Exhibit 10.2
INDEMNIFICATION AGREEMENT
     This INDEMNIFICATION AGREEMENT made and entered into as of
                     (“Agreement”), by and between EXTERRAN HOLDINGS, INC., a
Delaware corporation (“Company”), and                      (“Indemnitee”).
W I T N E S S E T H:
     WHEREAS, highly skilled and competent persons are becoming more reluctant
to serve public corporations as directors or officers unless they are provided
with adequate protection through insurance and indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of a corporation; and
     WHEREAS, uncertainties relating to indemnification have increased the
difficulty of attracting and retaining such persons; and
     WHEREAS, the Board of Directors has determined that the inability to
attract and retain such persons is detrimental to the best interests of the
Company’s stockholders and that the Company should act to assure such persons
that there will be increased certainty of such protection in the future; and
     WHEREAS, while the Amended and Restated Bylaws of the Company (the
“Bylaws”) require indemnification of the officers and directors of the Company,
the Bylaws and the General Corporation Law of the State of Delaware (the “DGCL”)
expressly provide that the indemnification provisions set forth therein are not
exclusive, and thereby contemplate that contracts may be entered into between
the Company and its directors, officers and other persons with respect to
indemnification; and
     WHEREAS, Indemnitee does not regard the protection available under the
Bylaws and through insurance as adequate in the present circumstances, and may
not be willing to serve as an officer, director, employee or agent without
adequate protection, and the Company desires Indemnitee to serve in one or more
such capacities; and
     WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify Indemnitee to the fullest extent
permitted by applicable law so that Indemnitee will serve or continue to serve
the Company free from undue concern that Indemnitee will not be so indemnified;
and
     WHEREAS, Indemnitee is willing to serve and to take on additional service
for or on behalf of the Company on the condition that Indemnitee be so
indemnified; and

 

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     WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws
and any resolutions adopted pursuant thereto, and shall not be deemed a
substitute therefor, nor to diminish or abrogate any rights of Indemnitee
thereunder.
     NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
     Section 1. Services by Indemnitee. Indemnitee agrees to serve as a
director, officer, employee or agent of the Company. This Agreement does not
create or otherwise establish any right on the part of Indemnitee to be and
continue to be nominated to be a director, officer, employee or agent of the
Company and does not create an employment contract between the Company and
Indemnitee.
     Section 2. Indemnification. The Company shall indemnify Indemnitee to the
fullest extent permitted by applicable law in effect on the date hereof or as
such laws may from time to time be amended. Without diminishing the scope of the
indemnification provided by this Section 2, the rights of indemnification of
Indemnitee provided hereunder shall include but shall not be limited to those
rights, except to the extent expressly prohibited by applicable law.
     Section 3. Action or Proceeding Other Than an Action by or in the Right of
the Company. Indemnitee shall be entitled to the indemnification rights provided
in this Section 3 if Indemnitee is a party to or participant in or is threatened
to be made a party to or participant in any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative in nature, other than an action by or in the right of the Company
to procure a judgment in its favor, by reason of the fact that Indemnitee is or
was a director, officer, employee, agent, or fiduciary of the Company or is or
was serving at the request of the Company as a director, officer, employee,
agent, or fiduciary of any other entity or by reason of anything done or not
done by him or her in any such capacity. Pursuant to this Section 3, Indemnitee
shall be indemnified to the fullest extent permitted by applicable law against
expenses (including attorneys’ fees and disbursements), judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by
Indemnitee in connection with such action, suit or proceeding (including, but
not limited to, the investigation, defense or appeal thereof or any claim, issue
or matter therein), if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee’s conduct was unlawful.
     Section 4. Actions by or in the Right of the Company. Indemnitee shall be
entitled to the indemnification rights provided in this Section 4 if Indemnitee
is a person who was or is made a party to or participant in or is threatened to
be made a party to or participant in any threatened, pending or completed action
or suit brought by or in the right of the Company to procure a judgment in its
favor by reason of the fact that Indemnitee is or was a director, officer,
employee, agent, or fiduciary of the Company or is or was serving at the request
of the Company as a director, officer, employee, agent, or fiduciary of any
other entity by reason of anything done or not done by Indemnitee in any such
capacity. Pursuant to this Section 4, Indemnitee shall be indemnified to the
fullest extent permitted by applicable law against expenses (including
attorneys’ fees and disbursements) actually and reasonably incurred by
Indemnitee in connection

 

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with such action or suit (including, but not limited to, the investigation,
defense, settlement or appeal thereof or any claim, issue or matter therein) if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in or not opposed to the best interests of the Company; provided, however,
that no such indemnification shall be made in respect of any claim, issue or
matter as to which Indemnitee shall have been finally adjudged by a court to be
liable to the Company, unless, and only to the extent that, the Court of
Chancery of the State of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite such adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnification for such expenses which such court
shall deem proper.
     Section 5. Indemnification for Expenses of Successful Party.
Notwithstanding the other provisions of this Agreement, to the extent that
Indemnitee has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Section 3 or 4 hereof, or in defense
of any claim, issue or matter therein, Indemnitee shall be indemnified against
all expenses (including attorneys’ fees and disbursements) actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection
therewith. For purposes of this Section and Section 6 below, and without
limitation, the termination of any claim, issue or matter in any such action,
suit or proceeding by dismissal, with or without prejudice, shall be deemed to
be a successful result as to such claim, issue or matter.
     Section 6. Partial Indemnification. If Indemnitee is only partially
successful in the defense, investigation, settlement or appeal of any action,
suit, investigation or proceeding described in Section 4 hereof, and as a result
is not entitled under Section 5 hereof to indemnification by the Company for the
total amount of the expenses (including attorneys’ fees and disbursements),
judgments, penalties, fines, and amounts paid in settlement actually and
reasonably incurred by Indemnitee, the Company shall nevertheless indemnify
Indemnitee, as a matter of right pursuant to Section 5 hereof, to the extent
Indemnitee has been partially successful. If the Indemnitee is only partially
successful in any such action, suit, investigation or proceeding, the Company
shall also indemnify Indemnitee, to the fullest extent permitted by applicable
law, against all expenses (including attorneys’ fees and disbursements)
reasonably incurred in connection with a claim, issue or matter related to any
claim, issue or matter on which the Indemnitee was successful.
     Section 7. Indemnification for Expenses of a Witness. To the extent that
Indemnitee is, by reason of Indemnitee’s Corporate Status (as hereinafter
defined), a witness in any proceeding, Indemnitee shall be indemnified by the
Company against all expenses actually and reasonably incurred by Indemnitee or
on Indemnitee’s behalf in connection therewith.
     Section 8. Additional Indemnification.
     (a) Notwithstanding any limitation in Sections 3, 4, 5 or 6 hereof, the
Company shall indemnify Indemnitee to the fullest extent permitted by applicable
law if Indemnitee is a party to or threatened to be made a party to any action,
suit or proceeding (including any action, suit or proceeding by or in the right
of the Company to procure a judgment in its favor) against all expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by Indemnitee in connection with the action, suit or proceeding.

 

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     (b) For purposes of Section 8(a), the meaning of the phrase “to the fullest
extent permitted by applicable law” shall include, but not be limited to:
     (i) to the fullest extent permitted by the provision of the DGCL that
authorizes or contemplates additional indemnification by agreement, or the
corresponding provision of any amendment to or replacement of the DGCL, and
     (ii) to the fullest extent authorized or permitted by any amendments to or
replacements of the DGCL adopted after the date of this Agreement that increase
the extent to which a corporation may indemnify its officers and directors.
     Section 9. Exclusions. Notwithstanding any provision of this Agreement, the
Company shall not be obligated under this Agreement to make any indemnity (and,
with respect to clause (c) below, advancement of expenses) in connection with
any claim made against Indemnitee:
     (a) for which payment has actually been made to or on behalf of Indemnitee
under any insurance policy or other indemnity provision, except with respect to
any excess beyond the amount paid under any insurance policy or other indemnity
provision; or
     (b) for (i) an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act (as hereinafter defined) or similar
provisions of state statutory law or common law, or (ii) any reimbursement of
the Company by the Indemnitee of any bonus or other incentive-based or
equity-based compensation or of any profits realized by the Indemnitee from the
sale of securities of the Company, as required in each case under the Exchange
Act (including any such reimbursements that arise from an accounting restatement
of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the
“Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the
purchase and sale by Indemnitee of securities in violation of Section 306 of the
Sarbanes-Oxley Act), or
     (c) except as provided in Section 13 of this Agreement, in connection with
any action, suit or proceeding (or any part thereof) initiated by Indemnitee,
including any action, suit or proceeding (or any part thereof) initiated by
Indemnitee against the Company or its directors, officers, employees or other
indemnitees, unless (i) the Board of Directors authorized the action, suit or
proceeding (or any part thereof) prior to its initiation or (ii) the Company
provides the indemnification or advancement of expenses, in its sole discretion,
pursuant to the powers vested in the Company under applicable law.
     Section 10. Determination of Entitlement to Indemnification.
     (a) Upon written request by Indemnitee for indemnification pursuant to
Section 3 or 4 hereof, the entitlement of the Indemnitee to indemnification
pursuant to the terms of this Agreement shall be determined by the following
person or persons who shall be empowered to make such determination: (i) if a
Change of Control shall have occurred, by Independent Counsel (as hereinafter
defined) in a written opinion to the Board of Directors, a copy of which shall
be delivered to Indemnitee, or (ii) if a Change of Control shall not have

 

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occurred, (A) by the Board of Directors, by a majority vote of the Disinterested
Directors (as hereinafter defined) even if less than a quorum; or (B) if there
are no such Disinterested Directors or if such Disinterested Directors so
direct, by Independent Counsel in a written opinion to the Board of Directors, a
copy of which shall be delivered to Indemnitee; or (C) if so directed by the
Board of Directors, by the stockholders of the Company. Such determination of
entitlement to indemnification shall be made not later than 60 days after
receipt by the Company of a written request for indemnification. Such request
shall include documentation or information which is necessary for such
determination and which is reasonably available to Indemnitee. To the fullest
extent not prohibited by law, any expenses (including attorneys’ fees) incurred
by Indemnitee in connection with Indemnitee’s request for indemnification
hereunder shall be borne by the Company, and the Company hereby indemnifies and
agrees to hold Indemnitee harmless therefrom irrespective of the outcome of the
determination of Indemnitee’s entitlement to indemnification. If the person
making such determination shall determine that Indemnitee is entitled to
indemnification as to part (but not all) of the application for indemnification,
such person shall reasonably prorate such partial indemnification among such
claims, issues or matters.
     (b) In the event the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 10(a) hereof, the Independent
Counsel shall be selected as provided in this Section 10(b). If a Change of
Control shall not have occurred, the Independent Counsel shall be selected by
the Board of Directors, and the Company shall give written notice to Indemnitee
advising Indemnitee of the identity of the Independent Counsel so selected. If a
Change of Control shall have occurred, the Independent Counsel shall be selected
by Indemnitee (unless Indemnitee shall request that such selection be made by
the Board of Directors, in which event the preceding sentence shall apply), and
Indemnitee shall give written notice to the Company advising it of the identity
of the Independent Counsel so selected. In either event, Indemnitee or the
Company, as the case may be, may, within ten (10) days after such written notice
of selection shall have been given, deliver to the Company or to Indemnitee, as
the case may be, a written objection to such selection; provided, however, that
such objection may be asserted only on the ground that the Independent Counsel
so selected does not meet the requirements of “Independent Counsel” as defined
herein, and the objection shall set forth with particularity the factual basis
of such assertion. Absent a proper and timely objection, the person so selected
shall act as Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court has determined
that such objection is without merit. If, within twenty (20) days after the
later of submission by Indemnitee of a written request for indemnification
pursuant to Section 10(a) hereof and the final disposition of the action, suit
or proceeding, no Independent Counsel shall have been selected and not objected
to, either the Company or Indemnitee may petition a court of competent
jurisdiction for resolution of any objection which shall have been made by the
Company or Indemnitee to the other’s selection of Independent Counsel and/or for
the appointment as Independent Counsel of a person selected by the Court or by
such other person as the Court shall designate, and the person with respect to
whom all objections are so resolved or the person so appointed shall act as
Independent Counsel under Section 10(a) hereof. Upon the due commencement of any
judicial proceeding or arbitration pursuant to Section 13 of this Agreement,
Independent Counsel shall be discharged

 

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and relieved of any further responsibility in such capacity (subject to the
applicable standards of professional conduct then prevailing).
     Section 11. Presumptions and Effect of Certain Proceedings.
     (a) The Secretary of the Company shall, promptly upon receipt of
Indemnitee’s request for indemnification, advise in writing the Board of
Directors or such other person or persons empowered to make the determination as
provided in Section 10 that Indemnitee has made such request for
indemnification. Upon making such request for indemnification, Indemnitee shall
be presumed to be entitled to indemnification hereunder and the Company shall
have the burden of proof in the making of any determination contrary to such
presumption. If the person or persons so empowered to make such determination
shall have failed to make the requested indemnification within 60 days after
receipt by the Company of such request, the requisite determination of
entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be entitled to such indemnification, to the fullest extent not prohibited
by law and absent actual and material fraud in the request for indemnification;
provided, however, that such 60-day period may be extended for a reasonable
time, not to exceed an additional thirty (30) days, if the person or persons so
empowered to make the determination with respect to entitlement to
indemnification in good faith requires such additional time to obtain or
evaluate documentation and/or information relating thereto; and provided,
further, that the foregoing provisions of this Section 11 shall not apply (i) if
the determination of entitlement to indemnification is to be made by the
stockholders pursuant to Section 10(a) of this Agreement and if (A) within
fifteen (15) days after receipt by the Company of the request for such
determination the Board has resolved to submit such determination to the
stockholders for their consideration at an annual meeting thereof to be held
within seventy-five (75) days after such receipt and such determination is made
thereat, or (B) a special meeting of stockholders is called within fifteen
(15) days after such receipt for the purpose of making such determination, such
meeting is held for such purpose within sixty (60) days after having been so
called and such determination is made thereat, or (ii) if the determination of
entitlement to indemnification is to be made by Independent Counsel pursuant to
Section 10(a) of this Agreement. The termination of any action, suit,
investigation or proceeding described in Section 3 or 4 hereof by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself: (x) create a presumption that Indemnitee did
not act in good faith and in a manner which Indemnitee reasonably believed to be
in or not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, that Indemnitee had reasonable cause to believe
that his or her conduct was unlawful; or (y) otherwise adversely affect the
rights of Indemnitee to indemnification except as may be provided herein or by
applicable law.
     (b) For purposes of any determination of good faith, Indemnitee shall be
deemed to have acted in good faith if Indemnitee’s action is based on the
records or books of account of the Company and/or its affiliates, including
financial statements, or on information supplied to Indemnitee by the officers
of the Company and/or its affiliates in the course of their duties, or on the
advice of legal counsel for the Company and/or its affiliates or on information
or records given or reports made to the Company and/or its affiliates by an
independent certified public accountant or by an appraiser or other expert
selected with the reasonable care by the Company and/or an affiliate thereof.
The provisions of this Section 11(b) shall not be deemed to

 

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be exclusive or to limit in any way the other circumstances in which the
Indemnitee may be deemed to have met the applicable standard of conduct set
forth in this Agreement.
     (c) The knowledge and/or actions, or failure to act, of any director,
officer, agent or employee of the Company or any affiliate thereof shall not be
imputed to Indemnitee for purposes of determining the right to indemnification
under this Agreement.
     Section 12. Advancement of Expenses. All reasonable expenses incurred by
Indemnitee (including attorneys’ fees, retainers and advances of disbursements
required of Indemnitee) in defending or otherwise participating in (including as
a witness) any civil, criminal, administrative or investigative action, suit or
proceeding shall be paid by the Company in advance of the final disposition of
such action, suit or proceeding, at the request of Indemnitee within twenty days
after the receipt by the Company of a statement or statements from Indemnitee
requesting such advance or advances from time to time (whether prior to or after
final disposition of any action, suit or proceeding). Such statement or
statements shall reasonably evidence the expenses incurred by Indemnitee in
connection therewith. The Indemnitee shall qualify for advances upon the
execution and delivery to the Company of this Agreement, which shall constitute
an undertaking by or on behalf of Indemnitee to repay such advances if it is
ultimately determined that Indemnitee is not entitled to be indemnified against
such expenses and costs by the Company as provided by this Agreement or
otherwise. All advances provided to Indemnitee hereunder shall be unsecured and
interest free, and such advances shall be made without regard to Indemnitee’s
ability to repay the expenses and without regard to Indemnitee’s ultimate
entitlement to indemnification under the other provisions of this Agreement.
Indemnitee’s entitlement to such expenses shall include those incurred in
connection with any proceeding by Indemnitee seeking an adjudication or award in
arbitration pursuant to Section 13 of this Agreement. The Company shall have the
burden of proof in any determination under this Section 12.
     Section 13. Remedies of Indemnitee in Cases of Determination Not to
Indemnify or to Advance Expenses. In the event that a determination is made that
Indemnitee is not entitled to indemnification hereunder or if payment has not
been timely made following a determination of entitlement to indemnification
pursuant to Section 10 or 11, or if expenses are not advanced pursuant to
Section 12, Indemnitee shall be entitled to a final adjudication in the Delaware
Court of Chancery. Alternatively, Indemnitee, at Indemnitee’s option, may seek
an award in arbitration to be conducted by a single arbitrator pursuant to the
rules of the American Arbitration Association, such award to be made within
sixty days following the filing of the demand for arbitration. The Company shall
not oppose Indemnitee’s right to seek any such adjudication or award in
arbitration or any other claim. Such judicial proceeding or arbitration shall be
made de novo and Indemnitee shall not be prejudiced by reason of a determination
(if so made) that Indemnitee is not entitled to indemnification. If a
determination is made or deemed to have been made pursuant to the terms of
Section 10 or 11 hereof that Indemnitee is entitled to indemnification, the
Company shall be bound by such determination and is precluded from asserting
that such determination has not been made or that the procedure by which such
determination was made is not valid, binding and enforceable. The Company
further agrees to stipulate in any such court or before any such arbitrator that
the Company is bound by all the provisions of this Agreement and is precluded
from making any assertion to the contrary. If the

 

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court or arbitrator shall determine that Indemnitee is entitled to any
indemnification hereunder, the Company shall, to the fullest extent not
prohibited by applicable law, pay all expenses (including attorneys’ fees and
disbursements) actually incurred by Indemnitee in connection with such
adjudication or award in arbitration (including, but not limited to, any
appellate proceedings).
     Section 14. Other Rights to Indemnification. The indemnification and
advancement of expenses (including attorneys’ fees) provided by this Agreement
shall not be deemed exclusive of any other rights to which Indemnitee may now or
in the future be entitled under any provision of the by-laws, agreement,
provision of the Certificate of Incorporation, as amended, vote of stockholders
or Disinterested Directors, provision of law, or otherwise; provided, however,
that this Agreement supersedes any other Agreement that has been entered into
between the Company and the Indemnitee which has as its principal purpose the
indemnification by the Company of Indemnitee.
     Section 15. Attorneys’ Fees and Other Expenses To Enforce Agreement. In the
event that Indemnitee is subject to or intervenes in any proceeding in which the
validity or enforceability of this Agreement is at issue or seeks an
adjudication or award in arbitration to enforce Indemnitee’s rights under, or to
recover damages for breach of, this Agreement, Indemnitee, if Indemnitee
prevails in whole or in part in such action, shall be entitled to recover from
the Company and shall be indemnified by the Company against, any actual expenses
for attorneys’ fees and disbursements reasonably incurred by Indemnitee,
provided that in bringing the advancement action, Indemnitee acted in good
faith.
     Section 16. Duration of Agreement. This Agreement shall continue until and
terminate upon the later of: (a) six (6) years after the date that Indemnitee
shall have ceased to serve as a director, officer, employee or agent of the
Company or, at the request of the Company, as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust employee benefit
plan or other enterprise or (b) one (1) year after the final termination of any
proceeding then pending in respect of which Indemnitee is granted rights of
indemnification or advancement of expenses hereunder and of any proceeding
commenced by Indemnitee pursuant to this Agreement relating thereto. This
Agreement shall be binding upon the Company and its successors and assigns
(including any transferee of all or substantially all of its assets and any
successor by merger of operation of law) and shall inure to the benefit of
Indemnitee and Indemnitee’s spouse, assigns, heirs, devises, executors,
administrators or other legal representatives.
     Section 17. Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the remaining provisions of
this Agreement (including without limitation, all portions of any paragraphs of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby; and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any section of this Agreement containing any such provision held to
be invalid, illegal or unenforceable, that are not

 

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themselves invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or
unenforceable.
     Section 18. Identical Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.
Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.
     Section 19. Headings. The headings of the sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
     Section 20. Definitions. For purposes of this Agreement:
          (a) “Beneficial Owner” shall have the meaning given to such term in
Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner
shall exclude any Person otherwise becoming a Beneficial Owner by reason of the
stockholders of the Company approving a merger of the Company with another
entity.
          (b) “Change of Control” of the Company shall mean:
     (i) The acquisition by any Person of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 40% or more of
either (A) the then outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided,
however, that for purposes of this subsection (i), any acquisition by any Person
pursuant to a transaction which complies with clause (A) of subsection (iii) of
this definition shall not constitute a Change of Control; or
     (ii) Individuals, who, as of the date hereof, constitute the Board of
Directors (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board of Directors; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company’s stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered for purposes of this definition as though such individual was a
member of the Incumbent Board, but excluding, for these purposes, any such
individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board of Directors; or

 

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     (iii) The consummation of a reorganization, merger or consolidation
involving the Company or any of its subsidiaries, or the sale, lease or other
disposition of all or substantially all of the assets of the Company and its
subsidiaries, taken as a whole (other than to an entity wholly owned, directly
or indirectly, by the Company) (each, a “Corporate Transaction”), in each case,
unless, following such Corporate Transaction, (A) all or substantially all of
the individuals and entities who were the beneficial owners of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such Corporate Transaction beneficially own, directly or indirectly, more
than 60% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the Resulting
Corporation in substantially the same proportions as their ownership,
immediately prior to such Corporate Transaction, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the case may be,
and (B) at least a majority of the members of the board of directors of the
Resulting Corporation were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board of Directors,
providing for such Corporate Transaction. Notwithstanding the foregoing, neither
the sale, lease or other disposition of assets by the Company or its
subsidiaries to the Partnership or its subsidiaries or their successors nor the
sale, lease or other disposition of any interest in the Partnership, its general
partner or its subsidiaries or their successors shall, in and of itself,
constitute a Change of Control for purposes of this Agreement.
          (c) “Corporate Status” shall mean the status of a person who is or was
a director, officer, employee, agent or fiduciary of the Company or any
majority-owned subsidiary or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise that such person is or
was serving at the request of the Company.
          (d) “Disinterested Director” shall mean a director of the Company who
is not or was not a party to the action, suit, investigation or proceeding in
respect of which indemnification is being sought by Indemnitee.
          (e) “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.
          (f) “Independent Counsel” means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party (other than with respect
to matters concerning the Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any other party
to the proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Independent Counsel” shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a

 

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conflict of interest in representing either the Company or Indemnitee in an
action to determine Indemnitee’s rights under this Agreement. The Company agrees
to pay the reasonable fees and expenses of the Independent Counsel referred to
above and to fully indemnify such counsel against any and all expenses, claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
          (g) “Partnership” shall mean Exterran Partners, L.P. (formerly named
Universal Compression Partners, L.P.).
          (h) “Person” shall mean any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.
          (i) “Resulting Corporation” means (1) the Company or its successor, or
(2) if as a result of a Corporate Transaction the Company or its successor
becomes a subsidiary of another entity, then such entity or the parent of such
entity, as applicable, or (3) in the event of a Corporate Transaction involving
the sale, lease or other disposition of all or substantially all of the assets
of the Company and its subsidiaries, taken as a whole, then the transferee of
such assets or the parent of such transferee, as applicable, in such Corporate
Transaction.
     Section 21. Modification and Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
     Section 22. Notice by Indemnitee. (a) Indemnitee agrees promptly to notify
the Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any matter
which may be subject to indemnification covered hereunder, either civil,
criminal, administrative, investigative or otherwise, provided, however, that
the failure to so notify the Company will not relieve the Company from any
liability it may have to Indemnitee except to the extent that such failure
materially prejudices the Company’s ability to defend such claim. With respect
to any such action, suit, proceeding, inquiry or investigation as to which
Indemnitee notifies the Company of the commencement thereof:
               (i) The Company will be entitled to participate therein at its
own expense; and
               (ii) Except as otherwise provided below, to the extent that it
may wish, the Company jointly with any other indemnifying party similarly
notified will be entitled to assume the defense thereof, with counsel reasonably
satisfactory to Indemnitee. After notice from the Company to Indemnitee of its
election so to assume the defense thereof, the Company will not be liable to
Indemnitee under this Agreement for any legal or other expenses subsequently
incurred by Indemnitee in connection with the defense thereof other than

 

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reasonable costs of investigation or as otherwise provided below. Indemnitee
shall have the right to employ Indemnitee’s own counsel in such action, suit,
proceeding, inquiry or investigation, but the fees and expenses of such counsel
incurred after notice from the Company of its assumption of the defense thereof
shall be at the expense of Indemnitee and not subject to indemnification
hereunder unless (x) the employment of counsel by Indemnitee has been authorized
by the Company; (y) in the reasonable opinion of counsel to Indemnitee there is
or may be a conflict of interest between the Company and Indemnitee in the
conduct of the defense of such action; or (z) the Company shall not in fact have
employed counsel to assume the defense of such action, in each of which cases
the fees and expenses of counsel shall be at the expense of the Company.
               (b) Neither the Company nor the Indemnitee shall settle any claim
without the prior written consent of the other (which shall not be unreasonably
withheld).
     Section 23. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (a) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed or if (b) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:
     (i) If to Indemnitee, to the address set forth below his or her signature.
     (ii) If to the Company to:
Exterran Holdings, Inc.
4444 Brittmoore
Houston, Texas 77041
Attn: Chief Executive Officer
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.
     Section 24. Contribution. To the fullest extent permissible under
applicable law, if the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be
paid in settlement and/or for expenses, in connection with any claim relating to
an indemnifiable event under this Agreement, in such proportion as is deemed
fair and reasonable in light of all of the circumstances of such action, suit or
proceeding in order to reflect (i) the relative benefits received by the Company
and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to
such action, suit or proceeding; and/or (ii) the relative fault of the Company
(and its directors, officers, employees and agents) and Indemnitee in connection
with such event(s) and/or transaction(s).
     Section 25. Governing Law; Consent to Jurisdiction. The parties agree that
this Agreement shall be governed by, and construed and enforced in accordance
with, the laws of

 

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the State of Delaware, without regard to its conflict of laws rules. Except with
respect to any arbitration commenced by Indemnitee pursuant hereto, the Company
and Indemnitee hereby irrevocably and unconditionally (i) consent to the
exclusive jurisdiction and venue of the federal and state courts located in
Houston, Texas, for any action or proceeding arising out of or in connection
with this Agreement, and agree that any such action or proceeding shall not be
heard in any other state or federal court in the United States of America or any
court in any other country, (ii) waive any objection to the laying of venue of
any such action or proceeding in any such federal or state court located in
Houston, Texas, (iii) waive, and agree not to plead or to make, any claim that
any such action or proceeding brought in any such court has been brought in an
improper or inconvenient forum, (iv) waive the right to trial by jury in any
such action or proceeding, and (v) consent to service of process by first class
certified mail, return receipt requested, postage prepaid, to the address at
which such party is to receive notice in accordance with Section 23.
     Section 26. Enforcement.
     (a) The Company expressly confirms and agrees that it has entered into this
Agreement and assumed the obligations imposed on it hereby in order to induce
Indemnitee to serve as a director, officer, employee or agent of the Company
(or, at the request of the Company, as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust employee benefit plan or
other enterprise), and the Company acknowledges that Indemnitee is relying upon
this Agreement in serving the Company in such capacity.
     (b) This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral, written and implied, between the parties
hereto with respect to the subject matter hereof; provided, however, that this
Agreement is a supplement to and in furtherance of the Certificate of
Incorporation of the Company, the Bylaws and applicable law, and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.
     Section 27. Miscellaneous. Use of the masculine pronoun shall be deemed to
include usage of the feminine pronoun where appropriate. The headings of the
paragraphs of this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the construction
thereof.

 

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.

            EXTERRAN HOLDINGS, INC.
      By:           Name:           Title:             [NAME]

 
(Signature)
                       
Address: