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EXHIBIT E
Form of Transitional Services Agreement
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EXHIBIT E
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TRANSITIONAL SERVICES AGREEMENT
BETWEEN
XXXXXXXXXXX INTERNATIONAL, INC.
AND
XXXXXXXXXXX GLOBAL COMPRESSION SERVICES, L.P.
, 2000
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TRANSITIONAL SERVICES AGREEMENT
This Transitional Services Agreement (this "Agreement") is entered into
as of _____, 2000, between Xxxxxxxxxxx International, Inc., a Delaware
corporation ("Weatherford"), and Xxxxxxxxxxx Global Compression Services, L.P.,
a Delaware limited partnership (the "Partnership").
WITNESSETH
WHEREAS, Enterra Compression Company, a Delaware corporation (the
"Company"), WEUS Holding, Inc., a Delaware corporation and a stockholder of the
Company ("WEUS"), Xxxxxxxxxxx International, Inc., a Delaware corporation and
the parent of WEUS ("Weatherford"), Universal Compression Holdings, Inc., a
Delaware corporation ("Parent"), and Universal Compression, Inc., a Texas
corporation and wholly owned subsidiary of Parent ("Merger Subsidiary"), are
parties to a certain Agreement and Plan of Merger ("Merger Agreement"), dated as
of October 23, 2000;
WHEREAS, pursuant to the Merger Agreement, Parent has agreed to acquire
the Partnership and certain of its affiliates by way of a merger of the Company,
as the parent of such entities, with and into Merger Subsidiary, with Merger
Subsidiary being the surviving corporation in such merger (the "Merger"); and
WHEREAS, prior to the Merger, Weatherford will acquire all of the
interest held by GE Capital Corporation, a New York corporation, in the
Partnership and related assets and operations under the terms of that certain
Purchase Agreement by and among Weatherford, WEUS, the Company and Global
Compression Services, Inc., a Delaware corporation dated October 23, 2000 (the
"GC Agreement") such that, immediately after the Merger, Parent will own 100% of
the Partnership, its related assets and operations (other than the Excluded
Assets, as such term is defined in the Merger Agreement);
WHEREAS, it is a condition precedent to the consummation of the
transactions contemplated by the Xxxxxxxxxxx Merger Agreement and the GC
Agreement that Weatherford and the Partnership enter into this Agreement;
WHEREAS, Weatherford and the Partnership desire for Weatherford and its
affiliates to provide certain services to the Partnership for a limited time
following the consummation of the mergers contemplated by the Merger Agreement
and the GC Agreement; and
NOW, THEREFORE, in consideration of these premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby covenant and agree as follows:
ARTICLE 1
DEFINITIONS
All capitalized terms or other defined terms used but not defined
in this Agreement are used in this Agreement with the meanings assigned thereto
in the Merger Agreement.
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ARTICLE 2
SERVICES
2.1 SERVICES.
(a) From and after the Effective Time until the [ ]day after the
Effective Time (the "Services Period"), Weatherford agrees to provide, or cause
its affiliates to provide, to the Partnership the services described in EXHIBIT
A hereto (the "Service(s)").
(b) Weatherford shall continue to permit the Partnership to lease
the property located at 0000 Xxxxx Xxx Xxxxxx, Xxxxxxx, Xxxxx [under the terms
of the existing Lease Agreement and Sublease Agreement]; provided, however, the
Partnership shall vacate such property prior to the 90th day following the
Effective Time.
2.2 EARLY TERMINATION OF SERVICES. Notwithstanding anything to the
contrary in this Agreement, the Partnership shall use commercially reasonable
efforts to eliminate its need for the Services prior to the expiration of the
Services Period. With respect to any Service (or portion thereof) that the
Partnership no longer requires Weatherford to perform, the Partnership shall
promptly notify Weatherford that such Service (or portion thereof) is no longer
required, and from and after receipt by Weatherford of such notice, such Service
(or portion thereof) will no longer be required under this Agreement, and
neither Weatherford nor the Partnership will have any further obligations with
respect thereto, including but not limited to, compensation and reimbursement
for such Service; provided, however, that the Partnership shall not be relieved
of its obligation to pay the Partnership for all such Service(s) provided to the
Partnership prior to the time of termination of such Service(s).
2.3 COMPENSATION AND REIMBURSEMENT. In connection with the provision of
the Services, Weatherford will allocate to the Partnership a proportional amount
of the costs and expenses of Xxxxxxxxxxx'x respective departments to the extent
they relate to matters associated with the Services. The Partnership agrees to
pay Weatherford for such proportional amount and for all additional costs, fees,
expenses, penalties, taxes and interest incurred by Weatherford relating to the
provision of the Services. Weatherford will prepare and submit to the
Partnership a monthly statement of account and invoice setting forth in
reasonable detail the amounts owed by the Partnership pursuant to this Article 2
for the immediately preceding month. [In consideration for Xxxxxxxxxxx'x
agreement to provide and administer the Services under this Agreement, the
Partnership also agrees to pay to Weatherford a management fee equal to 10% of
the total amount of the proportional amount of the costs and expenses of the
various Weatherford departments allocated to the Partnership.] Such management
fee shall be added to each monthly statement of account and invoice sent to the
Partnership. The Partnership agrees to pay to Weatherford, by wire transfer in
immediately available U.S. funds, all amounts owed and due under this Agreement
within 30 days of receipt of such monthly statement of account and invoice.
Interest at the rate of 10% per annum, compounded monthly, will accrue and will
be payable with respect to any amounts due and not paid by the Partnership until
such amounts, and any interest thereon, have been paid.
2.4 TERM AND TERMINATION. Subject to the provisions of Section 2.2
hereof, the term of this Agreement shall commence at the Effective Time and
shall continue until the end of the
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Services Period or until Weatherford and the Partnership agree in writing to
terminate this Agreement. The termination of this Agreement shall not release
(i) either party from its liability to the other party under this Agreement
arising from a breach of this Agreement, (ii) either party from its rights and
obligations under Article 3, or (iii) the Partnership from its payment
obligations under Sections 2.1 and 2.3.
ARTICLE 3
ALLOCATION OF LIABILITY; RELATIONSHIP
3.1 WAIVER AND INDEMNIFICATION. THE PARTNERSHIP HEREBY WAIVES ANY AND
ALL CLAIMS AGAINST WEATHERFORD, ITS AFFILIATES AND THEIR RESPECTIVE DIRECTORS,
OFFICERS, EMPLOYEES, AND AGENTS (THE "WEATHERFORD PARTIES") FOR DAMAGES
RESULTING FROM PERFORMANCE OF, ERROR OR DELAY IN PERFORMANCE, ATTEMPTING TO
PERFORM OR FAILING TO PERFORM, ANY RESPONSIBILITIES HEREUNDER, OR ANY DAMAGES OF
ANY KIND RELATED THERETO, INCLUDING CLAIMS ARISING AS A RESULT OF THE EXPRESS
NEGLIGENCE OF SUCH PERSONS UNLESS SUCH DAMAGES RESULTED FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH PERSONS. FURTHER, THE PARTNERSHIP
HEREBY AGREES TO DEFEND, INDEMNIFY, AND HOLD WEATHERFORD, ITS AFFILIATES AND
THEIR RESPECTIVE DIRECTORS, OFFICERS, AGENTS, AND EMPLOYEES HARMLESS TO THE
EXTENT OF THE PARTNERSHIP'S PARTICIPATION THEREIN AGAINST ANY AND ALL CLAIMS,
DAMAGES, CAUSES OF ACTION, AND LEGAL LIABILITIES ARISING OUT OF, IN CONNECTION
WITH, OR AS AN INCIDENT TO, THIS AGREEMENT OR ANY ACT OR OMISSION IN THE
PERFORMANCE BY SUCH PERSONS OF THEIR RESPONSIBILITIES HEREUNDER, INCLUDING
DAMAGES, CAUSES OF ACTION, AND LEGAL LIABILITIES ARISING AS A RESULT OF THE
NEGLIGENCE OF SUCH PERSONS, UNLESS SUCH DAMAGES RESULTED FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH PERSONS SEEKING INDEMNIFICATION.
3.2 LIMITATION ON WARRANTIES AND CONSEQUENTIAL DAMAGES. NONE OF THE
WEATHERFORD PARTIES MAKES ANY WARRANTIES OR REPRESENTATIONS REGARDING SERVICES
PROVIDED PURSUANT TO THIS AGREEMENT OTHER THAN THOSE EXPRESSED IN THIS
AGREEMENT, AND NONE OF THE WEATHERFORD PARTIES MAKES ANY EXPRESS OR IMPLIED
WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE. SUCH
SERVICES ARE FURNISHED ON AN "AS IS" BASIS, AND NONE OF THE WEATHERFORD PARTIES
ASSUMES ANY RESPONSIBILITY FOR ANY DAMAGE OR LOSS (INCLUDING, WITHOUT
LIMITATION, ANY CONSEQUENTIAL, EXEMPLARY OR SPECIAL DAMAGES OR LOST PROFITS)
ARISING OUT OF, RESULTING FROM, OR CAUSED BY SERVICES FURNISHED.
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3.3 EXPRESS NEGLIGENCE. THE INDEMNITIES SET FORTH IN THIS ARTICLE 3 ARE
INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH THE EXPRESS
TERMS AND SCOPE THEREOF NOTWITHSTANDING TEXAS' EXPRESS NEGLIGENCE RULE OR ANY
SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT INDEMNITIES BECAUSE OF
THE SIMPLE OR GROSS NEGLIGENCE (WHETHER SOLE, CONCURRENT, ACTIVE, OR PASSIVE) OR
OTHER FAULT OR STRICT LIABILITY OF ANY OF THE WEATHERFORD PARTIES.
3.4 INDEPENDENT CONTRACTOR. IN PERFORMING THE SERVICES HEREUNDER, THE
PARTNERSHIP AND WEATHERFORD ACKNOWLEDGE AND AGREE THAT THE WEATHERFORD PARTIES
AND THEIR RESPECTIVE REPRESENTATIVES SHALL BE CONSIDERED INDEPENDENT CONTRACTORS
WITH RESPECT TO THE PARTNERSHIP AND SHALL UNDER NO CIRCUMSTANCES BE DEEMED TO BE
AN EMPLOYEE, AGENT, PARTNER, OR JOINT VENTURER OF THE PARTNERSHIP. ADDITIONALLY,
WEATHERFORD SHALL HAVE THE EXCLUSIVE AUTHORITY AND RESPONSIBILITY TO SELECT THE
MEANS, MANNER, AND METHOD OF PERFORMING THE SERVICES REQUIRED TO BE CAUSED TO BE
PERFORMED BY IT HEREUNDER.
ARTICLE 4
MISCELLANEOUS
4.1 AUDIT RIGHT. Upon reasonable prior written request, the Partnership
shall have the right to audit Xxxxxxxxxxx'x calculations, and schedules thereto,
of the costs and expenses for the services provided hereunder. Upon the request
of the Partnership, Weatherford shall provide the Partnership with copies of
invoices relating to any third party costs and expenses relating to the
Services.
4.2 COMPLETE AGREEMENT; AMENDMENT. This Agreement constitutes the
entire agreement between Weatherford and the Partnership with respect to the
subject matter hereof and supersedes all other agreements, representations,
warranties, statements, promises, and understandings, whether oral or written,
with respect to the subject matter hereof. This Agreement may not be amended,
altered, or modified except by a writing signed by duly authorized officers of
Weatherford and the Partnership.
4.3 NOTICES.
(a) Addresses. All notices under this Agreement must be in
writing and delivered by personal service; certified or registered mail, postage
prepaid, return receipt requested; nationally-recognized overnight courier,
courier charges prepaid; or facsimile transmission (followed by telephone
confirmation of receipt), to Xxxxxxxxxxx or the Partnership, as applicable, at
the addresses herein set forth.
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The addresses for notices are as follows:
Xxxxxxxxxxx International, Inc.
000 Xxxx Xxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attention: Vice President - Legal
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
Xxxxxxxxxxx Global Compression Services, L.P.
0000 Xxxxxxxxxx, Xxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
(b) Effective Date of Notices, etc. All notices, demands, and
requests will be effective upon actual receipt or, in the case of delivery by
facsimile transmission, the completion of such transmission during the normal
business hours of the recipient. Rejection or other refusal to accept or the
inability to deliver because of changed address of which no notice was given as
provided in Section 4.3(c) will be deemed to be receipt of the notice, demand,
or request sent.
(c) Changes. By giving to the other party at least 10 Business
Days' written notice thereof, a party and its respective permitted successors
and permitted assigns will have the right from time to time and at any time
during the term of this Agreement to change their respective addresses for
notices and each will have the right to specify, as its or his address for
notices, any other address within the United States of America.
4.4 VALIDITY. Any provision hereof that is prohibited or unenforceable
in any jurisdiction will, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction will not invalidate or render unenforceable such provision in any
other jurisdiction.
4.5 ASSIGNMENT; OTHER BENEFITS. This Agreement will be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns. Neither party to this Agreement may
assign its rights under this Agreement without the prior written consent of the
other party; provided, however, Weatherford may assign any of its rights and
obligations under this Agreement to any of its affiliates, of which Weatherford
beneficially owns or controls at least 50% of the equity or other interests of
such affiliate, without the consent of the Partnership.
4.6 GOVERNING LAW. This Agreement will be governed by, and construed in
accordance with, the internal laws of the State of Texas, without reference to
or application of any conflicts of laws principles.
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4.7 WAIVER. No consent or waiver, express or implied, by a party hereto
to or of any breach or default by the other party hereto in the performance by
such other party of its obligations hereunder will be deemed or construed to be
a consent or waiver to or of any other breach or default in the performance by
such other party of the same or any other obligations of such other party
hereunder. Failure on the part of a party to complain of any act or failure to
act of the other party or to declare the other party in default, irrespective of
how long such failure continues, will not constitute a waiver by such party of
its rights hereunder. The giving of consent by a party in any one instance will
not limit or waive the necessity to obtain such party's consent in any future
instance.
4.8 TERMINOLOGY. All personal pronouns used in this Agreement, whether
used in the masculine, feminine, or neuter gender, will include all other
genders; and the singular will include the plural and vice versa. The headings
of the Articles and Sections of this Agreement are included for convenience only
and will not be deemed to constitute part of this Agreement or to affect the
construction hereof or thereof.
4.9 FORCE MAJEURE. Except for the obligation of the Partnership to make
payments hereunder when due and the indemnification obligations arising
hereunder, neither party shall be liable for delays in performance or for
non-performance, directly occasioned or caused by Force Majeure. "Force Majeure"
means any event beyond the reasonable control of the party claiming to be
affected thereby including without limitation acts of God, storms, floods, war,
fire, strikes, lockouts or differences with workers, acts of the public enemy,
insurrections, riots, or rules or regulations of any governmental authority
asserting jurisdiction or control, compliance with which makes continuance of
operations impossible. Inability of either party to secure funds shall not be
regarded as Force Majeure. Upon the occurrence of Force Majeure, the party
affected shall give prompt notice thereof to the other party and shall, at its
cost and expense, do all things reasonable to remove or mitigate its effect.
4.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will for all purposes be deemed to be an original
and all of which will constitute the same instrument.
4.11 FURTHER ASSURANCES. Each party agrees to do all acts and things
and to make, execute, and deliver such written instruments, as will from time to
time be reasonably required to carry out the terms and provisions of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth in the introduction to this Agreement.
XXXXXXXXXXX INTERNATIONAL, INC.
By:
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Name:
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Title:
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XXXXXXXXXXX GLOBAL COMPRESSION
SERVICES, L.P.
By:
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Name:
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Title:
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EXHIBIT A
TO TRANSITIONAL SERVICES AGREEMENT
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