the Purchase Price and Number of Shares. At any time while this
Warrant, or any portion hereof, remains outstanding and unexpired, the Purchase Price and,
accordingly, the number of Common Shares issuable upon exercise of this Warrant, shall be subject
to adjustment from time to time upon the happening of certain events as follows:

          (a) Reorganization, Merger or Consolidation. If Weatherford reorganizes, merges,
consolidates or otherwise combines with another Person, or consummates any other transaction
including, but not limited to a spin-off, a split-off or a split-up, whereby all of the holders of
Common Shares will receive shares of Common Shares or other securities, property or assets of
Weatherford, its successor or Affiliate payable with respect to or in exchange for each Common
Share held, lawful and adequate provisions shall be made whereby the Warrant Holder shall have the
right to receive, in Weatherford’s sole discretion, either (i) upon exercise of this Warrant, the
number of shares or other securities, property or assets of Weatherford, its successor or Affiliate
resulting from such reorganization, merger, consolidation or other transaction as may be issued or
payable with respect to or in exchange for a number of outstanding Common Shares equal to the
number of Common Shares immediately theretofore purchasable and receivable upon the exercise of
this Warrant, or (ii) a new warrant granted by Weatherford or its successor, with rights no less
favorable to the Warrant Holder than those contained in this Warrant, giving such Warrant Holder
the right to exercise such new warrant and procure upon such exercise, in lieu of each Warrant
Share theretofore issuable upon exercise of the predecessor Warrant, the number of shares or other
securities, property or assets described in clause (i) hereof. The foregoing provisions of this
Section 5(a) shall similarly apply to successive reorganizations, mergers, consolidations
or other applicable transactions and to the stock or securities of any other Person that are at the
time receivable upon exercise of this Warrant.

          (b) Reincorporation of Weatherford. Notwithstanding Section 5(a) above, if
Weatherford shall consummate a merger, inversion or other transaction for the purpose of
reincorporating into another domestic or foreign jurisdiction (a “Reincorporation
Transaction”), the terms and provisions of this Warrant shall remain in full force and effect
with the sole exception that the Warrant Holder shall be entitled to receive upon exercise of this
Warrant the same number of Common Shares of the resulting, successor or resulting parent
corporation (which shall be publicly-traded on the NYSE) as the number of Common Shares the Warrant
Holder is entitled to receive upon exercise hereof. In the event of the consummation of such a
Reincorporation Transaction involving such a resulting parent corporation, this Warrant and all of
the rights and obligations of Weatherford hereunder shall immediately be assigned to any such
resulting parent corporation, effective as of the date of such Reincorporation Transaction.

6

 

          (c) Reclassification, etc. If Weatherford by reclassification of securities or
otherwise, shall change the Common Shares or any other securities as to which purchase rights
under this Warrant may exist into the same or a different number of securities of any other class
or classes, this Warrant shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with respect to the securities
that were subject to the purchase rights under this Warrant immediately prior to such
reclassification or other change and the Purchase Price therefor shall be appropriately adjusted.

          (d) Subdivision or Combination of Shares; Share Dividends. If Weatherford shall
split, divide or combine its outstanding Common Shares or declare and pay a share dividend on its
outstanding Common Shares which consists of additional Common Shares (including a share split
effected in the form of a share dividend), then the Purchase Price shall be adjusted, as of the
opening of business on the effective date of such split, subdivision or combination or on the day
after the day upon which such dividend or other distribution is paid to shareholders, as the case
may be, to that price determined by multiplying the Purchase Price in effect immediately prior to
such payment or other distribution by a fraction:

          (i) the numerator of which shall be the total number of outstanding Common Shares
immediately prior to such dividend or distribution; and

          (ii) the denominator of which shall be the total number of outstanding Common Shares
immediately after such dividend or distribution.

          (e) Cash Dividends. If Weatherford declares and pays a cash dividend on its
outstanding Common Shares, then the Purchase Price will be reduced, effective as of the relevant
ex-dividend time and date, by an amount equal to the Dividend Amount (it being understood that for
any exercise of this Warrant on or after an ex-dividend date, the relevant dividend would not be
paid on the shares delivered on that exercise, even if the Warrant is exercised before the record
date for that dividend).

          (f) Adjustment of Number of Shares. Upon each adjustment of the Purchase Price
pursuant to any provisions of this Section 5, the number of Common Shares issuable
hereunder shall be adjusted, by calculation to the nearest one hundredth of a whole share, by
multiplying the number of Common Shares issuable prior to an adjustment by a fraction of which:

          (i) the numerator shall be the Purchase Price before any adjustment pursuant to this
Section 5; and

          (ii) the denominator shall be the Purchase Price after such adjustment,

provided, however, while adjustments in the number of shares will be calculated to the nearest
hundredth of a whole share, as specified in Section 4(a) above, no fractional shares will
be issued upon any exercise of this Warrant.

          (g) Liquidating Dividends. If Weatherford shall make a distribution of its assets or
evidences of indebtedness to the holders of its Common Shares as a dividend in liquidation or other
than as a dividend payable out of earnings or surplus legally available for dividends under
applicable law or any distribution to such holders made in respect of the sale of all or
substantially all of Weatherford’s assets (other than under the circumstances provided for in the
foregoing Sections 5(a) through 5(e) then the Warrant Holder shall be entitled to
receive upon such exercise of this Warrant, in addition to the Common Shares receivable in
connection therewith, and without payment of any consideration other than the Purchase Price
multiplied by such number of Common Shares, an amount in cash equal to the value of such
distribution per Common Share multiplied by such number of Common Shares (with no further
adjustment being made following any event which causes a subsequent adjustment in the number of
Common Shares issuable), and an appropriate provision therefor shall be made a part of any such
distribution. The value of a distribution that is paid in other than cash shall be determined in
good faith and a commercially reasonable manner by the Board of Directors of Weatherford or an
appropriate committee thereof.

          (h) No Other Adjustments. Other than specifically as set forth above in Sections
5(a) through 5(e), no adjustment shall be made to the Purchase Price or number of
Common Shares subject to the Warrant as a result of or pursuant to the granting or issuance by
Weatherford of additional Common Shares, or any security convertible thereinto or exercisable or
exchangeable therefore, including without limitation (i) the issuance of Common Shares or any other
security of Weatherford (including securities convertible into or exchangeable for Common Shares)
pursuant to an underwritten public offering or a private placement, (ii) the issuance of Common

7

 

Shares or any other security of Weatherford (including securities convertible into or
exchangeable for Common Shares) as consideration in an acquisition transaction, (iii) the issuance
of Common Shares or any other security of Weatherford (including securities convertible into or
exchangeable for Common Shares) in payment or satisfaction of any dividend upon any class of shares
of Weatherford with a preference as to dividends over the Common Shares and (iv) the issuance of
share options or restricted Common Shares to officers, employees or directors of, or consultants
to, Weatherford or any of its Affiliates.

          (i) Other Provisions Applicable to Adjustments Under this Section 5. The following
provisions will be applicable to the making of adjustments in any Purchase Price or number of
Common Shares subject to the Warrant provided in this Section 5:

          (a) Minimum Adjustment Amount. Notwithstanding any other provision of this
Section 5, when calculating the adjustments required by Sections 5(a)
through 5(e), no adjustment of the Purchase Price or number of Common Shares subject
to the Warrant shall be made unless and until such adjustment either by itself or with other
adjustments not previously made increases or decreases the Purchase Price in effect
immediately prior to the making of such adjustment by at least one percent (1%). Any
adjustment representing a change of less than such minimum amount (except as aforesaid)
shall be carried forward and made as soon as such adjustment, together with other
adjustments required by Sections 5(a) through 5(e) and not previously made,
would result in an adjustment of at least such minimum amount. All adjustments to the
Purchase Price required by Sections 5(a) though 5(e) will be calculated to
the nearest cent. All adjustments to the number of Common Shares subject to the Warrant
shall be calculated to the nearest Common Share.

          (b) No Multiple Adjustments. In the event of any one circumstance which may
give rise to an adjustment to the Purchase Price or number of Common Shares subject to the
Warrant under one or more of Sections 5(a) through 5(e), Weatherford shall
only be required to apply the provisions of one of such subsections, such subsection to be
determined in its sole discretion.

          (c) Par Value. Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of one Common Share, Weatherford shall
take any commercially reasonable corporate action that may be necessary in order that
Weatherford may deliver validly and legally issued, fully paid and nonassessable Common
Shares at such adjusted Purchase Price.

     6. Calculation of Adjustments. Upon each occurrence of an event causing an
adjustment the Purchase Price or number of Common Shares issuable upon exercise of this Warrant
pursuant to Section 5 above, Weatherford will promptly (a) calculate such adjustment and
retain a record of such calculation at its principal office and (b) deliver to the Warrant Holder a
certificate signed by an appropriate officer of Weatherford, setting forth in reasonable detail the
event requiring the adjustment, the method of calculation of the adjustment, and the Purchase Price
and number of Common Shares purchasable hereunder after giving effect to such adjustment. If
Warrant Holder does not agree with any adjustment calculated by Weatherford, then the Warrant
Holder may retain at its own expense a financial advisor to calculate the adjustment in question,
which calculation Weatherford will consider in good faith.

     7. Representations and Warranties of the Warrant Holder. The Warrant Holder
represents and warrants to Weatherford as follows:

     (a) The Warrant Holder is not an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940, as amended, or an
“investment advisor” within the meaning of the Investment Advisers Act of 1940, as amended.

     (b) The Warrant Holder has read, reviewed and understands the information, and any permitted
subsequent Warrant Holder will have read, reviewed and understood the information contained in
Weatherford’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005, filed with
the Commission on March 10, 2006 and the information contained in all subsequent filings made by
Weatherford with the Commission pursuant to the Securities Act or the Exchange Act.

8

 

     (c) The Warrant Holder is an “Accredited Investor” within the meaning of Rule 501 of
Regulation D under the Securities Act. The Warrant Holder understands that this Warrant is an
investment that is speculative in nature. The Warrant Holder is experienced in investment and
business matters, understands fully the nature of the risk involved in its investment in this
Warrant and any Common Shares which it may receive upon exercise hereof and understands that it may
lose all of its investment in this Warrant.

     (d) The Warrant Holder has sought such accounting, legal and tax advice as it considers
necessary to make an informed investment decision with respect to this Warrant and the Common
Shares which it may receive upon exercise thereof. The Warrant Holder understands that there can
be no assurance as to the federal or state tax result of an investment in this Warrant or any upon
exercise thereof.

     (e) The Warrant Holder is acquiring this Warrant and any Common Shares which it may receive
upon exercise thereof not with a view to the resale or distribution of all or any part thereof
other than in compliance with applicable securities laws.

     8. Representations and Warranties of Weatherford. Weatherford represents and
warrants to the Warrant Holder as follows:

     (a) Weatherford is a corporation validly existing and in good standing and under the laws of
Bermuda, and has the power and authority to execute and deliver this Warrant and to perform its
obligations hereunder.

     (b) The execution, delivery and performance by Weatherford of this Warrant and the issuance
and delivery of Common Shares upon exercise of this Warrant have been duly authorized by all
necessary corporate action on the part of Weatherford, and do not and will not violate or result in
a breach of Weatherford’s bye-laws or its Memorandum of Association.

     (c) This Warrant has been duly executed and delivered by Weatherford and constitutes a legal,
valid and binding obligation of Weatherford, enforceable against Weatherford in accordance with the
terms hereof, except as such enforceability may limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other laws of general application relating to
or affecting creditors’ rights and to general equitable principles.

     (d) Weatherford has authorized and reserved for issuance, and shall at all times as this
Warrant is exercisable keep authorized and reserved for issuance, solely for issuance and delivery
hereunder, such requisite number of Common Shares as shall from time to time be issuable upon
exercise hereof. From the date hereof through the last date on which this Warrant is exercisable,
Weatherford shall use commercially reasonable efforts to insure that such Common Shares have been
reserved for listing on the NYSE, subject to official notice of issuance.

     (e) Upon exercise of this Warrant and issuance and delivery of Common Shares to the Warrant
Holder, such Common Shares will be duly authorized, validly issued, fully paid and non-assessable.

     (f) Neither Weatherford nor WII received new value from the Warrant Holder in return for
issuing this Amended and Restated Warrant.

     9. Restrictions on Transfer.

          (a) General. This Warrant and the Common Shares that may be issued and delivered
hereunder shall not be transferred by the Warrant Holder or any subsequent permitted holder of all
or a part of this Warrant except in compliance with the provisions of this Section 9, which
conditions are intended to ensure compliance with the Securities Act and applicable state
securities laws with respect to the transfer of this Warrant, in whole or in part, or any such
Common Shares. The Warrant Holder acknowledges that this Warrant has not been registered under the
Securities Act, and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise
dispose of this Warrant or any Common Shares delivered upon its exercise, except in compliance with
the provisions of this Section 9.

9

 

          (b) Restrictive Legend. Absent registration under the Securities Act, this Warrant
shall bear the legend set forth of the cover page hereof. Unless a registration statement with
respect to Common Shares issuable upon exercise of this Warrant is effective at the time, any
Common Shares delivered upon such exercise shall bear the following legend, in addition to any
other legend imposed by applicable state securities laws:

THE COMMON SHARES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY
APPLICABLE STATE SECURITIES LAWS. SUCH SHARES MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, BY SALE, ASSIGNMENT, PLEDGE OR
OTHERWISE, IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. IN ADDITION, SUCH SHARES ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER DESCRIBED IN SECTION 9 OF THE AMENDED AND
RESTATED WARRANT, DATED AS OF JULY 12, 2006, ISSUED BY WEATHERFORD
INTERNATIONAL LTD.

          (c) Transfer Opinion. The Warrant Holder may sell, assign or otherwise transfer
(including pledge) this Warrant, in whole or in part, and any Common Shares delivered upon exercise
hereof to any Person; provided, however, Weatherford may in its sole discretion request that the
Warrant Holder deliver an opinion of counsel satisfactory to Weatherford that the proposed transfer
does not violate any applicable federal or state securities laws.

          (e) Further Limitations upon Transfer of Warrant. This Warrant, or any portion
hereof, may be sold, assigned or otherwise transferred, subject to the limitation that any
proposed sale, assignment or other transfer of the of the Warrant, in full or in part, must relate
to not less than 331/3% of the Total Number of Shares, unless exercised for the remaining
unexercised balance of the Total Number of Shares.

          (f) Indemnification. Except as provided in Section 12(e), the Warrant Holder
agrees to indemnify, with respect to any offer or sale, assignment or other transfer of this
Warrant, in full or in part (and any marketing or selling efforts undertaken or materials prepared
by or on behalf of the Warrant Holder in connection therewith), to the fullest extent permitted by
law, Weatherford, its directors and officers and each person who controls Weatherford (within the
meaning of the Securities Act) against any losses, claims, liabilities (joint or several), damages,
fines, costs and expenses (collectively, “Losses”) (including, without limitation,
reasonable fees and expenses of legal counsel) arising out of or resulting from any such offer or
sale or such marketing or selling efforts so undertaken or materials so prepared, except insofar as
such Losses arise out of or result from any untrue or alleged untrue statement of a material fact
or any omission or alleged omission of a material fact required to be stated in any reports filed
by Weatherford under the Exchange Act.

          (g) Governmental and Other Approvals; Costs and Expenses. Any transfer of this
Warrant, in full or in part , or any Common Shares issued and delivered upon its exercise, shall be
subject to the receipt of any and all necessary governmental and other third party approvals,
authorizations, waivers and consents which may be required to be obtained by this Warrant Holder
and/or the proposed transferee(s). Weatherford shall not be required to make any filings with any
governmental authorities or otherwise take any action that may be deemed to be necessary or
advisable in connection with obtaining any such approvals, authorizations, waivers and consents or
be required to bear any costs and expenses in connection therewith.

          (h) Survival of this Warrant. Except as described in this Section 9, upon
any transfer of this Warrant, in full or in part, by the Warrant Holder, the terms and provisions
of this Warrant and obligations of the Warrant Holder hereunder shall become the legal, valid and
binding obligations of such transferee(s).

          (i) Registration Rights. Notwithstanding any other provision of this Warrant, the
Common Shares issuable upon exercise of this Warrant are subject to registration rights as
described in Section 12 below and

10

 

may be resold under a Shelf Registration Statement (as defined in Section 12) upon the
effectiveness thereof without regard to the restrictions on transfer contained in this Section
9.

     10. Intentionally Deleted.

     11. Transfer of this Warrant on the Books of Weatherford.

          (a) Subject to the restrictions on transfer provided for in Section 9 above:

               (i) this Warrant shall be issued in registered form and Weatherford shall keep at its
principal executive office a register or ledger in which, subject to such reasonable regulations as
it may prescribe and at its expense (other than transfer taxes, if any), Weatherford shall provide
for the registration and transfer of this Warrant.

               (ii) title to this Warrant may be transferred, in whole or in part, by endorsement
(by the holder hereof properly executing the Assignment (in the form of Exhibit B hereto)
and delivery to Weatherford at its principal office in the same manner as in the case of a
negotiable instrument transferable by endorsement and delivery;

               (iii) any Person in possession of this Warrant properly endorsed is authorized to
represent himself as absolute owner hereof and is empowered to transfer absolute title hereto by
endorsement and delivery hereof to a bona fide purchaser hereof for value; each prior taker or
owner waives and renounces all of his equities or rights in this Warrant in favor of each such bona
fide purchaser, and each such bona fide purchaser shall acquire absolute title hereto and to all
rights represented hereby;

               (iv) until this Warrant is transferred on the books of Weatherford, Weatherford may
treat the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding
any notice to the contrary; and

               (v) any transfer tax relating to such transfer shall be paid by the Warrant Holder.

          (b) On receipt of evidence reasonably satisfactory to Weatherford of the loss, theft,
destruction, or mutilation of this Warrant, and (in the case of any such loss, theft or destruction
of this Warrant) on delivery of any indemnity agreement or security reasonably satisfactory in form
and amount to Weatherford or (in the case of any such mutilation) on surrender and cancellation of
this Warrant and at the Warrant Holder’s expense, Weatherford will execute and deliver to the
Warrant Holder, in lieu thereof, a new Warrant of like tenor.

     12. Registration Rights with Respect to Shares.

          (a) Demand Request. Subject to the limitations in contained in this Section
12, at any time during the Exercise Period the following conditions are met:

          (i) this Warrant has been exercised by the Warrant Holder with respect to at least 331/3%
of the Total Number of Shares; and

          (ii) all of the Common Shares received upon such exercise(s) are not eligible for
resale pursuant to Rule 144(k) under the Securities Act,

the Warrant Holder may request in writing (a “Demand Request”) that Weatherford prepare and
file a “shelf” registration statement (a “Shelf Registration Statement”) on Form S-3 (or
other appropriate form) pursuant to Rule 415 under the Securities Act with respect to dispositions
of Common Shares for resale from time to time; provided, however, Weatherford shall not be required
to file a Shelf Registration Statement that registers less than 331/3% of the Total Number of Shares.
A maximum of three (3) Demand Requests are available, in aggregate, under this Warrant.

11

 

          (b) Shelf Registration Statement. Upon receipt of a Demand Request, and if the
conditions set forth in clauses (i) and (ii) of paragraph (a) above have been met, Weatherford
shall file a Shelf Registration Statement with the Commission within 30 business days and will use
commercially reasonable efforts to cause the Shelf Registration Statement to be declared effective
as promptly as is practicable after such filing and, subject to Section 12(c) below, shall
use commercially reasonable efforts to keep the Shelf Registration Statement effective,
supplemented and amended to the extent necessary to assure that it is available for resale of the
Common Shares by the Warrant Holder and that it conforms with the requirements of this Agreement,
the Securities Act, and the rules and regulations promulgated by the Commission thereunder, in each
case during the entire period (the “Shelf Registration Period”) beginning on the date such
Shelf Registration Statement shall first be declared effective under the Securities Act (the
“Shelf Effective Date”) and ending on the earlier to occur of (A) the first anniversary of
the Shelf Effective Date and (B) the date on which all of the Common Shares registered under the
Shelf Registration Statement become eligible for resale pursuant to Rule 144(k) under the
Securities Act.

          (c) Information Supplied by Warrant Holder. The Warrant Holder shall furnish to
Weatherford in writing, as soon as practicable after the date of the Demand Request but not later
than five (5) business days prior to the initial filing of the Shelf Registration Statement, any of
the information specified in Items 507 and 508 of Regulation S-K under the Securities Act, or any
other information reasonably requested by Weatherford for inclusion in the Shelf Registration
Statement pursuant to the Securities Act or the rules and regulations promulgated by the Commission
thereunder. The Warrant Holder shall promptly furnish to Weatherford any such information upon
Weatherford’s request for inclusion in any new prospectus or prospectus supplement or
post-effective amendment.

          (d) Limitations. If during the Shelf Registration Period, Weatherford believes that
an event or events have occurred which, in the good faith opinion of Weatherford, require the
filing of a new prospectus or prospectus supplement or post-effective amendment in order that the
prospectus not contain any misstatement of a material fact or not omit to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (a “Corrective Filing”),
Weatherford shall promptly so notify the Warrant Holder (a “Material Event Notice”), and
Weatherford shall prepare and file with the Commission and deliver to the Warrant Holder such
Corrective Filing, as promptly as practicable but in any event within ten (10) business days after
the date a Material Event Notice is given, except that Weatherford may delay such filing for such
number of days, not to exceed seventy-five (75) days, if Weatherford determines that (x) the public
disclosure of any of the information requiring the Corrective Filing is impractical or would have a
material adverse effect on Weatherford, or (y) the filing of such Corrective Filing would have a
significant disruptive effect on any material transaction then pending; provided, however, that
such delay shall not be longer than is reasonably required, in Weatherford’s sole judgment, to
avoid such material adverse effect or significant disruptive effect. If any new prospectus or
prospectus supplement or post-effective amendment is required in connection with the Shelf
Registration Statement other than a Corrective Filing (any such filing, other than a Corrective
Filing, is herein called a “Routine Filing”), Weatherford will so notify the Warrant Holder
in writing (a “Filing Notice”) and shall prepare and file with the Commission and deliver
to the Warrant Holder such Routine Filing as promptly as practicable but in any event within ten
(10) days after the date the Filing Notice is given. The Warrant Holder may make sales of Common
Shares under the Shelf Registration Statement during the Shelf Registration Period, but if the
Warrant Holder has received a Material Event Notice or Filing Notice, sales may not be made from
the time such notice is received by the Warrant Holder until the date on which the Corrective
Filing or Routine Filing, as the case may be, has been filed or if the Corrective Filing or Routine
Filing is a post-effective amendment, the date the post-effective amendment has become effective
under the Securities Act, of which date Weatherford shall give prompt notice to the Holders.

In addition, notwithstanding anything to the contrary contained in this Section 12,
Weatherford shall be permitted, on written notice to the Warrant Holder, to suspend the period of
sale or distribution of Common Shares at any time:

               (i) in the case of an underwritten public offering of securities for the account of
Weatherford (A) not involving a “shelf” registration statement filed pursuant to Rule 415
under the Securities Act, during the period beginning ten (10) days prior to the estimated
date of filing of a registration statement pertaining to such offering and ending upon the
expiration of any “lock up” period reasonably requested by the underwriters of such public
offering with respect to Common Shares held by directors and executive officers of
Weatherford (the “Lock-up Expiration Date”) or (B) involving a “shelf”

12

 

registration statement filed pursuant to Rule 415 under the Securities Act, during the
period beginning ten (10) days prior to the date of any preliminary prospectus supplement
relating to such offering (or if no preliminary prospectus supplement is used, fifteen (15)
days prior to the pricing of such offering) and ending on the Lock-up Expiration Date;

               (ii) during any period in which Weatherford is in possession of material non-public
information concerning it or its business and affairs, the public disclosure of which, in
the good faith judgment of Weatherford, would have a material adverse effect on Weatherford;
or

               (iii) during any period if Weatherford is engaged in any material acquisition,
transaction or disposition transaction that would, in the good faith judgment of
Weatherford, be significantly disrupted by a sale or distribution.

          (e) Indemnification.

               (i) Indemnification by Weatherford. Weatherford agrees to indemnify, with
respect to a Shelf Registration Statement filed by Weatherford, to the fullest extent
permitted by law, the Warrant Holder, its directors and officers and each person who
controls the Warrant Holder (within the meaning of the Securities Act) against all Losses
(including, without limitation, reasonable fees and expenses of legal counsel) arising out
of or resulting from any untrue or alleged untrue statement of a material fact or any
omission or alleged omission of a material fact required to be stated in such Shelf
Registration Statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or necessary to make the statements therein not misleading, except
insofar as the same are caused by or contained in any information furnished to Weatherford
by or on behalf of the Warrant Holder expressly for use therein.

               (ii) Indemnification by the Warrant Holder. The Warrant Holder agrees to
indemnify, with respect to a Shelf Registration Statement filed by Weatherford, to the
fullest extent permitted by law, Weatherford, its directors and officers and each person who
controls Weatherford (within the meaning of the Securities Act) against any Losses
(including, without limitation, reasonable fees and expenses of legal counsel) arising out
of or resulting from any untrue or alleged untrue statement of a material fact or any
omission or alleged omission of a material fact required to be stated in such Shelf
Registration Statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or necessary to make the statements therein not misleading, to the extent
that such untrue statement or omission is caused by or contained in any information
furnished by or on behalf of the Warrant Holder for use therein.

          (f) Exchange Act Reports. Weatherford’s filing of a report under the Exchange Act that
is incorporated by reference into the prospectus shall be considered to be a Corrective Filing if
such filing eliminates the necessity of otherwise making a Corrective Filing.

          (g) Stop Transfer Instructions. Weatherford may give stop transfer instructions to
its transfer agent as it shall deem reasonably necessary to prevent any sale of Common Shares under
the Shelf Registration Statement at any time when the Warrant Holders are not permitted to make
such a sale pursuant to this Section 12.

          (h) No piggyback or other registration rights. Other than as set forth in this
Section 12, the Warrant Holder shall have no registration rights with respect to this
Warrant or any Common Shares delivered upon exercise hereof (including any “piggyback” registration
rights).

     13. Choice of Law. In all respects, including all matters of construction, validity
and performance, this Warrant and the obligations arising hereunder shall be governed by, and
construed and enforced in accordance with, the laws of the State of Texas applicable to contracts
made and performed in such state, without regard to the principles thereof regarding conflict of
laws, and any applicable laws of the United States of America.

13

 

     14. Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and shall be (i) personally
served, (ii) deposited in the mail, registered or certified, return receipt requested, postage
prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram or facsimile, addressed as set forth below or to such other address as
such party shall have specified most recently by written notice. Any notice or other communication
required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or
delivery by facsimile (with accurate confirmation generated by the transmitting facsimile machine,
so long as a hard copy is delivered by reputable courier during regular business hours on the next
business day) at the address or number designated below (if delivered on a business day during
normal business hours where such notice is to be received), or the first business day following
such delivery (if delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur. The addresses for such communications shall be:

          if to Weatherford, to:

Weatherford International Ltd.

515 Post Oak Boulevard, Suite 600

Houston, Texas 77027

Attention: Burt M. Martin

Phone: 713.693-4000

Facsimile: 713-693-4484

          if to the Warrant Holder, to:

Shell Technology Ventures Inc.

910 Louisiana, Rm. 530

Houston, Texas 77002

Attention: Ricardo Rodriquez

Telephone: 713-241-2520

Facsimile: 713-241-0302

Either party hereto may from time to time change its address or facsimile number for notices under
this Section 14 by giving at least ten (10) days’ prior written notice of such changed
address or facsimile number to the other party hereto.

     15. Entire Agreement. This Warrant, including the Exhibits hereto,
constitutes and contains the entire agreement and understanding of the parties with respect to the
subject matter hereof and supersede any and all prior negotiations, correspondence, agreements,
understandings, duties or obligations between the parties respecting the subject matter hereof.

     16. Amendment. Any provision of this Warrant may be amended and the observance
thereof may be waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of Weatherford and the Warrant Holder. Any amendment
or waiver effected in accordance with this Section 16 shall be binding upon the Warrant
Holder and Weatherford.

     17. Severability. If any provision of this Warrant or the application thereof,
becomes or is declared by a court of competent jurisdiction to the illegal, void or unenforceable,
the remainder of this Warrant will continue in full force and effect and the application of such
provision to other Persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or unenforceable
provisions of this Warrant with a valid and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of such void or unenforceable provision.

     18. Headings. The headings in this Warrant are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof.

* * * * *

14

 

     IN WITNESS WHEREOF, the parties hereto have caused this Warrant to be executed by their
respective officers thereunto duly authorized as of the day and year first above written.

Weatherford International, Inc.

By: /s/ BURT M. MARTIN

Name: Burt M. Martin

Title: Senior Vice President

Weatherford International Ltd.

By: /s/ BURT M. MARTIN

Name: Burt M. Martin

Title: Senior Vice President

Shell Technology Ventures Inc.,

as Warrant Holder

By: /s/ RICARDO RODRIQUEZ

Name: Ricardo Rodriquez

Title: Director of Investments

15

 

EXHIBIT A

Form of Exercise Notice

(To be executed only upon exercise

of the Warrant in whole or in part)

To Weatherford International Ltd.:

          The undersigned registered holder (the “Registered Holder”) of the accompanying
Amended and Restated Warrant, dated July 12, 2006 and issued by Weatherford International Ltd. (the
“Warrant”), hereby exercises such Warrant or portion thereof for, and purchases thereunder,
                     Common Shares. The Registered Holder hereby requests settlement of such exercise
be effected in the following manner(s):

     (i) Physical Delivery: through the delivery by Weatherford of                      Common
Shares, and the Registered Holder herewith makes payment of the aggregate Purchase Price
therefor of $                    ;

     (ii) Net Share Settlement: through the delivery by Weatherford of                     
Common Shares, and the Registered Holder has attached hereto a calculation of such number of shares in accordance with Section 2(b)(ii) of the Warrant; or

     (iii) Net Cash Settlement: through payment by Weatherford of $                    , and
the Registered Holder has attached hereto a calculation of the amount of such payment in
accordance with Section 2(b)(iii) of the Warrant.

     In the case of settlement through Physical Delivery and/or Net Share Settlement, the
undersigned requests that the certificates for such Common Shares be issued in the name of, and
delivered to,                                          whose address is                                         . In the case of
settlement through Net Cash Settlement, the undersigned requests that payment be made to
                                         whose address is                                         . Capitalized terms used but not
defined in this Exercise Notice shall have the meaning assigned to such terms in the Warrant.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Dated:                     	 	Name of Registered Holder:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 	 
	 	 	Signature:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	Name of Signatory:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	Address of Holder:	 	 	 	 

Exhibit A-1

 

EXHIBIT B

Form of Warrant Assignment

          FOR THE VALUE RECEIVED                                          (“Assignor”) hereby sells, assigns
and transfers unto the assignee named below (the “Assignee”) the right to purchase up to
                                         Common Shares represented by the Warrant (as defined below) and does
hereby irrevocably constitute and appoint                                          as its due and lawful attorney, to
register the transfer of said right to purchase Common Shares on the books of Weatherford
International Ltd., and to execute a new warrant (the “Assignee Warrant”) in the name of
Assignee evidencing the right to purchase the Common Shares sold, assigned and transferred hereby.
If this Warrant Assignment sells, assigns and transfers the right to purchase fewer Common Shares
than are represented by the Warrant, then Assignor requests that a new warrant representing the
right to purchase the remaining Common Shares, which right was not sold, transferred or assigned
hereby, be registered in the name of Assignor. Capitalized terms used but not defined in this Form
of Warrant Assignment shall have the meaning assigned to such terms in the Warrant.

	 	 	 	 	 
	Name and Address of Assignee:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 

	 	 	 	 	 	 	 	 	 
	Dated:                     	 	Name of Assignor:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 	 	Taxpayer Identification	 	 	 	 
	 	 	   Number of Assignor:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Signature:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	Name of Signatory:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 

     The Assignee named above herby agrees to purchase and take the Assignee Warrant evidencing the
right to purchase the number of Common Shares set forth above pursuant to and in accordance with
the terms and conditions of the Amended and Restated Warrant (the “Warrant”), dated as of
July 12, 2006, between Weatherford International Ltd. and the initial holder named therein and
agrees to be bound by the terms and provisions thereof, including all of the provision therein
applicable to the Warrant Holder.

	 	 	 	 	 	 	 	 	 
	Dated:                     	 	Name of Assignee:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 	 	Taxpayer Identification	 	 	 	 
	 	 	   Number of Assignee:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Signature:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	Name of Signatory:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 

Exhibit B-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}]]