Exhibit 10.5
Confidential Treatment has been requested for the redacted portions of this
agreement. The redactions are indicated with six asterisks (******). A complete
version of this agreement has been filed separately with the Securities and
Exchange Commission.
 
 
SECOND AMENDED AND RESTATED
OMNIBUS AGREEMENT
AMONG
EXTERRAN HOLDINGS, INC.
EXTERRAN ENERGY SOLUTIONS, L.P.
EXTERRAN GP LLC
EXTERRAN GENERAL PARTNER, L.P.
EXTERRAN PARTNERS, L.P.
AND
EXLP OPERATING LLC
 
 

 

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TABLE OF CONTENTS

         
ARTICLE I DEFINITIONS
    2  
1.1 Definitions
    2  
 
       
ARTICLE II NON-COMPETITION AND BUSINESS OPPORTUNITIES
    10  
2.1 Restricted Business
    10  
2.2 Overlapping Customers
    11  
2.3 Permitted Exceptions
    11  
2.4 Restricted Business Procedures
    14  
2.5 Scope of the Prohibition
    16  
2.6 New Customers
    16  
2.7 Rental Arrangements
    17  
2.8 Lease Takeover Arrangements
    17  
2.9 Enforcement
    17  
2.10 Termination
    18  
 
       
ARTICLE III SERVICES
    18  
3.1 Provision, Allocation and Reimbursement for Services
    18  
3.2 Limitations on Reimbursement
    19  
 
       
ARTICLE IV COMPRESSION EQUIPMENT TRANSFERS
    20  
4.1 Transfer Mechanics
    20  
4.2 Settlement; Appraised Value
    22  
4.3 [Reserved]
    23  
4.4 Like-Kind Exchange Treatment
    23  
4.5 Other Sales Permitted
    24  
4.6 Termination
    24  
4.7 Proration of Ad Valorem Taxes
    24  
 
       
ARTICLE V NEWLY FABRICATED COMPRESSION EQUIPMENT PURCHASES
    24  
 
       
ARTICLE VI LICENSE
    25  
6.1 Grant of License
    25  
6.2 Restrictions on Marks
    25  
6.3 Ownership
    25  
6.4 Confidentiality
    25  
6.5 Estoppel
    26  
6.6 Warranties; Disclaimers
    26  
6.7 In the Event of Termination
    26  
 
       
ARTICLE VII INDEMNIFICATION
    27  
7.1 Environmental Indemnification
    27  
7.2 Additional Indemnification
    28  
7.3 Limitations Regarding Indemnification
    29  
7.4 Indemnification Procedures
    29  
 
       
ARTICLE VIII MISCELLANEOUS
    30  

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8.1 Choice of Law; Submission to Jurisdiction
    30  
8.2 Notice
    30  
8.3 Entire Agreement
    31  
8.4 Termination
    31  
8.5 Effect of Waiver or Consent
    31  
8.6 Amendment or Modification
    31  
8.7 Assignment; Third Party Beneficiaries
    31  
8.8 Counterparts
    32  
8.9 Severability
    32  
8.10 Gender, Parts, Articles and Sections
    32  
8.11 Further Assurances
    32  
8.12 Withholding or Granting of Consent
    32  
8.13 Laws and Regulations
    32  
8.14 Negation of Rights of Limited Partners, Assignees and Third Parties
    32  
8.15 No Recourse Against Officers or Directors
    32  

EXHIBITS AND SCHEDULES
Exhibit 1 – Form Bill of Sale
Exhibit 2 – Form Lease Agreement
Exhibit 3 – Form Like-Kind Exchange Bill of Sale
Schedule 1.1 – Fixed Margin Percentage
Schedule 3.1(a) – Services
Schedule 3.1(b) – Excluded Services
Schedule 6.1 – Marks
Schedule A – Certain Exterran Customers
Schedule B – Exterran Overlapping Customers
Schedule C – Certain Partnership Customers
Schedule D – Partnership Overlapping Customers
 ii

 

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SECOND AMENDED AND RESTATED
OMNIBUS AGREEMENT
     THIS SECOND AMENDED AND RESTATED OMNIBUS AGREEMENT is entered into on, and
effective as of, November 10, 2009 (the “Effective Date”), and is by and among
Exterran Holdings, Inc., a Delaware corporation (“Exterran”), Exterran Energy
Solutions, L.P., a Delaware limited partnership (“EESLP”), Exterran GP LLC, a
Delaware limited liability company formerly named UCO GP, LLC (“GP LLC”),
Exterran General Partner, L.P., a Delaware limited partnership formerly named
UCO General Partner, L.P. (the “General Partner”), Exterran Partners, L.P., a
Delaware limited partnership (the “Partnership”) and EXLP Operating LLC (the
“Operating Company”). The above-named entities are sometimes referred to in this
Agreement each as a “Party” and collectively as the “Parties.”
RECITALS:
     The Parties or their predecessors entered into that certain First Amended
and Restated Omnibus Agreement dated as of August 20, 2007 (the “Omnibus
Agreement”).
     The Parties entered into that certain First Amendment to the Omnibus
Agreement dated as of July 30, 2008 (the “First Amendment”) in connection with a
reorganization that occurred on May 31, 2008.
     The Parties desire to amend and restate in its entirety the Omnibus
Agreement as amended by the First Amendment to evidence the following additional
agreements among the parties:

  1.   to increase the maximum selling, general and administrative costs that
may be allocated to the Partnership in Section 3.2(a) to take into account the
contribution of certain compression services agreements and compression
equipment (the “New Assets”) to the Partnership in the transaction (the
“Transaction”) contemplated by that certain Contribution, Conveyance and
Assumption Agreement by and among Exterran, Exterran Energy Corp., Exterran
General Holdings LLC, EESLP, EES Leasing LLC, EXH GP LP LLC, GP LLC, EXH MLP LP
LLC, the General Partner, the Operating Company, EXLP Leasing LLC and the
Partnership, dated as of October 2, 2009 (the “2009 Contribution Agreement”);  
  2.   to restate Schedules A, B, C and D to reflect the Exterran Customers,
Exterran Overlapping Customers, Partnership Customers and Partnership
Overlapping Customers, respectively, upon consummation of the Transaction; and  
  3.   to restate Exhibits A and B as Exhibits 1 and 2 attached hereto and to
add Exhibit 3 to reflect the current forms of bill of sale, equipment lease
agreement and like-kind exchange assignment and bill of sale.

     The Conflicts Committee of the Board of Directors of GP LLC has approved
the form, terms and substance of this Agreement in accordance with the
requirements set forth in Section 8.6 of the Omnibus Agreement, as amended by
the First Amendment.

 

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     In consideration of the premises and the covenants, conditions, and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:
ARTICLE I
DEFINITIONS
     1.1 Definitions
          (a) Capitalized terms used herein but not defined shall have the
meanings given them in the Partnership Agreement.
          (b) As used in this Agreement, the following terms shall have the
respective meanings set forth below:
     “2009 Contribution Agreement” has the meaning given such term in the
introduction of this Agreement.
     “Acquired Partnership Restricted Business” has the meaning given such term
in Section 2.3(h).
     “Acquired Exterran Restricted Business” has the meaning given such term in
Section 2.3(g).
     “Acquiring Party” has the meaning given such term in Section 2.4(a).
     “Affiliate” has the meaning given to such term in the Partnership
Agreement.
     “Agreement” means this Second Amended and Restated Omnibus Agreement, as it
may be amended, modified or supplemented from time to time in accordance with
the terms hereof.
     “Appraiser” means an appraiser mutually acceptable to Exterran and the
Partnership that is independent with respect to the Exterran Entities and the
Partnership Entities and their respective affiliates within the meaning of the
code of professional ethics of the American Society of Appraisers as selected by
mutual consent of Exterran and the General Partner.
     “Appraisal” means an appraisal of Compression Equipment prepared by an
Appraiser in conformity with, and subject to, the requirements of the code of
professional ethics and standards of professional conduct of the American
Society of Appraisers. The Appraisal shall specify value based upon the cost or
income approach or a combination thereof for the Compression Equipment
appraised.
     “Appraised Value” means an amount equal to (A) either (i) the most recent
Appraisal with respect to a particular piece of Compression Equipment owned by
the USCSB or the Partnership Group at the time of the Appraisal or (ii) with
respect to a particular piece of Compression Equipment for which an Appraisal
has not been

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conducted, the Appraised Value of substantially similar Compression Equipment,
plus (B) any costs incurred by the Transferor pursuant to Section 4.1(a)(iv) to
the extent such costs include overhauls, modifications or retrofittings that are
not reflected in the value assigned to the Compression Equipment pursuant to
clause (A) above.
     “Average Horsepower” means, with respect to a particular fiscal quarter,
the quotient of (i) the sum of the aggregate amount of Compression Equipment
horsepower owned or leased by the Partnership Group (excluding units owned by
the Partnership Group but leased to USCSB) that was working and not idle on the
last day of the month immediately preceding such quarter and on the last day of
each of the three months during such quarter, divided by (ii) four.
     “Billed Party” has the meaning set forth in Section 4.7.
     “Business Day” means any day other than a Saturday, a Sunday or a day on
which banking institutions in Houston, Texas are authorized or are obligated by
law, executive order or governmental decree to be closed.
     “CCSB” means the USCSB and the non-U.S. contract compression services
business of any of the Exterran Entities, collectively.
     “Change of Control” means, with respect to any Person (the “Applicable
Person”), any of the following events: (i) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all of the Applicable Person’s assets to any other Person, unless
immediately following such sale, lease, exchange or other transfer such assets
are owned, directly or indirectly, by the Applicable Person; (ii) the
dissolution or liquidation of the Applicable Person; (iii) the consolidation or
merger of the Applicable Person with or into another Person, other than any such
transaction where (a) the outstanding Voting Securities of the Applicable Person
are changed into or exchanged for Voting Securities of the surviving Person or
its parent and (b) the holders of the Voting Securities of the Applicable Person
immediately prior to such transaction own, directly or indirectly, not less than
a majority of the outstanding Voting Securities of the surviving Person or its
parent immediately after such transaction; and (iv) a “person” or “group”
(within the meaning of Sections 13(d) or 14(d)(2) of the Exchange Act) being or
becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act) of more than 50% of all of the then outstanding Voting Securities
of the Applicable Person, except in a merger or consolidation which would not
constitute a Change of Control under clause (iii) above.
     “Closing Date” means, as applicable, the closing date of the Transaction
contemplated by the 2009 Contribution Agreement or the closing date of the
transactions contemplated by another contribution agreement by and among members
of the Exterran Entities and members of the Partnership Group relating to the
conveyance of Partnership Assets from members of the Exterran Entities to
members of the Partnership Group.
     “Code” means the Internal Revenue Code of 1986, as amended.
     “Common Unit” has the meaning given such term in the Partnership Agreement.

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     “Compression Equipment” means natural gas compressor units, together with
any tangible components thereof, all related appliances, parts, accessories,
appurtenances, accessions, additions, improvements and replacements thereto, all
other equipment or components of any nature from time to time incorporated or
installed therein and all substitutions for any of the foregoing.
     “Competitive Services” means the provision by a Person of natural gas
contract compression services to a third-party customer, whether pursuant to the
Form Compression Services Agreement or any other compression services agreement,
a lease arrangement pursuant to which such Person leases Compression Equipment
to a third-party customer and is required to provide other compression services
to such customer (whether as part of one agreement or pursuant to a lease
agreement and related services agreement) or otherwise; provided, however, that,
for the avoidance of doubt, Competitive Services do not include the fabrication
of Compression Equipment by such Person, the sale by such Person of Compression
Equipment to a third-party customer, the sale by such Person of materials, parts
or equipment that are components of or used in the operation of Compression
Equipment, the leasing by such Person of Compression Equipment without the
provision of any related services or the operation, maintenance, service, repair
or overhaul by such Person of Compression Equipment owned by a third party
customer.
     “Conflicts Committee” has the meaning given such term in the Partnership
Agreement.
     “Conversion Condition” has the meaning given such term in Section 2.4(b).
     “Cost of Sales” means any costs incurred of the type included in the “Cost
of sales (excluding depreciation expense)” line item in the consolidated
statement of operations of the Partnership prepared in accordance with GAAP, as
applied as of the date of Exterran’s most recent quarterly or annual report
filed with the Securities and Exchange Commission.
     “Cost of Sales Limit” has the meaning given such term in Section 3.2(a).
     “Covered Environmental Losses” is defined in Section 7.1.
     “Direct Compression Equipment Costs and Expenses” means those costs and
expenses directly attributable to the transportation, operation, maintenance or
repair of any Compression Equipment owned by the Partnership Group.
     “Direct Leased Compression Equipment Capitalizable Costs” means those costs
directly attributable to the maintenance or repair of any Compression Equipment
that is leased between an Exterran Entity and a member of the Partnership Group
that qualifies as a capital addition under GAAP.
     “Direct Leased Compression Equipment Expenses” means those expenses
directly attributable to the transportation, operation, maintenance or repair of
any Compression

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Equipment that is leased between an Exterran Entity and a member of the
Partnership Group that qualifies as an expense under GAAP.
     “Effective Date” has the meaning given such term in the introduction of
this Agreement.
     “Effective Time” has the meaning given such term in Section 4.1(b).
     “EESLP” has the meaning given such term in the introduction to this
Agreement.
     “Environmental Laws” means all federal, state, and local laws, statutes,
rules, regulations, orders and ordinances, legally enforceable requirements and
rules of common law relating to protection of the environment including, without
limitation, the federal Comprehensive Environmental Response, Compensation, and
Liability Act, the Superfund Amendments Reauthorization Act, the Resource
Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution
Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Safe
Drinking Water Act, the Hazardous Materials Transportation Act and other
environmental conservation and protection laws, each as amended through the
applicable Closing Date.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended.
     “Exterran” has the meaning given such term in the introduction of this
Agreement.
     “Exterran Customers” means (a) the Persons set forth on Schedule A and any
of their respective Affiliates other than Affiliates otherwise set forth on
Schedule B, C or D, (b) any Exterran Overlapping Customer once the Partnership
Entities no longer provide any Compression Services to such Exterran Overlapping
Customer and (c) any New Customer that enters into an agreement with an Exterran
Entity in accordance with Section 2.6 pursuant to which such Exterran Entity
agrees to provide Competitive Services to such New Customer. Exterran Customers
shall not include any Released Exterran Customers.
     “Exterran Entities” means Exterran and any Person (other than the
Partnership Entities) controlled, directly or indirectly, by Exterran; and
“Exterran Entity” means any of the Exterran Entities.
     “Exterran Overlapping Customers” means the Persons set forth on Schedule B
and any of their respective Affiliates other than any such Person that becomes
an Exterran Customer pursuant to clause (b) of the definition of Exterran
Customers and other than Affiliates otherwise set forth on Schedule A, C or D.
     “Exterran Restricted Business” has the meaning given such term in
Section 2.1(a).
     “Exterran Site” has the meaning given such term in Section 2.2(a).

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     “Fabricated Cost” means the total costs (other than any allocations of
general and administrative expenses) incurred in fabricating a particular item
of Compression Equipment, as determined by the books and records of Exterran,
prepared in accordance with GAAP.
     “Fixed Margin Amount” means the amount resulting from the product of
(i) the Fabricated Cost and (ii) the percentage, expressed as a decimal, set
forth on Schedule 1.1 to this Agreement, which Schedule may be amended from time
to time with the approval of the Conflicts Committee.
     “Form Bill of Sale” means the form of Bill of Sale attached hereto as
Exhibit 1, which form may be amended or replaced with a new form of Bill of Sale
from time to time as long as such amended or replacement form does not
materially conflict with the terms and provisions of this Agreement.
     “Form Compression Services Agreement” means the standard form of agreement
pursuant to which members of the Partnership Group provide Competitive Services
to Partnership Customers as of the Effective Date.
     “Form Lease Agreement” means the form of Compression Equipment Lease
Agreement attached hereto as Exhibit 2, which form may be amended or replaced
with a new form of Compression Equipment Lease Agreement from time to time as
long as such amended or replacement form does not materially conflict with the
terms and provisions of this Agreement.
     “Form Like-Kind Exchange Bill of Sale” means the form of Like-Kind Exchange
Bill of Sale attached hereto as Exhibit 3, which form may be amended or replaced
with a new form of Like-Kind Exchange Bill of Sale from time to time as long as
such amended or replacement form does not materially conflict with the terms and
provisions of this Agreement.
     “GAAP” means generally accepted accounting principles in the United States,
consistently applied.
     “General Partner” has the meaning given such term in the introduction to
this Agreement.
     “GP LLC” has the meaning given such term in the introduction to this
Agreement.
     “Hazardous Substance” means (a) any substance that is designated, defined
or classified as a hazardous waste, hazardous material, pollutant, contaminant
or toxic or hazardous substance, or that is otherwise regulated under any
Environmental Law, including, without limitation, any hazardous substance as
such term is defined under the Comprehensive Environmental Response,
Compensation, and Liability Act, as amended, and (b) petroleum, petroleum
products, crude oil, gasoline, fuel oil, motor oil, waste oil, diesel fuel, jet
fuel and other petroleum hydrocarbons whether refined or unrefined and
(c) asbestos, whether in a friable or a non-friable condition, and
polychlorinated biphenyls.

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     “Indemnified Party” means either the Partnership Group or Exterran, as the
case may be, each in its capacity as a party entitled to indemnification in
accordance with Article VII.
     “Indemnifying Party” means either the Partnership Group or Exterran, as the
case may be, each in its capacity as a party from whom indemnification may be
required in accordance with Article VII.
     “Lease Takeover Arrangement” has the meaning given such term in
Section 2.8.
     “Licensees” means, for purposes of Article VI hereof, the Partnership
Entities.
     “Licensor” means, for purposes of Article VI hereof, Exterran.
     “Liens” means any mortgages, pledges, security interests, liens, charges,
claims, restrictions, easements or other encumbrances of any nature.
     “Limit Period” means the period commencing on the Effective Date and ending
on December 31, 2010.
     “Marks” means all trademarks, trade names, logos and/or service marks
identified on Schedule 6.1 attached hereto, which Schedule may be amended from
time to time with the approval of Exterran and the Conflicts Committee.
     “New Assets” has the meaning given such term in the Recitals.
     “New Customer” means any Person that is not an Exterran Customer, a
Partnership Customer or an Overlapping Customer and that informs any of the
Parties hereto of a need for Competitive Services.
     “Non-Qualifying Business” has the meaning given to such term in
Section 2.4(b).
     “Offer” has the meaning given such term in Section 2.4(a).
     “Offer Period” has the meaning given such term in Section 2.4(b)(ii)(A).
     “Offered Assets” has the meaning given such term in Section 2.4(a).
     “Offeree” has the meaning given such term in Section 2.4(a).
     “Operating Company” has the meaning given such term in the introduction to
this Agreement.
     “Organizational Documents” means certificates or articles of incorporation,
by-laws, certificates of formation, limited liability company operating
agreements, certificates of limited partnership or limited partnership
agreements or other formation or governing documents of a particular entity.
     “Other Losses” is defined in 7.2(a).

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     “Overlapping Customer” means an Exterran Overlapping Customer or a
Partnership Overlapping Customer.
     “Partnership” has the meaning given such term in the introduction to this
Agreement.
     “Partnership Agreement” means the First Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of April 14, 2008, as such
agreement is in effect on the Closing Date of the Transaction, to which
reference is hereby made for all purposes of this Agreement. An amendment or
modification to the Partnership Agreement subsequent to the Closing Date of the
Transaction shall be given effect for the purposes of this Agreement only if it
has received the approval of the Conflicts Committee that would be required, if
any, pursuant to Section 8.6 hereof if such amendment or modification were an
amendment or modification of this Agreement.
     “Partnership Assets” means the compression services contracts, compression
services customer relationships and Compression Equipment, directly or
indirectly conveyed, contributed or otherwise transferred (but not leased) to
the Partnership Group as of a Closing Date pursuant to a contribution agreement
or pursuant to the non-lease transfer mechanics set forth in Article IV of this
Agreement.
     “Partnership Customers” means (a) the Persons set forth on Schedule C and
any of their respective Affiliates other than Affiliates otherwise set forth on
Schedule A, B or D, (b) any Partnership Overlapping Customer once the Exterran
Entities no longer provide any Compression Services to such Partnership
Overlapping Customer and (c) any New Customer that enters into an agreement with
a member of the Partnership Group in accordance with Section 2.6 pursuant to
which such member of the Partnership Group agrees to provide Competitive
Services to such New Customer. Partnership Customers shall not include any
Released Partnership Customers.
     “Partnership Entities” means GP LLC, the General Partner and each member of
the Partnership Group; and “Partnership Entity” means any of the Partnership
Entities.
     “Partnership Group” means the Partnership, the Operating Company and any
Subsidiary of the Partnership or the Operating Company.
     “Partnership Horsepower” means, with respect to a particular month, the
quotient of (i) the sum of the aggregate amount of Compression Equipment
horsepower owned or leased by the Partnership Group (excluding units owned by
the Partnership Group but leased to USCSB), regardless of whether such
Compression Equipment is working or idle, on the last day of the month
immediately preceding such month and on the last day of each of such month,
divided by (ii) two.
     “Partnership Overlapping Customer” means the Persons listed on Schedule D
and any of their respective Affiliates other than any such Person that becomes a
Partnership Customer pursuant to clause (b) of the definition of Partnership
Customers and other than Affiliates otherwise set forth on Schedule A, B or C.

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     “Partnership Restricted Business” has the meaning given such term in
Section 2.1.(b).
     “Partnership Site” has the meaning given such term in Section 2.2(a).
     “Party” or “Parties” have the meaning given such terms in the introduction
to this Agreement.
     “Percentage Interest” means, with respect to a particular month, the value
(expressed as a percentage) obtained by multiplying (i) 100 by (ii) the quotient
of (x) the Partnership Horsepower divided by (y) the Total Domestic Horsepower.
     “Permitted Liens” means (i) mechanics’, carriers’, workmen’s, repairmen’s
or other like Liens arising or incurred in the ordinary course of business,
(iii) Liens for taxes that are not due and payable or that may thereafter be
paid without penalty, (iv) Liens securing debt of a transferor that will be
released prior to or as of the date of the applicable transfer and (v) other
imperfections of title or encumbrances that, individually or in the aggregate,
could not reasonably be expected to materially interfere with the ordinary
operation of the Compression Equipment to which the Permitted Liens are
attached.
     “Person” has the meaning given such term in the Partnership Agreement.
     “Purchase Agreement” has the meaning given such term in Section 2.4(a).
     “Qualifying Business” has the meaning given such term in Section 2.4(b).
     “Released Exterran Customers” means those customers of the Exterran
Entities that are designated as “Released Exterran Customers” pursuant to
Section 2.3(h).
     “Released Partnership Customers” means those customers of the Partnership
Group that are designated as “Released Partnership Customers” pursuant to
Section 2.3(g).
     “Rental Arrangement” means an arrangement requested by a Partnership
Customer or Partnership Overlapping Customer that will necessitate an agreement
that is materially dissimilar to the Form Compression Services Agreement from a
federal income tax treatment perspective (from the Partnership’s perspective)
and that may be offered to an Exterran Entity pursuant to Section 2.7.
     “Retained Assets” means the assets and investments owned by Exterran or any
of its Affiliates that were not conveyed, contributed or otherwise transferred
to the Partnership Group pursuant to a particular contribution agreement.
     “Services” has the meaning given such term in Section 3.1(a).
     “Site” means the specific geographic site at which a particular item of
Compression Equipment engaged in Competitive Services is being utilized, as
further

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specified by the customer contract, or any schedule thereto, pursuant to which
such Competitive Services are being provided.
     “Subsidiary” has the meaning given such term in the Partnership Agreement.
     “Total Domestic Horsepower” means, with respect to a particular month, the
sum of the USCSB Horsepower and the Partnership Horsepower.
     “Transaction” has the meaning given such term in the Recitals.
     “Transferee” means a transferee of Compression Equipment pursuant to
Article IV.
     “Transferor” means a transferor of Compression Equipment pursuant to
Article IV.
     “USCSB” means the U.S. contract compression services business of any of the
Exterran Entities conducted through Exterran’s U.S. Contract Compression
Segment, excluding the business of the Partnership Entities.
     “USCSB Horsepower” means, with respect to a particular month, the quotient
of (i) the sum of the aggregate amount of Compression Equipment horsepower owned
or leased by USCSB (excluding units designated “for sale only” by the Exterran
Entities or units owned by USCSB but leased to the Partnership Group),
regardless of whether such Compression Equipment is working or idle, on the last
day of the month immediately preceding such month and on the last day of such
month, divided by (ii) two.
     “Voluntary Cleanup Program” means a program of the United States or a state
of the United States enacted pursuant to Environmental Laws which provides for a
mechanism for the written approval of, or authorization to conduct, voluntary
remedial action for the clean-up, removal or remediation of contamination that
exceeds actionable levels established pursuant to Environmental Laws.
     “Voting Securities” of a Person means securities of any class of such
Person entitling the holders thereof to vote in the election of, or to appoint,
members of the board of directors or other similar governing body of the Person;
provided, that if such Person is a limited partnership, Voting Securities of
such Person shall be the general partner interest in such Person.
ARTICLE II
NON-COMPETITION AND BUSINESS OPPORTUNITIES
     2.1 Restricted Business.
     (a) Subject to Section 2.10 and except as permitted by Section 2.3, 2.7 or
2.8, each of the Exterran Entities shall be prohibited from providing (whether
directly or through the acquisition of or investment in equity or debt
securities in any Person) Competitive Services to any Partnership Customer, in
any state or territory of the United

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States (other than on behalf of a member of the Partnership Group) (the
“Exterran Restricted Business”).
     (b) Subject to Section 2.10 and except as permitted by Section 2.3, 2.7 or
2.8, each of the Partnership Entities shall be prohibited from providing
(whether directly or through the acquisition of or investment in equity or debt
securities in any Person) Competitive Services to any Exterran Customer, in any
state or territory of the United States (other than on behalf of any Exterran
Entity) (the “Partnership Restricted Business”).
     2.2 Overlapping Customers.
     (a) Except as otherwise provided in this Section 2.2 and except as
permitted by Section 2.3, 2.7 or 2.8, (i) the Exterran Entities shall be
prohibited from providing (whether directly or through the acquisition of or
investment in equity or debt securities of any Person) Competitive Services to a
particular Overlapping Customer at the particular Site at which any member of
the Partnership Group was providing Competitive Services to such Overlapping
Customer on the Effective Date (each, a “Partnership Site”) and (ii) the
Partnership Entities shall be prohibited from providing (whether directly or
through the acquisition of or investment in equity or debt securities of any
Person) Competitive Services to a particular Overlapping Customer at the
particular Site at which any of the Exterran Entities was providing Competitive
Services to such Overlapping Customer on the Effective Date (each, an “Exterran
Site”).
     (b) Notwithstanding the foregoing, the Parties agree that in the event
that, after the date of this Agreement, an Overlapping Customer requests
Competitive Services involving the provision of additional Compression Equipment
or additional contract compression services at a Partnership Site or an Exterran
Site, whether in addition to or in replacement of Compression Equipment or
contract compression services existing at such Site as of the Effective Date,
(i) any member of the Partnership Group shall be entitled to provide such
Competitive Services if such Overlapping Customer is a Partnership Overlapping
Customer and (ii) any Exterran Entity shall be entitled to provide such
Competitive Services if such Overlapping Customer is an Exterran Overlapping
Customer.
     (c) Except as expressly provided by Sections 2.2(a) or (b), the Parties
agree that any offer by any of the Parties hereto to provide Competitive
Services to (i) a Partnership Overlapping Customer in any state or territory of
the United States shall be made solely on behalf of the Partnership Entities and
(b) an Exterran Overlapping Customer in any state or territory of the United
States shall be made solely on behalf of the Exterran Entities.
     2.3 Permitted Exceptions. Notwithstanding any provision of Sections 2.1 or
2.2 to the contrary, the Parties may engage in any of the following activities
to the extent permitted below:

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     (a) The Exterran Entities may engage in any Exterran Restricted Business to
any Person with the prior written approval of the Conflicts Committee or in
accordance with Section 2.7 or Section 2.8.
     (b) The Exterran Entities may own securities of any class of any member of
the Partnership Group.
     (c) The Partnership Entities may engage in any Partnership Restricted
Business to any Person with the prior written approval of Exterran or in
accordance with Section 2.8.
     (d) The Exterran Entities may purchase and own in the aggregate not more
than five percent of any class of securities of any entity engaged in any
Exterran Restricted Business (but without otherwise participating in, managing
or directing the activities of such entity).
     (e) The Partnership Entities may purchase and own in the aggregate not more
than five percent of any class of securities of any entity engaged in any
Partnership Restricted Business (but without otherwise participating, managing
or directing the activities of such entity).
     (f) If a Partnership Customer (or that customer’s applicable business), on
the one hand, and a Exterran Customer (or that customer’s applicable business),
on the other hand, merge, consolidate, amalgamate or are otherwise combined,
each of the Partnership Entities and the Exterran Entities may continue to
provide Competitive Services to the applicable combined entity or business. Upon
such an occurrence, Exterran and the Conflicts Committee shall negotiate in good
faith, if and to the extent determined in the good faith of Exterran and the
Conflicts Committee to be necessary, to implement procedures or such other
arrangements to protect the value to each of the Partnership Entities, on the
one hand, and the Exterran Entities, on the other hand, of their respective
businesses of providing Competitive Services to each such customer or its
applicable business, as applicable.
     (g) The Exterran Entities may purchase and own (i) any class of securities
in any entity engaged (in whole or in part) in any Exterran Restricted Business
or (ii) any business or assets otherwise engaged or deployed in any Exterran
Restricted Business; provided, (x) in the good faith judgment of the Board of
Directors of Exterran, the aggregate value of the Exterran Restricted Business
owned by such entity or otherwise to be acquired by the Exterran Entities shall
be less than 50% of the aggregate value of the business and assets owned by such
entity or otherwise to be acquired by the Exterran Entities and (y) the
Partnership Group is offered the opportunity to acquire the Exterran Restricted
Business owned by such entity or otherwise acquired by the Exterran Entities (in
each case, the “Acquired Exterran Restricted Business”) in accordance with
Section 2.4. During the pendency of the procedures described in Section 2.4, the
Exterran Entities shall be entitled to own and operate the Acquired Exterran
Restricted Business. In the event that the General Partner (with the approval of
the Conflicts Committee) elects not to purchase such Acquired Exterran
Restricted Business whether

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pursuant to Section 2.4(b)(i) or Section 2.4(b)(ii)(B)(2), the Exterran Entities
shall be entitled to continue to own and operate the Acquired Exterran
Restricted Business and the Competitive Services customers of the Acquired
Exterran Restricted Business at the time of the consummation of such acquisition
shall no longer be Partnership Customers for purposes of this Agreement, but
rather shall be designated “Released Partnership Customers.” Without the prior
written approval of the Conflicts Committee, subject to Section 2.10, the
Exterran Entities shall be prohibited from providing (whether directly or
through the acquisition of or investment in equity or debt securities of any
Person) Competitive Services to a particular Released Partnership Customer at
the particular Site at which the Partnership Group was providing Competitive
Services to such Released Partnership Customer on the date of the acquisition by
the Exterran Entities of the applicable Exterran Restricted Business pursuant to
which such customer was designated a Released Partnership Customer.
     (h) The Partnership Entities may purchase and own (i) any class of
securities in any entity engaged (in whole or in part) in any Partnership
Restricted Business or (ii) any business or assets otherwise engaged or deployed
in any Partnership Restricted Business; provided, (i) in the good faith judgment
of the Conflicts Committee, the aggregate value of the Partnership Restricted
Business owned by such entity or otherwise to be acquired by the Partnership
Entities shall be less than 50% of the aggregate value of the business and
assets owned by such entity or otherwise to be acquired by the Partnership
Entities and (ii) Exterran is offered the opportunity to acquire the Partnership
Restricted Business owned by such entity or otherwise acquired by the
Partnership Entities (in each case, the “Acquired Partnership Restricted
Business”) in accordance with Section 2.4. During the pendency of the procedures
described in Section 2.4, the Partnership Entities shall be entitled to own and
operate the Acquired Partnership Restricted Business. In the event that Exterran
elects not to purchase such Acquired Partnership Restricted Businesses whether
pursuant to Section 2.4(b)(i) or Section 2.4(b)(ii)(B)(2), the Partnership
Entities shall be entitled to continue to own and operate the Acquired
Partnership Restricted Business and the Competitive Services customers of the
Acquired Partnership Restricted Business at the time of the consummation of such
acquisition shall no longer be Exterran Customers for purposes of this
Agreement, but rather shall be designated “Released Exterran Customers.” Without
the prior written approval of Exterran, subject to Section 2.10, the members of
the Partnership Group shall be prohibited from providing (whether directly or
through the acquisition of or investment in equity or debt securities of any
Person) Competitive Services to a particular Released Exterran Customer at the
particular Site at which Exterran Entities were providing Competitive Services
to such Released Exterran Customer on the date of the acquisition by the
Partnership Group of the applicable Partnership Restricted Business pursuant to
which such customer was designated a Released Exterran Customer.
     (i) If a Partnership Overlapping Customer (or that customer’s applicable
business), on the one hand, and an Exterran Overlapping Customer (or that
customer’s applicable business), on the other hand, merge, consolidate,
amalgamate or are otherwise combined, then, following consummation of such
transaction, solely for purposes of providing Competitive Services involving
additional Compression Equipment under Section 2.2(b) and offering to provide
Competitive Services under Section 2.2(c) and for

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the purposes of the definition of Partnership Customer and Exterran Customer,
the combined entity shall be deemed to be (a) a Partnership Overlapping Customer
for continuing and future new business if as of the date of the announcement of
such transaction the Partnership Entities provide more Competitive Services (as
measured by the total amount of horsepower of Compression Equipment utilized in
the provision of such Competitive Services on that date of announcement) to such
combined entity than are provided by the Exterran Entities and (b) an Exterran
Overlapping Customer for continuing and future new business if as of the date of
the announcement of such transaction the Exterran Entities provide more
Competitive Services (as measured by the total amount of horsepower of
Compression Equipment utilized in the provision of such Competitive Services on
that date of announcement) to such combined entity than are provided by the
Partnership Entities; provided, however, that the provisions of Section 2.2(a)
shall continue to apply to any Partnership Site or Exterran Site relating to
such newly combined Overlapping Customer on the date of closing of such
transaction.
     2.4 Restricted Business Procedures.
     (a) Within 30 days following the consummation of the acquisition of an
Acquired Exterran Restricted Business or an Acquired Partnership Restricted
Business by an Exterran Entity or a Partnership Entity, as the case may be (in
each such case such acquiring Person shall be referred to as an “Acquiring
Party”), the Acquiring Party shall notify in writing (x) the Partnership, if the
Acquiring Party is a Exterran Entity or (y) Exterran, if the Acquiring Party is
a Partnership Entity, of such acquisition. The Person that is so notified shall
be referred to herein as the “Offeree.” Such notice shall include an offer (the
“Offer”) by the Acquiring Party to sell the Acquired Exterran Restricted
Business or the Acquired Partnership Restricted Business, as the case may be
(the “Offered Assets”), to the Offeree, together with a proposed definitive
agreement to effectuate the purchase and sale of the Offered Assets (the
“Purchase Agreement”). The Offer shall set forth the Acquiring Party’s proposed
terms relating to the sale of the Offered Assets to the Offeree, including the
purchase price, any liabilities to be assumed by the Offeree as part of the
Offer and the other terms of the Offer; provided, that the representations and
warranties regarding the Offered Assets and the indemnification provision
contained in the Purchase Agreement shall be substantially consistent with the
terms contained in the definitive purchase agreement pursuant to which the
Acquiring Party acquired the Offered Assets or the entity that owned the Offered
Assets, subject to such adjustments that the Acquiring Party reasonably
determines are necessary to reflect the differences in the transaction.
     (b) As soon as practicable after the Offer is made, the Acquiring Party
will deliver to the Offeree all information prepared by or on behalf of or in
the possession of such Acquiring Party relating to the Offered Assets and
reasonably requested by the Offeree. As soon as practicable, but in any event,
within 60 days after receipt of the notification called for in Section 2.4(a),
the Offeree shall notify the Acquiring Party in writing that either:

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     (i) the Offeree (with the concurrence of the Conflicts Committee if the
Offeree is the Partnership) has elected not to purchase (or not to cause any of
its Subsidiaries to purchase) any of such Offered Assets; or
     (ii) the Offeree (with the concurrence of the Conflicts Committee if the
Offeree is the Partnership) has elected to purchase (or to cause any of its
Subsidiaries to purchase) all of such Offered Assets; provided, that if the
Offeree is the Partnership, and in the opinion of outside counsel to the
Partnership Entities, less than 90% of the gross income from the operations of
such Offered Assets consists of “qualifying income” under Section 7704 of the
Code (such portion of such Offered Assets that does not so qualify being
referred to herein as the “Non-Qualifying Business”), then the Partnership (with
the concurrence of the Conflicts Committee) may condition its obligation to
purchase the Non-Qualifying Business (but not the portion of the Offered Assets
that do not constitute the Non-Qualifying Business (the “Qualifying Business”))
on the conversion of the agreements pursuant to which the Non-Qualifying
Business provides Competitive Services to its customers to agreements
substantively similar to the Form Compression Services Agreement from a federal
income tax treatment perspective (from the Partnership’s perspective) and
otherwise having substantially the same economic terms as the agreements being
converted (the “Conversion Condition”); provided further, that in such event,
each of the Exterran Entities and the Partnership Entities shall use
commercially reasonable efforts to satisfy the Conversion Condition as soon as
commercially practicable. If the Offeree elects to purchase the Offered Assets,
the following procedures shall be followed:
     A. After the receipt of the Offer by the Offeree, the Acquiring Party and
the Offeree shall negotiate in good faith the fair market value of the Offered
Assets that are subject to the Offer (including the specific fair market value
of any Offered Assets that constitute a Non-Qualifying Business) and the other
terms of the Offer on which the Offered Assets will be sold to the Offeree. If
the Acquiring Party and the Offeree agree (with the concurrence of the Conflicts
Committee) on the fair market value of the Offered Assets that are subject to
the Offer and the other terms of the Offer during the 30-day period (the “Offer
Period”) after receipt by the Acquiring Party of the Offeree’s election to
purchase (or to cause any Subsidiary of the Offeree to purchase) the Offered
Assets, the Offeree shall purchase (or cause any of its Subsidiaries to
purchase) and the Acquiring Party shall sell the Offered Assets on such terms as
soon as commercially practicable after such agreement has been reached, which
obligation may require such parties to consummate the purchase and sale of the
Qualifying Business prior to satisfaction of the Conversion Condition.
     B. If the Acquiring Party and the Offeree are unable to agree on the fair
market value of the Offered Assets that are subject to the Offer or on any other
terms of the Offer during the Offer Period, the Acquiring

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Party and the Offeree will engage an independent investment banking firm prior
to the end of the Offer Period to determine the fair market value of the Offered
Assets (including the specific fair market value of any Offered Assets that
constitute a Non-Qualifying Business) and/or the other terms on which the
Acquiring Party and the Offeree are unable to agree. In determining the fair
market value and other terms on which the Offered Assets are to be sold, the
investment banking firm will have access to the proposed sale and purchase
values and terms for the Offer submitted by the Acquiring Party and the Offeree,
respectively, and to all information prepared by or on behalf of the Acquiring
Party relating to the Offered Assets and reasonably requested by the investment
banking firm. In determining the terms on which the Offered Assets are to be
sold (other than the fair market value of the Offered Assets), the investment
banking firm shall give substantial weight to the terms contained in the
definitive purchase agreement pursuant to which the Acquiring Party acquired the
Offered Assets or the entity that owned the Offered Assets. Such investment
banking firm will determine the fair market value of the Offered Assets and/or
the other terms on which the Acquiring Party and the Offeree are unable to agree
within 60 days of its engagement and furnish the Acquiring Party and the Offeree
its determination. The fees and expenses of the investment banking firm will be
divided equally between the Acquiring Party and the Offeree. Upon receipt of
such determination, the Offeree will have the option, but not the obligation, to
(with the concurrence of the Conflicts Committee if the Offeree is the
Partnership):
     1. purchase the Offered Assets on such terms as determined above; or
     2. elect not to purchase such Offered Assets.
If the Offeree elects to so purchase the Offered Assets, the Offeree shall
purchase (or cause any of its Subsidiaries to purchase) and the Acquiring Party
shall sell the Offered Assets on such terms as soon as commercially practicable
after such agreement has been reached, which obligation may require such parties
to consummate the purchase and sale of the Qualifying Business prior to
satisfaction of the Conversion Condition.
     2.5 Scope of the Prohibition. Except as provided in this Article II, each
of the Parties shall be free to engage (whether directly or through the
acquisition of or investment in equity or debt interests in any Person) in any
business activity whatsoever, including those that may be in direct competition
with any of the other Parties.
     2.6 New Customers. The Parties agree that any offer by any of the Parties
hereto to provide Competitive Services to New Customers in any state or
territory of the United States shall be first made on behalf of the Partnership
Entities and shall include an offer to provide such Competitive Services under
an agreement substantially in the form of the Form Compression

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Services Agreement. If the New Customer is unwilling to enter into an agreement
with a Partnership Entity that is substantively similar to the Form Compression
Services Agreement from a federal income tax treatment perspective (from the
Partnership’s perspective), an Exterran Entity may enter into an agreement to
provide Competitive Services to such New Customer for its own account provided
that any agreement between such Exterran Entity and such New Customer is not
substantively similar to the Form Compression Services Agreement from a federal
income tax treatment perspective (from the Partnership’s perspective). If a New
Customer enters into an agreement with a member of the Partnership Group for
Competitive Services, then such New Customer will then constitute a Partnership
Customer for the purposes of this Agreement and if, in accordance with this
Section 2.6, a New Customer enters into an agreement with an Exterran Entity for
Competitive Services, then such New Customer will then constitute an Exterran
Customer for the purposes of this Agreement.
     2.7 Rental Arrangements. If a Partnership Customer or Partnership
Overlapping Customer is unwilling to enter into an agreement that is
substantively similar to the Form Compression Services Agreement from a federal
income tax treatment perspective (from the Partnership’s perspective), whether
with respect to a Site, a region or otherwise, an Exterran Entity may (with the
Partnership’s consent) enter into a Rental Arrangement to provide Competitive
Services to such Partnership Customer or Partnership Overlapping Customer for
its own account. A Partnership Customer or Partnership Overlapping Customer
shall remain a Partnership Customer or Partnership Overlapping Customer for the
purposes of this Agreement even if it enters into a Rental Arrangement with an
Exterran Entity for Competitive Services in accordance with this Section 2.7.
     2.8 Lease Takeover Arrangements. If a Partnership Customer or Partnership
Overlapping Customer (or that customer’s applicable business) and an Exterran
Customer or Exterran Overlapping Customer (or that customer’s applicable
business) enter into an arrangement whereby one assigns or otherwise disposes of
certain mineral leasehold interests to the other or to a New Customer for whom
Competitive Services are provided by a Partnership Entity or an Exterran Entity,
respectively (a “Lease Takeover Arrangement”), the Competitive Services shall
continue to be provided by the Partnership Entity or Exterran Entity that had
provided the Competitive Services to the assignor at the relevant Site(s).
Notwithstanding the provision of Competitive Services by an Exterran Entity to a
customer as a result of a Lease Takeover Arrangement, if the assignee would
qualify as a new customer but for the Lease Takeover Arrangement, then that
assignee shall be deemed a New Customer for purposes of Section 2.6 with respect
to the first Competitive Services provided that are not a result of a Lease
Takeover Arrangement.
     2.9 Enforcement. Each Party agrees and acknowledges that the other Parties
hereto do not have an adequate remedy at law for the breach by such Party of the
covenants and agreements set forth in this Article II, and that any breach by
such Party of the covenants and agreements set forth in this Article II would
result in irreparable harm to the other Parties hereto. Each Party further
agrees and acknowledges that the other Parties hereto may, in addition to the
other remedies that may be available to the other Parties hereto, file a suit in
equity to enjoin such Party from such breach, and consents to the issuance of
injunctive relief under this Agreement.

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     2.10 Termination. Unless this Agreement has otherwise terminated pursuant
to Section 8.4, this Article II shall terminate on the third anniversary of the
Effective Date. In addition, unless this Agreement has otherwise been terminated
pursuant to Section 8.4 or this Article II has otherwise been terminated
pursuant to the first sentence of this Section 2.10, Sections 2.1, 2.2, 2.3, 2.4
and 2.6 shall terminate upon a Change of Control of Exterran. Unless this
Agreement has otherwise terminated pursuant to Section 8.4 or this Article II
has terminated pursuant to the first sentence of this Section 2.10, and in the
event that Sections 2.1, 2.2, 2.3, 2.4 and 2.6 terminate pursuant to the
immediately preceding sentence, without the prior written approval of the
Conflicts Committee, the Exterran Entities shall be prohibited from providing
(whether directly or through the acquisition of or investment in equity or debt
securities of any Person) Competitive Services to a particular Partnership
Customer at the particular Site at which the Partnership Group was providing
Competitive Services to such Partnership Customer on the date of the Change of
Control of Exterran.
ARTICLE III
SERVICES
     3.1 Provision, Allocation and Reimbursement for Services
     (a) Subject to Article V, the Exterran Entities shall, upon the reasonable
request of the General Partner, provide the Partnership Group with all personnel
and services reasonably necessary to run the business of the Partnership Group,
which services may include, without limitation, those services set forth on
Schedule 3.1(a) (collectively, the “Services”). For the avoidance of doubt, the
Services shall not include the services described on Schedule 3.1(b). These
Services shall be substantially similar in nature to the services of such type
previously provided by the Exterran Entities in connection with their management
and operation of the Partnership Assets and any other assets of a similar nature
directly or indirectly conveyed, contributed or otherwise transferred to the
Partnership Group, in each case during the 12-month period prior to such
transfer.
     (b) The Exterran Entities shall provide the Services to the Partnership
Group in a manner that is in the good faith judgment of Exterran commercially
reasonable; provided, that for so long as the Exterran Entities exercise at
least the same degree of care, skill and prudence in providing the Services as
customarily exercised by it for its own operation of the USCSB, then Exterran
will be deemed to have provided such Services in a commercially reasonable
manner. EXCEPT AS SET FORTH IN THE PRECEDING SENTENCE, THE EXTERRAN ENTITIES
MAKE NO (AND HEREBY DISCLAIM AND NEGATE ANY AND ALL) WARRANTIES OR
REPRESENTATIONS WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICES. IN
NO EVENT SHALL ANY EXTERRAN ENTITY OR ANY OF THEIR AFFILIATES BE LIABLE TO ANY
MEMBER OF THE PARTNERSHIP GROUP OR TO ANY OTHER PERSON FOR ANY EXEMPLARY,
PUNITIVE, INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR SPECIAL DAMAGES RESULTING FROM
ANY ERROR IN THE PERFORMANCE OF THE SERVICES, REGARDLESS OF WHETHER THE PERSON
PROVIDING SUCH SERVICES, ITS

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AFFILIATES, OR OTHERS MAY BE WHOLLY, CONCURRENTLY, PARTIALLY, OR SOLELY
NEGLIGENT OR OTHERWISE AT FAULT.
     (c) Any Direct Compression Equipment Costs and Expenses, any Direct Leased
Compression Equipment Capitalizable Costs where a member of the Partnership
Group is the Transferor pursuant to Section 4.2(b)(ii) and any Direct Leased
Compression Equipment Expenses where a member of the Partnership Group is the
Transferee pursuant to Section 4.2(b)(ii), in each case that are incurred by any
Exterran Entity in connection with providing the Services shall be allocated to
the Partnership at the actual cost to the applicable Exterran Entity providing
such Services.
     (d) The General Partner shall be entitled to allocate to the Partnership
any costs and expenses (other than Direct Compression Equipment Costs and
Expenses) incurred by any Exterran Entity in connection with providing the
Services on any reasonable basis determined by the General Partner. In the event
that such Services are associated with Exterran’s operation of both of the
businesses of the USCSB and the Partnership Group, including, without
limitation, general and administrative functions, such reasonable basis may
include, at the election of the General Partner, allocating a portion of such
costs and expenses incurred during a particular period to the Partnership on a
pro rata basis based on the Partnership Group’s Percentage Interest.
     (e) Subject to Section 3.2, the Partnership Group hereby agrees to
reimburse the Exterran Entities for all costs and expenses allocated to the
Partnership Group in accordance with the manners set forth in Sections 3.1(c)
and (d).
     3.2 Limitations on Reimbursement.
     (a) Notwithstanding Section 3.1, the amount that the Exterran Entities are
entitled to receive from the Partnership Group pursuant to Section 3.1 for
selling, general and administrative costs during any particular quarter
commencing with the quarter in which the Transaction is consummated during the
Limit Period shall not exceed $7.6 million (the “SG&A Limit”); provided, that
with respect to the quarter during which the Transaction is consummated, it
means the sum of (i) the product of $6.0 million multiplied by a fraction of
which the numerator is the number of days in such period prior to consummation
of the Transaction and of which the denominator is 91 or 92 as applicable and
(ii) the product of $7.6 million multiplied by a fraction of which the numerator
is the number of days in such period on and after consummation of the
Transaction and of which the denominator is 91 or 92 as applicable. The SG&A
Limit shall be reduced by any cash selling, general and administrative costs
incurred directly by the Partnership Group during the applicable period. In the
event that during the Limit Period the Partnership Group makes any additional
acquisitions of assets or businesses or the business of the Partnership Group
otherwise expands after consummation of the Transaction, then the Parties shall
negotiate in good faith any appropriate increase in the SG&A Limit in order to
account for any adjustments in the nature and extent of the selling, general and
administrative services provided by the Exterran Entities to the Partnership
Group, with any such increase in the SG&A Limit subject to the approval of the
Conflicts Committee.

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     (b) Notwithstanding Section 3.1, the amount that the Exterran Entities are
entitled to receive from the Partnership Group pursuant to Section 3.1 for Cost
of Sales during any particular quarter during the Limit Period shall not exceed
$21.75 times the Average Horsepower of the Partnership Group during such quarter
(the “Cost of Sales Limit”). The Cost of Sales Limit shall be reduced by any
Cost of Sales incurred directly by the Partnership Group during the applicable
period. In the event that during the Limit Period the Partnership Group makes
any additional acquisitions of assets or businesses or the business of the
Partnership Group otherwise expands after the Effective Date, then the Parties
shall negotiate in good faith any appropriate increase in the Cost of Sales
Limit in order to account for any adjustments in the Cost of Sales of the
Partnership Group (on a per horsepower basis) as a result of such acquisition or
expansion, with any such increase in the Cost of Sales Limit subject to the
approval of the Conflicts Committee.
ARTICLE IV
COMPRESSION EQUIPMENT TRANSFERS
     4.1 Transfer Mechanics
     (a) In the event that Exterran determines in good faith that there exists a
need on the part of the CCSB or on the part of the Partnership Group to transfer
Compression Equipment between the Exterran Entities, on the one hand, and the
Partnership Group, on the other hand, to meet the compression services
obligations of either of the CCSB or the Partnership Group, such Compression
Equipment shall be so transferred (or, to the extent provided in Section 4.2,
leased), at the election of Exterran, from a member of the Exterran Entities to
a member of the Partnership Group, or from a member of the Partnership Group to
a member of the Exterran Entities, as the case may be, or exchanged in a
like-kind exchange; provided, that all of the following conditions are satisfied
with respect to such transfer, exchange or lease (each such transfer, exchange
or lease for the purposes of this Article IV, unless set forth otherwise, a
“transfer”) at the Effective Time (as defined below) of such transfer:
     (i) Except as provided in Section 4.2 in respect of Compression Equipment
that is leased, such transfer will constitute a valid and absolute transfer
(each such transfer, as the case may be, constituting a “true sale” for
bankruptcy law purposes) of all right, title and interest of the Transferor in,
to and under the transferred Compression Equipment, free and clear of any Liens
except for any Liens created by the Transferee and any Permitted Liens;
     (ii) Such transfer will not conflict with any of the terms and provisions
of, result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default under, the
organizational documents of the Transferor or the Transferee, or any material
term of any indenture, agreement, mortgage, deed of trust, derivative instrument
or other instrument to which the Transferor or Transferee or any of their
respective subsidiaries is a party or by which either of them is bound, or
result in the creation or imposition of any Lien upon any of their respective
properties pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust, derivative

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instrument or other instrument, or violate any law or any order, rule, or
regulation applicable to the Transferor or Transferee or any of their respective
subsidiaries of any court or of any federal or state regulatory body,
administrative agency, or other governmental authority having jurisdiction over
either of them or any of their respective properties;
     (iii) Except as otherwise provided in this Article IV, such transfer will
not cause any member of the Partnership Group to suffer a loss of revenue under
any existing customer contract for Competitive Services or to incur any material
liabilities not reimbursed by the Exterran Entities; and
     (iv) The Compression Equipment will be transferred in a condition
appropriate for the Transferee’s anticipated commercial use of such Compression
Equipment; provided, that such anticipated commercial use shall be consistent
with such equipment’s historical use; provided further, that (A) any repairs or
modifications, or any costs associated therewith, required to make such
Compression Equipment appropriate for the Transferee’s anticipated commercial
use of such Compression Equipment shall be the obligation of the Transferor and
(B) the Transferee shall have communicated its anticipated commercial use of
such Compression Equipment to the Transferor at least ten (10) Business Days
prior to the anticipated date of such transfer, failing which, the Transferor
may transfer the Compression Equipment in its then current condition.
In connection with each proposed transfer, each of the Transferee and the
Transferor will use their respective commercially reasonable efforts to cause
the conditions set forth above to be satisfied as of the Effective Time (as
defined below).
     (b) All transfers of Compression Equipment pursuant to this Section 4.1
shall be deemed to take place at 12:01 a.m. on the date of transfer (the
“Effective Time”) and shall include all of the following assets, rights and
properties of the Transferor with respect to such transferred Compression
Equipment; provided, that with respect to transfers that are effected under a
lease pursuant to Section 4.2, the following assets, rights and properties shall
be so transferred to the extent provided for in, and not inconsistent with, the
relevant lease agreement, and except as provided below:
     (i) All Transferor-owned appliances, parts, instruments, machinery,
accessories and other equipment attached or installed thereto;
     (ii) The rights of the Transferor under all permits relating exclusively to
such Compression Equipment, to the extent that such permits are transferable and
the transfer of which is authorized or consented to by any third parties
required to make such transfer effective as to third parties;
     (iii) Except in the case of a lease, all warranties and guarantees, if any,
express or implied, existing for the benefit of the Transferor in connection
with such Compression Equipment to the extent assignable;

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     (iv) Except in the case of a lease, any fuels, lubricants and maintenance
supplies exclusively related to such Compression Equipment;
     (v) Except in the case of a lease, all vendor information, catalogs,
technical information, specifications, designs, drawings and maintenance records
related to such Compression Equipment and to which the Transferor has ready
access without undue effort; and
     (vi) Except in the case of a lease, all rights, claims or choses in action
of the Transferor against any Person relating exclusively to such Compression
Equipment.
     (c) Except as provided in Section 4.2 in respect of Compression Equipment
that is leased, on the date of any transfer of Compression Equipment, the
Transferor shall deliver or cause to be delivered to the Transferee the
following:
     (i) A general conveyance or bill of sale in the form of the Form Bill of
Sale or the Form Like-Kind Exchange Bill of Sale transferring to Transferee, as
of the Effective Time, good, marketable and indefeasible title to all of the
tangible personal property contemplated by Section 4.2(b) and included in the
transferred Compression Equipment, free and clear of any Liens, except for any
Liens created by the Transferee and except for Permitted Liens;
     (ii) All appropriate documents for the assignment as of the Effective Time
of the Transferor’s rights under the permits referred to in Section 4.1(b)(ii),
together with all consents of third parties required to make such assignments
effective as to such third parties; and
     (iii) Such other instruments of transfer and assignment in respect of the
transferred Compression Equipment as the Transferee shall reasonably require and
as shall be consistent with the terms and provisions of this Agreement.
     4.2 Settlement; Appraised Value
     (a) Prior to the Effective Time of any transfer pursuant to Section 4.1,
the Partnership Group and Exterran will determine the aggregate Appraised Value
of the Compression Equipment to be so transferred.
     (b) In consideration for such transfer, the Transferee, at its discretion
(subject to the provisos of Sections 4.2(b)(ii) and (iii) and subject to
Sections 4.2(b) and (c)), shall take any one or more of the following actions
prior to or contemporaneously with the Effective Time of such transfer:
     (i) Transfer Compression Equipment to the Transferor of equal or greater
Appraised Value than the Appraised Value of the Compression Equipment to be
transferred to the Transferee pursuant to

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Section 4.1 (provided, that if such Compression Equipment is of greater
Appraised Value than the Appraised Value of the Compression Equipment to be
transferred to the Transferee pursuant to Section 4.1, such excess Appraised
Value shall be deemed to be a transfer of Compression Equipment with a value
equal to such excess Appraised Value and Transferor shall be required to take
one or more of the actions contemplated by this Section 4.2(b) in consideration
for such excess Appraised Value) in accordance with this Article IV;
     (ii) Execute and deliver a lease agreement substantially in the form of the
Form Lease Agreement pursuant to which the Transferee agrees to lease from the
Transferor the Compression Equipment to be transferred to the Transferee
pursuant to Section 4.1, which lease agreement shall be counter-signed by the
Transferor (provided, however, that the ability of the Transferee to execute and
deliver such a lease may be limited in the sole discretion of Exterran, to the
extent that an Exterran Entity is the Transferor, or in the sole discretion of
the Conflicts Committee, to the extent that a member of the Partnership Group is
the Transferor); or
     (iii) Deliver to the Transferor cash (or an obligation to make payment in
cash no later than the end of the fiscal quarter in which the transfer is
effected) in the amount of the aggregate Appraised Value of the Compression
Equipment to be transferred to the Transferee pursuant to Section 4.1 (provided,
however, that the ability of the Transferee to make such a payment may be
limited in the sole discretion of Exterran, to the extent that an Exterran
Entity is the Transferor, or in the sole discretion of the Conflicts Committee,
to the extent that a member of the Partnership Group is the Transferor).
     (c) In the event that the Transferee cannot through the use of its
commercially reasonable efforts provide adequate consideration to the Transferor
for Compression Equipment to be transferred in any of the manners set forth in
Section 4.2(b), then no such transfer pursuant to the terms of this Article IV
shall occur.
     (d) Notwithstanding Section 4.2(b), if the Transferor is a member of the
Partnership Group, the Transferee shall not be entitled to take the actions
contemplated by Section 4.2(b)(ii) if such action would cause the Partnership to
be treated as an association taxable as a corporation or otherwise to be taxed
as an entity for federal income tax purposes. In such event, if compliance by
Exterran with Sections 4.2(i) or (iii) is not commercially practicable, the
Partnership and Exterran shall negotiate in good faith to reach agreement on
another manner in which to reimburse the Partnership for such Compression
Equipment; provided, that the final terms of such reimbursement shall be
approved by the Conflicts Committee.
     4.3 [Reserved].
     4.4 Like-Kind Exchange Treatment. Each Party agrees to cooperate to the
extent reasonably necessary to allow the other, if the other so desires, to
treat the transactions contemplated by Section 4.1(b) as a like-kind exchange
under Section 1031 of the Code, and relevant Treasury regulations and/or under
relevant state law provisions, if any. Any Party seeking such treatment
acknowledges that it has consulted or will consult with independent tax

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counsel regarding the applicability and benefits/detriments of such treatment
and in no way has relied upon any representations of the other party regarding
the same.
     4.5 Other Sales Permitted. Nothing otherwise set forth in this Article IV
shall be deemed to preclude any of the Exterran Entities and any member of the
Partnership Group from negotiating or consummating at any time the purchase and
sale of newly fabricated Compression Equipment, existing Compression Equipment
or all or any part of the USCSB; provided, however, that such negotiations or
purchase and sale shall be conducted pursuant to the terms and procedures then
mutually agreed upon by Exterran and the General Partner or the Conflicts
Committee, as applicable.
     4.6 Termination. Unless this Agreement has otherwise terminated pursuant to
Section 8.4, this Article IV shall terminate on the third anniversary of the
Effective Date.
     4.7 Proration of Ad Valorem Taxes. Ad valorem taxes relating to the
ownership of Compression Equipment transferred pursuant to Section 4.1 shall be
prorated on a daily basis between the Exterran Entities and the Partnership
Group with the Exterran Entities and the Partnership Group responsible for the
prorated portion of such taxes for the period (for purposes of this Section 4.7,
“period” means the period beginning on the assessment date for ad valorem taxes
through the day before the next assessment date for such taxes) of their
respective ownership of such transferred Compression Equipment. As between the
Exterran Entities and the Partnership Group, the party that receives the ad
valorem tax billing (the “Billed Party”) shall provide a copy of such billing to
the other party together with a calculation of the prorated ad valorem taxes
owed by each party. The party that did not receive the ad valorem tax billing
shall pay its prorated portion of the ad valorem taxes to the Billed Party prior
to the due date of such taxes and the Billed Party shall be responsible for the
timely payment of the ad valorem taxes to the taxing authorities.
ARTICLE V
NEWLY FABRICATED COMPRESSION EQUIPMENT PURCHASES
  The Parties hereby acknowledge that none of the Exterran Entities is under any
obligation to offer or sell to any member of the Partnership Group newly
fabricated Compression Equipment and no member of the Partnership Group is under
any obligation to purchase from any of the Exterran Entities newly fabricated
Compression Equipment; provided, that in the event that the General Partner and
Exterran mutually agree to enter into, or cause their respective Affiliates to
enter into, a purchase and sale agreement for the purchase and sale of newly
fabricated Compression Equipment, (i) such purchase and sale shall be subject to
the standard terms and conditions then utilized by the Exterran Entities for
purchases and sales of newly fabricated Compression Equipment and (ii) any
member of the Partnership Group shall be permitted to purchase such Compression
Equipment for a price that is not more than the Fabricated Cost of such
Compression Equipment plus the Fixed Margin Amount.

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ARTICLE VI
LICENSE
     6.1 Grant of License. Subject to the terms and conditions herein, Licensor
hereby grants to Licensees the right and license to use the Marks solely in
connection with the Licensees’ businesses and the services performed therewith
within the United States during the term of this Agreement.
     6.2 Restrictions on Marks. In order to ensure the quality of uses under the
Marks, and to protect the goodwill of the Marks, Licensees agree as follows:
     (a) Licensees will use the Marks only in accordance with such quality
standards and specifications as may be established by Licensor and communicated
to Licensees from time to time, it being understood that Licensor has evaluated
Licensees’ businesses and services and determined that they are of a quality
that justifies this grant of a license. Licensees recognize the substantial
goodwill associated with the Marks and will not permit the quality of the
businesses or services with which Licensees use the Marks to deteriorate so as
to affect adversely the goodwill associated with the Marks. Licensees will not
cause any action, or permit or fail to prevent any action by Licensees’
affiliates or any other party under Licensees’ control, that is deemed to
injure, harm or dilute the distinctiveness or goodwill of the Marks.
     (b) Licensees will only use the Marks in formats approved by Licensor and
only in strict association with Licensees’ businesses and the services performed
therewith;
     (c) Prior to publishing any new format or appearance of the Marks or any
new advertising or promotional materials that incorporate the Marks, Licensees
shall first provide such format, appearance or materials to Licensor for its
approval. If Licensor does not inform Licensees in writing within fourteen
(14) days from the date of the receipt of such new format, appearance, or
materials that such new format, appearance, or materials is unacceptable, then
such new format, appearance or materials shall be deemed to be acceptable and
approved by Licensor. Licensor may withhold approval of any proposed changes to
the format, appearance or materials which Licensees propose to use in Licensor’s
sole discretion; and
     (d) Licensees shall not use any other trademarks, service marks, trade
names or logos in connection with the Marks.
     6.3 Ownership. Licensor shall own all right, title and interest, including
all goodwill relating thereto, in and to the Marks, and all trademark rights
embodied therein shall at all times be solely vested in Licensor. Licensees have
no right, title, interest or claim of ownership in the Marks, except for the
licenses granted in this Agreement. All use of the Marks shall inure to the
benefit of Licensor. Licensees agree that they will not attack the title of
Licensor in and to the Marks.
     6.4 Confidentiality. The Licensees shall maintain in strictest confidence
all confidential or nonpublic information or material disclosed by Licensor and
in the materials

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supplied hereunder in connection with the license of the Marks, whether in
writing or orally and whether or not marked as confidential. Such confidential
information includes, but is not limited to, algorithms, inventions, ideas,
processes, computer system architecture and design, operator interfaces,
operational systems, technical information, technical specifications, training
and instruction manuals, and the like. In furtherance of the foregoing
confidentiality obligation, Licensees shall limit disclosure of such
confidential information to those of their employees, contractors or agents
having a need to access the confidential information for the purpose of
exercising rights granted hereunder.
     6.5 Estoppel. Nothing in this Agreement shall be construed as conferring by
implication, estoppel, or otherwise upon Licensees (a) any license or other
right under the intellectual property rights of Licensor other than the license
granted herein to the Marks as set forth expressly herein or (b) any license
rights other than those expressly granted herein.
     6.6 Warranties; Disclaimers.
     (a) The Licensor represents and warrants that (i) it owns and has the right
to license the Marks licensed under this Agreement and (ii) the Marks do not
infringe upon the rights of any third parties.
     (b) EXCEPT FOR THE WARRANTIES AND REPRESENTATIONS DESCRIBED IN SECTION
6.6(a), LICENSOR DISCLAIMS ANY AND ALL WARRANTIES, CONDITIONS OR REPRESENTATIONS
(EXPRESS OR IMPLIED, ORAL OR WRITTEN) WITH RESPECT TO THE SUBJECT MATTER HEREOF,
OR ANY PART THEREOF, INCLUDING ANY AND ALL IMPLIED WARRANTIES OF
NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS OR SUITABILITY FOR ANY PURPOSE
(WHETHER ANY LICENSEE KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS
OTHERWISE IN FACT AWARE OF ANY SUCH PURPOSE) WHETHER ALLEGED TO ARISE BY LAW, BY
REASON OF CUSTOM OR USAGE IN THE TRADE OR BY COURSE OF DEALING.
     6.7 In the Event of Termination. In the event of termination of this
Agreement pursuant to Section 8.4 or otherwise, the Licensees’ right to utilize
or possess the Marks licensed under this Agreement shall automatically cease,
and concurrently with such termination of this Agreement, the Licensees shall
(i) cease all use of the Marks and shall adopt new trademarks, service marks,
and trade names that are not confusingly similar to the Marks and (ii) no later
than ninety (90) days following the termination of this Agreement, the General
Partner shall have caused each of the Partnership Entities to change its legal
name so that there is no longer any reference therein to the name “Universal
Compression,” “Exterran,” “Hanover,” any name or d/b/a then used by any Exterran
Entity or any variation, derivation or abbreviation thereof, and in connection
therewith, the General Partner shall cause each such Partnership Entity to make
all necessary filings of certificates with the Secretary of State of the State
of Delaware and to otherwise amend its Organizational Documents by such date.

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ARTICLE VII
INDEMNIFICATION
     7.1 Environmental Indemnification.
     (a) Subject to Section 7.3, Exterran shall indemnify, defend and hold
harmless the Partnership Group from and against any environmental claims, losses
and expenses (including, without limitation, court costs and reasonable
attorney’s and expert’s fees) of any and every kind or character, known or
unknown, fixed or contingent, suffered or incurred by the Partnership Group by
reason of or arising out of:
     (i) any violation of Environmental Laws associated with the ownership or
operation of the Partnership Assets; or
     (ii) any event or condition associated with ownership or operation of the
Partnership Assets (including, without limitation, the presence of Hazardous
Substances on, under, about or migrating to or from the Partnership Assets or
the disposal or release of Hazardous Substances generated by operation of the
Partnership Assets) including, without limitation, (A) the cost and expense of
any investigation, assessment, evaluation, monitoring, containment, cleanup,
repair, restoration, remediation, or other corrective action required or
necessary under Environmental Laws or to satisfy any applicable Voluntary
Cleanup Program, (B) the cost or expense of the preparation and implementation
of any closure, remedial, corrective action or other plans required or necessary
under Environmental Laws or to satisfy any applicable Voluntary Cleanup Program
and (C) the cost and expense for any environmental pre-trial, trial, or
appellate legal or litigation support work; provided, in the case of clauses
(A) and (B) such cost and expense shall not included the costs of and associated
with project management and soil and ground water monitoring;
but only to the extent that such violation complained of under Section 7.1(a)(i)
or such events or conditions included under Section 7.1(a)(ii) occurred before
the applicable Closing Date with respect to such Partnership Assets
(collectively, “Covered Environmental Losses”).
     (b) The Partnership Group shall indemnify, defend and hold harmless
Exterran and its Affiliates from and against any Covered Environmental Losses
suffered or incurred by Exterran and its Affiliates relating to the Partnership
Assets occurring on or after the applicable Closing Date, except to the extent
that the Partnership Group is indemnified with respect to any of such Covered
Environmental Losses under Section 7.1(a), and unless such indemnification would
not be permitted under the Partnership Agreement by reason of one of the
provisos contained in Section 7.7(a) of the Partnership Agreement.
     (c) Except for claims for Covered Environmental Losses made before the
third anniversary of the applicable Closing Date, which shall not terminate, all

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indemnification obligations in this Section 7.1 shall terminate on the third
anniversary of the applicable Closing Date.
     7.2 Additional Indemnification.
     (a) In addition to and not in limitation of the indemnification provided
under Section 7.1(a), subject to Section 7.3 and except as otherwise set forth
in any Exhibit hereto, Exterran shall indemnify, defend and hold harmless the
Partnership Group from and against any claims, losses and expenses (including,
without limitation, court costs and reasonable attorney’s and expert’s fees) of
any and every kind or character, known or unknown, fixed or contingent, suffered
or incurred by the Partnership Group (“Other Losses”) by reason of or arising
out of:
     (i) failure to convey good and defensible title to the Partnership Assets
to one or more members of the Partnership Group, and such failure render the
Partnership Group unable to use or operate the Partnership Assets in
substantially the same manner as they were operated by the Exterran Entities
immediately prior to the applicable Closing Date with respect to such
Partnership Assets;
     (ii) events and conditions associated with the Retained Assets whether
occurring before or after the applicable Closing Date; and
     (iii) all federal, state and local income tax liabilities attributable to
the operation of the Partnership Assets prior to the applicable Closing Date,
including any such income tax liabilities of Exterran that may result from the
consummation of the formation transactions for the Partnership Entities;
provided, however, that in the case of clauses (i) and (ii) above, such
indemnification obligations shall terminate on the third anniversary of the
applicable Closing Date; and that in the case of clause (iii) above, such
indemnification obligations shall survive until sixty (60) days after the
termination of any applicable statute of limitations.
     (b) In addition to and not in limitation of the indemnification provided
under Section 7.1(b) and the Partnership Agreement and except as otherwise set
forth in any Exhibit hereto, the Partnership Group shall indemnify, defend and
hold harmless Exterran and its Affiliates from and against any claims, losses
and expenses (including, without limitation, court costs and reasonable
attorney’s and expert’s fees) of any and every kind or character, known or
unknown, fixed or contingent, suffered or incurred by Exterran and its
Affiliates by reason of or arising out of events and conditions associated with
the operation of the Partnership Assets and occurring on or after the applicable
Closing Date unless such indemnification would not be permitted under the
Partnership Agreement by reason of one of the provisos contained in
Section 7.7(a) of the Partnership Agreement.

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     7.3 Limitations Regarding Indemnification. (a) The aggregate liability of
Exterran under Section 7.1(a) shall not exceed $5.0 million.
     (b) No claims may be made against Exterran for indemnification pursuant to
Sections 7.1(a) or 7.2(a) unless the aggregate dollar amount of the Losses
suffered or incurred by the Partnership Group or the Partnership Indemnitees
exceed $250,000, after such time Exterran shall be liable for the full amount of
such claims, subject to the limitations of Section 7.3(a).
     (c) Notwithstanding anything herein to the contrary, in no event shall
Exterran have any indemnification obligations under Section 7.1(a) for claims
made as a result of additions to or modifications of Environmental Laws
promulgated after the applicable Closing Date with respect to a particular
Partnership Asset.
     7.4 Indemnification Procedures
     (a) The Indemnified Party agrees that promptly after it becomes aware of
facts giving rise to a claim for indemnification under this Article VII, it will
provide notice thereof in writing to the Indemnifying Party, specifying the
nature of and specific basis for such claim; provided, however, that the
Indemnified Party shall not submit claims more frequently than once a calendar
quarter (or twice in the case of the last calendar quarter prior to the
expiration of the applicable indemnity coverage under this Agreement).
     (b) The Indemnifying Party shall have the right to control all aspects of
the defense of (and any counterclaims with respect to) any claims brought
against the Indemnified Party that are covered by the indemnification under this
Article VII, including, without limitation, the selection of counsel,
determination of whether to appeal any decision of any court and the settling of
any such matter or any issues relating thereto; provided, however, that no such
settlement shall be entered into without the consent of the Indemnified Party
(with the concurrence of the Conflicts Committee in the case of the Partnership
Group) unless it includes a full release of the Indemnified Party from such
matter or issues, as the case may be, and does not include the admission of
fault, culpability or a failure to act, by or on behalf of such Indemnified
Party.
     (c) The Indemnified Party agrees to cooperate fully with the Indemnifying
Party, with respect to all aspects of the defense of any claims covered by the
indemnification under this Article VII, including, without limitation, the
prompt furnishing to the Indemnifying Party of any correspondence or other
notice relating thereto that the Indemnified Party may receive, permitting the
name of the Indemnified Party to be utilized in connection with such defense,
the making available to the Indemnifying Party of any files, records or other
information of the Indemnified Party that the Indemnifying Party considers
relevant to such defense and the making available to the Indemnifying Party, at
no cost to the Indemnifying Party, of any employees of the Indemnified Party;
provided, however, that in connection therewith the Indemnifying Party agrees to
use reasonable efforts to minimize the impact thereof on the operations of the
Indemnified Party and further agrees to endeavor to maintain the confidentiality
of all

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files, records and other information furnished by the Indemnified Party pursuant
to this Section 7.4. In no event shall the obligation of the Indemnified Party
to cooperate with the Indemnifying Party as set forth in the immediately
preceding sentence be construed as imposing upon the Indemnified Party an
obligation to hire and pay for counsel in connection with the defense of any
claims covered by the indemnification set forth in this Article VII; provided,
however, that the Indemnified Party may, at its own option, cost and expense,
hire and pay for counsel in connection with any such defense. The Indemnifying
Party agrees to keep any such counsel hired by the Indemnified Party informed as
to the status of any such defense, but the Indemnifying Party shall have the
right to retain sole control over such defense.
     (d) In determining the amount of any loss, cost, damage or expense for
which the Indemnified Party is entitled to indemnification under this Agreement,
the gross amount of the indemnification will be reduced by (i) any insurance
proceeds realized by the Indemnified Party and (ii) all amounts recovered by the
Indemnified Party under contractual indemnities from third Persons. The
Partnership hereby agrees to use commercially reasonable efforts to realize any
applicable insurance proceeds or amounts recoverable under such contractual
indemnities.
     (e) The date on which the Indemnifying Party receives notification of a
claim for indemnification shall determine whether such claim is timely made.
ARTICLE VIII
MISCELLANEOUS
     8.1 Choice of Law; Submission to Jurisdiction. This Agreement shall be
subject to and governed by the laws of the State of Texas, excluding any
conflicts-of-law rule or principle that might refer the construction or
interpretation of this Agreement to the laws of another state. Each Party hereby
submits to the jurisdiction of the state and federal courts in the State of
Texas and to venue in Texas.
     8.2 Notice. All notices, requests or consents provided for or permitted to
be given pursuant to this Agreement must be in writing and must be given by
depositing same in the United States mail, addressed to the Person to be
notified, postpaid, and registered or certified with return receipt requested or
by delivering such notice in person or by telecopier or telegram to such Party.
Notice given by personal delivery or mail shall be effective upon actual
receipt. Notice given by telegram or telecopier shall be effective upon actual
receipt if received during the recipient’s normal business hours, or at the
beginning of the recipient’s next business day after receipt if not received
during the recipient’s normal business hours. All notices to be sent to a Party
pursuant to this Agreement shall be sent to or made at the address set forth
below or at such other address as such Party may stipulate to the other Parties
in the manner provided in this Section 8.2.
For notices to any of the Exterran Entities:
16666 Northchase Drive
Houston, Texas 77060

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Phone: (281) 836-7000
Fax:   (281) 836-8061
Attention: Chief Financial Officer
For notices to any of the Partnership Entities:
16666 Northchase Drive
Houston, Texas 77060
Phone: (281) 836-7000
Fax:   (281) 836-8061
Attention: Chief Financial Officer
     8.3 Entire Agreement. This Agreement constitutes the entire agreement of
the Parties relating to the matters contained herein, superseding all prior
contracts or agreements, whether oral or written, relating to the matters
contained herein, other than the 2009 Contribution Agreement.
     8.4 Termination. This Agreement, other than the provisions set forth in
Articles VII and VIII hereof, shall terminate upon a Change of Control of GP
LLC, the General Partner or the Partnership, other than any Change of Control of
GP LLC, the General Partner or the Partnership deemed to have occurred pursuant
to clause (iv) of the definition of Change of Control solely as a result of a
Change of Control of Exterran.
     8.5 Effect of Waiver or Consent. No waiver or consent, express or implied,
by any Party to or of any breach or default by any Person in the performance by
such Person of its obligations hereunder shall be deemed or construed to be a
consent or waiver to or of any other breach or default in the performance by
such Person of the same or any other obligations of such Person hereunder.
Failure on the part of a Party to complain of any act of any Person or to
declare any Person in default, irrespective of how long such failure continues,
shall not constitute a waiver by such Party of its rights hereunder until the
applicable statute of limitations period has run.
     8.6 Amendment or Modification. This Agreement may be amended or modified
from time to time only by the written agreement of all the Parties; provided,
however, that the Partnership and the Operating Company may not, without the
prior approval of the Conflicts Committee, agree to any amendment or
modification of this Agreement that the General Partner determines will
adversely affect the holders of Common Units. Each such instrument shall be
reduced to writing and shall be designated on its face an “Amendment” or an
“Addendum” to this Agreement.
     8.7 Assignment; Third Party Beneficiaries. Any Party shall have the right
to assign its rights under this Agreement without the consent of any other
Party, but no Party shall have the right to assign its obligations under this
Agreement without the consent of the other Parties. Subject to the limitations
set forth in Section 8.14, each of the Parties hereto specifically intends that
each entity comprising the Exterran Entities and each entity comprising the
Partnership Entities, as applicable, whether or not a Party to this Agreement,
shall be entitled to

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assert rights and remedies hereunder as third-party beneficiaries hereto with
respect to those provisions of this Agreement affording a right, benefit or
privilege to any such entity.
     8.8 Counterparts. This Agreement may be executed in any number of
counterparts (including facsimile counterparts) with the same effect as if all
signatory Parties had signed the same document. All counterparts shall be
construed together and shall constitute one and the same instrument.
     8.9 Severability. If any provision of this Agreement or the application
thereof to any Person or circumstance shall be held invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected thereby and
shall be enforced to the greatest extent permitted by law.
     8.10 Gender, Parts, Articles and Sections. Whenever the context requires,
the gender of all words used in this Agreement shall include the masculine,
feminine and neuter, and the number of all words shall include the singular and
plural. All references to Article numbers and Section numbers refer to Articles
and Sections of this Agreement.
     8.11 Further Assurances. In connection with this Agreement and all
transactions contemplated by this Agreement, each Party agrees to execute and
deliver such additional documents and instruments and to perform such additional
acts as may be necessary or appropriate to effectuate, carry out and perform all
of the terms, provisions and conditions of this Agreement and all such
transactions.
     8.12 Withholding or Granting of Consent. Except as otherwise expressly
provided in this Agreement, each Party may, with respect to any consent or
approval that it is entitled to grant pursuant to this Agreement, grant or
withhold such consent or approval in its sole and uncontrolled discretion, with
or without cause, and subject to such conditions as it shall deem appropriate.
     8.13 Laws and Regulations. Notwithstanding any provision of this Agreement
to the contrary, no Party shall be required to take any act, or fail to take any
act, under this Agreement if the effect thereof would be to cause such Party to
be in violation of any applicable law, statute, rule or regulation.
     8.14 Negation of Rights of Limited Partners, Assignees and Third Parties.
The provisions of this Agreement are enforceable solely by the Parties, and no
shareholder, limited partner, member, or assignee of Exterran, EESLP, GP LLC,
the General Partner, the Partnership or the Operating Company or other Person
shall have the right, separate and apart from Exterran, EESLP, GP LLC, the
General Partner, the Partnership or the Operating Company, to enforce any
provision of this Agreement or to compel any Party to comply with the terms of
this Agreement.
     8.15 No Recourse Against Officers or Directors. For the avoidance of doubt,
the provisions of this Agreement shall not give rise to any right of recourse
against any officer or director of any Exterran Entity or any Partnership
Entity.

32

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[Signature pages follow.]

33

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     IN WITNESS WHEREOF, the Parties have executed this Agreement on, and
effective as of, the Effective Date.

                  EXTERRAN HOLDINGS, INC.    
 
           
 
  By:   /s/ Ernie L. Danner    
 
           
 
  Name:   Ernie L. Danner    
 
  Title:   President and Chief Executive Officer    
 
                EXTERRAN ENERGY SOLUTIONS, L.P.    
 
           
 
  By:   /s/ Ernie L. Danner    
 
           
 
  Name:   Ernie L. Danner    
 
  Title:   President and Chief Executive Officer    
 
                EXTERRAN GP LLC    
 
           
 
  By:   /s/ David S. Miller    
 
           
 
  Name:   David S. Miller    
 
  Title:   Vice President and Chief Financial Officer    
 
                EXTERRAN GENERAL PARTNER, L.P.    
 
           
 
  By:   Exterran GP LLC,    
 
      its general partner    
 
           
 
  By:   /s/ David S. Miller    
 
           
 
  Name:   David S. Miller    
 
  Title:   Vice President and Chief Financial Officer    

Signature Page — Omnibus Agreement

 

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                  EXTERRAN PARTNERS, L.P.    
 
           
 
  By:   Exterran General Partner, L.P.,    
 
      its general partner    
 
           
 
  By:   Exterran GP LLC,    
 
      its general partner    
 
           
 
  By:   /s/ David S. Miller     
 
           
 
  Name:   David S. Miller    
 
  Title:   Vice President and Chief Financial Officer    
 
                EXLP OPERATING LLC    
 
           
 
  By:   /s/ David S. Miller     
 
           
 
  Name:   David S. Miller    
 
  Title:   Vice President and Chief Financial Officer    

Signature Page — Omnibus Agreement

 

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Schedule 1.1
Fixed Margin Percentage
11.1%
Schedule 1.1

 

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Schedule 3.1(a)
Services

1)   operations,   2)   marketing,   3)   maintenance and repair of Compression
Equipment,   4)   periodic overhauls of Compression Equipment,   5)   inventory
management,   6)   legal,   7)   accounting,   8)   treasury,   9)   insurance
administration and claims processing,   10)   risk management,   11)   health,
safety and environmental,   12)   information technology,   13)   human
resources,   14)   credit,   15)   collections,   16)   payroll,   17)  
internal audit,   18)   taxes,   19)   engineering,   20)   facilities
management,   21)   investor relations,   22)   ERP,   23)   training,   24)  
executive,   25)   sales, and   26)   business development.

Schedule 3.1(a)

 

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Schedule 3.1(b)
Excluded Services

1.   Fabrication and sale of new Compression Equipment.

Schedule 3.1(b)

 

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Schedule 6.1
Marks
(EXTERRAN LOGO) [h77271h6965900.gif]
(EXTERRAN PARTNERS LOGO) [h77271h6965901.gif]
(UNIVERSAL COMPRESSION PARTNERS, L.P. LOGO) [h77271h6965902.gif]
(LOGO) [h77271h6965903.gif]
(UNIVERSAL COMPRESSION LOGO) [h77271h6965904.gif]
Schedule 6.1

 

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(HANOVER LOGO) [h77271h6965905.gif]
(HANOVER LOGO) [h77271h6965906.gif]
Schedule 6.1

 

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Exhibit 1
FORM ASSIGNMENT AND BILL OF SALE
     For valuable consideration, the receipt of which is hereby acknowledged,
                                        , a [place of formation] [entity type]
(“Seller”) hereby SELLS, GRANTS, ASSIGNS and TRANSFERS to
                                        , a [place of formation] [entity type]
(“Purchaser”), effective as of                     , 20___, good, marketable and
indefeasible title to all of Seller’s right, title and interest in, to and under
the Compression Equipment described on Exhibit A attached hereto and made a part
hereof for all purposes, together with all assets, rights and properties related
to such Compression Equipment of the sort described in Section 4.2(b) of the
Omnibus Agreement (as defined below) (collectively, the “Assets”):
     The Seller, in its name and in the name of its successors and assigns,
hereby represents that it has the power and authority to sell or otherwise
transfer the Assets in the manner provided in this Assignment and Bill of Sale
and that the Assets are free and clear of all Liens, except for any Liens
created by Purchaser and except for Permitted Liens. EXCEPT AS EXPRESSLY
PROVIDED IN THE OMNIBUS AGREEMENT, THE ASSETS ARE BEING SOLD WITHOUT ANY
WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY
WARRANTIES OF FITNESS FOR USE OR MERCHANTIBILITY.
     Seller does hereby bind itself, its successors and assigns, to forever
warrant and defend the title to the Assets unto Purchaser, its successors and
assigns against the lawful claim or claims of any person whomsoever claiming an
interest in the Assets.
     Seller covenants and agrees to execute and deliver to Purchaser all such
other additional instruments and other documents and will do all such other acts
and things as may be necessary to fully assign to Purchaser, or its successors
and assigns, all of the Assets.
     All of the provisions hereof shall inure to the benefit of and be binding
upon the respective heirs, successors and assigns of Seller and Purchaser.
     Terms used herein but not defined herein shall have the meanings assigned
to such terms in the Second Amended and Restated Omnibus Agreement dated as of
[___], 2009 by and among Exterran Holdings, Inc., a Delaware corporation
(“Exterran”), Exterran Energy Solutions, L.P., a Delaware limited partnership
(“EESLP”), Exterran GP LLC, a Delaware limited liability company formerly named
UCO GP, LLC (“GP LLC”), Exterran General Partner, L.P., a Delaware limited
partnership formerly named UCO General Partner, L.P. (the “General Partner”),
Exterran Partners, L.P., a Delaware limited partnership (the “Partnership”) and
EXLP Operating LLC (the “Operating Company”) (the “Omnibus Agreement”).
Exhibit 1-1

 

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     IN WITNESS WHEREOF, Seller has caused this Assignment and Bill of Sale to
be executed on                     , ___ 20___.

                  “SELLER”    
 
  [    ]        
 
  By:        
 
  Name:  
 
   
 
  Title:  
 
   
 
     
 
   
 
                “BUYER”    
 
  [    ]        
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:  
 
   
 
     
 
   

Exhibit 1-2

 

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Exhibit 2
FORM COMPRESSION LEASE AGREEMENT
EQUIPMENT MASTER RENTAL AGREEMENT
This Equipment Master Rental Agreement including all Schedule(s), which are
hereby incorporated by reference (collectively, this “Agreement”), is made
between                      (“Lessor”) and                     , (“Lessee”).
Lessor and Lessee agree as follows:
1. Lease. Subject to and on the terms and conditions set forth in Article IV of
the Second Amended and Restated Omnibus Agreement among Exterran Holdings, Inc.,
Exterran Energy Solutions, L.P., Exterran GP LLC, Exterran General Partner,
L.P., Exterran Partners, L.P., and EXLP Operating LLC, as such agreement may be
amended, restated, modified, supplemented or replaced (the “Omnibus Agreement”)
and herein, Lessee and Lessor may from time to time execute Schedule(s) to this
Agreement (each a “Schedule”) and Lessor hereby agrees to lease to Lessee, and
Lessee hereby agrees to lease from Lessor, the personal property described and
detailed as the “Equipment” on the applicable Schedule. Each Schedule in
conjunction with this Agreement shall be deemed to be a separately enforceable
lease between Lessee and Lessor with respect to the Equipment specified in such
Schedule. Lessee and Lessor each represent and warrant for itself that with
respect to this Agreement and each applicable Schedule:
     a. the execution, delivery and performance by each party have been duly
authorized by all necessary corporate action;
     b. the individual executing the same was duly authorized to do so; and
     c. each constitutes legal, valid and binding agreements, enforceable in
accordance with their terms.
2. Term; Rent; and Equipment Type.
     a. Each applicable Schedule shall set forth the term of the lease and
amount of rental payments for the Equipment listed thereon, which Lessee shall
pay as set forth on the applicable Schedule. If Lessee fails to pay any rental
or other sum when due, Lessee also shall pay to Lessor interest thereon from the
due date thereof to the date of payment at a rate equal to the lesser of 18% per
annum or the maximum rate permitted by applicable law (“Applicable Rate”). All
payments by Lessee hereunder shall be payable at the office of Lessor, or at
such other place as Lessor may from time to time may designate in writing. It is
the intent of the parties that the applicable Schedule shall have a term that is
no greater than a whole or fractional month less than 75% of the remaining
useful life of the Equipment subject to such Schedule. Notwithstanding the
foregoing, Lessor and Lessee may offset any amounts due and owing from the other
against any amounts due and owing to the other.
     b. Each applicable Schedule shall set forth the specific Equipment type.
3. Taxes.
     a. Lessee shall be liable for any and all license fees and assessments and
all consumption, sales, use, property, excise and other taxes or charges
(including any interest and penalties), now or hereafter imposed by any
governmental body or agency upon the Equipment or the purchase, ownership,
possession, leasing, operation, use, or disposition
Exhibit 2-1

 

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thereof hereunder, or the rentals or other payments hereunder (excluding taxes
on or measured by the net income of Lessor) (“Taxes”). In this regard, Lessee
shall prepare and file promptly with the appropriate offices any and all Tax and
other similar returns required to be filed with respect thereto (sending copies
thereof to Lessor) or, if requested by Lessor, notify Lessor of such requirement
and furnish Lessor with all information required by Lessor so that it may effect
such filing. If such filings shall be made by Lessor, Lessee shall reimburse
Lessor for any such Taxes promptly when due.
4. Inspection and Acceptance upon Delivery of Equipment to Lessee and Return of
Equipment to Lessor. Within ninety-six (96) hours after delivery of the
Equipment to be leased to Lessee under the applicable Schedule, Lessee shall
inspect the Equipment. Unless within said ninety-six (96) hour period Lessee
notifies Lessor in writing to the contrary stating the details of any defects,
Lessee shall be conclusively presumed to have accepted the Equipment in its then
condition. If within said ninety-six (96) hour period Lessee notifies Lessor in
writing of the unacceptability of the Equipment, Lessee’s obligations to lease
the Equipment shall cease forthwith. Except as otherwise provided in the
applicable Schedule, upon acceptance of delivery, Lessee assumes the care,
custody, supervision and control of the Equipment and of any and all persons or
property in the vicinity of the Equipment during the time of delivery, operation
and return. Lessee acknowledges that all Equipment rented hereunder and
specified in the Schedule(s) is of the size, design and capacity selected for
the operating conditions furnished to Lessor by Lessee and is suitable for
Lessee’s purposes. Lessee acknowledges that Lessor may not be the manufacturer
or supplier of the Equipment and any quotations or recommendations made by
Lessor are based on information supplied by Lessee and the manufacturer or
supplier of the Equipment. Within five (5) business days after return of
Equipment by Lessee to Lessor at its designated yard, Lessor shall inspect such
Equipment and notify Lessee of any damage of the Equipment in addition to damage
previously reported to Lessee pursuant to Section 7(e) and invoice Lessor for
any such damage.
5. Freight. Lessee agrees to bear all of the cost of connecting the Equipment
and of disconnecting the Equipment prior to returning the Equipment to Lessor.
Except as otherwise provided in the applicable Schedule, all costs of
transporting the Equipment from Lessor’s yard to Lessee’s Site described on the
applicable Schedule and of transporting the Equipment from such Site back to
Lessor’s designated yard will be at Lessee’s sole cost and expense.
6. Insurance. Lessee shall, at Lessee’s sole cost and expense, maintain
insurance or Lessor-approved self-insurance in such amounts, against such risks
(including, but not limited to, all risk and public liability and property
insurance with respect to the Equipment (including, but not limited to,
windstorm, flood and earthquake)) from the time of Lessee’s acceptance of the
Equipment in accordance with Section 4 until it is returned to the Lessor’s
designated yard, with such carriers and in such form as shall be satisfactory to
Lessor.
7. Use / Lessee’s Responsibilities. Lessee agrees to use the Equipment in a
careful and prudent manner with competent agents, employees or subcontractors in
accordance with the specifications, if any, of the manufacturer of the
Equipment. If the Equipment is compression equipment, Lessee agrees to pay for
damages to the Equipment resulting from free water, excessive condensate or
foreign solids, or impurities contained in the gas stream. Lessee further agrees
to pay for all damages to the Equipment resulting from abusive use, failure to
maintain the Equipment in accordance with this Agreement or from any negligence
on the part
Exhibit 2-2

 

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of Lessee, its agents, employees or subcontractors; provided, however, Lessee
shall not be liable for such damages to the extent such damages are caused by
the acts or omissions of Lessor or its parent company.
     In addition to any Lessee obligations contained elsewhere in this Agreement
and within any Schedule hereto, except to the extent any Schedule provides
otherwise, Lessee agrees to and shall:
     a. If Lessor is to install the equipment, provide Lessor with authorized
ingress and egress to and from the site designated in the applicable Schedule
for installation of the Equipment (the “Site”). Should Lessor be denied access
to the Site for any reason not reasonably within Lessor’s control, any time lost
by Lessor shall be paid for by Lessee on demand, and if not then paid, shall
incur interest at the Applicable Rate. To the extent that Lessee has superior
knowledge of the Site and access routes to the Site, Lessee must advise Lessor
of any conditions or obstructions which Lessor might encounter while en route to
the Site. Lessee agrees to maintain the road, if any, and the Site in such a
condition that will allow free access and movement to and from the Site in an
ordinary highway type vehicle. If because of an attribute of Lessee’s
operations, Lessor is required to use any specialized transportation equipment,
cranes or other services and supplies, Lessee shall furnish the same at its
expense and without cost to Lessor;
     b. Prepare a sound location at the Site adequate in size and capable of
properly supporting the Equipment;
     c. Immediately mitigate and repair any stoppage, malfunction or leaks of
oil or coolant from the Equipment; and
     d. Return the Equipment in good operating condition, which by way of
example, but not exclusion, means free of hydrocarbons, mud, sand and naturally
occurring radioactive materials and with castings (e.g. blocks, frames, heads,
manifolds, housings, distance pieces, cylinders), shafts (e.g. crankshafts,
camshafts, cooler shafts), rods (e.g. connecting rods, piston rods), controls,
pumps, scrubbers, bottles, processing piping, header, box, fan and accessories
that are not, by way of example, but not exclusion, damaged, rusted or pitted,
bent, cracked or inoperable. If the Equipment is not returned in good operating
condition, Lessee agrees to pay Lessor such amounts necessary to bring Equipment
up to good operating condition upon invoice by Lessor; provided, however, Lessee
shall not be liable for such amounts to the extent such damages are caused by
the acts or omissions of Lessor or its parent company.
     e. Perform such other obligations set forth in Annex A hereto.
8. Maintenance. Unless otherwise provided in the applicable Schedule or separate
written operation and maintenance agreement, including the Omnibus Agreement,
Lessee acknowledges that Lessor is providing the Equipment as a “bare rental”
and, therefore, Lessor will have no maintenance or inspection obligations with
respect to the Equipment.
9. Inspection. Lessor shall have the right at all reasonable times to enter upon
the premises where the Equipment may be located for the purpose of inspecting it
or observing its use.
10. Title; Personal Property; Encumbrances; Location. Lessee covenants that:
     a. The Equipment is and shall remain personal property and shall not be
attached to or become part of any realty;
     b. The Equipment will be installed and used at the Site specified in the
applicable Schedule pertaining thereto and that it shall not be removed
therefrom without the permission of Lessor;
Exhibit 2-3

 

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     c. That Lessee will not, except as expressly authorized in this Agreement,
sell, secrete, mortgage, assign, transfer, lease, sublet, loan part with
possession of, or encumber the Equipment or permit any liens or charges to
become effective thereon or permit or attempt to do any of the acts aforesaid.
Lessee agrees, at Lessee’s own expense, to take such action as may be necessary
to remove any such encumbrance, lien or charge and to prevent any third party
from acquiring any other interest in the Equipment (including, but not limited
to, by reason of such Equipment being deemed to be a fixture or a part of any
realty); and
     d. Lessee will not change or remove any insignia, serial number or
lettering of the Equipment.
11. Licenses, Permits and Compliance. Lessee shall, at its sole expense;
     a. Comply with all applicable rules and regulations of any federal,
provincial, state, county, city, local, municipal or regulatory agency relating
to the construction or operation of the Equipment at the Site, or environmental
requirements associated therewith (including, but not limited to, air emission,
noise and environmental discharges); and
     b. Obtain and maintain throughout the term, or any extension thereof, any
and all licenses and/or permit fees assessed as a result of this Agreement or
against said Equipment.
12. Waste Disposal. Lessee bears responsibility for disposal of liquids, solid,
and hazardous waste discharged by the Equipment at the Site in accordance with
federal, state and local environmental rules and regulations.
13. Events of Default; Remedies; Expenses. In the event that:
     a. Lessee shall default in the payment of any installment of rent or other
sum payable under this Agreement or default in the observance or performance of
any other covenant or agreement in this Agreement and the failure to cure said
default within ten (10) days after notice by Lessor;
     b. Lessee shall dissolve, or become insolvent (however evidenced) or
bankrupt, make an assignment for the benefit of creditors, suspend the
transaction of its usual business or consent to the appointment of a trustee or
receiver, or a trustee or a receiver shall be appointed for Lessee or for a
substantial part of its property, or bankruptcy, reorganization, insolvency, or
similar proceedings shall be instituted by or against Lessee;
     c. an order, judgment, or decree shall be entered against Lessee by a court
of competent jurisdiction and such order, judgment or decree shall continue
unpaid or unsatisfied and in effect for any period of sixty (60) consecutive
days without a stay of execution, or any execution or writ or process shall be
issued in connection with any action or proceeding against Lessee or its
property whereby all Equipment under the Schedules or any substantial part of
Lessee’s property may be taken or restrained;
     d. any indebtedness of Lessee for borrowed money shall become due and
payable by acceleration of maturity thereof; or
     e. Lessor shall in good faith believe that the prospect of payment or
performance by Lessee is impaired,
then and in any such event, Lessor may, by written notice to Lessee:
          (1) Immediately terminate this Agreement and any Schedule then in
effect, at its option, and Lessee’s rights thereunder; and/or
          (2) Declare immediately due, and payable all rental installments and
other sums hereunder forthwith due and payable whereupon the same shall
forthwith become due and payable as liquidated damages and not as a penalty;
and/or
Exhibit 2-4

 

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          (3) Proceed by appropriate court action or actions either at law or in
equity, to enforce performance by Lessee of the applicable covenants of this
Agreement or to recover damages for the breach thereof; and/or
          (4) Without necessity of process or other legal action, enter onto the
premises of Lessee or such other premises as the Equipment may then be located
and stop the operation of the Equipment and/or take possession of the Equipment,
disconnecting and separating the Equipment from any other property and using all
force necessary or permitted by applicable law, without Lessor incurring any
liability to Lessee or any other person arising out of the taking of any such
action. Lessee agrees to and shall indemnify and hold harmless Lessor from any
and all claims, losses, damages, causes of action, suits and liabilities of any
kind arising in favor of Lessee, or any interest owner that Lessee represents or
serves as operator and arising out of or in connection with the stopping of the
operation of the Equipment and/or the removal of the Equipment as aforesaid,
whether same result from the forfeiture of any oil, gas or mineral lease, damage
to a producing reservoir or lease operations, lost production or other event or
condition. In addition, Lessee shall continue to be liable for all other
indemnities under this Agreement and for all legal fees and other costs and
expenses resulting from the foregoing defaults or the exercise of Lessor’s
remedies. Lessor shall be entitled to take or retain, by way of offset against
any or all amounts due and owing under this Agreement, any assets, tangible or
intangible, of Lessee which may then be in the possession of Lessor, its
correspondents or agents, wheresoever situated.
14. Indemnity of Lessor.
     a. Lessee is responsible and liable for loss of or damage to Equipment
arising between the time of delivery and redelivery of the Equipment and Lessee
shall protect, defend, indemnify and hold Lessor harmless from and against any
such loss or damage, including, but not limited to, improper operation, improper
maintenance (unless Lessor performs maintenance), compression of dirty or wet
gas, fire, freezing, theft, windstorm, hailstorm, flood, riot, insurrection or
explosion, except to the extent such loss or damage is caused by the acts or
omissions of Lessor or its parent company.
     b. Lessee shall protect, defend, indemnify and hold Lessor harmless from
and against any loss, damage, liability, suit, expense, cost or claim, however
occurring as the result of loss of or damage to property (other than the
Equipment), arising between the time of delivery and redelivery of the
Equipment, whether such property is owned by Lessee or third party, and for
injury to or death of persons, whether Lessee or its employees or third parties,
except to the extent such loss or damage is caused by the acts or omissions of
Lessor or its parent company.
     c. No Limit. Except as otherwise provided herein, the indemnity obligations
in this Agreement shall not be limited to the amount of insurance carried by
either party hereto.
     d. Application, Construction and Interpretation. Notwithstanding any
provision in this Agreement to the contrary, the parties agree that the
indemnities in this Agreement shall be limited to the extent and only to the
extent necessary to comply with applicable law and that this Agreement shall be
deemed to be amended to the extent necessary to enforce the indemnities herein.
     e. Waiver of Consequential Damages. NOTWITHSTANDING ANYTHING CONTAINED IN
THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY
FOR, AND EACH PARTY HEREBY RELEASES THE OTHER PARTY FROM, ANY INDIRECT, SPECIAL,
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES OR LOSSES RELATED TO OR IN
CONNECTION WITH THIS AGREEMENT, OR ANY EQUIPMENT, INCLUDING, BUT NOT LIMITED TO,
Exhibit 2-5

 

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DAMAGES OR LOSSES FOR LOST PRODUCTION, LOST REVENUE, LOST PRODUCT, LOST PROFITS,
LOST BUSINESS OR BUSINESS INTERRUPTIONS, REGARDLESS OF WHETHER CAUSED OR
CONTRIBUTED TO BY PRE-EXISTING CONDITIONS, WHETHER SUCH CONDITIONS BE PATENT OR
LATENT, BREACH OF REPRESENTATION OR WARRANTY (EXPRESS OR IMPLIED),
ULTRAHAZARDOUS ACTIVITY, STRICT LIABILITY, TORT, BREACH OF CONTRACT, BREACH OF
STATUTORY DUTY, BREACH OF ANY SAFETY REQUIREMENT OR REGULATION, OR THE
NEGLIGENCE OF ANY PERSON OR PARTY, INCLUDING, BUT NOT LIMITED TO, THE
INDEMNIFIED PARTY OR PARTIES AND ITS OR THEIR GROUPS, WHETHER SUCH NEGLIGENCE BE
SOLE, JOINT AND/OR CONCURRENT, ACTIVE OR PASSIVE, OR ANY OTHER THEORY OF LEGAL
LIABILITY WITHOUT LIMITATION, EXCEPT TO THE EXTENT ANY SUCH RELEASING PARTY
ACTUALLY SUFFERS SUCH DAMAGES OR LOSSES TO A THIRD PARTY AND SUCH DAMAGES OR
LOSSES ARE OTHERWISE INDEMNIFIABLE UNDER SECTION 14 OF THIS AGREEMENT. THE
PARTIES FURTHER AGREE THAT THE FORGOING RELEASE OF LIABILITY SHALL ALSO EXTEND
TO EACH PARTY’S PARENT, SUBSIDIARY, AFFILIATED AND RELATED COMPANIES AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND REPRESENTATIVES.
15. Savings Clause. The parties agree that the indemnities in this Agreement are
limited to the extent necessary to comply with applicable state or federal law
and that this Agreement shall be deemed to be amended to comply with those laws
to the extent their requirements are at variance with any indemnification
provisions set forth in this Agreement.
16. Assignment By Lessor. Lessor may assign its rights and delegate its duties
under this Agreement. Lessor covenants to Lessee that Lessor is empowered to
execute this Agreement. Conditioned upon Lessee’s performing the conditions
hereof, Lessee shall peaceably and quietly hold, possess and use the Equipment
during the term and any extensions thereof without hindrance. If Lessor assigns
the rents reserved herein or all or any of Lessor’s rights hereunder, such
assignee’s rights shall be independent of any claim of Lessee against Lessor.
Lessee on receiving notice of any such assignment shall abide thereby and make
payment as may therein be directed. Following such assignment, the term “Lessor”
shall be deemed to include or refer to Lessor’s assignee, except such assignee’s
rights shall be independent of any claim of Lessee against Lessor as provided
herein.
17. Assignment and Subleasing by Lessee. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
IN THIS SECTION 17, LESSEE SHALL NOT, WITHOUT THE PRIOR CONSENT OF LESSOR,
ASSIGN, TRANSFER OR ENCUMBER ITS RIGHTS, INTERESTS OR OBLIGATIONS UNDER THIS
AGREEMENT. ANY ATTEMPTED ASSIGNMENT, TRANSFER OR ENCUMBRANCE BY LESSEE OF ITS
RIGHTS, INTERESTS OR OBLIGATIONS UNDER THIS AGREEMENT SHALL BE NULL AND VOID. So
long as no material event of default shall have occurred and be continuing,
Lessee may, without the consent of Lessor, sublease one or more of the Equipment
to any third party or use the Equipment in connection with the provision of
contract compression services pursuant to a contract (a “User Contract”). No
such subleasing, or use in connection with provision of services, by Lessee will
reduce or affect any of the obligations of Lessee hereunder or the rights of
Lessor under this Agreement, and all of the obligations of Lessee hereunder
shall be and remain primary and shall continue in full force and effect as the
obligations of a principal and not of a guarantor or surety.
Exhibit 2-6

 

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18. No Lessor Equipment Warranties. EXCEPT AS OTHERWISE PROVIDED IN THE
APPLICABLE SCHEDULE, LESSOR LEASES THE EQUIPMENT TO LESSEE AS-IS AND EXPRESSLY
DISCLAIMS AND MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AS TO THE CONDITION,
DESIGN, QUALITY, CAPACITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OF OR CONCERNING THE EQUIPMENT, OR ANY WARRANTY THAT THE EQUIPMENT IS FREE OF
THE RIGHTFUL CLAIM OF ANY THIRD PERSON BY WAY OF INFRINGEMENT OR THE LIKE,
WHETHER PATENT OR TRADEMARK INFRINGEMENT OR OTHERWISE, OR ANY OTHER MATTER,
CONCERNING THE EQUIPMENT.
19. Enforceability. If any part hereof is contrary to, prohibited by or deemed
invalid under applicable laws or regulations of any jurisdiction, such provision
shall be inapplicable and deemed omitted but shall not invalidate the remaining
provisions hereof.
20. No Conditional Sale. It is the intention of the parties hereto to hereby
create a lease on the Equipment described herein, and not a conditional sale. To
provide solely for the eventuality that a court might hold this to be a
conditional sale, Lessor hereby retains a purchase money security interest to
secure payment of the sales price of the Equipment as determined by such court,
and Lessee grants to Lessor all rights given to a secured party under the
Uniform Commercial Code of the United States or similar law of the governing
jurisdiction, if any other law should govern this Agreement or the Equipment, in
addition to Lessor’s other rights hereunder. It is the intention of the parties
that the Equipment shall be deemed personal property and that it not be deemed a
fixture, even though it may be attached in some manner to realty. To provide
solely for the eventuality that a court might also hold the Equipment to be a
fixture, the parties state for the purpose of complying with the legal
requirements for a financing statement that collateral is or includes fixtures
and the Equipment is affixed or is to be affixed to the lands described in the
applicable Schedule(s).
21. Alterations. Except as required or permitted by this Agreement, and subject
to this Section 21, Lessee shall not modify or alter the Equipment without the
prior approval of Lessor.
22. Miscellaneous.
     a. No representation, covenant or condition of this Agreement can be waived
or changed except by the written consent of both parties. Forbearance or
indulgence by Lessor in any regard whatsoever shall not constitute a waiver or
change of the representation, covenant or condition to be performed by Lessee to
which the same may apply, and until complete performance by Lessee of said
covenant or condition, Lessor shall be entitled to invoke any remedy available
to Lessor under this Agreement or by law or equity despite said forbearance or
indulgence. Waiver of any defaults shall not waive any other default.
     b. The language governing this Agreement shall be in English, any
translation thereof into other languages shall not have any legal effect.
     c. Service of all notices under this Agreement shall be sufficient if
mailed to the party involved at its respective address on file with the other
party. Any such notices mailed to such address shall be effective when deposited
in the mail, duly addressed and with postage prepaid, or delivered by hand or
electronic mail delivery.
     d. “Lessor” and “Lessee” as used in this Agreement shall include the heirs,
executors, administrators, successors, and/or permitted assigns of such parties.
Exhibit 2-7

 

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     e. If more than one Lessee executes this Agreement, their obligations under
this Agreement shall be joint and several.
     f. Lessee will, if requested by Lessor, join with Lessor in executing one
or more financing statements, as may be desired by Lessor, in form satisfactory
to Lessor.
     g. In case of conflict between provisions found in this Agreement and those
listed in the Schedule(s) hereto, the provisions on the Schedule(s) shall
prevail.
     h. The law governing this Agreement shall be that of the State of Texas,
United States in force at the date of this Agreement, excepting any conflict of
laws provisions that provide for the application of the laws of another
jurisdiction.
     i. Lessor and Lessee agree that venue of any lawsuit arising from or in
connection with the terms of this Agreement shall be in Houston, Harris County,
Texas, United States. For purposes of this Agreement, Lessee irrevocably
consents to the jurisdiction of the courts of Houston, Harris County, Texas,
United States.
     j. This Agreement contains the full agreement between the parties. No
representation or promise has been made by either party to the other as an
inducement to enter into this Agreement. Lessor does not in any way or for any
purpose become partner of Lessee, or a joint venture, or a member of a joint
enterprise with Lessee.
     k. Lessee hereby waives its right to receive a copy of any financing
statement or financing change statement registered by Lessor in connection with
this Agreement.
     l. Lessor and Lessee hereby agree that no rights or remedies referred to in
Article 2A of the Uniform Commercial Code of the United States or similar law of
the governing jurisdiction shall be conferred upon either Lessor or Lessee
unless expressly granted in this Agreement. To the extent any Schedule contains
chattel paper under the Uniform Commercial Code of the United States or similar
law of the governing jurisdiction, no security interest in any Schedule may be
created through the transfer and possession of any counterpart thereof other
than the counterpart retained by Lessor.
     m. If Lessee at any time shall fail to pay any sum which Lessee is required
by this Agreement to pay or shall fail to do or perform any other act Lessee is
required by this Agreement to do or perform, Lessor at its option may pay such
sum or do or perform such act (or have it performed by a third party), and
Lessee shall reimburse Lessor on demand for the amount of such payment and for
the cost and expenses which may be incurred by Lessor for such acts or
performance, together with interest thereon at the Applicable Rate from the date
of demand until paid.
     n. This Agreement is based on the applicable laws existing at the time of
its execution. Any changes, including, but not limited to, changes in
governmental enforcement practices, revisions or new applicable laws, including,
but not limited to, those related to taxes, permits, fees and duties, that have
the effect of increasing Lessor’s burden, including, but not limited to, cost,
time-consumption and risk exposure, shall entitle Lessor to fair and equitable
Agreement modifications, which modifications the parties agree to work toward in
good faith and in a timely fashion, failing which Lessor may terminate this
Agreement or any Schedule(s) hereunder immediately upon written notice to
Lessee.
     o. This Agreement may be executed in any number of counterparts and by the
different parties to this Agreement on separate counterparts, each of which when
executed and delivered shall be an original but all the counterparts shall
together constitute one and the same instrument. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy or e-mail shall be
effective as delivery of a manually executed counterpart of this Agreement.
Exhibit 2-8

 

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Executed this day of                      , 20__.
LESSOR:                                                           
                      

             
 
  BY:        
 
     
 
   
 
  NAME:        
 
     
 
   
 
  TITLE:        
 
     
 
   

LESSEE:                                                                  
              

             
 
  BY:        
 
     
 
   
 
  NAME:        
 
     
 
   
 
  TITLE:        
 
     
 
   

Exhibit 2-9

 

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Annex A
LESSEE’S RESPONSIBILITIES
Lessee –
     In addition to the responsibilities detailed in the Master Agreement,
Lessee shall furnish the following:
Daily maintenance and inspections of all engines, compressors and accessory
parts forming the Equipment (both labor and necessary parts), including without
limitation:

  o   Monthly adjustments on the engine and compressor per Lessor’s guidelines;
    o   Anti-freeze in accordance with Lessor’s requirements;     o   Lubricants
and related filters in accordance with Lessor’s requirements; and     o   Daily
inspections/monitoring.

Competent and prudent Equipment operator for normal operations.
Provide an inlet separator for the Equipment to remove solids (such as sand) and
all entrained liquids from the gas stream; Lessee hereby acknowledging that the
scrubber provided by Lessor with the Equipment is only an emergency scrubber.
Site preparation, including suitable sand or gravel pad or concrete base as
required.
Valves and piping to suction and discharge flanges, and fuel gas inlet(s) of
compressor(s).
Suction to discharge bypass piping and suction pressure control valve (if
required).
All installation expenses.
Suitable, sweet, dry natural gas fuel for engine use with 900 to 1100 BTU/ft3
and no more than 10 ppm H2S.
Air/gas pressure of with sufficient pressure and volume for engine starting.
Provide, connect and maintain a properly functioning waste discharge system
downstream of the Equipment, including an outlet connection from the skid drain
and all pipes, connections, the blow casing and tank downstream of the skid
drain; and remove and dispose of all fluids discharged by the discharge tank,
the blow casing and any pipes or connections to the skid plus collection and
disposal of such liquids from the Equipment’s skid and any other liquids
incidental to Equipment operations.
Equipment Site with ingress and egress satisfactory to Lessor.
Disconnection of Equipment and Site restoration expenses.
Site fencing, if requested by Lessor.
Any and all necessary equipment, supplies and services not specifically listed
as Lessor’s responsibility, above.
The following responsibilities apply when Site is offshore or in inland
waterways:
Suitable platform or barge capable of supporting the Equipment.
All transporation (including air and water) and cranes necessary for delivery,
installation, maintenance, repair and removal of the Equipment.
All transportation (including air and water) for Lessor personnel, parts, tools
and supplies.
Cost for any standby time in excess of 4 hours that is beyond the direct control
of Lessor (including due to inclement weather that, in the sole but reasonable
discretion of Lessor impedes safe travel).
Exhibit 2-10

 

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SCHEDULE ‘A’ TO EQUIPMENT MASTER RENTAL AGREEMENT
(BARE RENTAL)
Lessee:                                                                     
                                                    Date:                      
Attention:                                                             
                                               
In accordance with your request, we are pleased to offer the herein described
Equipment for your application on the                       lease in     
                                       (detail, to the extent available,
section, township, range, county/parish, state and country) (“Site”).
Unit #:                                            
HP:                                           
Equipment Description:                                                    
                                                                  
                                       
The term of this Schedule A shall commence upon the date the Equipment is
accepted in accordance with the Master Agreement and shall continue indefinitely
until terminated by either party, upon thirty (30) days’ advanced written
notice. Neither party may terminate this schedule A within twelve (12) months of
commencement of the term. Notwithstanding the foregoing, this Schedule A shall
terminate if (a) gas conditions change or the use of the Equipment by the Lessee
pursuant to a User Contract ends rendering the Equipment unnecessary; (b) force
majeure prevents a party from performing its obligations hereunder; or (c) a
default occurs under this Schedule A or the Master Agreement. The RENTAL RATE is
$                     per month for the duration of the term of this Schedule A.
The Rental Rate shall be payable monthly in arrears within 30 days of the end of
each month (beginning on the date the Equipment is accepted) in which the
Equipment is leased.
Any manufacturing check the box designation in any User Contract shall apply in
equal force to this Schedule A.
When executed by Lessor and Lessee, this Schedule A shall apply to the EQUIPMENT
MASTER RENTAL AGREEMENT (or equivalent master agreement) executed by Lessee and
Lessor (or their respective predecessors or affiliates) and dated as shown below
(the “Master Agreement”) whether or not attached hereto, and shall be deemed an
individual agreement between the parties hereto for the Equipment described
herein. This Schedule A and the applicable Master Agreement contains the entire
agreement between the parties relating to the matters contained herein and
therein, superseding all prior contracts and agreements, relating to the mattes
contained herein and therein. Unless otherwise defined herein, terms have the
meanings set forth in the Master Agreement.
Master Agreement
Date:                                                             
              ACKNOWLEDGED and ACCEPTED by the undersigned, duly-authorized
representatives of the parties as of the date first shown above.
LESSOR:
                                                                              
       

             
 
  By:        
 
     
 
   
 
  Title:        
 
     
 
   

LESSEE:
                                                                                
     

             
 
  By:        
 
     
 
   
 
  Title:        
 
     
 
   

Exhibit 2-11

 

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Exhibit 3
Form Like-Kind Exchange Bill of Sale
ASSIGNMENT AND BILL OF SALE
(Like-Kind Exchange)
     For valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto, EES Leasing LLC, a Delaware limited liability company,(“EES
Leasing”) on the one hand and EXLP Leasing LLC, a Delaware limited liability
company, (“EXLP Leasing”) on the other hand each hereby SELLS, GRANTS, ASSIGNS
and TRANSFERS to the other, effective as of this ___ day of
                    , 20___, good, marketable and indefeasible title to all of
the transferor’s right, title and interest in, to and under its Compression
Equipment described on Exhibit A attached hereto and made a part hereof for all
purposes, together with all assets, rights and properties related to such
Compression Equipment of the sort described in Section 4.2(b) of the Omnibus
Agreement (as defined below) (in each respective case, collectively the
“Assets”).
     Each of EES Leasing and EXLP Leasing in its respective capacity as a
transferor, in its name and in the name of its successors and assigns, hereby
represents that (a) it intends to convey its Assets and to acquire in exchange
the Assets owned by the other party which are of like kind and qualifying use
within the meaning of Section 1031 of the Code and (b) it has the power and
authority to exchange or otherwise transfer the Assets in the manner provided in
this Assignment and Bill of Sale and that the Assets are free and clear of all
Liens, except for any Liens created by its respective transferee and except for
Permitted Liens. EXCEPT AS EXPRESSLY PROVIDED IN THE OMNIBUS AGREEMENT, THE
ASSETS ARE BEING EXCHANGED WITHOUT ANY WARRANTIES, WHETHER EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF FITNESS FOR USE OR
MERCHANTIBILITY.
     Each of EES Leasing and EXLP Leasing in its respective capacity as
transferor does hereby bind itself, its successors and assigns, to forever
warrant and defend the title to the Assets unto its respective transferee, its
successors and assigns against the lawful claim or claims of any person
whomsoever claiming an interest in the Assets.
     Each of EES Leasing and EXLP Leasing in its respective capacity as
transferor covenants and agrees to execute and deliver to its respective
transferee all such other additional instruments and other documents and will do
all such other acts and things as may be necessary to fully assign to its
respective transferee, or its successors and assigns, all of the Assets.
     All of the provisions hereof shall inure to the benefit of and be binding
upon the respective heirs, successors and assigns of EES Leasing and EXLP
Leasing.
     Terms used herein but not defined herein shall have the meanings assigned
to such terms in the Second Amended And Restated Omnibus Agreement entered into
on, and effective as of, [___], 2009, by and among Exterran Holdings, Inc.,
Exterran Energy Solutions, L.P., Exterran GP
Exhibit 3-1

 

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LLC, Exterran General Partner, L.P., Exterran Partners, L.P., and EXLP Operating
LLC (as amended, modified, supplemented or restated from time to time, the
“Omnibus Agreement”).
     IN WITNESS WHEREOF, Each of EES Leasing and EXLP Leasing in its respective
capacity as transferor has caused this Assignment and Bill of Sale to be
executed on the date first set forth above.

                  EES LEASING:    
 
                EES Leasing LLC, a Delaware limited liability company    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                EXLP LEASING:    
 
                EXLP Leasing LLC, a Delaware limited liability company    
 
                By: EXLP Operating LLC, its sole member    
 
                By: Exterran Partners, L.P., its sole member    
 
                By: Exterran General Partner, L.P., its general partner    
 
                By: Exterran GP LLC, its general partner    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        

Exhibit 3-2

 

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Exhibit A
Compression Equipment Transferred
(Like-Kind Exchange)
Exhibit 3-3

 

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Schedule A
Exterran Customers
******

 

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Schedule B
Exterran Overlapping Customers
******

 

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Schedule C
Partnership Customers
******

 

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Schedule D
Partnership Overlapping Customers
******