**Exhibit 10.19**

***EXECUTION VERSION***

*** ***

**GUARANTY AGREEMENT**

 

**DATED AS OFOCTOBER 20, 2006**

 

**MADE BY**

**UCI COMPRESSOR HOLDING, L.P.,**ASGUARANTOR

**AND**

**UCI MLP LP LLC,**ASGUARANTOR

**AND**

**EACH OF THE OTHER GUARANTORS (AS DEFINED HEREIN)**

 

**IN FAVOR OF**

 

WACHOVIABANK, NATIONAL ASSOCIATION**,**AS ADMINISTRATIVE AGENT

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**TABLE OF CONTENTS**
|                                                | ** ** | ** **                                                 | ** ** | **Page** |
|------------------------------------------------|------------|------------------------------------------------------------|------------|----------|
| **ARTICLE I Definitions**                      |       | 1                                                          |
| Section 1.01                                   |       | Definitions                                                |       | 1        |
| Section 1.02                                   |       | Rules of Interpretation                                    |       | 3        |
| **ARTICLE II Guarantee**                       |       | 3                                                          |
| Section 2.01                                   |       | Guarantee                                                  |       | 3        |
| Section 2.02                                   |       | Right of Contribution                                      |       | 4        |
| Section 2.03                                   |       | No Subrogation                                             |       | 4        |
| Section 2.04                                   |       | Amendments, Etc. with respect to the Borrower  Obligations |       | 5        |
| Section 2.05                                   |       | Waivers                                                    |       | 5        |
| Section 2.06                                   |       | Guaranty Absolute and Unconditional                        |       | 5        |
| Section 2.07                                   |       | Reinstatement                                              |       | 7        |
| Section 2.08                                   |       | Payments                                                   |       | 7        |
| **ARTICLE III Representations and Warranties** |       | 7                                                          |
| Section 3.01                                   |       | Representations in Credit Agreement                        |       | 7        |
| Section 3.02                                   |       | Benefit to the Guarantor                                   |       | 8        |
| Section 3.03                                   |       | Solvency                                                   |       | 8        |
| **ARTICLE IV Covenants**                       |       | 8                                                          |
| Section 4.01                                   |       | Covenants in Credit Agreement                              |       | 8        |
| **ARTICLE V The Administrative Agent**         |       | 8                                                          |
| Section 5.01                                   |       | Authority of Administrative Agent                          |       | 8        |
| **ARTICLE VI Subordination of Indebtedness**   |       | 9                                                          |
| Section 6.01                                   |       | Subordination of All Guarantor Claims                      |       | 9        |
| Section 6.02                                   |       | Claims in Bankruptcy                                       |       | 9        |
| Section 6.03                                   |       | Payments Held in Trust                                     |       | 9        |
| Section 6.04                                   |       | Liens Subordinate                                          |       | 10       |
| Section 6.05                                   |       | Notation of Records                                        |       | 10       |
| **ARTICLE VII Miscellaneous**                  |       | 10                                                         |
| Section 7.01                                   |       | Waiver                                                     |       | 10       |
| Section 7.02                                   |       | Notices                                                    |       | 10       |
| Section 7.03                                   |       | Amendments in Writing                                      |       | 10       |
| Section 7.04                                   |       | Successors and Assigns                                     |       | 10       |
| Section 7.05                                   |       | Survival; Revival; Reinstatement                           |       | 11       |
| Section 7.06                                   |       | Counterparts; Integration; Effectiveness                   |       | 11       |
| Section 7.07                                   |       | Severability                                               |       | 12       |
| Section 7.08                                   |       | Set-Off                                                    |       | 12       |
| Section 7.09                                   |       | Governing Law; Submission to Jurisdiction                  |       | 12       |
| Section 7.10                                   |       | Headings                                                   |       | 13       |
| Section 7.11                                   |       | Acknowledgments                                            |       | 13       |
| Section 7.12                                   |       | Additional Guarantors                                      |       | 14       |
| Section 7.13                                   |       | Acceptance                                                 |       | 14       |

 

 

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ANNEXES:

I                                            Form of Assumption Agreement

SCHEDULES:

1                                          Notice Addresses of Guarantors

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This GUARANTYAGREEMENT is dated as of October 20, 2006 made by UCI COMPRESSOR HOLDING,L.P., a Delaware limited partnership (“UCI Compressor”) and UCI MLP LP, LLC, aDelaware limited liability company (“Limited Partner”) and each of thesignatories hereto (each of the signatories hereto, together with UCICompressor and the Limited Partner and the Subsidiary Guarantors that becomes aparty hereto from time to time after the date hereof, the “Guarantors”), in favor of Wachovia Bank,National Association, as the administrative agent (in such capacity, togetherwith its successors in such capacity, the “Administrative Agent”), forthe banks and other financial institutions (the “Lenders”) from time totime parties to the Credit Agreement dated October 20, 2006 (as amended,supplemented or otherwise modified from time to time, the “Credit Agreement”), among Universal Compression, Inc.,a corporation formed under the laws of the State of Texas (“UCI”);Universal Compression Holdings, Inc., a corporation formed under the lawsof the State of Delaware (“Holdings”); Universal Compression Canada,Limited Partnership, a Nova Scotia limited partnership (“Universal Canada”);UC Canadian Partnership Holdings Company, a Nova Scotia unlimited liability company(“UC Canadian Holdings” and together with UCI, Holdings and UniversalCanada, the “Borrowers”); the Lenders, the Administrative Agent, and theother Agents party thereto.

**R E C I T A L S**

A.                                   The Borrowers have requestedthat the Lenders provide certain loans to and extensions of credit on behalf ofthe Borrowers.

B.                                     The Lenders have agreed to makesuch loans and extensions of credit subject to the terms and conditions of theCredit Agreement.

C.                                     It is a condition precedent tothe obligation of the Lenders to make their respective extensions of credit tothe Borrowers under the Credit Agreement that the Guarantors shall haveexecuted and delivered this Agreement to the Administrative Agent for theratable benefit of the Lenders.

D.                                    NOW, THEREFORE, in considerationof the premises herein and to induce the Administrative Agent and the Lendersto enter into the Credit Agreement and to induce the Lenders to make theirrespective extensions of credit to the Borrowers thereunder, each Guarantorhereby agrees with the Administrative Agent, for the ratable benefit of theLenders, as follows:

**ARTICLE I****Definitions**

Section 1.01                                Definitions.

(a)                                  Unless otherwise defined herein,terms defined in the Credit Agreement and used herein have the meanings givento them in the Credit Agreement, and all uncapitalized terms which are definedin the UCC on the date hereof are used herein as so defined.

(b)                                 The following terms have thefollowing meanings:

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“Agreement”means this Guaranty Agreement, as the same may be amended, supplemented orotherwise modified from time to time.

“BankruptcyCode” means Title 11, United States Code, as amended from time to time.

“BorrowerObligations” means the collective reference to the payment and performancewhen due of all indebtedness, liabilities, obligations and undertakings of theBorrowers (including, without limitation, all Indebtedness) of every kind ordescription arising out of or outstanding under, advanced or issued pursuant,or evidenced by, the Guaranteed Documents, including, without limitation, theunpaid principal of and interest on the Loans and the LC Exposure and all otherobligations and liabilities of the Borrowers (including, without limitation,interest accruing at the then applicable rate provided in the Credit Agreementafter the maturity of the Loans and LC Exposure and interest accruing after thefiling of any petition in bankruptcy, or the commencement of any insolvency,reorganization or like proceeding, relating to the Borrowers, whether or not aclaim for post-filing or post-petition interest is allowed in such proceeding)to the Guaranteed Creditors, whether direct or indirect, absolute orcontingent, due or to become due, or now existing or hereafter incurred,arising out of or outstanding under, advanced or issued pursuant, or evidencedby, the Guaranteed Documents, whether on account of principal, interest,premium, reimbursement obligations, payments in respect of an early terminationdate, fees, indemnities, costs, expenses or otherwise (including, withoutlimitation, all reasonable costs, fees and disbursements that are required tobe paid by the Borrowers pursuant to the terms of any Guaranteed Documents).

“CollateralAgreement” means that certain Collateral Agreement, dated October 20,2006 by Universal Compression, Inc., Universal Compression Holdings, Inc.,UCI Compressor Holding, L.P. and UCI MLP LP LLC, collectively, as Grantors infavor of Wachovia Bank, National Association, as US Administrative Agent forthe Lenders.

“GuaranteedCreditors” means the collective reference to the Administrative Agent, theLenders and the Lenders and Affiliates of Lenders that are parties toGuaranteed Hedging Agreements.

“GuaranteedDocuments” means the collective reference to the Credit Agreement, theother Loan Documents, each Guaranteed Hedging Agreement and any other documentmade, delivered or given in connection with any of the foregoing.

“Guaranteed HedgingAgreement” means any Hedging Agreement between any Borrower or anyRestricted Subsidiary and any Lender or any Affiliate of any Lender while suchPerson (or, in the case of an Affiliate of a Lender, the Person affiliatedtherewith) is a Lender, including any Hedging Agreement between such Persons inexistence prior to the date hereof, but excluding any Hedging Agreement nowexisting or hereafter arising in connection with the ABS Facility. For theavoidance of doubt, a Hedging Agreement ceases to be a Guaranteed HedgingAgreement if the Person that is the counterparty to any Borrower or anyRestricted Subsidiary under a Hedging Agreement ceases to be a Lender under theCredit Agreement (or, in the case of an Affiliate of a Lender, the Personaffiliated therewith ceases to be a Lender under the Credit Agreement).

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“GuarantorObligations” means with respect to any Guarantor, the collective referenceto (a) the Borrower Obligations and (b) the payment and performancewhen due of all indebtedness, liabilities, obligations and undertakings of suchGuarantor of every kind or description, whether direct or indirect, absolute orcontingent, due or to become due, or now existing or hereafter incurred,arising out of or outstanding under, advanced or issued pursuant, or evidencedby, any Guaranteed Document to which such Guarantor is a party, in each case,whether on account of principal, interest, guarantee obligations, reimbursementobligations, payments in respect of an early termination date, fees,indemnities, costs, expenses or otherwise (including, without limitation, all reasonablefees and disbursements that are required to be paid pursuant to the terms ofany Guaranteed Document).

“Guarantors”means the collective reference to each Guarantor.

“Obligations”means:  (a) in the case of eachBorrower, the Borrower Obligations and (b) in the case of each Guarantor,its Guarantor Obligations.

“Guarantor Claims” has the meaning assigned tosuch term in Section 6.01.

Section 1.02                                Rules ofInterpretation. Section 1.04 of the Credit Agreement is herebyincorporated herein by reference and shall apply to this Agreement, *mutatis mutandis*.

**ARTICLE II****Guarantee**

Section 2.01                                Guarantee.

(a)                                  Each of the Guarantors herebyjointly and severally, unconditionally and irrevocably, guarantees to theGuaranteed Creditors and each of their respective permitted successors,indorsees, transferees and assigns, the prompt and complete payment in cash andperformance by the Borrowers when due (whether at the stated maturity, byacceleration or otherwise) of the Borrower Obligations. This is a guarantee ofpayment and not collection and the liability of each Guarantor is primary andnot secondary.

(b)                                 Anything herein or in any otherGuaranteed Document to the contrary notwithstanding, the maximum liability ofeach Guarantor hereunder and under the other Guaranteed Documents shall in noevent exceed the amount which can be guaranteed by such Guarantor underapplicable federal and state laws relating to the insolvency of debtors (aftergiving effect to the right of contribution established in Section 2.02).

(c)                                  Each Guarantor agrees that theBorrower Obligations may at any time and from time to time exceed theamount of the liability of such Guarantor hereunder without impairing theguarantee contained in this ARTICLE II or affecting the rights andremedies of any Guaranteed Creditor hereunder.

(d)                                 Each Guarantor agrees that if thematurity of the Borrower Obligations is accelerated by bankruptcy or otherwise,such maturity shall also be deemed accelerated for the purpose of thisguarantee without demand or notice to such Guarantor. The guarantee containedin this ARTICLE II shall remain in full force and effect until all theBorrower Obligations shall 

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have been satisfiedby payment in full in cash, no Letter of Credit shall be outstanding (exceptfor Letters of Credit secured by cash collateral as permitted in Section 2.01(b)(iii) ofthe Credit Agreement) and all of the Aggregate Commitments are terminated,notwithstanding that from time to time during the term of the Credit Agreement,no Borrower Obligations may be outstanding.

(e)                                  No payment made by any Guarantor,any other guarantor or any other Person or received or collected by anyGuaranteed Creditor from any Guarantor, any other guarantor or any other Personby virtue of any action or proceeding or any set-off or appropriation orapplication at any time or from time to time in reduction of or in payment ofthe Borrower Obligations shall be deemed to modify, reduce, release orotherwise affect the liability of any Guarantor hereunder which shall,notwithstanding any such payment (other than any payment made by such Guarantorin respect of the Borrower Obligations or any payment received or collectedfrom such Guarantor in respect of the Borrower Obligations), remain liable forthe Borrower Obligations up to the maximum liability of such Guarantorhereunder until the Borrower Obligations are paid in full in cash, no Letter ofCredit is outstanding (except for Letters of Credit secured by cash collateralas permitted in Section 2.01(b)(iii) of the Credit Agreement) and allof the Aggregate Commitments are terminated.

Section 2.02                                Rightof Contribution.  Each Guarantor hereby agrees that to the extentthat a Guarantor shall have paid more than its proportionate share of anypayment made hereunder, such Guarantor shall be entitled to seek and receivecontribution from and against any other Guarantor hereunder which has not paidits proportionate share of such payment. Each Guarantor’s right of contributionshall be subject to the terms and conditions of Section 2.03. Theprovisions of this Section 2.02 shall in no respect limit the obligationsand liabilities of any Guarantor to the Guaranteed Creditors, and eachGuarantor shall remain liable to the Guaranteed Creditors for the full amountguaranteed by such Guarantor hereunder.

Section 2.03                                NoSubrogation.  Notwithstanding any payment made by any Guarantorhereunder or any set-off or application of funds of any Guarantor by anyGuaranteed Creditor, no Guarantor shall be entitled to be subrogated to any ofthe rights of any Guaranteed Creditor against any Borrower or any otherGuarantor or any collateral security or guarantee or right of offset held byany Guaranteed Creditor for the payment of the Borrower Obligations, nor shallany Guarantor seek or be entitled to seek any indemnity, exoneration,participation, contribution or reimbursement from any Borrower or any otherGuarantor in respect of payments made by such Guarantor hereunder, until allamounts owing to the Guaranteed Creditors on account of the BorrowerObligations are irrevocably and indefeasibly paid in full in cash, no Letter ofCredit is outstanding (except for Letters of Credit secured by cash collateralas permitted in Section 2.01(b)(iii) of the Credit Agreement) and allof the Aggregate Commitments are terminated. If any amount shall be paid to anyGuarantor on account of such subrogation rights at any time when all of theBorrower Obligations shall not have been irrevocably and indefeasibly paid infull in cash, any Letter of Credit is outstanding (except for Letters of Creditsecured by cash collateral as permitted in Section 2.01(b)(iii) ofthe Credit Agreement) or any of the Aggregate Commitments are in effect, suchamount shall be held by such Guarantor in trust for the Guaranteed Creditors,and shall, forthwith upon receipt by such Guarantor, be turned over to theAdministrative Agent in the exact form received by such Guarantor (dulyindorsed by such Guarantor to the Administrative Agent, if required), to beapplied against the Borrower 

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Obligations, whether matured orunmatured, in accordance with Section 11.02(c) of the CreditAgreement.

Section 2.04                                Amendments,Etc. with respect to the Borrower Obligations.  Each Guarantorshall remain obligated hereunder, and such Guarantor’s obligations hereundershall not be released, discharged or otherwise affected, notwithstanding that,without any reservation of rights against any Guarantor and without notice to,demand upon or further assent by any Guarantor (which notice, demand and assentrequirements are hereby expressly waived by such Guarantor), (a) anydemand for payment of any of the Borrower Obligations made by any GuaranteedCreditor may be rescinded by such Guaranteed Creditor or otherwise and anyof the Borrower Obligations continued; (b) the Borrower Obligations, theliability of any other Person upon or for any part thereof or anycollateral security or guarantee therefor or right of offset with respectthereto, may, from time to time, in whole or in part, be renewed, extended,amended, modified, accelerated, compromised, waived, surrendered or releasedby, or any indulgence or forbearance in respect thereof granted by, anyGuaranteed Creditor; (c) any Guaranteed Document may be amended,modified, supplemented or terminated, in whole or in part, as the GuaranteedCreditors may deem advisable from time to time; (d) any collateralsecurity, guarantee or right of offset at any time held by any GuaranteedCreditor for the payment of the Borrower Obligations may be sold,exchanged, waived, surrendered or released; (e) any additional guarantors,makers or endorsers of the Borrowers’ Obligations may from time to time beobligated on the Borrowers’ Obligations or any additional security orcollateral for the payment and performance of the Borrowers’ Obligations may fromtime to time secure the Borrowers’ Obligations; and (f) any other eventshall occur which constitutes a defense or release of sureties generally. NoGuaranteed Creditor shall have any obligation to protect, secure, perfect orinsure any Lien at any time held by it as security for the Borrower Obligationsor for the guarantee contained in this ARTICLE II or any Property subjectthereto.

Section 2.05                                Waivers.  EachGuarantor hereby waives any and all notice of the creation, renewal, extensionor accrual of any of the Borrower Obligations and notice of or proof ofreliance by any Guaranteed Creditor upon the guarantee contained in this ARTICLE IIor acceptance of the guarantee contained in this ARTICLE II; the BorrowerObligations, and any of them, shall conclusively be deemed to have beencreated, contracted or incurred, or renewed, extended, amended or waived, inreliance upon the guarantee contained in this ARTICLE II and no notice ofcreation of the Borrower Obligations or any extension of credit already orhereafter contracted by or extended to the Borrowers need be given to anyGuarantor; and all dealings between any Borrower and any of the Guarantors, onthe one hand, and the Guaranteed Creditors, on the other hand, likewise shallbe conclusively presumed to have been had or consummated in reliance upon theguarantee contained in this ARTICLE II. Each Guarantor waives diligence,presentment, protest, demand for payment and notice of default or nonpayment toor upon any Borrower or any of the Guarantors with respect to the BorrowerObligations.

Section 2.06                                GuarantyAbsolute and Unconditional.

(a)                                  Each Guarantor understands andagrees that the guarantee contained in this ARTICLE II is, and shall beconstrued as, a continuing, completed, absolute and unconditional guarantee ofpayment, and each Guarantor hereby waives any defense of a surety or guarantoror any other obligor on any obligations arising in connection with or inrespect of 

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any of thefollowing and hereby agrees that its obligations hereunder shall not bedischarged or otherwise affected as a result of, any of the following:

(i)                                     the invalidity orunenforceability of any Guaranteed Document, any of the Borrower Obligations orany other collateral security therefor or guarantee or right of offset withrespect thereto at any time or from time to time held by any GuaranteedCreditor;

(ii)                                  any defense, set-off orcounterclaim (other than a defense of payment or performance) which may atany time be available to or be asserted by any Borrower or any other Personagainst any Guaranteed Creditor;

(iii)                               the insolvency, bankruptcyarrangement, reorganization, adjustment, composition, liquidation, disability,dissolution or lack of power of any Borrower or any other Guarantor or anyother Person at any time liable for the payment of all or part of theObligations, including any discharge of, or bar or stay against collecting, anyObligation (or any part of them or interest therein) in or as a result ofsuch proceeding;

(iv)                              any sale, lease or transfer ofany or all of the assets of any Borrower or any other Guarantor, or any changesin the shareholders of any Borrower or the Guarantor; provided that upon anysuch sale, lease or transfer, such assets shall be released in accordance with Section 8.12of the Collateral Agreement.

(v)                                 any change in the corporate existence(including its constitution, laws, rules, regulations or power), structure orownership of any Guarantor;

(vi)                              the fact that any Collateral orLien contemplated or intended to be given, created or granted as security forthe repayment of the Obligations shall not be properly perfected or created, orshall prove to be unenforceable or subordinate to any other Lien, it beingrecognized and agreed by each of the Guarantors that it is not entering intothis Agreement in reliance on, or in contemplation of the benefits of, thevalidity, enforceability, collectability or value of any of the Collateral forthe Obligations;

(vii)                           the absence of any attempt tocollect the Obligations or any part of them from any Guarantor;

(viii)                        (A) any Guaranteed Creditor’selection, in any proceeding instituted under chapter 11 of the Bankruptcy Code,of the application of Section 1111(b)(2) of the Bankruptcy Code; (B) anyborrowing or grant of a Lien by the Borrowers, as debtor-in-possession, orextension of credit, under Section 364 of the Bankruptcy Code; (C) thedisallowance, under Section 502 of the Bankruptcy Code, of all or anyportion of any Guaranteed Creditor’s claim (or claims) for repayment of theObligations; (D) any use of cash collateral under Section 363 of theBankruptcy Code; (E) any agreement or stipulation as to the provision ofadequate protection in any bankruptcy proceeding; (F) the avoidance of anyLien in favor of the Guaranteed Creditors or any of them for any reason; or (G) failureby any Guaranteed Creditor to file or enforce a claim against any Borrower or anyBorrower’s estate in any bankruptcy or insolvency case or proceeding; or

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(ix)                                any other circumstance or actwhatsoever, including any action or omission of the type described in Section 2.04(with or without notice to or knowledge of the Borrowers or such Guarantor),which constitutes, or might be construed to constitute, an equitable or legaldischarge of the Borrowers for the Borrower Obligations, or of such Guarantorunder the guarantee contained in this ARTICLE II, in bankruptcy or in anyother instance.

(b)                                 When making any demand hereunderor otherwise pursuing its rights and remedies hereunder against any Guarantor,any Guaranteed Creditor may, but shall be under no obligation to, join or makea similar demand on or otherwise pursue or exhaust such rights and remedies asit may have against any Borrower, any other Guarantor or any other Personor against any collateral security or guarantee for the Borrower Obligations orany right of offset with respect thereto, and any failure by any GuaranteedCreditor to make any such demand, to pursue such other rights or remedies or tocollect any payments from any Borrower, any other Guarantor or any other Personor to realize upon any such collateral security or guarantee or to exercise anysuch right of offset, or any release of any Borrower, any other Guarantor orany other Person or any such collateral security, guarantee or right of offset,shall not relieve any Guarantor of any obligation or liability hereunder, andshall not impair or affect the rights and remedies, whether express, implied oravailable as a matter of law, of any Guaranteed Creditor against any Guarantor.For the purposes hereof “demand” shall include the commencement and continuanceof any legal proceedings.

Section 2.07                                Reinstatement.  Theguarantee contained in this ARTICLE II shall continue to be effective, orbe reinstated, as the case may be, if at any time payment, or any part thereof,of any of the Borrower Obligations is rescinded or must otherwise be restoredor returned by any Guaranteed Creditor upon the insolvency, bankruptcy,dissolution, liquidation or reorganization of any Borrower or any Guarantor, orupon or as a result of the appointment of a receiver, intervenor or conservatorof, or trustee or similar officer for, any Borrower or any Guarantor or anysubstantial part of its Property, or otherwise, all as though suchpayments had not been made.

Section 2.08                                Payments.  EachGuarantor hereby guarantees that payments hereunder will be paid to theAdministrative Agent, for the ratable benefit of the Guaranteed Creditors,without set-off, deduction or counterclaim in dollars, in immediately availablefunds, at its US Principal Office.

**ARTICLE III****Representationsand Warranties**

To induce theAdministrative Agent and the Lenders to enter into the Credit Agreement and toinduce the Lenders to make their respective extensions of credit to theBorrowers thereunder and to induce the Lenders (and their Affiliates) to enterinto Hedging Agreements with the Borrowers and their Restricted Subsidiaries,each Guarantor hereby represents and warrants to the Administrative Agent andeach Lender that:

Section 3.01                                Representationsin Credit Agreement.  In the case of each Guarantor, therepresentations and warranties set forth in Article VII of the CreditAgreement as they relate to such Guarantor or to the Loan Documents to whichsuch Guarantor is a party are true and correct 

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in all material respects,provided that each reference in each such representation and warranty to eachBorrower’s knowledge, as applicable, shall, for the purposes of this Section 3.01,be deemed to be a reference to such Guarantor’s knowledge.

Section 3.02                                Benefit to the Guarantor.  EachBorrower is a member of an affiliated group of companies that includes eachGuarantor and each Borrower and the other Guarantors are engaged in relatedbusinesses. Each Guarantor is a Restricted Subsidiary of Holdings and itsguaranty and surety obligations pursuant to this Agreement reasonably may beexpected to benefit, directly or indirectly, it; and it has determined thatthis Agreement is necessary and convenient to the conduct, promotion andattainment of the business of such Guarantor and each Borrower.

Section 3.03                                Solvency.  Each Guarantor (a) isnot insolvent as of the date hereof and will not be rendered insolvent as aresult of this Agreement (after giving effect to Section 2.02), (b) isnot engaged in business or a transaction, or about to engage in a business or atransaction, for which any Property remaining with it constitute unreasonablysmall capital, and (c) does not intend to incur, or believe it will incur,Debt that will be beyond its ability to pay as such Debt matures.

**ARTICLE IV****Covenants**

Each Guarantorcovenants and agrees with the Administrative Agent and the Lenders that, fromand after the date of this Agreement until the Borrower Obligations shall havebeen paid in full in cash, no Letter of Credit shall be outstanding (except forLetters of Credit secured by cash collateral as permitted in Section 2.01(b)(iii) ofthe Credit Agreement) and all of the Aggregate Commitments shall haveterminated:

Section 4.01                                Covenants in Credit Agreement.  Inthe case of each Guarantor, such Guarantor shall take, or shall refrain fromtaking, as the case may be, each action that is necessary to be taken ornot taken, as the case may be, so that no Default is caused by the failureto take such action or to refrain from taking such action by such Guarantor orany of its Restricted Subsidiaries.

**ARTICLE V****TheAdministrative Agent**

Section 5.01                                Authorityof Administrative Agent.  Each Guarantor acknowledges that therights and responsibilities of the Administrative Agent under this Agreementwith respect to any action taken by the Administrative Agent or the exercise ornon-exercise by the Administrative Agent of any option, voting right, request,judgment or other right or remedy provided for herein or resulting or arisingout of this Agreement shall, as between the Administrative Agent and theGuaranteed Creditors, be governed by the Credit Agreement and by such otheragreements with respect thereto as may exist from time to time among them,but, as between the Administrative Agent and the Guarantors, the AdministrativeAgent shall be conclusively presumed to be acting as agent for the GuaranteedCreditors with full and valid 

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authority so to act orrefrain from acting, and no Guarantor shall be under any obligation, orentitlement, to make any inquiry respecting such authority.

**ARTICLE VI****Subordinationof Indebtedness**

Section 6.01                                Subordinationof All Guarantor Claims.  As used herein, the term “Guarantor Claims” shall mean all debts andobligations of the Borrowers or any other Guarantor to any other Guarantor,whether such debts and obligations now exist or are hereafter incurred orarise, or whether the obligation of the debtor thereon be direct, contingent,primary, secondary, several, joint and several, or otherwise, and irrespectiveof whether such debts or obligations be evidenced by note, contract, openaccount, or otherwise, and irrespective of the Person or Persons in whose favorsuch debts or obligations may, at their inception, have been, or may hereafterbe created, or the manner in which they have been or may hereafter beacquired by. After and during the continuation of an Event of Default, no Guarantorshall receive or collect, directly or indirectly, from any obligor in respectthereof any amount upon the Guarantor Claims.

Section 6.02                                Claimsin Bankruptcy.  In the event of receivership, bankruptcy,reorganization, arrangement, debtor’s relief, or other insolvency proceedingsinvolving any Guarantor, the Administrative Agent on behalf of theAdministrative Agent and the Guaranteed Creditors shall have the right to provetheir claim in any proceeding, so as to establish their rights hereunder andreceive directly from the receiver, trustee or other court custodian, dividendsand payments which would otherwise be payable upon Guarantor Claims. Each Guarantorhereby assigns such dividends and payments to the Administrative Agent for thebenefit of the Administrative Agent and the Guaranteed Creditors forapplication against the Borrower Obligations as provided under Section 11.02(b) ofthe Credit Agreement. Should any Agent or Guaranteed Creditor receive, forapplication upon the Obligations, any such dividend or payment which isotherwise payable to any Guarantor, and which, as between such Guarantors,shall constitute a credit upon the Guarantor Claims, then upon payment in fullin cash of the Borrower Obligations, the expiration of all Letters of Credit(except for Letters of Credit secured by cash collateral as permitted in Section 2.01(b)(iii) ofthe Credit Agreement) and the termination of all of the Aggregate Commitments,the intended recipient shall become subrogated to the rights of theAdministrative Agent and the Guaranteed Creditors to the extent that suchpayments to the Administrative Agent and the Lenders on the Guarantor Claimshave contributed toward the liquidation of the Obligations, and suchsubrogation shall be with respect to that proportion of the Obligations whichwould have been unpaid if the Administrative Agent and the Guaranteed Creditorshad not received dividends or payments upon the Guarantor Claims.

Section 6.03                                PaymentsHeld in Trust.  In the event that notwithstanding Section 6.01and Section 6.02, any Guarantor should receive any funds, payments, claimsor distributions which is prohibited by such Sections, then it agrees: (a) tohold in trust for the Administrative Agent and the Guaranteed Creditors anamount equal to the amount of all funds, payments, claims or distributions soreceived, and (b) that it shall have absolutely no dominion over theamount of such funds, payments, claims or distributions except to pay thempromptly to the Administrative Agent, for the benefit of the GuaranteedCreditors; and each Guarantor covenants promptly to pay the same to theAdministrative Agent.

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Section 6.04                                LiensSubordinate.  Each Guarantor agrees that, until the BorrowerObligations are paid in full in cash, the expiration of all Letters of Credit(except for Letters of Credit secured by cash collateral as permitted in Section 2.01(b)(iii) ofthe Credit Agreement) and the termination of all of the Aggregate Commitments,any Liens securing payment of the Guarantor Claims shall be and remain inferiorand subordinate to any Liens securing payment of the Obligations, regardless ofwhether such encumbrances in favor of such Guarantor, the Administrative Agentor any Guaranteed Creditor presently exist or are hereafter created or attach. Withoutthe prior written consent of the Administrative Agent, no Guarantor, during theperiod in which any of the Borrower Obligations are outstanding or the AggregateCommitments are in effect, shall (a) exercise or enforce any creditor’sright it may have against any debtor in respect of the Guarantor Claims,or (b) foreclose, repossess, sequester or otherwise take steps orinstitute any action or proceeding (judicial or otherwise, including withoutlimitation the commencement of or joinder in any liquidation, bankruptcy,rearrangement, debtor’s relief or insolvency proceeding) to enforce any Lienheld by it.

Section 6.05                                Notationof Records.  Upon the request of the Administrative Agent, allpromissory notes and all accounts receivable ledgers or other evidence of the GuarantorClaims accepted by or held by any Guarantor shall contain a specific writtennotice thereon that the indebtedness evidenced thereby is subordinated underthe terms of this Agreement.

**ARTICLE VII****Miscellaneous**

Section 7.01                                Waiver.  Nofailure on the part of the Administrative Agent or any Guaranteed Creditorto exercise and no delay in exercising, and no course of dealing with respectto, any right, power, privilege or remedy or any abandonment or discontinuanceof steps to enforce such right, power, privilege or remedy under this Agreementor any other Loan Document shall operate as a waiver thereof, nor shall anysingle or partial exercise of any right, power, privilege or remedy under thisAgreement or any other Loan Document preclude or  be construed as a waiver of any other orfurther exercise thereof or the exercise of any other right, power, privilegeor remedy. The remedies provided herein are cumulative and not exclusive of anyremedies provided by law or equity.

Section 7.02                                Notices.  Allnotices and other communications provided for herein shall be given in themanner and subject to the terms of Section 13.02 of the Credit Agreement;provided that any such notice, request or demand to or upon any Guarantor shallbe addressed to such Guarantor at its notice address set forth on Schedule 1.

Section 7.03                                Amendmentsin Writing.  None of the terms or provisions of this Agreement may bewaived, amended, supplemented or otherwise modified except in accordance with Section 13.04of the Credit Agreement.

Section 7.04                                Successorsand Assigns.  The provisions of this Agreement shall be bindingupon the Guarantors and their successors and assigns and shall inure to thebenefit of the Administrative Agent and the Guaranteed Creditors and theirrespective successors and assigns; provided that except as set forth in Section 13.06of the Credit Agreement, no Guarantor may assign, transfer or delegate anyof its rights or obligations under this Agreement without the prior 

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written consent of theAdministrative Agent and the Lenders, and any such purported assignment,transfer or delegation shall be null and void.

Section 7.05                                Survival;Revival; Reinstatement.

(a)                                  All covenants, agreements,representations and warranties made by any Guarantor herein and in thecertificates or other instruments delivered in connection with or pursuant tothis Agreement or any other Loan Document to which it is a party shall beconsidered to have been relied upon by the Administrative Agent, the otherAgents, the Issuing Bank and the Lenders and shall survive the execution anddelivery of this Agreement and the making of any Loans and issuance of anyLetters of Credit, regardless of any investigation made by any such other partyor on its behalf and notwithstanding that the Administrative Agent, the otherAgents, the Issuing Bank or any Lender may have had notice or knowledge ofany Default or incorrect representation or warranty at the time any credit isextended hereunder, and shall continue in full force and effect as long as theprincipal of or any accrued interest on any Loan or any fee or any other amountpayable under the Credit Agreement is outstanding and unpaid or any Letter of Creditis outstanding and so long as the Aggregate Commitments have not expired orterminated.

(b)                                 To the extent that any paymentson the Guarantor Obligations are subsequently invalidated, declared to befraudulent or preferential, set aside or required to be repaid to a trustee,debtor in possession, receiver or other Person under any bankruptcy law, commonlaw or equitable cause, then to such extent, the Guarantor Obligations sosatisfied shall be revived and continue as if such payment or proceeds had notbeen received and the Administrative Agent’s and the Guaranteed Creditors’Liens, security interests, rights, powers and remedies under this Agreement andeach other Loan Document shall continue in full force and effect. In suchevent, each Loan Document shall be automatically reinstated and the Borrowersshall take such action as may be reasonably requested by theAdministrative Agent and the Guaranteed Creditors to effect such reinstatement.

Section 7.06                                Counterparts;Integration; Effectiveness.

(a)                                  This Agreement may beexecuted in counterparts (and by different parties hereto on differentcounterparts), each of which shall constitute an original, but all of whichwhen taken together shall constitute a single contract.

(b)                                 **THIS AGREEMENT AND THE OTHER LOANDOCUMENTS EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES ANDSUPERSEDE ALL OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATINGTO THE SUBJECT MATTER HEREOF AND THEREOF. THIS AGREEMENT AND THE LOAN DOCUMENTSREPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BECONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORALAGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THEPARTIES.**

(c)                                  This Agreement shall becomeeffective when it shall have been executed by the Administrative Agent and whenthe Administrative Agent shall have received counterparts hereof which, whentaken together, bear the signatures of each of the other parties 

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hereto, andthereafter shall be binding upon and inure to the benefit of the partieshereto, the Lenders and their respective successors and assigns. Delivery of anexecuted counterpart of a signature page of this Agreement bytelecopy shall be effective as delivery of a manually executed counterpart ofthis Agreement.

Section 7.07                                Severability.  Anyprovision of this Agreement or any other Loan Document held to be invalid,illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, beineffective to the extent of such invalidity, illegality or unenforceabilitywithout affecting the validity, legality and enforceability of the remainingprovisions hereof or thereof; and the invalidity of a particular provision in aparticular jurisdiction shall not invalidate such provision in any other jurisdiction.

Section 7.08                                Set-Off.  Ifan Event of Default shall have occurred and be continuing, each Lender and eachof its Affiliates is hereby authorized at any time and from time to time, tothe fullest extent permitted by law, to set off and apply any and all deposits(general or special, time or demand, provisional or final) at any time held andother obligations (of whatsoever kind, including, without limitationsobligations under Hedging Agreements) at any time owing by such Lender orAffiliate to or for the credit or the account of any Guarantor against any ofand all the obligations of the Guarantor owed to such Lender now or hereafterexisting under this Agreement or any other Loan Document, irrespective ofwhether or not such Lender shall have made any demand under this Agreement orany other Loan Document and although such obligations may be unmatured. Therights of each Lender under this Section 7.08 are in addition to otherrights and remedies (including other rights of setoff) which such Lender or itsAffiliates may have. Notwithstanding anything to the contrary contained inthis Agreement, the Lenders hereby agree that they shall not set off any fundsin any lock boxes whatsoever in connection with this Agreement, except for suchlock boxes which may be established in connection with this Agreement.

Section 7.09                                GoverningLaw; Submission to Jurisdiction.

(a)                                  THIS AGREEMENT SHALL BE GOVERNEDBY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

(b)                                 ANY LEGAL ACTION OR PROCEEDINGWITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT INTHE COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES OF AMERICA FOR THESOUTHERN DISTRICT OF TEXAS, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,EACH OF THE PARTIES HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BYLAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THEJURISDICTION OF THE AFORESAID COURTS. EACH PARTY HEREBY IRREVOCABLY WAIVES ANYOBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUEOR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW ORHEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCHRESPECTIVE JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE ANDDOES NOT PRECLUDE A PARTY FROM OBTAINING JURISDICTION OVER ANOTHER PARTY IN ANYCOURT OTHERWISE HAVING JURISDICTION.

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(c)                                  EACH GUARANTOR IRREVOCABLYCONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANYSUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED ORCERTIFIED MAIL, POSTAGE PREPAID, TO SUCH GUARANTOR AT ITS ADDRESS SET FORTH ON SCHEDULE 1HERETO OR AS UPDATED FROM TIME TO TIME, SUCH SERVICE TO BECOME EFFECTIVE THIRTY(30) DAYS AFTER SUCH MAILING.

(d)                                 NOTHING HEREIN SHALL AFFECT THERIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER OR ANY HOLDER OF A NOTE TOSERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGALPROCEEDINGS OR OTHERWISE PROCEED AGAINST THE GUARANTOR IN ANY OTHERJURISDICTION.

(e)                                  EACH PARTY HEREBY (i) IRREVOCABLYAND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BYJURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANYSECURITY INSTRUMENT AND FOR ANY COUNTERCLAIM THEREIN; (ii) IRREVOCABLYWAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVETO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE ORCONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUALDAMAGES; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OFTHE ADMINISTRATIVE AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OFLITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (iv) ACKNOWLEDGESTHAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE SECURITY INSTRUMENTSAND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS,THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 7.10.

Section 7.10                                Headings.  Article andSection headings and the Table of Contents used herein are for convenienceof reference only, are not part of this Agreement and shall not affect theconstruction of, or be taken into consideration in interpreting, thisAgreement.

Section 7.11                                Acknowledgments.  EachGuarantor hereby acknowledges that:

(a)                                  it has been advised by counselin the negotiation, execution and delivery of this Agreement and the other LoanDocuments to which it is a party;

(b)                                 neither the Administrative Agentnor any Guaranteed Creditor has any fiduciary relationship with or duty to any Guarantorarising out of or in connection with this Agreement or any of the other LoanDocuments, and the relationship between the Guarantors, on the one hand, andthe Administrative Agent and Guaranteed Creditors, on the other hand, inconnection herewith or therewith is solely that of debtor and creditor; and

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(c)                                  no joint venture is createdhereby or by the other Loan Documents or otherwise exists by virtue of thetransactions contemplated hereby among the Guaranteed Creditors or among the Guarantorsand the Guaranteed Creditors.

(d)                                 Each of the parties heretospecifically agrees that it has a duty to read this Agreement, the SecurityInstruments and the other Loan Documents and agrees that it is charged withnotice and knowledge of the terms of this Agreement, the Security Instrumentsand the other Loan Documents; that it has in fact read this Agreement, theSecurity Instruments and the other Loan Documents and is fully informed and hasfull notice and knowledge of the terms, conditions and effects thereof; that ithas been represented by independent legal counsel of its choice throughout thenegotiations preceding its execution of this Agreement and the SecurityInstruments; and has received the advice of its attorney in entering into thisAgreement and the Security Instruments; and that it recognizes that certain ofthe terms of this Agreement and the Security Instruments result in one partyassuming the liability inherent in some aspects of the transaction andrelieving the other party of its responsibility for such liability. **EACH PARTY HERETO AGREES AND COVENANTS THAT IT WILLNOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THISAGREEMENT AND THE SECURITY INSTRUMENTS ON THE BASIS THAT THE PARTY HAD NONOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”**

Section 7.12                                AdditionalGuarantors.  Each Significant Domestic Subsidiary of Holdingsthat is required to become a party to this Agreement pursuant to Section 9.09of the Credit Agreement shall become an Guarantor for all purposes of thisAgreement upon execution and delivery by such Subsidiary of an AssumptionAgreement in the form of Annex I hereto and shall thereafter havethe same rights, benefits and obligations as an Guarantor party hereto on thedate hereof.

Section 7.13                                Acceptance.  EachGuarantor hereby expressly waives notice of acceptance of this Agreement,acceptance on the part of the Administrative Agent and the Guaranteed Creditorsbeing conclusively presumed by their request for this Agreement and delivery ofthe same to the Administrative Agent.

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IN WITNESSWHEREOF, each of the undersigned has caused this Guaranty Agreement to be dulyexecuted and delivered as of the date first above written.

 
| **BORROWERS:**  | **UNIVERSAL COMPRESSION, INC.** |
|-----------------|--------------------------------------|
| ** **      | ** **                           |
|            | By:                                  | /s/ J. Michael Anderson |
|            | Name:                                | J. Michael  Anderson |
|            | Title:                               | Senior  Vice President and |
|            |                                 | Chief Financial  Officer |
|            |                                 |   |
|            |                                 |   |
| ** **      | **UNIVERSAL COMPRESSION**            |
| ** **      | **HOLDINGS, INC.**              |
| ** **      | ** **                           |
|            | By:                                  | /s/ J. Michael Anderson |
|            | Name:                                | J. Michael Anderson |
|            | Title:                               | Senior Vice President and |
|            |                                 | Chief Financial Officer |
|            |                                 |   |
|            |                                 |   |
| **GUARANTORS:** | **UCI  MLP LP LLC**                  |
| ** **      | ** **                           |
| ** **      | ** **                           |
|            | By:                                  | /s/ Pamela A. Jasinki |
|            | Name:                                | Pamela A. Jasinski |
|            | Title:                               | Manager |
|            |                                 |   |
|            |                                 |   |
|            | **UCI COMPRESSOR HOLDING,  L.P.**    |
|            | ** **                           |
|            | ** **                           |
|            | By:                                  | /s/ J. Michael Anderson |
|            | Name:                                | J. Michael Anderson |
|            | Title:                               | Senior Vice President and |
|            |                                 | Chief Financial  Officer |
|                 |                                      |  |  |

 

Signature Page – GuarantyAgreement

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| Acknowledged and Agreed to  as |                         |               |
|--------------------------------|------------------------------|--------------------|
| of the date  hereof by:        |                         |               |
|                           |                         |               |
| **ADMINISTRATIVE AGENT:**      | **WACHOVIA  BANK, NATIONAL** |
|                           | **ASSOCATION**               |
|                           | ** **                   |
|                           | ** **                   |
|                           | By:                          | /s/ Todd Schanzlin |
|                           | Name:                        | Todd Schanzlin     |
|                           | Title:                       | Vice President     |
|                                |                              |                    |  |

 

Signature Page – Guaranty Agreement

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