UNIVERSAL COMPRESSION HOLDINGS INC
TRANSITIONAL SERVICES AGREEMENT
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>5
<FILENAME>h84190ex10-1.txt
<DESCRIPTION>TRANSITIONAL SERVICES AGREEMENT
<TEXT>

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                                                                    EXHIBIT 10.1











                         TRANSITIONAL SERVICES AGREEMENT

                                     BETWEEN

                         WEATHERFORD INTERNATIONAL, INC.

                                       AND

                  WEATHERFORD GLOBAL COMPRESSION SERVICES, L.P.

                                FEBRUARY 9, 2001




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                                                                    EXHIBIT 10.1


                         TRANSITIONAL SERVICES AGREEMENT

         This Transitional Services Agreement (this "Agreement") is entered into
as of February 9, 2001, between Weatherford International, Inc., a Delaware
corporation ("Weatherford"), and Weatherford Global Compression Services, L.P.,
a Delaware limited partnership, on behalf of itself and each of its affiliates
(collectively, the "Partnership").

                               W I T N E S S E T H

         WHEREAS, Enterra Compression Company, a Delaware corporation (the
"Company"), WEUS Holding, Inc., a Delaware corporation and a stockholder of the
Company ("WEUS"), Weatherford 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 dated October 23, 2000 (the "GC Agreement") by and among
Weatherford, WEUS, the Company and Global Compression Services, Inc., a Delaware
corporation, 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 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. From and after the Effective Time until the 30th day
after the Effective Time (the "Initial Services Period"), Weatherford agrees to
provide, or cause its affiliates to provide, to the Partnership all services
currently provided to the Partnership and its affiliates prior to the Effective
Time, except for legal services (the "Full Services"). From the 31st day to the
120th day after the Effective Time (the "Partial Services Period", and together
with the Initial Services Period, the "Services Periods"), Weatherford agrees to
reasonably provide, or cause its affiliates to reasonably provide, to the
Partnership the services relating to the areas set forth on Exhibit A hereto
(the "Partial Services", and together with the Full Services, the "Service(s)");
provided, however, that with respect to Services provided in the area of
insurance and risk management, Weatherford will continue to administer all
claims relating to the Partnership that are for periods prior to the Effective
Time and that are covered under Weatherford's existing insurance program. All
losses, costs, fees and expenses (including deductibles) relating to such claims
and Weatherford's administration thereof shall be the sole responsibility of the
Partnership.

         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 Periods. With respect to any Service (or portion thereof) that the
Partnership no longer requires Weatherford or its affiliates 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 Full Services, Weatherford will charge the Partnership $125,000 plus all
additional costs and third party expenses incurred by Weatherford relating to
the provision of the Full Services. In connection with the provision of the
Partial Services, Weatherford will allocate to the Partnership a proportional
amount of the costs and expenses of Weatherford's respective departments to the
extent they relate to matters associated with the Partial 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 Partial Services. Provided,
however, that in connection with the provision of the Services, Weatherford
shall not incur individual third party expenses on a monthly basis in excess of
$7,500 without the prior written consent of the Partnership. 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
Weatherford's agreement to provide and administer the Partial Services under
this Agreement, the Partnership also agrees to pay to Weatherford beginning on
the 31st day following the Effective Time 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


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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 Services Periods 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


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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.

         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 Weatherford's 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;


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nationally-recognized overnight courier, courier charges prepaid; or facsimile
transmission (followed by telephone confirmation of receipt), to Weatherford or
the Partnership, as applicable, at the addresses herein set forth.

                  The addresses for notices are as follows:

                           Weatherford International, Inc.
                           515 Post Oak Park, Suite 600
                           Houston, Texas  77027-3415
                           Attention:  Vice President - Law
                           Facsimile:  (713) 693-4481
                           Confirm:    (713) 693-4178

                           Weatherford Global Compression Services, L.P.
                           4440 Brittmore, Road
                           Houston, Texas  77041
                           Attention:  Chief Financial Officer
                           Facsimile:  (713) 466-6720
                           Confirm:    (713) 335-7226

                  (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, that 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.


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         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.

         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; HEADINGS. 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.



      [Remainder of page intentionally left blank - Signature page follows]


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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.



                                            WEATHERFORD INTERNATIONAL, INC.


                                           By: /s/ BURT M. MARTIN
                                               -------------------------------
                                               Name: Burt M. Martin
                                               Title:   Vice President



                                           WEATHERFORD GLOBAL COMPRESSION
                                                 SERVICES, L.P.

                                           By: Weatherford Global
                                                 Compression Holding,
                                                 L.L.C., its general
                                                 partner

                                           By: /s/ ERNIE L. DANNER
                                               -------------------------------
                                               Name: Ernie L. Danner
                                               Title:   Executive Vice President


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                                    EXHIBIT A


AREAS RELATING TO THE PROVISION OF PARTIAL SERVICES

I.  Corporate:
        1.       Insurance and Risk Management
        2.       Payroll Services
        3.       Accounts Payable
        4.       Accounts Receivable
        5.       Credit
        6.       Information Technology - Hardware
        7.       Management Information Systems - Software
        8.       Marketing and Sales Information (including information on
                 Weatherford's Server and website)
        9.       Fleet Department
        10.      Corporate Accounting
        11.      Treasury/Cash Management
        12.      Taxes (income and non-income based)
        13.      Welfare Employee Benefits
        14.      Shared Field Services

II.  Artificial Lift:
        1.       Argentina - Accounting Support/Regional Manager
        2.       Peru - Accounting Support
        3.       Asia Pacific - Regional Manager
        4.       Europe - Regional Manager
        5.       Venezuela - Maintenance Work/Regional Manager
        6.       Middle East - Regional Manager
        7.       Australia - Services provided by International Pumps &
                 Compressors, Pty. Ltd.

III.  Completion & Oilfield Services:
        1.       Argentina - Accounting Support
        2.       Australia - Accounting Support
        3.       Brazil - Accounting Support
        4.       Thailand - Human Resources/Accounting Support/Regional Manager


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