Exhibit 10.4


 


CONFORMED COPY


 


 


 


GUARANTY


 


THIS GUARANTY, dated as of October 28, 2005
(as amended, modified or supplemented from time to time in accordance with its
terms, this “Guaranty”), is issued by
UNIVERSAL COMPRESSION HOLDINGS, INC., a Delaware corporation (together with its
successors and permitted assigns, “UCH”), for
the benefit of UCO COMPRESSION 2005 LLC, a Delaware limited liability company
(together with its successors and permitted assigns, the “Issuer”)
and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
indenture trustee on behalf of the parties set forth in the hereinafter defined
Indenture (in such capacity, together with its successors and permitted
assigns, the “Indenture Trustee”; each of
the Issuer and the Indenture Trustee (for the benefit of the Noteholders, each
Series Enhancer and any Interest Rate Hedge Provider), a “Beneficiary”
and collectively, the “Beneficiaries”).


 


PRELIMINARY STATEMENTS:


 


(1)           The Issuer and
Universal Compression, Inc. (“UCI”)
have entered into that certain Management Agreement, dated as of October 28, 2005
(as amended, modified or supplemented from time to time in accordance with its
terms, the “Management Agreement”)
pursuant to which UCI has and will manage certain Compressors on behalf of the Issuer;


 


(2)           The Issuer is issuing
one or more classes of notes (collectively, the “Notes”) pursuant to that certain Indenture (as amended,
modified or supplemented from time to time in accordance with its terms, the “Indenture”), dated as of October 28,
2005, between the Issuer and the Indenture Trustee, which Notes will be
collateralized by, inter alia, all
of the Issuer’s right, title and interest in and to the Owner Compressors, the
User Contracts and the Management Agreement;


 


(3)           UCI is a wholly-owned
subsidiary of UCH;


 


(4)           Issuer requires that UCH
guarantee the payment and performance by UCI under the Management Agreement as
a condition to purchasing the Compressors from Contributor and Old Lessor
pursuant to the Contribution Agreement and the Sale Agreement, respectively;


 


(5)           UCH will obtain
substantial direct and indirect benefit from the management of the Compressors by
UCI, and is willing to provide this guaranty on the terms and conditions set
forth herein; and


 


(6)           Beneficiaries have
entered into the Indenture in reliance upon the benefits of this Guaranty;


 


NOW, THEREFORE, in consideration of the
premises and other consideration, the receipt and sufficiency of which is
hereby acknowledged by UCH, UCH hereby agrees as follows:


 


SECTION 1.           Definitions.
 Capitalized terms used in this Guaranty,
unless otherwise defined herein, shall have the meaning set forth in Appendix A
to the Indenture.


 


SECTION 2.           Guaranty.
 UCH hereby irrevocably, absolutely and
unconditionally guarantees, as primary obligor and as a guarantor of payment
and not merely as surety or guarantor of collection to


 


1

















 


the
Beneficiaries:  (i) the full and
prompt payment when due, whether by stated maturity, acceleration or otherwise,
and at all times thereafter, of the payment and deposit obligations of UCI as
the initial Manager under the Management Agreement (UCI in this capacity, the “Guaranteed Party”) and all other
amounts from time to time owing by UCI under the Management Agreement, and (ii) the
full and timely performance of, and compliance with each and every duty,
agreement, covenant, undertaking, indemnity, and obligation of the Guaranteed
Party under the Management Agreement, in each case, howsoever created, arising
or evidenced, whether direct or indirect, primary or secondary, absolute or
contingent, joint or several, now or hereafter existing or due or to become
due, which arises out of or in connection with the Management Agreement (all of
such obligations described in clauses (i) and (ii) above being hereinafter
collectively called the “Liabilities”);
provided that nothing contained herein shall be deemed to constitute credit
recourse to UCH for payment of:  (A) losses
arising solely from the financial inability of a User to make contract payments
or other payments under a User Contract, (B) losses arising solely from
the failure of the remarketing proceeds of a Compressor to equal or exceed the
Appraised Value thereof for reasons other than the Manager’s failure to comply
with the Services Standard, or (C) the Notes.  UCH further agrees to pay all costs and
expenses (including reasonable attorneys’ fees and legal expenses) paid or
incurred by any Beneficiary in endeavoring to collect the Liabilities, or any
part thereof, and in enforcing this Guaranty.


 


SECTION 3.           Continuing
Guaranty.  This Guaranty shall in all
respects be a continuing, absolute and unconditional guaranty, and shall remain
in full force and effect (notwithstanding, without limitation, that at any time
or from time to time all Liabilities may have been paid in full), subject to
discontinuance only upon payment in full in cash and performance in full of:  (i) all Liabilities and (ii) any and
all expenses paid or incurred by a Beneficiary in endeavoring to collect the
Liabilities and in enforcing this Guaranty; and all of the agreements and
obligations under this Guaranty shall remain fully in effect until all such
obligations and expenses finally shall have been paid in full in cash.


 


SECTION 4.           Rescission.
 UCH further agrees that, if at any time
all or any part of any payment theretofore applied by Beneficiary to any of the
Liabilities is or must be rescinded or returned by Beneficiary for any reason
whatsoever, such Liabilities shall, for the purposes of this Guaranty, to the
extent that such payment is or must be rescinded or returned, be deemed to have
continued in existence, notwithstanding such application by Beneficiary, and
this Guaranty shall continue to be effective or be reinstated, as the case
maybe, as to such Liabilities, all as though such application by Beneficiary
had not been made.


 


SECTION 5.           Certain
Actions.  Each Beneficiary may, from
time to time at its sole discretion and without notice to UCH, take any or all
of the following actions without affecting the obligations of UCH hereunder:  (a) retain or obtain the primary or
secondary obligation of any obligor or obligors, in addition to UCH, with
respect to any of the Liabilities or any obligation hereunder; (b) extend
or renew for one or more periods (regardless of whether longer than the
original period), alter or exchange any of the Liabilities, or release or
compromise any obligation of UCH hereunder or any obligation of any nature of
any other obligor including UCI with respect to any of the Liabilities; and (c) resort
to UCH for payment of any of the Liabilities, regardless of whether Beneficiary
shall have proceeded against any other obligor primarily or secondarily
obligated with respect to any of the Liabilities.


 


SECTION 6.           Subrogation.
 Any amounts received by a Beneficiary
from whatsoever source on account of the Liabilities may be applied by it
toward the payment of such of the Liabilities, and in such order of
application, as Beneficiary may from time to time elect.  Until one year and one day after payment of
the full amount of all Liabilities in cash, the performance of all of UCH’s
obligations hereunder and the termination of this Guaranty, no payment made by
or for the account of UCH pursuant to this Guaranty shall entitle UCH by
subrogation, indemnity or otherwise to any payment by UCI or from or out of any
property of UCI, and UCH shall not exercise any right or remedy against UCI or
any


 


2

















 


property of
UCI by reason of any performance by UCH of this Guaranty.  If any amount shall be paid to UCH on account
of such subrogation rights at any time when all of the Liabilities shall not
have been paid in full in cash, such amount shall be held in trust for the
benefit of the Beneficiaries and shall forthwith be paid to the Indenture
Trustee to be credited and applied upon the Liabilities, whether matured or
unmatured, in accordance with the terms of this Guaranty.


 


SECTION 7.           Waiver;
Waiver of Defenses.  UCH hereby
expressly waives:  (a) notice of any
Beneficiary’s acceptance of this Guaranty; (b) notice of the existence or
creation or non payment of all or any of the Liabilities; (c) presentment,
demand, notice of dishonor, protest, and all other notices whatsoever (provided
that nothing contained in this clause (c) shall affect any obligations to give
notice or make demand as set forth in the Management Agreement); and (d) all
diligence in collection or protection of or realization upon the Liabilities or
any thereof, any obligation hereunder, or guaranty of any of the foregoing.  To the fullest extent permitted by Applicable Law,
UCH agrees not to assert, and hereby waives for the benefit of each
Beneficiary, all rights (whether by counterclaim, setoff or otherwise) and
defenses (including, without limitation, the defense of fraud or fraud in the
inducement), whether acquired by subrogation, assignment or otherwise, to the
extent that such rights and defenses may be available to UCH to avoid payment
of its obligations under this Guaranty in accordance with the express
provisions of this Guaranty.


 


SECTION 8.           Unconditional
Nature of Guaranty.  This Guaranty
shall constitute a guaranty of payment or of performance and not of collection,
and UCH specifically agrees that it shall not be necessary, and that UCH shall
not be entitled to require, before or as a condition of enforcing the liability
of UCH under this Guaranty or requiring payment or performance of the
Liabilities by UCH hereunder, or at any time thereafter, that any Person:  (a) file suit or proceed to obtain or
assert a claim for personal judgment against UCI or any other Person that may
be liable for any Liabilities; (b) make any other effort to obtain payment
or performance of any Liabilities from UCI or any other Person that may be
liable for such Liabilities; (c) exercise or assert any other right or
remedy to which such Person is or may be entitled in connection with any
Liabilities or other guaranty therefor; or (d) assert or file any claim
against the assets of UCI or any other Person liable for any Liabilities.  Notwithstanding anything herein to the
contrary, no provision of this Guaranty shall require UCH to pay, perform or
discharge any Liabilities prior to the time such Liabilities are due and
payable.  No delay on any Beneficiary’s
part in the exercise of any right or remedy shall operate as a waiver thereof,
and no single or partial exercise by any Beneficiary of any right or remedy
shall preclude other or further exercise thereof or the exercise of any other right
or remedy; nor shall any modification or waiver of any of the provisions of
this Guaranty be binding upon Beneficiary except as expressly set forth in a
writing duly signed by each Beneficiary.  The Beneficiaries may in all events pursue
their rights under this Guaranty prior to or simultaneously with pursuing their
various rights referred to in the Management Agreement, as the Beneficiaries
may determine.  No action of any
Beneficiary permitted hereunder shall in any way affect or impair any Beneficiary’s
rights or UCH’s obligations under this Guaranty.  For the purposes of this Guaranty, Liabilities
shall include all of UCI’s obligations under the Management Agreement,
notwithstanding any right or power of UCI or anyone else to assert any claim or
defense as to the invalidity or unenforceability of any such obligation, and no
such claim or defense shall affect or impair the obligations of UCH hereunder.  The obligations of UCH are unlimited in amount
(but not greater than the Liabilities plus costs and expenses payable
hereunder) and shall be continuing and irrevocable, absolute and unconditional,
primary, original and immediate and not contingent and shall remain in full
force and effect without regard to and not be released, discharged or in any
way affected by any circumstance or condition (other than by payment in full of
Liabilities and the costs and expenses payable hereunder) including, without
limitation, the occurrence of any one or more of the following:


 


(i)            any
lack of validity or enforceability of any of the Liabilities under the
Management Agreement or any document entered into in connection with the


 


3

















 


transactions contemplated by the Management Agreement, any provision
thereof, or any other agreement or instrument relating thereto or the absence
of any action to enforce the same;


 


(ii)           any
failure, omission, delay or lack on the part of the Beneficiaries to enforce,
assert or exercise any right, power, privilege or remedy conferred on the Beneficiaries
in the Management Agreement or this Guaranty, or the inability of the
Beneficiaries to enforce any provision of the Management Agreement for any
reason, or any other act or omission on the part of the Beneficiaries; provided
that the foregoing shall not apply to applicable statutes of limitation;


 


(iii)          any
change in the time, manner or place of performance or of payment, or in any
other term of, all or any of the Liabilities, or any other modification,
supplement, amendment or waiver of or any consent to departure from the terms
and conditions of any of the Management Agreement, the Intercreditor Agreement
or any document entered into in connection with the transactions contemplated
by the Management Agreement or the Related Documents;


 


(iv)          any
taking, release or amendment or waiver of or consent to departure from any
other guaranty, for all or any of the Liabilities;


 


(v)           the
waiver by the Beneficiaries of the performance or observance by the Guaranteed
Party of any Liabilities, the waiver of any default in the performance or
observance thereof, any extension by the Beneficiaries of the time for payment
or performance and discharge by the Guaranteed Party of any Liabilities or any
extension, indulgence or renewal of any Liabilities; provided that the
foregoing shall not apply to applicable statutes of limitation;


 


(vi)          any
bankruptcy, suspension of payments, insolvency, sale of assets, winding-up,
dissolution, liquidation, receivership or reorganization of, or similar
proceedings involving, the Guaranteed Party or its assets or any resulting
release or discharge of any of the Liabilities;


 


(vii)         the
recovery of any judgment against any Person or any action to enforce the same;


 


(viii)        any
failure or delay in the enforcement of the Liabilities of any Person under the
Management Agreement or any document entered into in connection with the
transactions contemplated by the Management Agreement or any provision thereof;
provided that the foregoing shall not apply to applicable statutes of
limitation;


 


(ix)           any
set-off, counterclaim, deduction, defense, abatement, suspension, deferment,
diminution, recoupment, limitation or termination available with respect to any
Liabilities and, to the extent permitted by Applicable Law, irrespective of any
other circumstances that might otherwise limit recourse by or against UCH or
any other Person;


 


(x)            the
obtaining, the amendment or the release of or consent to any departure from the
primary or secondary obligation of any other Person, in addition to UCH, with
respect to any Liabilities;


 


4

















 


(xi)           any
compromise, alteration, amendment, modification, extension, renewal, release or
other change, or waiver, consent or other action, or delay or omission or
failure to act, in respect of any of the terms, covenants or conditions of the
Management Agreement or any document entered into in connection with the
transactions contemplated by the Management Agreement or any Liabilities, or
any other agreement or any related document referred to therein, or any
assignment or transfer of any thereof


 


(xii)          any
change in control or the ownership of the Guaranteed Party, any change, merger,
demerger, consolidation, restructuring or termination of the corporate
structure or existence of the Guaranteed Party or its subsidiaries;


 


(xiii)         to
the fullest extent permitted by Applicable Law, any other circumstance which
might otherwise constitute a defense available to, or a discharge of, a
guarantor or surety with respect to any Liabilities;


 


(xiv)        any
default, failure or delay, whether as a result of actual or alleged force majeure,
commercial impracticability or otherwise, in the performance of the
Liabilities, or by any other act or circumstances which may or might in any
manner or to any extent vary the risk of UCH, or which would otherwise operate
as a discharge of UCH;


 


(xv)         the
existence of any other obligation of UCH, or any limitation thereof, in the
Management Agreement;


 


(xvi)        any
regulatory change or other governmental action (whether or not adverse or other
change in applicable law); or


 


(xvii)       the
partial payment or performance of the Liabilities (whether as a result of the
exercise of any right, remedy, power or privilege or otherwise) or the
invalidity of any payment for any reason whatsoever.


 


Should any money due or owing under this Guaranty not be recoverable
from UCH due to any of the matters specified in clauses (i) through (xvii)
above or for any other reason, then, in any such case, such money shall
nevertheless be recoverable from UCH as though UCH were principal debtor or
obligor in respect thereof and not merely a guarantor and shall be paid by UCH
forthwith.


 


This Guaranty shall continue to be effective
or be automatically reinstated, as the case may be, if at any time any payment,
or any part thereof, of any of the Liabilities is rescinded or must otherwise
be restored or returned by the Beneficiaries for any reason whatsoever, whether
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Guaranteed Party or otherwise, all as though such payment had not been
made, and UCH agrees that it will indemnify the Beneficiaries on demand for all
reasonable costs and expenses (including, without limitation, fees and
disbursements of counsel) incurred by the Beneficiaries in connection with such
rescission or restoration.  If an event
permitting the exercise of remedies under the Management Agreement shall at any
time have occurred and be continuing and such exercise, or any consequences thereof
provided in the Management Agreement, shall at such time be prevented by reason
of the pendency against the Guaranteed Party of a case or proceeding under a
bankruptcy or insolvency law, UCH agrees that, for purposes of this Guaranty
and its obligations hereunder, amounts payable under the Management Agreement
shall be deemed to have been declared in default, with all attendant
consequences as provided in the Management Agreement as if such declaration of
default and the consequences thereof had been accomplished in accordance with
the terms of the


 


5

















 


Management Agreement, and UCH shall forthwith
pay any amounts guaranteed hereunder, without further notice or demand.


 


SECTION 9.           Information;
Reporting Requirements.


 


(a)           Information.          UCH
has and will continue to have independent means of obtaining information
concerning UCI’s affairs, financial condition and business. Beneficiary shall
not have any duty or responsibility to provide UCH with any credit or other
information concerning UCI’s affairs, financial condition or business which may
come into Beneficiary’s possession.


 


(b)           Financial
Statements.  UCH shall deliver to each
Series Enhancer and the Indenture Trustee, (i) as soon as available and in
any event within one hundred twenty (120) days after the end of any fiscal year
of UCH, a copy of each annual report and any amendment to a report filed with
the SEC or any successor agency pursuant to Section 13 or 15(d) of the Exchange
Act (currently Form 10-K), as the same may be amended from time to time (which
shall include, inter alia, the audited consolidated
and consolidating statements of income, stockholders’ equity and cash flows of UCH
and its consolidated subsidiaries as at the end of such fiscal year, and
setting forth in each case in comparative form the corresponding figures from
the corresponding figures for the preceding fiscal year, and accompanied by the
related opinion of independent public accountants of recognized national
standing acceptable to the Indenture Trustee (at the direction of the Requisite
Global Majority) which opinion shall state that said financial statements
fairly present the consolidated and consolidating financial condition and
results of operations of UCH and its consolidating subsidiaries as at the end
of, and for, such fiscal year and that such financial statements have been
prepared in accordance with GAAP, except for such changes in such principles
which the independent public accountants shall have concurred and such opinion
shall not contain a “going concern” or like qualification or exception, and a
certificate of such accountants stating that, in making the examination
necessary for their opinion, they obtained no knowledge, except as specifically
stated, of any Manager Default), and (ii) as soon as available and in any
event within sixty (60) days after the end of each of the first three fiscal
quarterly periods of each fiscal year of UCH, a copy of each quarterly report
and any amendment to any quarterly report filed with the SEC or any successor
agency pursuant to Section 13 or 15(d) of the Exchange Act (currently Form
10-Q), as the same may be amended from time to time (which shall include
consolidated and consolidating statements of income, stockholders’ equity and
cash flows of UCH and its consolidated subsidiaries for such period and for the
period from the beginning of the respective fiscal year to the end of such
period, and the related consolidated and consolidating balance sheets as at the
end of such period, and setting forth in each case in comparative form the
corresponding figures for the corresponding period in the preceding fiscal
year, accompanied by the certificate of a Responsible Officer, which
certificate shall state that said financial statements fairly present the consolidated
and consolidating financial condition and result of operations of UCH and its
consolidated subsidiaries in accordance with GAAP, as of, and for, such period
(subject to normal year end audit adjustments)), provided, however, that UCH
shall be deemed to have furnished the information required by this Section 9(b) if UCH shall have timely
made the same available on “EDGAR” and/or on its home page on the worldwide web
(at the date of this Agreement located at http://www.universalcompression.com);
provided, further, however, that if any Series Enhancer or Indenture
Trustee is unable to access EDGAR or UCH’s home page on the worldwide web or is
unable to access such information from such sources, UCH agrees to provide such
Series Enhancer or Indenture Trustee, as the case may be, with paper copies of
the information required to be furnished pursuant to this Section 9(b) promptly following notice
from such Series Enhancer or Indenture Trustee, as the case may be.  Information required to be


 


6

















 


delivered pursuant to this Section
9(b) shall be deemed to have been delivered on the date on which
UCH provides notice to the Series Enhancers and Indenture Trustee that such
information has been posted on “EDGAR” or UCH’s website or another website
identified in such notice and accessible by the Series Enhancers or Indenture
Trustee without charge (and UCH hereby agrees to provide such notice).  In the event that UCH is no longer required
to file quarterly or annual reports with the SEC or any successor agency
pursuant to Section 13 or 15(d) of the Exchange Act, UCH agrees to provide each
Series Enhancer and Indenture Trustee with paper copies of the information
required to be furnished pursuant to this Section
9(b) when and as if UCH was required to file such quarterly and
annual reports with the SEC or any successor agency pursuant to Section 13 or
15(d) of the Exchange Act.


 


SECTION 10.         Representations
and Warranties.  UCH represents and
warrants as follows:


 


(a)           Organization
and Good Standing.  It has been duly
organized and is validly existing as a corporation in good standing under the
laws of its state of incorporation, with corporate power and authority to own
its properties and to conduct its business as such properties are presently
owned and such business is presently conducted.


 


(b)           Due
Qualification.  It is duly licensed,
qualified and authorized to do business and is in good standing in each
jurisdiction where the ownership, leasing or operation of its property or the
conduct of its business requires such license or qualification except for
failures to be so qualified which, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Change.


 


(c)           Power
and Authority; Due Authorization.  It
has (i) all necessary power, authority and legal right to execute, deliver
and perform its obligations under this Guaranty and (ii) duly authorized
by all necessary corporate action such execution, delivery and performance of
this Guaranty.


 


(d)           Binding
Obligations.  This Guaranty
constitutes the legal, valid and binding obligation of UCH, enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors’ rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.


 


(e)           No
Violation.  The execution, delivery
and performance of this Guaranty will not (i) conflict with, or 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 (A) the
certificate of incorporation or by-laws of UCH or (B) any indenture, lease,
loan agreement, receivables purchase agreement, mortgage, deed of trust, or
other agreement or instrument to which UCH is a party or by which it or its
property is bound, (ii) result in or require the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such indenture,
lease, loan agreement, receivables purchase agreement, mortgage, deed of trust,
or other agreement or instrument or (iii) violate any law or any order,
rule, regulation applicable to UCH of any court or of any federal, state or
foreign regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over UCH or any of its properties.


 


(f)            Solvency.
 The execution, delivery and performance
by UCH of this Guaranty will not render UCH insolvent, nor is it being made in
contemplation of UCH’s insolvency; UCH does not, in its reasonable judgment,
have an unreasonably small capital for conducting its business as presently
contemplated by it.


 


7

















 


SECTION 11.         Successors
and Assigns Amendment.


 


(a)           This
Guaranty shall be binding upon UCH and upon UCH’s successors and permitted assigns
and all references herein to UCH or UCI shall be deemed to include any
successor or successors whether immediate or remote and any permitted assigns,
to such Person. UCH shall not assign any of its obligations hereunder without
the prior written consent of each Beneficiary.


 


(b)           This
Guaranty shall inure to the benefit of each Beneficiary and respective its
successors and assigns and all references herein to Beneficiary shall be deemed
to include any successors and assigns of Beneficiary (whether or not reference
in a particular provision is made to such successors and assigns).


 


(c)           No
amendment or waiver of any provision of this Guaranty, and no consent to any
departure by UCH herefrom, shall in any event be effective unless the same
shall be in writing and signed by UCH and each Beneficiary and then such waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which given.


 


SECTION 12.         GOVERNING
LAW.  THIS GUARANTY SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW,
BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.  Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective only to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.


 


SECTION 13.         Consent
to Jurisdiction; Waiver of Jury Trial.  Each Beneficiary may enforce any claim arising
out of this Guaranty in any state or federal court having subject matter
jurisdiction and located in New York, New York and with respect to any such
claim, UCH hereby irrevocably submits to the jurisdiction of such courts.  UCH irrevocably consents to the service of
process out of said courts by mailing a copy thereof, by registered mail,
postage prepaid, to UCH, and agrees that such service, to the fullest extent
permitted by law, (i) shall be deemed in every respect effective service
of process upon it in any such suit, action or proceeding and (ii) shall
be taken and held to be valid personal service upon and personal delivery to
it.  Nothing herein contained shall preclude
Beneficiary from bringing an action or proceeding in respect hereof in any
other country, state or place having jurisdiction over such action.  UCH irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in such a
court located in New York, New York and any claim that any such suit, action or
proceeding brought in such court has been brought in an inconvenient forum.  UCH HEREBY EXPRESSLY WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
THIS GUARANTY OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS GUARANTY, AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.


 


SECTION 14.         Notices.
 All notices, demands or requests given
pursuant to this Guaranty shall be in writing, sent by overnight courier
service or by telefax or hand delivery to the following addresses:


 


8

















 


	
  To Manager:

  	
  Universal Compression, Inc

  
	
   

  	
  4444 Brittmoore Road

  
	
   

  	
  Houston, Texas 77041

  
	
   

  	
  Telephone:(713) 335-7295

  
	
   

  	
  Facsimile:  (713) 446-6720

  
	
   

  	
  Attention:   J. Michael
  Anderson

  
	
   

  	
   

  
	
  To Issuer:

  	
  UCO Compression 2005 LLC

  
	
   

  	
  4444 Brittmoore Road

  
	
   

  	
  Houston, Texas 77041

  
	
   

  	
  Telephone:(713) 335-7295

  
	
   

  	
  Facsimile:  (713) 446-6720

  
	
   

  	
  Attention:   J. Michael
  Anderson

  
	
   

  	
   

  
	
  To the Indenture Trustee:

  	
  Wells Fargo Bank, National Association

  
	
   

  	
  MAC N9311-161

  
	
   

  	
  Sixth Street and Marquette Avenue

  
	
   

  	
  Minneapolis, MN 55479

  
	
   

  	
  Telephone:(612) 667-7181

  
	
   

  	
  Facsimile:  (612) 667-3464

  
	
   

  	
  Attention: Corporate Trust Services -Asset-

  
	
   

  	
   

  	
   Backed Administration

  
	
   

  	
   

  
	
  To any Series Enhancer:

  	
  At the address as set forth in the related
  Enhancement Agreement

  
	
   

  	
   

  
	
  To any Interest Rate Hedge

  	
   

  
	
  Provider:

  	
  At the address as set forth in related
  Interest Rate Swap Agreement

  



 


Notice shall be effective and deemed received
(a) one (1) day after being delivered to the courier service, if sent by
courier, (b) upon receipt of confirmation of transmission, if sent by
telecopy, or (c) when delivered, if delivered by hand.  Copies of each such notice shall be sent to
the Administrative Agent at Wachovia Capital Markets, LLC, Structured Asset
Finance 301 S. College St., Mailcode:  NCO610,
Charlotte, North Carolina 28288-0610, Attention:  Manoj Kumar.


 


SECTION 15.         Third
Party Beneficiary.  In addition to
its rights as a Beneficiary hereunder as a secured party under the Indenture,
the Series Enhancer shall be a third party beneficiary of this Guaranty and
shall be entitled to directly enforce its rights hereunder as though it were a
party hereto.


 


SECTION
16.  Counterparts.  This Guaranty may be executed
in two or more counterparts, and it shall not be necessary that any one of the
counterparts be executed by all of the parties hereto.  Each fully or partially executed counterpart
shall be deemed an original, but all such counterparts taken together shall
constitute but one and the same instrument.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK -

SIGNATURE PAGE FOLLOWS]


 


9

















 


IN WITNESS WHEREOF, this Guaranty has been
executed and delivered by UCH’s duly authorized officer as of the date first
written above.


 


 


	
   

  	
  UNIVERSAL COMPRESSION HOLDINGS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Michael Anderson

  	
   

  
	
   

  	
   

  	
  J. Michael Anderson,

  
	
   

  	
   

  	
  7Senior Vice President and Chief Financial

  
	
   

  	
   

  	
  Officer

  



 


 


Accepted and Agreed:


 


WELLS FARGO BANK, NATIONAL ASSOCIATION,


not in its individual capacity, but solely as Indenture Trustee


	
  By:

  	
  /s/ Marianna C. Stershic

  	
   

  
	
  Name:

  	
  Marianna C. Stershic

  
	
  Title:

  	
  Vice President

  



 


 


UCO COMPRESSION 2005 LLC


 


 


	
  By:

  	
  /s/ J. Michael Anderson

  	
   

  
	
   

  	
  J. Michael Anderson,

  
	
   

  	
  Senior Vice President and Chief

  
	
   

  	
  Financial Officer