This GUARANTY AGREEMENT is dated as of
October 20, 2006 made by UCI COMPRESSOR HOLDING, L.P., a
Delaware limited partnership (“UCI Compressor”) and UCI
MLP LP, LLC, a Delaware limited liability company (“
Limited Partner ”) and each of the signatories hereto
(each of the signatories hereto, together with UCI Compressor and
the Limited Partner and the Subsidiary Guarantors that becomes a
party hereto from time to time after the date hereof, the “
Guarantors
”), in favor of Wachovia Bank, National Association, as the
administrative agent (in such capacity, together with its
successors in such capacity, the “ Administrative
Agent ”), for the banks and other financial institutions
(the “ Lenders ”) from time to time parties to
the Credit Agreement dated October 20, 2006 (as amended,
supplemented or otherwise modified from time to time, the “
Credit
Agreement ”), among Universal
Compression, Inc., a corporation formed under the laws of the
State of Texas (“ UCI ”); Universal Compression
Holdings, Inc., a corporation formed under the laws of the
State of Delaware (“ Holdings ”); Universal
Compression Canada, Limited Partnership, a Nova Scotia limited
partnership (“ Universal Canada ”); UC Canadian
Partnership Holdings Company, a Nova Scotia unlimited liability
company (“ UC Canadian Holdings ” and together
with UCI, Holdings and Universal Canada, the “
Borrowers ”); the Lenders, the Administrative Agent,
and the other Agents party thereto.
R E C I T A L S
A.
The Borrowers have requested that the Lenders provide certain loans
to and extensions of credit on behalf of the Borrowers.
B.
The Lenders have agreed to make such loans and extensions of credit
subject to the terms and conditions of the Credit Agreement.
C.
It is a condition precedent to the obligation of the Lenders to
make their respective extensions of credit to the Borrowers under
the Credit Agreement that the Guarantors shall have executed and
delivered this Agreement to the Administrative Agent for the
ratable benefit of the Lenders.
D.
NOW, THEREFORE, in consideration of the premises herein and to
induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrowers thereunder, each Guarantor
hereby agrees with the Administrative Agent, for the ratable
benefit of the Lenders, as follows:
ARTICLE I
Definitions
Section 1.01
Definitions .
(a)
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein have the meanings given to them in the
Credit Agreement, and all uncapitalized terms which are defined in
the UCC on the date hereof are used herein as so defined.
(b)
The following terms have the following meanings:
“ Agreement ” means this
Guaranty Agreement, as the same may be amended, supplemented
or otherwise modified from time to time.
“ Bankruptcy Code ” means
Title 11, United States Code, as amended from time to
time.
“ Borrower Obligations ”
means the collective reference to the payment and performance when
due of all indebtedness, liabilities, obligations and undertakings
of the Borrowers (including, without limitation, all Indebtedness)
of every kind or description arising out of or outstanding under,
advanced or issued pursuant, or evidenced by, the Guaranteed
Documents, including, without limitation, the unpaid principal of
and interest on the Loans and the LC Exposure and all other
obligations and liabilities of the Borrowers (including, without
limitation, interest accruing at the then applicable rate provided
in the Credit Agreement after the maturity of the Loans and LC
Exposure and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding, relating to the Borrowers, whether or not a
claim for post-filing or post-petition interest is allowed in such
proceeding) to the Guaranteed Creditors, whether direct or
indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, arising out of or outstanding
under, advanced or issued pursuant, or evidenced by, the Guaranteed
Documents, whether on account of principal, interest, premium,
reimbursement obligations, payments in respect of an early
termination date, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all reasonable costs, fees and
disbursements that are required to be paid by the Borrowers
pursuant to the terms of any Guaranteed Documents).
“ Collateral Agreement ”
means that certain Collateral Agreement, dated October 20,
2006 by Universal Compression, Inc., Universal Compression
Holdings, Inc., UCI Compressor Holding, L.P. and UCI MLP LP
LLC, collectively, as Grantors in favor of Wachovia Bank, National
Association, as US Administrative Agent for the Lenders.
“ Guaranteed Creditors ”
means the collective reference to the Administrative Agent, the
Lenders and the Lenders and Affiliates of Lenders that are parties
to Guaranteed Hedging Agreements.
“ Guaranteed Documents ”
means the collective reference to the Credit Agreement, the other
Loan Documents, each Guaranteed Hedging Agreement and any other
document made, delivered or given in connection with any of the
foregoing.
“ Guaranteed Hedging Agreement
” means any Hedging Agreement between any Borrower or any
Restricted Subsidiary and any Lender or any Affiliate of any Lender
while such Person (or, in the case of an Affiliate of a Lender, the
Person affiliated therewith) is a Lender, including any Hedging
Agreement between such Persons in existence prior to the date
hereof, but excluding any Hedging Agreement now existing or
hereafter arising in connection with the ABS Facility. For the
avoidance of doubt, a Hedging Agreement ceases to be a Guaranteed
Hedging Agreement if the Person that is the counterparty to any
Borrower or any Restricted Subsidiary under a Hedging Agreement
ceases to be a Lender under the Credit Agreement (or, in the case
of an Affiliate of a Lender, the Person affiliated therewith ceases
to be a Lender under the Credit Agreement).
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“ Guarantor Obligations ”
means with respect to any Guarantor, the collective reference to
(a) the Borrower Obligations and (b) the payment and
performance when due of all indebtedness, liabilities, obligations
and undertakings of such Guarantor of every kind or description,
whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, arising out of
or outstanding under, advanced or issued pursuant, or evidenced by,
any Guaranteed Document to which such Guarantor is a party, in each
case, whether on account of principal, interest, guarantee
obligations, reimbursement obligations, payments in respect of an
early termination date, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all reasonable fees and
disbursements that are required to be paid pursuant to the terms of
any Guaranteed Document).
“ Guarantors ” means the
collective reference to each Guarantor.
“ Obligations ” means:
(a) in the case of each Borrower, the Borrower Obligations and
(b) in the case of each Guarantor, its Guarantor
Obligations.
“ Guarantor Claims ”
has the meaning assigned to such term in
Section 6.01.
Section 1.02
Rules of Interpretation . Section 1.04 of the
Credit Agreement is hereby incorporated herein by reference and
shall apply to this Agreement, mutatis mutandis .
ARTICLE II
Guarantee
Section 2.01
Guarantee .
(a)
Each of the Guarantors hereby jointly and severally,
unconditionally and irrevocably, guarantees to the Guaranteed
Creditors and each of their respective permitted successors,
indorsees, transferees and assigns, the prompt and complete payment
in cash and performance by the Borrowers when due (whether at the
stated maturity, by acceleration or otherwise) of the Borrower
Obligations. This is a guarantee of payment and not collection and
the liability of each Guarantor is primary and not secondary.
(b)
Anything herein or in any other Guaranteed Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder
and under the other Guaranteed Documents shall in no event exceed
the amount which can be guaranteed by such Guarantor under
applicable federal and state laws relating to the insolvency of
debtors (after giving effect to the right of contribution
established in Section 2.02).
(c)
Each Guarantor agrees that the Borrower Obligations may at any
time and from time to time exceed the amount of the liability of
such Guarantor hereunder without impairing the guarantee contained
in this ARTICLE II or affecting the rights and remedies of any
Guaranteed Creditor hereunder.
(d)
Each Guarantor agrees that if the maturity of the Borrower
Obligations is accelerated by bankruptcy or otherwise, such
maturity shall also be deemed accelerated for the purpose of this
guarantee without demand or notice to such Guarantor. The guarantee
contained in this ARTICLE II shall remain in full force and
effect until all the Borrower Obligations shall
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have been satisfied by payment in full in cash,
no Letter of Credit shall be outstanding (except for Letters of
Credit secured by cash collateral as permitted in
Section 2.01(b)(iii) of the Credit Agreement) and all of
the Aggregate Commitments are terminated, notwithstanding that from
time to time during the term of the Credit Agreement, no Borrower
Obligations may be outstanding.
(e)
No payment made by any Guarantor, any other guarantor or any other
Person or received or collected by any Guaranteed Creditor from any
Guarantor, any other guarantor or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application
at any time or from time to time in reduction of or in payment of
the Borrower Obligations shall be deemed to modify, reduce, release
or otherwise affect the liability of any Guarantor hereunder which
shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or
any payment received or collected from such Guarantor in respect of
the Borrower Obligations), remain liable for the Borrower
Obligations up to the maximum liability of such Guarantor hereunder
until the Borrower Obligations are paid in full in cash, no Letter
of Credit is outstanding (except for Letters of Credit secured by
cash collateral as permitted in Section 2.01(b)(iii) of
the Credit Agreement) and all of the Aggregate Commitments are
terminated.
Section 2.02
Right of Contribution . Each Guarantor hereby
agrees that to the extent that a Guarantor shall have paid more
than its proportionate share of any payment made hereunder, such
Guarantor shall be entitled to seek and receive contribution from
and against any other Guarantor hereunder which has not paid its
proportionate share of such payment. Each Guarantor’s right
of contribution shall be subject to the terms and conditions of
Section 2.03. The provisions of this Section 2.02 shall
in no respect limit the obligations and liabilities of any
Guarantor to the Guaranteed Creditors, and each Guarantor shall
remain liable to the Guaranteed Creditors for the full amount
guaranteed by such Guarantor hereunder.
Section 2.03
No Subrogation . Notwithstanding any payment made
by any Guarantor hereunder or any set-off or application of funds
of any Guarantor by any Guaranteed Creditor, no Guarantor shall be
entitled to be subrogated to any of the rights of any Guaranteed
Creditor against any Borrower or any other Guarantor or any
collateral security or guarantee or right of offset held by any
Guaranteed Creditor for the payment of the Borrower Obligations,
nor shall any Guarantor seek or be entitled to seek any indemnity,
exoneration, participation, contribution or reimbursement from any
Borrower or any other Guarantor in respect of payments made by such
Guarantor hereunder, until all amounts owing to the Guaranteed
Creditors on account of the Borrower Obligations are irrevocably
and indefeasibly paid in full in cash, no Letter of Credit is
outstanding (except for Letters of Credit secured by cash
collateral as permitted in Section 2.01(b)(iii) of the
Credit Agreement) and all of the Aggregate Commitments are
terminated. If any amount shall be paid to any Guarantor on account
of such subrogation rights at any time when all of the Borrower
Obligations shall not have been irrevocably and indefeasibly paid
in full in cash, any Letter of Credit is outstanding (except for
Letters of Credit secured by cash collateral as permitted in
Section 2.01(b)(iii) of the Credit Agreement) or any of
the Aggregate Commitments are in effect, such amount shall be held
by such Guarantor in trust for the Guaranteed Creditors, and shall,
forthwith upon receipt by such Guarantor, be turned over to the
Administrative Agent in the exact form received by such
Guarantor (duly indorsed by such Guarantor to the Administrative
Agent, if required), to be applied against the Borrower
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Obligations, whether matured or unmatured, in
accordance with Section 11.02(c) of the Credit
Agreement.
Section 2.04
Amendments, Etc. with respect to the Borrower Obligations
. Each Guarantor shall remain obligated hereunder, and
such Guarantor’s obligations hereunder shall not be released,
discharged or otherwise affected, notwithstanding that, without any
reservation of rights against any Guarantor and without notice to,
demand upon or further assent by any Guarantor (which notice,
demand and assent requirements are hereby expressly waived by such
Guarantor), (a) any demand for payment of any of the Borrower
Obligations made by any Guaranteed Creditor may be rescinded
by such Guaranteed Creditor or otherwise and any of the Borrower
Obligations continued; (b) the Borrower Obligations, the
liability of any other Person upon or for any part thereof or
any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part,
be renewed, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by, or any indulgence or
forbearance in respect thereof granted by, any Guaranteed Creditor;
(c) any Guaranteed Document may be amended, modified,
supplemented or terminated, in whole or in part, as the Guaranteed
Creditors may deem advisable from time to time; (d) any
collateral security, guarantee or right of offset at any time held
by any Guaranteed Creditor for the payment of the Borrower
Obligations may be sold, exchanged, waived, surrendered or
released; (e) any additional guarantors, makers or endorsers
of the Borrowers’ Obligations may from time to time be
obligated on the Borrowers’ Obligations or any additional
security or collateral for the payment and performance of the
Borrowers’ Obligations may from time to time secure the
Borrowers’ Obligations; and (f) any other event shall
occur which constitutes a defense or release of sureties generally.
No Guaranteed Creditor shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as
security for the Borrower Obligations or for the guarantee
contained in this ARTICLE II or any Property subject
thereto.
Section 2.05
Waivers . Each Guarantor hereby waives any and
all notice of the creation, renewal, extension or accrual of any of
the Borrower Obligations and notice of or proof of reliance by any
Guaranteed Creditor upon the guarantee contained in this
ARTICLE II or acceptance of the guarantee contained in this
ARTICLE II; the Borrower Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon
the guarantee contained in this ARTICLE II and no notice of
creation of the Borrower Obligations or any extension of credit
already or hereafter contracted by or extended to the Borrowers
need be given to any Guarantor; and all dealings between any
Borrower and any of the Guarantors, on the one hand, and the
Guaranteed Creditors, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance
upon the guarantee contained in this ARTICLE II. Each
Guarantor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon any Borrower
or any of the Guarantors with respect to the Borrower
Obligations.
Section 2.06
Guaranty Absolute and Unconditional .
(a)
Each Guarantor understands and agrees that the guarantee contained
in this ARTICLE II is, and shall be construed as, a
continuing, completed, absolute and unconditional guarantee of
payment, and each Guarantor hereby waives any defense of a surety
or guarantor or any other obligor on any obligations arising in
connection with or in respect of
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any
of the following and hereby agrees that its obligations hereunder
shall not be discharged or otherwise affected as a result of, any
of the following:
(i)
the invalidity or unenforceability of any Guaranteed Document, any
of the Borrower Obligations or any other collateral security
therefor or guarantee or right of offset with respect the
